[Federal Register Volume 59, Number 32 (Wednesday, February 16, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 94-20]


[[Page Unknown]]

[Federal Register: February 16, 1994]


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Part II





Environmental Protection Agency





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40 CFR Part 80



Regulation of Fuels and Fuel Additives; Standards for Reformulated and 
Conventional Gasoline; Final Rule
ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[AMS-FRL-4817-8]

 

Regulation of Fuels and Fuel Additives: Standards for 
Reformulated and Conventional Gasoline

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: Through the amended Clean Air Act of 1990, Congress mandated 
that EPA promulgate new regulations requiring that gasoline sold in 
certain areas be reformulated to reduce vehicle emissions of toxic and 
ozone-forming compounds. This document finalizes the rules for the 
certification and enforcement of reformulated gasoline and provisions 
for unreformulated or conventional gasoline.

DATES: The regulations for the reformulated gasoline program are 
effective on March 18, 1994. The incorporation by reference of certain 
publications listed in the regulations is approved by the Director of 
the Federal Register as of March 18, 1994. The information collection 
requirements contained in 40 CFR part 80 have not been approved by the 
Office of Management and Budget (OMB) and are not effective until OMB 
has approved them. EPA will publish a document in the Federal Register 
following OMB approval of the information collection requirements.
    Retail sale of reformulated gasoline will begin on January 1, 1995, 
as will the provisions for the ``simple model'' certification, the 
anti-dumping program for conventional gasoline, and the associated 
enforcement procedures. (For all ensuing sections of this document, the 
program's beginning date of January 1, 1995 refers only to the retail 
sale of reformulated gasoline.) Certification of reformulated gasoline 
by the ``complex model'' and compliance with the Phase II performance 
standards, will begin January 1, 1998 and January 1, 2000, 
respectively.

ADDRESSES: Materials relevant to this FRM are contained in Public 
Dockets A-92-01 and A-92-12, located at room M-1500, Waterside Mall 
(ground floor), U.S. Environmental Protection Agency, 401 M Street SW., 
Washington, DC 20460. The docket may be inspected from 8 a.m. until 12 
noon and from 1:30 p.m. until 3 p.m. Monday through Friday. A 
reasonable fee may be charged by EPA for copying docket materials. 
FOR FURTHER INFORMATION CONTACT:

Paul Machiele (reformulated gasoline requirements), U.S. EPA (RDSD-12), 
Regulation Development and Support Division, 2565 Plymouth Road, Ann 
Arbor, MI 48105, Telephone: (313) 668-4264.
George Lawrence (reformulated gasoline and anti-dumping enforcement 
requirements), U.S. EPA (6406J), Field Operations and Support Division, 
501 3rd Street, Washington, DC 20005, Telephone: (202) 233-9307.

SUPPLEMENTARY INFORMATION: Today's final rule is preceded by four 
previous notices: an initial notice proposing standards for 
reformulated and conventional gasoline (NPRM) published on July 9, 1991 
(56 FR 31176), a supplemental notice (SNPRM) published on April 16, 
1992 (57 FR 13416), an additional NPRM published on February 26, 1993 
(58 FR 11722), and a notice of correction for Phase II standards 
published on April 1, 1993 (58 FR 17175). Insofar as the rules 
finalized today mirror the proposed standards, those previous documents 
may be referred to.
    Today's preamble explains the basis and purpose of the final rule, 
focusing on issues that have been revised since the publication of the 
correction notice for the Phase II performance standards (58 FR 17175). 
Support documents, including the Regulatory Impact Analysis (RIA), are 
available in Public Docket No. A-92-12.
    To Request Copies of This Final Rule Contact: Delores Frank, U.S. 
EPA (RDSD-12), Regulation Development and Support Division, 2565 
Plymouth Road, Ann Arbor, MI 48105, Telephone: (313) 668-4295.
    Copies of the preamble, the Final Regulatory Impact Analysis (RIA), 
the Responses to Comments on Enforcement Provisions (RCEP), the complex 
model, the simple model and the regulations for the reformulated 
gasoline rulemaking are 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, or 9600 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
    A list of ZIP files will be shown, all of which are related to the 
reformulated gasoline rulemaking process. The six documents mentioned 
above will be in the form of a ZIP file and can be identified by the 
following titles: ``PREAMBLE.ZIP'' (preamble); ``RIAFINAL.ZIP'' (RIA); 
``ENFORCE.ZIP'' (RCEP); ``EPAFINAL.ZIP'' (complex model); 
``MODFINAL.ZIP'' (simple model); ``REGFINAL.ZIP'' (regulations). To 
download these files, type the instructions below and transfer 
according to the appropriate software on your computer:

ownload, 

rotocol, xamine, ew, ist, 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. Then go into your own software and tell it 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. I. Background The purpose of the reformulated gasoline regulations is to improve air quality by requiring that gasoline be reformulated to reduce motor vehicle emissions of toxic and tropospheric ozone-forming compounds, as prescribed by section 211(k)(1) of the Clean Air Act (CAA or the Act), as amended. This section of the Act mandates that reformulated gasoline be sold in the nine largest metropolitan areas with the most severe summertime ozone levels and other ozone nonattainment areas that opt into the program. It also prohibits conventional gasoline sold in the rest of the country from becoming any more polluting than it was in 1990. This requirement ensures that refiners do not ``dump'' fuel components that are restricted in reformulated gasoline and that cause environmentally harmful emissions into conventional gasoline. Section 211(k)(l) directs EPA to issue regulations that, beginning in 1995, ``require the greatest reduction in emissions of ozone-forming and toxic air pollutants (``toxics'') achievable through the reformulation of conventional gasoline, taking into consideration the cost of achieving such emission reductions, any non air-quality and other air-quality related health and environmental impacts and energy requirements.'' The Act mandates certain requirements for the reformulated gasoline program. Section 211(k)(3) specifies that the minimum requirement for reductions of volatile organic compounds (VOC) and toxics for 1995 through 1999, or Phase I of the reformulated gasoline program, must require the more stringent of either a formula fuel or an emission reductions performance standard, measured on a mass basis, equal to 15 percent of baseline emissions. Baseline emissions are the emissions of 1990 model year vehicles operated on a specified baseline gasoline. CAA compositional specifications for reformulated gasoline include a 2.0 weight percent oxygen minimum and a 1.0 volume percent benzene maximum. For the year 2000 and beyond, the Act specifies that the VOC and toxics performance standards must be no less than that of the formula fuel or a 25 percent reduction from baseline emissions, whichever is more stringent. EPA can adjust this standard upward or downward taking into account such factors as feasibility and cost, but in no case can it be less than 20 percent. These are known as the Phase II reformulated gasoline performance standards. Taken together, sections 211(k)(1) and 211(k)(3) call for the Agency to set standards that achieve the most stringent level of control, taking into account the specified factors, but no less stringent than those described by section 211(k)(3). The reader may refer to the April 16, 1992 SNPRM (57 FR 13416) and the February 26, 1993 NPRM (58 FR 11722) described in more detail below), the February 1993 Draft Regulatory Impact Analysis (DRIA), the Final Regulatory Impact Analysis (RIA), and Public Dockets A-91-02 and A-92-12 for a thorough description of the goals and regulatory development of the reformulated and anti-dumping programs and discussions of a number of associated technical issues. A. Regulatory Negotiation (Reg Neg) Shortly after passage of the Clean Air Act Amendments of 1990, EPA entered into a regulatory negotiation with interested parties to develop specific proposals for implementing both the reformulated gasoline and related anti-dumping programs. These parties included representatives of the oil and automobile industries, vehicle owners, state air pollution control officials, oxygenate suppliers, gasoline retailers, environmental organizations, and citizens' groups. (See the 1991 NPRM for the members of the negotiating committee and a discussion of the process for selecting them.) In August 1991 the committee reached consensus on a program outline and signed an ``Agreement in Principle'' describing that consensus. EPA agreed to propose a two-step approach to reformulated gasoline. The first step would take effect in 1995 and utilize a ``simple model'' to certify that a gasoline meets applicable emission reduction standards. The simple model allows certification based on a fuel's oxygen, benzene, heavy metal and aromatics content and Reid Vapor Pressure (RVP). Under the second step, according to the regulatory negotiation agreement, EPA would propose a ``complex model'' to supplant the simple model for certifying compliance with these standards. Certification under the complex model would take effect 4 years after it is promulgated. EPA also agreed to propose the more stringent Phase II emission performance standards. B. July 9, 1991 NPRM (56 FR 31176) The first NPRM for the reformulated gasoline program was published prior to the conclusion on the regulatory negotiations. Normally, in a negotiated rulemaking, such a reg-neg committee meets to develop a proposed rule which will be acceptable to all parties. If consensus is reached on a proposed rule, it is published as an NPRM. The committee members and the entities they represent agree to support the proposal and not to seek judicial review of the final rule if it has the same substance and effect as the consensus proposal. In this case, EPA published an NPRM while the advisory committee was still conducting negotiations. The Agency believed that although consensus of the members on an acceptable rule was possible, an NPRM was required at that time in order to meet the statutory deadline. The 1991 NPRM described the provisions of both a program to require the sale of gasoline which reduces emissions of toxics and ozone- forming volatile organic compounds (VOCs) in certain nonattainment areas and a program to prohibit the gasoline sold in the rest of the country from becoming more polluting. The 1991 notice described the outline of the reformulated gasoline program as required by statutory provisions and options that the regulatory negotiation committee members were considering. Topics included in the 1991 proposal consisted of the derivation of the emission standards, fuel certification by modeling, opt-in provisions, credits, anti-dumping requirements, and enforcement provisions for all aspects of the reformulated gasoline program. C. April 16, 1992 SNPRM (57 FR 13416) As noted above, the Agency's SNPRM (57 FR 13416) reflected the agreement reached in the regulatory negotiation that had been conducted to develop reformulated gasoline regulations under section 211(k). The Supplemental Notice of Proposed Rulemaking (SNPRM) described the standards and enforcement scheme for both reformulated and conventional gasoline. It also included specific proposals for the simple emission model to be used in gasoline certification and enforcement. D. February 26, 1993 NPRM (58 FR 11722) In their comments on the SNPRM, the ethanol industry expressed concern that the reformulated gasoline rulemaking, as proposed in the SNPRM, effectively excluded ethanol from the reformulated gasoline market. In an attempt to address their concern, the Agency proposed an ethanol incentive program, at the direction of former President Bush, intended to promote the use of ethanol (and other renewable oxygenates) in reformulated gasoline. The objective of the proposed renewable oxygenate program was to enhance the market share for renewable oxygenates while, theoretically, maintaining the overall environmental benefits of the reformulated gasoline simple model. This would be accomplished by offsetting any increase in volatility that may result from the inclusion of ethanol with volatility reductions that occur in the rest of the RFG pool. This volatility balancing, however would not take into account any increase in volatility in-use due to mixing of ethanol and non-ethanol gasoline blends (commingling). The renewable oxygenate program would not be required in class B areas (the South) unless a state requested inclusion in the program. Thus, the NPRM (58 FR 11722) for reformulated gasoline proposed revisions to the simple model, as well as to the associated anti-dumping, and enforcement provisions. Also included in the NPRM were the proposed complex model for certification of reformulated gasoline and the proposed Phase II performance standards. The complex model is now scheduled to take effect January 1, 1998. The complex model will provide a method of certification based on the fuel characteristics such as oxygen, benzene, aromatics, RVP, sulfur, olefins and the percent of fuel evaporated at 200 and 300 degrees Fahrenheit (E200 and E300, respectively). The NPRM also proposed Phase II standards for reformulated gasoline which are to take effect in the year 2000, as prescribed by section 211(k)(3) of the Clean Air Act (CAA). The proposed VOC performance standard was 20-32 percent for class B and 26- 35 percent for class C. EPA proposed to set the toxic standard at 20 or 25 percent reduction since additional toxics control was not found to be cost effective and, in most cases, these greater toxics reductions were expected to occur through fuel reformulation for VOC control. The NPRM also included proposed NOx performance standards of 0-16 percent in classes B and C. The proposed NOx standards greater than zero were not required by the CAAA, but were proposed under the authority of section 211(c)(1) in conjunction with the Phase II reformulated gasoline standards of the Act since additional NOx control was deemed beneficial and cost effective in reducing ambient ozone levels. E. Discussion of Major Comments and Issues EPA received a number of comments on the first NPRM (56 FR 31176), the SNPRM (57 FR 13416), and the latest NPRM (58 FR 11722) for reformulated and conventional gasoline. Comments covered a wide range of topics including regulatory procedure, certification standards, modeling emissions by the simple and complex models, the role of ethanol and other oxygenates in reformulated gasoline, vehicle testing, the anti-dumping program, Phase II standards, cost-effectiveness, and a number of enforcement-related issues. EPA has conducted an analysis of the comments received and duly considered the significant issues. Summaries of these comments and EPA's responses to them are contained in the Final Regulatory Impact Analysis and the Summary and Analysis of Comments which has been placed in the docket for this rulemaking (Public Docket No. A-92-12). Since the publication of the NPRM, the Agency has continued to develop the complex model. The first revisions of the complex emissions model since 1993 NPRM publication for reformulated gasoline have been provided to the public at a June 2, 1993 public workshop. EPA developed several complex model options in July which was provided to the public. In October of 1993, a draft version of the final complex model was released for public inspection as well. All the iterations of the complex model since the publication of the 1993 NPRM have been available to the public via a public electronic bulletin board and in submittals to the EPA Air Docket, Docket No. A-92-12. All the various components of this rulemaking are being finalized in today's notice. The additional time has allowed adequate public review of the complex model and its implications for the reformulated gasoline Phase II standards. The remainder of this preamble is organized into the following sections: II. Treatment of Ethanol III. Simple Model for Reformulated Gasoline Compliance IV. Complex Model V. Augmenting the Models Through Testing VI. Phase II (Post-1999) Reformulated Gasoline Performance Standards and NOx Standards for Reformulated Gasoline VII. Enforcement VIII. Anti-Dumping Requirements for Conventional Gasoline IX. Anti-Dumping Compliance and Enforcement Requirements for Conventional Gasoline X. Provisions for Opt-In by Other Ozone Non-Attainment Areas XI. Federal Preemption XII. Environmental and Economic Impacts XIII. Public Participation XIV. Compliance With the Regulatory Flexibility Act XV. Statutory Authority XVI. Administrative Designation and Regulatory Analysis XVII. Compliance With the Paperwork Reduction Act XVIII. Notice Regarding Registration of Reformulated Gasolines II. Treatment of Ethanol A. Background The April 16, 1992 proposal of the Simple Model and Phase I standards was designed to be fuel and oxygenate neutral. Ethanol, however, when added to gasoline in the amount needed to satisfy the oxygen content requirement of the Act raises the Reid vapor pressure (RVP) of the resulting blend by about 1 psi, making it more difficult for ethanol blends to meet the mass VOC performance standards than blends using other oxygenates. For ethanol to be blended with the RFG, a blendstock gasoline with an RVP low enough to offset the increase resulting from adding ethanol would have to be obtained. Ethanol industry representatives commented that obtaining such blendstocks would be both difficult and expensive, because ``sub-RVP'' blendstocks would be more costly to refine and because blendstock production would be controlled by petroleum refiners. Methyl tertiary butyl ether (MTBE), an oxygenate which does not boost a fuel's RVP, which is derived from methanol gas and the petroleum product isobutylene and whose blends can readily be put through petroleum pipelines, was thought to be the oxygenate of choice for most refiners. Ethanol's representatives theorized that the oil industry would have a desire to use MTBE over ethanol and, thus, little incentive to make the sub-RVP blendstock necessary for ethanol blending. The ethanol industry contended that a reformulated gasoline program which they argued would effectively preclude ethanol was contrary to Congress' intent that ethanol have a role in the program. They argued that the oxygen content requirement of section 211(k)(2) was motivated in large part by a desire to expand markets for ethanol. They noted the strong support afforded the RFG legislative initiative by members of Congress from agricultural states. They also cited statements in the legislative history indicating some members' expectation that the RFG program would provide an increasing market for ethanol. Ethanol representatives contended that the benefits of ethanol use justify its inclusion in the RFG program. Specifically, they explained that ethanol is currently made in the United States from domestically- grown grains, primarily corn, and thus represents an important domestic and renewable source of energy. They further explained that to the extent ethanol is used in place of imported petroleum products, it promotes the nation's energy independence and improves its balance of trade, and that ethanol use also strengthens the market for corn, consequently reducing the need for price supports. Moreover, as a biomass-based product, ethanol is potentially a renewable fuel to the extent the energy derived exceeds any fossil fuel energy consumed in producing the ethanol. In view of ethanol's importance to the nation's energy security and agricultural economy, ethanol representatives urged that the proposal be revised to allow ethanol to effectively participate in the RFG market. They suggested several possible revisions. For example, they argued that the 1 psi waiver granted to certain ethanol blends by section 211(h) of the CAA be applied to ethanol-blended RFG under section 211(k). They reasoned that since Congress recognized in the provision requiring nationwide reductions in fuel RVP that ethanol required such a waiver, ethanol should receive a similar waiver if the VOC performance standard for RFG sold in the smoggiest cities were defined in terms of a required reduction in RVP. If the section 211(h) waiver were not available to RFG ethanol blends, the ethanol industry suggested that the VOC reduction requirement take into account that specific VOCs from various reformulated gasolines differ in their ozone formation potential. While ethanol raises a fuel's volatility and thus its VOC emissions, they argued that the resulting VOCs are less ozone-forming than those that would otherwise occur. They urged that the 15 percent reduction requirement should thus be interpreted to require a 15 percent reduction in ozone-forming potential, not simply mass of ozone-forming VOCs. Ethanol supporters suggested additional ways of encouraging or even requiring ethanol use in RFG. The Governors Ethanol Coalition, for instance, suggested that EPA require the RFG market to satisfy its oxygenate requirements through a minimum percentage of domestically produced renewable fuel. Based on ethanol's importance to the nation's energy and agricultural policy, President Bush on October 1, 1992 announced a plan to allow ethanol to effectively compete in the RFG program, with the expectation that, with barriers removed, ethanol use would grow. In lieu of an RVP waiver, or inclusion of ozone reactivity this plan was based upon provisions of section 211(k)(1) allowing the Administrator to take into consideration cost, energy requirements, and other specified factors in setting RFG performance standards. The most significant part of this plan called for EPA to ``establish rules for reformulated gasoline in all northern cities that will have the effect of granting a one-pound waiver for the first 30 percent market share of ethanol blends, while achieving environmental benefits comparable to those provided for in EPA's proposed rule and regulatory negotiation.'' The environmental benefits of the proposed RFG program would be maintained by offsetting any increase in volatility of RFG containing ethanol with reductions in the volatility of the rest of the reformulated gasoline pool. In response to the announcement by former President Bush, EPA proposed on February 26, 1993 provisions to provide an RVP (and VOC) incentive for the use in reformulated gasoline of renewable oxygenates such as ethanol. B. Concerns With the Proposal At the time of the February 26, 1993 proposal, EPA had a number of concerns with respect to its legality, energy benefits, and environmental neutrality. Nevertheless, we proposed the provisions for public comment in the hope that these concerns could be overcome based on new data and information developed in-house or received through public comment. Since the time of the proposal these concerns have been enhanced. Additional data and information has been developed which indicates that energy benefits would be unlikely to occur as a result of the proposal. While the production of much of the ethanol in the country produces on the margin more energy and uses less petroleum than went into its production, a recent study by the Department of Energy (refer to DOE's comments on the proposal) indicates that the margin disappears when ethanol is mixed with gasoline. The energy loss and additional petroleum consumption necessary to reduce the volatility of the blend to offset the volatility increase caused by the ethanol causes the energy balance and petroleum balance to go negative. Since the potential energy benefits were the basis in the proposal for providing the incentives for renewable oxygenates, the justification for the proposal no longer exists. Additional data and information has also been developed which indicates that VOC emissions would increase significantly under the proposal. As discussed in section I of the RIA, the commingling effect of mixing ethanol blends with non-ethanol blends in consumer's fuel tanks, the effect of ethanol on the distillation curve of the blend, and unrestricted early use of the complex model combined result in roughly a 6-7.5% increase in gasoline vehicle VOC emissions even though there is no increase in the average RVP of in-use gasoline. As a result, the proposal would have sacrificed 40 to 50 percent of the VOC control that is required under section 211(k) for reformulated gasoline in exchange for incentives for what is likely to have been only a marginal increase in the market share of ethanol in reformulated gasoline and no energy benefits or cost savings. As discussed in section I of the RIA, ethanol is not excluded from competing in the reformulated gasoline market under the provisions of the April 16, 1992 SNPRM. As a result of the economic advantage of ethanol over other oxygenates, ethanol should maintain a significant market share under the reformulated gasoline program even without the renewable oxygenate incentives proposed in the February 16, 1993 proposal. As a result, the actual ethanol market share increase as a result of the renewable oxygenate provisions would be expected to be far less than the maximum of 30% for which incentives were provided. Given the relatively small increase in ethanol demand as a result of the renewable oxygenate provisions in exchange for such a large loss in the environmental control of the reformulated gasoline program, there does not appear to be any justification for promulgating these provisions. Furthermore, comments were received from virtually all parties, including ethanol industry representatives, that the proposal was unworkable and would significantly increase the cost of the reformulated gasoline program. While EPA maintains that the program would have provided an economic incentive for the use of renewable oxygenates in reformulated gasoline up to a 30% market share, EPA acknowledges that the proposal would have intruded into the efficient operation of the marketplace, impacting the cost of the reformulated gasoline program. As a result, after taking into account the cost, non- air quality and environmental impacts, and energy impacts, EPA has found itself with no choice but to back away from the renewable oxygenate provisions of the February 26, 1993 proposal. C. Provisions for the Final Rule In lieu of the renewable oxygenate proposal, EPA investigated a number of options aimed at making the program more workable by reducing the fuel tracking, recordkeeping, and enforcement burden associated with the proposal. While such options tended to make the program more workable from the standpoint of the refining and fuel distribution processes, they also tended to either reduce the assurance that the environmental benefits of the program would be achieved in all areas covered by the RFG program, or to place additional restrictions on the flexibility contained in the proposal for blending ethanol into gasoline. Given this and the other concerns with the proposal (cost, lack of energy benefits, significant environmental loss, etc.), EPA did not believe these options to be appropriate or justifiable either under the provisions of section 211(k) of the Act. The reader is referred to the Final Regulatory Impact Analysis for a detailed discussion of the renewable oxygenate program. A number of commenters suggested alternative provisions (1.0 psi RVP waiver for ethanol blends, inclusion of ozone reactivity in the standard setting process, mandates for refiners to provide clear gasoline blendstock for downstream blending with ethanol, etc.) to the proposed renewable oxygenate program to allow ethanol to play a larger role in the reformulated gasoline program. It was argued that without such provisions ethanol would be excluded from the market entirely in direct conflict with the intent of Congress in the CAA. EPA, however, does not agree that ethanol is excluded from competing in the reformulated gasoline marketplace under the provisions of the April 16, 1992 proposal. In fact, as under the recently implemented wintertime oxygenated fuels program, ethanol is expected to significantly increase its market share under the reformulated gasoline program, especially in Midwestern areas where ethanol enjoys State tax incentives and relatively low distribution costs. In addition, not only is ethanol expected to compete as an alcohol, but it also may compete with methanol as an ether feedstock in the future. As a result, EPA believes that the treatment of ethanol blends under the April 16, 1992 proposal is entirely consistent with the intent of Congress as expressed in section 211(k) of the CAA. The alternative provisions (1.0 psi RVP waiver for ethanol blends, inclusion of ozone reactivity in the standard setting process, mandates for refiners to provide clear gasoline blendstock for downstream blending with ethanol, etc.) suggested by various commenters to further enhance the competitiveness of ethanol in the reformulated gasoline program are not appropriate. These provisions are both outside of EPA's legal authority under the CAA, and indefensible from an environmental and scientific standpoint. The 1.0 psi waiver for example, could easily forfeit all VOC emission reductions otherwise achieved by the reformulated gasoline program. A move away from the mass based standards of the Act to reactivity based standards is not only unsupportable on the basis of the available scientific information, but even if EPA were able to do so, it would be unlikely to provide any significant advantage for ethanol blends. As discussed in section I of the RIA, the recent urban airshed modeling studies claiming that ethanol blends with a 1.0 psi waiver do not increase ozone relative to an MTBE blended reformulated gasoline are frought with invalid assumptions and inconsistencies and are not applicable to the reformulated gasoline situation. As a result, they provide no credible scientific support for special provisions for ethanol in the context of the reformulated gasoline program. Given the lack of justification for the renewable oxygenate provisions of the February 26, 1993 proposal, the options considered for simplifying that proposal, and other alternative provisions recommended by commenters, EPA is, thus, basing the oxygenate-related provisions of the final rule on the provisions as proposed in the April 16, 1992 proposal. Despite this decision, EPA still believes ethanol will be able to compete favorably in the reformulated gasoline market either as a direct additive or as an ether feedstock as discussed above. As such, EPA believes that the nationwide production of ethanol will increase as a result of this rulemaking with corresponding benefits to our Nation's agricultural sector. However, the increase may not be as large as it otherwise would have been had an incentive program been promulgated for ethanol. The reader is referred to section I. of the RIA for additional description of the comments and information which led up to this decision. III. Simple Model for Reformulated Gasoline Compliance In accordance with section 211(k) of the Clean Air Act, EPA requires that in order for a gasoline to be certified as reformulated, it must contain at least 2.0 weight percent oxygen, no more than 1.0 volume percent benzene, and no heavy metals (unless a waiver is granted); result in no increase in NOX emissions; and achieve required toxics and VOC emission reductions. The VOC, NOX, and toxics emission requirements effective between January 1, 1995 and December 31, 1997 and EPA's derivation of them are set forth below. Two methods by which refiners can certify their fuel as meeting the VOC, NOX, and toxics requirements of reformulated gasoline are contained in this rulemaking. The first, by use of a ``Simple Model,'' is described in this section. A second method, the use of the ``Complex Model'' is described in Section IV. Provisions for augmenting the Complex Model through vehicle testing are described in Section V. For reasons set forth in the April 16, 1992 SNPRM (57 FR 13417-13418) and discussed Section V, vehicle testing is not an option as a separate, stand-alone method of certification. First, models can better reflect in-use emission effects since they can be based on the results of multiple test programs. Second, individual test programs may be biased, either intentionally or unintentionally. Third, fuel compositions tend to vary due in part to factors beyond the control of fuel suppliers, potentially requiring testing of each batch if a model is not used. Finally, models make more efficient use of scarce and expensive emissions effects data than is otherwise possible. For these reasons, EPA believes that the modeling options promulgated by EPA are necessary for the reformulated gasoline program to achieve its environmental objectives and to minimize the costs of the program. Comments were received suggesting that EPA allow certification based on testing as an optional means of certification. However, for the same reasons discussed above, EPA does not believe such an option would be appropriate. EPA would have much less certainty that the results of the test program were valid. At the time of the simple model proposal, while a number of fuel parameters were thought to impact emissions, data were sufficient for only a few of these parameters (Reid vapor pressure, fuel oxygen, benzene, and aromatics) to quantify their effect with reasonable accuracy for use in an emissions model. For those additional parameters which were thought to impact emissions in a directionally clear, but as of yet unquantifiable manner (sulfur, T90, and olefins), EPA proposed that they be capped at the refiner's 1990 average level to prevent emission effects from changes in their levels from undercutting the emission reductions achieved by the parameters contained in the simple model. The effect of aromatics on VOC and NOX emissions was also unclear, but instead of being capped, it was believed that the level of aromatics would be controlled by the role aromatics plays in the formation of air toxics emissions. Data is now available to accurately quantify not only the effects of RVP, oxygen, benzene, and aromatics on emissions, but also sulfur, T90 (or E300), olefins, and T50 (or E200). The effects of these fuel parameters are incorporated into the Complex Model described in Section IV. The Complex Model is the most accurate and complete model currently available for use in the reformulated gasoline program. Absent any other considerations, EPA would require use of the Complex Model for purposes of certification. However, based on leadtime considerations, EPA is allowing use of either the Simple or Complex Model during the first three years of the reformulated gasoline program as proposed. These lead time considerations were described in the April 1992 proposal (57 FR 13417-8). EPA is providing four years leadtime before use of the Complex Model is mandatory to allow the regulated industry adequate time to plan and design necessary refinery modifications, obtain necessary permits and capital, complete construction, and complete start-up and equipment shakedown. Furthermore, EPA has every confidence that on average the refiners certifying their fuel using the Simple Model will achieve the emission reductions that Congress intended for the reformulated gasoline program. Various comments were received criticizing the use of the Simple Model for fuel certification, stating that it had limited flexibility, discouraged innovation, penalized refiners producing cleaner than average gasoline in 1990, and should be scrapped. Many of these comments would appear to be resolved by the option available for early use of the Complex Model. Therefore, in keeping with the need to provide adequate lead time and the fact that compliance with the Simple Model will produce the mandatory VOC and toxic emission reductions, refiners will be permitted to use the simple model for certification until December 31, 1997. Until this date, fuel suppliers will have the option of using the complex model instead of the simple model to take advantage of the effects of parameters contained in the complex model but not contained in the simple model (as described in the following paragraphs). The reader is referred to the April 16, 1992 SNPRM for more discussion of these lead time provisions. A. Simple VOC Emissions Model The simple model for VOC emissions is comprised of fuel specifications for RVP and oxygen. Fuels sold at retail outlets must have an RVP during the high ozone season (June 1 through September 15) of no more than 7.2 psi in VOC control region 1 (the southern areas typically covered by ASTM class B during the summer) and 8.1 psi in VOC control region 2 (the northern areas typically covered by ASTM class C during the summer).1 The differences in climate between these two types of areas requires a corresponding difference in gasoline volatility to achieve the same emissions effect. The period of June 1 through September 15 was chosen for the high ozone season because most of the ozone violations occur during this period. (See 56 FR 24242 for a discussion of the determination of this period.) --------------------------------------------------------------------------- \1\Lower RVP limits apply for fuels that comply under averaging. RVP controls also apply from May 1 to May 31 for facilities upstream of retail outlets. These issues are discussed elsewhere in this proposal. --------------------------------------------------------------------------- Section 211(k)(3) of the Act requires that at a minimum reformulated gasoline comply with the more stringent of either a 15% reduction in VOC emissions or a formula fuel described in that section, whichever is greater. EPA has determined that the formula fuel would achieve less than a 15% reduction in VOC. As such, the minimum VOC emission reduction required by the Act is 15%. As discussed in section IV, EPA believes that the VOC emission reduction in VOC control region 2 from a fuel with an RVP of 8.1 psi and 2.0 weight percent oxygen will be sufficient to achieve the minimum 15% VOC emission reduction relative to the Clean Air Act baseline gasoline (which has an RVP of 8.7 psi). In VOC control region 1, an 8.1 psi RVP fuel with 2.0 percent oxygen (which would meet the minimum 15% reduction requirement relative to the CAA baseline fuel) would actually have greater emissions than a fuel meeting EPA's Phase II RVP control standards for VOC control region 1 (maximum RVP of 7.8 psi). EPA believes that when Congress designated cities for inclusion in the reformulated gasoline program that it intended the program to provide emissions reductions in addition to those provided by the Phase II RVP requirements. If EPA merely required reformulated gasoline in VOC control region 1 to meet the RVP requirement for VOC control region 2, then no reduction in VOC emissions would accrue under the first phase of the reformulated gasoline program beyond those mandated by Phase II RVP standards. EPA projects that relative to Phase II RVP control levels, a fuel with 7.2 psi RVP and 2.0 weight percent oxygen would provide VOC emission reductions in VOC control region 1 similar to those obtained in VOC control region 2. While requiring reformulated gasoline sold in VOC control region 1 to have an RVP of no more than 7.2 psi goes beyond the minimum requirement stated in section 211(k)(3), section 211(k)(1) authorizes EPA to require emission reductions in VOC control region 1 of this magnitude because they are achievable considering costs, other air quality and non-air quality impacts, and the energy implications of such a requirement. Similarly, EPA believes that additional VOC reductions are obtainable if refiners are allowed to meet the RVP and oxygen standards through averaging. If refiners wish to take advantage of averaging, EPA thus will require their average RVP for both VOC control regions 1 and 2 to be reduced by 0.1 psi to 7.1 and 8.0 psi, respectively, and the average oxygen concentration to be increased to 2.1 weight percent oxygen. For additional discussion of the rationale for the more stringent standard in VOC control region 1 and the increase in stringency of the averaging standards, the reader is referred to the April 16, 1992 SNPRM. B. Simple NOx Emissions Model The Clean Air Act requires that there be no NOX emissions increase from reformulated fuels. Based on data available during the regulatory negotiations and at the time of the April 16, 1992 proposal, it appeared that fuel oxygen content and the type of oxygenate used may have an impact on NOX emissions while no other simple model parameter appeared to have such an impact. Due to the statutory requirement for oxygenate use, and the lack of any other parameters in the simple model by which refiners could offset any NOX increase, EPA needed to place restrictions on the amount of oxygen that could be added to the fuel in order to prevent NOX emission increases. EPA proposed on the basis of the data then available that MTBE blends containing up to 2.7 weight percent (wt%) oxygen and other blends containing up to 2.1 wt% oxygen would be presumed to result in no NOX increase. Greater oxygenate concentrations could not be permitted due to the risk of NOX emission increases. When additional data became available, however, there did not appear to be any significant difference between the NOX emission effects of oxygen from different oxygenates. Furthermore, it appeared that reducing the concentration of a number of additional fuel parameters (aromatics, olefins, sulfur, etc) could reduce NOX emissions. Since these fuel parameters all tend to be reduced to varying degrees when oxygenates are added to gasoline, EPA proposed in its February 26, 1993 proposal that all oxygenates be assumed to result in no NOX emission increase under the simple model up to 2.7 wt% oxygen. Under the final Complex Model discussed in Section IV, oxygen has been found to result in no NOX increase, in fact, it results in a very slight decrease. However, the other changes that occur to the fuel when oxygenates are added both increase and decrease NOX emissions (increases in E200 increase NOX emissions while reductions in sulfur, olefins, aromatics, and increases in E300 reduce NOX emissions). Typically the effect of these other fuel changes will be to further reduce NOX emissions. However, there is no control placed on E200 levels under the simple model, and the levels of sulfur, olefins, an E300 are only constrained to the refiner's 1990 baseline levels (aromatics is controlled indirectly to some degree by the toxics requirement). As a result, there is no assurance under the simple model that oxygenate addition will not increase NOX emissions. The more oxygenate added, the greater the increase in E200, and the greater the possibility for a NOX increase. For this reason EPA believes it is still appropriate to cap the maximum oxygen content under the Simple Model at 2.7 wt%. Any higher oxygen concentrations will require use of the complex model. However, for a number of reasons, EPA believes it is appropriate for any oxygenate up to 3.5 weight percent oxygen to be presumed to result in no NOX emission increase under the simple model during those months without ozone violations (e.g., winter months) unless a state requests that oxygenate levels be limited to the 2.7 wt% oxygen level applicable during those months with ozone violations. First, although there are a number of concerns associated with NOX emissions, the main concern of focus in this rulemaking is ozone which is for the most part a summertime problem. Second, while there is no assurance that individual batches of gasoline containing more than 2.7 wt% oxygen will not increase NOX emissions, the increase, if any, would be small (i.e., likely less than 1 percent). Third, on average across all fuel produced by all refiners in an area, a NOX reduction may still occur. Fourth, there are benefits to the use of oxygenates during the winter months (lower CO and air toxics emissions) that may be more important to individual states than the certainty that no one batch of fuel increases NOX emissions relative to the 1990 baseline. A state may make a request for the 2.7 wt% oxygen limit to apply during the non-ozone season when it believes that the use of higher oxygenate levels would interfere with attainment or maintenance of another ambient air quality standard (other than ozone) or another air quality problem. This proposal parallels the Regulatory Negotiation Agreement of August 16, 1991 and EPA's letter to the Renewable Fuels Association dated August 14, 1991. C. Simple Toxics Emissions Model Under section 211(k)(3), EPA must at a minimum require the more stringent of either a specified formula fuel or a 15 percent reduction in toxics emissions from that of baseline gasoline. All five of the toxic air pollutants that section 211(k)(10) of the Act specifies for control through reformulated gasoline (benzene, 1,3-butadiene, polycyclic organic matter (POM), formaldehyde, and acetaldehyde) also fall under the category of VOCs. Exhaust emissions include unburned benzene and benzene formed from other aromatics during the combustion process. Benzene, an aromatic compound, is a natural component of gasoline and, as such, is present in evaporative, running loss and refueling emissions (nonexhaust emissions). However, nonexhaust VOC and benzene emissions data are only available in sufficient quantities under high ozone test conditions. Therefore, nonexhaust benzene emissions are not considered outside of the high ozone season. The four other toxic air pollutants subject to control by reformulated gasoline are not present in gasoline and hence are solely products of combustion. The equations that represent the simple model for air toxics emissions are shown in section 80.42 of the regulations. The derivation and referenced work is given in the regulatory impact analysis. Only minor changes were made to the proposed simple toxics model. One change excluded ethane from the exhaust VOC baseline emissions as discussed below in Section III.D.3. The weight fractions of the various toxics as a function of VOC have also been adjusted accordingly, resulting in no net change in predicted toxics performance for a particular fuel. At the request of commenters, EPA has also included the oxygenates tertiary amyl methal ether (TAME) and ethyl tertiary amyl ether (ETAE) as well as provisions for other oxygenates and mixed oxygenates. Due to their similar chemical makeup, methyl ethers (such as TAME) and ethyl ethers (such as ETAE) are to be modeled using the same equations as for MTBE and as for ETBE, respectively. Higher alcohols will be modeled using the same equations as for ethanol. Higher ethers will be modeled as ETBE for all air toxics, since ETBE was the highest ether for which toxics data were available. D. Baseline Determination Where the performance standard is more stringent than the formula, the Act requires EPA to promulgate standards for the performance of reformulated gasoline that are relative to emission levels from baseline vehicles using baseline fuel. In order to determine whether fuels meet the performance requirements of reformulated gasoline under the simple model, EPA must therefore establish the baseline to which the emission performance of reformulated fuels are to be compared. The following discussion describes how EPA derived the emission baselines. 1. Control Periods Before the emission baselines can be determined, the time frame over which fuel performance will be evaluated must be identified. Section 211(k) of the Act requires control of VOC emissions during the ``high ozone season.'' For the purposes of this rulemaking, the high ozone season is defined to be June 1 through September 15. This period covers the vast majority of days during which the national ambient air quality standard for ozone is exceeded nationwide and is consistent with the period covered by EPA's gasoline volatility control requirements. All gasoline at service stations must thus comply with the reformulated gasoline requirements during this period. Also in keeping with the gasoline volatility control rulemaking the ``VOC control Period'' for compliance with the reformulated gasoline provisions upstream from the service station (necessary to ensure complying fuel is available at the service stations during the high ozone season) is May 1 through September 15. 2. Baseline Gasoline The fuels to be used in determining baseline emissions are unchanged from the February 26, 1993 proposal and are shown below. Table III-1.--Baseline Fuel Compositions ------------------------------------------------------------------------ Summer Winter ------------------------------------------------------------------------ Sulfur, ppm....................................... 339 338 Benzene, volume percent........................... 1.53 1.64 RVP, psi.......................................... 8.7 11.5 Octane, R+M/2..................................... 87.3 88.2 T10, degrees F.................................... 128 112 T50, degrees F.................................... 218 200 T90, degrees F.................................... 330 333 Aromatics, volume percent......................... 32.0 26.4 Olefins, volume percent........................... 9.2 11.9 Saturates, volume percent......................... 58.8 61.7 ------------------------------------------------------------------------ 3. Definition of Ozone-Forming VOC The Act requires reductions in emissions of ozone-forming VOCs. This interpretation is consistent with the focus of Section 211(k) on the areas with the most extreme ozone pollution problem. EPA proposed in April 16, 1992 that methane would be excluded from the definition of VOC on the basis of its low reactivity in keeping with past EPA actions, but included all other VOCs including ethane. EPA further proposed, however, that should the Agency modify the definition of VOC, we might do so for the reformulated gasoline rulemaking as well. As discussed in the February 26, 1993 proposal, EPA has also modified the definition of VOC to exclude ethane in a separate Agency rulemaking (57 FR 3941). As a result, the performance of fuels meeting the VOC emission requirements under the simple model are expressed on a non- methane, non-ethane basis. This change resulted in slight changes to the simple model equations previously proposed, but the overall results of the simple model are essentially unaffected. 4. Simple Model Baseline The following table shows the baseline emissions under the simple model which result from the assumptions discussed above. Since the MOBILE model does not estimate toxics emissions, however, separate data and information was necessary to determine their baseline emissions. The toxics baseline was developed in essentially the same manner as that proposed in the April 16, 1992 proposal. An explanation of this derivation can be found in Section II of the RIA. Table III-2.--Simple Model Baseline Emissions ------------------------------------------------------------------------ Summer -------------------------- Winter Region 1 Region 2 ------------------------------------------------------------------------ Exhaust VOCs (g/mi).............. 0.444 0.444 0.656 Non-Exhaust VOC (g/mi)........... .856 .766 0 Total VOCs (g/mi)................ 1.30 1.21 0.656 Exhaust Benzene (mg/mi).......... 30.1 30.1 40.9 Evaporative Benzene.............. 4.3 3.8 0.0 Running Loss Benzene............. 4.9 4.5 0.0 Refueling Benzene................ 0.4 0.4 0.0 1,3-Butadiene.................... 2.5 2.5 3.6 Formaldehyde..................... 5.6 5.6 5.6 Acetaldehyde..................... 4.0 4.0 4.0 POMs............................. 1.4 1.4 1.4 -------------------------------------- Total TAPs (mg/mi)........... 53.2 52.1 55.5 ------------------------------------------------------------------------ E. Phase I Performance Standards Under the Simple Model Section 211(k)(3) directs EPA to require, at minimum, that Phase I reformulated gasoline comply with the more stringent of two alternative VOC and toxics emission requirements--either a performance standard of a 15 percent reduction from baseline levels on a mass basis, or compositional requirements specified as a formula in Section 211(k)(3)(A). The formula effectively defines a set of maximum or minimum fuel parameter specifications. In evaluating which requirement is more stringent, EPA is to consider VOC and toxics separately. The stringency of the formula is best evaluated by determining the emissions performance of the fuels that would be certifiable if EPA were to impose the requirements of Section 211(k)(3)(A). A gasoline would meet these requirements if it (1) had no more than 1.0 volume percent benzene, (2) had no more than 25 volume percent aromatics, (3) had no less than 2.0 weight percent oxygen, and (4) met the requirements for detergent additives and lead content. The formula does not specify or limit any additional gasoline properties, and therefore a wide variety of fuels with very different properties would qualify as complying with the formula. For example, the formula specifies the weight percent oxygen but does not specify the type of oxygenate. If EPA were to impose the requirements of Section 211(k)(3)(A), then any approved oxygenate could be used to meet the formula's oxygen requirement, as long as it was blended to achieve the required weight percent oxygen. The same would be true of sulfur levels, distillation characteristics, olefin levels, RVP levels, and so on. As long as the formula's requirements were met, the fuel would be certifiable if EPA were to base its certification requirements on Section 211(k)(3)(A). To evaluate the emissions performance of the various fuels that would comply with the formula requirements, EPA used the Phase I complex model. Given the Phase I baseline emission levels, EPA considers the complex model to be the most appropriate means of evaluating emissions performance since it incorporates the Agency's most recent, complete, and accurate knowledge of the effects of fuel properties on VOC and toxics emissions. Since many of the fuel parameters that are not specified for the formula affect VOC and toxics emissions, the various possible formula fuels exhibit a wide variety of emission performance levels as these unspecified parameters vary. According to the Complex Model, requirements based on many possible formula fuels would be less stringent than requirements based on the 15 percent minimum reduction requirements of Section (211)(k)(3)(B). In addition, the lack of specificity of the formula fuel would make establishment of an equivalent emissions performance standard impossible, since one or more possible formula fuels would fail to meet any specific standard. In past proposals, EPA has evaluated the formula fuel by assigning levels for unspecified parameters at their level in baseline gasoline, as defined in section 211(k)(9)(B) of the Act. However, such an interpretation would not eliminate the problems described above, since the oxygenate type would remain unspecified. Hence the requirements of a formula could be met by a range of fuels, each based on different oxygenates, even if unspecified parameters were to be set to baseline levels, and this range of fuels would exhibit a range of emission performance levels. While the Complex Model attributes identical effects to oxygen in different chemical forms for most pollutants, it incorporates emission effects that depend on the type of oxygenate used for nonexhaust benzene, acetaldehyde, and formaldehyde emissions. EPA therefore ran the complex model for several fuels, varying the type of oxygenate and holding other parameters not specified by the formula at statutory baseline levels. The VOC emission reductions from baseline levels for all such formula fuels were less than 15 percent. EPA therefore based the VOC emission requirements for Phase I reformulated gasoline on the 15 percent reduction minimum performance standard, since this standard is more stringent than the requirements of the formula. For toxics performance, EPA separately evaluated the emissions performance of fuels that met the formula requirements and contained statutory baseline levels of unspecified fuel properties for VOC control regions 1 and 2, since nonexhaust benzene emissions would differ in these two regions. EPA also evaluated such fuels with different oxygenate types. The results are shown in Table II-3. These results include both summer and winter effects, weighted based on the share of vehicle miles traveled in each season. Table II-3.--Phase I Toxics Emissions Performance of Formula Fuels ------------------------------------------------------------------------ Percent reduction from CAAB levels Oxygenate type ------------------------- VOC control VOC control region 1 region 2 ------------------------------------------------------------------------ ETBE.......................................... 11.82 11.65 Ethanol....................................... 13.16 13.01 MTBE.......................................... 16.33 16.15 TAME.......................................... 16.81 16.67 ------------------------------------------------------------------------ The results indicate that whether a formula fuel (with unspecified fuel parameters at statutory baseline levels) meets the 15% minimum performance requirement of section 211(k)(3)(B) depends on the type of oxygenate used. If EPA were to impose the formula requirements of section 211(k)(3)(A), the results presented in Table II-3 indicate that not all gasolines which could be certified as reformulated would achieve at least a 15 percent reduction in toxics mass emissions, even if unspecified fuel properties were set at statutory baseline levels. If EPA were to require a 15 percent emissions reduction in accordance with section 211(k)(3)(B), however, all fuels would achieve this minimum level of reductions. EPA therefore believes that the formula requirements of section 211(k)(3)(A) are not as stringent as the performance standard set forth in Section 211(k)(3)(B). The minimum performance standard for Phase II is even more stringent than the Phase I standards. EPA has therefore determined that the performance standard is more stringent than the formula for both VOCs and toxics, for both Phase I and Phase II. EPA must therefore set its Phase I requirements for both VOCs and toxics to be no less stringent than the 15 percent emission reduction performance standard required by section 211(k)(3)(B). EPA has considered whether it should require greater reductions in toxics mass emissions than that required by the 15 percent minimum performance standard. However, the Agency has concluded that more stringent toxics requirements are not cost- effective, as is discussed more fully in Section VI. Hence EPA has set the Phase I toxic emission performance standard at the minimum 15 percent reduction from baseline levels required by the Act. Compliance with this standard must be demonstrated using the appropriate emission models throughout Phase I. Under the authority of section 211(k)(1), EPA believes that the greater flexibility and reduced cost afforded to gasoline refiners and importers by an averaging program allow EPA to require a greater reduction in toxics emissions than is required under section 211(k)(3). As discussed in Section VII, the Agency believes it appropriate, when the air toxics standard is met on average, that it be 1.5 percentage points more stringent than standards met on a per-gallon basis. EPA estimates that the approximate 1.5 percentage point margin will be sufficient to recoup any compliance margin refiners would have otherwise had to maintain to ensure achievement of the toxics requirements in the absence of an averaging program. In sum, the tighter averaged standard should have the potential to increase the environmental benefits of the reformulated gasoline program while not increasing the cost of obtaining those benefits. As a result, the air toxics performance standard when met on an annual average basis is set at a 16.5% reduction from baseline levels. F. Applicability (1995-7) The Simple Model described in this section is effective beginning January 1, 1995 with the beginning of the reformulated gasoline program as a means by which fuel producers can certify that their fuel meets the requirements for reformulated gasoline. The Complex Model described in Section IV will not be required to be used for fuel certification until January 1, 1998. Until January 1, 1998, refiners who produce reformulated gasoline will have a choice of certifying their gasoline by using either the Simple Model or the Complex Model. EPA proposed three options for establishing the performance standards under early, optional use of the Complex Model. Under one option, if a refiner opts to utilize the Complex Model before January 1, 1998 the reformulated gasoline can have no worse VOC, NOX, or toxic emissions performance than would be predicted by the Complex Model for a Simple-Model fuel (minimum 2.0 percent oxygen, maximum 1.0 percent benzene, and maximum RVP of 8.1 psi in Class C areas and 7.2 psi in Class B areas) having that refiner's average 1990 levels of sulfur, olefins, and T90 (E300). The second option was a variation of the first, in that refiners producing gasoline for use in only the southern reformulated gasoline areas (VOC control region 1) could measure their fuel performance against the CAA baseline gasoline as an alternative to their own 1990 refinery baseline. The third option, proposed by EPA in February 1993, would extend the second option to all reformulated gasoline areas. The rationales for these options are discussed in detail in EPA's proposals. Many of the comments were also received prior to the proposals, and as such were addressed there. As a result, the reader is referred back to the proposals for additional discussion. After considering the comments, EPA has decided to promulgate the first option. First, under this option each refiner will have to achieve the same reductions, whether they use the simple model or the complex model. The option to use either model increases refiner flexibility, but will not change the emissions reductions required for a refiner prior to mandatory use of the complex model in 1998. EPA believes that the reductions required under the simple model are achievable considering all relevant factors and will continue to be so under the optional use of the complex model. In fact, the additional flexibility of using the complex model would in some cases make them even more reasonable. Second, the other two options create an incentive for early use of the complex model by those refiners who would then have a less stringent performance standard than under the simple model. This would produce on average an increase in overall emissions for reformulated gasoline compared to average emissions if only the simple model was allowed. Refiners with individual baselines for sulfur, T90 and olefins that are lower than the CAA baseline would, under the second and third options, get credit for emission benefits for these parameters, and could use this to justify a less stringent RVP control than required under the simple model. There would be no parallel disincentive to early use of the complex model for refiners with higher baselines which would result in an increase in their required reductions. This imbalance in the expected early use of the complex model could easily lead to an average 1-2 percentage point reduction in the average emission performance of reformulated gasoline from 1995-7 as discussed in section I of the RIA. Based on this negative environmental impact, and the reasonableness of the complex model performance standard under the first option, EPA has decided to promulgate the first option described above for early use of the complex model. G. Enforcement of the Early Use Option Additional controls over reformulated gasoline certified using the ``early-use'' complex model are necessary for the operation of the downstream enforcement mechanisms of VOC and NOX emissions performance minimums, and covered area gasoline quality surveys. These restrictions are necessary because under the restricted early-use approach being promulgated, VOC, toxics, and NOX percentage reductions are calculated from a baseline fuel using the refiner's 1990 baseline levels of sulfur, T-90, and olefins. As a result, the reformulated gasolines produced by different refiners (or in some cases, at different refineries) under this option will likely each meet different percentage reduction standards for VOC, toxics, and NOX. Therefore, the performance of a fungible mixture of complex model gasolines produced by different refiners at different refineries could not be predicted, nor could be evaluated.\2\ --------------------------------------------------------------------------- \2\Beginning in 1998, certification of reformulated gasoline using the simple model will no longer be an option, and all reformulated gasoline will be certified using the complex model. Also beginning in 1998, all refiners and importers will calculate emissions performance reductions from Clean Air Act average gasoline; individual refiner baselines will not be relevant to reformulated gasoline. As a result, the difficulties with downstream enforcement and surveys will be resolved. --------------------------------------------------------------------------- In order for the per-gallon minimums for VOC and NOX emissions performance to be monitored by downstream regulated parties and enforced by EPA, the baseline for a given gasoline sample must be known. Without knowledge of the baseline, it is not possible to determine whether the fuel complies with the per-gallon minimums, since it will be different for each refinery. Similarly, in order for the gasoline quality surveys to function under early use of the complex model, the baseline from which to determine the emission performance for VOC, toxics, and NOX must be known. Without knowledge of the baseline, it is not possible to determine whether the complex model fuels in an area on average meet the per-gallon standards. EPA received comments from two industry groups representing the refining industry on this issue. Both commenters stated that EPA should require that ``early-use'' complex model gasolines subject to different baselines be segregated through the gasoline distribution system. EPA is adopting this suggested approach as the best (and perhaps only) means of accommodating both the restricted early-use option and downstream enforcement of per-gallon minimums and gasoline quality surveys. Under this approach, gasoline sampled at any point in the distribution system would have known values for VOC, toxics, and NOX emissions performance that meet the per-gallon and minimum standards. Today's rule requires that these values must be included in the product transfer documents for ``early-use'' complex model gasoline, to inform downstream parties and EPA of the relevant per- gallon and minimum values. Today's rule prohibits the commingling throughout the distribution system, including at retail outlets, of ``early-use'' complex model gasoline that is subject to different baselines. One commenter stated that the segregation of this gasoline should be through the terminal level only. EPA disagrees with this comment because segregation through the retail level also is necessary in order for gasoline quality surveys to function. Survey samples are taken at retail outlets, and the survey requires that the relevant per-gallon values for VOC, toxics, and NOX emissions performance must be known for each sample. EPA realizes that restrictions on commingling of ``early-use'' complex model gasolines constitutes a significant constraint on the use of this option, because most gasoline used in the United States is transported as a fungible commodity. As a result, EPA anticipates that before 1998 the complex model will be used only in limited situations. This might occur where a refiner has a gasoline transportation system that is dedicated from the refinery through the retail level, or where the cost advantages of using the complex model are sufficiently large to offset the difficulties of segregation. In spite of these constraints, EPA sees no alternative to requiring segregation controls over ``early-use'' complex model gasoline. IV. Complex Model The complex model described in this section has undergone significant changes since it was first proposed in the February 1993 NPRM. These changes have been made in response to three key factors: EPA's improved understanding of the relationship between fuel characteristics and emissions, EPA's use of more appropriate data analysis methods, and comments received in response to the February NPRM, a public workshop held on May 25, 1993, and EPA's July 14, 1993 docket submission that described a number of alternative complex models. The key elements in the complex model being promulgated today are discussed in this section. This discussion also addresses the major substantive comments received by EPA regarding the complex model. A more detailed description of the model and its derivation, including a detailed summary and analysis of comments, can be found in Section IV of the RIA. Baseline Emissions As discussed in Section III, EPA is using a July 11, 1991 version of MOBILE4.1 to estimate baseline emissions from light-duty vehicles for the simple model, assuming a basic inspection and maintenance program. This baseline was developed in the regulatory negotiation and was at the time the best estimate of the in-use emission performance of 1990 vehicles from which to ensure that the minimum performance standards required by section 211(k) of the Clean Air Act would be achieved. Since that time the Agency has developed a new version of the MOBILE model, MOBILE5a, for use by the states in demonstrating compliance with the national ambient air quality standard for ozone. As proposed in the February 26, 1993 proposal, EPA will use MOBILE5a in conjunction with an enhanced I/M program to establish the emission baseline for Phase II of the reformulated gasoline program beginning in the year 2000. EPA, however, has decided to retain the MOBILE4.1 and basic I/M baseline assumption for the simple model during Phase I of the RFG program. Switching to a MOBILE5a baseline for Phase I would have required reformulated fuels to meet a slightly more stringent RVP standard to maintain the minimum VOC emissions performance required by the Act. The majority of the VOC emission reductions achieved by RFG are from nonexhaust emissions; under MOBILE5a, nonexhaust VOC emission reductions are less effective in reducing overall VOC emissions than are exhaust VOC reductions, while the opposite is true under MOBILE4.1. Thus, in order to provide refiners with sufficient leadtime to complete the investments needed to meet the requirements of the program, the baseline for the Simple Model is determined using MOBILE4.1. When replacement of the Simple Model with the Complex Model is required in 1998, the issue again arises as to whether a more stringent standard should be required by shifting to use of MOBILE5a in determining the baseline. MOBILE5a clearly provides a more recent estimate of the mobile source VOC inventory than does MOBILE4.1. However, many of the changes made in MOBILE5a were intended to significantly increase the accuracy of the exhaust emission estimates while similar changes which would have increased the accuracy of the nonexhaust VOC emission estimate were not incorporated for various reasons, including the limited time available to revise the MOBILE model. As a result, the proportional contribution of exhaust and nonexhaust VOC emissions to the in-use VOC inventory may not be any more accurate in MOBILE5a than in MOBILE4.1 even though MOBILE5a provides a more accurate assessment of the total contribution of mobile sources to the entire VOC inventory by virtue of its greater accuracy in estimating exhaust VOC emissions. Since it is the relative proportions of exhaust and nonexhaust VOC emissions and not the overall magnitude of the mobile source VOC inventory which determines how difficult it will be for refiners to meet the overall VOC standard in 1998, it is unclear whether MOBILE5a would be more appropriate to use in 1998 than MOBILE4.1. A simple model fuel evaluated using the complex model achieves more than the minimum 15% requirement of the Act using the MOBILE4.1 baseline exhaust/nonexhaust ratio but less than the 15% requirement using the MOBILE5a baseline exhaust/nonexhaust ratio. Given the uncertainty in the actual in-use exhaust/nonexhaust ratio during this interim period, it is difficult to know whether or not the 15% actually would be achieved in-use by a fuel meeting the requirements of the Simple Model. Using MOBILE4.1 to determine the baseline in 1998 would introduce some risk that the 15% minimum performance requirement of the Act would not be met in-use by a fuel meeting the requirements of the Simple Model. However, this risk is relatively small in magnitude (less than three percentage points of emission reduction are at stake) and duration (the risk exists for only two years). On the other hand, using MOBILE5a to determine the 1998 baseline would result in some risk that refiners would be required to incur greater costs to achieve a more stringent standard than the minimum required by the Act. This greater stringency would have the effect of creating a third interim phase to the RFG program. Given the uncertainty in determining whether a MOBILE4.1-based performance standard or a MOBILE5a-based standard more accurately reflects the in-use conditions in 1998, the potential disruption to refinery operations (even if only for a small increase in the stringency of the fuel reformulation requirements), the fact that a more stringent standard in 1998 was not discussed or envisioned as part of the regulatory negotiation process, and the fact that any risk to the environment is small and of short duration, EPA does not believe it to be appropriate to base the Phase I complex model standards on MOBILE5a and require refiners to meet a more stringent performance standard in 1998. As a result, EPA will retain MOBILE4.1 with basic I/M as the basis for the Phase I performance standards under the Complex Model in 1998. In summary, EPA has retained the VOC and NOX baselines proposed in the SNPRM, including the relevant I/M assumptions, for use with the complex model prior to 2000. The onset of the Phase II performance standards in 2000 will increase the overall stringency of the standards, and a new baseline based on MOBILE5A will not, by itself, be the cause of new investment by refiners. By this time, enhanced I/M programs should be fully operational in nearly all reformulated gasoline areas. Therefore, baseline VOC and NOX emission levels to be used with the complex model in Phase II are based on MOBILE5A's estimate of emissions from light-duty vehicles and trucks with enhanced I/M. Baseline estimates of toxics emissions are not available directly from the MOBILE models. The nonexhaust toxics model bases its estimates of nonexhaust toxics on the RVP and benzene levels of the fuel. Since both of these levels are specified for Clean Air Act baseline (CAAB) gasoline, EPA has used the nonexhaust toxics model to determine the baseline nonexhaust toxics emission level. The exhaust toxics baseline has been estimated by multiplying the exhaust toxics emission level predicted by the complex model for CAAB gasoline by the ratio of baseline exhaust VOC emissions to the average exhaust VOC emission measurement in the complex model database. Since the five regulated exhaust toxic pollutants are all classified as VOCs, this adjustment sets the baseline exhaust toxics level equal to the exhaust toxics levels that would have been observed if the vehicles represented by the complex model database had VOC emission levels representative of in-use vehicles when tested on CAAB gasoline. No comments were received opposing this approach, which is discussed in more detail in Section III of the RIA. In evaluating the performance of simple model fuels, EPA has focused its attention on the average refiner. The need to compensate for differences between individual refinery baselines and the Clean Air Act baseline when the use of the complex model becomes mandatory has been communicated in past proposals, workshops, and the discussions associated with the Agreement in Principle. Hence refiners have been given adequate notice that if their baseline fuel produces higher emissions than CAAB fuel, then they must offset such emissions when the use of the complex model becomes mandatory in 1998. The four years before use of the complex model becomes mandatory is adequate leadtime for refiners. Refiners undertaking investments to comply with the simple model requirements have been made aware of these requirements, and this transition process was inherent in the regulatory negotiation agreement and in prior proposals. EPA recognizes that the precise emissions impact of individual refiner baselines could not be determined with confidence until the Complex Model was promulgated. However, refiners were aware of at least one course of action that would satisfy the requirements of the program under the complex model, namely to alter their baseline fuel to match the Clean Air Act baseline prior to meeting the simple model requirements. Baseline emissions of VOC, NOx, and toxics are given in Table IV-1 for Phase I and in Table IV-2 for Phase II. Summer and winter baselines are shown for both phases, with summer baseline emissions for VOC Control Regions 1 and 2 shown separately. The toxics emission baseline shown in Table IV-1 is applicable only during 1998 and 1999 and for those refiners choosing to use the complex model prior to 1998; the baselines shown in Table IV-2 are applicable in 2000 and beyond. Table IV-1.--Phase I Baseline Emissions, Milligrams/Mile ------------------------------------------------------------------------ Summer Pollutant -------------------------------------- Region 1 Region 2 Winter ------------------------------------------------------------------------ Running loss VOC................. 430.77 390.42 0.00 Hot soak VOC..................... 264.61 229.96 0.00 Diurnal VOC...................... 125.09 108.71 0.00 Refueling VOC.................... 40.01 40.01 0.00 ------------------------------------------------------------------------ Nonexhaust VOC................... 860.48 769.10 0.00 Exhaust VOC...................... 446.00 446.00 660.00 Total VOC........................ 1306.48 1215.10 660.00 NOx.............................. 660.00 660.00 750.00 Running loss benzene............. 4.92 4.46 0.00 Hot soak benzene................. 3.02 2.63 0.00 Diurnal benzene.................. 1.30 1.13 0.00 Refueling benzene................ 0.42 0.42 0.00 ------------------------------------------------------------------------ Nonexhaust toxics................ 9.66 8.63 0.00 Exhaust benzene.................. 26.10 26.10 37.57 Acetaldehyde..................... 2.19 2.19 3.57 Formaldehyde..................... 4.85 4.85 7.73 1,3-butadiene.................... 4.31 4.31 7.27 POM.............................. 1.50 1.50 2.21 ------------------------------------------------------------------------ Exhaust toxics................... 38.95 38.95 58.36 Total toxics................. 48.61 47.58 58.36 ------------------------------------------------------------------------ Table IV-1.--Phase II Baseline Emissions, Milligrams/Mile ------------------------------------------------------------------------ Summer Pollutant -------------------------------------- Region 1 Region 2 Winter ------------------------------------------------------------------------ Running loss VOC................. 328.53 294.15 0.00 Hot soak VOC..................... 84.11 80.97 0.00 Diurnal VOC...................... 93.34 63.62 0.00 Refueling VOC.................... 53.33 53.33 0.00 ------------------------------------------------------------------------ Nonexhaust VOC................... 559.31 492.07 0.00 Exhaust VOC...................... 907.00 907.00 1341.00 Total VOC.................... 1306.48 1215.10 1341.00 NOX.............................. 1340.00 1340.00 1540.00 Running loss benzene............. 3.75 3.36 0.00 Hot soak benzene................. 0.96 0.93 0.00 Diurnal benzene.................. 0.97 0.66 0.00 Refueling benzene................ 0.56 0.56 0.00 ------------------------------------------------------------------------ Nonexhaust toxics................ 6.24 5.51 0.00 Exhaust benzene.................. 53.54 53.54 77.62 Acetaldehyde..................... 4.44 4.44 7.25 Formaldehyde..................... 9.70 9.70 15.34 1,3-butadiene.................... 9.38 9.38 15.84 POM.............................. 3.04 3.04 4.50 ------------------------------------------------------------------------ Exhaust toxics................... 80.10 80.10 120.55 Total toxics................. 86.34 85.61 120.55 ------------------------------------------------------------------------ Exhaust Emissions Model 1. Data Sources The relationship between fuel properties and exhaust emissions is complex and the theory behind such relationships continues to be developed. As a result, EPA has asked industry, state regulatory agencies, and other organizations with relevant test data to make their data available to the Agency to ensure that this rule is based on as much relevant information as possible. The complex model described in the following section is based on data generated from a number of exhaust emissions testing programs. These programs, their design intent, and their limitations are discussed in Section IV.A of the RIA. Data from these programs were excluded from EPA's analysis if the data were not based on a valid FTP measurement cycle, if the vehicle in question did not employ 1990-equivalent emission control technology, if the vehicles did not exhibit stable, repeatable emissions performance, or if the data were clearly inconsistent with the bulk of the data available to EPA (based on statistical considerations). In addition, data from programs that did not measure nonmethane hydrocarbon emissions were not used to develop EPA's exhaust VOC complex model. The Agency believes its analysis considered all valid, and relevant data on the exhaust emissions effect of fuel modifications when used in 1990 model year and equivalent vehicles that was available at the time the model was developed. 2. Analysis Method Exhaust emissions are affected by both vehicle and fuel characteristics. Since the test programs described above generally involved different vehicles, different fuels, and in some cases different test procedures, the analysis required to determine the relationship between fuel properties and emissions is complex. However, EPA believes that the methods used to develop the complex model considers and addresses these complexities appropriately. EPA utilized statistical analysis techniques to isolate the effects of fuel modifications on exhaust emissions of VOC, NOX, and toxics from other factors affecting exhaust emissions. At a series of six public workshops held over the past two years, the Agency presented its views on data sources, analysis methods, and preliminary emissions models for public review and comment. The Agency also requested other organizations to share their data, analysis expertise, and emissions models at these workshops. The methods used to develop the model promulgated today appropriately incorporate the comments and suggestions regarding the analysis process received at the workshops, as well as other comments and suggestions received from industry, state and federal government authorities, and other interested parties during the course of this rulemaking. Information regarding the workshops, public comments and suggestions, and EPA's analysis methods can be found in Docket A-92-12. The approach chosen by EPA to analyze the available data is summarized below and is discussed more fully in Section IV.A of the RIA. Since the vehicle and the fuel both affect exhaust emissions, EPA's analysis separated exhaust emissions into fuel components and vehicle components. In all test programs analyzed by EPA, the single most significant determinant of the level of emissions from a given vehicle on a given fuel was the vehicle itself. Fuel properties exert a much smaller influence on exhaust emissions than do vehicle characteristics such as emission control system technology, vehicle mileage, catalyst efficiency, oxygen sensor efficiency, engine size, engine design, vehicle size, fuel efficiency, vehicle maintenance, etc. To identify the effects of fuel property modifications on emissions, EPA found it necessary to identify the effect of each vehicle on emissions and separate this effect from the fuel effects. For vehicles used in more than one test program, EPA found it necessary to determine the vehicle effect separately for each test program since vehicle effects were observed to change between studies. The fuel components of exhaust emissions were separated into two main categories. The first category consisted of the effects of individual fuel parameters. For example, the effect of sulfur on NOX emissions was best modeled by a relationship containing a linear sulfur term (of the form c1S, where c1 is a constant and S is the sulfur level) and a second-order sulfur term (of the form c2S2, where c2 is a constant). The second category of fuel terms consisted of interactive effects between two fuel parameters. For example, EPA's analysis found that the effect of aromatics on hydrocarbon emissions is related to the E300 level of the fuel. This effect cannot be represented as an aromatics or E300 effect alone but must be represented as an interactive term of the form c3AE, where c3 is a constant, A is the aromatics level, and E is the E300 level. In the February 1993 proposal, EPA indicated that it planned to make several changes to the method used to develop the complex model. As discussed in that proposal and in the RIA, fuels can be characterized in terms of a number of different sets of fuel parameters. EPA used the results of individual fuel studies and its public workshops to select the set of fuel parameters used to model exhaust emissions in its February 1993 proposal. At that time, the Agency indicated that it might alter its choice of parameters to represent gasoline distillation characteristics from a temperature basis (using T50 and T90) to a percent evaporated basis (using E200 and E300, the percentage of the fuel's volume that evaporates when heated to 200 deg.F and 300 deg.F, respectively). For reasons outlined in the February 1993 NPRM and section IV.A of the RIA, EPA has chosen to make this change and has converted its exhaust emission models to a percent evaporated basis since the NPRM was issued, removing the T50 and T90 terms from its models in the process. The Auto/Oil Heavy Hydrocarbon and EPA Phase II Reformulated Gasoline Test Program studies have been added to the complex model database. Finally, EPA has changed the confidence level required to permit terms to remain in the model to 90 percent, in keeping with the approach used in developing the simple model. The Agency was not able to determine the influence of the type of aromatic compounds in fuels, specifically heavy aromatics, on exhaust emissions, and hence such terms have not been included in the complex model at this time. Because vehicles can have different emission control systems, the Agency anticipated that fuel modifications would have different emission effects on different types of cars. To account for these differences, EPA's February 1993 proposal divided vehicles into two ``emitter classes'' (normal and higher emitters) based on their exhaust emission levels. EPA then subdivided vehicles in each emitter class into ``technology groups'' based on the emission control technology with which each vehicle was equipped. However, as discussed in the NPRM, EPA was concerned that technology group distinctions among higher emitters might not be appropriate, since such vehicles' high level of emissions indicated that their emission control systems were not functioning properly. In addition, the limited quantity of data for higher emitters made it difficult to identify genuine differences in emissions response between higher emitters of different technology groups. Many commenters expressed similar concerns. Hence the model promulgated today does not divide higher emitters into technology group categories but retains such distinctions when analyzing normal emitters. In response to numerous comments, EPA attempted to reduce the number of normal emitter technology groups. However, as discussed in section IV.A of the RIA, EPA was unable to identify an appropriate basis for consolidation. EPA considers its retention of emitter class and technology group distinctions to be justified by the presence of statistically significant fuel effects specific to individual emitter classes and technology groups in today's complex model. At the same time, EPA recognized the validity of comments received from a number of sources that (1) many emission effects were likely to be consistent across multiple technology groups or across emitter classes, and (2) insufficient data were available to model many potential terms, particularly interactive terms. The approach used by EPA to construct the complex model proposed in February 1993 did not incorporate these legitimate concerns. To do so, EPA has utilized a modified version of the ``unified'' approach advocated by API and other commenters (as described in the RIA) to develop today's complex model. This modeling approach, the statistical criteria used by EPA in conjunction with this approach, and the techniques used to simplify the models are discussed in detail in section IV.A of the RIA and are summarized below. First, interactive terms were permitted to enter the models only when sufficient data were available. The model proposed in the February 1993 NPRM permitted all interactive terms to enter the models, regardless of whether sufficient data were available to estimate such an effect, and it did not apply statistical criteria to evaluate whether terms added to the model introduced more risk of inaccuracy in the model than they removed. Second, preliminary models for higher emitting vehicles were constructed based solely on data from such vehicles. Only those terms that satisfied EPA's statistical criteria (discussed at length in the RIA) were retained. These criteria included measures to balance overfitting (introducing too many terms to explain the observed data) and underfitting (not including terms necessary to explain the observed data). The NPRM model did not include measures to prevent overfitting. Third, the entire database was analyzed using the unified approach. The effects of each term on emissions was divided into two parts: an average effect across all vehicles, and a series of adjustment terms for each technology group and for higher emitters. Only those terms that satisfied EPA's statistical criteria were retained, with two exceptions. Higher emitter adjustment terms were retained regardless of statistical significance since they had been found to be statistically significant when examining the higher emitter data separately. EPA was concerned that failure to do so might cause genuine higher emitter effects to be ``washed out'' by the greater number of data for normal emitters. In addition, some overall terms were retained for hierarchy reasons despite low statistical significance. For example, a linear term for a given fuel parameter (e.g., E300) might not be significant while a squared term for the same parameter (e.g., E300\2\) might be significant. Since the mathematical form of the squared terms includes the corresponding linear effects, the linear term would be retained regardless of significance to preserve the model's hierarchical structure. The importance of hierarchy was emphasized by a number of workshop participants and commenters, as discussed in the RIA. The NPRM model included separate terms for each technology group and emitter class and hence did not include terms to represent the average effect of a fuel parameter across all vehicles. The NPRM model also did not incorporate hierarchy considerations. Fourth, outlying and overly influential data were dropped from the database and the model was re-estimated based on the remaining data. Outlying data consist of observations that differ from the average observed effect by so large a margin that they are more likely to represent observational error, reporting error, or other measurement artifacts than genuine phenomena. Outlying data can obscure genuine emissions effects. Influential data consist of observations that by themselves materially affect the resulting model, i.e., the model would differ materially if they were excluded. In a database the size of the Complex Model database, individual data points should not have such unusually large effects. Excluding outlying and influential observations is standard statistical practice. The NPRM model did not exclude either type of observation. Fifth, terms were deleted from the resulting model to avoid overfitting and collinearity problems. Overfitting occurs when so many terms are included in a regression model that the expected error due to the erroneous inclusion of a term exceeds the expected error due to not including the term. Collinearity problems occur when the fuel parameters included in the model are correlated with one another in the fuels tested. For example, the addition of oxygenate to gasoline causes E200 to increase. The oxygenate-containing fuels in the complex model database tend to have higher E200 values than fuels without oxygenate. In a sense, one can predict the E200 value of a fuel by knowing its oxygen content. Hence these two parameters would be considered to be highly collinear. Since regression models are developed under the assumption that terms are not collinear, the presence of strong collinearities can introduce error into the regression. Today's complex model takes both collinearity and overfitting into account by using a standard statistical criterion called Mallow's Cp criterion to remove terms which introduce large overfitting and collinearity problems. This approach resulted in a simpler, more reasonable, and statistically more sound model than had been proposed in the February 1993 NPRM. It should be noted that high emitter terms forced into the model earlier in the process could be dropped at this stage of the analysis. Measures were taken to limit collinearity problems in the NPRM model, but overfitting concerns and the Cp criterion were not addressed. Sixth, the contribution of each remaining term to the model's explanatory power was estimated, and those terms whose contribution summed to less than one percent were deleted (i.e., the retained terms accounted for 99 percent of the explanatory power of the model) to simplify the form of the model without materially reducing its ability to predict the emissions impact of fuel modifications. This step was not taken during development of the NPRM model. Finally, the resulting models for each technology group within the set of normal emitting vehicles were consolidated into a single equation using a random balance approximation. The details of that approximation are given in Section IV.A of the RIA. This step was not taken during development of the NPRM model. The results of EPA's modeling efforts confirms the importance of technology group and emitter class distinctions, as can be seen by examining the differences in the exhaust emission equations for specific normal emitter technology groups or for normal and higher emitter class categories (as discussed in greater detail in the RIA). Efforts to reduce the number of technology group categories for normal emitters were not successful. Efforts to subdivide higher emitters by their emission characteristics such as exhaust hydrocarbon to NOX ratio did not improve the quality of EPA's higher emitter model. However, as discussed above, EPA found it unnecessary to separate higher emitters by technology group. This modification reflects EPA's belief, supported by preliminary field information, that one or more emission control components on higher emitters tend to be malfunctioning, which renders a classification scheme based on vehicle equipment questionable. 3. Exhaust Model As was discussed in the April 1992 and February 1993 proposals, the weight assigned to each technology group or emitter class for modeling purposes was set equal to its contribution to in-use emissions for each pollutant. The weight assigned to each emitter class was set equal to its projected contribution to in-use emissions. The weighting factor assigned to normal emitters was then broken down further by technology group, again according to their projected contribution to in-use emissions. These estimates and projections are essentially unchanged from the February 1993 proposal, although minor changes have been made to reflect more complete information about the fraction of 1990 sales accounted for by each technology group. The rationale for, derivation of, and renormalization of the weighting factors themselves are discussed in more detail in the RIA. Various commenters indicated that they considered EPA's previously proposed models were too complex. In response, the Agency has modified its analysis method in several ways. The resulting method, described in Section IV.B.2, results in exhaust emission models containing two equations for each pollutant instead of as many as sixteen separate equations, as was the case for the model proposed in February 1993. Each equation also has far fewer terms than the February 1993 equations. However, EPA does not believe that today's less complicated complex model is less accurate than the complex models presented at public workshops or in the February proposal. This belief is based on the models' comparable explanatory power (as reflected in their similar R\2\) and the superior accuracy of today's model in accounting for the emission effects seen in the vehicle testing programs that comprise the complex model database. Today's VOC and NOX models are based on the most accurate of the three sets of models included in EPA's July 14, 1993 docket submittal, while also taking into account relevant comments regarding specific aspects of the models. Today's toxics models are a further simplification of the models included in the July 1993 docket submittal in response to comments received by EPA on its docket submittal. These points are discussed more fully in Section IV.A of the RIA. The specific equations that comprise the complex model can be found in section 80.45 of the regulations for this rule. Their derivation is discussed in detail in Section IV.A of the RIA. The range of parameter values for which these equations are valid is discussed in Section D and in Section IV.D of the RIA. As discussed in Section V, refiners are required to submit data to augment the model if they wish to certify fuels with properties that fall outside this range as reformulated gasolines. C. Nonexhaust Model Nonexhaust emissions are less strongly affected by vehicle design and are influenced by fewer fuel characteristics than are exhaust emissions. In addition, the theoretical principles involved in nonexhaust emissions (which include evaporative, running loss, and refueling emissions) are better understood, and nonexhaust emission control technologies are more consistent across vehicles, than are exhaust emissions and emission control technologies. Since the relationship between fuel properties and nonexhaust emissions is less complex and better understood than for exhaust emissions, there was much less need for EPA to generate additional data to evaluate nonexhaust emissions than was the case for exhaust emissions. EPA was able to base its nonexhaust VOC emission model on data generated from EPA's ongoing nonexhaust emissions testing program that has been used to develop EPA's MOBILE emission inventory models, specifically the MOBILE4.1 and MOBILE5.0A models. EPA believes this data to be sufficient to model the relationship between fuel properties and nonexhaust VOC emissions for the purposes of this rule. Additional information about MOBIL4.1 and MOBILE5.0A can be found in Dockets A-91- 02 and A-92-12. EPA is in the process of developing an enhanced model of nonexhaust VOC emissions, based on a more complete set of theoretical principles and additional test data, that is expected to be more accurate and more widely applicable to oxygenated fuels than the MOBILE models. A preliminary version of this model was discussed at a public workshop held on August 25, 1992, and materials related to this model have been placed in the docket for this rulemaking. At this time, however, this enhanced nonexhaust VOC emissions model is not complete and hence is not incorporated in today's complex model. The nonexhaust VOC model in today's complex model is based on correlations between RVP and nonexhaust VOC emissions derived from the July 11, 1991 version of MOBILE4.1 for Phase I of the reformulated gasoline program (1995-1999) and from MOBILE5A for Phase II (2000 and beyond). This approach is consistent with the definition of baseline emissions set forth in Section IV.A and is based on the same considerations outlined in that section. To develop the correlations shown below, the MOBILE models were used with temperatures of 69 to 94 degrees Fahrenheit for Class B areas and 72 to 92 degrees Fahrenheit for Class C areas. As discussed in Section IV.A, a basic inspection and maintenance program was assumed for Phase I while an enhanced I/M program was assumed for Phase II. In addition, the presence of Stage II evaporative emissions recovery systems with an overall vapor recovery efficiency of 86 percent was assumed (as discussed in the SNPRM and NPRM). EPA is in the process of promulgating requirements for onboard refueling emission controls which may be more effective at controlling refueling emissions than Stage II vapor recovery systems. However, these requirements did not apply to 1990 model year vehicles and hence cannot be incorporated into the model for certification purposes. In addition, EPA has chosen not to incorporate the effects of onboard refueling controls in its evaluation of the effects of reformulated fuels on emissions from the entire in- use vehicle fleet, which includes vehicles from a number of different model years. This decision was made for several reasons. First, requirements for onboard refueling controls have not yet been finalized, making evaluation of their impact on in-use emissions difficult. Second, onboard refueling controls are not expected to be required on all new vehicles until 2000 and are not expected to be present on the bulk of in-use vehicles for several years after that time. Third, while onboard controls are expected to be more efficient at controlling refueling emissions than Stage II controls, the difference is not expected to be large in areas affected by the reformulated gasoline program and will affect only a small portion of total nonexhaust VOC emissions. Since EPA's analysis of the additional benefits of onboard vapor recovery controls is not yet available, and since such benefits are expected to be small relative to overall emissions, EPA has chosen to retain its assumptions regarding Stage II vapor recovery in forecasting the effects of fuel modifications on nonexhaust VOC emissions from the in-use vehicle fleet. The only toxic air pollutant covered by the reformulated gasoline program that is found in nonexhaust emissions is benzene, which is a natural component of gasoline. The other four toxic air pollutants listed in section 211(k) are solely products of fuel combustion and hence are not found nonexhaust emissions. As discussed in the SNPRM, the Agency's correlation between fuel benzene content and summer non- exhaust benzene emissions is based on results from General Motors' proprietary model of tank vapors, as confirmed independently by EPA- generated data using a number of fuels. Both the derivation and verification of the non-exhaust benzene emissions model are discussed more fully in the RIA. The nonexhaust benzene emission model also depends on the RVP of the fuel, as is the case for the nonexhaust VOC emission model. The derivation of the nonexhaust benzene and VOC models is discussed more fully in the RIA. D. Range/Extrapolation Like all regression models, the complex model is not valid for all possible input values. The range of fuel parameter values over which the complex model accurately predicts vehicle emissions is given in Table IV-3. These ranges are based on the range of data used to develop the models and on comments received by the Agency on this issue. The limits proposed in the February 1993 were, in some cases, narrower than the range of data used to develop the complex model. In addition, the limits proposed in the NPRM would have prevented a number of very low emitting fuels from being certified using the model. Table IV-3.--Parameter Ranges for Which the Complex Model Can Be Used ------------------------------------------------------------------------ Valid range for: --------------------------- Fuel Parameter Reformulated Conventional fuel fuel ------------------------------------------------------------------------ Aromatics, vol %............................ 0-50 0-55 E200, %..................................... 30-70 30-70 E300, %..................................... 70-100 70-100 Olefins, vol %.............................. 0-25 0-30 Oxygen, vol %............................... 0-3.7 0-3.7 RVP, psi.................................... 6.4-10 6.4-11 Sulfur, ppm................................. 0-500 0-1000 Benzene, vol %.............................. 0-2.0 0-4.9 ------------------------------------------------------------------------ EPA has received a number of comments requesting alterations in the model's range. After considering these comments and re-evaluating the data on which the complex model is based, EPA has modified the range limits. In some cases, EPA has chosen to extrapolate the complex model slightly beyond the range for which data were available in order to allow additional fuels, both conventional and reformulated, to be evaluated using the model without recourse to expensive and time- consuming vehicle testing. These extrapolations are limited to those parameters whose effects appear to be well-characterized by the complex model. A detailed discussion of the limits of the available data, EPA's rationale for extending the valid range of the model for some parameters, and the extrapolation method used to extend the model can be found in Section IV.D of the RIA. E. Winter While the VOC performance standard for reformulated fuels applies only in the summer, the toxics and no-NOx-increase requirements apply year-round. EPA therefore recognized the need to model the exhaust toxics and NOx emissions performance of reformulated gasolines during the winter months as well as during the high ozone season. Modeling winter emissions performance, however, presented a number of difficulties. First, the data sources described earlier provided data on emissions performance only under summer conditions and for gasolines with RVP levels typical of summer gasolines. Second, the RVP levels of fuels included in the complex model database ranged from 7 to 10 psi, while winter fuels tend to have RVP levels in the 11.5 psi range and are not restricted by other regulations. Hence the complex model cannot be used directly for fuels with typical winter RVP levels. RVP's impact on canister loading and subsequent purging is thought to be the primary cause of its effects on exhaust emissions. Since data do not exist on the effects of winter fuels on canister loading under winter conditions, the Agency is not able at this time to model the effects of winter RVP levels on exhaust emissions. To avoid making unsound or speculative predictions, EPA proposed and is now promulgating a requirement that for purposes of evaluating emissions effects using the complex model, the RVP of winter fuels be set at the summer statutory baseline RVP value. In effect, this requirement builds into the model the assumption that the RVP level of winter gasolines has no effect on NOx or exhaust toxics emissions. As a result, refiners will not be required to alter the RVP levels of winter gasolines. Refiners will receive neither benefit nor penalty for changing the RVP of their winter gasolines. To evaluate winter fuels using the complex model, an RVP value equal to that of summer baseline gasoline (8.7 psi) must be used instead of the fuel's actual RVP. Doing so effectively removes the contribution of RVP to winter exhaust emissions. When sufficient data is developed on the emissions impact of winter RVP levels under winter ambient conditions, EPA will be able to revise the complex model accordingly. Until then, EPA believes it is more appropriate to assume that RVP levels have winter exhaust emission effects than to speculate about the magnitude of such impacts. In its prior proposals, EPA had proposed that winter nonexhaust emissions, including winter nonexhaust benzene emissions, be considered zero. EPA received a number of comments requesting that both baseline emissions and the nonexhaust toxics model include winter nonexhaust benzene emissions. This request was based on the belief that the year- round benzene limits would result in reduced nonexhaust benzene emissions in the winter months. EPA has evaluated this claim, taking into account temperature ranges and the effects of inspection and maintenance programs on such emissions. EPA acknowledges the validity of this claim, since winter nonexhaust emissions, including nonexhaust benzene emissions, are likely to be nonzero under all winter temperature ranges. In the past, the lack of sufficient data on nonexhaust emissions under winter temperature conditions has prevented EPA from developing reliable, accurate models of winter nonexhaust emissions. The commenters provided a limited quantity of data on winter nonexhaust emissions to support their claim. However, the data submitted in support of this claim were based on measurements of nonexhaust emissions from vehicles with very low nonexhaust emissions. EPA's analysis indicates that these vehicles are not representative of in-use vehicles. In addition, the chemical composition of the measured nonexhaust emissions were characteristic of resting losses (losses that occur due to permeation through fuel system components) rather than of diurnal, hot soak, or running loss emissions. Resting losses are not included in EPA's baseline emission estimates, so EPA does not consider it appropriate to include resting losses in its nonexhaust emission models. Finally, no data were submitted on nonexhaust benzene emissions from fail vehicles under winter conditions. Since nonexhaust benzene emissions from such vehicles will comprise a significant portion of winter nonexhaust benzene emissions, EPA is concerned that a model based on the submitted data would not provide accurate estimates of such emissions. Given the theoretical merits of the claim, however, EPA will consider including a model of winter benzene nonexhaust emissions in the complex model in the future when sufficient data become available. F. Fungibility EPA has long recognized the importance of maintaining a fungible fuel system, in which complying gasolines can be mixed freely without resulting in mixtures that do not themselves comply with regulatory requirements. Fungibility is essential to smooth, cost-effective operation of fuel distribution systems such as pipelines. The Agency has received numerous comments on the need to maintain fungibility. At the same time, the Agency considers it essential that gasolines certified as reformulated meet all required emission performance levels in the field. In cases where the effects of a given fuel parameter on emissions are non-linear, it is possible for two complying fuels to produce a non-complying fuel when mixed. The complex model contains a number of nonlinear terms, which introduces the possibility that gasolines which comply with this rule's requirements in isolation would not comply if mixed with other complying fuels. EPA has been concerned with this possibility and has undertaken extensive analyses to determine its likelihood and to develop methods to cope with its occurrence. EPA's analyses, which have utilized methods that have been supported by a number of organizations, indicate that the complex model promulgated in today's rule will not create fungibility problems despite its inclusion of nonlinear terms. This analysis is explained in greater detail in Section IV.F of the RIA. G. Future Model Revisions The complex model promulgated in this rulemaking reflects EPA's best understanding of the relationship between fuel characteristics and vehicle emissions. However, EPA expects future research to clarify this relationship. EPA also recognizes that changes in in-use vehicle emission control programs (e.g., I/M programs) will continue to occur and that these changes may alter the relationship between fuel characteristics and in-use emissions. In addition, the Agency is concerned that augmentations to the model through vehicle testing (Section V) may, over time, accumulate to the point that a revised complex model, incorporating the current complex model database and all relevant information gathered since then, would be beneficial. As discussed in Section V, EPA plans to issue revised complex models when the Agency deems that sufficient new information is available to warrant such action. Model revisions will be developed through a formal rulemaking process. H. Complex Model Performance of Simple Model Fuels Fuels qualifying as reformulated under the simple model must meet specified benzene, oxygen, and RVP requirements while also satisfying the toxics performance standard. The RVP requirement differs between VOC control regions, and the requirements and standards also vary depending on whether compliance is being achieved on a per-gallon or averaging basis. In addition, levels of other fuel parameters are only specified under the simple model in terms of deviations from each refiner's baseline fuel. Evaluating the performance of simple model fuels under the complex model is difficult since fuel properties can vary widely. However, it is possible to evaluate a set of fuels that are representative of expected, typical simple model fuels. EPA expects most refiners to pursue compliance on average (for all or part of their product slate) in order to maximize flexibility in day-to-day refinery operations and recoup compliance margins. Given present and projected conditions, EPA also expects that MTBE and ethanol will be the most commonly used oxygenates during Phase I of the reformulated gasoline program. The fuels specified in Tables IV-4 and IV-5 below include fuels designed to meet the requirements of the simple model in both VOC control regions and using both oxygenates. The level of olefins, sulfur, E200, and E300 have been set to Clean Air Act baseline levels, while the level of aromatics has been set at the level necessary to comply with the toxics requirements of the simple model. Aromatics levels were assumed to be the same for summer and winter fuels. Table IV-4.--Typical Simple Model Fuels Using MTBE [Under Averaging] ------------------------------------------------------------------------ Fuel ------------------------------------------------------- 1 2 3 4 ------------------------------------------------------------------------ Fuel Description: Season........ Summer...... Summer...... Winter...... Winter VOC Control 1........... 2........... 1........... 2 Region. Fuel Parameter:. RVP, psi...... 7.1......... 8.0......... N/A......... N/A Oxygen, wt%... 2.1......... 2.1......... 2.1......... 2.1 Benzene, vol%. 0.95........ 0.95........ 0.95........ 0.95 Aromatics, 27.5........ 26.3........ 27.5........ 26.3 vol%. Olefins, vol%. 9.2......... 9.2......... 11.9........ 11.9 E200, %....... 41.......... 41.......... 50.......... 50 E300, %....... 83.......... 83.......... 83.......... 83 Sulfur, ppm... 339......... 339......... 338......... 338 ------------------------------------------------------------------------ Table IV-5.--Typical Simple Model Fuels Using Ethanol [Under Averaging] ------------------------------------------------------------------------ Fuel ------------------------------------------------------- 5 6 7 8 ------------------------------------------------------------------------ Fuel Description: Season........ Summer...... Summer...... Winter...... Winter VOC Control 1........... 2........... 1........... 2 Region. Fuel Parameter:. RVP, psi...... 7.1......... 8.0......... N/A......... N/A Oxygen, wt%... 2.1......... 2.1......... 2.1......... 2.1 Benzene, vol%. 0.95........ 0.95........ 0.95........ 0.95 Aromatics, 25.5........ 24.3........ 25.5........ 24.3 vol%. Olefins, vol%. 9.2......... 9.2......... 11.9........ 11.9 E200, %....... 41.......... 41.......... 50.......... 41 E300, %....... 83.......... 83.......... 83.......... 83 Sulfur, ppm... 339......... 339......... 338......... 338 ------------------------------------------------------------------------ The performance of these fuels according to the complex model (using the MOBILE4.1 baseline as previously discussed) is summarized in Table IV-6. Table IV-6.--Performance of Typical Simple Model Fuels Under the Phase I Complex Model [Under Averaging]\1\ ---------------------------------------------------------------------------------------------------------------- Emission reduction versus CAAB fuel (percent) ---------------------------------------------------------------- Fuel Nonexhaust Exhaust VOC VOC Total VOC NO X Toxics ---------------------------------------------------------------------------------------------------------------- 1.............................................. 7.92 51.42 36.57 1.46 27.33 2.............................................. 5.35 23.93 17.11 1.28 24.57 3.............................................. 0.33 N/A 0.33 -0.21 12.83 4.............................................. 0.80 0.00 0.80 0.04 13.87 5.............................................. 8.64 51.42 36.82 1.90 25.70 6.............................................. 6.09 23.93 17.38 1.76 22.56 7.............................................. 3.55 N/A 3.56 0.58 11.52 8.............................................. 4.01 N/A 4.01 0.88 12.48 ---------------------------------------------------------------------------------------------------------------- \1\Performance of summer fuels (#s 1, 2, 5, 6) given relative to that of Clean Air Act summer baseline fuel. Performance of winter fuels (#s 3, 4, 7, 8) given relative to that of the winter baseline fuel defined in Section III. I. Phase I Performance Standards Under the Complex Model All fuels produced during Phase I of the reformulated gasoline program must meet the VOC, toxics, and NOX requirements of the Act. Fuels certified using the complex model in Phase I must show either no increase in NOX emissions from baseline levels on a per- gallon basis as discussed in the February 1993 proposal or a 1.5% reduction from baseline levels on average as discussed in Section VII. In addition, as discussed in Section III.E., such fuels must result in either a 15% reduction in total toxics emissions from baseline levels on a per-gallon basis or a 16.5% reduction in total toxics emissions from baseline levels on average. With regard to the VOC standards, EPA considers fuels produced to meet the provisions of the simple model to be producible. Thus, as discussed in the February 1993 proposal, EPA believes it feasible to base the Phase I standards for VOC emissions on the performance of fuels that meet the Simple Model requirements, provided that this performance is more stringent than minimum performance required by the Act. EPA considers the fuels whose VOC performances were evaluated in Section IV.H to be representative of Simple Model fuels. Under the reformulated gasoline program, VOC emissions are controlled only during the high ozone season. For this reason, the VOC performance standard has been determined by the performance of the Phase I summer fuels presented in Section IV.H. Since these fuels achieve emissons reductions that equal or exceed the minimum requirements set forth in the Act, the VOC performance standard during Phase I for fuels certified under the complex model has been based on the performance of these fuels. Setting the VOC performance standards in 1998-1999 equal to this VOC performance level, which EPA believes to be a reasonable estimate of the average performance of fuels produced in 1995-1997, preserves the integrity of the two-phase program specified by Congress and is consistent with the Agreement in Principle signed in 1991. The summer VOC performance of ``typical'' high ozone season simple model reformulated gasolines according to the complex model is presented in Table IV-6. In VOC Control Region 1, the simple model fuel reduces VOC emissions by 36.6 percent for the MTBE-containing fuel (Fuel 1) and 36.8 percent for the ethanol-containing fuel (Fuel 5). Since the 1998 performance requirements in VOC Control Region 1 are to be based on the performance of typical simple model fuels, and since Fuels 1 and 5 both satisfy the simple model requirements and are considered by EPA to be representative of typical simple model fuels, EPA has set its 1998 performance standards in VOC Control Region 1 so as to permit both of these fuels to meet the 1998 performance standards. In addition, EPA considers Fuel 1 to be more representative of typical simple model fuels in VOC Control Region 1 since MTBE does not boost fuel RVP levels to the extent that ethanol does. As was discussed in the April 1992 and February 1993 proposals, EPA believes that per-gallon performance standard should be set 1.5 percentage points below the averaging performance standard. Hence high ozone season fuels certified using the complex model during Phase I of the reformulated gasoline program must provide a VOC emission reduction from baseline levels of 36.6 percent when complying on average and 35.1 percent when complying on a per-gallon basis. Similarly, high ozone season fuels certified using the complex model during Phase I in VOC Control Region 2 must provide a VOC emission reduction from baseline levels of 17.1 percent when complying on average and 15.6 percent when complying on a per-gallon basis. These standards are summarized in Table IV-7 for both VOC control regions, under averaging and per-gallon compliance. Note that a negative performance standard signifies a reduction from baseline emission levels. Table IV-7.--Reformulated Gasoline Performance Standards Relative to Clean Air Act Baseline Gasoline for 1998- 1999 [Percent] ---------------------------------------------------------------------------------------------------------------- VOC control region 1 VOC control region 2 Emission --------------------------------------------------------------- Average Per gallon Average Per gallon ---------------------------------------------------------------------------------------------------------------- VOC............................................. -36.6 -35.1 -17.1 -15.6 Toxics.......................................... -16.5 -15.0 -16.5 -15.0 NOX............................................. -1.5 0.0 -1.5 0.0 ---------------------------------------------------------------------------------------------------------------- In summary, the per-gallon and averaging VOC performance standards under the complex model during Phase I is set by the performance of the corresponding simple model fuel when evaluated using the complex model. The toxics performance standard is set at the statutory requirement of a 15 percent reduction from baseline levels for per-gallon compliance and a 16.5 percent reduction for compliance on average. Similarly, the NOX performance standard under the complex model during Phase I must satisfy the no NOx increase requirement on a per-gallon basis, or meet a 1.5% reduction for compliance on average. V. Augmenting the Models Through Testing During the regulatory negotiation process, vehicle testing and emission modeling procedures for certifying that a gasoline complies with the NOX, toxics, and VOC requirements were discussed. Emission models such as the simple model described in Section III and the complex model described in Section IV offer several advantages over testing to determine emission effects. First, models can better reflect in-use emission effects since they can be based on the results of multiple test programs. Second, individual test programs may be intentionally or unintentionally biased due to vehicle selection, test design, and analysis methods. Third, fuel compositions tend to vary due in part to factors beyond the control of fuel suppliers such as variations in crude oil compositions and the inherent variability of refining processes. As a result, without one or more modeling options, each batch of fuel would have to be tested to ascertain its emission performance. Such levels of testing are neither desirable (because of the potential for intentional or unintentional bias in vehicle test programs) nor practical (because of the time and expense involved in vehicle testing). Fourth, models make more efficient use of scarce and expensive emission effects data than is possible otherwise. For these reasons, EPA believes that the modeling options outlined above are necessary for the reformulated gasoline program to achieve its environmental objectives and to minimize the costs of the program. These emission models, however, reflect currently-available information and hence do not allow refiners to take advantage of emission benefits derived from new fuel additives or changes in fuel parameters not contained in the models. To allow for fuel technology development and innovation, the Agency also believes that testing has a role in certification as a means of supplementing the models. This section contains a detailed discussion of the provisions EPA is promulgating regarding the conditions under which testing is permitted, the manner in which test results can be used to supplement the models, and the minimum requirements for vehicle testing programs. As was first outlined in the February 1993 NPRM, the vehicle testing process described in this section has undergone significant changes since it was first proposed in the April 1992 SNPRM. These changes have been made in response to changes in EPA's approach to modeling the relationship between fuel properties and emissions, as described in Section IV, and comments received in response to the April 1992 and February 1993 proposals. The following discussion addresses the major substantive comments received by EPA regarding certification of fuels by vehicle testing. A detailed summary and analysis of comments can be found in Section IV.G of the RIA. A. Applicability of Testing Vehicle testing is the primary way that the effects of various gasoline formulations on motor vehicle emissions can be determined. As described above, data from vehicle testing programs forms the bulk of the basis for the simple and complex models. EPA believes that fuel certification through single test programs is inherently less reliable than certification through a testing-based model. The simple and complex models developed by EPA are based on a far greater amount of testing than would be available from any single test program. These models incorporate and balance the varying and conflicting results of numerous test programs. The statistical variation associated with an individual test program may cause a fuel to show emission effects during testing that would not occur in-use. Therefore, EPA proposes that testing only be permitted to augment the models for fuel effects that are not covered in the models. B. Augmenting the Simple Model Due to the belief that fuels certified by vehicle testing should be evaluated in conjunction with the most complete emission model available to more accurately determine the emission benefits of the fuels being tested, EPA proposed that vehicle testing be permitted to augment the simple model only for the effect of oxygenates on NOx emissions beyond the simple model's oxygen caps. All other testing was to have been performed to augment the complex model. Based on data collected since the time of the proposal on the effect of oxygenates on NOx, EPA no longer believes it appropriate to augment the simple model even in the limited manner described above. Considerably more data are available in the complex model database regarding the effect of oxygenates on NOx emissions than would be provided by any individual test program. Therefore, testing can only be performed to augment the complex model. Fuels with oxygen concentrations in excess of 2.7 weight percent must be certified using the complex model. C. Augmenting the Complex Model EPA believes that the objective of testing under the complex model should be to evaluate the emission effects of fuels whose emission effects cannot be adequately represented by the model. Such fuels would include fuels claiming emission effects from parameters not included in the complex model and fuels containing complex model parameters at levels beyond the range covered by the model. Without this constraint, it may be possible for a fuel producer to use the statistical variation associated with testing to claim emission effects through testing which would not be demonstrated in-use, when tested to a greater degree, or when modeled. For example, a fuel that would fail to meet the VOC requirement by a small margin when evaluated under the complex model could be tested and shown to meet the VOC requirement due to the testing error associated with any vehicle testing program. In addition, allowing testing of existing modeled parameters essentially would make the complex model, and the associated emission performance standards, a fluid target. Fuel producers would lose the certainty associated with a fixed model and the confidence that their capital investments will be useful for a fixed amount of time. Therefore, vehicle testing can be used only to determine the emission effects of parameters not adequately represented by the complex model. The emission effects of the fuel parameter in question will be determined by combining the emission effects determined through vehicle testing with the emission effects predicted by the complex model. Furthermore, each testing program can be used to identify the effects of only one new fuel parameter, unless the changes in other fuel parameters are a natural and inherent consequence of the primary fuel modification. Without this constraint, EPA believes that accurate determination of the effects of specific fuel parameters would be more difficult due to the inherent variability in testing programs and the increased opportunities for gaming. In addition, fuel suppliers opting to augment the complex model through vehicle testing must examine the extent to which emissions are affected when fuels certified with the augmented complex model are mixed with other fuels. The Agency is concerned with two potential problems when different fuels are combined. First, the emission effects of a parameter, as determined from vehicle testing, may not behave linearly as fuels with one level of the parameter are mixed with fuels with different levels of the same parameter. The degree to which this process occurs is referred to in this notice as the parameter's dilution effect. Dilution effects are evident in the complex model proposed in February 1993 and in the model being promulgated today. Second, the emission effects of various fuel parameters may be affected by the level of other fuel parameters. The degree to which this process occurs is referred to in this notice as an interactive effect. If such effects are present (as in the complex model proposed in February 1993 and in the complex model being promulgated today), actual emission performance of the fuel mixture in-use could be worse than emission performance predicted from the complex model augmented by vehicle testing results. Therefore, the testing process must be structured so as to identify dilution and interactive effects. D. Advance Approval of Test Programs Given the number of factors involved in designing a test program, the potential for inappropriate design is high. EPA wishes to avoid submittal of petitions based on test data from poorly designed programs in order to assure that the time and money invested in such programs is well-spent and to assure that all augmentations to the model are based on accurate data from well-designed test programs. Hence EPA will require petitioners to obtain advance approval from the Agency for their proposed vehicle testing programs. EPA will consider petitions to augment the model only if based on the results of approved testing programs. Furthermore, EPA retains the discretion to evaluate other data when evaluating petitions to augment the complex model and when determining the nature, extent, and limitations of the augmentation. This data may include the existing complex model database, additional vehicle testing programs, and other augmentation applications. Petitioners are required to include the following information when submitting a test program plan for approval: the fuel parameter to be evaluated for emission effects; the number and description of vehicles to be used in the test, including model year, model name, VIN number, mileage, emission performance, technology type, and vehicle manufacturer; the methods used to procure and prepare the vehicles for testing; the fuels to be used in the testing program, characterized as defined in Section V.I.5; the pollutants and emission categories to be evaluated; the methods and precautions to be used to ensure that the effects of the parameter in question are independent of the effects of other parameters already included in the complex model; a description of the quality assurance procedures to be used during the test program, and the identity and location of the organization performing the testing. EPA anticipates and encourages petitioners to submit the information listed above in stages beginning with the most general and ending with the most specific in order to streamline the approval process and eliminate wasted effort. EPA will work with petitioners to remedy unsatisfactory aspects of their proposed testing program. These provisions provide the Agency with greater assurance that petitioners would not selectively report test results to the Agency that support their petitions. Petitioners would still be able to ``game'' the testing process by pre-screening vehicles to obtain a test fleet with the desired sensitivity to the proposed parameter. However, such a test fleet would have to be re-tested as part of the formal test program and hence would be subject to the variability inherent in vehicle testing, which would tend to reduce the gaming benefits from pre-screening. EPA believes that the risks and costs associated with re-testing will tend to dissuade petitioners from attempting to manipulate the testing process in this manner. EPA further requires that the results of all approved testing programs be submitted to the Agency, even if the parameter in question proves not to provide an emission benefit. The Agency believes this requirement is necessary to ensure that all available data is at the Agency's disposal when evaluating proposed augmentations to the complex model and when updating the model itself. EPA does not intend to use this provision to limit legitimate, innovative test programs. Rather, EPA is only interested in preventing the creation of artificial fuel parameters that claim to be the source of emission effects which are in reality only normal statistical variability. An example may help clarify the problems that can arise if testing is permitted for such artificial parameters. The level of C10+ aromatics (aromatics whose molecules contain ten or more carbon atoms) influences a fuel's E200, E300, and total aromatics levels. A testing program to identify the effects of C10+ aromatics may indicate that an emission effect from such compounds exists when the effect is actually due to differences in the fuels' E200, E300, and total aromatics levels or to the inherent statistical variability associated with vehicle testing. A petition for approval of a test program to identify the effects of C10+ aromatics would be required to identify specific measures to be taken to isolate the emission effects of C10+ aromatics from those of E200, E300 and total aromatics, all three of which are included in the complex model. In this example, EPA might require that certain test fuels contain identical levels of E200, E300, and total aromatics; that more rigorous statistical tests be used to identify genuine C10+ aromatics effects beyond those already incorporated in the complex model for E200, E300, and total aromatics; that the fuels used in the test program meet more detailed compositional criteria to ensure their representativeness; or that additional vehicles and/or fuels be tested. This provision helps assure that the effects observed in vehicle testing programs are genuine and will occur in-use. E. Exclusive Rights to Augmentation EPA's April 1992 and February 1993 proposals discussed the advantages and disadvantages of providing a system of exclusive rights to model augmentations. EPA has given this matter further consideration, including consideration of comments regarding exclusive rights. The Agency has concluded that the reasons given in its April 1992 proposal for not providing a system of exclusive rights are still valid. Hence the regulations governing augmentation of the complex model through vehicle regulation being promulgated today do not provide for exclusive rights to augmentations. Each augmentation will be available to any refiner desiring to utilize it, and no restrictions are provided under this rulemaking for exclusive rights, other than those granted under other legal code (e.g., patent law). The Agency does not believe adequate authority exists to promulgate exclusive rights provisions under this rulemaking. Furthermore, as discussed in the April 16, 1992 proposal, there are a number of reasons from economic, administrative, and air quality perspectives that make open use of model augmentations a desirable public policy. To allow interested parties to review and comment on a model augmentation, EPA will publish a description of the augmentation and its supporting data and information for public comment prior to approving an augmentation for use. In keeping with the provision of the Act, EPA will take into account any comments received, and act upon any request received for fuel certification through model augmentation within 180 days of such a request being completed. F. Duration of Augmentation In its April 1992 proposal, EPA proposed that augmentations would remain in effect until the next subsequent complex model update was issued. EPA further proposed that if an augmentation had been valid for three or fewer years upon implementation of the subsequent update to the complex model, then refiners were permitted to continue using the augmentation in conjunction with the previous complex model for an additional length of time, subject to certain restrictions. EPA has received a number of comments on this proposal. Today's rule includes a set of limitations on the duration of the augmentation that incorporate some elements of these comments. These limitations are described below. The Agency is concerned that fuel suppliers not be allowed to claim emission effects in perpetuity based on the testing program described in this section due to the smaller degree of statistical confidence in such effects compared to those included in an updated complex model. The Agency also recognizes the need for fuel suppliers to recoup investments made to reformulate gasoline, including investments to utilize the emission effects identified through vehicle testing. Therefore, petitioners will be permitted to use emission effects determined through vehicle testing only for a limited period of time. In general, this period of time extends until an updated version of the complex model takes effect. Updates to the complex model will be issued by EPA through a formal rulemaking process at such time that the Agency determines that sufficient additional data has become available to warrant issuing such an update. Since some augmentations may be in place for a relatively short period of time before the model is updated, the Agency may not be able to adequately assess the augmentation. However, if a proposed update to the complex model is issued within three years of the time at which the augmentation takes effect, then fuel suppliers may be permitted to continue using the augmentation to determine the emission effects of reformulated gasolines. Specifically, if the Agency does not formally accept, reject, or modify the augmentation in question for inclusion in the updated complex model, then the augmentation will remain available until the next update to the model takes effect. If the Agency reviews the augmentation and either excludes the augmentation entirely or includes the augmentation in a modified form, then the augmentation will remain available for use in its original form, in conjunction with the complex model for which the augmentation was issued, to those fuel producers who can demonstrate to the Administrator's satisfaction that they have begun producing fuels that are certified using the augmentation. In such cases, the augmentation may continue to be used for five years from the date the augmentation took effect or for three years of fuel production, whichever is shorter. For the reasons discussed above, augmentations to the model for the effects of a given parameter over a particular range are permitted only once. Regardless of whether the emission effects of a parameter are included in an updated model, the augmentation can neither be used nor renewed (even with data from a second identical test program) once the maximum time period for use of a model augmented with the effects of that parameter has expired. Further testing is permitted, however, to provide EPA with the additional data needed to include the effect in a future update to the model. G. Limits on the Range of an Augmentation Fuel suppliers will be permitted to claim the emission effects of augmentations only to the extent that the test program measured the effects of the fuel parameter in question over the range in question. If the parameter is included in the complex model, then the augmentation will be valid for fuels containing levels of the parameter between the level tested in the test program and the nearest limit of the complex model (as described in Section IV). If the parameter is not included in the complex model, then the augmentation will be valid for fuels containing levels of the parameter between the candidate and baseline levels (i.e., the levels found in Addition Fuels 1 and 3 in Table V.1). This provision is intended to be consistent with the limits on the application of the simple and complex models as expressed in Sections III and IV. H. EPA Approval, Confirmatory Testing, and Fees In the process of reviewing a model augmentation, EPA must confirm the accuracy of the test results. To this end, EPA intends to monitor the petitioner's test program. The Agency also reserves the right to perform confirmatory testing to assure the validity of the test results and the emission performance of the reformulated fuel before allowing augmentation of the model. EPA further reserves the right to collect fees any lawful of an amount sufficient to recoup all costs associated with such confirmatory testing. EPA anticipates that if any confirmatory testing is performed that it will be of a limited nature and focused only on those aspects of the test program which are unexpected or contrary to prior test programs and engineering knowledge. Since EPA has not proposed methods to be used to calculate and collect such fees, these provisions will be handled through a subsequent rulemaking. I. Test Requirements 1. Winter Testing To be certified as reformulated, a gasoline must meet the air toxics and NOX emission requirements year-round; the oxygen, benzene, and heavy metal content requirements year-round, and the VOC emission requirements in the high ozone season. As discussed in Section IV of this notice and Sections III and IV of the RIA, the Agency does not have sufficient data to model winter exhaust emissions. While differences between the effects of fuel parameters under summer and winter conditions beyond those discussed in Section IV may exist, the Agency does not have any evidence to date to suggest that they are significant. Therefore, EPA will apply the exhaust models developed for summer emissions to winter fuels as well for purposes of determining their air toxics and NOX emissions. The Agency is concerned that allowing winter testing for some fuel parameters while modeling the effects of other parameters based on summer emission data creates the possibility of ``gaming'' the testing process. Fuel suppliers could use the summer model to determine the effects of parameters that would behave unfavorably under winter conditions and use winter testing to determine the effects of parameters that would behave favorably under winter conditions. This possibility may result in fuels being certified for winter use (through a combination of winter testing and summer modeling) that result in smaller emission reductions in-use than are intended by the Act or than would occur by using the summer model. Therefore, EPA is at this time requiring that all testing be performed under summer ambient conditions. As the Agency gathers additional data in the future with which to revise the model, EPA will consider whether sufficient winter test data exists to permit the development of winter NOX and air toxics models. If such models can be developed, the Agency will consider whether to allow winter testing. 2. Pollutants to be Measured To the extent testing is performed to augment the complex model, it must be performed to determine the emission effects on all the pollutants covered by the reformulated gasoline certification requirements, including toxics (carbon monoxide and carbon dioxide emissions must also be measured to permit validation of test results). Failure to have such a requirement might result in important emission effects being overlooked and could allow fuel producers to ``game'' the certification requirements by permitting them to utilize the modeling option for one pollutant and the test results for another pollutant when it would be advantageous. The resulting certified reformulated gasolines may not meet all of the applicable emission reduction requirements in-use. For example, the model augmented by test results may indicate that a fuel meets the VOC requirement but fails the toxics requirement, while the model alone may indicate that the fuel meets the toxics requirement but fails the VOC requirement. Allowing the petitioner to claim the toxics emission effects predicted by the model while claiming VOC benefits determined through testing would ignore fuel effects on toxics that may not be addressed by the model. Testing costs would be significantly reduced if only VOC and NOX emissions were measured by testing, and toxics emissions were allowed to be modeled. However, since the testing option can only be used when the candidate fuel's parameters fall outside of the range of the model, EPA believes that adequate information seldom would be available to allow toxics emissions from such fuels to be modeled adequately if adequate information on VOC and NOX emissions were not available. If a fuel parameter is expected to affect VOC or NOX and is not covered by the model, toxics emissions may very well be affected and should be measured. It should be noted, however, measurement of toxics emissions for the fuels used to determine interactive effects (discussed below in section IV.I.4.) need not be performed. During development of the complex model, EPA found that interactive effects for air toxics are either statistically insignificant, impossible to discern given the accuracy and extent of available data, or too small to contribute substantially to the model's explanatory and predictive power. The complex model being promulgated today contains no interactive terms for air toxics emissions for these reasons, and hence EPA considers it unnecessary to require testing for interactive effects on air toxics. Specifically, toxics emissions need not be measured when testing additional Extension Fuels to determine interactive effects or when testing Addition Fuels 4, 5, 6, and 7, as described in Section V.I.5. However, EPA reserves the right to require that toxics be measured during vehicle testing programs when evidence exists that adverse interactive effects may exist for toxics. In particular, EPA reserves the right to require testing for interactive toxics effects if future revisions to the complex model include such effects. To better optimize the test program for the particular fuel parameter being evaluated, the Administrator may approve a request to waive certain pollutant measurement requirements contained in this section. Any such waiver would have to be obtained in advance of vehicle testing. A request for such a waiver must include an adequate justification for the requested change, including the rationale for the request and supporting data and information. Such a request must justify the reason that measurement of certain pollutants clearly is not necessary, and identify those pollutants for which additional testing may be warranted. For example, a petition might note that reducing the concentration of a specific high molecular weight aromatic decreased VOC emissions even though the overall concentration of similar aromatics remained unchanged. The petitioner may be able to justify a reduced need for toxics measurement based on the results of other studies which show that toxics are proportional to total aromatics rather than to individual aromatics species. In exchange, additional testing may be justified for VOC emissions to enable a greater degree of statistical confidence in the test results. As a result, the fuel supplier may be able to present EPA with sufficient justification to warrant increased testing for VOC emissions and decreased testing for toxics emissions. 3. Exhaust and Nonexhaust Testing VOC and air toxics emissions occur in both exhaust and nonexhaust emissions. However, EPA believes that the relationship between fuel characteristics and nonexhaust emissions is known with greater certainty and precision than the relationship between fuel characteristics and exhaust emissions. Nonexhaust emissions are a much simpler phenomenon to model than exhaust emissions. Nonexhaust emissions are driven primarily by well-understood principles of physical chemistry and are modified by devices such as charcoal canisters that are relatively easily modeled. Exhaust emissions, by contrast, involve combustion and catalysis reactions that are not as well understood theoretically and are much more difficult to model. In addition, exhaust emissions are estimated directly from the Federal Test Procedure (FTP) utilizing the Urban Dynamometer Driving Schedule, while nonexhaust emissions are estimated from both FTP and non-FTP test cycles in a complex process. Finally, data on nonexhaust emissions is much more extensive and internally consistent than data for exhaust emissions. For these reasons, EPA is restricting testing to augment the model to exhaust emission testing. Vehicle testing of nonexhaust emissions will not be accepted by EPA as the basis for augmentations to the nonexhaust emission model promulgated in today's rulemaking. EPA reserves the right to revise the nonexhaust emission model in the future to reflect new data acquired by the Agency, with such revisions taking effect after the start of Phase II of the program. In particular, either a new MOBILE model or ongoing research aimed at modeling nonexhaust emissions as a function of true vapor pressure over a range of temperatures may provide the basis for a revised nonexhaust model. The nonexhaust complex model being promulgated today relies on the Reid vapor pressure (RVP) to characterize fuels' nonexhaust emission characteristics. However, RVP is measured at a fixed fuel temperature (100 deg.F), while nonexhaust emissions occur over a wide range of fuel temperatures (80 deg.F to 130 deg.F). Since different oxygenates alter the relationship between RVP and true vapor pressure at a given temperature to different extents, EPA believes that a model based on true vapor pressure would be more accurate for fuels containing oxygenates than a model based solely on RVP. By permitting nonexhaust emissions from a given fuel to be estimated only from models and exhaust emissions to be estimated based in part on vehicle testing, EPA believes that the accuracy of fuel emission estimates will be enhanced. EPA also believes that this restriction will focus testing resources on those emission effects which the model predicts with the least degree of certainty (i.e., exhaust emissions), thereby improving the degree of certainty of emission predictions over the long run. 4. Eligibility of Fuel Properties for Testing In providing for augmentation of the complex model through vehicle testing, EPA's intent is to provide refiners with the ability to take advantage of new or ongoing research into the relationship between fuel properties and exhaust emissions. As discussed elsewhere in this section, however, the Agency believes that the complex model is more accurate and reliable than any single test program for the parameters included in the model. Therefore, augmentation by testing will be permitted only for certain fuel parameters and for certain levels of those parameters. Augmentations will not be permitted for fuel parameters that are included and quantified in the complex model database, regardless of whether they appear in the complex model itself. Such parameters were either not identified or identified and later rejected during the rulemaking process, which included a series of regulatory negotiation meetings, public workshops, and public meetings. EPA believes that the opportunities for error far exceed the potential emission benefits from allowing model augmentations using parameters that did not survive the peer review process. Augmentation through vehicle testing will be permitted to extend the valid range of the complex model for parameters already included in the model. The purpose of such testing would be to determine the behavior of the parameter within this extended range. Augmentations also will be permitted for parameters that neither have been included in today's complex model nor were measured for the fuels contained in the complex model database. The purpose of testing in this case would be to determine the behavior of new parameters, including any dilution and interactive effects. The test requirements differ for these two cases to reflect differences in existing knowledge and environmental risk. 5. Test Fuels The Agency has three major goals that must be satisfied before accepting an augmentation to the complex model. First, the augmentation must provide proper credit for fuel modifications. Second, the augmentation must account for dilution effects properly. Third, the augmentation must account for interactive effects between the parameter being tested and other fuel parameters properly. EPA believes that these three goals cannot be met without specifying at least some of the characteristics of fuels to be included in a test program. The remainder of this section describes the basic characteristics of the fuels required as part of a vehicle test program. a. Fuels required to extend the range of existing complex model parameters. Three ``extension fuels'' must be included in test programs intended to extend the range of the complex model for a given parameter to a more extreme level. Extension fuel #1 would contain the more extreme level of the parameter being extended in order to determine the parameter's effects on emissions at this more extreme level. Extension fuel #2 would contain the parameter being extended at levels at or near its current lower limit in the model. Extension fuel #3 would contain the parameter being extended at levels at or near its current upper limit in the model. These latter two fuels are necessary in order to estimate the size and significance of squared terms involving the parameter being extended. For all three fuels, the levels of other complex model parameters are to be set at the levels specified in Table V.2, which the Agency believes are representative of levels that will be found in typical reformulated fuels. In addition, all three fuels must be blended from representative refinery streams to the extent practicable. The three extension fuels must meet the requirements presented in Tables V.1 and V.2 to within the blending tolerances specified in Table V.4. If the Complex Model contains interactive effects between the parameter in question and other parameters, two additional fuels must be tested to quantify the magnitude of any such effect at extended levels of the parameter in question. For each interacting parameter, the two additional fuels would contain the parameter being tested at levels identical to that found in Extension Fuel #1. The interacting parameter would be present at the levels specified in Table V.1 for Extension Fuels 2 and 3, respectively, in the two additional fuels in order to quantify the size of the interactive effect over its full range. Other parameters would be set at the levels specified in Table V.2. It should be noted that since today's complex model includes only one interactive term (involving aromatics and E300), this situation would arise relatively infrequently. Table V.1.--Level of Existing Complex Model Parameters Being Extended ------------------------------------------------------------------------ Extension Extension Extension Fuel property being extended fuel # fuel #2 fuel #3 ------------------------------------------------------------------------ Sulfur, ppm........................ Extension 80 450 Level. Benzene, vol%...................... Extension 0.5 1.5 Level. RVP, psi........................... Extension 6.7 8.0 Level. E200, %............................ Extension 38 61 Level. E300, %............................ Extension 78 92 Level. Aromatics, vol%.................... Extension 20 45 Level. Olefins, vol%...................... Extension 3.0 18 Level. Oxygen, wt%........................ Extension 1.7 2.7 Level. Octane, R+M/2...................... 87.5......... 87.5 87.5 ------------------------------------------------------------------------ Table V.2.--Levels for Fuel Parameters Other Than Those Being Extended ------------------------------------------------------------------------ Extension Extension Extension Fuel property fuel #1 fuel #2 fuel #3 ------------------------------------------------------------------------ Sulfur, ppm............................ 150 150 150 Benzene, vol%.......................... 1.0 1.0 1.0 RVP, psi............................... 7.5 7.5 7.5 E200, %................................ 50 50 50 E300, %................................ 85 85 85 Aromatics, vol%........................ 25 25 25 Olefins, vol%.......................... 9.0 9.0 9.0 Oxygen, wt%............................ 2.0 2.0 2.0 Octane, R+M/2.......................... 87.5 87.5 87.5 ------------------------------------------------------------------------ b. Fuels required to qualify new complex model fuel parameters. Seven ``addition fuels'' must be included in test programs intended to augment the complex model with fuel parameters not included in the model. These fuels are intended to provide the data necessary to estimate linear, squared, and interactive emission effects for the parameter being tested. The fuel parameter values for all seven addition fuels are specified in Table V.3; these values must be met to within the blending tolerance ranges specified in Table V.4. Table V.3.--Properties of Fuels To Be Tested When Augmenting The Model With A New Fuel Parameter ---------------------------------------------------------------------------------------------------------------- Fuels Fuel property --------------------------------------------------------------------- 1 2 3 4 5 6 7 ---------------------------------------------------------------------------------------------------------------- Sulfur, ppm............................... 150 150 150 35 35 500 500 Benzene, vol%............................. 1.0 1.0 1.0 0.5 0.5 1.3 1.3 RVP, psi.................................. 7.5 7.5 7.5 6.5 6.5 8.1 8.1 E200, %................................... 50 50 50 62 62 37 37 E300, %................................... 85 85 85 92 92 79 79 Aromatics, vol%........................... 27 27 27 20 20 45 45 Olefins, vol%............................. 9.0 9.0 9.0 2.0 2.0 18 18 Oxygen, wt%............................... 2.1 2.1 2.1 2.7 2.7 1.5 1.5 Octane, (R+M)/2........................... 87 87 87 87 87 87 87 New Parameter\1\.......................... C C+B B C B C B ---------- 2 ---------------------------------------------------------------------------------------------------------------- \1\C=Candidate level, B=Baseline level. In Table V.3, Fuel 1 is the candidate fuel, Fuel 3 is the candidate-baseline fuel, and Fuel 2 is a dilution fuel that is tested to determine whether emissions respond linearly to levels of the candidate fuel parameter. Testing on addition fuels 1, 2, and 3 will provide the data needed to assess the emission effects of the parameter being tested in isolation. Three separate levels of the parameter are specified in order to provide data to estimate both linear and squared terms involving the parameter, while other fuel parameters have been set at levels expected to be typical of in-use reformulated gasolines. Fuels 4 and 5 are low-emitting fuels with candidate and baseline levels of the parameter in question. Fuels 6 and 7 are the corresponding high- emitting fuels. Testing on these four fuels will provide the data needed to assess the existence and size of interactive effects between the parameter being tested and other fuel parameters already included in the complex model. Estimating these effects for very high emitting fuels (addition fuels 6 and 7) and very low emitting fuels (addition fuels 4 and 5) maximizes the sensitivity of the test program to such effects. If the parameter being tested is not specified for CAA baseline gasoline, its baseline level must be comparable to its level in gasoline representative of commercial reformulated gasolines. Petitioners are required to obtain approval for the baseline level of this parameter from the Agency prior to beginning their vehicle test programs. Such approval would depend in part on the use of an appropriate basis for determining the properties of ``representative'' commercial reformulated gasolines. The basis for this specification and for the specifications described in Table V.3 are discussed more fully in section IV.G of the RIA. c. Other fuels requirements. To produce fuels with the parameter values listed above for the extension and addition fuels, the amount and type of paraffins present in each fuel may require adjustments. These adjustments must reflect the distribution of paraffin types in representative refinery streams. Two other issues must also be addressed regarding the composition and properties of extension and addition fuels. First, non-compositional fuel properties such as RVP, E200, and E300 may differ from the values specified in Tables V.2 and V.3 as a natural result of compositional differences among fuels or as a result of the inherent variability in blending processes. In such cases, the complex model is to be used to compensate for such differences when evaluating vehicle testing results, as described in section 80.48 of today's regulations. Second, EPA also is concerned that variations due to blending may cause fuel parameters not included in the model to vary among fuels, and such parameters may have significant emission effects not predicted by the model. To minimize this risk, the properties of the various fuels must match those specified in Tables V.1 through V.3 to within the tolerances defined in Table V.4. In addition, the extension and addition fuels must be blended from identical refinery streams to the extent possible. Failure to meet this requirement would reduce the certainty that emission effects found in vehicle testing are due solely to the parameter being tested. However, if a petitioner can show that it is not feasible to meet all such tolerances for the petitioner's fuels due either to: (1) Naturally-resulting changes in fuel parameters arising from changes in the parameter(s) in question or (2) blending technology limitations, EPA will consider modifying the relevant tolerances. Any such request must come prior to the start of the test program. In such cases, EPA reserves the right to use the model and relevant data from prior augmentation petitions to adjust for whatever differences remain among the fuels. Table V.4.--Fuel Parameter Blending Tolerances ------------------------------------------------------------------------ Blending Fuel parameter tolerance ------------------------------------------------------------------------ Sulfur content....................................... 25 ppm. Benzene content...................................... 0.2 vol %. RVP.................................................. 0.2 psi. E200 level........................................... 2 %. E300 level........................................... 4 %. Oxygenate content.................................... 1.0 vol %. Aromatics content.................................... 2.7 vol %. Olefins content...................................... 2.5 vol %. Saturates content.................................... 2.0 vol %. Octane............................................... 0.5. Candidate parameter.................................. To be determined as part of the augmentation process. ------------------------------------------------------------------------ An octane requirement of 87.5 (measured by the (R+M)/2 method) must be met for all fuels used in vehicle testing to within the tolerance specified in Table V.4, unless octane itself is the fuel property being evaluated for its effect on emissions. All test fuels must also contain detergent additives in concentrations adequate to meet the requirements of section 211(l) of the Act, and the concentration must be within ten percent of the average detergent concentration for all fuels included in the test program. 6. Test Procedures For the reformulated gasoline program to achieve actual in-use reductions in fuel-related VOC and toxics emissions, certification test results must correlate with reductions in in-use emissions. No test procedure, however, is completely representative of all in-use conditions. The range of vehicle uses and operating conditions and the range of geographical and climatic conditions throughout the country prevent a single test procedure from being entirely representative. However, EPA has developed or is in the process of developing test procedures which attempt to reflect a broad spectrum of in-use vehicle operating conditions. These test procedures were used in part to develop the emission factors in EPA's MOBILE4.1, MOBILE5, and MOBILE5A emission models, which in turn have been used to develop the modeling option for fuel certification. To maintain consistency between the certification methods, these test procedures also are to be used for vehicle testing to augment the model. a. Exhaust emission testing. Exhaust emissions must be measured through the use of the Federal Test Procedure (FTP) for new vehicle certification (Subpart B of Part 86 of the Code of Federal Regulations) with modifications to allow vehicle preconditioning between tests on different fuels and to provide for benzene, formaldehyde, acetaldehyde, and 1,3-butadiene sampling and analysis. Since POM (the fifth regulated toxic air pollutant) cannot currently be measured accurately and since no single measurement procedure is generally accepted, its measurement is not required. A detailed description of the toxics measurement procedures can be found in section 80.55 and section 80.56 of the regulations for this rulemaking. b. Fuel parameter measurement precision. One source of error in testing programs as described in this section is uncertainty in the composition and properties of the fuels being tested. Since fuel testing is far less expensive than vehicle emission testing, EPA believes it is highly cost effective to measure the properties of the fuels multiple times to reduce the uncertainty in projected emissions due to uncertainty in fuel composition. As a result, at minimum, the properties defined in Table V.5 must be measured a sufficient number of times to reduce the 95 percent confidence interval, as calculated using a standard t-test, to the tolerances defined in Table V.5. Table V.5.--Fuel Parameter Measurement tolerances for Fuel Certification by Vehicle Testing ------------------------------------------------------------------------ Measurement tolerance (95 Parameter percent confidence interval) ------------------------------------------------------------------------ API Gravity....................................... 0.2 deg.API. Sulfur content.................................... 5 ppm. Benzene content................................... 0.05 vol %. RVP............................................... 0.08 psi. Octane............................................ 0.1 (R+M/ 2). E200 level........................................ 2 %. E300 level........................................ 2 %. Oxygenate content................................. 0.2 vol %. Aromatics content................................. 0.5 vol %. Olefins content................................... 0.3 vol %. Saturates content................................. 1.0 vol %. Octane............................................ 0.2. Candidate parameter............................... To be determined as part of the augmentation process. ------------------------------------------------------------------------ EPA recognizes that fuels used in vehicle testing may differ significantly in composition in terms of specific chemical species while appearing to be identically composed in terms of broad chemical families. The Agency further recognizes that such compositional differences may result in emission effects, and that such differences may confound or be used to ``game'' testing programs. Therefore, the fuels used in vehicle testing must be blended from representative refinery streams, and their composition must be fully characterized by gas chromatography or equivalent analysis methods (following the methodology used in the Auto/Oil study3) and the results submitted to EPA. Petitioners would have the option of either submitting these results for approval prior to beginning vehicle testing or including these results in their completed petition. However, in either case, EPA would retain the authority to require modifications to the test fuels to ensure that their compositions are appropriate. Hence petitioners electing not to obtain prior approval of their fuel compositions would assume the risk that EPA may require modifications to the petitioner's test fuels upon receipt of the completed petition, thereby invalidating any testing the petitioner may have completed. --------------------------------------------------------------------------- \3\Auto/Oil Air Quality Improvement Research Program, Technical Bulletin #1, December 1990. --------------------------------------------------------------------------- EPA received a number of comments on its fuel specification and measurement precision proposals. Many of these comments have been incorporated in today's testing regulations, notably removal of the end point specification and inclusion of detergents and octane specifications. A detailed discussion of comments can be found in Section VI.G of the RIA. c. Other test fuel provisions. To maximize the accuracy and confidence in the results from a test program of the magnitude specified in this section, it is good practice to ensure that systematic changes in the emission characteristics of the test vehicles do not occur during testing. Such effects can overwhelm the fuel effects being measured. Therefore, the first fuel tested in any given vehicle must be retested in that vehicle at the end of the test program. In addition, the order in which fuels are tested on each vehicle must be randomized to prevent carryover effects from biasing test results. In response to comments, EPA has decided to remove the requirement for repeat measurements of VOC and NOX emissions from each fuel. EPA considers the measures described above to provide adequate quality assurance without repeat measurements and recognizes that removal of the repeat testing requirements will make vehicle testing significantly less onerous and time-consuming. 7. Vehicle Selection a. 1990 Equivalency. Section 211(k)(3) of the CAA specifies that the required reductions in VOC and toxics emissions are to be measured from the emissions of those pollutants from ``baseline vehicles.'' Section 211(k)(10)(A) defines baseline vehicles as representative model year 1990 (MY-90) vehicles. However, in order to simplify test vehicle selection and remain consistent with the practices used to develop the complex model, other model year vehicles may be included in the test program. Specifically, 1986 through 1989 model year vehicles may be tested if the 1990 version had an engine and exhaust system that was not different from the earlier model year versions in ways that could affect the emission performance of the vehicles (i.e., if the model's EPA emission certification data were ``carried over'' through the 1990 model year4). EPA retains the right to reject any non-1990 model year vehicle that the manufacturer deems to be different in terms of emission control technology or engine design from 1990 vehicles made by that manufacturer. The test fleet must be composed only of light-duty vehicles and light-duty trucks, in keeping with the practices followed in developing the complex model. --------------------------------------------------------------------------- \4\For a more complete explanation of this issue, please see ``1990 Baseline Vehicles,'' memorandum from David Korotney to EPA Air Docket A-92-12, November 30, 1993. --------------------------------------------------------------------------- b. Vehicle selection criteria. Another consideration in vehicle selection is the condition of the test vehicles. EPA believes that Congress intended that the required VOC and toxics emission reductions be achieved not only at certification but also in-use. In order for this to be true, the test vehicles' condition should be representative of that of in-use vehicles. Therefore, for the purposes of the reformulated gasoline program, representative vehicles must have emission performances typical of the in-use emission performance of 1990 vehicles over their lifetime, a technology mix similar to that of the 1990 model year fleet, and a minimum of 4,000 miles of service to assure break-in of engine and emission control system components. In addition, the test fleet must contain vehicles with a distribution of VOC emissions similar to that of in-use vehicles. Emissions of other pollutants tend to respond in a similar manner (e.g., carbon monoxide and air toxics) or in an essentially uncorrelated manner (e.g., NOX). In order for the emissions effects measured during vehicle testing to reflect the emission effects that will be experienced by actual in- use vehicles, EPA considers it necessary to control the composition of the test fleet. As discussed in Section IV, EPA's complex model has identified significant differences in the effects of fuel modifications on emissions among vehicles from different emitter classes and technology groups. EPA's vehicle fleet requirements are intended to assure that a sufficient number of vehicles are tested to provide statistical confidence in observed emission effects, to assure that the vehicles tested are representative of the emission characteristics of in-use vehicles, and to assure that the vehicles tested have emission control technologies that are representative of emission control technologies found on 1990 model year vehicles. (1) Higher Emitters/Normal Emitters. In order that the test fleet for exhaust emission testing reflect the distribution in vehicle emission performance in-use, the test fleet must consist of two exhaust VOC emitter subfleets, normal emitters and higher emitters. The proportion of vehicles in each subfleet is to be set equal to the distribution of vehicle emission performance when enhanced I/M programs are in place. These proportions are shown in Table V.6, which is based on an EPA analysis5 of the distribution of the in-use emission performance of a hypothetical fleet composed entirely of 1990 model year vehicles when subject to an enhanced I/M program. This distribution is consistent with the assumptions made in developing the Phase II Complex Model. --------------------------------------------------------------------------- \5\``Exhaust VOC Emission Inventory By Vehicle Emitter Class Following Implementation of an Enhanced Inspection and Maintenance (I/M) Program'', Memorandum from Christian Lindhjem and David Brzezinski to EPA Air Docket A-92-12, June 24, 1993. Table V.6.--Emitter Groups and In-Use Emissions ------------------------------------------------------------------------ Fraction Emission of in- fraction Emitter group use ----------------- fleet VOCs NOX ------------------------------------------------------------------------ Normal: <2 x THC Standard (<0.82 g/mi)...... 0.738 0.444 0.738 Higher: 2 x THC Standard (0.82 g/mi).............................. 0.262 0.556 0.262 ------------------------------------------------------------------------ An option had been proposed for comment which would not have separated the test fleet into separate emitter groups under the assumption that they may not respond differently to fuels. However, EPA's analysis of the complex model database and the complex model itself indicates that this assumption is invalid. Hence EPA has determined that the test fleet must contain vehicles from both emitter groups. Assembling a test fleet with the specified emission performance distribution requires vehicles to be obtained with the desired emission performance. For the reformulated gasoline program, such vehicles must be obtained by randomly selecting vehicles with the desired emission performance from the in-use fleet and testing those vehicles in their as-received condition. This method helps assure that the vehicles selected for testing have emission control problems that are representative of in-use emission problems. EPA had considered allowing normal emitting vehicles with intentionally-disabled emission control systems to serve as higher emitting vehicles, but no suitable disablement scheme has been identified and evidence indicating that disabled vehicles would have emission performance representative of in- use higher emitters has not been found. For these reasons, EPA will not permit higher emitting vehicles to be created by intentionally disabling normal emitting vehicles. Test vehicles' emission performance will need to be pre-screened to place them in the appropriate emitter group and to assure the proper emissions distribution within the test fleet. Such prescreening tests must be conducted using EPA vehicle certification fuel (Indolene) over the Federal Test Procedure since these were the conditions which were used to generate the data for the in-use emission distribution. Prescreening tests can also be performed using the Clean Air Act baseline gasoline and/or the I/M 240 test procedure. Results from such tests can be correlated with FTP test results with Indolene (as outlined in section 80.62 of the accompanying regulations). (2) Technology Groups. As discussed in Section IV, the development of the complex model revealed that the emissions effect of fuel modifications in normal emitting vehicles varied among the engine and exhaust system technologies present in 1990 model year vehicles. Hence EPA has concluded that the normal emitter test fleet must have a technology distribution that is representative of the technology distribution present in the 1990 model year fleet. The required distribution is shown in Table V.7. In addition to the technology group criteria of Table V.7, approximately 30 percent of the vehicles selected for each emitter class sub-fleet must be light-duty trucks (LDTs) to reflect the representation of LDTs in the light-duty vehicle fleet. EPA believes that the benefits of providing flexibility in determining the selection of LDTs for the test fleet outweigh the benefits of accuracy achieved by specifying which vehicles from Table V.7 should be LDTs. However, as is also the case for other design elements of the test program, the distribution of LDTs among the normal emitter technology groups is subject to EPA approval. A number of commenters objected to the application of this technology group distribution to the higher emitting vehicle subfleet, as was specified in prior proposals. EPA's experience in developing the complex model, as discussed in Section IV and the RIA, confirms that higher emitter emissions tend to be much less dependent on vehicle technology differences than are normal emitter emissions. Therefore, the higher emitting vehicle subfleet need not meet the technology distribution requirement, though a mixture of vehicle models and manufacturers should still be included. The higher emitter subfleet also must meet the 1990 model year and light duty vehicle criteria described previously and, like other elements of proposed testing programs, is subject to EPA approval. Table V.7.--Test Vehicle Characteristics ---------------------------------------------------------------------------------------------------------------- Tech. Veh. # Fuel system Catalyst Air injection EGR group Manufacturer ---------------------------------------------------------------------------------------------------------------- 1.......................... Multi....... 3W No Air........ EGR........... 1 GM. 2.......................... Multi....... 3W No Air........ No EGR........ 2 Ford. 3.......................... TBI......... 3W No Air........ EGR........... 3 GM. 4.......................... Multi....... 3W+OX Air........... EGR........... 4 Ford. 5.......................... Multi....... 3W No Air........ EGR........... 1 Honda. 6.......................... Multi....... 3W No Air........ No EGR........ 2 GM. 7.......................... TBI......... 3W No Air........ EGR........... 3 Chrysler. 8.......................... Multi....... 3W+OX Air........... EGR........... 4 GM. 9.......................... TBI......... 3W+OX Air........... EGR........... 7 Chrysler. 10......................... Multi....... 3W Air........... EGR........... 5 Toyota. 11......................... Multi....... 3W No Air........ EGR........... 1 Ford. 12......................... Multi....... 3W No Air........ No EGR........ 2 Chrysler. 13......................... Carb........ 3W+OX Air........... EGR........... 9 Toyota. 14......................... TBI......... 3W No Air........ EGR........... 3 Ford. 15......................... Multi....... 3W+OX Air........... EGR........... 4 GM. 16......................... Multi....... 3W No Air........ EGR........... 1 Toyota. 17......................... Multi....... 3W No Air........ No EGR........ 2 Mazda. 18......................... TBI......... 3W No Air........ EGR........... 3 GM. 19......................... Multi....... 3W+OX Air........... EGR........... 4 Ford. 20......................... Multi....... 3W No Air........ EGR........... 1 Nissan. ---------------------------------------------------------------------------------------------------------------- Table V.8--Technology Group Definitions ---------------------------------------------------------------------------------------------------------------- Tech. group Fuel system Catalyst Air injection EGR ---------------------------------------------------------------------------------------------------------------- 1........................................... Multi......... 3W No Air.......... EGR 2........................................... Multi......... 3W No Air.......... No EGR 3........................................... TBI........... 3W No Air.......... EGR 4........................................... Multi......... 3W+OX Air............. EGR 5........................................... Multi......... 3W Air............. EGR 6........................................... TBI........... 3W Air............. EGR 7........................................... TBI........... 3W+OX Air............. EGR 8........................................... TBI........... 3W No Air.......... No EGR 9........................................... Carb.......... 3W+OX Air............. EGR ---------------------------------------------------------------------------------------------------------------- Legend for Tables V.7 and V.8 Fuel System: Multi = Multi-point fuel injection TBI = Throttle body fuel injection Carb = Carburetted Catalyst: 3W = 3-Way catalyst 3W+OX = 3-Way catalyst plus an oxidation catalyst Air Injection: Air = Air injection No Air = No air injection EGR: EGR = Exhaust gas recirculation No EGR = No exhaust gas recirculation Vehicles must be added to the normal emitter sub-fleet in the order in which they appear in the table. If more than 20 vehicles are included in the normal emitter sub-fleet, then the additional vehicles must be selected starting over with vehicle number one in Table V.7. (3) Number of Test Vehicles. Exhaust emissions are subject to considerable variability due to the complexity of combustion chemistry, engine behavior, and emission control. As a result, substantial statistical uncertainty typically exists in exhaust emission reduction estimates based on a single test program. To reduce this uncertainty, an adequate number of vehicles must be tested for their exhaust emissions. In order to keep statistical uncertainty reasonably low while at the same time limit the test fleet size to reasonable levels, the test fleet for exhaust emissions must consist of a minimum of 20 vehicles. To maintain adequate statistical confidence in test results, however, the distribution of the test fleet among the emitter groups must also be defined so as to minimize statistical uncertainty. As discussed in the April 16, 1992 proposal, differences in VOC, NOX and toxics emission distributions for in-use vehicles prevents optimization of the size of the emitter groups for all three pollutants simultaneously. EPA is basing the number of vehicles in each emitter group on their VOC emission performance, based on the reasons discussed in the April 16, 1992 proposal and on the use of VOC emission performance to define emitter groups. The uncertainty associated with VOC emissions is quite complex. The higher emitting vehicles in various test programs have tended to have significantly greater variability in emission effects than normal emitting vehicles. Hence to minimize statistical uncertainty, a greater proportion of higher emitters should be tested than would be suggested by their contribution to in-use emissions. However, EPA believes that pre-screening and stabilization of higher emitters can reduce their variability to approach that of normal emitters. Therefore, to minimize the statistical uncertainty in the test program the number of normal and higher emitters in the test fleet should represent the contribution of each sub-fleet to total in-use emissions. Since the relative contribution of normal and higher emitters to total VOC emissions is approximately equal (as discussed at length in the RIA), equal numbers of normal and higher emitters must be contained in any test fleet. (4) Waiver Provisions for Different Test Program Requirements. A number of options were discussed in April 16, 1992 which attempted to simplify or minimize the vehicle test fleet requirements while still maintaining the statistical confidence in the results of any test program. Based upon EPA's experience with the programs conducted as part of the complex model development, the test fleet provisions promulgated here represent the minimum possible if adequate statistical confidence in test program results is to be maintained. In fact, EPA believes that many petitioners may desire to test additional vehicles in order to improve their study's statistical power and thereby improve the likelihood that an augmentation petition would be granted. Nevertheless, in some instances petitioners may believe that a more optimal test fleet composition than the one specified above exists for the fuel parameter being tested. In such cases, petitioners can petition the Administrator to approve a waiver from certain of the requirements in this section relating to the number of test vehicles and their distribution among the normal and higher emitter groups. Any such waiver would have to be obtained in advance of the start of the test program involved. A request for such a waiver must include an adequate justification for the requested change, including the rationale for the request and supporting data and information. EPA reserves the right to require testing of additional vehicles beyond the 20-vehicle minimum where such testing is necessary to evaluate emission effects properly. 8. Data Analysis a. Weighting of emission test data. The manner in which the test data is to be analyzed must be consistent with the goal that the emission benefits from reformulated gasoline be realized in-use, just as is the case for the exhaust emission complex model itself (as discussed in Section IV). Therefore, augmentation of the models with vehicle testing results must reflect the effects of fuel modifications on emissions of each exhaust pollutant (VOC, NOX, benzene, 1,3- butadiene, formaldehyde, and acetaldehyde) on 1990 vehicles. The augmentation also must incorporate differences in these effects for vehicles with different emission control technologies and different emission levels. The vehicle selection criteria discussed above are intended to satisfy these requirements without requiring an extremely large test fleet. The results of vehicle test programs will be weighted to reflect the contribution of each emitter class and technology type to in-use emissions according to the procedure described in Section IV for the exhaust emission complex model. b. Data analysis to extend the range of existing model parameters. When extending the range of a fuel parameter already included in the complex model, EPA believes that the data generated through vehicle testing should be combined with the data used to develop the complex model itself. This approach offers several important advantages. First, it takes full advantage of existing knowledge regarding the effects of the parameter in question on emissions. Second, it reduces inconsistencies between the complex model and the augmentation, thereby simplifying certification and enforcement. Third, it reduces the possibility of petitioners deliberately manipulating the test program to obtain a desired augmentation since the limited data generated by the test program will be combined with the much more extensive data available in the complex model database. The analysis process is described in detail in section 80.48 of today's regulations and in Section IV.G of the RIA. The process requires that the emission effects of the parameter being tested be verified at the extended level while not permitting emission effects of other parameters to be modified from the effects incorporated in the complex model. In addition, the augmentation would only apply to fuels with levels of the parameter being tested that fall outside the range for which the complex model is valid. These safeguards are intended to prevent the results of vehicle testing from being used to alter aspects of the complex model that a fuel supplier or other organization deems undesirable. c. Data analysis to add new fuel parameters. Vehicle test data for new fuel parameters such as new additives cannot be analyzed in the manner described above for existing fuel parameters. Vehicle-to-vehicle variability can cause significant differences in vehicle responses to parameters already included in the complex model from what the complex model would predict. The analysis method described above would apply these differences entirely to the new parameter, which would allow substantial opportunities to game the testing and model augmentation process. To minimize the risk of gaming and assure proper representation of the effects of new fuel parameters, a different analysis process must be used when augmenting the model with a new fuel parameter. This process is designed to identify the effects of the new parameter itself, including its behavior upon dilution, as well as any interactive effects between the parameter and existing complex model parameters. The process itself is described in detail in section 80.48 in today's regulations and in Section IV of the RIA. The modeling process incorporates five techniques to minimize gaming and isolate the actual emission effects of the new parameter being tested. First, the complex model is used to adjust the emissions performance of the test vehicles on the three fuels for any differences in fuel parameters other than the one being tested. These adjustments should be minor, since fuel properties other than the one being tested are required to be nearly identical. Second, the linear and squared terms for the new parameter are determined based on test data from addition fuels 1, 2, and 3 before interactive effects are introduced into the augmented complex model based on the results of testing addition fuels 4, 5, 6, and 7. This approach is used because the direct effects of fuel parameters (represented by the linear and squared terms) are less easily gamed or obscured than are interactive effects since fewer variables are involved. Third, the statistical criteria defined in section 80.57 are used to assure that only statistically significant terms are included in the augmentation. Fourth, the model must include all terms for the pollutant being modeled that are already included in the complex model. In addition, only the linear, squared, and interactive terms involving the new parameter are permitted to enter the augmentation. The coefficients for the complex model terms will be fixed at the values established in this rule. By not permitting the augmentation to change existing complex model terms, the analysis process reduces opportunities to game to modify complex model effects that the testing organization considers undesirable. Fifth, augmentations are not permitted for parameters not contained in the complex model but for which measurements exist in the complex model database. Including such parameters in an augmented complex model is likely to result in large changes in complex model coefficients due to the interrelationship between fuel properties. Such changes would complicate enforcement and might introduce fungibility problems that would diminish the in-use effectiveness of reformulated fuels. Further, EPA's experience in developing the complex model suggests that including such parameters would introduce collinearity problems and exacerbate the risk of test program gaming. Since such parameters were considered for inclusion in the complex model but were rejected based on input from affected parties and EPA staff, EPA has decided not to permit augmentations for such parameters. However, the Agency will consider including such parameters in subsequent revisions to the complex model. Interactive terms were not permitted to enter EPA's complex models for exhaust toxics, as discussed in Section IV and the RIA. Hence interactive effects on toxics emissions are not permitted in augmentation petitions, unless the test program was intended and specificially designed to investigate such effects. The preceding discussion assumes that the interactive effects identified through testing cannot be traced to a specific cause. If the cause of the interactive effect can be identified, it may be appropriate to determine a greater beneficial augmentation due to the parameter in question than the effects identified through the procedure above or to include an interactive term in the complex model. Therefore, EPA will allow testing of additional fuels to identify the cause of the interactive effect and the magnitude of the effect for representative in-use fuels (again subject to Agency approval regarding the appropriateness of the petitioner's definition of representative gasoline). Petitioners will be required to obtain approval from the Administrator for the proposed additional testing before beginning such testing. Petitioners will be permitted to claim larger benefits for the parameter in question based on the results of such tests, subject to the approval of the Administrator. For a more complete description of these procedures, the reader is referred to section 80.57 of the regulations and to Section IV of the RIA. d. Acceptance criteria. As discussed in Section H, EPA reserves the right to evaluate the quality of testing data submitted in support of petitions to augment the models, to reject test data or analyses submitted to the Agency if such data or analyses are found to be insufficient, flawed, or otherwise deficient, and to include test data or analyses from other sources when evaluating the proposed augmentation to the model. VI. Phase II (Post-1999) Reformulated Gasoline Performance Standards and NOX Standards for Reformulated Gasoline A. Introduction The Clean Air Act (the Act), as amended in November 1990, establishes a more stringent minimum level of control of ozone-forming VOCs and air toxics emissions from reformulated gasoline beginning in the year 2000 than is required prior to that date. For the first five years of the reformulated gasoline program (Phase I; January 1, 1995 through December 1999), Congress established a minimum requirement of 15% reduction of ozone forming VOCs and toxic air pollutants [CA section 211(k)(3)(B)].6 Starting with January 1, 2000 (Phase II), the 15% minimum required reductions are increased to 25%, with the provision that EPA may increase or decrease this level based on technological feasibility, considering cost, but may not decrease it below 20% [CA section 211(k)(3)(B)]. The restriction on increases in NOX emissions continues to apply during Phase II of the program. --------------------------------------------------------------------------- \6\The numerical performance standard of Sec. 211(k)(3)(B) sets the minimum level of reductions, as it is more stringent than the reductions achieved by the formula fuel in Sec. 211(k)(3)(A). --------------------------------------------------------------------------- The regulatory negotiation conducted by EPA for this rulemaking did not address the Phase II VOC and toxics standards, nor did it address a reduction in NOX emissions beyond the statutory cap imposed under section 211(k)(2)(A). After analyzing the costs and benefits of various controls, along with other relevant factors, EPA proposed a range of possible Phase II standards for VOC and toxics. Furthermore, based on EPA's view that NOX reductions were important to achieve attainment of the ozone NAAQS in many nonattainment areas, EPA also proposed a NOX reduction performance standard for Phase II reformulated gasoline relying on EPA's authority under section 211(c)(1)(A). A more detailed discussion of EPA's Phase II proposals for VOCs, toxics, and NOX is provided in subsection 2 below. For the reasons described below, EPA has decided to establish per gallon Phase II VOC performance standards of 25.9% for VOC control region 2 (northern areas) and 27.5% for VOC control Region 1 (southern areas).7 EPA is also promulgating a per gallon toxics performance standard of 20% for all reformulated gasoline. Reformulated gasoline will also have to meet a 5.5% per gallon reduction in emissions of NOX. EPA has also established more stringent VOC, toxics, and NOX performance standards where a refiner or importer complies on average, as well as minimum per gallon standards, as explained in section C below. --------------------------------------------------------------------------- \7\The 27.9% VOC performance standard for VOC control region 1 is measured against the statutory baseline gasoline, which has an RVP of 8.7 psi. This amounts to a 17.7% VOC reduction when measured against a baseline gasoline with RVP of 7.8 psi. --------------------------------------------------------------------------- 1. Statutory Requirements Section 211(k)(1) requires that reformulated gasoline achieve the greatest reductions possible in volatile organic compounds (VOCs) and toxics emissions, ``taking into consideration the cost of achieving such emission reductions, any nonair-quality and other air-quality related health and environmental impacts and energy requirements. Specifically, section 211(k)(3)(B) of the Act requires that, in the year 2000 and beyond, ``aggregate emissions of ozone-forming volatile organic compounds from baseline vehicles8 when using reformulated gasoline shall be 25 percent below the aggregate emissions of ozone forming volatile organic compounds from such vehicles when using baseline gasoline9.'' Similarly, a 25% reduction in emissions of toxic air pollutants is required. The Act also specifies that the Administrator may adjust the 25 percent reduction level to provide for lesser or greater reductions based on technological feasibility, giving consideration to the cost of achieving such reductions. In no case can the required reduction be less than 20 percent. The Act further provides that emissions of oxides of nitrogen (NOX) cannot increase as a result of the use of reformulated gasoline. These VOC and toxics reductions and NOX limit are known as the Phase II reformulated gasoline standards. --------------------------------------------------------------------------- \8\According to section 211(k)(10)(A) of the Act, ``baseline vehicle'' means representative model year 1990 vehicles. \9\The formulation for summertime baseline gasoline is defined in section 211(k)(10)(B) of the Act. See further discussion of baseline emissions in section IV. --------------------------------------------------------------------------- Section 211(c) of the Act allows the Administrator to regulate fuels or fuel additives if ``any emission product of such fuel or fuel additives causes, or contributes to, air pollution which may reasonably be anticipated to endanger the public health or welfare.'' Section 211(c)(2) further provides that EPA cannot control these fuels and fuel additives ``except after consideration of all relevant medical and scientific evidence available * * *, including consideration of other technologically or economically feasible means of achieving emissions standards.'' In addition, EPA must find that the prohibition ``will not cause the use of any other fuel or fuel additive which will produce emissions which will endanger the public health or welfare to the same or greater degree than the use of the [regulated fuel/fuel additive].'' EPA has elected to use this authority to require reformulated fuels to also achieve NOX reductions in order to reduce ozone formation, based on scientific evidence regarding the benefits of NOX control and on the cost-effectiveness of NOX reductions. The determination of the need for, scientific justification of, and cost-effectiveness of NOX control is presented in the RIA and summarized in subsection C.2 below. 2. Proposal EPA proposed a range of VOC and toxics performance standards for Phase II reformulated gasoline, covering a variety of options for setting these standards [see the Notice of Correction for the Proposed Rule 58 FR 17175 (April 1, 1993)]. The proposed VOC standards ranged between 29.7 and 37.7 percent reduction in emissions for VOC control region 1 areas (Class A and B, the southern areas of the country) based on a baseline fuel with an RVP of 8.7 psi10, and between 26.7 and 34.7 percent reduction for VOC control region 2 areas (Class C, the northern areas of the country) [58 FR 17178, 17179, 17180 (April 1, 1993)]. These percentage reductions are in comparison to the emissions performance of baseline vehicles operating on baseline gasoline; the proposed version of the complex model was used to establish a fuel's emissions performance. In proposing the range of values EPA considered the costs of VOC control, the cost-effectiveness of the controls, the health and environmental effects, energy impacts, and technological feasibility. --------------------------------------------------------------------------- \1\0Relative to a baseline fuel including an RVP of 7.8 psi, the proposed VOC standards ranged between 20.7 and 31.7 percent reduction. --------------------------------------------------------------------------- EPA's analysis showed that fuels meeting the proposed VOC and toxics standards were expected to show no increase in NOX emissions, and in fact would likely achieve some reduction in NOX. Based on the expected benefits of NOX reduction, and considering various other factors, EPA also proposed NOX emissions reduction standards for Phase II reformulated gasoline based on the authority of section 211(c)(1)(A) of the Act. The proposed NOX standards ranged from 0 to 14.8 percent reduction for VOC control region 1 (southern areas) and 0 to 15.4 percent reduction for VOC control region 2 (northern areas) [58 FR 17178-9 (April 1, 1993)]. Again, the NOX emissions performance of a fuel would be determined using the proposed complex model. The range of proposed standards was based, in part, on different levels of potentially acceptable cost-effectiveness as well as whether the cost-effectiveness was calculated based on reductions in NOX emissions alone or on the combined reduction in VOC and NOX emissions. EPA proposed alternative VOC standards that would apply depending on whether EPA adopted a NOX reduction standard. These were based on changes in the cost-effectiveness analysis from combined VOC plus NOX emissions reductions. As explained in the proposal, measures taken to achieve the NOX reductions under this option would result in VOC emission reductions incremental to those obtained under the proposed VOC only standards, which were based solely on the cost per ton of VOC reduced. These additional VOC emission reductions obtained through a combined VOC plus NOX standard presented the option of setting a standard for larger VOC reductions. EPA analyzed the cost- effectiveness of a more stringent VOC standard in connection with a NOX standard, and proposed a range of values depending on the target cost-effectiveness level: for southern areas, 29.7-40.2 percent based on an 8.7 psi baseline RVP (20.7-33.8 percent reduction based on a 7.8 psi baseline RVP); for northern areas, 26.7-37.3 percent reduction. In analyzing potential VOC and NOX reduction requirements, EPA looked at two potential cost-effectiveness targets: $5,000/ton and $10,000/ton. These figures were selected as representative of the range of cost-effectiveness for controls which would be incurred by many ozone nonattainment areas in achieving attainment. In addition, they reflected higher cost-effectiveness values than those for any then- existing federal nationwide motor vehicle or motor vehicle fuel control programs. Finally, EPA proposed a toxics emissions reduction standard between 20 and 25 percent. The 25 percent reduction standard proposed was based on the level specified in section 211(k)(3)(ii) of the Act. In the proposal, EPA recognized that while on average this level of toxics control was cost effective, it could be highly cost ineffective for some refiners. The statutory minimum 20 percent reduction standard was proposed as an alternative to allow refiners further flexibility in meeting the VOC and NOX standards (and for some to reduce the need for capital intensive modifications specific to toxics control), under circumstances where in most cases large reductions in toxics emissions would automatically result from the VOC and NOX controls. 3. General Comments Received on Proposal EPA received several comments recommending a reproposal of the Phase II standards once the complex model was finalized and EPA could develop a single standard for each pollutant. One comment stated that the construct of the complex model will have a significant effect on the standards, and it was therefore not possible to comment on the costs or performance of the Phase II standards as proposed (since they were not based on the final complex model). Others commented that it was improper to establish standards until the model that predicts benefits exists. EPA does not believe it is necessary to repropose these standards, since the proposal presented a range of values for the standards and outlined all of the options that were considered. The final standards were derived based on the final complex model, so the standards include the effect of the complex model on the emissions reductions predicted. EPA had proposed, and it was agreed in Reg-Neg, that the Phase II standards would be promulgated with the complex model. Briefly described below are the factors EPA considered in setting the standards being promulgated today, the methodology used in determining the cost-effectiveness of fuel controls, and the reasoning used in determining the standards. The full analysis leading to the final standards is more thoroughly discussed in section VI of the regulatory impact analysis (RIA) associated with this rulemaking. B. Factors Affecting Selection of the Phase II Standards In determining the Phase II reformulated gasoline standards, EPA considered the health, environmental, and energy impacts, as well as the cost and the technological feasibility of reformulating gasoline to attain emission reductions of VOCs, toxics, and NOX. EPA's analyses of these factors are discussed briefly below, and in detail in the RIA. 1. Health and Environmental Impacts The purpose of the reformulated gasoline program is to reduce motor vehicle emissions of ozone forming VOCs and certain specified toxic air pollutants in those areas most in need of such reductions. As discussed above, EPA is also reducing ozone forming NOX emissions from RFG as a part of this rulemaking. EPA measured the health and environmental benefits of the reformulated gasoline program in terms of the number of tons of VOC, NOX, and toxics reduced, since the Act specifies mass-based emissions reductions. The benefits of toxics reductions were further evaluated on the basis of the number of cancer incidences avoided, since this is a common measure of the effectiveness of toxics control. The reader is directed to section C below for quantified estimates of these reductions. The benefits of ozone reduction will be gained through the reduction of both VOC and NOX emissions. Ambient ozone levels and the effect of VOC emission reductions on these levels vary from city to city, making it difficult to quantify the benefits of the VOC reduction beyond tons of emissions reduced. In general, reductions in VOC emissions will improve the air quality of most affected areas and thereby reduce the negative health impacts of exposure to high levels of ozone. Visibility and other environmental measures are also improved through reductions in emissions of ozone precursors. Similar benefits will be gained through reductions in NOX emissions. The reader is directed to subsection C.2 for further discussion on the health and environmental benefits of NOX control. Reducing ozone levels in highly populated urban areas would help to reduce short-term health effects such as impaired lung function, cough, nausea, chest pain, throat irritation, increased susceptibility to respiratory infection, and increased sensitivity of asthmatics to allergens (e.g., pollen) and other bronchoconstrictors. Long-term health effects of exposure to ozone include accelerated aging of the lungs, reduced elasticity of the lungs, scarring of lung tissue, and permanent reductions in baseline lung function. Although the reformulated gasoline program is concentrated in urban areas, some reformulated gasoline will be used in rural areas as a result of spillover in the distribution system. Reducing ozone levels in rural areas would enhance agricultural crop yield, currently estimated to be reduced by as much as $2-3 billion per year by existing ozone concentrations.11 In addition, lower ozone levels would help reduce damage to forest ecosystems which experience lower tree growth rate, foliage damage, and increased susceptibility to stress (e.g., insects, disease, drought) caused by current tropospheric ozone levels.12 --------------------------------------------------------------------------- \1\1U.S. EPA, ``Air Quality Criteria for Ozone and Other Photochemical Oxidants,'' EPA Report No. EPA-600/8-84/020A-E, p.1- 27. \1\2Ibid., p. 7-1 through 7-4. --------------------------------------------------------------------------- Reductions in mobile source emissions of the air toxics addressed in the reformulated gasoline program (benzene, 1,3-butadiene, formaldehyde, acetaldehyde, and POM) may result in fewer cancer incidences. A number of adverse noncancer health effects have also been associated with exposure to air toxics, particularly with higher level exposures experienced in particular microenvironments such as parking garages and refueling stations. These other health effects include blood disorders, heart and lung diseases, and eye, nose, and throat irritation. Some of the toxics may also be developmental and reproductive toxicants, while very high exposure can cause effects on the brain leading to respiratory paralysis and even death. The use of reformulated gasoline meeting the Phase II standards will likely help to reduce some of these health effects, as well. A more thorough discussion of the variety of possible non-cancer effects of concern from exposure to air toxics is contained in EPA's Motor Vehicle-Related Air Toxics Study.13 --------------------------------------------------------------------------- \1\3EPA document 420-R-93-005, April 1993. --------------------------------------------------------------------------- The emissions reductions and cancer incidences avoided as a result of today's standards are discussed below in section C. In addition to the benefits from reductions in emissions of VOC, NOX, and toxics, other environmental benefits will be realized as a result of the use of reformulated gasoline. Emissions of carbon monoxide will decrease as the result of adding oxygen to the fuel, to the benefit of areas out of attainment for this air pollutant and to human health in general.14 In addition, since reformulated gasoline is projected to cost more than conventional gasoline, it is possible that consumers will purchase and, thus, use less gasoline, resulting in fewer overall emissions due to mobile sources. --------------------------------------------------------------------------- \1\4Most of this benefit will occur as a result of the use of oxygen in Phase I RFG, not from the Phase II reductions. --------------------------------------------------------------------------- 2. Energy Impacts Production of Phase II reformulated gasoline subject to performance standards for VOC, NOX, and toxics will require an increase in the amount of energy used at the refinery. An estimate of the energy used depends on many factors, including how the energy balance is evaluated, the type and source of oxygenate, the refinery configuration, and the reformulation approach. Determining an exact energy increase associated with reformulated gasoline production (on the basis of a constant level of gasoline energy produced) is difficult. As later sections of this document will show, the standards for VOC and NOx reduction promulgated today will likely be met largely through reductions in the sulfur content and Reid vapor pressure (RVP) of the fuel. The process used to remove sulfur from gasoline, hydrodesulfurization, is an energy intensive process; mainly due to the need for and consumption of hydrogen. The energy impact will depend on the sulfur level of the crude used by the refinery and the level of sulfur control necessary for that refinery to meet the standards. Reducing the RVP of the fuel requires removal of the lighter compounds in the fuel, also an energy consuming process. Overall, it is expected that the energy consumption by refineries in producing Phase II reformulated gasoline will increase slightly (perhaps a couple percent) over the level of energy used to make Phase I RFG, but the magnitude of this increase is difficult to measure due to the many variables involved. 3. Technological Feasibility EPA also considered the technological feasibility of producing fuels to meet the Phase II standards. EPA believes that the refinery modeling results (from which the fuel parameter control costs were estimated) indicated that it is technologically feasible to make the fuel parameter changes that were analyzed in developing the standards. The refinery models utilize only well-developed, demonstrated, commercially available technologies, and are designed to only model fuels within the limits of these technologies.15 Given the cost incentives created by this rulemaking, in all likelihood new technologies will be developed between now and the year 2000 which will reduce the costs for certain types of fuel parameter changes. Thus, EPA believes that the determination of fuel parameter control costs using the results of the existing refinery models is reasonable, that the costs generated are perhaps conservative, and that the technological feasibility of producing such emission-reducing fuels is justifiable. This position was supported by many of the comments received. While other commenters questioned the costs used in developing the proposal (as discussed in subsection 4.b), no comments questioned the technological feasibility of these refinery configurations. --------------------------------------------------------------------------- \1\5See the RIA for additional details on the refinery models used for this analysis. --------------------------------------------------------------------------- Because the standards promulgated today will not take effect until the year 2000, and because all the processes needed to produce complying fuels are already commercially available, EPA does not believe that lead time will be an issue in achieving the required emissions reductions. 4. Fuel Safety and Driveability EPA evaluated safety concerns associated with the use of low RVP fuels and found no significant negative impacts, as discussed in the RIA. Comments also raised concerns about driveability problems arising from the use of low RVP fuels. They raised concerns that EPA's analysis in the proposal did not address spring months (the transition time to the VOC control period), September RVP fuel sold in October, and low RVP gasoline sold in low temperature areas near nonattainment areas. While neither EPA nor any other organization conducted driveability testing at low ambient summer temperatures, EPA has looked at the actual vapor pressure of fuels currently in production, as documented in the draft RIA.16 Based upon a comparison of actual vapor pressures, EPA believes that 6.5 psi RVP fuel in the summer should have similar driveability to current winter fuels. At this time EPA believes there should be no significant driveability problems with gasoline at an RVP level down to 6.5 psi. Until such time as data can be gathered to more fully evaluate the driveability impacts of low RVP fuels, EPA believes that 6.5 psi may present a practical lower limit below which the existence of adverse driveability impacts is unknown. Discussions with representatives of both the oil and automotive industries reflected a similar uneasiness in going below 6.5 psi RVP given the lack of data at lower levels. However, the standards for Phase II RFG are performance based standards. As a result, flexibility exists for refiners to meet the Phase II standards, without reducing the RVP of the gasoline below 6.5 psi. --------------------------------------------------------------------------- \1\6``Draft Regulatory Impact Analysis for the Notice of Proposed Rulemaking of the Complex Model, Phase II Performance Standards, and Provisions for Renewable Oxygenates,'' February 5, 1993. --------------------------------------------------------------------------- 5. Cost-Effectiveness of Emissions Reductions a. Introduction. For purposes of this discussion, EPA defines cost- effectiveness as the ratio of the incremental cost of a control measure to the incremental benefit, e.g., tons of VOC or other emissions reduced. Considering cost-effectiveness allows the Agency to develop a relative ranking of various ozone and toxics control strategies so that an environmental goal can be achieved at minimum cost. As the cost- effectiveness of an emission reduction strategy increases, it may be possible to achieve similar, substantial emission control in other ways (e.g., through other regulatory programs) at the same or lower cost per unit of benefit. EPA therefore considered cost-effectiveness in deciding what VOC, NOx, and toxics control, if any, to impose beyond the minimum levels required under section 211(k)(3)(B). One commenter recommended that EPA evaluate the cost-effectiveness of this program separately for small and large refiners, and also that EPA consider granting small refiners more time to comply with the requirements (as is allowed by California for California reformulated gasoline). The California reformulated gasoline program requires all refiners selling gasoline in the state to produce reformulated gasoline, and thus does not afford any flexibility to refiners, large or small. The federal RFG program, however, does not require 100% production of RFG in any region, nor does it require that every refiner produce RFG. Hence, small refiners can choose not to produce RFG and instead supply conventional gasoline if the costs of complying with the program are too burdensome. For those small refiners electing to produce RFG, the option to select between per gallon and averaging standards, as well as the ability to set their own baselines, gives them flexibility to meet the standards in the manner that is most cost effective for them. Furthermore, the enforcement structure is based on a single set of standards for Phase II RFG. Allowing some refiners to comply with a different set of standards would require additional and more complicated enforcement provisions, and could jeopardize the fungibility of reformulated gasolines.17 Since EPA believes that the existing program provides sufficient flexibility to small refiners, there is no need to pursue multiple enforcement programs. See section XV for additional discussion of the impact of this rule on small refiners. --------------------------------------------------------------------------- \1\7For Phase I RFG, the standards are set at the statutory minimum for both VOCs and toxics. EPA could not lawfully allow small refiners less stringent standards or more time to comply with the Phase I standards. --------------------------------------------------------------------------- b. Fuel Parameter Control Costs. Fuel parameter control costs and interrelationships between fuel parameters are integral parts in the evaluation of the cost-effectiveness of Phase II RFG controls. The costs and interrelationships used to develop the VOC and toxics standards were estimated from the results of refinery modeling performed by Bonner and Moore Management Science,18 by Turner, Mason, and Co. for the Auto-Oil Air Quality Improvement Research Program;19 by Turner, Mason, and Co. for the Western States Petroleum Association (WSPA);20 and by EPA in-house (using the Bonner and Moore refinery model).21 EPA used these regional refinery models to estimate the cost and interrelationships of various fuel parameter controls. The final average nationwide costs were obtained by weighing the regional values by the estimated fraction of total reformulated gasoline (RFG) production in each region. --------------------------------------------------------------------------- \1\8Bonner and Moore Management Science, ``Study of the Effects of Fuel Parameter Changes on the Cost of Producing Reformulated Gasoline,'' Prepared for EPA under contract through Southwest Research Institute and the National Institute for Petroleum and Energy Research. This data, as well as data generated by EPA in- house, was made available to the public through the following document: ``DOE and API Phase II Cost Estimates,'' EPA Memorandum from Lester Wyborny, FSSB, to the Air Docket, November 4, 1993. \1\9``Costs of Alternate Gasoline Reformulations, Results of U.S. Refining Study,'' Turner, Mason & Co. for the Economics Committee of the Auto/Oil Air Quality Improvement Research Program, April 1992. \2\0``WSPA Study of the Cost Impacts of Potential CARB Phase 2 Gasoline Regulations,'' Turner Mason & Company for the Western States Petroleum Association, November 18, 1993. \2\1``Aromatics and E200 Reformulation Costs,'' Memorandum from Lester Wyborny, EPA, to the Air Docket, December 10, 1993. --------------------------------------------------------------------------- Many comments were received on the costs used in the proposal. Some of these comments, and EPA's response, are summarized here, while the RIA contains a complete discussion and analysis of the comments received. Several commenters questioned the appropriateness of using independent refinery models to generate costs for control of individual parameters. In addition, they questioned the aggregation of results from regional models to generate national average costs, and recommended instead using a model from the region likely to realize the highest costs for producing reformulated gasoline (PADD 1). While using regional models to estimate national average costs requires an acknowledgment of the inherent limitations in such models, EPA believes that it is appropriate to use them for the purpose of determining the costs to produce reformulated gasoline. The limitations and assumptions made in using the refinery models and the results of this analysis are discussed in detail in the RIA. The manufacturing cost of producing gasoline is the sum of the capital recovery cost and the operating costs, adjusted for changes in the energy content of the fuel (to represent consistent fuel economy). VOC control is mandated only during the high ozone season, and thus all costs were allocated to the high ozone season in the refinery modeling work. In contrast to VOC control, toxics control and the benefits from reductions in toxics emissions occur year-round. Although the costs of toxics control should be determined on an annual basis, EPA used the same costs that were used for the VOC analysis, since it had been determined in the RIA (and supported by many comments received) that additional toxics control would be highly cost-ineffective. The level of either VOC or toxics control that is cost effective is not greatly affected by the accuracy of the costs, due to the magnitude of reductions achieved. Some comments received on the proposal raised the concern that this method of determining costs did not accurately reflect all of the costs of the program, since the ``compliance costs'' for record keeping and enforcement, as well as costs incurred by pipelines or other entities, were not included. While it is true that ``compliance costs'' will be incurred as a result of the reporting and enforcement requirements of Phase II RFG, EPA does not anticipate the costs to be greater than those incurred by the Phase I RFG program. Refiners will already be supplying the information required by EPA for Phase I, and will continue to do so under Phase II. Hence, there is no additional cost of compliance to add to the costs of Phase II RFG. Other factors affecting incremental fuel parameter control costs include the amount of reformulated gasoline produced by the refinery and the effects of fuel parameter changes on fuel economy. Because producing reformulated gasoline reduces flexibility in refinery operations, the cost of producing such fuels increases with the amount of reformulated gasoline that is produced in a given refinery. In this analysis, EPA used a scenario of RFG production based on participation in the reformulated gasoline program by the nine mandated areas, those areas which had opted into the program as of August 14, 1993 (the close of the comment period on the proposal), the entire Northeast Ozone Transport Region (including both attainment and nonattainment areas), and all other ozone nonattainment areas. This scenario was chosen to represent the Phase II RFG program that would result if all eligible areas opted into the program. Since the Ozone Transport Commission has not announced plans to opt-in to the RFG program, and the only additional nonattainment areas that have opted into the program since August 14 are those located in Kentucky, the volume of RFG production used for this analysis is overstated by about 20 percentage points. As a result, the cost estimates are higher than will likely be experienced, since use of RFG in the entire Northeast would severely limit refinery production in that region, incurring somewhat higher costs to individual refiners, particularly to those refiners which for economic reasons would choose not to produce RFG and merely continue producing conventional fuel. EPA evaluated the costs for incremental control levels for a variety of fuel parameters. This evaluation revealed that the greater the level of control, the higher the costs of achieving that level. Complete information on the development of the individual parameter costs is provided in the RIA. Several comments were received questioning the validity of evaluating the cost-effectiveness of Phase II RFG on a parameter by parameter basis. The recommended alternative was to evaluate the cost of producing a gasoline meeting the standards for a variety of refinery configurations, and to use this information to determine the cost- effectiveness of the standard. As explained in the RIA, EPA determined that it was appropriate to evaluate cost-effectiveness on an incremental basis to properly compare fuel controls to other forms of emission control. c. Emissions reductions.--In determining the emission reductions and the associated cost-effectiveness of VOC control, EPA employed a convention typically used in estimating the benefit of both mobile and stationary source VOC controls. This convention requires the determination of cost-effectiveness on the basis of annual tons of VOC reduced. Thus, even though VOC emission reductions required under section 211(k) occur only during the high ozone season, the convention is to calculate the cost of the fuel parameter control per ton of VOC removed as if the high ozone season emission reductions were spread over the whole year. Comments were received that questioned the appropriateness of evaluating the cost-effectiveness on an annualized tons reduced basis rather than on a summer tons reduced basis, since the program is a summer program. The purpose of applying this convention to the evaluation of Phase II RFG was to allow direct comparison of the cost-effectiveness of this program with the cost- effectiveness of other VOC control strategies, which is typically calculated on a year-round basis. The only other appropriate alternative would be to recalculate the cost-effectiveness of all other programs on the basis of cost per ton of control during the high ozone season, the only time period when emission reductions for the purposes of ozone control are of any significant value. Reductions in emissions of both exhaust and evaporative VOC are determined for a given fuel parameter change using the complex model. As discussed in earlier sections, the complex model statutory baseline emissions are based on 1990 vehicle technology, and compliance with the Phase II standards is measured relative to these base emissions. As explained in the RIA, EPA determined that the olefin level specified in the statutory baseline was not representative of the actual olefin level of gasoline in 1990. Phase I RFG includes no specific limits on olefins, and thus refiners can meet Phase I standards (under the complex model) by controlling any fuel parameters. However, refiners whose olefin baseline is significantly higher than the statutory level may need to reduce olefins to meet the no NOx increase requirement, putting them at a competitive disadvantage because olefin control is costly. Hence, using data from Bonner and Moore modelling as well as fuel surveys from cities across the country, the baseline olefin level was reevaluated and set at 13.1 vol% for the purposes of determining cost-effectiveness. Although the standards require reductions for baseline vehicles relative to the emissions from the statutory baseline fuel, the cost- effectiveness of a given fuel parameter control is measured based on actual, i.e., in-use emission reductions. For this reason, EPA determined the cost-effectiveness of fuel parameter changes relative to the incremental in-use emissions. The baseline in-use emissions were determined for 2003, a typical post-1999 year, using MOBILE5a with enhanced inspection and maintenance (I/M), as discussed in section IV.22 Exhaust and evaporative percent reductions for in-use emissions are determined separately by applying the percent reduction in emissions predicted by the complex model to the in-use emissions, and then totalled to get total in-use emissions reductions. The cost, emissions reductions, and cost-effectiveness of incremental changes in fuel parameters for Phase II RFG is calculated relative to Phase I RFG. --------------------------------------------------------------------------- \2\2Following the precedent set in the proposal, the in-use baseline for VOC Control Region 1 areas included an RVP of 7.8 psi. The standards set today are based on reductions relative to the statutory baseline fuel with an RVP of 8.7 psi, however. --------------------------------------------------------------------------- To determine the cost-effectiveness of the toxics standard, EPA employed the convention of basing cost-effectiveness on the number of cancer incidences avoided. The number of cancer incidences avoided is determined based on the reduction in emissions of each regulated air toxic. The complex model was used to calculate the annual reduction in both exhaust and evaporative emissions of each toxic for each fuel reformulation. Each toxic emission has a different unit risk factor, defined as the number of cancer incidences per year per gram-per-mile- emission per person. Therefore, the emissions of each toxic pollutant were converted to an estimate of annual cancer incidences using the risk factor for that pollutant and the population of the participating reformulated gasoline areas. The total cancer incidences resulting from the total toxics emissions were then calculated by summing the cancer incidences for the individual toxics. d. Cost-effectiveness. The costs and emissions reductions for each parameter change are combined to determine the incremental cost- effectiveness ($/ton) of each level of control, assigning all of the costs to the control of the pollutant of concern (VOC or NOX). Several comments were received regarding this method of establishing cost-effectiveness. One comment suggested that refiners are likely to reduce parameters to levels lower than the mandated limits to ensure compliance with the standards. Thus it was suggested that the cost analysis should be based on a marginal increase in the standard to determine the true cost-effectiveness of the program. EPA's cost- effectiveness analysis is inherently an averaging analysis, however, since the cost estimates are based on the responses of average regional refineries to changes in fuel composition. Averaging allows refiners to be high or low for any batch of fuel, as long as their average meets the standard over the course of the entire compliance period. Measurement error goes both above and below the true values on any given batch of fuel, but should average zero over the course of many batches. As a result, there is no need for a compliance margin in setting an averaging standard. EPA proposed a range of VOC and NOX emission reduction standards based, in part, on two possible benchmarks for cost- effectiveness, $5,000/ton and 10,000/ton.23 Several commenters stated that $5,000/ton was most appropriate, particularly in light of the inaccuracies in the cost analysis. Some commenters believed that $5,000/ton was too high compared to alternate control strategies, while others stated that this was reasonable compared to other strategies currently required. --------------------------------------------------------------------------- \2\3As discussed later, EPA considered a number of issues, including flexibility of refiners and burden to the industry, in addition to cost-effectiveness when setting the Phase II RFG standards. --------------------------------------------------------------------------- Upon review of the costs of other VOC and NOX control programs (see subsections C.1 and C.2 below), EPA believes that a cost- effectiveness benchmark of $10,000/ton is too high at this point in time and that a cost-effectiveness of approximately $5,000/ton is more appropriate for the Phase II VOC standard and the accompanying NOX standard. The standards presented today fall within this guideline. The cost-effectiveness of toxics control was similarly determined as the ratio of the total incremental cost for the incremental reduction in emissions to the total tons of toxics reduced. The cost- effectiveness of toxics control was also calculated as the ratio of total costs to incremental reductions in cancer incidences. EPA's proposal did not include any benchmark limits for the cost- effectiveness of toxics control, but did acknowledge that in most cases control above the statutory minimum was not cost-effective. This conclusion was supported by the comments received, and by the final analysis presented here. C. Phase II Reformulated Gasoline Standards and NOX Standards for Reformulated Gasoline The following sections explain the development of the VOC standards for Phase II reformulated gasoline, and the NOX standards EPA is setting for gasoline sold in RFG areas after 1999. The final standards are summarized in subsection 3 below. 1. VOC Standards Development Table VI-1 shows the incremental fuel parameter control costs, emissions reductions, and cost-effectiveness calculated by EPA for use in setting the VOC emissions standards. The specific fuel parameter changes shown in the table are only examples; refiners may achieve the required standards by any combination of fuel component controls resulting in the required emissions performance. EPA received conflicting comments regarding which parameters would likely be controlled to meet the proposed standards in a cost effective manner. As demonstrated in the RIA, EPA has used all available information to determine which parameters can be controlled in a cost effective manner to achieve VOC emission reductions. Table VI-1.--Fuel Parameter Control Costs and VOC Reductions\1\ ------------------------------------------------------------------------ Incremental Fuel parameter cost ( Cumulative Incremental Incremental control cents/gal) reduction cost-eff. to phase I (%) ($/ton) ($/ton) ------------------------------------------------------------------------ Phase I--RVP: 8.0 psi, Oxygen: 2.1wt%, Benzene: 0.95%: RVP to 7.1 psi.. 0.18 22.9 400 400 RVP to 6.7 psi.. 0.08 25.5 600 400 Sulfur to 250 ppm............ 0.12 \2\26.1 3,700 600 Sulfur to 160 ppm............ 0.56 27.1 11,000 1,300 Sulfur to 138 ppm............ 0.24 27.4 19,000 1,600 Sulfur to 100 ppm............ 0.52 27.8 24,000 2,300 Olefins to 8.0 vol%........... 0.78 26.2 (-) 3,700 Aromatics to 20 vol%........... 2.01 27.8 24,000 6,000 Oxygen to 2.7 vol%........... 0.61 28.2 28,000 6,600 Olefins to 5.0 vol%........... 2.77 27.4 (-) 11,000 E300 to 88%..... 0.35 27.4 48,000 11,000 E300 to 91%..... 2.01 27.5 198,000 14,000 E200 to 44%..... 0.38 27.7 37,000 14,000 E200 to 47%..... 1.32 28.4 36,000 15,000 E200 to 50%..... 2.97 29.0 96,000 18,000 ------------------------------------------------------------------------ \1\Based on costs and emissions reductions for VOC control region 2 (northern areas). Assumes all costs allocated to VOC control. \2\RVP control down to 6.5 psi, the limit considered reasonable at this point in time for driveability purposes, would increase this value to 27.2% at a similar cost-effectiveness level. As the information in the Table VI-1 shows, RVP control down to 6.7 psi achieves virtually all of the VOC emission reductions that are achievable at less than $5,000 per incremental ton of VOC reduced.24 Sulfur can be reduced to a level of approximately 250 ppm at an incremental cost-effectiveness of less than $5,000 per ton, gaining an additional 0.6% VOC reduction, to achieve a total reduction (on average) of 26.1%. RVP could also be reduced further to 6.5 psi, the level currently considered a reasonable limit for driveability purposes, to obtain an additional 1.1% reduction (for a total of 27.2%). Incremental changes in fuel parameters other than RVP have only a marginal effect on VOC emissions and can be very costly; less than an additional one percent reduction would be achieved at a significantly higher incremental cost of over $10,000/ton VOC. In spite of the uncertainty in the cost estimates used, the level of VOC control that is cost effective is relatively insensitive to variations in cost due to the fact that anything other than RVP and the first increment of sulfur control causes the costs to escalate dramatically, making control of other parameters cost ineffective. --------------------------------------------------------------------------- \2\4Note that the cost of this level of reduction incremental to the emission reductions achieved by Phase I RFG is significantly less than $1,000/ton VOC. --------------------------------------------------------------------------- The cost-effectiveness of VOC control in Phase II RFG presented in Table VI-1 has been compared to the cost-effectiveness of other stationary and mobile source VOC control strategies. As summarized in the RIA, a review of the estimated cost-effectiveness of controlling VOC emissions from stationary sources yielded a wide range of values. Many of the existing VOC control strategies have minimal costs or even result in savings. However, a number of VOC control options have significant costs associated with them. For example, the estimated cost-effectiveness of reducing emissions from automobile and light truck coating operations in assembly plants is $1,000-4,000/ton VOC. Reducing emissions from the production of pneumatic rubber tires is estimated to cost between $150 and $18,800 per ton of VOC reduced, depending on the operation to which control is applied. Control of emissions from floating roof tanks used for storage of petroleum liquids can cost up to $3,700/ton VOC reduced. Reducing emissions from the production of high density polyethylene, polypropylene, and polystyrene resins can cost between $1,000 and $3,000/ton VOC reduced depending on the level of control. Control of VOC emissions from mobile sources similarly is estimated (see the RIA) to result in a wide range of cost-effectiveness values, depending on the type of program and level of control achieved. Enhanced inspection and maintenance (I/M) programs will cost between $900-1,700/ton VOC reduced, while basic I/M was estimated to cost $5,400/ton VOC.25 The Tier 1 standards for light duty vehicles (already implemented for the 1994 model year) were estimated to cost about $6,000/ton VOC. --------------------------------------------------------------------------- \2\5``Inspection/Maintenance Program Requirements,'' Final Rule, 57 FR 52984, November 5, 1992. --------------------------------------------------------------------------- 2. NOX Standards Development While section 211(k)(2)(A) of the Act specifies that there be no net increase in NOX emissions (over baseline levels) resulting from the use of reformulated gasoline, both a National Research Council study26 and a study prepared for EPA27 have indicated that additional NOX reductions could significantly reduce ozone formation in many areas. Gasoline vehicles contributed 20-35% of total urban NOX inventories in 1990 and are expected to contribute similar amounts in 2000.28 As identified in subsection A.1 above, section 211(c) of the Act gives the Agency broad regulatory authority to regulate motor vehicle fuel quality if any emission product of such fuel causes or contributes to air pollution which may reasonably be anticipated to endanger public health or welfare. Based on the reports cited above, other EPA work in ambient ozone analysis, and the authority granted EPA under section 211(c), EPA proposed setting a NOX emission reduction standard in connection with the Phase II standards to further reduce ozone formation during the high ozone season. --------------------------------------------------------------------------- \2\6 ``Rethinking the Ozone Problem in Urban and Regional Air Pollution,'' National Research Council, December 18, 1991. \2\7 ``Modeling the Effects of Reformulated Gasolines on Ozone and Toxics Concentrations in the Baltimore and Houston Areas,'' prepared for EPA,OPPE,APB by Systems Applications International, September 30, 1992. \2\8While Tier I vehicles, which have lower NOX emissions than conventional vehicles, will be entering the fleet, they will have only had five years to displace older, dirtier cars by 2000. Anticipated growth in vehicle miles travelled will offset any emissions benefits gained from the use of cleaner cars. --------------------------------------------------------------------------- A number of aspects of the RFG program lead naturally to a focus on NOX control. First, Phase II RFG is focused on the worst ozone nonattainment areas. Second, these areas will be required to use VOC controlled Phase II RFG only during the time of the year when control is needed (the summer months). Third, special fuel distribution for RFG will already be in place in these areas; many of the costs of producing and distributing this new gasoline will have been incurred as a result of the Phase II program. Fourth, EPA has shown (in the RIA and the following sections) that gasoline can be refined cost-effectively to reduce NOX emissions. EPA sees little benefit in creating a second gasoline program, which would likely differ only slightly from RFG in the geographic areas affected, to control NOX emissions. A large segment of the industry is already making the changes necessary to comply with the Phase I RFG standards in 1998 relative to the statutory baseline for sulfur and olefin levels (and all other parameters defined). Therefore, many refiners will be assessing the need for sulfur and olefin control in the next few years to ensure they comply with the no NOX increase requirement of the Act. Promulgated separately, a NOX standard would require refiners to make changes to their refineries in addition to those already made to comply with Phase I RFG and the Phase II VOC and toxics standards, perhaps making some of the original refinery changes obsolete. By enacting a NOX emissions reductions program at this time EPA hopes to avoid this concern. EPA believes that in locations where reformulated gasoline is found necessary to reduce the formation of ozone, a NOX standard is appropriate as well, as discussed below and in Section VI of the RIA. The Agency received many comments about the proposed NOX standards. Some commenters claimed it was counter to the regulatory negotiation agreement. This concern has been addressed in section A above. Others felt that NOX control should be considered on a local basis to meet local needs and thus should not be part of a national fuel program. Another stated that states should have to demonstrate the need for mobile source NOX control before EPA required it. Some commenters supported NOX control based on the cost-effectiveness analysis presented in the proposal because of the similarity with the costs of other current NOX control programs. One comment suggested that EPA control NOX by eliminating the oxygen requirement using the authority granted in section 211(k)(2)(A). It was also questioned whether EPA had satisfied the requirements to use the authority granted in section 211(c) regarding the supporting information presented in the proposal. The remainder of this section presents EPA's response to these concerns; additional detail may be found in the RIA. a. Scientific justification for NOX control. As discussed in the RIA, a recent study by the National Research Council (NRC) indicated that VOC control alone is of minimal benefit to ozone nonattainment areas such as Houston which have high VOC to NOX ratios in the ambient air.29 The NRC study and work by EPA30 and others31 have also indicated that NOX control is an effective ozone control strategy for the northeast (including New York- Connecticut and Boston-Maine) as well as the Lake Michigan region (Milwaukee, Chicago, and Muskegon). In general, many studies have shown that NOX control alone may be helpful in achieving ozone reductions in some areas, though not necessarily in all areas, again depending on the VOC to NOX ratios. Reductions in emissions of both VOC and NOX should benefit all areas, however. Those areas that do not benefit from the reduction in NOX emissions should benefit from the large reduction in VOC emissions that will be achieved by Phase II RFG. --------------------------------------------------------------------------- \2\9National Research Council, Rethinking the Ozone Problem in Urban and Regional Air Pollution, National Academy Press, Washington, D.C., 1991. \3\0U.S. EPA, Regional Ozone Modelling for Northeast Transport (ROMNET), EPA Report 450/4-91-002a, June 1991. \3\1See the RIA for additional references. --------------------------------------------------------------------------- There are also non-ozone benefits of NOX control, such as reductions in emissions leading to acid rain formation, reductions in toxic nitrated polycyclic aromatic compounds, lower secondary airborne particulate (i.e. ammonium nitrate) formation, reduced nitrate deposition from rain, improved visibility, and lower levels of nitrogen dioxide. A complete discussion of these benefits can be found in the RIA. A NOX standard also should effectively protect against an increase in the olefin content of the fuel, reducing concern over a possible increase in the reactivity of vehicle emissions. b. Consideration of section 202 motor vehicle controls. Before controlling or prohibiting a fuel or fuel additive under section 211(c)(1)(A), the Administrator must consider ``other technologically or economically feasible means of achieving emission standards under section [202].'' This has been interpreted as requiring consideration of regulation through motor vehicle standards under section 202 prior to regulation of fuels or fuel additives under section 211(c)(1)(A) [Ethyl Corp. v. Environmental Prot. Agcy., 541 F.2d 1, 32 (D.C. Cir. 1976)]. This does not establish a mandatory preference for vehicle controls over fuel controls, but instead calls for the good faith consideration of motor vehicle standards before imposition of fuel controls [541 F.2d at 32 n.66]. This reflects Congress' recognition that fuel controls under section 211(c)(1)(A) might logically involve controls on fuel composition itself, while vehicle standards under section 202 are generally performance standards, regulating vehicle emissions and not the design or structure of the vehicle. Fuel controls might therefore lead to greater government involvement in the regulation of the manufacturing process than would be expected from vehicle controls [541 F.2d at 11 n.13]. Congress addressed this concern by requiring agency ``consideration'' of vehicle standards under section 202 before imposition of fuel controls under section 211(c)(1)(A). It is important to note that the Administrator must in good faith consider such vehicle controls, but retains full discretion in deciding whether to adopt either fuel or vehicle controls, or both [541 F.2d at 32 n.66]. In evaluating motor vehicle controls under section 202 in this context, the first major point to consider is that EPA has already imposed more stringent NOX control standards on motor vehicles. The Tier 1 standards for light-duty motor vehicles and trucks require reductions in light-duty motor vehicle NOX emissions starting with model year 1994, with a percentage phase-in of the more stringent Tier 1 standards until they apply to all new model year 1996 and later light-duty vehicles and trucks. These vehicles are also required to meet in-use standards.32 For heavy-duty vehicles, EPA recently reduced the NOX standard to 4 g/bhp-hr, starting with model year 1998 [58 FR 15781, March 24, 1993] --------------------------------------------------------------------------- \3\256 FR 25724, June 5, 1991. Also, note that the Tier 1 standards apply to light-duty trucks with a loaded vehicle weight rating of 3,750 lbs. or less. --------------------------------------------------------------------------- While these motor vehicle and motor vehicle engine controls are expected to reduce mobile source emissions of NOX, this result is limited by certain basic facts. First, the standards only apply to new motor vehicles and engines. It will therefore take several years after the first model year of the standards before vehicles and engines certified to these standards will make up a significant portion of the motor vehicle fleet.33 In addition, it is expected that emissions reductions based on the reduction in the NOX standard will be offset to a significant extent by an increase, over time, in total vehicle miles travelled. --------------------------------------------------------------------------- \3\3As supported by the MOBILE5a model, 58 FR 29409, May 20, 1993. --------------------------------------------------------------------------- In addition to motor vehicle controls under section 202, EPA has recently adopted or proposed other controls aimed at in-use NOX emissions from mobile sources. The enhanced inspection and maintenance (I/M) rules call for use of these more stringent I/M procedures starting with 1996 [57 FR 52950, November 5, 1992]. EPA has also proposed standards that would limit NOX emissions from new large horsepower diesel non-road engines, pursuant to section 213 of the Act [58 FR 28809, May 17, 1993]. While enhanced I/M programs will directly affect the motor vehicle fleet, the non-road engine regulations are similar to the motor vehicle regulations under section 202 in that they would apply to new non-road engines only, and therefore involve a certain time before a significant portion of this category of non-road engines is replaced by new engines certified to meet the NOX standards. Additional mobile source controls, whether under section 202 or under other authority such as described above, may well be cost effective and reasonable options that EPA might decide to adopt. However, there are certain limitations imposed by Congress on adoption of more stringent standards (``Tier 2 standards''). For example, Congress spelled out when and under what conditions EPA may promulgate more stringent NOX standards for light-duty vehicles and trucks. Congress required that EPA conduct a study on whether more stringent standards for light-duty vehicles and trucks should be adopted, and report back to Congress no later than June 1, 1997 [section 202(i) (1), (2)]. Based on the study EPA must conduct a rulemaking to determine whether there is a need for such further reductions, whether the technology will be available for such reductions, and whether further reductions in emissions from such vehicles will be cost effective. If these determinations are made in the affirmative, then EPA would proceed to promulgate emissions standards that are more stringent than the Tier 1 standards [section 202(i)(3)(C)]. If EPA does promulgate more stringent standards, they may not take effect any earlier than model year 2004, and no later than model year 2006. It is clear from this that EPA has not, at this time, completed the lengthy process for determining whether or not more stringent standards should be established for light-duty vehicles and trucks under section 202(i). Congress established a detailed provision spelling out the procedures to follow and the substantive determinations that must be made before such controls could be adopted. There is no indication, and EPA does not believe, that these mandated procedures and criteria preclude the exercise of discretion under section 211(c)(1)(A) prior to completion of the rulemaking under section 202(i). Congress required that EPA consider motor vehicle controls, but did not establish a mandatory preference for such controls and did not preclude the adoption of fuel controls prior to a decision on Tier 2 motor vehicle standards. In any case, it is clear that a decision to impose more stringent NOX standards for light-duty vehicles and trucks under section 202(i) could not take effect prior to model year 2004. It would then take several years before a significant portion of the in-use fleet would include vehicles or trucks certified to a NOX standard more stringent than the Tier 1 standard. A similar situation would apply to a more stringent NOX standard for heavy-duty engines. The mandatory leadtime and stability provision of section 202(a)(3)(C) would preclude imposition of more stringent NOX standards for heavy-duty engines until model year 2001 at the earliest. It would again take several years before a significant portion of the in-use heavy-duty fleet contained engines certified to a more stringent NOX standard. For non-road engines and vehicles, EPA expects to continue to explore NOX controls. But as with motor vehicles, any new or more stringent NOX standards will only apply to new non- road engines, after providing a reasonable period for leadtime. The effect on in-use emissions is delayed based on the time needed before new non-road engines replace earlier models. Given these circumstances, there are several important reasons why promulgation of a NOX reduction standard for reformulated gasoline is important, whether or not additional vehicle or engine controls are later adopted by the Agency. First, emissions reductions from the NOX performance standard would start as soon as the standard is applicable, with no delay based on fleet turnover time. Significant NOX emission reductions would be achieved right away, in the summer of 2000, while more stringent light-duty or heavy-duty standards would not be expected to significantly affect in-use emissions until much later in that decade. Second, a NOX reduction standard for reformulated gasoline would act to reduce emissions from all mobile sources that use gasoline, whether on-road or off-road, while section 202 or section 213 standards only act to limit emissions from new engines or vehicles in that specific category of mobile sources. Third, this fuel control is specifically aimed at areas of the country that are in nonattainment for ozone, and is limited in time to that part of the year when ozone is of most concern. Vehicle or engine controls, in contrast, apply to all new engines or vehicles, wherever they are used, throughout the year. This fuel control thus allows a more narrow regulatory solution aimed at the specific geographical areas and time periods when control is needed. Fourth, the expected increase in vehicle miles travelled over time leads EPA to believe that this fuel control is needed to continue to achieve the in-use NOX emission reductions necessary for many areas of the country to reach attainment for ozone. Finally, the NOX fuel standard adopted here minimizes any concern there might be that a fuel control would tend to interfere in the production process by directing refiners on how to make their product. The NOX standard is not a fuel recipe, but instead establishes a performance standard, leaving refiners free to produce their gasoline in any way that achieves the desired reductions. EPA is not at this time determining whether additional vehicle or engine NOX controls should be adopted under section 202 or any other provision of the Act. Instead, based on all of the above, EPA believes that a NOX reduction standard for reformulated gasoline under section 211(c)(1)(A) is an appropriate exercise of discretion, whether or not the agency imposes additional vehicle or engine NOX controls in the future. c. Cost-effectiveness of NOX control in RFG. EPA has evaluated the cost-effectiveness of NOX control using the same costs that were used in establishing the standard for VOC control. The results are summarized in Table VI-2 below. The table indicates that sulfur is the only fuel parameter that results in significant NOX reductions at a reasonable cost. Changes in fuel parameters other than sulfur have only a small effect on NOX emissions at significantly higher costs, with the possible exception of olefin control (which would increase VOC at the same time it reduced NOX). A NOX reduction of approximately 6.8% could be achieved with sulfur control down to approximately 138 ppm at a reasonable cost, whether compared on the basis of the cost of the last increment of reduction (5.8% to 6.8% NOX) or the overall cost incremental to Phase I RFG reductions. Table VI-2.--Fuel Parameter Control Costs and NOX Reductions\1\ ------------------------------------------------------------------------ Incremental Fuel parameter cost ( Cumulative Incremental Incremental control cents/gal) reduction cost-eff. to phase I (percent) ($/ton) ($/ton)\2\ ------------------------------------------------------------------------ Phase I: RVP: 8.0 psi, Oxygen: 2.1wt percent, Benzene: 0.95 percent......... RVP to 6.7 psi... ........... 0.4 Sulfur to 250 ppm 0.12 2.4 1,300 3,200 Sulfur to 160 ppm 0.56 5.8 3,700 3,500 Sulfur to 138 ppm 0.24 6.8 5,200 3,700 Sulfur to 100 ppm 0.52 8.7 6,200 4,200 Olefins to 8.0 vol percent..... 0.78 10.8 8,000 5,000 Aromatics to 20 vol percent..... 2.01 11.9 40,000 8,200 Oxygen to 2.7 vol percent......... 0.61 12.5 25,000 8,900 Olefins to 5.0 vol percent..... 2.77 14.1 37,000 12,000 E300 to 88 percent......... 0.35 14.1 (-) 13,000 E300 to 91 percent......... 2.01 14.2 820,000 16,000 E200 to 44 percent......... 0.38 13.9 (-) 17,000 E200 to 47 percent......... 1.32 13.7 (-) 19,000 E200 to 50 percent......... 2.97 13.5 (-) 24,000 ------------------------------------------------------------------------ \1\Based on costs and emissions reductions for VOC control region 2 (northern areas). Assumes all costs allocated to NOX control. Cost effectiveness values will be slightly lower if credit given for the VOC reductions that also result with some of the fuel changes. \2\NOX cost effectiveness incremental to a Phase II VOC standard would be slightly lower, especially for the first few increments. A NOX emissions reduction of 6.8% would be slightly less than half of that achieved from California Phase II reformulated gasoline, since California requires sulfur reduction to approximately 30 ppm,34 aromatics reduction to 22 vol%, olefins reduction to 4 vol%, and control of fuel distillation parameters.35 However, the cost-effectiveness of producing a fuel with the requirements of California Phase II RFG in a national program would be extremely poor (roughly an order of magnitude higher) relative to that of the standards being set today. --------------------------------------------------------------------------- \3\4All values based on the averaging standard. \3\5Based on the same methodology used to determine the 7.0% NOX reduction for federal RFG (using the complex model), California Phase II RFG is estimated to achieve a NOX reduction of about 14.6%. --------------------------------------------------------------------------- d. Cost-effectiveness of other NOX control strategies. The cost-effectiveness of a 6.8% NOX standard has been compared to the cost-effectiveness of other existing and planned mobile and stationary source NOX control programs. The Tier 1 emissions standards for light duty vehicles (already implemented for the 1994 model year) described above in 2.b will incur an estimated incremental cost of $2,000-6,000/ton NOX if credit is only given for those emission reductions achieved in ozone nonattainment areas (to allow direct comparison with reformulated gasoline). Increasing the stringency of the NOX cutpoint in enhanced inspection and maintenance programs (in effect, causing a greater number of vehicles to fail the test and incur repair costs) is estimated to have a cost-effectiveness of $4,000-8,000/ton. Achieving the Tier 2 mobile source NOX standards (should EPA determine that such standards are necessary to meet air quality requirements) are likely to cost more than $10,000/ton of NOX reduced. Certain NOX controls for heavy-duty highway and nonroad vehicles are likely to be as or more cost effective as a 6.8% NOX reduction standard. EPA is in the process of developing and studying such controls. However, as discussed in subsection 2.b, heavy-duty NOX controls cannot be implemented without mandatory leadtime provisions, and thus the benefits of these controls will not be realized for many years beyond implementation of the Phase II RFG standards. In addition, all heavy-duty mobile source NOX control strategies that have not yet been implemented or are not already under consideration are likely to be very costly. NOX control combined with the reformulated gasoline program is very reasonable by contrast. The comparative cost-effectiveness to stationary source NOX emission controls is based on control strategies suggested for utility boilers.36 In ozone nonattainment areas, standards are being considered that will require controls more stringent than suggested by reasonably achievable control technology (RACT) standards. The RACT standards will likely be met through the use of low NOX burner technology. This technology has a relatively low cost-effectiveness at up to $1,000/ton, but the achievable emissions reduction is limited. In order to attain the required level of control for utilities to meet the ozone air quality standard in many areas, additional controls will likely be required, especially by the year 2000. One of the likely strategies utilized will be selective catalytic reduction (SCR) which is estimated to cost $3,000-$10,000/ton NOX. --------------------------------------------------------------------------- \3\6``Evaluation and Costing of NOX Controls for Existing Utility Boilers in the NESCAUM Region''; Draft Report prepared by Acurex Corp., prepared for Bill Neuffer, OAQPS, U.S. EPA, October 1992. --------------------------------------------------------------------------- 3. Final VOC Standards and NOX Standards To reduce the cost to the industry of complying with the Phase I and Phase II RFG standards, EPA had proposed granting refiners the option of meeting the VOC and the air toxics emission standards on an averaging basis rather than requiring compliance on a per gallon basis. However, the NOX emissions standards had to be met on a per gallon basis rather than on an average basis. Several comments received on the NOX standard expressed a desire for the allowance of NOX averaging as well as a per gallon standard. According to these comments NOX averaging would provide greater flexibility to refiners, and was consistent with the Reg-Neg agreement. One comment stated that NOX averaging would not cause air quality concerns, while a per gallon NOX standard (even at no NOX increase) would impose substantial constraints on VOC. NOX averaging would provide the industry with greater flexibility in meeting the NOX standard for Phase II RFG. In addition, the cost-effectiveness analysis is inherently based on averaging (since the costs are derived based on regional refinery models). Hence, EPA has elected to allow both a per gallon and an averaging standard for NOX emissions under the Phase II RFG program. As discussed in section VII, the Phase II averaging standard for NOX is set 1.3 percentage points more stringent than the per gallon standard (slightly smaller than the increment for VOC and air toxics). A minimum per gallon standard (under averaging) will be set at 4 percentage points below the averaging standard, following the precedent set with the VOC standard for Phase I RFG. Based on all of the factors discussed above, as well as the results of the regulatory impact analysis, EPA today is setting VOC reduction standards for Phase II reformulated gasoline and concurrent NOX reduction standards for gasoline sold in areas participating in the RFG program beginning in the year 2000. (The toxics standard is discussed below in subsection 4.) The standards are shown in Table VI-3 below. The combination of fuel parameters on which the standards are based is just one of many fuel formulations which could be used to achieve the standards. From EPA's analysis of cost-effectiveness, however, it is clear that RVP control and sulfur control are expected to be the basic fuel parameter changes that refiners will rely on to comply with these standards. At the same time, it must be stressed that today's standards are performance standards which may be met by the refiner's choice of fuel parameter controls; EPA is not establishing specifications for fuel composition. Specific issues concerning these final standards are discussed in the following sections. Table VI-3.--VOC Standards for Phase II Reformulated Gasoline and NOX Reduction Standards [Percent Reduction in Emissions] ------------------------------------------------------------------------ VOC VOC Controlled emission control control region 1 region 2 ------------------------------------------------------------------------ VOC: Per gallon.................................... \1\27.5 25.9 Averaging..................................... 29.0 27.4 Minimum....................................... 25.0 23.4 NOX: Per gallon.................................... 5.5 5.5 Averaging..................................... 6.8 6.8 Minimum....................................... 3.0 3.0 ------------------------------------------------------------------------ \1\Reductions relative to a base fuel with RVP at 7.8 psi on a per gallon basis would be 17.2% for VOC and 5.3% for NOX. a. Flexibility for refiners. The VOC and NOX standards presented in Table VI-3 were determined assuming both controls were necessary. Were EPA not to set a NOX standard, there may be greater flexibility to further control RVP for the purposes of VOC control. As shown in Table VI-1, for the purposes of VOC control RVP to 6.5 and sulfur to 250 ppm would achieve a reduction of 27.2% in VOC control region 2, at an incremental cost-effectiveness of $3,700/ton VOC (or less than $600/ton incremental to the Phase I reductions). This is nearly the same level of reduction achieved with RVP at 6.7 psi and sulfur reductions to 138 ppm under the combined VOC and NOX standards. Various comments questioned basing the VOC standard on a gasoline RVP of 6.5 psi, due to potential driveability problems with fuels at lower RVPs (which refiners will produce on occasion to meet the average standard). Commenters were concerned that the VOC standard would reduce the flexibility available to refiners by essentially requiring all RFG to have an RVP of 6.5 psi. As discussed previously, EPA currently believes that 6.5 psi RVP is a practical limit in the reduction of gasoline volatility, due to the lack of information at the present time to ascertain whether or not driveability problems exist below that level. In the absence of NOX control, EPA believes that adequate flexibility would still exist for refiners to meet a VOC performance standard based on the control of RVP down to 6.5 psi, since some flexibility still exists in adjusting sulfur and olefin levels. However, in the context of a NOX standard this flexibility is greatly reduced. A fuel meeting the combined requirements of 6.5 psi RVP and 138 ppm sulfur would achieve a VOC reduction of 28.4% (in VOC control region 2) and a NOX reduction of 6.9%. Standards based on this fuel formulation could severely restrict the flexibility for some refiners, and pose an undue burden on others. For example, refiners with various parameter levels above the statutory baseline would need additional VOC control to offset the VOC impact of these parameters. Under the above scenario, these refiners would be limited in achieving further RVP control, since the ability to further reduce RVP and sulfur and/or increase olefins would be limited. This would significantly increase the cost-effectiveness of the VOC control. Upon consideration of these concerns, among other issues, EPA decided to set a VOC standard derived based on a fuel RVP of 6.7 psi to allow refiners some flexibility to meet the performance-based VOC standard through control of RVP without the need to go below 6.5 psi. By setting a concurrent NOX standard based largely on additional sulfur control, which also achieves some small additional VOC reductions, refiners will not need to go as low as 6.5 psi to meet the equivalent level of VOC control. The cost-effectiveness of a 6.8% (on average) NOX reduction standard when credit is given for the additional level of VOC control obtained at this level of sulfur reduction is approximately $5,000/ton NOX reduced. b. Costs and emissions reductions. The overall cost of the Phase II reformulated gasoline VOC standards and NOX standards for Phase II RFG is approximately 1.2 cents per gallon (incremental to Phase I RFG). This value appears to be reasonable, as the less stringent Phase I reformulated gasoline cost is estimated to be about 3-5 cents per gallon, as discussed in section V. EPA does not expect non-production related costs, such as distribution costs, recordkeeping and reporting costs, etc., to increase relative to Phase I reformulated gasoline. A complete discussion of the development of these costs is found in the RIA. As a result of today's standards, VOC emissions will be reduced by about 10,000 tons in VOC control region 1 (southern) areas each summer and 32,000 tons in VOC control region 2 (northern) areas. In addition, southern areas will experience a reduction of about 8,300 tons NOX and northern areas will experience a reduction of 13,800 tons NOX. The emissions reductions experienced in southern areas are smaller than experienced in northern areas due to the fact that southern areas are already required to use fuels with lower Reid vapor pressures, and thus the emissions reduction benefits of RFG use in these areas is smaller. c. Compliance margin consideration. Several commenters expressed a desire for looser standards to account for compliance margins. The optional provision for averaging standards allows refiners to meet the standards in the manner which is most cost-effective for their refinery in exchange for meeting a standard that is considered at least or more stringent as the per gallon standard plus a compliance margin. The VOC and NOX reduction standards have both been based in part on a cost-effectiveness analysis that implicitly is based on an averaging standard. In that case, a compliance margin becomes much less relevant, if at all, because of the flexibility introduced through averaging. d. Local selection of VOC or VOC and NOX control. EPA requested comments on an option to allow nonattainment areas to select between either VOC control or combined VOC and NOX control, depending on the air quality needs of that area. A potential problem with this option is that it would require production of another type of reformulated gasoline in one or more grades. Distribution problems and complications already expected with implementation of the reformulated gasoline requirements could increase. Many commenters opposed this option, citing added costs and complications to the distribution system which would likely result. No commenters appeared to be strongly in favor of it. Hence, the Agency has chosen not to allow local selection of a VOC and/or NOX control program. The standards for VOC and NOX emissions will apply to all reformulated gasoline areas. e. Other options considered. EPA proposed37 and investigated several options for VOC standards. One proposed option was to set a VOC standard at the statutory level of 25% reduction; this standard could also be set higher based on the cost-effectiveness analysis. Also mentioned in the NPRM was the option to relax the VOC standard if a NOX standard was promulgated to allow refiners more flexibility in meeting both standards. Finally, EPA proposed granting refiners the option to trade off VOC and NOX control within fixed limits on either standard. --------------------------------------------------------------------------- \3\7As corrected in 58 FR 17175, Thursday, April 1, 1993. --------------------------------------------------------------------------- EPA determined that setting only a 25% reduction VOC standard (with a requirement of no NOX increase) would provide minimal NOX reductions and marginal VOC benefits to southern (VOC Control Region 1) areas which will already use lower RVP fuel than northern areas under Phase I. A higher VOC standard selected based on a cost-effectiveness benchmark of about $5,000/ton would get somewhat greater NOX reductions and some additional VOC reductions in southern areas. EPA has set the VOC standard based on a level of reduction that would allow flexibility to refiners and would not be too economically burdensome. Since a NOX standard is being set concurrently, EPA set the VOC standard based on a slightly more relaxed RVP than might have been used if only a VOC standard were implemented, as discussed above in subsection a. One comment on the proposal strongly opposed lessening the maximum achievable level of VOC reduction to achieve NOX reductions. As discussed above, however, roughly the same level of VOC reduction is being achieved with both a NOX standard and a VOC standard (basing the standard on a fuel with 138 ppm sulfur and an RVP of 6.7 psi) as would be achieved if only VOC control were required (basing the standard on a fuel RVP of 6.5 psi and a sulfur level of 250 ppm). The final option proposed by EPA was to set a combined VOC and NOX standard and allow refiners flexibility in controlling emissions of either. As discussed in subsection C.2 above, EPA believes it is important to achieve both VOC and NOX control. VOC control alone would not provide significant ozone reduction benefits in all areas using RFG. The option of allowing refiners to meet a combined VOC and NOX standard would have likely resulted in VOC control (primarily through RVP reductions) with minimal NOX control. Refiners would have had a strong incentive to augment the complex model through vehicle testing and push RVP well below the 6.5 psi level in order to avoid sulfur control (for NOX reductions), since RVP control is much less costly. As mentioned previously, EPA has significant concerns about driveability problems with fuels with RVPs lower than 6.5 psi. Since refiners would be limited in their ability to cost effectively achieve the combined standards, the reductions achieved through this type of program would be in question. Hence, EPA has decided not to implement a combined VOC and NOX standard. No significant comments were received on this option. 4. Toxics Standard The statute sets the minimum Phase II standard for toxics reduction at 25%, although EPA has the authority to reduce this to no lower than 20% ``based on technological feasibility, considering cost.''38 EPA proposed both levels of reductions as options for the toxics standard. EPA has looked at the technology required to attain a 25% toxics standard, and the cost of implementing that technology. EPA expects that the technology implemented by refiners to comply with the required VOC and NOX reductions will result on average in a 26% reduction in annual toxics at reasonable costs, as discussed earlier. For certain refiners with higher baseline levels of various parameters, however, EPA expects that compliance with the VOC and NOX standards will not automatically lead to compliance with a 25% toxics standard. For these refiners, additional toxics control will typically require further benzene reduction or aromatics reduction (if octane can be maintained). Benzene reductions would impact only emissions of benzene, not 1,3-butadiene, which has been shown to be of greater cancer-causing risk to the public than the other air toxics.39 (The statutory requirements of section 211(k) requires a focus on reductions in mass emissions of air toxics, not on a reduction in cancer risk, and therefore does not permit EPA to set the standard based on cancer risk.) Implementation of the benzene and/or aromatics reduction technology will be expensive and will raise their costs of production, putting refiners facing this situation at a competitive disadvantage to those refiners who comply with the toxics standard ``for free'' based on their compliance with the VOC and NOX standards. In addition, a requirement of additional toxics reductions may also limit refiners' flexibility in producing reformulated gasoline. --------------------------------------------------------------------------- \3\8The toxics standard is a requirement for an average percent reduction over the entire year, not solely in the summer (high ozone) season. \3\9``Motor-Vehicle Related Air Toxics Study,'' EPA Report 420- R-93-005, April 1993. --------------------------------------------------------------------------- EPA has considered two additional factors in considering the feasibility of requiring this subset of refiners to pay the costs of implementing additional toxics control technology in order to meet a 25% standard. First, even if the toxics standard is reduced to 20%, EPA believes that the average toxics reduction across all refiners will still be above 25% based upon the fuel changes used to comply with the VOC and NOX standards. Second, the additional toxics control required by this subset of refiners results in very high cost per cancer incidence avoided. The main control strategies for toxics, benzene and aromatics reductions, are very expensive, in excess of $100 million/CI. This is well beyond the $1-10 million/CI which the Agency believes to be achievable through other programs. Even though a 25% toxics standard is technologically feasible, the unique circumstances discussed above raise questions about the increased cost to this subset of refiners of implementing additional toxics reduction technology. Based on these concerns regarding the costs of implementing toxics control technology, EPA is setting the toxics standard for Phase II RFG in both VOC control regions at 20%. There was general support in the comments received for the fact that the cost-effectiveness of toxics control beyond a 20% reduction is questionable. No substantive comments were received opposing the option of setting the standard at the minimum 20% reduction. Based on today's standards and the analysis summarized in the RIA, about 630 tons of toxics will be reduced in VOC control region 2 each summer and 370 tons of toxics in VOC control region 1. Emissions of all toxics except formaldehyde will be reduced. As a result of these emissions reductions, approximately 3-4 cancer incidences will be avoided annually nationwide (incremental to Phase I). VII. Enforcement Section 211(k) of the Clean Air Act requires, beginning January 1, 1995, that the gasoline sold or dispensed in certain ozone nonattainment areas must be certified as reformulated. Gasoline that is not certified as reformulated is classified as conventional gasoline and must be sold outside these nonattainment areas. Under the enforcement scheme promulgated today, refiners and importers will be required to designate all gasoline as either reformulated or conventional. Gasoline designated as reformulated must meet the standards for reformulated gasoline, and conventional gasoline must meet the anti-dumping standards for conventional gasoline. In addition, refiners and importers will be required to prepare product transfer documents for all gasoline produced or imported, that identify the gasoline as reformulated or conventional and specify restrictions as to the time and place where the gasoline may be used. Parties downstream of refiners and importers that transport, store, or dispense gasoline are responsible for ensuring that only reformulated gasoline is used in reformulated gasoline covered areas, and that reformulated gasoline is used at a time and place consistent with the time and place of use restrictions recited in the product transfer documents. In addition, downstream parties are responsible for ensuring that reformulated gasoline does not violate the per-gallon minimum and maximum standards, discussed more fully below. During calendar years 1995 through 1997, refiners and importers may certify reformulated gasoline pursuant to either the Phase I simple model standards, or the Phase I complex model (early use) standards. This election must be made separately for each refinery on a calendar year basis. During calendar years 1998 and 1999, all reformulated gasoline must meet the Phase I complex model standards, and beginning in 2000, all reformulated gasoline must meet the Phase II complex model standards. The final rule establishes reformulated gasoline standards for oxygen, benzene, toxics emissions performance, and heavy metals under all models. Standards for RVP, sulfur, T-90, and olefins are included only under the simple model, and standards for VOC and NOX emissions performance are included only under the Phase I and II complex models. A refiner or importer electing early use of the complex model during 1995, 1996, or 1997 must determine individual refinery or importer performance standards for VOC, toxics, and NOX. These standards are determined by evaluating the following slate of fuel parameter values in the Phase I complex model: The simple model requirements, per section 80.41(a) or (b), for benzene, RVP and oxygen; the aromatics value necessary to meet the simple model toxics standard using these values for benzene, RVP and oxygen; the refinery or importer individual baseline values for E-300, sulfur, and olefins; and the statutory summertime or wintertime baseline value for E-200. The percent reductions in VOC, toxics, and NOX emissions determined using the above fuel in the Phase I complex model are the reformulated gasoline standards for a refinery or importer electing early use of the complex model. Beginning in 1998, the Phase I reformulated gasoline VOC, toxics, and NOX standards for a refinery or importer are as specified in section 80.41 (c) and (d). As a result of the individual refinery or importer baselines under complex model early use, gasoline that is produced under this option at any specific refinery or imported by any specific importer, may not be fungibly mixed with gasoline that is produced at another refinery or imported by another importer. This segregation of early use complex model gasolines, and other segregation requirements, are discussed more fully below. Refiners and importers may elect to meet certain reformulated gasoline 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 gasoline produced at a refinery by a refiner, or imported by an importer, during a calendar year. Refiners and importers cannot meet the standard for any single parameter on a per-gallon basis for certain batches and on average for other batches during any calendar year. A refiner or importer that opts for compliance on average must also meet requirements for gasoline quality surveys. Standards that may be met on average are RVP, oxygen, and benzene, and VOC, toxics, and NOX emissions performance. The purpose of the gasoline quality surveys is to ensure, for example, that RVP averaging by refiners or importers does not result in a covered area receiving reformulated gasoline that, on average over the covered area, has a higher RVP than would occur without such refiner or importer averaging. This applies for each parameter subject to refiner or importer averaging. In the event a gasoline quality survey reveals that the gasoline being used in a covered area does not meet the per-gallon standard for any regulated parameter, the per- gallon maximum or minimum standard for that parameter is made more rigorous, and except in the case of oxygen the standard for average compliance is made more rigorous. With certain limited exceptions, these adjusted standards apply to all gasoline produced at each refinery that supplied the covered area with the failed survey during the year of the survey failure, or during any year the adjusted standards apply. These gasoline quality survey requirements also apply to oxygenate blenders that meet the oxygen standard on average. The final rule also includes other mechanisms to ensure that refiner or importer averaging will not result in a covered area receiving reformulated gasoline that, on average, is less ``reformulated'' than would occur absent such refiner or importer averaging. To meet this goal, EPA established standards for average compliance that are more rigorous than the standards for per-gallon compliance, and established the per-gallon maximums and minimums that apply to gasoline meeting the averaged standards. These maximums and minimums limit the range of averaging for the averaged standards, and the more stringent averaged standards require refiners and importers to further reformulate their gasoline to meet these standards. Refiners and importers may meet the averaged standards for oxygen and benzene through the exchange of credits. Credits are generated as a result of a refiner producing, or an importer importing, gasoline that on average exceeds the averaged standards for oxygen or benzene over the averaging period. An oxygenate blender using the averaged oxygen standard may generate, or use, oxygen credits. The final rule specifies the manner in which credits must be used. Credits must be generated in the same averaging period as they are used--credits may not be banked for use in a later averaging period; all credit transfers must occur within fifteen days following the end of the averaging period in which they are generated; and only validly created credits may be used to achieve compliance. The final rule constrains the use of the averaged standard for oxygen, and the use of oxygen credits in certain circumstances. Reformulated gasoline subject to simple model standards that is designated for use in the high ozone season--VOC-controlled reformulated gasoline--must meet both the oxygen standard and the RVP standard separately during the VOC control period (discussed more fully below). Simple model VOC-controlled gasoline may not be averaged with simple model non-VOC-controlled gasoline to show compliance with the oxygen standard during the VOC control period. In addition, reformulated gasoline designated for use in cities subject to the requirements of the oxygenated fuels program during the oxygenated fuels program control period (or ``OPRG'' gasoline) may not be averaged together with gasoline not designated for this use for purposes of meeting the oxygen standard on average.40 As a result, only oxygen credits generated from VOC-controlled gasoline subject to simple model standards may be used to meet the separate oxygen standard for VOC- controlled gasoline; and oxygen credits generated from OPRG gasoline may only be used to meet the oxygen standard for OPRG gasoline. The mechanisms used to ensure correct accounting under these oxygen averaging and credit constraints are discussed in a separate section below. --------------------------------------------------------------------------- \4\0The oxygenated fuels program refers to state programs established pursuant to Sec. 211(m) of the Act, involving wintertime use of oxygenated gasoline to control emissions of carbon monoxide. --------------------------------------------------------------------------- The final rule also includes provisions that regulate the manner in which oxygenates may be added downstream of the refinery or import facility within the reformulated gasoline program. Oxygenate may only be added to specially formulated reformulated gasoline blendstock intended for such downstream oxygenate blending (or ``RBOB''). If oxygenate were added to reformulated gasoline not specially formulated, in most cases the resulting gasoline would not meet the reformulated gasoline standards. Refiners and importers of RBOB are required to include in the RBOB product transfer documents the type and amount, or range of types and amounts, of oxygenate that may be blended with each particular RBOB. RBOB must be segregated from reformulated gasoline, and from other RBOB having different oxygenate requirements, to the point of oxygenate blending. Distributors may only dispense RBOB to registered oxygenate blenders. Oxygenate blenders may only blend the specified type and amount of oxygenate with any RBOB, and must meet the standard for oxygen for all RBOB dispensed to them. Refiners and importers are required to meet the reformulated gasoline standards for RBOB for all parameters other than oxygen, based on the properties of the reformulated gasoline that will be produced through blending the appropriate type and amount of oxygenate with the RBOB. As a result, if the incorrect type and/or amount of oxygenate is blended with the RBOB, the refiner or importer may fail to comply with the non-oxygen standards. In order to ensure that the non-oxygen standards for RBOB are met, refiners and importers may transfer RBOB only to oxygenate blenders with whom they have a first- or second-hand contractual relationship. This contract must include procedures intended to ensure proper performance of oxygenate blending. In addition, the refiner or importer must conduct a quality assurance program over the oxygenate blender's blending operation. These constraints on the transfer of RBOB do not apply if a refiner or importer designates the RBOB as suitable for blending with any oxygenate or with ethers only,41 and assumes that ethanol will be blended with ``any-oxygenate'' RBOB and MTBE will be blended with ``ether-only'' RBOB. A refiner or importer using this blending assumption option further assumes that the volume of oxygenate blended will be that amount necessary for the resulting reformulated gasoline to have an oxygen content of 2.00 weight percent, or approximately 5.70 volume percent in the case of ethanol, and approximately 10.80 volume percent in the case of MTBE. These oxygenate blending assumptions are discussed more fully below. --------------------------------------------------------------------------- \4\1The ethers include but are not limited to MTBE, TAME, and ETBE. --------------------------------------------------------------------------- In order to ensure that gasoline produced or imported as reformulated in fact meets the reformulated gasoline standards, refiners and importers are required to engage an independent laboratory to sample each batch of reformulated gasoline produced or imported, and to analyze up to ten percent of the samples collected. EPA will direct the independent laboratories as to which samples to analyze. Refiners producing gasoline using computer-controlled in-line blending may obtain a waiver from EPA and have the in-line blending records audited in lieu of the independent sampling and testing requirements. The independent sampling and testing requirement is discussed more fully below. Under the final rule, refiners, importers, and oxygenate blenders are required to keep specified records that relate to the production or importation of gasoline, sampling and testing of gasoline, credit transfers, and compliance calculations. All regulated parties are required to keep copies of product transfer documents, and records of any quality assurance sampling and testing performed. Refiners, importers, and oxygenate blenders are required to submit reports to EPA that contain information necessary to demonstrate that standards have been achieved either per-gallon or on average. The periods for reporting are calendar quarters (January through March, April through June, July through September and October through December). The quarterly reports are due on the last day of the second month following the end of the quarter. Quarterly reports consist of detailed information describing each batch of reformulated gasoline or RBOB produced or imported. Additional reporting requirements apply for refiners, importers, and oxygenate blenders who produce reformulated gasoline or RBOB which meets any of the applicable standards on average. RVP, VOC, and NOX averaging reports are submitted with the third quarterly report of a given year and cover the high ozone season averaging period. Oxygen, benzene and toxics averaging reports and credit transaction reports are submitted with the fourth quarterly report and cover the annual averaging period. Credit transaction and averaging reports are not required for reformulated gasoline or RBOB which meets all of the applicable standards on a per-gallon basis. Refiners, oxygenate blenders, and importers are required to register with EPA by November 1, 1994 or no later than three months in advance of the first date the party will produce or import reformulated gasoline, whichever is later. Registration information identifies the refiner, blender, or importer and any facilities at which reformulated gasoline or RBOB may be produced, and the independent laboratory that will be used to fulfill the independent analysis requirements. EPA will supply a registration number to each refiner, importer, and oxygenate blender, and a facility registration number for each refinery and oxygenate blending facility that is identified; these registration numbers must be used in all reports to EPA. The final rule includes a requirement that all refiners, importers, and oxygenate blenders must commission an annual review of the information contained in the reports to EPA, or an ``attest engagement.'' Attest engagements must be conducted either by a Certified Public Accountant, or by a Certified Internal Auditor, following procedures included in the final rule. The attest procedures are intended to ensure that all gasoline produced or imported is included in the reports for either reformulated gasoline or conventional gasoline; that product transfer documents are properly prepared; that the requirements for downstream oxygenate blending are met; and that in the case of a refiner using computer-controlled in- line blending, that the blend records support the reported properties of the gasoline produced. All parties in the gasoline distribution system are required to segregate certain categories of reformulated gasoline from other categories. These segregation requirements result primarily from the time and place of use restrictions necessary for reformulated gasoline, and to a lesser extent are necessary for per-gallon minimums and maximums and gasoline quality surveys in covered areas. In summary form, the segregation requirements are the following. Gasoline subject to simple model standards may not be fungibly mixed with gasoline subject to complex model standards. In addition, gasoline produced at any refinery or imported by any importer that is subject to the complex model before 1998 must be segregated from complex model gasoline produced at any other refinery or imported by any other importer. These two segregation requirements, which are limited to the period 1995 through 1997, are necessary in order for per-gallon minimums and maximums and gasoline quality surveys to properly function. Only gasoline that is VOC-controlled may be used during the high ozone season, which requires the segregation of VOC-controlled and non- VOC-controlled gasoline in advance of the high ozone season (other than to ``blend up'' storage tanks to the VOC-controlled standards). Similarly, only gasoline designated for VOC Control Region 1 may be sold in that region, which requires the segregation of VOC Control Region 1 gasoline from VOC Control Region 2 gasoline. In addition, VOC- controlled gasoline produced with ethanol may not be mixed with VOC- controlled gasoline produced using any other oxygenate during the period January 1 through September 15. These segregation requirements are necessary in order for VOC emission reductions to be achieved. Lastly, only gasoline designated as oxygenated fuels program reformulated gasoline (OPRG) may be sold in an oxygenated fuels program area during the oxygenated fuels control period, which requires the segregation of OPRG gasoline from non-OPRG gasoline in advance of any oxygenated fuels control period (other than to ``blend up'' storage tanks). This segregation requirement is necessary so that the extra oxygenate used in oxygenated fuels program cities does not, through averaging, result in non-oxygenate fuels program cities receiving less oxygen than is required under the Clean Air Act. The final rule establishes liability for a number of prohibited activities that may occur downstream of the refinery or importer, including the following: The sale, dispensation, transportation, or storage of conventional gasoline represented to be reformulated; the failure of reformulated gasoline to meet the minimum or maximum standards; and the use of reformulated gasoline in a manner inconsistent with the time and place of use restrictions recited in the product transfer documents. When such a violation is found, the following parties are presumed liable: The operator of the facility at which the violating gasoline is found, and each upstream party, other than carriers, that supplied any of the gasoline found to be in violation. In the case of a facility operating under the brand name of a refiner, that refiner is also presumed liable regardless of whether the refiner supplied any of the gasoline found in violation. A party presumed liable may establish an affirmative defense by showing that it did not cause the violation, that the party's product transfer documents were proper, and that the party carried out a quality assurance program to monitor the per-gallon minimum and maximum standards of the gasoline under the party's control. A more detailed description of the liability and defense provisions relating to carriers is included below. The final rule specifies the manner in which penalties will be determined for violations of the final rule. These penalty provisions include calculations of the number of days of violation, and presumptions regarding the properties of gasoline. The remainder of Section V of the preamble discusses major changes from the enforcement provisions that were proposed in the supplemental notice of proposed rulemaking published at 58 FR 11722 (February 26, 1993). The following portion of this section also responds to a number of significant public comments on the enforcement provisions contained in the 1993 proposal. Responses to other significant comments EPA received are contained in a separate ``response to comments'' document that has been placed in the docket for this rulemaking. A. California Enforcement Exemption In the February 26, 1993, notice of proposed rulemaking (NPRM), EPA proposed to exempt refiners, importers and blenders of ``California gasoline'' from certain enforcement provisions in the proposed federal reformulated gasoline regulations. The Agency generally proposed that ``California gasoline'' would mean gasoline subject to the State of California's reformulated gasoline regulations that was either produced within the State or imported into the State from outside the United States. The proposed California enforcement exemptions were based on the Agency's comparison of the estimated emission reduction benefits of California's Phase 2 reformulated gasoline program with those anticipated from the federal phase I reformulated gasoline program, using the federal complex model proposed in the NPRM. The California Phase 2 program establishes standards for eight gasoline characteristics--sulfur, benzene, olefin, aromatic hydrocarbons, oxygen, RVP, T50 and T90--applicable starting March 1, 1996. EPA's analysis indicated that California Phase 2 gasoline will have a greater emission reduction benefit than federal reformulated gasoline. This analysis also indicated that, in the case of VOC, toxic and NOX emissions performance, California Phase 2 gasoline has a greater emissions performance reduction than federal phase I gasoline, compared to Clean Air Act base gasoline. EPA's review also indicated that the California oxygen ``flat limit'' of 1.8 to 2.2% will in practice be equivalent to the 2.0% minimum oxygen content required by the Act. See 58 FR 11746-7 (February 26, 1993). The Agency proposed that, effective with the start of California's Phase 2 program, regulated parties would be exempt from meeting the enforcement requirements dealing with compliance surveys (section 80.69), independent sampling and testing (section 80.70(c)), designation of gasoline (section 80.70(d)), marking of conventional gasoline (section 80.70(g)), downstream oxygenate blending (section 80.72), record keeping (section 80.74), reporting (section 80.75), product transfer documents (section 80.77), and antidumping record keeping (section 80.105) and reporting (section 80.106).42 Between the January 1, 1995, start of the federal program and the March 1, 1996, start of the California Phase 2 program, EPA proposed a more limited set of exemptions from federal enforcement requirements, specifically the compliance survey and independent sampling and testing requirements (sections 80.69 and 80.70(c), respectively). --------------------------------------------------------------------------- \4\2 The numbering of many provisions in the proposed regulations has been changed in the final rules. For example, proposed Sec. 80.69 is now Sec. 80.68, proposed Sec. 80.70(c) is now Sec. 80.65(f), proposed Sec. 80.70(d) is now Sec. 80.65(d), proposed Sec. 80.70(g) is now Sec. 80.65(g), and proposed Sec. 80.72 is now Sec. 80.69. Cross-references in the final California enforcement exemption regulation have been revised to reflect these and other numbering changes in the final reformulated gasoline regulations. --------------------------------------------------------------------------- The Agency also proposed a number of restrictions on the applicability of the California enforcement exemptions. First, the exemptions would not apply to gasoline sold in California and produced at a refinery located within the United States but outside California. Similarly, the exemptions would not apply to gasoline produced in California but sold outside that State. Second, the exemptions would not apply to gasoline produced under a two-year (March 1, 1996, through February 29, 1996) extension granted to small refiners under the California regulations. Third, the exemptions would become null and void (i.e., they would not apply to any California regulated party) if any gasoline formulation certified by the State using a predictive model or vehicle testing does not comply with the federal reformulated gasoline standards. Fourth, the enforcement exemptions would cease to apply to a party granted a variance by California unless EPA granted relief for extraordinary circumstances under section 80.73 of the federal regulations. Fifth, a regulated party that is assessed a penalty for a violation of either the California or federal reformulated gasoline requirements would lose its enforcement exemptions. (Such a party could petition the Agency for relief from this result, for good cause.) Sixth, the California enforcement exemptions would apply only during the time that the federal phase I program remains in effect (i.e., until the year 2000), subject to extension in a later rulemaking. The February 26, 1993, NPRM contains a more detailed discussion of the California reformulated gasoline program, the Agency's comparison of the emission reduction benefits of the California and federal programs, and the proposed California enforcement exemption provisions. That notice also includes a detailed rationale for the proposed exemptions and restrictions. See 58 FR 11747-11750. The Agency received several comments on the proposed California enforcement exemptions, all of which were generally supportive of the regulation. Most of these comments also suggested various modifications and clarifications of the proposed regulations. In this final rule the Agency is promulgating a revised version of the California enforcement exemptions regulation, which includes many of the modifications recommended by commenters.43 A detailed discussion of these comments, the Agency's responses to these comments, and the modifications made to the proposed rule is contained in a separate ``Responses to Comments'' document. The following is a summary of the more significant changes made to the proposed rule: --------------------------------------------------------------------------- \4\3The Agency has re-analyzed the relative emission reduction benefits of the California Phase II reformulated gasoline program and the federal Phase I program, using the complex model being promulgated today, and has again concluded that the California program is at least as stringent as the federal program. The analysis also found that fuel meeting the standards of the California Phase II program has a greater VOC, NOX and toxic performance reduction than fuel meeting the federal reformulated gasoline Phase I standards. A copy of this analysis has been placed in the rulemaking docket. --------------------------------------------------------------------------- The proposed exclusion from the enforcement exemptions of small refiners who are granted a two-year extension under the California program has been dropped from the final rule. The Agency has determined that the emissions performance of fuels meeting the California reformulated gasoline standards to which these refiners will be subject during the two-year period, in conjunction with the statewide California sulfur standard, meets or exceeds the performance required under the Phase I federal reformulated gasoline program, as measured by the complex model (which may be used to determine compliance with federal standards during this period44). An analysis of these standards has been placed in the rulemaking docket. --------------------------------------------------------------------------- \4\4 Use of the complex model is optional until the end of 1997, and mandatory thereafter. --------------------------------------------------------------------------- The enforcement exemptions have been extended to California reformulated gasoline produced at refineries located outside of California that produce only California reformulated gasoline and federal conventional gasoline (i.e., that do not produce federal reformulated gasoline). The primary rationale for excluding such gasoline, that its producer would be required to implement all of the federal enforcement provisions for a refinery's non-California reformulated gasoline, is not applicable to facilities that do not produce federal reformulated gasoline. In order to assure that such gasoline is in fact shipped to, and sold in, California, section 80.81(g) of the final regulations now prescribes transfer documentation and record keeping requirements for such gasoline. The compliance survey exemption is extended to all gasoline subject to the California reformulated gasoline regulations (no matter where produced) and will not be lost by a party who otherwise loses its California enforcement exemptions (e.g., a refiner who violates federal or state reformulated gasoline regulations or whose gasoline formulation is found to be less stringent than the federal requirements). The purpose of compliance surveys is to ensure that each area receiving reformulated gasoline receives gasoline that, on average, achieves the performance that would be expected if per-gallon compliance was the only available compliance option. The Agency believes that there would be little purpose served in imposing this requirement on only a small subset of the gasoline sold in California. Exemptions from the following enforcement provisions have been added in the final rule: the parameter value reconciliation requirements in section 80.65(e)(2); the reformulated gasoline and RBOB compliance requirements in section 80.65(c); the annual compliance audit requirements in section 80.65(h); and the compliance attest engagement requirements in subpart F. The Agency believes that these exemptions are consistent with the rationale for the exemptions proposed in the NPRM. The provision related to withdrawal of the enforcement exemptions on the basis of certification by California of a gasoline formulation that does not meet the federal reformulated gasoline standards has been modified in several ways. First and most importantly, the withdrawal will only apply to the refiner, importer or blender of the non- complying formulation, not to all California gasoline. Second, any party whose gasoline is certified under either the predictive model or vehicle testing provisions of the California regulations will be required to notify the Agency within 30 days of such a certification and to submit a written demonstration that the gasoline formulation is in compliance with federal standards. If such a demonstration is not timely submitted, the exemptions are automatically (and immediately) lost. If a submitted demonstration is determined to be incorrect by the Agency, EPA will notify the party (by first-class mail)45 that its enforcement exemptions will expire on a certain date. Third, the date on which these exemptions will expire has been extended to no earlier than 90 days from the date of the EPA notice, to provide additional time for compliance. The Agency believes that this additional time is needed to comply with all of the many enforcement requirements that will become applicable if a California exemption is lost. In particular, requirements such as the independent analysis requirements (section 80.65(f)) and the compliance attest engagement requirements (subpart F) may require the negotiation of contracts with third parties. --------------------------------------------------------------------------- \4\5 Because the loss of the enforcement exemption will apply to only a single party (rather than to all producers and importers of California gasoline), the Agency does not believe that there is a need for a Federal Register notice announcing a determination of non-compliance (as proposed in the NPRM) and has deleted this provision from the final rule. --------------------------------------------------------------------------- The effective date for the withdrawal of the enforcement exemptions on the basis of a reformulated gasoline penalty assessment has been extended to 90 days, and this provision has been revised to make clear that this grace period does not begin until any interim administrative appeal has been completed. Once a final penalty assessment has been made by an agency or a district court, the 90-day period will begin. The provision related to compliance with standards on average for an averaging period that is partly before and partly after March 1, 1996, has been clarified. Under the final rule, producers and importers who elect to demonstrate compliance on average with any federal reformulated gasoline standard46 will be required to demonstrate such compliance for two overlapping averaging periods: January 1, 1995, through December 31, 1995; and March 1, 1995, through February 29, 1996. The proposal could have been interpreted to require compliance with these standards for a two-month averaging period in early 1996, which would be very difficult for refiners to meet on average and which was not intended by the Agency. --------------------------------------------------------------------------- \4\6 In the case of refiners and importers using the simple model, the standards that may be met on average are the RVP, benzene, oxygen, and toxics emissions performance standards. For parties using the complex model, the standards that may be met on average are the benzene, oxygen, and toxics and VOC emissions performance standards. --------------------------------------------------------------------------- The provision intended to prohibit the averaging of ``very clean'' California reformulated gasoline with ``less clean'' federal reformulated gasoline has been clarified in the final rule. In addition, it has been made applicable to producers and importers of all gasoline subject to the California program, not just to refiners and importers located outside the State (as was proposed). Section 80.81(d) now provides that producers and importers of such gasoline must exclude the volume and properties of California reformulated gasoline from all conventional gasoline and federal reformulated gasoline sold elsewhere, for purposes of demonstrating compliance with standards specified in section 80.41 and 80.90. An overall demonstration of compliance for all gasoline (California and non-California) produced or imported is also still required. The exemption from the federal recordkeeping requirements has been modified to require the retention for five years of records mandated by section 2270 of the California reformulated gasoline regulations (which require retention for two years). This requirement, along with other enforcement provisions for which an exemption is not being provided, will provide the Agency with the capability of performing audits of compliance with federal requirements by parties who produce California reformulated gasoline. As noted above, more detailed information on the modifications made to the proposed rule and the comments on which they are based is contained in the separate ``Responses to Comments'' document. That document also responds to comments that did not result in changes to the proposed rule. B. Testing Methods and Testing Tolerances The final rule, in section 80.46, sets forth test methods regarding reformulated gasoline parameters. EPA has carefully considered all comments concerning proposed test methods and related issues and many of those comments have been incorporated in the final rule. The test methods are those that provide for the best balance of accuracy, cost effectiveness and ease of use for competent lab technicians. The final rule generally provides for one regulatory method for each parameter in order to assure accuracy and to avoid problems with biases between different methods. However, in two cases (regarding oxygen and aromatics) the regulation provides for an alternative method for industry to use, if desired, until January 1, 1997, to provide lead time to acquire equipment necessary for the primary test method and to become familiar with its use. Where American Society of Testing and Materials (ASTM) methods have been adopted, any future updated version of the ASTM methods will not automatically be adopted. EPA will use appropriate procedures if it desires to adopt any updated methods. 1. Test Methodology Overview EPA proposed test methods for the measurement of each of the parameters required in the creation of reformulated gasoline, and received numerous comments regarding the proposed methods. Most of the comments were quite similar in their overall character. However, one commenter seemed to summarize the prevailing recommendations quite well. API stated in part: ``API recommends that EPA observe the following guiding principles regarding laboratory test methods: (1) Test methods must be proven. . . . (2) Test methods must be reliable. . . . (3) Test procedures must be suitable for refinery personnel. . . . (4) Test methods must not be unnecessarily costly. . . . (5) Test method reproducibility must be recognized. . . . (6) Criteria for adoption of other methods should be developed. . . .'' EPA agrees with most of these criteria. It would be ideal to discover accurate test methods that have been proven reliable in the industry, that are easy for personnel to operate and have a minimal cost. The new test method for Reid Vapor Pressure (RVP) set forth in the volatility regulations (40 CFR part 80, appendix E, Method 3) is an example of such a method that is accurate, easy to operate and is relatively inexpensive. These qualities in the RVP test method have enabled many downstream parties to incorporate this method into their oversight program under the volatility rule. EPA believes this improved oversight contributed significantly to the reduction in volatility violations during the 1993 high ozone season. Ease of operation and cost were considered when EPA adopted this test method. However, it must be recognized that the most important factors in the choice of the new RVP test method were its accuracy and precision. EPA would like to prescribe test methods that conform to API's criteria. However, EPA's leading priority must remain precision and accuracy, even at the expense of other criteria. EPA is always willing to cooperate with industry to investigate the possibility of easier and less expensive methods if the methods also are accurate and precise. To do so not only aids industry, but also ultimately assists EPA's purpose of preventing violations. EPA must follow its policy in maintaining precision and accuracy with regard to any enforcement test tolerances as well. EPA is determined to achieve the most accurate and precise result that is practical. EPA's purpose in testing is to ensure relevant standards are being met, and to allow an enforcement action where EPA is able to establish a violation with reasonable certainty. However, EPA does not have sufficient data at this time from the EPA laboratory to determine the most precise test tolerances. Interim test tolerances have been established until that data becomes available. Enforcement test tolerances are discussed more fully below. Most commenters requested that EPA allow more than one test method for each parameter. The final rule provides for one regulatory method for each parameter in order to assure accuracy and to avoid problems of bias between different methods. Refiners and importers must use the regulatory method, or an alternative method in the case of two parameters during a limited time period, when testing to meet the mandatory testing requirements of section 80.65(e). In addition, independent laboratories, when conducting tests to verify the accuracy of the refiner and importer testing, must use the regulatory method. EPA has learned from its experience with other motor vehicle fuel regulatory programs, notably volatility, that it is preferable to have one regulatory testing method as opposed to multiple regulatory test methods for each parameter because of the potential for conflicting results among methods due to bias. However, in two cases, oxygen and aromatics, where the test methods are relatively new, the regulation provides for optional alternative methods for refiners and importers to use to meet the testing requirements of section 80.65(e) until January 1, 1997, providing lead-time for industry to acquire equipment and to become familiar with use of the regulatory methods. Of course, these alternative methods can likewise be used at any time for defense purposes as long as there is correlation with the regulatory methods. 2. Test Methods Under Section 80.46 a. Reid vapor pressure (RVP). EPA proposed to use the ASTM method ES-15 or the procedure described in 40 CFR part 80, appendices D and E. Comments favored the use of ASTM ES-15. However, it was noted that ES- 15 is a temporary emergency ASTM standard and will expire shortly. ASTM D-5191 is the permanent standard. It was also noted that this method is suitable for oxygenated blends. Commenters requested that EPA also allow the two dry methods set forth in appendices D and E in 40 CFR part 80. These methods are the manual tank and gauge method, the Herzog analog method, and the Herzog digital method. In addition, a request was made to include the ASTM D- 5190 method, an alternative mini method. EPA has decided that RVP must be determined in accordance with the method in 40 CFR part 80, appendix E, Method 3. This method, very similar to ASTM D-5191, clearly complies with many of the criteria espoused by API. The method is simple and inexpensive. Industry has already begun to gear up for this method because of its use in the Phase II Volatility regulations. It is appropriate to use the same RVP test method for the volatility and reformulated gasoline programs to prevent confusion and inconsistencies. EPA has decided that the method in 40 CFR part 80, appendix E, Method 3 will be the only regulatory volatility test method. As with the volatility rule, other methods may be used for defense purposes as long as the method used is properly correlated with the regulatory method. (40 CFR part 80, appendix E, Method 3, Paragraph 9.4). See, 58 FR 14476 (March 17, 1993) for a more thorough discussion regarding the choice of a single volatility test method. b. Distillations. EPA proposed to use the ASTM method D-86-82 as the regulatory test method, and comments were favorable with regard to this method. It was noted, however, that the method was updated in November 1990. This most recent revision of this method is ASTM D-86- 90. One commenter requested that the language be more specific. Another commenter suggested that a newer method, D-3710, which is a gas chromatography method, be used. A notation was also made that the repeatability and reproducibility figures in degrees Fahrenheit in the ASTM method D-86-90 were incorrect. EPA has decided that the distillation parameters must be determined in accordance with the ASTM method D-86-90. The regulatory language has been amended to state that the figures for repeatability and reproducibility given in degrees Fahrenheit in Table 9 in the ASTM method are incorrect, and may not be used. As with all the parameters, there will be only one regulatory distillation test method. However, other suitable methods may be used for defense purposes (but not to meet mandatory testing requirements) as long as they are properly correlated with the regulatory test method. EPA is always interested in the development of alternative methods if they are as accurate and precise as the regulatory test method. Many of the parameters in reformulated gasoline can be measured by a gas chromatograph with an appropriate detector. For this reason, it might be appropriate to explore the development of the D-3710 method or some alternative gas chromatographic method with an appropriate detector for future use as the distillation test method. c. Benzene. EPA proposed to use ASTM method D-3606 for the regulatory test method, and most commenters were in agreement with the use of this method. However, commenters noted that other acceptable gas chromatographic methods exist for the determination of benzene such as D-4815 (a gasoline oxygenate method) and D-4420 (an aromatics method). Comments were made that D-3606 requires a dedicated chromatograph for benzene in gasoline only. It was also noted that the D-3606 results may be affected by interference from the presence of ethanol and methanol. EPA has decided that the single regulatory method for measuring concentration of benzene will be ASTM method D-3606-92. Due to the possibility of a slight interference from ethanol and methanol in the test results, the method has been amended by the regulation to require that the instrument parameters be adjusted to ensure complete resolution of the benzene, ethanol and methanol peaks. As with all reformulated gasoline parameters, EPA has chosen one regulatory test method. However, it should be noted that the presence of benzene can be tested also by the GC-MS, the regulatory method for aromatics testing. With the GC-MS, there should not be a problem with the presence of oxygenates and a dedicated chromatograph is not needed. EPA is interested in the possibility of participating with industry in the development of the GC-MS method for benzene. d. Aromatics. EPA proposed to use the Gas Chromatograph-Mass Spectrometry (GC-MS) method, developed by EPA, for total aromatics determination. Most commenters opposed the method proposed by EPA. One commenter recommended delaying selection of a lab test method until the procedure can be evaluated and completely developed. Commenters also criticized the method for its cost, the amount of time the method demands, and because industry feels that the method will require highly specialized staff. One commenter stated that the proposed method was so incomplete that it was not possible to provide detailed technical comments on it. Most commenters suggested that EPA adopt ASTM method D-1319, a fluorescent indicator absorption method. EPA has decided to adopt the proposed method, the GC-MS, as the single regulatory method for the determination of total aromatics. However, because the method is relatively new, leaving industry little time to scrutinize the method, the final regulations allow use of ASTM method D-1319-93 until January 1, 1997 for purposes of meeting the industry testing requirements under section 80.65(e), provided this method is correlated with the GC-MS method. This two year transition period should allow sufficient time for industry to purchase equipment and become familiar with the new method. In addition, during this time period, it is anticipated that EPA and industry can discuss any problems that might arise as a result of the new method being promulgated. Moreover, the GC-MS method has been rewritten to provide more detail and specificity. EPA is aware that industry is uncomfortable with a newly developed method that has not had the usual round-robin testing or extensive participation by ASTM. However, EPA believes that the method available, D-1319, is so archaic when compared with present day technology, and has such extremely poor accuracy and precision, that it is necessary to develop a new method. Furthermore, D-1319 has not been proven effective with oxygenated fuels even though the updated version does include a multiplication factor to use when oxygenates are present. EPA also believes that it does not have the choice of leaving the method open until the GC-MS could be evaluated more thoroughly given the timing of the final rule. EPA believes the GC-MS is a dependable, accurate and precise method that, with the aid of industry, can be applied in the near future to many of the other reformulated gasoline parameters. The eventual use for several parameters should somewhat offset the initial cost. EPA also believes, based on personal experience, that the GC-MS apparatus is readily usable by competent lab technicians with about one week of training. It is less personnel-intensive and more accurate than the D-1319 method. e. Oxygen and Oxygenates. EPA proposed to use the GC-Oxygenate Flame Ionization Detector (OFID) method for determining oxygen content. Many commenters objected to the OFID method due to the fact that ASTM is still reviewing it through round-robin testing and precision information is not presently known. Commenters were concerned with the laboratory time required and the high deterioration and replacement rate cost of the cracker reactor. Commenters were also concerned with possible increased down-time in the laboratory. Most commenters suggested that ASTM method D-4815, a method used by industry during the winter oxygenate season, be used for testing oxygenates. Some commenters also suggested the use of portable Infrared (IR) analyzers because of their low cost and rapid results. EPA has chosen to use the GC-OFID method as the single regulatory method for measuring oxygen content and oxygenates. As with the aromatics determination, EPA felt compelled to develop a new method given the shortcomings of the methods presently available. However, the ASTM method D-4815-93 can be used for the compounds specified in the method until January 1, 1997 to meet industry testing requirements under section 80.65(e). ASTM method D-4815 has been used for quite some time, but with the addition of heavier oxygenates, D-4815 has become increasingly difficult to use. EPA is aware that there has been an attempt to expand the scope and range of D-4815 to include heavier oxygenates (as set forth in D-4815-93). However, the longer one has to wait to extract the heavier oxygenates, the more likely it is that hydrocarbons will be drawn out with the oxygenates, interfering with the test results. In addition, EPA is not satisfied with the accuracy of D-4815. The reproducibility and repeatability factors are quite large. Presently, OFID is the only accurate method known that is capable of testing for oxygenates at all ranges. EPA believes a reliable, accurate and precise method that is capable of testing for oxygenates at all ranges is required when the reformulated gasoline requirements go into effect. EPA has been using GC-OFID for four years. During that period, the cracker reactor has required replacement on only one occasion. EPA has had the opportunity to use various portable IR methods for field screening tests and has been pleased with the results. However, although these are excellent screening devices, they are not presently at the stage of development that would allow their use as a regulatory enforcement method. f. Sulfur. EPA proposed to use an inductively coupled plasma atomic emission spectrometer (ICP-AES) method for sulfur analysis that was developed at EPA's laboratory. Most commenters were opposed to this method because it is an unproven technology, because it is very expensive, and because there are no substantial benefits received from this technology that are not also available through existing methods. It was also thought not to be practical in a refinery environment. Commenters suggested the use of ASTM D-4045, ASTM D-2622, or ASTM D- 4294. After considering the comments, EPA has chosen ASTM D-2622-92, an x-ray spectrometry method, as the regulatory sulfur test method. This is a newer version of the same test method that is used for testing sulfur in the low sulfur diesel fuel program. Industry should already be on-line with this method since the diesel program went into effect on October 1, 1993. The newer version has correction factors to adjust for the interference from oxygenated product. g. Olefins. EPA proposed to use the ASTM method D-1319-88 to determine olefin content. Most commenters were in favor of this method since there are no other standard methods for olefins from which to choose at this time. Most commenters pointed out that the method is not as accurate as it should be. Comments were made that the method was updated in 1989 (D-1319-89). Comments were made that the method would not detect any oxygenates present, but that the results can be normalized to determine the amount of oxygen present using multiplications factors. EPA has chosen the ASTM method D-1319-93, Fluorescent Indicator Absorption method (FIA) as the single regulatory method to determine olefin content. EPA has chosen this method because there are no alternative methods available. EPA believes that an accuracy greater than is possible with the D-1319 method is desirable and looks forward to working with industry to develop a suitable GC-MS method to detect olefins in the near future. The newest version, ASTM D-1319-93, was chosen because it contains multiplication factors to determine the amount of oxygen present. 3. Enforcement Test Tolerances EPA has chosen to set forth enforcement test tolerances in the preamble of this regulation for oxygen, benzene, and RVP, the three parameters that will be subject to enforcement testing for minimum and/ or maximum levels under the simple model. Commenters suggested that EPA should set enforcement test tolerances for all seven parameters. One commenter stated the belief that EPA is required by the Clean Air Act to set enforcement test tolerances. Many commenters requested enforcement leniency downstream so that pipelines, while attempting to stay in compliance, do not force refiners to produce reformulated gasoline at even lower specifications than the regulations require. a. Issues Regarding Whether Enforcement Test Tolerances Are Required. There are three specific provisions in the section 211(k) that refer to establishing test tolerances. The first, section 211(k)(3)(A), establishes a formula fuel as the statutory minimum for VOC and toxic emissions reductions, if the formula fuel is more stringent than the performance standards found in section 211(k)(3)(B). The formula includes a minimum oxygen content of 2.0 wt. % ``subject to a testing tolerance established by the Administrator.'' This provision is inapplicable, however, as EPA has determined that the performance standards in section 211(k)(3)(B) are more stringent than the formula fuel. Second, section 211(k)(4)(C) of the Act requires that EPA establish ``appropriate measures of, and methodology for, ascertaining the emissions of air pollutants (including calculations, equipment, and testing tolerances).'' This provision addresses technical issues regarding measurement or determination of emissions of various air pollutants, and does not require that EPA establish enforcement test tolerances. Congress most likely expected that individual vehicle testing by refiners, importers, and EPA would be the basis for quantifying the emissions reductions from reformulated gasolines, with certification of reformulated gasoline based on such individual test programs.47 In using a large data base from several vehicle test programs EPA has exercised the authority provided under this provision, and has established emissions models that are much more accurate and reliable predictors of emissions performance than individual vehicle test programs. Variability in test results was accounted for in the modeling process itself, so that the models include a ``test tolerance'' based on averaging of test results from the vehicle test programs underlying the emissions models. --------------------------------------------------------------------------- \4\7While Congress apparently expected that EPA would in all likelihood establish a vehicle testing program to measure emissions and certify reformulated gasoline, EPA has instead adopted an emission model that is built on many different test programs. To the extent ``calculations, equipment, and testing tolerances'' is still relevant in this context, it is taken to address testing needed to use the model, such as testing of a gasoline to obtain data for input into the model. The test procedures adopted by EPA typically include provisions designed to address test variability. In addition EPA's regulations specify test tolerances for various parameters, such as when a refiner and an outside laboratory measure the fuels parameters, and specify the acceptable range for such parameters in using the model. --------------------------------------------------------------------------- EPA has established appropriate test procedures for use with the model, but they measure not air pollution emissions but fuel parameter values needed to operate the model. 40 CFR 80.46. EPA has, however, established test tolerances to determine when fuel parameter values are acceptable for use in the model, as well as limits on the range of the parameters for the model. Where a refiner or importer seeks to augment the emissions model through a vehicle test program, EPA's regulations also include provisions on testing and calculations, and account for test tolerances through the averaging of vehicle test results. EPA believes these fully implement any requirement to establish test tolerances in a context where an emissions model is the methodology to determine air pollutant emissions. Some commenters point to language of various legislators made during the floor debate on the Clean Air Act Amendments of 1990. In the floor debate, various Congressmen made general statements on the issue of whether EPA must provide enforcement tolerances under section 211(k)(4)(C).48 There is no clear indication in these statements that Congress intended in section 211(k)(4)(C) to mandate changes in the numerical standards adopted by EPA, or to mandate a regulatory exercise of enforcement discretion. Instead these floor debate statements are most reasonably read as indicating that EPA should establish reasonable testing tolerances in the procedures and methodologies adopted to quantify air pollutants for the reformulated gasoline and anti-dumping programs, so that the regulated community and EPA can measure these air pollutants in a workable, verifiable manner without undue cost. EPA believes that its regulations fully implement this objective. To the extent these statements during the floor debate are read to imply that ``testing tolerances'' should be interpreted the same for purposes of section 211(k)(2)(B) and 211(k)(4)(C), EPA respectfully rejects this interpretation as contrary to the intent of Congress as expressed in the language of the Act. Furthermore, floor debate quotes are not authoritative as to the meaning of the Act, especially where such statements are contrary to the language of the Act itself. --------------------------------------------------------------------------- \4\8See, e.g., statement by Congressman Hall at 136 Cong. Rec. H12901 (October 26, 1990.) ``A reasonable testing tolerance is expressly provided for oxygen in new 211(k)(2)(B). Under 211(k)(4)(C), EPA must also establish reasonable testing tolerances for all other aspects of this program, to minimize cost and make it workable and verifiable in the real world. EPA is specifically expected to promptly establish such tolerance limits. Similar reasonable tolerances are intended for the CO program in 211(m).'' --------------------------------------------------------------------------- The third relevant statutory provision is section 211(k)(2)(B). There Congress tied the testing tolerance requirement to the level of the standard itself. This provision establishes a minimum oxygen content requirement for the reformulated gasoline of ``2.0 percent by weight (subject to a testing tolerance established by the Administrator)''. Unlike section 211(k)(4)(C), which addresses technical issues regarding measurement of air pollutants, this provision addresses the level of the standard itself and compliance with the oxygen content requirement. EPA interprets this as requiring establishment of a reasonable testing tolerance for the oxygen content requirement. As in the winter time oxygenated gasoline program, EPA is establishing this tolerance as 0.30 wt.% oxygen. Unlike section 211(k)(4)(C), there is no explicit requirement that this tolerance be incorporated into the regulations, and given the nature of an enforcement testing tolerance EPA is not adopting it as a rule. b. The discretionary nature of enforcement test tolerances. As discussed above, enforcement test tolerances are not required by the Act except for oxygenate testing pursuant to section 211(k)(2)(B), and even there, Congress left to EPA's discretion at what level such tolerance should be set as well as any criteria EPA would use. EPA has carefully considered the many comments regarding test tolerances. Any test tolerance would involve establishing a policy that the Agency would forego an enforcement action unless, in testing an enforcement sample, EPA found that a standard was exceeded by a set amount. Other appropriate conditions could also be required, such as evidence that the regulated party conducted appropriate sampling and testing. Establishing an enforcement tolerance based on testing or any other factor is a matter solely within the Agency's enforcement discretion, and is not addressed by section 211(k), except for purposes of the oxygen content requirements of section 211(k)(2)(B). As described below, EPA has decided to announce its current position on enforcement test tolerances with respect to several of the emission and content standards specified for reformulated gasoline subject to the simple model. EPA is aware that as a result of the gasoline volatility regulations at 40 CFR 80.27-28, many pipelines only accept gasoline which tests below the RVP standard minus a margin of safety set by the pipelines. In some cases, the margin of safety set by the pipelines is equal to the reproducibility of the RVP test method. Many commenters expressed concern that a similar pipeline policy also would apply to the reformulated gasoline maximum/minimum parameters. Likewise, EPA is concerned about downstream parties who have limited control over the quality of the product received. For example, gasoline in the custody of a pipeline or terminal may be the product of several commingled refinery shipments. In light of these concerns, EPA intends to withhold prosecution of downstream parties such as pipelines and terminals, where proper sampling and testing by the downstream party shows that the product exceeds standard but tests within the tolerance set by EPA, and where there is no reason to believe that the party caused the gasoline to exceed the standard. 4. Enforcement Test Tolerance Values Almost every commenter suggested that EPA use reproducibility for enforcement tolerances. Commenters suggested that because the comparison of test results from different laboratories is inevitable, it is necessary to incorporate an appropriate measure of the variability between laboratories. EPA has decided in its discretion to adopt enforcement test tolerances for certain requirements in addition to oxygen content. As discussed above, the Clean Air Act does not require enforcement testing tolerances for the six reformulated gasoline parameters other than oxygen (i.e., RVP, distillations, benzene, aromatics, sulfur, and olefins). In addition, only three fuel parameters (RVP, oxygen, and benzene) have maximum and/or minimum standards under the simple model. Therefore, these simple model parameters are the only ones likely to involve EPA testing for enforcement purposes. Although not required to do so, EPA has decided to set forth in the preamble of this Rule testing tolerances for these parameters, in order to provide regulated entities with information of interest to them regarding EPA's enforcement program. In fuels enforcement programs under Title II of the Clean Air Act, EPA generally uses data obtained from its own laboratory to determine the appropriateness of any testing tolerance. At the present time, however, sufficient data needed to determine enforcement testing tolerances based on EPA laboratory data are not available. Therefore, EPA is setting initial test tolerances sufficiently large to assure that any competent laboratory testing a conforming sample could arrive at results that would indicate that the sample was not in violation. However, EPA may adopt new tolerances as data on test methods are developed, as technology changes, or as further information becomes available concerning the precision and accuracy of a particular method, whether established by EPA or by multiple testing protocol. The test tolerance is only to be used by EPA to determine whether an enforcement action should be brought. It is EPA's contention that any sample that is over the standard is in violation. However, no enforcement action will be brought if the sample is over the standard, but within the tolerance. Furthermore, refiners and importers may not use the tolerance to expand the applicable standard. If the refiner or importer results show the product to be above the standard, then the product is in violation regardless of whether or not it is within the tolerance. To better establish the most appropriate test tolerances, EPA proposes a joint effort between EPA and industry to develop a gasoline standard with known properties which could be used by all laboratories for calibration purposes and for detecting laboratory biases. EPA has not included in this Preamble the enforcement tolerances for VOC and NOX emissions performance, but intends to issue guidance that includes these enforcement tolerances within the next several months. The tolerances applicable under the complex model will be applied by EPA in the manner discussed above. The following enforcement tolerances currently are applicable under the simple model: a. RVP. A tolerance of 0.30 psi will be allowed for RVP in order to be consistent with the tolerance level currently used in the gasoline volatility program. b. Oxygen. The oxygen tolerance will be 0.30 weight percent oxygen, which is consistent with the test tolerance currently in use in the winter oxygenate program. c. Benzene. The initial test tolerance for benzene is 0.21 vol%, but this tolerance value will be modified through a round-robin testing process that is intended to identify a more appropriate test tolerance for benzene. Under this approach, the 0.21 vol% initial benzene tolerance will be used only until January, 1996, when the modified benzene tolerance will apply. The process for identifying the new benzene tolerance will involve a round-robin testing program to be carried out cooperatively by EPA and the American Petroleum Institute (API). This testing program will involve testing by a number of laboratories selected by EPA and API, in accordance with a round-robin testing protocol that will be developed jointly by EPA and API. The purpose of the testing program is to identify the lab-to-lab reproducibility that exists among high-caliber laboratories that follow good laboratory procedures including procedures dealing with quality assurance and quality control, and where all reasonable steps have been taken to achieve high lab-to-lab correlation. The testing program generally will follow the round-robin methodology used by the American Society of Testing and Materials (ASTM). EPA, API, and the laboratories involved also will attempt to improve lab-to-lab correlations, through use of a gasoline matrix with known, repeatable properties. The new tolerance will be determined from the reproducibility standard deviation resulting from the round-robin in such a way that the Agency can be 95% certain that materials tested at the standard plus the tolerance are in fact over the standard. The above calculations will be used to establish the tolerance regardless of whether the resulting value is less than or greater than 0.21 vol%, but the value will not be greater than 0.30 vol% regardless of the results of the testing program. The round-robin testing is to be completed by January 1, 1995, statistical analysis of the test results will be completed by June 1, 1995, the new tolerance will be announced by EPA by July 1, 1995, and the new tolerance will be effective beginning in January, 1996. In the event the round-robin testing program is not completed by January, 1995, the benzene tolerance will be 0.03 vol% beginning in January, 1996, provided that the failure to complete the program is through no fault of EPA. If, however, the testing program failure is EPA's fault, or if the testing program is completed in accordance with the round- robin testing protocol and the testing data is submitted to EPA by January 1, 1995, the initial 0.21 vol% benzene tolerance will continue to apply beyond January, 1996. If, through EPA's fault, the announcement of the tolerance is delayed beyond July 1, 1995, the new tolerance will become effective six months following announcement of the new tolerance, and until then the tolerance of 0.21 vol% will apply. C. Independent Sampling and Testing Requirements In its 1992 supplemental proposal, EPA proposed that refiners and importers would be required to carry out a program of independent sampling and testing of reformulated gasoline that is produced or imported. 57 FR 13445. Only refiners commented on this proposal; without exception, these comments were critical. Nevertheless, EPA has retained the independent sampling and testing requirement in the final rule, with certain revisions based on comments, for the reasons contained in the 1992 SNPRM and in today's notice. In the 1992 SNPRM, EPA explained the reasons for the independent sampling and testing requirement. Independent sampling and testing would flag errors in refiner or importer analysis and allow corrections of either noncomplying product or of the accounting books kept by these parties. These errors could be caused by mistakes in sample collection, sample analysis, by bias in the refiner's or importer's sampling and/or testing system, by inadvertent mistake, or by outright cheating. In addition, EPA expects that reformulated gasolines will almost always be combined in the fungible gasoline distribution system after it leaves the refinery, and in many cases such fungible mixing will occur before the gasoline leaves the refinery or is transferred by the refiner to another party. Once fungible mixing occurs, there is no opportunity to look behind the refiner's or importer's test result records, except for those limited cases where EPA inspects reformulated gasoline at the refinery before fungible mixing of the gasoline occurs. This problem is amplified by the averaging option available for refiners and importers. Once a batch of reformulated gasoline becomes mixed with other batches from the same or different refiners or importers, EPA is no longer able to test this fungible mixture to determine compliance with either per-gallon or averaging standards. EPA can then only sample and test for compliance with the maximum and minimum requirements, and has to rely on the refiner's or importer's records and test results to verify the accuracy of averaging and credit reports that are submitted. Sampling and testing by EPA would therefore normally be a valid check only for maximum and minimum requirements, and will not provide a means of verifying whether the individual gasolines contained in a fungible mixture met the reformulated gasoline per-gallon or average standards when produced. Absent independent sampling and testing, therefore, there would be little or no means of verifying whether reformulated gasoline met standards, or whether reports of credit creation are accurate. Commenters on the proposed rule cited a number of reasons the independent sampling and testing requirements should be revised or not be made final. One commenter stated that independent sampling and testing is unnecessary and redundant to other enforcement requirements included in the reformulated gasoline program, such as penalties for noncompliance, the quality assurance sampling and testing defense element, gasoline quality surveys, recordkeeping, and attest engagements. While these enforcement requirements in the final rule are important, their focus is different from the focus of independent sampling and testing. Quality assurance sampling and testing is a required showing for most parties presumed liable for downstream violations that is intended to monitor compliance with the maximum and minimum requirements, and is not intended to monitor the accuracy of the per-batch properties refiners and importers enter into their records. The recordkeeping requirements do not play a verification role; records kept by refiners and importers are only as accurate as the information entered by these parties. The gasoline quality surveys monitor the overall quality of gasoline being used in a covered area during the survey periods, but the capacity of surveys to detect cheating by refiners and importers is limited. Surveys will take place in any covered area during only several weeks per year. In addition, the gasoline used in a covered area is a mixture of the gasolines produced or imported by a large number of refiners and importers, often hundreds or thousands of miles distant from the covered area. Surveys would not be expected to detect improper deviations in gasoline properties from the properties reported by one or several of these refiners or importers. The procedures specified for attest engagements were specifically designed to not overlap with the independent sampling and testing provisions. In any event, in most cases attests would not be capable of detecting errors or cheating in sample analysis; an auditor only can review the information contained in a refiner's records, and is not able to collect and analyze samples of gasoline produced months prior to the attest engagement. These and other components of EPA's enforcement program for reformulated gasoline are not able on their own to address the main focus of the independent sampling and testing program--the accuracy of the individual batch determinations made by refiners and importers. These determinations must be accurate to achieve compliance with either the per-gallon or averaging standards. Given the fungible mixing of reformulated gasoline both within a refinery or import facility and in the gasoline distribution system, EPA is not able to check the accuracy of these individual batch determinations. Compliance with the reformulated gasoline requirements also involves accurately analyzing many more gasoline components than is required under any of EPA's prior motor vehicle fuel regulations. This additional complexity both increases the need for refiner or importer accuracy, and makes it that much harder for EPA to check compliance after gasoline has been fungibly mixed. EPA believes the independent sampling and testing program is a reasonable response to these circumstances, and draws a reasonable balance between EPA's enforcement needs and the desirability of maintaining a highly fungible gasoline distribution system. Other commenters stated that independent sampling and testing was unnecessary because the fungible gasoline distribution system, and contractual commitments, will guarantee product compliance. EPA believes that product specifications will be set by pipelines or gasoline sales contracts for reformulated gasoline, however these specifications are expected to address only the minimum and maximum requirements and time and place of use restrictions. EPA does not believe these specifications will focus on whether a particular batch of reformulated gasoline was produced on average or per-gallon, or on the specific parameter values of the batch, provided the values are within the maximum and minimum requirements. As a result, gasoline specifications do not obviate the need for independent sampling and testing. Several commenters cited cost as a basis for excluding independent sampling and testing from the final rule. One industry group commented that the costs of independent sampling and testing will be $30 to $40 million per year. EPA believes the costs of independent sampling and testing will be significantly smaller than this commenter suggested. EPA has estimated that the annual costs of this program element will be between $1.9 and $7.8 million per year. A copy of a memorandum describing EPA derivation of this estimate has been placed in the docket for this rulemaking. EPA believes that the principal difference between the industry and EPA cost estimates is that the industry assumes it will be necessary for each refinery to have an independent sampler in place 24 hours per day, 365 days per year. As a result of this assumption, industry assigns an annual cost of $32 million for sample collection only. This assumption is not justified. While some high-volume refineries producing a large percentage of reformulated gasoline may require the presence of an independent sampler much of the time, most refineries will produce a batch of reformulated gasoline less frequently than every day.49 --------------------------------------------------------------------------- \4\9 Industry has estimated that, nationwide, 175 batches of gasoline are produced per day. Only a portion of these will be of reformulated gasoline, and of these, a portion will be produced through in-line blending and not require independent sampling and testing. The number of batches per day that will require independent sampling and testing is between 22 and 71. There are about 200 refineries operating in the United States; EPA believes that between 100 and 120 of these will produce reformulated gasoline (excluding refineries in California that will be exempt from the independent sampling and testing requirements). As a result, EPA estimates that on average refineries will produce one batch of reformulated gasoline that requires independent sampling and testing every 1.4 to 5.5 days. --------------------------------------------------------------------------- Several commenters stated that the costs of independent sampling and testing will be disproportionately high for small refiners, because their batch sizes are small in comparison to batch sizes for larger refiners, and because independent labs may not be conveniently located relative to small refineries, requiring sample shipping. It is true that the per-gallon costs of independent sampling and testing will be larger for a refinery producing reformulated gasoline in small batches in comparison to the per-gallon costs for a refiner producing larger batches. Nevertheless, EPA believes this cost difference is insignificant. For a 20,000 barrel batch, a small-sized batch, the per- gallon cost of independent sampling and testing would be $0.0003; for a 50,000 barrel batch, the per-gallon cost would be $0.0001.50 EPA anticipates that samples collected at refineries located distant from any reliable independent laboratory will be shipped to the laboratory, but does not believe such sample shipping is problematic or costly. These conclusions are based on EPA's experience in conducting gasoline quality inspections throughout the country over at least the past dozen years, when its inspectors have shipped several thousand samples per year to EPA's laboratory for analysis. --------------------------------------------------------------------------- \5\0 EPA estimates the cost to collect and store a sample will be $230, and the analysis costs will be $42 (based on an analysis cost of $415 and analysis of 10% of the samples collected at a refinery), or $272. --------------------------------------------------------------------------- Commenters stated that the independent sampling and testing requirements will result in delays in the movement of finished reformulated gasoline due to the time required to resolve test result discrepancies between refiner/importer laboratories and independent laboratories, or that gasoline found to violate standards through independent sampling and testing may not be correctable because the gasoline in question will be in the fungible distribution system at the time the violation is determined. EPA does not believe these concerns create a basis for excluding the independent sampling and testing requirements. EPA does not construe the independent sampling and testing provisions to require refiners or importers to hold gasoline at the refinery or import facility until the independent testing is completed. In the event of a discrepancy between the refinery/importer test result for a gasoline batch and the independent laboratory test result for that batch, EPA anticipates the refiner/importer will correct the batch values it claims: if the standard for the parameter in question is being met on average, the value for that parameter used in calculating compliance would be changed (if the correct parameter value is within the per- gallon maximum). In the case of gasoline subject to the per-gallon standards, and in the case of the per-gallon minimum and maximum standards, EPA believes refiners and importers will be able to avoid the situation where, subsequent to the gasoline leaving the refinery or import facility, the gasoline is discovered to violate these standards. Refiners and importers will avoid this situation in several ways. First, refiners and importers will have the results of their own tests before the gasoline leaves the refinery or import facility, and the final rule requires that these tests must indicate the gasoline meets all standards. Second EPA's experience is that refiners and importers produce gasoline subject to per-gallon standards with a ``margin-of- safety'' sufficient to ensure tests by others do not indicate the gasoline fails to meet the standards. Third, with regard to tests pursuant to the independent sampling and testing requirement, refiners and importers presumably will select only high-caliber independent labs, and will closely correlate with them, making the possibility of conflicting test results unlikely. Fourth, the independent lab results do not have to exactly match the refiner- or importer-test results, but rather have to be within a range that is specified in the final rule. Lastly, test results by regulated parties downstream of the refinery or import facility (e.g., pipelines, terminals), or by EPA, would not be a basis for concluding gasoline violates a per-gallon minimum or maximum standard unless the test result exceeds the standard plus an enforcement tolerance. Enforcement tolerances are discussed in another section of this preamble. Nevertheless, in a situation where these mechanisms fail and a refiner or importer learns, through tests by EPA or others, that a parameter value for a gasoline batch subject to the per-gallon standard violated that standard, or for a gasoline batch subject to the average standard violated a per-gallon minimum or maximum standard, the refiner or importer would be expected to correct the violation. Several commenters raised concerns over the logistics and safety of non-company employees entering refineries to collect samples. EPA agrees that in order to comply with the independent sampling and testing requirements, a refiner or importer will be required to make arrangements with the independent laboratory that address logistics and safety issues. A refiner or importer would be expected to select as its independent laboratory a company that is able and willing to commit by contract to collect samples in a manner that minimizes interference with refinery or importer operations--to collect samples in a timely manner, and comply with company safety requirements. Because refiners and importers are given the latitude to select their own independent laboratories, EPA believes these parties will be able to identify and select ones that are satisfactory. Several commenters stated that independent sampling and testing will not be a successful deterrent to willful cheating, because a cheater can buy off its ``independent'' laboratory. While this type of fraud is always possible, EPA believes it is considerably more difficult for a refiner or importer intent on cheating to falsify reports when a second company has to be brought into the conspiracy. Given the consequences if caught, independent laboratories are unlikely to collaborate with a refiner or importer to falsify reports to EPA. False reporting by a refiner, importer, or independent laboratory would constitute a criminal violation under 18 U.S.C. section 1001, subject to monetary penalties and imprisonment, and EPA would expect to seek vigorous prosecution of such a case. In addition, the final rule provides that any laboratory that fails to comply with the requirements of the rule is subject to debarment or suspension, i.e., the company that operates the laboratory would be made ineligible for any government contracts, and would be precluded from participating in the reformulated gasoline program. Another criticism made of the independent sampling and testing provision is the inconsistency with the requirements for conventional gasoline, where independent sampling and testing is not required. EPA considered requiring independent sampling and testing for conventional gasoline, but decided to treat conventional and reformulated gasoline differently in this regard. EPA believes the profit incentive for cheating is less for a producer of conventional gasoline than for a producer of reformulated gasoline. Conventional gasoline does not require the new and costly refining procedures necessary for reformulated gasoline, and will not be sold at reformulated gasoline's price. In contrast to reformulated gasoline, conventional gasoline is subject to neither time and place of use restrictions nor to per-gallon maximums and minimums. Moreover, an enforcement program for reformulated gasoline that is more strict than for conventional gasoline is appropriate given the greater air quality concerns in the areas slated to receive reformulated gasoline. EPA considered enforcement approaches to verifying refiner and importer test results for conventional gasoline that are less burdensome than independent sampling and testing, such as the approaches that were suggested by the reformulated gasoline commenters and are discussed below. These middle-ground approaches were rejected for the same reasons they were rejected for the reformulated gasoline program--they simply would not be effective as test verification mechanisms. As a result, EPA concluded that while independent sampling and testing is necessary for reformulated gasoline, these procedures are not justified for conventional gasoline. Commenters suggested several alternatives to independent sampling and testing. None of these alternatives satisfy the program needs addressed by independent sampling and testing, however. Many commenters stated that EPA should establish a program of EPA certification of refiner and importer company laboratories, and participation in round-robin analysis programs, as an alternative to independent sampling and testing. Presumably independent sampling and testing only would be required where a company laboratory failed to obtain EPA certification. Commenters cited other federal programs that include the laboratory certification and/or round-robin approach, including the National Pollutant Discharge Elimination System (NPDES) and federal requirements for petroleum products produced to meet military specifications. EPA does not believe that laboratory certification and round-robin programs would provide sufficient verification of refiner or importer testing of reformulated gasoline. Programs of this type generally provide information on the quality of work a given laboratory is capable of performing under optimal conditions; they shed little light on the quality of the laboratory's day-to-day work which is the main focus of the independent sampling and testing requirement. Certification by EPA or another organization would determine if a laboratory has proper equipment and personnel properly trained as of the date of the certification, but would provide no certainty of the ongoing laboratory operation. The treatment of round-robin samples by laboratories is predictably special. If a laboratory's continued certification is contingent on the quality of its analysis of samples received from EPA, the laboratory would be expected to assign its best personnel to this task, to be particularly careful in the analysis, and probably to repeat the analysis enough times to be certain a correct result is obtained. The treatment received by round-robin samples may bear little resemblance to the treatment normal samples receive. Certainly, neither laboratory certification nor round-robin testing would constitute any deterrent to a willfully cheating refiner or importer. EPA believes the other federal programs that use laboratory certification and/or round-robins are inappropriate precedents for use of these approaches in the reformulated gasoline program. In the case of petroleum products produced to military specifications, the military presumably receives the products produced and can at that time verify whether the products meet relevant standards and criteria. This type of after-the-fact verification is not possible for reformulated gasoline for the reasons that have been discussed. In the case of facilities regulated under the NPDES program, it is possible to verify whether the levels of pollutants being discharged by the facilities are consistent with facility-specific permits that have been issued through EPA inspections that include water samples collected at the facilities. The reformulated gasoline situation is distinguished from the NPDES program because fungible mixing that often occurs within the refinery or import facility would render EPA inspections ineffective as a reformulated gasoline test verification mechanism. Commenters offered other alternatives to independent sampling and testing that would rely on random refinery audits by independent parties or by EPA, or of verification-analysis by EPA of a representative portion of the samples analyzed by refiners and importers. EPA rejected these alternatives. The limitations inherent in EPA refinery or import facility inspections that result from fungible mixing, discussed above, also would apply to audits conducted by independent parties. A program that would rely on EPA-conducted verification analysis of certain samples that are sent to EPA by refiners or importers raises the same types of concerns that occur under the round-robin approach. Refiners and importers would be expected to analyze samples that also are sent to EPA for verification- testing with a level of care that may bear little resemblance to normal laboratory practices, and this approach would provide small deterrent to the willful cheater. Other commenters suggested that EPA should rely on EPA-conducted inspections at refineries and at downstream locations, as in the gasoline volatility program. EPA intends to conduct inspections like these under the reformulated gasoline program, but does not consider them to be replacements for independent sampling and testing. EPA inspections at refineries and import facilities will be able to monitor the refiner- or importer-claimed properties for reformulated gasoline only if product is present at the time of the EPA inspection that has not been fungibly mixed. EPA believes this will often not be the case. Moreover, the refiner or importer is required to submit reports to EPA stating the claimed properties of a batch of gasoline only at the conclusion of each quarter, and would know which gasoline EPA sampled during an inspection. It would be expected that prior to filing its report to EPA, a refiner or importer would verify, and re-verify, its analysis results for gasoline that had been sampled by EPA. A willful cheater could simply record the correct properties for gasoline that had been sampled by EPA, while continuing to report bogus properties for the remainder of the gasoline. Inspections conducted by EPA downstream would almost always be of fungibly mixed gasolines, and as a result would be valid only for checking compliance with the maximum and minimum requirements; downstream inspections would not serve as a check on the per-gallon or average properties claimed by refiners and importers. It is relevant to note the difference in enforcement that was used under the lead phasedown program, as contrasted with the enforcement possible under reformulated gasoline. Lead phasedown was similar to reformulated gasoline in that refiners and importers were required to meet an average standard that applied to gasoline produced or imported. Unlike reformulated gasoline, however, lead phasedown compliance was based only on the volume of gasoline produced and the amount of lead used in that production--two categories of information that were easily verified after-the-fact. Lead usage was verifiable because EPA required all lead manufacturers to report to EPA the amount of lead shipped to each refinery. EPA could verify the volume of gasoline produced through audits of refinery production documents, cross checked with refinery sales documents and records from transferees of refinery gasoline. Under reformulated gasoline, however, this type of after-the-fact verification of refinery or importer reports is not possible. In contrast with volume information, routinely determined and kept by all parties to gasoline transactions, the properties relevant to reformulated gasoline include many that are routinely determined only a single time--by the refiner laboratory--and are therefore not susceptible to verification and cross checks. One commenter stated that EPA should require independent sampling and testing only for identified violators. EPA has rejected this option, however, because of difficulties in implementing such an approach. The limitations in determining refiner or importer cheating in its reports to EPA, discussed above, would make it difficult for EPA to know or prove any party is a violator in this way. Such refiner- specific imposition of independent sampling and testing would most properly be based on proof of refiner violations involving improper product testing, but if such violations could be documented easily, or even with difficulty but reliably, there would be little need for independent sampling and testing to begin with. It is precisely this difficulty in detecting and documenting testing violations that creates the need for independent sampling and testing. Violations that are susceptible to reliable documentation, such as of the minimum and maximum requirements or of the time and place of use restrictions, would not appear appropriate predicates for imposing independent sampling and testing. Requirements of this type are not the primary focus of independent sampling and testing. Moreover, if non-testing violations resulted in the imposition of independent sampling and testing, alleged violators would likely use protracted litigation to avoid the consequence. Commenters made a number of suggestions as to changes that should be made in the independent sampling and testing program as proposed. One commenter proposed that EPA should require independent sampling and testing only for reformulated gasoline that meets standards on average, and not for reformulated gasoline that meets standards per-gallon. EPA rejected this option, however, for the reasons provided below. EPA could inspect reformulated gasoline produced to meet the per- gallon standard, or fungible mixtures of per-gallon gasolines, and gain reasonable certainty that the gasolines were produced in compliance with the per-gallon standard. This is the type of enforcement program used for other gasoline rules with per-gallon standards, such as volatility. See 40 CFR part 80. In the absence of averaging, this is the type of enforcement program EPA might expect to use for reformulated gasoline. EPA believes that most reformulated gasoline found downstream will not be per-gallon gasoline only, however, but rather is likely to be either averaged gasoline or a mixture of per-gallon and averaged gasoline, and therefore not susceptible to downstream verification of refiner and importer reports. As a result, the ultimate consequence of removing the independent sampling and testing requirement from per- gallon gasoline would be the loss of verification over most refiner and importer reports for per-gallon reformulated gasoline. One commenter said that EPA should require independent laboratories to use the same test methods as the refinery. EPA agrees with this suggestion, and has incorporated it in the final rule. As discussed in the test method section of this Preamble, EPA requires refiners and importers to use the regulatory test methods when meeting the refinery and import facility testing requirements in order to avoid erroneous test results due to bias among test methods. For the same reason, the accuracy of test results by independent laboratories would be compromised if independent laboratories use non-regulatory test methods. The commenter's suggestion is an appropriate solution to this possibility. Another commenter said that EPA should reduce the length of time independent laboratories are required to retain samples, from the 180- day period in the proposal to 60 days. EPA has retained the 180-day sample retention period to allow EPA the opportunity to obtain portions of samples after it receives quarterly reports from refiners, importers, and independent laboratories. EPA recognizes that certain types of analysis results become less reliable as samples age, but believes there is enough information to be learned from samples older than 60 days to justify the 180-day sample retention requirement.51 --------------------------------------------------------------------------- \5\1Reid vapor pressure is the fuel parameter most susceptible to change due to storage time, because the more volatile fractions of a fuel sample may be lost if samples are not properly capped and stored at cold temperatures. Even in the case of RVP, however, EPA's experience with analyses of samples that have been stored for 180 days has been that the RVP of samples decline only approximately 0.2 psi, which is a change sufficiently small that EPA may continue to use the samples. --------------------------------------------------------------------------- Lastly, one commenter said that EPA should eliminate the requirement that independent laboratories determine certain information about the gasoline sampled, including the batch volume, storage tank identification, and the grade of gasoline. EPA proposed that independent laboratories obtain this information as part of the verification process over refiner or importer reports, and continues to believe it is necessary. For example, the properties of gasoline produced is only one part of the information necessary for demonstrating compliance; the volume of gasoline produced with given properties also is necessary. Information on storage tank and gasoline grade is included as a means of confirming the gasoline sampled and tested by the refiner or importer, and that by the independent laboratory, is the same. D. Downstream Oxygenate Blending Assumptions EPA received various comments on the assumptions refiners and importers may make regarding downstream oxygenate blending for purposes of calculating the properties of reformulated gasoline blendstock intended for downstream oxygenate blending (RBOB). Under the proposal, and the final rule, refiners and importers of RBOB are responsible for meeting all reformulated gasoline standards, except the oxygen standard; downstream oxygenate blenders are responsible for meeting the oxygen standard for reformulated gasoline produced using RBOB. In order to determine compliance with the non-oxygen reformulated gasoline standards a refiner or importer must calculate the non-oxygen parameter values for the reformulated gasoline. To do this, a refiner or importer must include a value for the oxygen content the RBOB will achieve subsequent to downstream oxygenate blending, because the values of non- oxygen parameters will differ based upon the type and amount of oxygenate blended downstream.52 --------------------------------------------------------------------------- \5\2The impact of blending different oxygenate types and amounts on the non-oxygen properties of RBOB is great. VOC emissions are dramatically affected by changes in RVP, yet different oxygenates affect RVP very differently; ethanol blended above about four volume percent (1.5 weight percent oxygen) increases the RVP of the resulting gasoline by 1 psi, while oxygenates other than ethanol cause very little or no change in RVP. Similarly, toxics emissions performance and benzene are strongly influenced by the dilution effect caused by oxygenate blending, yet different oxygenates must be blended at very different volumes to result in the same oxygen content in the gasoline produced; to produce gasoline with 2.00 weight percent oxygen, for example, requires 5.4 volume percent ethanol, or 11.0 volume percent MTBE. --------------------------------------------------------------------------- EPA proposed that refiners and importers of RBOB have two options for the oxygen content value used in their calculations of non-oxygen parameters. A refiner or importer could use the actual oxygenate type and amount blended with the RBOB, provided the refiner or importer carries out a program of contractual controls and quality assurance sampling and testing over the downstream oxygenate blending operation. Under the second option, the refiner or importer could make certain default assumptions regarding the type and amount of oxygenate blended downstream. EPA proposed that this assumption must be the ``worst case'' assumption with regard to the oxygenate type, and volume (within the oxygen minimum and maximum requirements).53 --------------------------------------------------------------------------- \5\3The worst case assumption for RVP and VOC emissions performance reduction would be ethanol, at the oxygen maximum level. For toxics emissions performance and benzene, the worst case would be the oxygenate providing the minimum volume (normally ethanol) at the oxygen minimum level. --------------------------------------------------------------------------- One commenter suggested that EPA should modify the nature of this default assumption, by allowing refiners to designate one of two categories of RBOB, ``ether-only RBOB'' and ``any-oxygenate RBOB.'' These categories would have different assumptions for oxygenate type; ether-only RBOB would be assumed to be blended with MTBE, and any- oxygenate RBOB would be assumed to be blended with ethanol. Notwithstanding the assumption of MTBE use for purposes of compliance calculations for ether-only RBOB, any ether could be added downstream to an ether-only RBOB. However, it would be a violation to add an alcohol to an ether-only RBOB. This commenter stated further that the amount of oxygenate should be assumed to be that amount necessary to add 2.1 weight percent oxygen, the annual average oxygen level that oxygenate blenders must achieve for reformulated gasoline produced using RBOB when meeting the oxygen content standard on average. EPA has generally adopted this suggestion for the final rule, but in a slightly modified form. By adopting the approach suggested in the comments EPA is in effect adding an ether-only designation to the any-oxygenate designation implicit in EPA's proposal. EPA also is modifying to some extent the oxygen content and type assumptions that refiners must make if they rely on this RBOB designation in determining compliance with the VOC, toxics, and other non-oxygen content requirements of reformulated gasoline. First, refiners and importers that produce or import RBOB are required to designate the RBOB as any-oxygenate RBOB, or as ether-only RBOB.54 These designations are in addition to, but must be consistent with, the specifications for the type(s) and amount(s) of oxygenate that must be included in the product transfer documents for RBOB. Second, refiners or importers that do not meet the requirements for a quality assurance program over downstream oxygenate blending, must assume that ethanol is blended with any-oxygenate RBOB, and that MTBE is blended with ether-only RBOB. For both types of RBOB, the refiner or importer must assume that the amount used is that amount sufficient for the gasoline produced to have 2.0 weight percent oxygen, or approximately 5.70 volume percent in the case of ethanol and approximately 10.80 volume percent in the case of MTBE. Refiner or importer oversight of the downstream oxygenate blending operation is not required if a refiner or importer relies on these ``worst case'' assumptions. However, as noted below, these types of RBOB must be segregated from one another. --------------------------------------------------------------------------- \5\4Any oxygenate RBOB must meet all reformulated gasoline standards subsequent to blending with any of the following: ethanol, methanol, butanol, MTBE, TAME, or ETBE. Ether-only RBOB must meet all reformulated gasoline standards subsequent to blending with any of the following: MTBE, TAME, or ETBE. --------------------------------------------------------------------------- EPA believes these assumptions regarding the type of oxygenate used are appropriate. The principal risk to the environment under the oxygen use assumptions is that an oxygenate blender will blend ethanol with ether-only RBOB, which would result in reformulated gasoline that probably would support neither the toxics nor benzene properties claimed by the refiner or importer of the RBOB (due to an insufficient dilution effect), nor, in the case of VOC-controlled gasoline, the claimed RVP nor VOC properties (due to RVP increases from ethanol). On the other hand, any-oxygenate RBOB will be formulated for blending with ethanol, and would only improve for all properties if blended with an ether such as MTBE. Several mechanisms will help ensure ethanol is not blended with ether-only RBOB. Ether-only RBOB and any-oxygenate RBOB must be segregated throughout the distribution system to the point of oxygenate blending. The product transfer documents will identify ether-only RBOB as such, which will put each person in the distribution network, and the oxygenate blender, on notice that the RBOB is not suitable for ethanol blending. Absent a highly unusual situation, a distributor would not be expected to dispense ether-only RBOB into a gasoline delivery truck for splash blending, because ethanol is the only oxygenate that normally is splash blended in trucks. In addition, it is likely that if ethanol were blended with VOC-controlled ether-only RBOB, the resulting gasoline will not meet the RVP maximum or VOC emissions performance minimum requirements, and would be susceptible to detection through EPA inspections or quality assurance programs conducted by regulated parties. EPA believes the volume assumptions based on 2.0 weight percent oxygen are preferable to the commenter's suggested 2.1 weight percent basis, because there is no reason to believe any particular oxygenate blender will elect to use the averaged oxygen standard of 2.1 weight percent. In a situation like this involving default assumptions it is appropriate to adopt a more conservative assumption. Oxygenate blenders have the option of meeting either the oxygen standard for per-gallon compliance of 2.0 weight percent, or the oxygen standard for average compliance of 2.1 weight percent. EPA believes the assumption that oxygenate blenders will at least meet the per-gallon standard is appropriate, and preferable to the proposed ``worst case'' oxygen use assumption of 1.5 weight percent, due to enforcement mechanisms contained in the final rule that apply to oxygenate blenders, i.e., quality assurance sampling and testing and recordkeeping. While it is true that any single batch of reformulated gasoline produced by blending RBOB with oxygenate could receive the per-gallon minimum 1.5 weight percent oxygen, the oxygenate blender must offset any gasoline produced at this oxygen level with other gasoline produced with oxygen levels greater than 2.1 in order to meet the 2.1 average oxygen content standard. In addition, EPA believes it is likely that most oxygenate blenders will choose to meet the oxygen standard on a per-gallon basis, rather than on average. The testing, recordkeeping, and reporting requirements for an oxygenate blender who elects the average oxygen standard are significantly greater than for an oxygenate blender who elects the per-gallon standard. Moreover, EPA's oversight experience with the state-enforced wintertime oxygenated fuels program, which includes the option of meeting that program's oxygen standard either per-gallon or on average, is that the vast majority of oxygenate blenders have elected the per-gallon option in that program. This precedent from the oxygenated fuels program is more compelling because the oxygen standard in the oxygenated fuels program is 2.7 weight percent for both the per-gallon and average options, yet oxygenate blenders for the most part still chose the per-gallon option. In contrast, under the reformulated gasoline program the average oxygen standard (2.1 weight percent) is more rigorous than the per-gallon oxygen standard (2.0 weight percent), which is an additional reason to believe reformulated gasoline oxygenate blenders will choose the per- gallon option. All oxygenate blenders, including a blender using any-oxygenate or ether-only RBOB and who uses the average oxygen standard, must follow the oxygen amount instructions contained in the RBOB product transfer documents. These instructions must specify the minimum oxygen necessary for the resulting reformulated gasoline to meet all per-gallon minimum and maximum standards. For example, a particular batch of any-oxygenate RBOB may specify 2.0 weight percent oxygen in order for the resulting reformulated gasoline to meet the 1.3 vol% benzene per-gallon maximum. An oxygenate blender using the RBOB in this example is required to add a volume of oxygenate that is large enough for the reformulated gasoline to have a minimum 2.0 weight percent oxygen (e.g., a minimum of 5.4 vol% ethanol), regardless of whether the oxygenate blender is meeting the oxygen standard per-gallon or on average. A refiner or importer of RBOB who, in lieu of producing ether-only and/or any-oxygenate RBOB, elects to conduct a quality assurance program over downstream oxygenate blending operations may use the actual oxygen types and amounts blended with the RBOB. If such a refiner or importer fails to properly carry out the quality assurance program, however, the RBOB will be deemed to have been blended with 4.0 vol% ethanol (1.5 wt% oxygen), the ``worst case'' oxygenate type and amount that is not constrained by ``ether-only'' or ``any-oxygenate'' designations. Under this assumption the reformulated gasoline would receive a 1 psi RVP boost associated with ethanol (see Section I of the RIA), and the minimum dilution effect of any oxygenate at 1.5 wt% oxygen (for example, 1.5 wt% oxygen results from 4.0 vol% ethanol, or 8.2 vol% MTBE). This assumption is appropriate in such a situation because it is possible the RBOB could be blended with ethanol at the 1.5 wt% oxygen minimum. EPA believes it is reasonable to assume the RBOB will be blended with at least the per-gallon minimum oxygen volume of 1.5 wt% oxygen, because of the requirements imposed on oxygenate blenders, such as recordkeeping, and mechanisms included in the final rule to ensure compliance with per-gallon minimums, such as quality assurance sampling and testing by regulated parties and enforcement by EPA. E. Averaging issues 1. Use of per-gallon and average standards EPA proposed that refiners and importers would be allowed to decide, on a per-batch basis, which regulated parameters will be subject to per-gallon standards and which will be subject to average standards. See 57 FR 13444 (April 16, 1992). For example, under the proposal refiners could decide for any given batch of reformulated gasoline to meet the benzene per-gallon standard and the toxics emissions reduction standard on average. Under the proposal these elections could be made separately for each batch of gasoline produced or imported, and separately for each parameter. EPA also intended that these per-gallon/average elections could be changed subsequent to the gasoline leaving the refinery or import facility, so that if gasoline that was intended to meet a particular standard on a per-gallon basis is discovered, subsequent to shipment, to violate the per-gallon standard, the refiner or importer could change its accounting records to switch the gasoline batch to the average standard category (provided the gasoline meets the per-gallon minimum or maximum). EPA has reconsidered this approach, and now believes that refiners and importers should be allowed to use either the per-gallon or the average standard for each parameter, but that parties may not use a combination of per-gallon and average standards for any parameter during any single averaging period. This per-gallon versus average election must be made separately for each refinery and for each importer or oxygenate blender. Under this revised approach, for example, a refiner could elect to meet the benzene standard per-gallon and the toxics emissions performance standard on average for all reformulated gasoline produced at a refinery, but once these elections are made, they would apply to all reformulated gasoline produced at that refinery for the entire averaging period for these parameters. EPA is making this change from the proposal because it is concerned that under the proposed approach nationwide average levels for regulated parameters would not achieve the levels of the average standards. For example, the average standard for benzene is set at 0.95 wt%, because, among other factors, EPA estimates that this level is at least as stringent as the benzene level that would exist in the absence of averaging. EPA is concerned that under the proposed approach for electing per-gallon versus average standards the nationwide average benzene levels in reformulated gasoline would be greater than the 0.95 wt% average standard for benzene. This result would be contrary to the intent of the Clean Air Act and EPA's goal that averaging should result in average parameter levels that are no less stringent than would occur in the absence of averaging. Section 211(k)(7)(C) of the Act provides that benzene and oxygen credits may not result in average levels for these parameters that are less stringent than would occur in the absence of using any benzene or oxygen credits. EPA has viewed this constraint on the use of credits as appropriate to employ for all reformulated gasoline parameters that may be met on average, including parameters other than oxygen and benzene, that averaging should not result in average parameter levels that are less stringent than would occur in the absence of averaging. In addition, section 211(k)(1) of the Act directs EPA to promulgate reformulated gasoline regulations that require the greatest achievable reductions in VOC and toxics emissions, taking into account cost, health and environmental impacts, and energy requirements. EPA has concluded that if refiners were required to meet the reformulated gasoline standards on a per-gallon basis only, that refiners would produce gasoline with properties equal to the standards plus ``margins- of-safety'' necessary to ensure the gasoline in fact meets the per- gallon standards. EPA also has concluded that the added flexibility afforded regulated parties through an average VOC or toxics standard results in the ability by refiners and importers to achieve more stringent standards when met on average than is possible when standards are met per-gallon, and the magnitude of this greater stringency is at least equal to the margins-of-safety that would be used with per-gallon standards. As a result, in implementing section 211(k)(1) EPA intends to establish requirements that will result in reformulated gasoline having VOC and toxics properties that in practice are at least equal to the per-gallon standards plus the margins-of-safety (which is equal to the average standards). In implementing these two statutory provisions, EPA intends that reformulated gasoline should have VOC and toxics emissions performance properties, and benzene and oxygen content properties that, regardless of whether credits or averaging are used, are in practice at least equal to the more stringent properties refiners would achieve if only a per-gallon standard were allowed. The level of these more stringent properties is at least equal to the per-gallon standard plus any ``margin-of-safety'' refiners would employ if only per-gallon standards were included. As a result, EPA proposed and is adopting standards for average compliance that are more stringent than the standards for per-gallon compliance. Moreover, the differences between the proposed average and per-gallon standards reflect EPA's estimates of this per-gallon ``margin-of-safety'' for each parameter. The relationship between margins-of-safety and average standards is discussed more fully in the 1992 SNPRM, at 57 FR 13457-13458. EPA is concerned that if refiners, importers, and oxygenate blenders can elect per-gallon versus average standards on a batch-by- batch basis, the levels of parameters in practice will not, on average, be approximately at the level expected if only a per-gallon standard were applied (equal to the per-gallon standards plus the margins-of- safety), but rather will on average be closer to the per-gallon standards. EPA believes the proposed approach would have this result because of the ability of refiners and importers to elect to use the per-gallon or the average standards separately for each batch. For example, the per-gallon benzene standard is 1.00 vol%, and the average benzene standard is 0.95 vol%. Under the proposal a refiner could, for each batch of gasoline produced, elect to meet the per- gallon or the average benzene standard. EPA believes that under the proposed approach most refiners would produce gasoline with the intention that the benzene level will be very close to, but slightly below, 1.00 vol%. If the refiner's benzene test for any given batch indicates the benzene level is between 0.95 vol% and 1.00 vol% (which refiners would be able to achieve for most batches), the batch would be placed in the per-gallon compliance category. If the refiner misses this benzene goal for any batch, and the refiner's test result indicates a benzene level above 1.00 vol% (1.05 vol%, for example), the refiner would simply place that batch in the average compliance category, and also produce a corresponding volume of gasoline in the average category (or change a previously-produced batch to the average compliance category) having a benzene level sufficiently below 0.95 vol% that the two batches have an average benzene content of 0.95 vol%. The net result over the annual benzene averaging period would be that the majority of gasoline would be in the per-gallon compliance category with an average benzene content close to 1.00 vol%, while the minority of gasoline would be in the average compliance category with an average benzene content of 0.95 vol%. Under this example, the resulting overall benzene level of the gasoline produced by the refiner would be greater than the approximately 0.95 vol% which EPA would expect if all reformulated gasoline had to meet the per-gallon benzene standard. EPA announced in its 1992 proposal a clear intention that average standards be allowed in order to increase refiner and importer flexibility. EPA also made clear its expectation that the ``margin-of- safety'' normally expected with a per-gallon standard not be lost because of averaging. This change is designed to implement this goal by preventing the potential unfavorable result from averaging described above. The final rule therefore includes a requirement that refiners, importers, and oxygenate blenders must elect, for each calendar year and for each parameter, to use only the per-gallon standard or only the average standard for each regulated parameter. This election must be made separately for each refinery. Under this revised approach to averaging, the average parameter levels for the gasoline produced by any refiner would be approximately the same regardless of whether the refiner elects the per-gallon or the average standards. For example, a refiner who elects to meet the benzene standard on a per-gallon basis probably will plan to produce gasoline with benzene levels sufficiently below the 1.00 wt% benzene standard to ensure that, when the production of each batch is complete, the refiner's benzene test results for each batch will be below 1.00 wt%. EPA estimates that refiners subject to the per-gallon benzene standard would aim for approximately 0.95 wt% benzene, and as a result the gasoline produced by such a refiner would have an average benzene level of about 0.95 wt%. In the case of refiners subject to the average benzene standard, on the other hand, refiners probably would plan to produce gasoline with benzene levels that exactly equal the 0.95 wt% benzene standard, with the result that the average benzene level for the gasoline produced by such refiners would be almost exactly 0.95 wt%. Under the revised approach for selecting whether to meet standards per-gallon versus average, therefore, the average parameter values in practice will be at the levels intended by EPA and Congress, and not at the less stringent levels that would have resulted from the proposed approach. EPA has not included a process for refiners, importers, and oxygenate blenders to notify EPA in advance of the per-gallon versus average standard elections. Rather, parties in effect will make this election when the first batch of reformulated gasoline is produced or imported each averaging period, because all reformulated gasoline subsequently produced or imported during the averaging period must follow the lead of the first batch. 2. Oxygen averaging a. Separate oxygen averaging for simple model VOC-controlled reformulated gasoline. In the proposed regulations published in 1992, EPA proposed that in the case of gasoline subject to the simple model the oxygen standard would have to be met separately for reformulated gasoline that is designated as VOC-controlled. The rationale for this category of oxygen averaging was that under the simple model the VOC emissions reductions required for reformulated gasoline would be deemed met only if the oxygen and RVP standards are each met for gasoline designated as VOC-controlled. Under that proposal, the gasoline quality surveys to be conducted in cities during the high ozone season would measure both RVP and oxygen of gasoline; the city would be considered to have passed a VOC survey only if both the oxygen and RVP levels met the per-gallon standards for these parameters. An industry group commented on this approach to VOC surveys and oxygen averaging. This commenter suggested that the VOC surveys should be based on a ``simple model'' VOC equation that would take into account both oxygen and RVP. Under this VOC equation, if the oxygen content found during a survey is below the per-gallon oxygen standard (worse than the standard), this deficiency may be offset by an RVP level that is below the per-gallon RVP standard (better than the standard), and vice versa. This commenter went on to suggest that under this approach, there would be no need to require refiners and importers to separately meet the oxygen standard for simple model VOC-controlled reformulated gasoline.55 Instead, according to this comment, the oxygen standard should apply only on an annual basis.56 --------------------------------------------------------------------------- \5\5Under the 1992 proposal, the separate RVP standard would apply only to simple model VOC-controlled reformulated gasoline. The manner in which the RVP standard applies to VOC-controlled gasoline under today's rule is the same as in the proposals. The oxygen standard, on the other hand, would have to be met separately for two categories of reformulated gasoline under the 1992 proposal: VOC- controlled reformulated gasoline and all reformulated gasoline. \5\6Under the 1992 proposal, for purposes of oxygen averaging, gasoline intended for use in oxygenated fuels program areas during the oxygenated fuels control periods (or OPRG) could not be averaged together with non-OPRG gasoline. The reason separate oxygen averaging was proposed for non-OPRG gasoline is to ensure areas not included in the oxygenated fuels program receive gasoline that meets the 2.0 oxygen content mandated by the Clean Air Act. If OPRG and non-OPRG gasoline could be averaged together for oxygen purposes, the gasoline in the OPRG areas--where 2.7 weight percent oxygen is required during the oxygenated fuels control period--could be used to offset gasoline with 1.5 weight percent oxygen intended for use in non-OPRG areas. No comments were received on this proposed treatment of oxygen averaging for gasoline designated as OPRG versus non-OPRG, and this treatment is unchanged under today's rule. --------------------------------------------------------------------------- In the 1993 proposal, EPA adopted the approach to VOC surveys and oxygen averaging suggested by this commenter. EPA has now reconsidered, and has included in the final rule a requirement for separate oxygen averaging for simple model VOC-controlled gasoline. The final rule retains the ``simple model'' VOC emissions reduction equation for use in gasoline quality surveys during the high ozone season, however. EPA agrees that the ``simple model'' VOC equation is appropriate for use in the VOC compliance surveys. This is because the surveys are designed to help ensure that the area in fact receives the VOC reductions required by the simple model RVP and oxygen per-gallon and averaging standards, where refiners and importers do not need to demonstrate compliance on average beyond the refinery or importer level. If the surveys show compliance on average with the expected VOC reductions, then there would not be a need to ``ratchet'' the RVP or oxygen standards. However, the surveys are an enforcement and compliance tool, and do not replace the simple model standards themselves. Even if the surveys are passed, the separate RVP and oxygen content standards still apply under the simple model and refiners and importers must comply with them. Given the inherent limits on the frequency and number of VOC gasoline quality surveys they can not reasonably be treated as a substitute for the standards themselves. It is reasonable to require that a refiner or importer demonstrate compliance with the simple model oxygen content standards that apply under averaging. Under this view, the purpose of the ``simple model'' VOC equation as used in VOC compliance surveys is to allow a slight variance in oxygen due to averaging, to be offset by a slight variance in RVP due to averaging, and vice versa. The ``simple model'' VOC equation is not intended to encourage refiners to employ a strategy of producing simple model VOC-controlled gasoline well below the oxygen standard, to be offset by gasoline well below the RVP standard. The simple model RVP and oxygen standards will still apply. Under the complex model separate oxygen averaging is not necessary for VOC-controlled gasoline, because there is a specific standard for VOC emissions performance that applies to reformulated gasoline. VOC emissions performance will be used under the complex model gasoline quality surveys. b. Averaging and credits under the separate oxygen categories. Under the final rule, simple model reformulated gasoline designated as meeting the oxygen standard on average must meet the oxygen standard during the calendar year averaging period, and must meet this standard separately for VOC-controlled gasoline, and for non-OPRG gasoline.57 This preamble section is intended to clarify the mechanism for meeting these overlapping oxygen requirements within a single refinery or oxygenate blending facility, or for a single importer. In addition, this section is intended to clarify the manner in which oxygen credits may be created, transferred, and used. --------------------------------------------------------------------------- \5\7 Non-OPRG reformulated gasoline is reformulated gasoline not intended for use in an oxygenated fuels control area during the oxygenated fuels control period. --------------------------------------------------------------------------- There are four possible categories of reformulated gasoline for purposes of oxygen averaging and credits: 1. VOC-controlled, non-OPRG; 2. Non-VOC-controlled, non-OPRG; 3. Non-VOC-controlled, OPRG; and 4. VOC-controlled, OPRG.58 \5\8One industry group commented that there will be no gasoline in the VOC-controlled, OPRG category. EPA disagrees with this conclusion. VOC-controlled gasoline must be present in terminals in covered areas during the period May 1 through September 15. The oxygenated fuels control periods for areas that also are included in the reformulated gasoline program begin on October 1 or later, and last through either January or February, except for the New York City area, which lasts until April 30. Parties will supply OPRG gasoline to terminals in advance of October 1 in order to ``blend up'' terminals to the oxygenated fuels standard by that date. If this OPRG gasoline arrives at terminals before September 15 (which likely will occur), the gasoline also would have to meet the VOC-control standards; the product thus would be in the VOC-controlled, OPRG category. A similar situation will likely occur in the Spring in New York City, where parties will supply VOC-controlled gasoline to terminals in advance of May 1 in order to ``blend up'' terminals to meet the VOC-control standards by that date. This pre-May 1 gasoline thus would also be in the VOC-controlled, OPRG category. --------------------------------------------------------------------------- The final rule does not require that each of these categories must separately meet the oxygen standard. Only VOC-controlled and non-OPRG gasoline must each separately meet the oxygen standard. As a result, the oxygen averaging standards must be separately met for the following three classes of gasoline: 1. All reformulated gasoline produced or imported, consisting of all four categories; 2. VOC-controlled gasoline, consisting of the VOC-controlled, OPRG; and VOC-controlled, non-OPRG categories; and 3. Non-OPRG gasoline, consisting of the VOC-controlled, non- OPRG; and non-VOC-controlled, non-OPRG categories. In order for oxygen credit creation and use to be consistent with the separate classes of oxygen averaging, the creator/transferor of any credits must identify which of the four categories the credits represent. The user/transferee of credits must apply the credits to that same category, in order to determine if the oxygen averaging requirements have been met for the three classes specified above. By way of example, assume that Refiner A produced the following batches of reformulated gasoline, each of which was designated for average compliance for oxygen, and each of which was produced during the same calendar year: ------------------------------------------------------------------------ Designations Volume --------------------- Batch No. (gallons) Oxygen VOC- content controlled OPRG ------------------------------------------------------------------------ 1............................. 100 2.3 Yes....... No. 2............................. 150 1.9 No........ No. 3............................. 120 2.2 No........ Yes. 4............................. 100 1.8 Yes....... Yes. 5............................. 130 2.1 Yes....... No. 6............................. 160 2.2 No........ No. 7............................. 160 2.5 Yes....... No. ------------------------------------------------------------------------ Refiner A then calculated the compliance total for oxygen for each of the four categories, by multiplying the volume of gasoline in that category times 2.1; and the actual total for oxygen for each category, by multiplying the volume of each batch in a category times the oxygen content of the batch, and summing the results for the category. The refiner's results are as follows: ------------------------------------------------------------------------ Categories --------------------------------------------------- VOC- Non-VOC- Non-VOC- VOC- control, control, control, control, non-OPRG non-OPRG OPRG OPRG ------------------------------------------------------------------------ Compliance total.... 819 651 252 210 Actual total........ 903 637 264 180 ------------------------------------------------------------------------ Refiner A transferred 52 credits in the VOC-controlled, non-OPRG category to another refiner, and recalculated its actual total in that category to be 851. Refiner A then calculated its compliance position with regard to each separate class of oxygen averaging, by calculating the compliance total and the actual total for the three classes of oxygen averaging: VOC-controlled, non-OPRG, and overall. The results of these calculations are as follows: ------------------------------------------------------------------------ Class of oxygen averaging ----------------------------------- VOC-control Non-OPRG Overall ------------------------------------------------------------------------ Compliance total.................... 1029 1470 1932 Actual total........................ 1031 1488 1932 Net total........................... 2 18 0 ------------------------------------------------------------------------ Because the actual total for oxygen is, for each class of oxygen averaging, equal to or greater than the compliance total, Refiner A has met the oxygen averaging standards. For gasoline subject to the complex model, there are only two classes for oxygen averaging: non-OPRG, and overall. In consequence, oxygen credits must be placed into one of only two categories--OPRG, and non-OPRG. With these simplifications, oxygen credits for gasoline subject to complex model standards would be created, transferred, and use in a manner similar to the example described above. Because of the differences in oxygen categories for simple and complex gasoline, however, oxygen credits generated from gasoline subject to the complex model could not be used to achieve compliance for gasoline subject to the simple model. 3. NOX averaging EPA proposed that the NOX complex model standard would be a 0% emissions performance increase under Phase I of the complex model before 2000. Under Phase II of the complex model beginning in 2000, EPA proposed a range of NOX standards, from a 0% emissions performance increase to a 15% emissions performance decrease. Averaging was not proposed as a compliance option for NOX. In the final rule, EPA has finalized the Phase II NOX standards, and has allowed for NOX averaging under both Phase I and Phase II. Under Phase I in the final rule, the NOX per-gallon standard remains at the proposed level of a 0% emissions performance increase. The final rule also provides an average standard for NOX compliance of a 1.5% emissions performance reduction, which is more stringent than the per-gallon standard, and with an associated per- gallon minimum NOX standard of a 2.5% emissions performance increase. EPA believes that the most appropriate interpretation of section 211(k)(2)(A) is that the NOX emissions performance of reformulated gasoline should be at the level expected from a 0% NOX increase standard on a per-gallon basis. This approach guarantees no increase in NOX emissions, and is a reasonable interpretation of this provision. At the same time, EPA does not believe that NOX averaging is precluded in all cases under this provision. The text of section 211(k)(2)(A) is not explicit on this point, and the certification provision of section 211(k)(4) would appear to allow averaging over a slate of fuels. The Phase I NOX averaging provisions are designed such that the average NOX performance of reformulated gasoline should be the same under either standard. Given this result, and the discretion afforded the Administrator in section 211 (k)(2)(A) and (k)(4), the NOX averaging provisions under Phase I complex model standards is a reasonable way to implement this statutory requirement. Under Phase II, the NOX standards are different for VOC- controlled versus non-VOC-controlled gasoline. Non-VOC-controlled gasoline has the same per-gallon, average, and per-gallon minimum standards as under Phase I. The NOX standards for VOC-controlled gasoline under Phase II require a NOX reduction: A 5.5% emissions performance reduction in the case of the per-gallon standard, and a 6.8% emissions performance reduction in the case of the average standard. In addition, the average standard has an associated per- gallon minimum NOX standard of a 3.0% emissions performance reduction. The rationale for requiring NOX reductions in conjunction with VOC-controlled gasoline under Phase II is discussed more fully in section VI of the preamble. The general approach used for setting the average NOX standards, and the per-gallon NOX minimums associated with the average standards, is the same as for other average and per-gallon minimums/maximums for reformulated gasoline. The average standard is set at a level that is equal to the per-gallon standard plus the ``margin-of-safety'' refiners would use to ensure compliance if only a per-gallon standard were allowed. EPA estimates this ``margin-of- safety'' would be 1.5% in the case of VOC and toxics emissions performance. In the case of NOX emissions performance, EPA estimates the ``margin-of-safety'' also would be 1.5% during Phase I, but during Phase II would be 1.3%. The per-gallon minimum is included in order to cap the averaging range. It is set at a level that is 2.5% less stringent than the per- gallon standard in the case of VOC, toxics, and NOX emissions performance. Limiting the averaging range is one of the mechanisms included in the final rule to ensure each covered area receives reformulated gasoline that on average provides the air quality benefits Congress intended for reformulated gasoline. The relationship between per-gallon and average standards, and the need for per-gallon minimums and maximums, are discussed in the 1992 SNPRM at 57 FR 13455-13458. The final rule requires that the NOX averaging standards under both Phase I and Phase II must be met separately for gasoline and RBOB that is designated VOC-controlled and for gasoline and RBOB that is not designated as VOC-controlled. This separate averaging is necessary in order to ensure that the ozone reduction benefits deriving from the NOX reductions occur during the high ozone season. If the VOC- controlled and non-VOC-controlled gasoline could be averaged together over the entire calendar year NOX averaging period, there is the possibility that gasoline in the non-VOC-controlled category could have sufficient NOX reductions that, through averaging, gasoline in the VOC-controlled category would not have the intended NOX reductions. Separate NOX averaging for VOC-controlled and non-VOC- controlled gasoline also is necessary to ensure that both the VOC- controlled and the non-VOC-controlled categories of gasoline comply with the no increase in NOX emissions performance instruction of section 211(k)(2)(A) of the Act. If VOC-controlled and non-VOC- controlled gasoline could be averaged together, there is the possibility that the gasoline in one category or the other would have greater NOX emissions performance reductions than is required, with the consequence that the gasoline in the other category could have a NOX emissions performance increase. Requiring separate NOX averaging for VOC-controlled and non-VOC-controlled gasoline prevents this possibility. In a departure from the general approach used for average standards, there is no gasoline quality survey prerequisite for use of the complex model Phase II NOX average standard for VOC-controlled gasoline. The gasoline quality surveys serve the purpose of ensuring that the minimum reformulated gasoline requirements of section 211(k) are met in each covered area when averaging is used. The minimum per gallon NOX reductions required under Phase II for VOC-controlled gasoline go beyond the minimum requirements of section 211(k), however, so there is certainty the minimum NOX requirements of section 211(k)(2)(A) (no NOX increase) will be met in each covered area without the need for surveys and possible ratchets. F. Survey Issues 1. Ratchets of Simple and Complex Standards on Survey Failure Under the 1992 and 1993 proposals, and under the final rule, refiners, importers, and oxygenate blenders that meet standards on average must conduct gasoline quality surveys in reformulated gasoline covered areas; in the event of a survey failure for a parameter, the standards for that parameter are ``ratcheted'' to be more rigorous. Under the 1993 proposal, and under the final rule, VOC and toxics surveys consist of a simple model portion and a complex model portion. Also under the 1993 proposal, EPA proposed that in the event of a failure of either the simple or the complex model portions of a VOC or toxics survey, that both simple and complex model VOC and toxics standards would be ratcheted.59 --------------------------------------------------------------------------- \5\9 Surveys for benzene and oxygen include both simple and complex model samples, because the measurements for these fuel parameters are not dependent on the simple or the complex models. As a result, failure of a benzene survey results in ratchets of the benzene standard under both the simple and the complex models; and the failure of an oxygen survey results in ratchets of the oxygen standard under both the simple and the complex models. --------------------------------------------------------------------------- One industry group commented on this proposal to ratchet both simple and complex standards, stating that instead of EPA's proposed approach, a failure of the simple model portion of a survey should result only in a ratchet of simple model standards, and vice versa. The commenter's concern was that ratchets of both the simple and complex standards, when only one survey type is violated, would be unnecessary to achieve the surveys' purpose--to ensure gasoline quality fluctuations due to averaging do not result in gasoline quality in any covered area that is ``dirtier'' than it would be if all gasoline was certified to the per-gallon standards. With the exception of simple model VOC and toxics survey failures that occur in 1997, discussed below, EPA generally agrees with this comment. Deficiencies in gasoline quality that are identified by the surveys are corrected (prospectively) through ratchets of average and maximum standards that occur only for the class of gasoline (simple or complex) for which a survey is failed. Survey failures also are prevented through quality assurance measures implemented by refiners and importers intended to prevent survey failures and ratchets, and such measures probably would not be different if ratchets occur only for the class of gasoline for which a survey is failed. The exception to this ratchet approach in the case of simple model VOC and toxics survey failures in 1997 occurs because a ratchet of the simple model standard in such a case would not constitute an incentive to refiners or importers to prevent survey failures of this type. Use of the complex model is mandatory beginning on January 1, 1998; subsequent to this date, the simple model standards may no longer be used. As a result of this timing, any failure of a simple model VOC or toxics survey in 1997 would have no consequence if only the simple model standards are ratcheted, because ratcheted standards become applicable only in the year subsequent to the year of the survey failure. Therefore, unless both the simple and complex model standards ratchet in the event of a simple model VOC or toxics survey failure in 1997, refiners and importers will have no incentive to take steps to avoid simple model survey failures in the year before the complex model becomes mandatory. The final rule has been modified to reflect this approach to survey ratchets. 2. The (Limited) Intra-Covered Area Averaging Alternative to Surveys Section 211(k)(7) of the Act states that the reformulated gasoline regulations shall provide for granting oxygen and benzene credits to persons who produce gasoline that exceed the standards for these parameters, providing for certification of gasoline based on such credits where they are used within the same covered area as they are generated, and requiring that the use of credits not result in average oxygen or benzene levels that are worse than would occur if no credit provisions were allowed. This is the statutory basis for including benzene and oxygen credits in the proposals and in the final rule. EPA believes these provisions are satisfied by refinery-based averaging combined with compliance surveys, but also believes they would allow a refiner or importer to meet the reformulated gasoline standards for oxygen and/or benzene (but not for other parameters) on average if the party is able to demonstrate the gasoline it produces or imports, and uses within a single covered area, meets the oxygen or benzene standards on average. To the extent section 211(k)(7) provides for such intra-covered area averaging, it would be allowed without the need for the gasoline quality surveys that are the general prerequisite for averaging. In order to give regulatory effect to this averaging aspect of section 211(k)(7) of the Act, EPA proposed regulations that would allow intra-covered area averaging without meeting the survey requirements. The proposal would have allowed this averaging approach for all parameters that may be averaged. The proposal did not, however, include enforcement mechanisms intended to ensure a party choosing this option does so properly, such as mechanisms to ensure, and document, the gasoline in question is used only in a single covered area, such as recordkeeping, reporting, or quality assurance requirements. EPA generally has retained this averaging option in the final rule in section 80.67(a)(2), but with several modifications. The final rule restricts the non-survey averaging option to oxygen and benzene only. This restriction is included because EPA intends to limit its application only to those parameters included in section 211(k)(7) of the Act. In addition, EPA has included in the final rule the requirement that any party intending to use the non-survey averaging option must first obtain approval from EPA through a petition process. The final rule specifies that the petition must describe in detail the mechanisms the refiner or importer will use to ensure that the gasoline in question is in fact produced by the refiner or imported by the importer, and is used only within the covered area and in no other attainment area or covered area. The petition also must describe the recordkeeping, reporting, auditing, and other quality assurance measures the party will use to document and report the quality of the gasoline used in the covered area. The petition would be expected to address mechanisms to establish with certainty the properties of the gasoline used in the covered area, and mechanisms to ensure the gasoline delivered for use in the covered area is not transported by a transferee of the gasoline (e.g., a truck distributor) for use in an adjoining attainment area or in another covered area. To the extent any of a party's gasoline is mixed with gasoline produced by another refiner or imported by another importer in the fungible gasoline distribution system, EPA believes the party would have serious difficulty achieving the product tracking certainties required for intra-covered area averaging. EPA believes this intra-covered area averaging approach will have very limited, if any, application, because it requires precise tracking of the quality of gasoline that is produced by a single refiner or is imported by a single importer and used within a single covered area. It was the great difficulty in this type of gasoline tracking, voiced by refiners and downstream segments of the gasoline distribution system, that gave rise to the general reformulated gasoline averaging approach included in the final rule--of refinery-level averaging combined with covered area gasoline quality surveys. Having established mechanisms to accomplish averaging on a nationwide basis, EPA believes it should sanction separate, intra-covered area averaging only if there is complete certainty the intra-covered area approach can be carried out successfully and in a manner subject to full enforcement oversight. EPA further believes the petition-approach included for intra-covered area averaging is the best means of accomplishing this certainty, without promulgating an additional extensive regulatory scheme. G. Conventional Gasoline Marker EPA's proposed intent to designate the chemical phenolphthalein as the required marker for conventional gasoline has been subjected to reconsideration on the basis of phenolphthalein field tests conducted using the gasoline pipeline operated by the Amoco Oil Company in Mandan, North Dakota by the American Petroleum Institute and Amoco. The results of those field tests suggest that phenolphthalein may not perform to EPA's expectations for reliably distinguishing conventional gasoline from reformulated gasoline. Specifically, the field tests suggest that phenolphthalein does not adequately mix with conventional gasoline and may act to contaminate water, metal surfaces and/or other petroleum products. Accordingly, EPA has elected not to issue a final rule governing conventional gasoline markers at this time. Instead, EPA has undertaken further investigation of alternative markers with interested petroleum and chemical companies. EPA intends to publish a new proposal for the conventional gasoline marker, and to promulgate a final conventional gasoline marker rule based on this proposal. Interested parties will have the opportunity to comment on this proposal. H. Responsibilities of Refiners and Oxygenate Blenders The introduction to this Preamble section describes the various responsibilities of refiners and oxygenate blenders under the reformulated gasoline program. Comments were received requesting clarification of the requirements that would apply in a case where more than one party is involved in a refinery or oxygenate blending operation. The final regulations define the terms ``refiner,'' ``refinery,'' ``oxygenate blender,'' and ``oxygenate blending facility.''60 The definition of ``oxygenate blender'' includes a party that owns or controls the blendstocks or gasoline used or the gasoline produced at an oxygenate blending facility. This definition is necessary in recognition of the practice of blendstock owners to specify the type and amount of oxygenates to be added by another party. Because the blendstock owner thus exercises control over the blending operation and affects the qualities of the finished gasoline, it is appropriate to include the product owner within the definition of oxygenate blenders and to impose responsibility for regulatory compliance on that party with substantial control over the quality of the final product. --------------------------------------------------------------------------- \6\0 Section 80.2(h) defines refinery as ``a plant at which gasoline is produced.'' Section 80.2(i) defines refiner as ``any person who owns, leases, operates, controls, or supervises a refinery.'' Section 80.2(ll) defines oxygenate blending facility as ``any facility (including a truck) at which oxygenate is added to gasoline or blendstock, and at which the quality or quantity of gasoline is not altered in any other manner except for the addition of deposit control additives.'' Section 80.2(mm) defines oxygenate blender as ``any person who owns, leases, operates, controls, or supervises an oxygenate blending facility, or who owns or controls the blendstocks or gasoline used or the gasoline produced at an oxygenate blending facility.'' --------------------------------------------------------------------------- As a result of these definitions, there may be situations where more than one person meets the definition of refiner or oxygenate blender for a single refinery or oxygenate blending facility. For example, at an oxygenate blending facility there may be one person who owns the RBOB and oxygenate and causes those products to be combined to produce reformulated gasoline (who also could be a distributor or reseller), another person who owns the gasoline storage tanks in which the RBOB and oxygenate are combined (who also could be a truck or terminal carrier), and still another person who operates and controls the blending equipment at the facility on a day-to-day basis. Each of the parties described in this example independently meets the definition of oxygenate blender for the oxygenate blending facility described. A similar scenario, with more than one person meeting the definition of refiner, is possible in the case of a refinery. The final rule provides that each person meeting the definition of refiner or oxygenate blender is independently responsible that standards and other requirements that attach to a refining or oxygenate blending operation must be met. This is the same requirement that attaches in other motor vehicle fuel regulatory programs. For example, under the gasoline lead phasedown program, in cases where the lead phasedown standard is violated as a result of excess average lead content of gasoline produced, EPA holds each person meeting the refiner definition liable; and under the gasoline volatility program, in cases where the volatility standard is violated as a result of improper oxygenate blending, EPA holds each person meeting the definition of oxygenate blender liable. However, as in other motor vehicle fuel regulatory programs, EPA intends to exercise its enforcement discretion and not seek to hold liable parties meeting a definition in relation to a batch of gasoline that chose to jointly meet the requirements of the final rule. In practice, therefore, each requirement pertaining to an individual batch of gasoline must be met only once. For example, the determination of properties, independent sampling and testing, compliance audits, testing of RBOB, record keeping and reporting requirements, and oxygenate blender quality assurance programs need not be met separately by each person who meets the refiner or oxygenate blender definition with respect to a specific batch of gasoline or blendstock. Rather, within the exercise of EPA's enforcement discretion, each party is individually responsible for ensuring that each requirement is met at least once for any specific batch. For example, EPA would exercise its enforcement discretion and not seek to impose liability on a party that meets the definition of oxygenate blender that does not separately sample and test the gasoline produced or separately submit reports to EPA relating to a specific batch of gasoline, as long as some party with equivalent standing (an oxygenate blender) does conduct the required sampling and testing and does file a valid annual report. However, each person meeting the definition of oxygenate blender in this example is individually responsible that the required sampling and testing occurs and that the required reports to EPA are submitted. EPA anticipates that the people involved in a refining or oxygenate blending operation will discuss among themselves who will be responsible for each of the regulatory requirements. In most cases, EPA anticipates that the product owner will take the lead in satisfying requirements, though the allocation of these responsibilities is strictly within the province of the regulated parties involved. If a refinery or oxygenate blending facility requirement is accomplished by one person, EPA will consider the requirement to have been accomplished by each person who meets the definition of refiner or oxygenate blender. If a refinery or oxygenate blending facility requirement is not properly accomplished, however, EPA will consider the lapse to be a violation by each person who meets the definition of refiner or oxygenate blender. Similarly, if a standard applicable to the refinery or oxygenate blending facility is not satisfied, EPA will consider each person who meets the definition of refiner or oxygenate blender to have failed to satisfy the relevant standard. EPA anticipates that reformulated gasoline and RBOB will be produced exclusively, or almost exclusively, at the refinery at which the blendstocks are produced from crude oil, due to the complexities inherent in producing reformulated gasoline and RBOB. EPA believes it will be very difficult for a downstream party to obtain blendstocks with the specific mixtures of properties such that the blendstocks may be blended together to produce gasoline meeting the standards for reformulated gasoline or RBOB. However, if such downstream blending-refining does occur, all requirements attaching to refiners apply to all parties meeting the definition of a ``refiner''. Note that, if blendstocks are combined with reformulated gasoline, the reformulated gasoline standards must be met on the basis of the volume and properties of the blendstocks only and compliance may not rely on the properties of the reformulated gasoline to which the blendstock is added. In addition the resulting reformulated gasoline/blendstock mixture must meet all reformulated gasoline standards. In the event any party attempts downstream blending-refining of reformulated gasoline or RBOB, EPA intends to scrutinize the operation closely. Commenters expressed concern that, where the oxygen standard is being met on an average basis, all persons who satisfy the oxygenate blender definition may not have access to the information necessary to know that this standard is being met in fact. This issue was of particular concern for oxygenate blenders who are carriers, where the normal business practice is to blend oxygenate according to the instructions of the product owner-oxygenate blender. The final rule provides that oxygenate blenders will be held liable, inter alia, for reformulated gasoline produced for averaged compliance that is determined to exceed the minimum and/or maximum standards. The final rule also prohibits the sale, by any person, of gasoline that violates, inter alia, a refiners' averaged compliance with the standards. Oxygenate blenders have direct control over whether a specific fuel meets the minimum and/or maximum requirements of the reformulated gasoline program. Blenders have no control over whether that fuel is being produced to comply with per-gallon or averaged standards. Where gasoline is designated for oxygen compliance on a per-gallon basis, the blender may take steps to ensure that 2.0 weight percent oxygen is added to each batch of gasoline produced. Where gasoline is produced to averaged compliance, the blender is precluded from independent knowledge of whether the average will be met. EPA appreciates this dilemma faced by parties downstream of a refiner achieving compliance on average. However, EPA believes both that the requirements that blenders be held potentially liable for selling averaged gasoline that fails to meet the averaged standard is necessary and that adequate safeguards are available. Potential liability is necessary to effectively prevent the sale and distribution of non-complying product by downstream parties which possess any opportunity to prevent the product from being released into the environment. For example, if a carrier-oxygenate blender receives instructions to add less than 2.00 weight percent oxygen to RBOB (the per-gallon oxygen standard), the carrier should obtain the assurance of the product owner, in writing if possible, that the reformulated gasoline being produced meets the oxygen standard on average. If a violation of the average oxygen standard occurs involving gasoline produced by the carrier-oxygenate blender, and the carrier-oxygenate blender can demonstrate that it made this inquiry in good faith and received an appropriate assurance, EPA will exercise its enforcement discretion and not hold the carrier-oxygen blender liable for the standard violation unless the carrier knew, or should have known, the oxygen standard would not be met on average. This type of inquiry and assurance would be no defense for oxygenate blended outside the per-gallon minimum/ maximum standard, however. I. Prohibitions, Liabilities and Defenses 1. Prohibitions The final rule contains certain prohibitions that apply to all parties in the gasoline distribution network, that address the per- gallon minimum and maximum standards for reformulated gasoline and the restrictions related to the time and place of use for reformulated gasoline. Also prohibited for every party are, inter alia, the addition of oxygenate to reformulated gasoline (except reformulated gasoline that is designated for use in an oxygenated fuels program during the oxygenated fuels control period); the combining of reformulated gasoline produced using ethanol with reformulated gasoline produced using another oxygenate during the period May 1 through September 15; and (during 1995 through 1997) the combining of reformulated gasolines or RBOBs subject to complex model standards unless the constituent reformulated gasolines or RBOBs have identical baselines. The final rule also prohibits all parties, other than retailers and wholesale purchaser-consumers, from combining reformulated gasoline or RBOB subject to simple model standards with reformulated gasoline or RBOB that is subject to complex model standards during 1995 through 1997. The rational for these prohibitions are discussed separately in the preamble sections dealing with the specific topics which result in the prohibitions. EPA received comments on its proposal to prohibit any party from transporting, storing, dispensing, selling, or supplying reformulated gasoline that does not meet a reformulated gasoline certification. The commenters were concerned that only gasoline that meets all reformulated gasoline standards would be ``certified,'' and that, as a result of averaging, parties downstream of the refinery would have no way of knowing if a particular batch of gasoline was produced to meet standards. EPA agrees with this comment, and has modified the final rule to limit the downstream prohibition involving reformulated gasoline properties to the per-gallon minimum and maximum standards that apply to all reformulated gasoline, regardless of whether the gasoline is produced to the per-gallon or average standards.61 As a result, downstream parties may determine if any particular gasoline batch meets the per-gallon minimums and maximums through sampling and testing. Moreover, EPA inspections conducted downstream of the refinery/importer will monitor compliance with the per-gallon minimums and maximums, and not compliance with the standards that apply to refiners and importers. --------------------------------------------------------------------------- \6\1For example, the refiner/importer benzene standard is 1.00 volume percent if met on a per-gallon basis, or 0.95 volume percent if met on average with a 1.30 volume percent per-gallon maximum. As a result, no gallon of gasoline may have a benzene content greater than 1.30 volume percent, regardless of whether the gasoline is produced or imported to the per-gallon or average standard. This 1.30 benzene maximum thus may be enforced against downstream parties. --------------------------------------------------------------------------- EPA's proposal would also prohibit refiners and importers from producing or importing reformulated gasoline that does not meet reformulated gasoline standards. Several commenters observed that the production alone of reformulated gasoline or RBOB that fails to meet required standards does not cause environmental harm, because the product may be corrected before it leaves the refinery. EPA generally agrees with this comment, and has adjusted the regulatory language to clarify that the prohibition against the production of reformulated gasoline that fails to meet standards applies only to gasoline that is intended for sale or use. During the course of any inspection at a refinery or import facility, EPA will rely on the documentation used by a refiner or importer to determine if any particular gasoline is ``finished'' and therefore is intended for sale or use, or is an ``unfinished'' product for which the refiner or importer intends additional blending. Accordingly, the final rule prohibits the manufacture, sale, offering for sale, distribution, dispensing, supplying offering for supply, transporting or causing the transportation by refiners and importers of finished gasoline ``intended'' for sale or use where such gasoline fails to meet reformulated gasoline standards. This approach is consistent with EPA's approach under the Lead Phasedown, Fuel Volatility and Diesel Desulfurization Programs. 2. Liabilities a. General. The final rule provides that where the gasoline contained in a storage tank at any facility owned, leased, operated, controlled or supervised by any refiner, importer, oxygenate blender, carrier, distributor, reseller, retailer, or wholesale purchaser- consumer is found in violation of the prohibitions, most parties involved in the chain of distribution upstream of the facility found in violation are presumed liable for the violation. Carriers are presumed liable for violations arising from product under the control and/or custody of the carrier at the carrier's facility, and for violations at any facility where EPA demonstrates that the carrier caused the violation. Carriers who meet the definition of refiner or oxygenate blender have the same liabilities and defenses as any other refiner or oxygenate blender. The final rule also provides defenses against liability for each person presumed liable. These defenses are discussed below. For a more detailed discussion of the rationale for the liabilities and defenses established by this rule, see EPA's proposal at 57 FR 13470-13473 (April 16, 1992). One commenter stated that where gasoline in a storage tank is in violation of the regulations, EPA should either narrow the range of persons presumptively liable or expand the availability of affirmative defenses. The comment is based on the normal industry practice of commingling products in common storage tanks, the number of fuel manufacturers that would be involved, the likelihood of commingling, the absence of quantitative thresholds, and the absence of a requirement that individual parties exercise sufficient control over the contents of the tank. Another commenter queried what distinguishes this program from other fuels programs which did not impose such presumptive liability. EPA has had extensive experience in enforcing other motor vehicle fuel programs under 40 CFR part 80, including the unleaded gasoline and gasoline volatility programs and the recent diesel sulfur program. Each of these other fuels programs include presumptive liability schemes that are very similar to the presumptive liability scheme proposed for reformulated gasoline. The liability and defense provisions of this rule are structured similarly to those adopted by EPA in its prior motor vehicle fuel programs, including the controls on leaded and unleaded gasoline, gasoline volatility and diesel fuel desulfurization. For those programs, EPA's regulations identify various persons who are presumed liable when violations are detected at various points in the motor fuel distribution system. For example, 40 CFR 80.28 identifies those persons responsible for violations of the gasoline volatility regulations when a violation is detected at refiner or importer facilities (Sec. 80.28(a)), at carrier facilities (Sec. 80.28(b)), at branded distributor facilities, reseller facilities, or ethanol blending plants (Sec. 80.28(c)), at unbranded distributor facilities and ethanol blending plants (Sec. 80.28(d)), at branded retail outlets or wholesale purchaser-consumer facilities (Sec. 80.28(e)), and at unbranded retail outlets or wholesale purchaser-consumer facilities (Sec. 80.28(f)). In general, all persons who could have caused a violation at a facility are presumed to be liable for the violation detected at the facility. At branded facilities the refiner is also presumed liable based on their ability to exercise a degree of control at these facilities. Various affirmative defenses are afforded to persons presumed liable, and in all cases the presumptions of liability are rebuttable. 40 CFR 80.28(g). The affirmative defenses typically involve showing (1) that the person did not cause the violation, (2) that they either conducted tests showing the gasoline was in compliance when they transferred it to the next person in the distribution system, or that they received proper documentation when they received the gasoline and conducted a sufficient quality assurance sampling and testing program. Additional elements of an affirmative defense must be shown by refiners when a violation is detected at a branded outlet. A detailed discussion of the reasons for the gasoline volatility liability defense provisions can be found at 54 FR 11872 (March 22, 1989). The regulations adopted for the reformulated gasoline program follow this same general structure. For example, if the gasoline in a storage tank, or at any other point in the distribution system, is found to be in violation of the requirements, then the following persons are presumed liable: All persons (including carriers) who own, lease, operate, supervise or control the facility; all persons other than carriers who manufactured, sold, transported, or dispensed the gasoline found at the facility; carriers who dispensed, transported, supplied or stored the gasoline where EPA can show they caused the violation; and the refiner or importer whose brand name is displayed at the facility, if any. They will not be deemed liable if they can show (1) they did not cause the violation, (2) that product transfer documents indicate the gasoline in question met all relevant requirements, and (3) they conducted a sufficient quality assurance program. Additional elements must be shown by refiners or importers for violations at branded facilities. The rationale for assigning a presumption of liability to all contributors to a batch of noncomplying fuel is that, as with gasoline volatility and the other motor vehicle fuel programs, EPA is in a particularly poor position to know who caused a violation that is detected at a point in the distribution system. In the case of a violation found at a retail station, for example, the retailer often will say it has no control over the quality of the gasoline delivered by the distributor (or by more than one distributor) and did nothing to cause the violation; the distributor will say it has no control over the quality of the gasoline provided by the terminal and did nothing to cause the violation; the terminal will say it only supplies the gasoline received from the pipeline and did nothing to cause the violation, etc. EPA normally lacks the information necessary to establish the cause of the violation because its inspectors were not present when the gasoline in question moved through the distribution system; yet EPA has a sample that is, in fact, in violation. In contrast to EPA, the parties responsible for the facility, or for supplying the gasoline contained at a facility found to be in violation are, collectively, in the best position to determine the cause of the violation. It is these parties who are presumed liable. The presumption of liability normally has the desired effect of forcing the presumptively liable parties to cooperate in identifying the violation's cause, which both resolves the issue of liability for the party or parties actually responsible for the violation and establishes defenses against liability for parties not responsible. In addition, branded refiners or importers are presumed liable based on the degree of control such refiners or importers have over gasoline that is sold under their brand name. The likelihood of commingling, the absence of quantitative thresholds, the degree of control exercised by the branded parties presumed liable, and the reasonableness of a presumption of liability for parties involved with the production or distribution of the gasoline discovered in violation is the same for the reformulated gasoline program as it is for the gasoline volatility and other motor vehicle fuel programs. In both cases, EPA is confronted with a fungible gasoline distribution system, with various persons either involved with the production or distribution of the noncomplying gasoline, or exercising some degree of control over the downstream facility where the violation was detected. In both cases EPA is not reasonably able to locate the cause of the violation, and the regulations reasonably require the parties involved with the noncomplying gasoline and facility to bear the burden of locating the cause of the violation. EPA has included in the final rule liability for branded importers for violations found at facilities at which that importers' brand name is displayed. This liability is parallel with the liability presumption that attaches to branded refiners for violations found at branded facilities. This change from the proposed liability scheme is included because the absence of liability for branded importers created a potential gap in the regulatory scheme. If any party meets the definition of a branded importer, it is reasonable that they be treated equally with branded refiners. Moreover, EPA does not believe the scope of the liability provisions should be narrowed. The scope of parties presumed liable is designed to ensure that each party in the reformulated gasoline production and distribution system with any opportunity to affect the quality of the fuel may be held accountable for noncomplying fuel. Otherwise, the substantial economic incentives associated with cheating under this program would result in the exploitation of gaps in the scope of coverage. As a result, EPA declines to adjust the range of parties presumptively liable for commingled fuels violations or to adjust the affirmative defenses. Certain commenters requested clarification of the volume of gasoline a party must contribute to a non-complying storage tank to create the presumption of liability. EPA's April 1992 proposal would hold each party responsible for a violation detected at a storage tank, or at any other point in the gasoline distribution system, if the party was involved with any of the noncomplying gasoline. This would include distributors for the most recent delivery, and in most cases would also include distributors for the several prior deliveries. See 57 FR 13471 (April 16, 1992). Commenters requested clarification from EPA as to what was meant by ``several deliveries.'' EPA has retained the proposed language that assigns presumptive liability to any party that contributes ``any gasoline'' to the noncomplying gasoline in the batch or storage tank. There is no single de minimis volume that would be appropriate in every situation. In addition, there is no single number of deliveries that would identify the source for all noncomplying gasoline present in the batch or storage tank yielding the noncomplying sample. EPA will evaluate the issue of non-causation as a result of a small volume contribution to a non-complying storage tank on a case-by-case basis. One commenter observed that a downstream party receiving noncomplying product would be obliged to store the product until the owner of the product determines a solution. The commenter recommended that a party storing nonconforming product that has been properly re- documented stating its actual characteristics should not be penalized. EPA generally agrees with this comment. The final rule prohibits, inter alia, the distribution, transportation, storage or sale (or offer to sell) of noncomplying product represented as reformulated gasoline and intended for sale or use in any covered area. EPA will assume, absent countervailing evidence, that all gasoline found in the United States is intended for domestic sale or use and thus subject to the reformulated gasoline or anti-dumping rules. Countervailing evidence to overcome this assumption with regard to a specific tank of gasoline would include a showing of the following: demonstrate that the gasoline is clearly identified as noncomplying product; that the noncomplying gasoline is segregated from other gasoline; that the storage tank containing the gasoline has been clearly designated as product unavailable for sale or distribution; that the noncomplying gasoline in fact has not re-entered the distribution system; and that the gasoline is redirected toward a process of bringing the gasoline into compliance. A party storing noncomplying gasoline meeting this burden would not be in violation of the prohibitions contained in today's rule. b. Carriers. EPA received a variety of comments objecting to the imposition of presumptive liability on carriers. Several commenters argued that the prohibitions contained in section 211(k)(5) of the Act identify refiners, blenders and marketers as the regulated parties under the reformulated gasoline and anti- dumping programs, but does not specifically name carriers. Section 211(k)(1) authorizes EPA to ``promulgate regulations * * * establishing requirements for reformulated gasoline * * *.'' This broad grant of authority is the principal source of authority for the regulatory structure adopted for the reformulated gasoline program, along with the various specific requirements and authorizations found in other paragraphs in section 211(k). EPA has determined, in exercising this authority, that the most appropriate structure for this program is one which provides for the regulation of reformulated gasoline from its point of production or importation to its eventual transfer to the ultimate consumer. First, EPA's experience with various other motor vehicle fuel regulations, promulgated under section 211(c) of the Act, indicate that this is critical to the success of the program. This is based on the fungible nature of the gasoline distribution system, the complex interrelationships between the various parties involved in producing and marketing gasoline, and the large number of different parties that will be involved in bringing reformulated gasoline to the market. Second, the reformulated gasoline program includes a complex mixture of requirements, involving the regulation of several different gasoline components as well as the emissions performance of the gasoline. A cradle-to-grave approach is necessary to ensure that the air quality benefits from this program are actually achieved in use, given the large number of parties who will have custody or control of a batch of reformulated gasoline, and the potential that their actions could adversely affect the emissions reductions expected from the reformulated gasoline program. This could occur, for example, because the quality of gasoline has been changed, or because it has been dispensed or used at an improper time or place. For these reasons, EPA believes that it is proper to regulate all parties involved with the production, distribution and sale of reformulated gasoline. At the same time, EPA has assigned different responsibilities to different parties in the production and distribution system. EPA proposed and has decided to adopt final rules including carriers as a regulated party, and assigning them responsibilities commensurate with their unique role in the gasoline distribution system. EPA believes this is a reasonable exercise of its broad grant of authority under section 211(k)(1). EPA has determined that the regulation of carriers--pipelines, barge operators or truck carriers--is necessary to accomplish the goal of cradle-to-grave oversight monitoring and enforcement. This determination is based on the potential for carriers to cause violations of the reformulated gasoline regulation, the need to impose a duty on carriers to exercise care in transporting or storing reformulated gasoline, and the need for EPA to be able to determine the source of violations within the program. For example, carriers possess the potential to cause violations of this program by commingling inappropriate grades of gasoline, delivering conventional gasoline into a covered area, or by carrying non-VOC controlled gasoline in a storage facility over from a non-VOC control period into a VOC control period and selling or distributing that product. In each of these examples, the carrier would be directly responsible for causing the violation. EPA believes that the presumption of liability proposed in the final rule effectively imposes a duty of care on carriers to avoid these violations. Further, as discussed in the economic analysis accompanying this final rule, the costs associated with carrier compliance are reasonable and have been designed to provide carriers with the minimum oversight costs necessary to accomplish the goals of this program. Certain carriers argue that Congress did not authorize the regulation of carriers in this program as the prohibition found in section 211(k)(5) of the Act only applies to refiners, importers, distributors and marketers, but not carriers. Therefore, it is argued, EPA may not regulate carriers. EPA disagrees with this argument. First, it misinterprets the prohibitions adopted by Congress in section 211(k)(5). The statutory prohibitions found in that paragraph are self-effectuating once EPA promulgates regulations establishing the requirements for certification of reformulated gasoline. Section 211(k)(5) does not limit EPA's authority to establish various additional regulatory prohibitions, as necessary, in the exercise of EPA's rulemaking discretion under section 211(k)(1). It also does not limit EPA's authority under section 211(k)(1) to regulate, as appropriate, the activities of various persons in the gasoline distribution system, including carriers. In any case, EPA believes that carriers are reasonably included in the term ``marketers'' as used in section 211(k)(5). That term is vague and ambiguous, and EPA reasonably interprets it to include all persons regulated by EPA in the reformulated gasoline program including carriers. The Act does not define the term marketer for purposes of section 211(k), and while that term is used in various other provisions of the Act, it is only defined for purposes of one unrelated provision, section 324 (involving responsibility for gasoline vapor recovery systems at small volume retail outlets). The term generally appears to indicate a broad category of persons involved in the gasoline distribution system, a generic phrase with a catch-all meaning. See sections 211(h)(4), 211(1) and 211(m)(2). As used in those provisions, the scope of the term may be broader or narrower, depending on how detailed Congress made the list of parties covered by each provision. For example, the long list of parties referenced in section 211(h)(4) makes it clear that ``marketer'' as used there means an undefined category of persons other than distributors, blenders, resellers, carriers, retailers, or wholesale purchaser-consumers, while in sections 211(1) and (m)(2) the term means an undefined category of persons other than refiners. The legislative history for section 211(k) fails to shed any light on Congress' intent. The generally accepted meaning of the term ``marketer'' is ``one that deals in a market.'' Webster's Ninth New Collegiate Dictionary (1990). A carrier would reasonably fall within this definition. Given the lack of a clear definition in the Act for this vague term, the indications that Congress intended it to have a somewhat broad, catch- all meaning, and the reasons provided above supporting EPA's inclusion of carrier's as regulated parties in the reformulated gasoline program, EPA has reasonably determined that carriers are included in the term ``marketer'' as it is used in section 211(k) of the Act. Various commenters claimed that it was inappropriate to impose a presumption of liability on carriers, based on their unique circumstances. They noted that carriers do not take title to or own the gasoline, have contractual obligations to maintain the integrity of the shipment, only act in accordance with instructions from the product owner, and have incentives to not tamper with the product, as it would expose them to liability and would prejudice their relationships with both the shipper and purchaser. Commenters stated that carriers lack any economic incentive to violate the reformulated gasoline requirements, and any action that does not violate these requirements is only in response to the gasoline owner's instructions. Commenters also stated that carriers cannot refuse such instructions except for clear violations of the law. Barge operator-carriers noted that the risk of accidental contamination for barge operator-carriers is virtually nonexistent due to contract obligations to maintain cargo integrity and the product testing that occurs before and after shipping. They also argued that the volume of product in a barge-tank would dilute any trace contaminants such that there was no practical risk of a violation of the reformulated gasoline requirements from contamination. EPA recognizes that carriers occupy a role that is somewhat unique in the gasoline distribution system. In general, EPA agrees that there is limited economic incentive for carriers to tamper with the quality of gasoline, in that carriers do not own the gasoline they ship or store and would not profit by taking advantage of the price differential between complying and noncomplying gasoline. At the same time, there are still significant opportunities for carriers to directly cause violations of the reformulated gasoline program. For example, a carrier's delivery territory may span a boundary between an area requiring reformulated gasoline and an area that may receive conventional gasoline. Misdelivery of conventional fuel into the reformulated gasoline covered area would be a violation of the prohibitions of the reformulated gasoline program. Other situations where a carrier can cause a violation include a terminal-carrier or truck-carrier who mixes conventional gasoline and reformulated gasoline and transfers the resulting gasoline as reformulated; who mixes reformulated gasoline designated as VOC-controlled with non-VOC- controlled gasoline and transfers the resulting gasoline as VOC- controlled; who delivers gasoline designated for use in VOC-Control Region 1 to a retail outlet located in VOC-Control Region 2; who mixes oxygen program reformulated gasoline (OPRG) and non-OPRG reformulated gasoline and transfers the mixture as OPRG; or who mixes simple and complex model reformulated gasoline. In these examples, EPA would hold the carrier liable if the carrier improperly delivered the gasoline or mixed the gasolines that should have been segregated. Note that the gasoline owner in each of these examples also would be presumed liable for the violation. Based on these circumstances, the presumption of liability assigned to carriers is much more limited than that assigned to any other regulated party. Like other parties, a carrier is liable for violations that occur at its own facility. However, unlike other regulated parties, carriers are not liable for violations detected at other facilities, unless EPA can show that the carrier caused the violation. This is a significant reduction in the scope of the presumption of liability as compared to the scope proposed for carriers, and reflects EPA's balancing of the unique characteristics noted by carriers and the need to prevent carriers from adversely affecting the characteristics of reformulated gasoline. This parallels the presumption of liability for carriers adopted by the Agency in the gasoline volatility regulations, and approved by the court in National Tank Truck Carriers, Inc. v. U.S.E.P.A., 907 F.2d 177 (D.C. Cir. 1990). EPA acknowledges that carriers may operate on the instructions of the product owner. In fact, several commenters suggested that carriers are obligated to not deviate from the owner's instructions regardless of whether those instructions are consistent with the reformulated gasoline rules. However, the Interstate Commerce Commission62 has advised EPA that carriers are not obligated to store or transport gasoline in a manner that violates applicable laws. The ICC view of carrier obligation allows carriers to self-determine which loads they will store or carry. The ICC also observed that a carrier's obligation to accept tenders is superseded by an obligation to comply with applicable law, including regulations that implement the Clean Air Act Amendments of 1990. Accordingly, carriers are not placed in an untenable position by refusing to store or transport gasoline that does not comply with the reformulated gasoline requirements. --------------------------------------------------------------------------- \6\2Per telephone conversation with Charles Wagner, Deputy Director, Operations and Enforcement Section, Office of Compliance and Consumer Assistance, Interstate Commerce Commission. --------------------------------------------------------------------------- c. Carriers acting as refiners or oxygenate blenders. The final rule provides for a presumption of liability for violations found downstream of a refinery or oxygenate blending facility for all persons who meet the definition of refiner or oxygenate blender, including carriers who meet this definition.63 --------------------------------------------------------------------------- \6\3 Liabilities and defenses for refiners and oxygenate blenders are discussed generally in the section on refiners and oxygenate blenders above. --------------------------------------------------------------------------- A presumption of liability is necessary in the case of a carrier acting as a refiner or oxygenate blender because in both cases the carrier plays a significant role in the actions that establish or change the quality of reformulated gasoline. For example, the practice of splash-blending oxygenates and gasoline in gasoline delivery trucks is a common form of gasoline blending, and the trucks used for splash blending often are operated by truck carriers. Frequently, the carrier truck driver directly controls the volumes of gasoline blendstock and oxygenate that are combined in the truck. In consequence, the carrier is directly responsible for the quality of the finished gasoline in such a splash-blending operation. Commenters observed that in other fuel regulatory programs, carriers acting as refiners or oxygenate blenders are specifically excepted from presumptive liability for violations determined at facilities downstream from the refinery or oxygenate blending facility. This is not accurate. Carriers who meet the refiner or oxygenate blender definition are treated the same under the reformulated gasoline regulations as under other motor vehicle fuel programs. The definition of a ``refiner'' is consistent throughout EPA's fuel regulatory programs, and in all these programs a carrier who meets the refiner definition is subject to the same liability as any other person who meets the refiner definition. Oxygenate blenders are simply a sub- category of refiners who produce gasoline only by oxygenate blending. As a result, carriers acting as oxygenate blenders are regulated consistently with any other oxygenate blender under the program. Carrier-commenters argued that the owner of the gasoline and oxygenate used in an oxygenate blending operation should be responsible for meeting the requirements for sampling and testing, compliance record keeping, reporting and auditing, because only the owner can remedy violations. For the reasons discussed in the refiner and oxygenate blender section of this preamble, EPA has determined that each person who meets the oxygenate blender definition is individually responsible for ensuring that the requirements that attach to an oxygenate blending operation are met. However, as discussed above, carrier-oxygenate blenders and product owner-oxygenate blenders may reach agreements on the allocation of responsibilities for meeting the oxygenate blending requirements within the scope of EPA's enforcement discretion. 3. Defenses The final rule specifies that a regulated party may rebut the presumption of liability by demonstrating (1) that it did not cause the violation, (2) that the product transfer documents account for all the gasoline in question and indicate that the product complied with all applicable standards, and (3) that the party conducted an acceptable quality assurance program of periodic sampling and testing. When a non-complying product is found at a facility operating under a refiner's brand name, the refiner must also demonstrate additional elements for a valid defense. This includes a showing that the violation was caused by a party in violation of a contractual understanding imposed by the refiner to prevent such action. The defenses available to regulated parties to rebut the presumption of liability are closely patterned after those adopted for other motor vehicle fuel regulatory programs under 40 CFR part 80, including the gasoline volatility program. The presumption of liability is rebuttable, including the imposition of vicarious refiner liability for violations detected at branded facilities. This regulatory structure is fully consistent with the relevant judicial decisions in this area. See Amoco Oil Co. v. Environmental Protection Agency, 501 F.2d 270 (D.C. Cir. 1976) (``Amoco II''), and National Tank Truck Carriers, Inc., supra. As discussed above, carriers not acting as refiners or oxygenate blenders will not be deemed presumptively liable for violations found downstream of the carrier facility, unless EPA shows that the carrier caused the violation. Accordingly, such carriers will not be required to present a defense to such downstream violations. However, where a violation is found at a carrier's facility, the carrier must meet the defense elements in order to avoid liability. Note that EPA intends to exercise its enforcement discretion to permit a carrier to rely on a properly conducted quality assurance program undertaken by the product owner to satisfy the quality assurance program defense element. One commenter observed that the proposed regulations fail to account for carriers making consecutive deliveries to reformulated gasoline and conventional gasoline markets. Such carriers may appear to have complying and non-complying product on board, according to the commenter. The issue raised by this commenter applies not only to carriers, but potentially to any party who transports gasoline (e.g., a distributor or reseller). EPA does not consider the transportation of both reformulated and conventional gasoline in the same vehicle to be a violation provided that the destinations of the different products are proper and documented, and the products are properly segregated. Obviously, any party in such a situation should use care that the gasolines are not mixed and are properly delivered. Various commenters objected to the proposal that refiners would be presumptively liable for downstream violations, including those found at downstream facilities that display the refiner's brand name. One commenter stated that the proposed regulations would impose an irrebuttable presumption of liability in violation of the Due Process clause of the Constitution and Amoco Oil Co. v. EPA, 501 F.2d 722 (D.C. Cir. 1974) (``Amoco I'') and Amoco II. The commenter claimed that the presumption was in practice irrebuttable due to product fungibility and the very high cost of testing required to avoid liability. The commenter also observed that refiners lack sufficient control over downstream parties to lawfully impose vicarious liability on the refiner, in part due to the Petroleum Marketing Practices Act. EPA disagrees. The defense elements established in the final rule set forth reasonably attainable criteria to rebut a presumption of liability for violations detected downstream of a refinery. The final rule provides that refiners must demonstrate: (1) That the refiner did not cause the violation; (2) that product transfer documents account for all of the gasoline found in violation and indicate that the gasoline met relevant requirements; and (3) that the refinery has conducted a quality assurance sampling and testing program. Where the violation is found at a facility carrying the refiner's brand name, the refiner must show, in addition, that the violation was caused by: (1) An act in violation of law; (2) or an action in violation of a contractual obligation imposed by the refiner; or, (3) the action of a carrier or other distributor not subject to a contract with the refiner but engaged by the refiner for the transportation of gasoline, despite specification or inspection of procedures and equipment by the refiner reasonably calculated to prevent such action. Addressing the above defense elements seriatim, EPA believes the information necessary to demonstrate that the refiner did not cause a violation determined downstream is reasonably within the control of a refiner through review of its production testing and shipping records. Further, refineries may reasonably provide in contracts with downstream parties for the refiner to conduct quality assurance sampling and testing at the downstream facility. Such testing would be limited to determining that maximum/ minimum and other applicable standards are met. Branded refiners, as discussed elsewhere in this preamble, are held to a more stringent standard for establishing a defense to downstream violations due to the enhanced control such refiners have over branded downstream parties. First, EPA anticipates that a brand refiner is able to exercise sufficient control over its downstream affiliates so as to prevent any violation other than one arising from a violation of law (other than a violation of this final rule). EPA also anticipates that a branded refiner will possess contractual leverage to be able to impose contractual obligations on downstream parties necessary to assure that violations will not occur under the terms of the contract. Finally, EPA anticipates that a brand refiner will possess contractual leverage to impose handling requirements on non-brand carriers or other distributors not subject to the refiner's brand but engaged by the refiner for the transportation of gasoline, and to allow specification or inspection of procedures and equipment by the refiner reasonably calculated to prevent such action. As with branded downstream parties, EPA believes that a conservative quality assurance program will deter violations downstream of the refiner by creating an atmosphere of oversight presence and quality assurance by the refiner. Further, EPA believes that quality assurance is in the refiner's self-interest in guaranteeing the quality of its product in the market. One commenter suggested that downstream quality assurance requirements might adversely affect the positions of independent distributors by allowing branded refiners to tighten up on contracts with the independents and force them out of the market. However, EPA believes that most distributors will conduct quality assurance programs regardless of any involvement by branded refiners, because of the distributor's potential for liability for violations that exists independent of the refiner's liability, and because most distributors are concerned about product quality for reasons that are independent of the reformulated gasoline requirements. As a result, EPA does not believe that contractual provisions requiring quality assurance imposed by branded refiners constitute a significant additional burden on distributors. Moreover, the defense provisions related to branded refiners requires contracts only with branded resellers or retailers. As a result, refiners are not required to impose contractual quality assurance provisions on distributors who are not identified with the refiner's brand name. EPA believes that the result of the final rule's liability and defense scheme is that refiners who maintain careful compliance with this rule and conduct an appropriate quality assurance program over their branded facilities, including periodic sampling and testing, will not be held inequitably liable for violations caused by downstream parties who display the refiner's brand name. Because many of these elements of defense call for the refiner to exercise precaution through normal contractual instruments, EPA anticipates that the cost of these measures will be minimal and consistent with the costs and expenses experienced in the gasoline volatility and lead phasedown programs. The rebuttable presumption of liability in the reformulated gasoline program is consistent with the holdings in Amoco I and Amoco II. The liability provision of the unleaded gasoline regulations that was challenged in Amoco I and held by the Court to be improper imposed strict vicarious liability on parties upstream of a retail facility at which a violation had been determined. The Amoco I court held that any presumption of liability must be rebuttable. Amoco II held that a presumption of refiner liability must be rebuttable for violations resulting from the sale of leaded gasoline as unleaded by retail facilities owned and leased by the refiner. As a result of the Amoco I and Amoco II decisions, the unleaded gasoline regulations were revised to allow refiners to rebut a presumption of liability even where the refiner owned or leased a retail outlet found in violation. All presumptions of liability contained in the reformulated gasoline regulations are rebuttable. As in other 40 CFR part 80 fuels programs (unleaded gasoline, volatility, and diesel sulfur), the final reformulated gasoline rule provides for more stringent refiner defense elements in the case of a violation at a facility displaying that refiner's brand name, as opposed to a case where the facility in violation does not display the refiner's brand name. Nevertheless, the final regulations provide that the refiner in such a brand-name- facility case may rebut a presumption of vicarious liability by showing that the violation was caused by a party other than the refiner. Accordingly, the final rule does not create strict vicarious liability by any party, and is consistent with the teachings of Amoco I and Amoco II. One commenter stated that a retailer could prove the first retailer defense element (that the retailer did not cause the violation) only by proving the second retailer defense element (that product transfer documents that meet relevant requirements account for all gasoline purchased and sold by the retailer), and therefore the element should be deleted. EPA agrees that one of the most common ways retailers show non-causation is by identifying the source of all gasoline present at the retail outlet, and showing that this product was represented by the distributor(s) or reseller(s) to meet all relevant requirements. In enforcing other motor vehicle fuels programs where retailers have often used this type of evidence to proffer a defense, however, EPA's experience has been that retailers are rarely found to be ultimately liable unless the retailer made decisions to commingle gasolines in the retail tank that should have been segregated. It is possible that a retailer's proferring of product transfer documents may be inadequate to establish a complete defense to an allegation of a violation. For instance, the retailer may have knowledge, independent of the product transfer documents, that should lead the retailer to understand that the gasoline's qualities are not as represented on the documents. In such a circumstance, the retailer would be required to show by means other than the documents that it did not cause the violation. Accordingly, the elements of defense for a retailer may overlap, and as a result are not redundant. The adequacy of a defense will be determined on a case-by-case basis. One commenter objected that a party would have to test gasoline received by the party following each receipt, and test the gasoline delivered to other parties following each delivery, in order to absolutely prove the party did not cause a violation for which the party could be presumptively liable. EPA agrees that the most conclusive proof for non-causation for any possible allegation of liability would be test results of the type described by the commenter. In fact, this is the type of testing that commonly is carried out by the parties where large volumes of gasoline are involved. Refiners and importers conduct such testing of the gasoline they produce or import, as do other parties such as pipelines and terminals when receiving or shipping large-sized batches of gasoline. In situations where the volume of gasoline received or shipped/delivered is small, EPA does not anticipate that every-batch testing is needed to show non-causation. EPA believes that parties who deal in small-sized gasoline batches are able to effectively monitor the quality of gasoline received and shipped/delivered and establish the cause of violations that occur through careful attention to program requirements, discretion in the selection of business partners, and good quality control practices including a program of periodic sampling and testing. This belief by EPA is based on its experience in enforcing other motor vehicle fuels programs. One commenter stated that the requirement of a quality assurance program in addition to all other testing and audit requirements, is redundant. EPA believes that quality assurance sampling and testing is essential so that there is an incentive for parties to adequately monitor the quality of gasoline received and shipped/delivered. The principal purpose of quality assurance sampling and testing, in EPA's view, is to alert a party to gasoline quality problems so that the party may correct the problem and the conditions that caused the problem before EPA documents any violations. Other enforcement mechanisms that are included in the reformulated gasoline program are important for their own reasons, but EPA does not believe they eliminate the need for sampling and testing. In addition, the existence of an adequate quality assurance program is a separate element of the defense to a presumption of liability because EPA does not feel confident that a party did not cause a violation absent such evidence. For example, even if one party can show that another party was the apparent or primary cause of a downstream violation, that does not on its own show that the first party did not also cause the violation. The fungible nature of the gasoline distribution system could well lead to situations where more than one and perhaps several parties contributed to a violation detected downstream. Absent a sufficient quality assurance program, production of proper transfer records, and any other evidence needed to show that the first party did not cause the violation, EPA does not believe that the first party has properly rebutted the presumption of liability. A quality assurance program, which involves sampling and testing the gasoline while it is in the hands of a party, is reasonably considered a necessary, minimum element of properly showing that a party did not cause a violation and thereby rebutting a presumption of liability. Refiners, importers and oxygenate blenders are required to conduct sampling and testing under the regulations, as well as have independent audits performed. For those parties, the required sampling and testing may well satisfy the quality assurance element of a defense to presumptive liability and is therefore not redundant. For those parties it only calls for additional sampling and testing where the required sampling and testing would not be adequate to satisfy that element of the defense. For all other parties, the quality assurance element of a defense is not redundant as there is no required sampling and testing for other parties. Nevertheless, sampling and testing by parties other than refiners, importers, and oxygenate blenders is not required by the final rule, but rather is a voluntary defense element only. If a party believes that no violations will occur as a result of other program requirements, the party could choose to avoid a quality assurance sampling and testing program. Such a decision would, however, increase the risk of violation attributable to the party. Without a quality assurance sampling and testing program a party would have scant basis for knowing if the gasoline it receives and ships or delivers meets standards. In addition, in the event the party's confidence is misplaced and EPA documents a violation for which the party is presumed liable, the party would be unable to establish a defense against that liability. A commenter requested that EPA define the frequency of sampling and testing that EPA would consider sufficient to satisfy the quality assurance defense element. Another commenter recommended that EPA should base enforcement actions exclusively on EPA testing using regulatory test methods and not on oversight sampling and testing by regulated parties. EPA is reluctant to specify the details of a ``sufficient'' quality assurance sampling and testing program, because the type of program that is sufficient in any situation depends on the particular facts of that situation. In addition, EPA believes regulated parties are closest to their own operations and are therefore in the best position to judge the program that is adequate. Typically, such a program should include sampling and testing of a representative sampling of the gasoline the party receives and ships or delivers; identification of any sample that is in violation of relevant standards, and for such a sample, correction of the violation and the conditions that caused the violation; and an increased rate of sampling and testing when conditions indicate an increased likelihood of violations (e.g., violating samples found). In the case where a violation is detected through a party's quality assurance program, and the party corrects both the violation and the conditions that caused the violation without any involvement by EPA, EPA generally forgoes any enforcement on the basis of the party's test results. If the party does not follow-up on violations in this manner, however, EPA may initiate an enforcement action on the basis of the party's test results. Carrier-commenters objected to the quality assurance sampling and testing defense element as applied to carriers. Commenters stated that a carrier is in a uniquely weak position in the gasoline distribution system to verify the characteristics of product received in order to rebut an assertion that the carrier caused a violation. EPA recognizes that the term ``carrier'' covers an array of carriage and distribution operations. Pipelines, barge operations, ship operations, tank trucks, and storage facilities may all meet the definition of a carrier. Each type of carrier has unique capacities for conducting quality assurance sampling and testing programs. For instance, pipelines, barge and ship carriers, and storage facilities typically deal with large volumes of gasoline. EPA believes that these high volume operations already conduct sampling and testing programs during the normal course of business that normally will satisfy the quality assurance defense element. In fact, commenters observed that barge carriers typically sample and test loads both before and after shipment to ensure the integrity of their product. The unique circumstances of tank truck carriers have been considered in the final rule. Truck carriers, like other carriers, will be asked to present evidence of a quality assurance program only where EPA documents a violation at the carrier's facility.64 In addition, truck carriers may rely on a properly conducted quality assurance program carried out by another party over the carrier's operation (most likely the product owner). Moreover, quality assurance sampling involving gasoline delivery trucks may be accomplished using samples collected at retail stations following truck deliveries (discussed more fully above), providing carriers with additional flexibility in meeting this defense element. It is also relevant that under the existing gasoline volatility and diesel sulfur programs carriers, including truck carriers, are required to conduct quality assurance sampling and testing in order to establish a defense for violations. As a result, the carrier quality assurance defense element in the reformulated gasoline program is merely an extension of the carriers' current quality assurance responsibilities. --------------------------------------------------------------------------- \6\4Carriers are liable under two circumstances: when a violation is found at the carrier's facility, and where EPA shows the carrier caused a violation found elsewhere. The quality assurance defense element would have application only in the first circumstance, however, because in a case where EPA establishes the carrier caused a violation the carrier would not be able to establish a defense even if the carrier conduced a quality assurance program. --------------------------------------------------------------------------- EPA intends to exercise its enforcement discretion to provide carriers with flexibility to satisfy the quality assurance sampling and testing defense element if another party, most likely the product owner, carries out an adequate sampling and testing program over the gasoline stored or transported by the carrier. The product owner is required to conduct a quality assurance program in order to establish a defense against its own liability, so that an arrangement between the carrier and the product owner in this regard would be little additional burden for the product owner. Carriers also may seek contractual indemnification from the product owner against liability for violations detected at the carrier's facility. EPA believes that the traditional allocation of risk through contract is an appropriate method for carriers to safeguard their interests within the fuel distribution system. Contractual indemnification combined with a contractual commitment by the product owner to carry out an effective quality assurance sampling and testing program would provide a carrier with reasonable protection against financial exposure for liability for violations for which the carrier is not responsible. EPA has analyzed the costs associated with voluntary carrier sampling and testing. First year per-party costs65 are calculated to be approximately $2,672 for pipelines, $1,042 for truckers acting as oxygenate blenders, and $517 for other truckers. Costs during 1996 and 1997 are estimated at $2,437, $673 and $480, respectively. Moreover, EPA assumes that many of these costs will be shared among carriers and the owners of the product. EPA has concluded that these costs are reasonable given the importance of the quality assurance program to the success of the reformulated gasoline program. --------------------------------------------------------------------------- \6\5First year costs include: analyzing RFG regulatory provisions; planning activities; training; field testing for conventional gasoline marker; sampling and testing for reform properties (though this is partially a customary and usual business practice by virtue of required testing for RVP and oxygenates for federal and state programs). Pipelines already routinely test for other properties as well. --------------------------------------------------------------------------- 4. Alternative Enforcement Options Several commenters offered alternatives to EPA's proposed enforcement scheme. The alternatives proposed include: EPA should rely on cease and desist orders; EPA should only presume liability where a violation is found and allow private contract law to insure the violator against upstream causation; EPA should require willful and knowing negligence for vicarious refiner liability; and EPA should impose sampling and testing requirements on all tank truck carriers, even if sampling and testing is already performed by an upstream party for the carrier, to avoid economic advantage over for-hire carriers. EPA has considered these alternative enforcement schemes and has determined to implement the scheme as proposed or modified and discussed above. This enforcement scheme is unified, consistent with EPA's enforcement in the gasoline volatility, diesel sulfur and lead phasedown programs, and focusses enforcement attention at the points in the distribution system where the pollution forming potential of gasolines may be affected by parties in the manufacturing and/or distribution process. A stringent compliance oversight and enforcement program, as described in detail in the final rule and this preamble, is necessitated by the significant financial incentives that exist for parties to not comply. EPA's experience in the lead phasedown and gasoline volatility programs has been that financial incentives will result in cheating and that a vigorous enforcement presence will result in diminished incidence of non-compliance. Accordingly, EPA believes that an enforcement program relying on cease and desist orders alone for encouraging compliance by parties would not be effective in deterring violations and would fail to remove economic incentives for non-compliance. Further, EPA believes that reliance on private contract law to insure the violator against upstream causation would be ineffective in providing for maximum compliance due to the uncertainty of the resolution of contract disputes and the amenability of such disputes to resolution for reasons other than the interests of compliance with the Clean Air Act. Also, EPA has determined not to require willful and knowing negligence for vicarious refiner liability due to the difficulty of establishing knowledge and due to EPA's belief that such a requirement would ease the obligation of refiners to strictly monitor the quality of their product as it is distributed. Finally, EPA has created a system of sampling and testing that creates the most thorough oversight scheme necessary while avoiding unnecessary redundancies. The regulations require each party to conduct sampling and testing at appropriate points in the distribution system. However, as discussed above, EPA will exercise its enforcement discretion so as to allow parties the flexibility to jointly assume responsibility for the accomplishment of required testing. This exercise of enforcement discretion is intended to avoid redundancies. EPA cannot justify the imposition of unnecessary sampling and testing on the regulated community to alter economic advantages associated with this program. J. Baselines for Imported Gasoline EPA received comments on the appropriate baseline to apply for gasolines produced at foreign refineries and imported into the United States. 1. Introduction EPA's regulations prescribe the procedures for establishing 1990 baselines for refiners and importers. Compliance with the anti-dumping standards is measured by comparison to these baselines. In addition, during the period 1995 through 1997, the reformulated gasoline emissions standards are based in part on maximum parameter levels measured against these baselines. Section 211(k)(8) provides for refiners, blenders or importers to determine individual 1990 baselines predicated on adequate and reliable data. In the absence of such adequate and reliable data, Congress prescribed a summertime baseline and mandated that the Administrator would establish a wintertime baseline.''66 --------------------------------------------------------------------------- \6\6The statutory baseline is intended to approximate the national average gasoline parameter values for gasoline used in the United States in 1990. --------------------------------------------------------------------------- The final rule provides mechanisms for establishing accurate and verifiable refinery baselines, while avoiding options that might provide incentives for the regulated community to ``game'' the baseline-setting process. These two principles that underlie the baseline-setting mechanisms (accurate, verifiable, and no opportunity for ``gaming'') serve the environmental purpose of ensuring that the quality of gasoline used in the United States beginning in 1995 is properly compared with the quality of the gasoline used in the United States in 1990. Subsequent to January 1, 1995, all conventional gasoline marketed in the U.S. will be subject to emission standards established with reference to an individual baseline. Between January 1, 1995 and January 1, 1998, all reformulated gasoline marketed in the U.S. also will be subject to standards established with reference to an individual baseline. The consequence of a baseline-setting mechanism that would result in baselines that, overall, are less stringent than 1990 average gasoline quality, would be that the environmental benefits intended for reformulated and conventional gasoline beginning in 1995 would not be achieved. If refiners had the option of presenting the data necessary to establish an individual refinery baseline, or being assigned the anti- dumping statutory baseline, each refiner's choice would be clear. Each refiner would calculate whether the individual baseline or the statutory baseline is more stringent for that refiner, and would simply select the least stringent option. In consequence, if parties were given more than one regulatory option to establish a baseline, the cumulative effect of each individual refiner's exercise of the baseline-setting option would be that the environmental benefits intended for reformulated and conventional gasoline would not be achieved. Accordingly, EPA has avoided providing options within the baseline-setting scheme. 2. Required Individual Baselines--Domestic Refiners EPA's final rule provides for a scheme to establish refinery baselines for domestic refiners that avoids giving parties options, and within this no-option constraint, that uses the best available data in setting baselines. As a general approach, parties are required to establish individual baselines using actual 1990 data (Method 1). However, EPA does not anticipate that many domestic refiners will have all the data necessary to establish an individual baseline based entirely on actual 1990 data. Therefore, where the actual 1990 data is not available, the baseline provisions provide for the modelling of 1990 parameters (Methods 2 and 3). These models are based on the absence of ``first choice'' 1990 data, and require that the affected party provide the ``next best'' data available from production subsequent to 1990 to establish a modelled accurate baseline. Domestic refiners are not permitted an option to revert to the use of Methods 2 and 3. Rather, refiners are required to use Method 1 if actual 1990 data is available. If the Method 1 data are not available, refiners are required to use Method 2, and if Method 2 data are not available, refiners are required to use Method 3. Domestic refiners are not permitted an option to use the statutory baseline. Domestic refiners are required to use independent commercial auditors to certify the accuracy and the availability (or non-availability) of data for any of the baseline setting methods, and to assure the proper application of those methods. This scheme does not give domestic refiners any choice in the manner in which baselines are set, thus avoiding the potential for ``gaming'' by individual refiners. Moreover, EPA is easily able to conduct enforcement audits of the baseline submissions of domestic refiners. In consequence, EPA believes that this scheme will result in the establishment of an accurate representation of the actual U.S. 1990 baseline gasoline fuel properties from domestic refiners. This baseline setting scheme is discussed in detail in Section VIII of this preamble. 3. Baselines--Importers of Foreign Gasoline The final rule provides that importers of gasoline must establish an individual baseline using actual 1990 gasoline characteristics (Method 1). Where actual 1990 data are not available, however, an approach that is different than the approach used for domestic refiners is necessary. In the absence of actual 1990 data, an importer is required to use the anti-dumping statutory baseline. Importers are not permitted to use Methods 2 or 3 because often it is simply not technically feasible to model an importer's 1990 baseline from gasoline imported during the years subsequent to 1990, for the following reasons. The foreign sources and production processes underlying an importer's post-1990 gasoline will have changed for most importers from those sources and processes underlying the importer's 1990 product. The model Methods are not designed to factor in such changes. In addition, it is exceedingly difficult to establish the refinery-of-origin of discrete products, due in part to the fact that foreign gasoline from different foreign refineries often is subject to fungible mixing prior to arrival at the U.S.67 Accordingly, both the importers and EPA would be unable to verify the accuracy or reliability of an importer's modelled baseline. --------------------------------------------------------------------------- \6\7In discussions with representatives of the U.S. Customs Service, EPA has been informed that the Customs Service has found it is virtually impossible to trace a batch of gasoline from point of entry in the U.S. back to the country of origin. Country of origin for gasoline is relevant for Customs purposes because import tariffs on gasoline differ depending on whether the country of origin has most-favored-nation trade status. To the extent the Customs Service is unable to verify even the country of origin of gasoline, the refinery of origin would be even more difficult to verify. --------------------------------------------------------------------------- As a result of the technical infeasibility of the application of Methods 2 and 3 to importers (change of gasoline source-refiners between 1990 and later years, and inability to track refinery-of-origin generally), and lack of adequate enforcement, all importers that are unable to produce actual 1990 production values are required to revert to the anti-dumping statutory baseline. In addition, EPA anticipates that most importers lack the actual 1990 testing data necessary for establishing a baseline using Method 1. As a result, EPA expects most importers will be assigned the anti-dumping statutory baseline. EPA considered giving foreign refiners, as opposed to importers, the option of either setting individual baselines using Methods 1, 2, and 3, or of being assigned the anti-dumping statutory baseline. This approach is flawed, however, because of the gaming opportunity it would give foreign refiners. As discussed above, such a gaming opportunity would result in an overall quality of gasoline in 1995 and thereafter that would fail to achieve the environmental goals intended for reformulated and conventional gasoline. A foreign refiner with an actual baseline dirtier than the statutory baseline would prefer to continue to produce to that baseline. However, a foreign refiner with an actual baseline cleaner than the statutory baseline would prefer to produce to the less stringent statutory baseline. Accordingly, the incentives to game the program would result in the average quality of gasoline imported to the U.S. being skewed to produce dirtier gasoline than the statutory baseline. Foreign refiners would collectively exceed the U.S. average gasoline parameters, resulting in dirtier U.S. air. EPA also considered whether it would be feasible to apply the same baseline-setting approach used for domestic refiners to foreign refiners directly, i.e., that any foreign refiner would be required to establish an individual baseline using Methods 1, 2, or 3. Under this approach, any foreign refiner, like any domestic refiner, who is unable to establish the quality of its 1990 US-market gasoline would be barred from supplying gasoline for use within the United States beginning in 1995. This approach would be consistent with the guiding themes for baseline-setting: That parties not have options in setting baseline levels, and that within this constraint that the baselines are set using the best available data. Application of this baseline-setting approach to foreign refiners is problematic, however. Foreign refiner use of the general scheme using Methods 1, 2 and 3 would require that the foreign refiner must have actual test data for the portion of its production destined for U.S. markets, or in the alternative, foreign refiners would have to model the 1990 quality of their U.S. product based on post-1990 gasoline quality data and refinery configuration information. EPA believes that most foreign refiners lack the information necessary to establish their 1990 U.S. market gasoline under either Method 1, 2 or 3. Most (if not all) foreign refiners, like domestic refiners, did not collect adequate data in 1990 to use Method 1. In addition, Methods 2 and 3 generally are inappropriate for use by foreign refiners for technical reasons, in that Methods 2 and 3 model the quality of overall refinery gasoline production, not the quality of a portion of refinery production. The overall quality of gasoline from a refinery may bear scant resemblance to the quality of the portion going to the U.S. market. Accordingly, Methods 2 and 3 normally will not work for refineries that ship only a portion of their production to the U.S. market. EPA believes that it is inappropriate to require the use of Methods 2 and 3 baselines when these Methods will not work properly for some or most foreign refiners, and when the consequence of such a failure would be to bar the foreign refiner from importing gasoline into the U.S. Therefore, in order to create a non-optional baseline setting approach for foreign refiners, EPA determined to regulate their gasolines through domestic importers as described above. In addition to the technical difficulties inherent in applying baseline-setting Methods 2 and 3 to importers and foreign refiners, and the potential for gaming that would result from optional use of these Methods, EPA is concerned that it would be unable to carry out a consistently effective compliance monitoring and enforcement program of foreign refinery baselines set using these Methods, with the result that the accuracy of foreign refinery baselines would not be ensured. There is a fundamental distinction between EPA's ability to monitor and enforce regulatory requirements that would apply against domestic as opposed to foreign refiners. Simply put, domestic refiners are subject to the full panoply of EPA's regulatory jurisdiction and compliance monitoring, while not all foreign refiners desiring to produce reformulated and/or conventional gasoline may be subject to EPA's regulatory jurisdiction with equivalent certainty. Compliance monitoring and enforcement are integral to the establishment of accurate and verifiable baselines, as well as subsequent compliance with standards based on these baselines. The reformulated gasoline program compliance monitoring and enforcement scheme consists of several elements designed in the aggregate to ensure that the environmental goals of the Clean Air Act are met, including, inter alia: baseline-setting audits; mandatory reporting and record keeping; independent laboratory sampling and testing; tracking of product from point of production to point of distribution; unannounced EPA compliance inspections; annual attest engagements by certified professionals; and an enforcement scheme comprised of civil penalties, injunctive relief, and criminal sanctions. Domestic refiners and importers are subject to EPA jurisdiction in each of these activities; all foreign refiners may not be equally amenable to EPA jurisdiction. Domestic refiners, required to establish individual baselines using actual or inferred 1990 production values (Methods 1, 2 and/or 3), are required to have baseline parameter determination methodology and resulting values verified by an EPA-certified auditor. However, foreign refiners, like all foreign corporations and citizens, enjoy protected status under the laws of their national jurisdiction and are not equally amenable to EPA audits of refiner baselines.68 EPA has experienced difficulty in other mobile source regulatory programs, including the foreign automotive certificate of conformity program, in gaining entry to foreign countries to conduct compliance inspections and therefore believes similar problems could arise under the reformulated gasoline program. --------------------------------------------------------------------------- \6\8A commenter suggested that diplomatic instruments may be available to mitigate EPA's concerns with access to foreign refineries for baseline certification and compliance monitoring and oversight. However, EPA has not been presented with a model instrument that guarantees such access over time. In contrast, EPA does have guaranteed access to domestic refineries and importers through authority provided in the Act and its implementing regulations. Further, EPA is unaware of any current diplomatic instruments which would provide EPA with assurances of oversight of the integrity of compliance audits conducted by non-U.S. auditors. --------------------------------------------------------------------------- EPA has considered whether one or more foreign refiners may be able to devise a diplomatic instrument sufficient to guarantee EPA's certified auditors and inspectors access to conduct baseline verification audits and compliance oversight and enforcement inspections. However, the foreign supply of gasoline (conventional and ultimately reformulated gasolines) to the U.S. currently depends on imports from numerous foreign sources. EPA believes it unlikely that all current (or foreseeable future) foreign suppliers of gasoline will be able to provide adequate diplomatic guarantees for EPA access. The environmental benefits of the reformulated gasoline program depend on EPA's receipt of accurate and verifiable reports from regulated parties, and EPA's ability to review the data possessed by the regulated community that underlies the reports, or in the alternative, EPA's ability to seek civil, criminal and professional sanctions against domestic corporate officers and professionals engaged in maintaining records or submitting reports and audits to the U.S. government. However, in the case of foreign refineries, EPA does not have the authority for oversight of the record keeping and reporting process that is equivalent to EPA's authority over domestic refiners and possible sanctions are not equally available to ensure accurate reports by foreign parties. Again, EPA believes it unlikely that all foreign governments desiring to import reformulated or conventional gasoline to the U.S. would either consent or be able to provide adequate assurance of foreign reporters' amenability to EPA legal process. The integrity of the reformulated gasoline program is also affected by EPA's ability to verify the baseline that applies to each batch of gasoline produced domestically or imported. The baseline of a gasoline batch establishes the standard against which compliance for that batch will be measured. In the case of gasoline produced domestically, baselines are set at the refinery; any gasoline produced at a refinery and intended for the domestic market is subject to that refinery's baseline. As a result, tracking of gasoline to its refinery-of-origin is not necessary in the case of domestically-produced gasoline. If foreign refinery-specific baselines were applied to imported gasolines, however, it would be necessary to identify the refinery-of- origin for all imported gasoline. This type of identification often would be very difficult or impossible. At the time gasoline arrives by ship at a U.S. port of entry, the gasoline has no inherent quality that would identify either the refinery at which the gasoline was produced or the baseline that properly applies to the gasoline. The only mechanism available for correlating any imported gasoline with the refinery-of-origin is the paperwork that accompanies the gasoline. EPA's ability to verify the accuracy of such paperwork is extremely limited. Gasoline produced by a foreign refinery may trade hands or be intermixed with other product several times before entering the United States. EPA lacks the ability to accurately and readily determine the refinery-of-origin based solely on the documentation of fuel transactions and shipments through myriad distribution parties and routes outside the United States. If foreign refinery baselines were allowed, EPA would have no recourse other than to rely on the import paperwork that is supplied by the importer for purposes of identifying the baseline applicable for imported gasoline. EPA would have little or no means of detecting, documenting, or proving any cheating in the form of misstating the refinery-of-origin and thereby the applicable baseline for imported gasoline. EPA would therefore lack the ability to monitor the compliance of foreign refineries with individual baselines. Accordingly, EPA has determined to abide by its proposal to focus regulation of foreign gasoline on domestic importers of product over which EPA does enjoy enforcement jurisdiction. Domestic refiners and importers are subject to unannounced compliance inspections by EPA. Foreign refiners, by virtue of their sovereign protected status, are not equally subject to unannounced inspections. Again, the environmental and public health benefits arising from an austere compliance monitoring program are not as readily available with respect to foreign refiners. Domestic refiners and importers are subject to a panoply of enforcement mechanisms to ensure compliance with the Clean Air Act. EPA may seek civil or criminal penalties or injunctive relief within the U.S. judicial system and be assured that judgments will be enforced. Judicial remedies are essential to EPA's enforcement of a regulatory program in which significant economic incentives exist to produce non- complying product. However, U.S. judicial jurisdiction may not fully and easily extend to foreign refiners. EPA's ability to exercise enforcement measures against foreign refiners is uncertain, at best. For example, in an EPA motor vehicle recall administrative action against a foreign automobile manufacturer, the manufacturer argued EPA lacked jurisdiction and refused to accept service or comply with administrative discovery requirements in a manner that would not be possible by a domestic automobile manufacturer. Accordingly, EPA has determined to focus its regulatory authority on domestic importers of foreign gasoline which are amenable to U.S. legal process. In summary, EPA has considered all proposed baseline-setting alternatives for foreign gasolines to the final rule and has determined that the rule issued today is necessary to protect the quality of U.S. air and public health. Further, the baseline setting scheme promulgated today is the least restrictive scheme available to ensure that the goals of the Clean Air Act are achieved. EPA is aware that the baseline approach adopted today for foreign refiners is the result of EPA's concerns over a variety of technical and enforcement issues related to the importation of gasoline. 4. Comments One foreign refiner commenter to the 1992 SNPRM objected to this baseline-setting scheme on the grounds that some domestic refiners may receive baselines dirtier than the statutory baseline due to their ability to use actual or inferred 1990 production values, while most importers, and therefore foreign refiners, would be subject to the statutory baseline and would not enjoy an opportunity to use an individual baseline dirtier than the statutory baseline.69 This would occur because it is unlikely that domestic importers that do not own foreign refineries maintained records of 1990 imported gasoline characteristics adequate to establish an individual baseline. The commenter recommended that foreign refiners be permitted to establish individual baselines using Methods 1, 2 and/or 3 to establish their baselines. --------------------------------------------------------------------------- \6\9 This issue is primarily of concern to foreign refiners whose actual 1990 production characteristics exceed the statutory baseline. --------------------------------------------------------------------------- EPA gave serious consideration to this comment, and in the 1993 SNPRM described the concerns raised by the comment and the alternatives suggested by the commenter, and invited comment on the issue. In response to the 1993 SNPRM several commenters objected to providing foreign refineries with individual baselines on the grounds that such baselines would promote gaming of the system, thereby reducing the air quality benefits sought under the Act, and would provide foreign refiners with a competitive advantage. Because foreign refiners do not have to comply with the reformulated gasoline program's anti-dumping provisions for conventional gasoline sold outside of the U.S., the commenters alleged that foreign refiners can produce reformulated gasoline at lower overall cost. Other comments were received that supported the granting of foreign refinery baselines, on the grounds that such baselines would enhance competition among gasoline suppliers within domestic US markets, to the advantage of the public generally. EPA believes the comments related to any competitive consequences of baselines are irrelevant. As a result, EPA has rejected all comments relating to competitive concerns, and EPA's decisions regarding the manner in which baselines are set are not influenced by such considerations. After consideration of all relevant comments on this issue, EPA has determined to implement the baseline provisions described above. The detriment to the U.S. environment associated with the potential establishment of inaccurate refinery baselines by current and possibly future foreign sources of imported gasoline, along with the difficulties associated with monitoring compliance with the anti- dumping and reformulated gasoline programs, compel the Agency to require that domestic importers establish individual baselines using Method 1 or that they comply with the anti-dumping statutory baseline, and to not establish individual baselines for foreign refiners. This scheme is consistent with the scheme of requiring refiners, domestic or foreign, to measure compliance against an accurate and verifiable baseline that is based on adequate and reliable data. The approach is also consistent with EPA's intent to avoid the creation of options within the baseline setting scheme that would allow gaming by the regulated community. Further, the scheme is consistent with EPA's compliance monitoring and enforcement capacity. 5. U.S. Energy Security One commenter suggested that requiring foreign refiners to produce to the statutory baseline would result in a shortfall of imported gasolines to the U.S. EPA's analysis indicates that gasoline supplies will be unaffected by implementation of the proposed baseline requirements. This conclusion is based on the likelihood that the baseline proposal would at most result in a small change in gasoline imports in limited markets, combined with the excess domestic refining capacity, and the expansion of gasoline volume that will result from the oxygenate use mandated for domestic gasoline. EPA concludes that the baseline provisions adopted today pose no significant problem for U.S. energy security. 6. Date the Complex Model Becomes Mandatory One commenter notes that the individual baseline issue is only pertinent to the years during which gasoline may be produced under the simple model for determining gasoline characteristics. Beginning in 1998, when the complex model becomes mandatory, the commenter correctly points out, all reformulated gasoline will be required to achieve specified reductions from the statutory baseline. Accordingly, the commenter observes, individual baselines for foreign refineries are only critical during the years the simple model is relevant. However, the refinery/importer individual baseline will continue to be relevant beyond application of the simple model due to its application to conventional gasoline through the anti-dumping requirements. As a result, if individual foreign refinery baselines were allowed, the difficulties described above would persist in perpetuity. Accordingly, the feasibility of the baseline setting scheme established today will have longstanding effect on the viability of the reformulated gasoline and anti-dumping program. K. Date Reformulated Gasoline Requirements Begin Section 211(k)(5) prohibits the sale or dispensing of conventional gasoline in any covered area beginning on January 1, 1995. In order to implement this timing mandate, EPA proposed that the reformulated gasoline requirements would apply at all locations beginning on January 1, 1995. EPA now believes that it is necessary for the reformulated gasoline requirements to apply at facilities upstream of the retail outlet level beginning on December 1, 1994, in order for facilities at the retail level to have reformulated gasoline beginning on January 1, 1995. Under the gasoline volatility program (40 CFR 80.27-80.28), the volatility standards apply at facilities upstream of the retail outlet level beginning on May 1 of each year, and at all facilities including retail outlets and wholesale purchaser-consumers beginning on June 1 of each year.70 This regulatory approach provides a one month lead- time during which the gasoline being dispensed at terminals meets the summertime volatility standard, in order to ``turn over'' the gasoline in retail level storage tanks to meet the summertime volatility standard before June 1. As a result of this timing requirement for gasoline volatility, almost all retail outlets achieve the summertime volatility standard by June 1 through the normal cycle of gasoline deliveries. --------------------------------------------------------------------------- \7\0 The end of the volatility control season each year is September 15 at all facilities. --------------------------------------------------------------------------- In contrast to this favorable experience under the gasoline volatility program, during implementation of the diesel sulfur program (40 CFR 80.29-80.30) retailers and wholesale purchaser-consumers had significant difficulties complying with the new requirements at the beginning of that program on October 1, 1993. The diesel sulfur regulations did not require facilities upstream of the retail level to have low sulfur diesel fuel in place well before October 1, 1993, and many terminals did not meet the low sulfur standard until very shortly before October 1. As a result, a large number of retail outlets and wholesale purchaser-consumers were not able to obtain low sulfur diesel fuel in advance of the October 1, 1993 date when all facilities were required to meet the low sulfur diesel standard. In consequence of this situation in some areas of the country prices of low sulfur diesel fuel rose 30 cents to 40 cents over the cost of high sulfur diesel fuel. As a result, EPA was compelled to grant retailers and wholesale purchaser consumers additional time after October 1 to come into compliance with the diesel sulfur standard. EPA believes that unless a lead-time is mandated under the reformulated gasoline program, the January 1, 1995 commencement will result in the same supply difficulties that occurred under diesel sulfur, and retailers and wholesale purchaser consumers will be unable to meet the reformulated gasoline standards on January 1, 1995. EPA further believes that a one month lead-time is appropriate for the reformulated gasoline program, because a lead-time of this length has been successful under the gasoline volatility program. As a result, the final regulations include the requirement that certain reformulated gasoline requirements must be met by facilities upstream of the retail level beginning on December 1, 1994. This regulatory provision constitutes a clarification of the proposal that would require all parties, including retailers and wholesale purchaser-consumers, to meet the reformulated gasoline standards beginning on January 1, 1995. The proposed regulatory timing could only be achieved if upstream facilities began dispensing reformulated gasoline before January 1, 1995, and that in consequence a lead-time of approximately one month was implicit in the proposal. All regulatory requirements for reformulated gasoline apply to gasoline that is produced or imported after December 31, 1994, or any time during 1994 if it is intended for use after January 1, 1995. It is presumed that all gasoline produced or imported after December 1, 1994 is intended for use after January 1, 1995. These requirements include, inter alia, independent sampling and testing, provisions dealing with downstream oxygenate blending, record keeping, reporting, and attest engagements. This reach of the reformulated gasoline requirements is consistent with the regulatory provision contained in the proposal (also included in the final rule at Sec. 80.65(a)), that reformulated gasoline requirements would apply to all gasoline sold, dispensed, stored, transported, produced, or imported on or after January 1, 1995. EPA thus proposed that gasoline sold or dispensed on January 1, 1995, and that necessarily will have been produced or imported during 1994, would be subject to all reformulated gasoline requirements. Thus, for example, all gasoline produced or imported on or after December 1, 1994 will have to be designated as reformulated or conventional. If it is designated as reformulated it will have to comply with reformulated gasoline standards. If it does not comply with reformulated gasoline standards, it will have to be designated as conventional, segregated from reformulated gasoline, and clearly labeled as conventional gasoline and not intended for use in any covered area. In the case of reporting requirements, EPA intends that no quarterly or averaging reports will be submitted in 1994, and that the first quarterly report in 1995, that must be submitted by May 31, 1995, will be the first reformulated gasoline report. As a result, all batch- specific information for gasoline produced during 1994 should be included in the first quarter 1995 report. A provision is included in the final rule to this effect, at Sec. 80.75(a)(3). Similarly, EPA does not intend that a separate attest engagement must be performed at the conclusion of 1994, but that the 1995 attest engagement must include all gasoline produced or imported in 1994. EPA also has included a provision in the final rule, at Sec. 80.67(i), to specify the manner in which standards are met for reformulated gasoline produced to average (as opposed to per-gallon) standards during 1994. Proposed provisions dealing with averaging did not address this category of reformulated gasoline, because the averaging proposals only addressed gasoline produced beginning in January 1995. The provision in the final rule specifies that reformulated gasoline that is produced or imported during 1994 but that is intended to be used in 1995 may meet the reformulated gasoline standards on average, provided that the refiner or importer satisfies the gasoline quality survey prerequisite during 1995. The provision further specifies that any such average compliance reformulated gasoline must be grouped with gasoline produced or imported during 1995 for purposes of compliance calculations, as well as reporting. As a result of the requirement that for each parameter only the per-gallon or only the average standard may be used during each averaging period, the compliance approach used for each parameter in 1994 (per-gallon vs. average) must also be used for all of 1995. EPA believes this approach for average compliance gasoline produced in 1994 is appropriate, because it represents the alternative that preserves the opportunity for refiners and importers to meet standards on average for this category of gasoline, with the smallest regulatory burden for regulated parties and for EPA. EPA considered, and rejected, the alternative of allowing parties to use only the per-gallon standards during 1994, because of the adverse impact on flexibility of such a restriction. EPA also rejected the option of requiring that average standards must be met separately for gasoline produced or imported during 1994.71 EPA believes there would be no significant environmental consequence of combining 1994-gasoline with 1995-gasoline for averaging purposes, but that the regulatory burden of separate accounting for 1994-gasoline would be significant. The simple model standards that will apply for gasoline produced or imported during 1994 are limited to oxygen, benzene, and toxics emissions performance, because this gasoline will not be VOC-controlled. These parameters are regulated because of toxic pollution concerns, and have the relatively long averaging period of twelve months because the threat of toxic pollution is long-term, cumulative in nature. EPA believes that combining the limited volume of 1994-gasoline with 1995-gasoline is consistent with the long-term averaging approach to toxics generally. --------------------------------------------------------------------------- \7\1 A refiner or importer who produces or imports reformulated gasoline using the average standards, but who uses only the per- gallon standards during 1995, would be required to meet the average standards using the 1994-gasoline only. --------------------------------------------------------------------------- VIII. Anti-Dumping Requirements for Conventional Gasoline A. Introduction Section 211(k)(8) of the Act requires that average per gallon emissions of specified pollutants from non-reformulated (i.e., conventional) gasoline use must not deteriorate relative to emissions from 1990 gasoline, on a refiner72 basis. Compliance is measured by comparing emissions of a refiner's conventional gasoline against those of a baseline gasoline. An individual baseline, consisting of fuel parameters and emissions, is developed for each refiner based on the quality of its 1990 gasoline, although under certain circumstances the individual baseline is the statutory baseline fuel parameters and emissions. To implement this requirement, EPA is promulgating requirements known as the anti-dumping provisions for conventional gasoline producers and importers. These requirements apply to all conventional gasoline producers and importers whether or not they also produce or import reformulated gasoline. --------------------------------------------------------------------------- \7\2For ease in discussion, the term ``refiner'', as used in this discussion of the anti-dumping program, will hereafter include refiners, blenders and importers. Where appropriate, blenders and importers will be mentioned specifically. --------------------------------------------------------------------------- This section describes the key features of the anti-dumping provisions (excluding the compliance and enforcement provisions applicable to conventional gasoline which are discussed in Section IX). The requirements discussed in this section are detailed primarily in Sec. 80.90 to Sec. 80.93 in the accompanying regulations. This section also highlights major comments received on EPA's proposals in this area and how this final rule differs from those proposals. Additional supporting information can be found in Section VII of the associated Regulatory Impact Analysis (RIA). B. Emission Requirements 1. Introduction Section 211(k)(8) of the Act requires that EPA promulgate regulations ensuring that, for each refiner, average per gallon emissions of VOC, CO, NOX and toxic air pollutants from its conventional gasoline do not increase over emissions from the gasoline introduced into commerce by that refiner in calendar year 1990. Emissions are to be measured on a mass basis, and each of the four pollutants is to be considered separately. Increases in NOX emissions due to oxygenate use may be offset by equivalent or greater mass reductions in the other pollutants. The regulations promulgated today address exhaust benzene, total exhaust toxics and NOX emissions from conventional gasoline use. In addition, under the simple model, refiner specific caps are set for sulfur, olefins and T90. EPA is not promulgating specific requirements for emissions of VOCs or CO, as EPA believes that the regulations promulgated herein, in conjunction with various other agency regulations and Clean Air Act requirements, will adequately meet the emissions limits for all four pollutants specified in section 211(k)(8). A detailed discussion of EPA's reasons for adopting this approach may be found in the Agency's July 9, 1991 proposal and, in summary, in the RIA. Section 211(k)(8) authorizes this approach as that provision requires that EPA promulgate regulations ``ensuring'' that conventional gasoline meet certain requirements on a refiner specific basis, but does not mandate that EPA promulgate regulations for each of the four pollutant categories. This provision therefore provides EPA with the discretion to fashion a regulatory program that ``ensures'' these results. While a relatively straightforward approach to this would involve emissions requirements for each of the four pollutant categories, it need not if the regulatory program otherwise achieves the required result. While the language used by Congress in section 211(k)(8)(A) supports this interpretation, there are several other provisions in section 211(k) where Congress clearly specified that EPA promulgate various requirements, and such language is conspicuously missing from section 211(k)(8)(A). See, for example, section 211(k)(8)(D) (``The Administrator shall promulgate an appropriate compliance period * * *''), section 211(k)(1) (``regulations shall require the greatest reduction in emissions * * * taking into consideration * * *''), section 211(k)(2) (``regulations * * * shall require that reformulated gasoline comply with paragraph (3) and * * * each of the following requirements * * *''), section 211(k)(4)(A) (``The regulations * * * shall include [certification procedures] * * *''), section 211(k)(7) (``The regulations * * * shall provide for the granting of an appropriate amount of credits * * *''). While EPA received several comments on the proposed conventional gasoline requirements, no one disagreed with the above interpretation of EPA's authority under section 211(k)(8)(A). 2. Emission Requirements Prior to January 1, 1998 Prior to mandatory use of the complex model on January 1, 1998, the requirements of section 211(k)(8) of the Act will be met by requiring that the annual average exhaust benzene emissions of a refiner's conventional gasoline not exceed its baseline exhaust benzene emissions. The exhaust benzene emissions due to conventional gasoline can be determined using the simple model discussed in Section III. Only the effects of fuel benzene and fuel aromatic content on exhaust benzene are included in this model. When the simple model is used for compliance, the annual average sulfur, olefin and T90 values of a party's conventional gasoline cannot exceed its baseline values of those parameters by more than 25 percent. These limits will provide some additional assurance that conventional gasoline emissions of toxics and NOX will not rise prior to use of the complex model. EPA does not expect the levels of these parameters in conventional gasoline to naturally increase due to the reformulated gasoline program, since the simple model for reformulated gasoline simply caps these three fuel parameters at their baseline levels and does not require their reduction. A refiner may also use the complex model for determining compliance prior to its mandatory use. Because all of the fuel parameters affecting exhaust benzene emissions are part of the model (benzene, aromatics, RVP, sulfur, olefins, E300, E200, and oxygen) there is no need for separate ``caps'' on fuel parameters as associated with the simple model. A refiner's baseline exhaust benzene emissions are determined by evaluating the refiner's baseline fuel parameter values in the model chosen by the refiner for compliance. At the end of a compliance period, the average fuel parameter values of a refiner's conventional gasoline over that period are evaluated in the same compliance model used to determine the refiner's baseline emissions. The resulting emission values are then compared to the baseline emission values to determine if the party is in or out of compliance with the anti-dumping requirement. While there was general support for the regulatory approach taken by EPA, several commenters suggested specific revisions to the emissions requirements. EPA's responses are discussed in the RIA. However, none of the comments caused EPA to change its proposed requirements, and all of the above provisions are being promulgated essentially as proposed. EPA had proposed that while a refiner may choose to use either the simple model or the complex model prior to January 1, 1998, it must use the same model for both the reformulated gasoline and the anti-dumping programs. Several commenters disagreed with this last restriction. EPA is, however, promulgating this requirement as proposed because the anti-dumping and reformulated gasoline provisions are inherently tied together. The specific model used to certify reformulated gasoline will affect which fuel components are likely to be dumped. To avoid incentives to dump, the effect of these components on conventional gasoline emissions should be evaluated on the same basis as the reformulated gasoline emissions. Otherwise, incentives will exist to shift dirty components to conventional fuel areas using whichever model predicts the lowest emissions increase due to those components. 3. Emission Requirements Beginning January 1, 1998 Beginning January 1, 1998, the requirements of section 211(k)(8) of the Act shall be met by requiring that the exhaust toxic emissions and the NOX emissions of a party's conventional gasoline not exceed that party's baseline exhaust toxic and NOX emissions. Compliance with this requirement shall be determined using the complex model described in Section IV. The exhaust toxics emissions requirement under mandatory use of the complex model includes all five pollutants defined in section 211(k)(10)(C) as toxics. These are exhaust benzene, formaldehyde, acetaldehyde, 1,3-butadiene and POM. Benzene emissions occur in both exhaust and nonexhaust emissions, and accordingly, section 211(k)(10)(C) does not limit the toxic air pollutant benzene to exhaust benzene. However, as stated, EPA is only promulgating regulations applicable to exhaust benzene. Nonexhaust benzene emissions will be effectively controlled by the summertime volatility controls applicable to conventional gasoline.73 The sum of the baseline exhaust emissions of each of the five toxics is the value that must not be exceeded by the sum of the exhaust emissions of these toxic pollutants due to a refiner's or importer's annual average conventional gasoline. --------------------------------------------------------------------------- \7\3 No credit can be taken nor penalties received under the anti-dumping program for nonexhaust benzene reductions, or increases. Nonexhaust benzene emissions decrease due to RVP reductions, which are a VOC reduction strategy already considered under the anti-dumping program as the reason for not explicitly controlling VOC emissions. --------------------------------------------------------------------------- NOX emissions from conventional gasoline use are also controlled beginning January 1, 1998. Although EPA is concerned that high oxygenate levels may contribute to increased NOX emissions, the Act states that any NOX emissions increase in conventional gasoline due to oxygenate use can be offset by VOC, CO and toxic emission reductions. EPA is addressing this provision of the Act by allowing compliance with the anti-dumping NOX emission requirement to be determined on either a nonoxygenated basis or an oxygenated basis, as discussed further in paragraph C.5.e of this section. C. Requirements for Individual Baseline Determination 1. Introduction Compliance under section 211(k)(8) of the Act is measured against an individual baseline (comprised of individual baseline fuel parameter and emission values) which is determined for each refiner if sufficient data exist from which to determine a baseline representative of that refiner's 1990 gasoline. Additionally, the Act states that if no adequate or reliable data exist regarding the gasoline sold by a refiner in 1990, the refiner must use the statutory baseline gasoline fuel parameters74 as its baseline fuel parameters. --------------------------------------------------------------------------- \7\4 The statutory baseline gasoline for anti-dumping purposes is discussed further in paragraph C.3.e of this section. --------------------------------------------------------------------------- 2. Requirements for Refiners, Blenders and Importers a. Requirements for producers of gasoline and/or gasoline blendstocks. No adverse comments were received on the proposal that a refinery which primarily produces gasoline blendstocks from crude oil (including crude oil derivatives) and mixes those blendstocks to form gasoline be subject to baseline determination using any, or a combination of, the three data types described below in paragraph 3. The requirements are being promulgated essentially as proposed. Likewise, no adverse comments were received regarding the proposal to exempt (from the anti-dumping requirements) those entities which produce and/or supply gasoline blendstocks to refiners and blenders, but do not produce gasoline. Hence EPA is not promulgating anti-dumping requirements for such entities. b. Requirements for purchasers of gasoline and/or gasoline blendstocks. As proposed in April 1992, refiners who exclusively purchase blendstocks and/or gasoline and mix these purchased components to form another gasoline (i.e., blenders) must use Method 1-type data (as described in paragraph 3 below). Lacking sufficient Method 1-type data, the blender shall have the anti-dumping statutory baseline as its individual baseline. Most who commented on this issue suggested that blenders should be allowed the same opportunities as refiners to use 1990 and post-1990 gasoline and blendstock data. Otherwise, a blender may have to ``reformulate'' its conventional gasoline. Commenters also stated that this provision penalized blenders for not sampling their 1990 fuel when there were no such requirements. As discussed in the proposal, EPA does not believe that use of blendstock data or post-1990 gasoline or blendstock data would allow an accurate portrayal of a blender's 1990 production. Additional comments are discussed in the RIA; however, none led to a change in the proposed requirements for blenders. c. Requirements for importers of gasoline. On April 16, 1992, EPA proposed that those who imported gasoline into the U.S. in 1990 must use Method 1-type data (as described in paragraph 3). Lacking sufficient Method 1-type data, the importer would have the anti-dumping statutory baseline as its individual baseline. An importer who did not import gasoline into the U.S. in 1990, but who does so after 1994, would also have the anti-dumping statutory baseline as its individual baseline. EPA proposed that if a U.S. importer is also a refiner and imported 75 percent or more of the 1990 gasoline production of a refinery into the U.S. in 1990, it could determine a baseline for that refinery using the three data types described in paragraph 3 below. Most commenters agreed with EPA's overall proposal concerning importers. Some felt, however, that the ``75 percent'' criteria was self-selecting--only those importer/refiners with higher baseline emissions relative to the statutory baseline would choose to develop an individual baseline. Those importer/refiners with relatively low baseline emissions would use the statutory baseline, and thus dumping could result, since they would be complying with a baseline which was less stringent than one based on their own 1990 gasoline quality. EPA agrees that ``dumping'' could occur, but expects it to be minimal since few importing refineries are likely to meet the ``75 percent'' criteria. Nonetheless, EPA is requiring that all importers which are also refiners utilize Method 1-, 2- and 3-type data to determine the individual baselines of their refineries which meet the 75 percent criteria. One commenter claimed that location, not percent of production imported, dictates enforceability. However, EPA believes that enforcement of a non-domestic refinery is governed less by location and more by the willingness of the company and/or country to open its refinery for compliance visitations. Another commenter specifically stated that Canadian refineries should be treated the same as domestic refineries for the purpose of establishing baselines. As stated, EPA believes that it will be relatively easy to accurately determine the quality of the gasoline produced in 1990 at a refinery outside of the U.S., for sale to the U.S., if a significant amount (i.e., 75 percent) of the production of the refinery came to the U.S. Independent of where the refinery is located, if less than this amount was imported, it will be more difficult to combine information on refinery operations and blendstock and gasoline data (i.e., Methods 2 and 3-type data) and allocate such information so as to establish the quality of the refinery's 1990 gasoline which was sent to the U.S. Some commenters felt that an importer should be allowed to use all available 1990 and later data to establish a baseline and have its baseline verified by an auditor. However, as stated in the proposals, EPA believes that significant dumping could occur if post-1990 data is allowed since that data may not represent the importer's 1990 gasoline. EPA is thus promulgating this essentially provision as proposed. d. Requirements for exporters of gasoline. EPA's proposals did not explicitly discuss whether gasoline exported from the U.S. in 1990 would be included in individual baseline determinations. However, because exported gasoline did not contribute to pollution in the U.S. in 1990, a producer of gasoline exported from the U.S. in 1990 shall not include the exported gasoline properties or volumes in its baseline determination. A refiner which exports all of its future gasoline outside of the U.S. is not subject to the anti-dumping requirements. 3. Types of Data a. Introduction. As discussed in the July 9, 1991 proposal, EPA is concerned that use of the statutory baseline parameters in lieu of determining an individual baseline could have severe competitive effects. At the same time, EPA realizes that there likely will be insufficient directly measured 1990 fuel parameter data available from which to determine representative individual baseline parameters. Thus, in order to make the best use of available data in developing representative individual baselines, EPA is specifying the types of data and calculations that may be used in the baseline determination. In the proposals, three methods (Methods 1, 2 and 3) were described for refiners to use to determine their baseline parameter values. Method 1-type data consists of a refiner's measured fuel parameter value and volume records of its 1990 gasoline. As discussed in the RIA, Method 1-type data can be from 1990 production or 1990 shipments as long as no data is double counted and all available production and shipment data are used in the baseline determination. Method 2-type data consists of a refiner's 1990 gasoline blendstock composition data and 1990 gasoline and blendstock production records. Method 3-type data consists of a refiner's post-1990 blendstock composition data and 1990 gasoline and blendstock production records. For both Methods 2 and 3, these provisions apply to those blendstocks used in the production of gasoline within the refinery. Under certain circumstances, Method 3- type data may consist of post-1990 gasoline composition data as well. No major comments were received negating the appropriateness of utilizing these three methods or data types. A few minor comments were submitted which are addressed in the RIA. Several commenters did request that EPA allow combinations of Methods 1, 2 and 3-type data to be used in baseline determination, in order to improve the use of available data and thus develop more accurate and representative 1990 individual baselines. EPA agrees that a more representative baseline will result if a combination of higher and lower levels of data is used rather than excluding the better data (i.e., Method 1) due to it being inadequate by itself. EPA had proposed that the different types of data must be used in a hierarchical order, i.e., Method 1-type data has to be used first, and if insufficient Method 1-type data was available for a given fuel parameter, Method 2-type data would be used, etc. EPA is modifying the proposals to allow baseline parameter values to be determined using a combination of the methods, or data types, if necessary, although the same hierarchy must be maintained. Thus, insufficient Method 1-type data may be supplemented with Method 2-type data and, if data were still lacking, the available Method 1 and 2-type data would be supplemented with Method 3-type data. b. Inclusion of gasoline blendstock. Although not specified in the proposals, EPA is requiring that gasoline blendstock which becomes gasoline (per 40 CFR 80.2(c)) solely upon the addition of a specific type and amount of oxygenate, be included in the baseline determination. Unless evidence is provided which indicates that such blendstock was blended with oxygenate other than ethanol or less than 10.0 volume percent ethanol, or was not further modified downstream, the refiner shall assume that said blendstocks were blended with ten (10.0) volume percent ethanol. This requirement provides some assurance that baseline emissions are not artificially low due to selective inclusion or exclusion of such blendstock. Requiring that the blendstock be assumed to have been blended with a specific amount of ethanol (unless otherwise shown) will result in a more stringent baseline than if the blendstock were assumed blended with a lower volume of ethanol, a different oxygenate or not further modified. Hence, the burden of proof of actual disposition of such product is on the refiner. c. Method 3 additional information. In order that the fuel parameter values obtained with Method 3-type data adequately represent the 1990 values of those parameters, EPA proposed that the refiner must provide detailed documentation of its 1990 and post-1990 refinery operations, including comparing 1990 and post-1990 operations, intermediates and products, and other aspects of refinery operations which would cause its post-1990 gasoline to differ from its 1990 gasoline. For instance, if post-1991 data is used, appropriate adjustments must be made for the refinery operational changes that occurred due to the 1992 volatility rules and the oxygenated fuels program, two situations which could cause post-1990 operations to differ from 1990 operations. The required documentation will assist the baseline auditor in its verification and EPA in its review of the refiner's baseline submission. This provision is being promulgated as proposed. EPA proposed to allow post-1990 gasoline data to be used to estimate 1990 baseline parameters under certain circumstances. In addition to requiring the same detailed documentation of 1990 and post- 1990 operations as above, in the February 26, 1993 proposal, EPA specified that the volumetric fraction of each blendstock in post-1990 gasoline must be within ten (10.0) percent of the volumetric fraction of the same blendstock in 1990 gasoline. For example, if a refiner's 1990 gasoline contained 30 volume percent reformate, post-1990 gasoline data may be used in the baseline determination as long as it contained 27.0-33.0 volume percent reformate and provided all other blendstocks also conformed to these requirements. EPA received many comments stating that the use of post-1990 gasoline data was more accurate, and less costly, than using post-1990 blendstock data. EPA agrees, and is allowing the use of gasoline data under certain circumstances, as discussed below. Commenters also suggested that verification of differences and similarities between 1990 and post-1990 operations and the resulting gasoline should be left to the baseline auditor rather than compared to specific criteria. While the auditor will verify the comparison of 1990 and post-1990 operations, etc., all issues verified by the auditor will also be reviewed by EPA. In addition to the technical reasons discussed below, specifying such criteria (i.e., the ``10 percent'' criterion) will ensure the uniformity of both auditor and EPA evaluations and verifications. As discussed in the RIA, unless post-1990 blendstock fractions are sufficiently similar to 1990 blendstock fractions, adjustments for differences will have to be made at the blendstock level, making any gasoline data moot. Larger differences than 10 percent in large streams such as reformate could affect overall aromatic levels by up to 3 volume percent, which is clearly significant. For smaller streams, however, a 10 percent change could be insignificant. Therefore, EPA is expanding its criteria by allowing post-1990 gasoline blendstocks to meet the larger of (1) the 10 percent criterion, or (2) be within two absolute volume percent of the blendstock volumetric fraction in 1990 gasoline. As discussed in the RIA, this means of utilizing post-1990 gasoline should adequately cover typical fluctuations in both large and small volume blendstocks without unduly sacrificing accuracy. Post-1990 gasoline data for which a single 1990 blendstock does not meet either of the blendstock fraction requirements cannot be used in the baseline determination. However, EPA also received comment that many refiners would not be able to use post-1990 gasoline data, even with the expanded criteria, simply due to butane utilization changes from 1990. Because butane, and thus RVP, were reduced after 1990 due to volatility controls, and because RVP reductions reduce emissions, EPA is exempting butane from the blendstock requirements for using post- 1990 gasoline. d. E200 and E300. Although not previously included among the fuel parameters for which baseline values are required to be determined, EPA is now requiring that baseline values be determined for the fuel parameters E200 and E300, the percent evaporated at 200 deg.F and 300 deg.F, respectively. Although these two fuel parameters replace T50 and T90, respectively, in the complex model, T90 baseline values are still required to be determined for use prior to mandatory complex model use. EPA expects E200 and E300 values to be determined directly from gasoline or blendstock data, even if distillation information has to be regraphed. If such a determination is not possible, E200 and E300 values may be estimated from otherwise acceptable T50 and T90 data using the equations specified in the regulations. Thus, this addition will not void any data collected under the proposed criteria. e. Anti-dumping statutory baseline. As mentioned earlier, in some cases a blender or importer may not be able, or be allowed, to develop an individual baseline from its own data. In that case, the refiner or importer would have the statutory baseline as its individual baseline. Although the compliance period for conventional gasoline is annual (as discussed in the proposals and as described in section IX), emissions determined using the complex models are determined on a summer and winter basis. Thus, there are separate anti-dumping summer and winter baseline fuel parameters, which are the statutory summer baseline specified in the Act, and the winter baseline determined by EPA as required by the Act. Few comments were received concerning the proposed annual average statutory baseline (which is a weighted average of the statutory summer and winter baselines, as discussed in the proposals). None of the comments led to a change in the annual average baseline fuel parameter values. 4. Data Collection and Testing Requirements a. Sampling requirements. In the February 26, 1993 proposal, EPA proposed minimum sampling requirements in order to ensure that enough gasoline or blendstock samples were taken from which to develop a representative baseline. Namely, for Method 1-type data, at least half of the batches (by number of batches, not volume), or shipments if not batch blended, in a calendar month shall have been tested for a particular parameter. For Methods 2 and 3-type data, at least weekly sampling of continuous blendstock streams and, if blendstocks are produced on a batch basis, sampling of at least half of the batches of each blendstock produced in a month is required. Many refining industry commenters protested this proposal claiming that they had sampled based on the April 16, 1992 proposal requiring ``sufficient'' sampling, and that EPA's more specific requirement could void data collected, and the time and money spent. EPA agrees that the sufficient frequency of sampling may vary according to circumstance (such as the degree of variation in operating conditions), and is modifying its latest proposal by accepting, under certain circumstances, data which does not meet the requirements specified above. However, if less than the minimum data is used, the refiner must document, and the auditor verify, why the data is less than the minimum requirements and why it is sufficient in quantity and quality to use in the baseline determination. EPA retains the right to reject use of less than the minimum data if the documentation is incomplete or the justification not technically sound. In all cases,75 all available samples must be analyzed and the results used in baseline determination if more than the minimum number of samples are available. --------------------------------------------------------------------------- \7\5 In instances where a sample was mislabeled or improperly tested or where an analysis results in a value which is significantly different from expected values based on operating conditions, etc., the result may be excluded from the baseline calculation. However, all instances of such exclusion must be documented and verified by the auditor. --------------------------------------------------------------------------- Additionally, EPA is promulgating its proposal to require at least three months worth of both summer and winter data. As discussed in the RIA, this requirement ensures that the collected data covers the typical changes in gasoline composition which occurs across seasons. Although not explicitly stated in the proposal, to better distinguish between summer and winter, summer months shall consist of any month in which gasoline was produced to meet the federal summer volatility requirements. It is not necessary for such low volatility fuel to be produced for the entire month. Winter months are any months which could not be considered summer months. b. Post-final rule data collection. Few comments were received on the February 26, 1993 proposal that if a refiner collects data after promulgation of these regulations, the data must be collected no later than the end of the third month of the first three full months during which summer gasoline is produced by the refiner following promulgation of the final rule. EPA is modifying this provision slightly, requiring only that proof must be given that additional data was needed and indeed was collected after today. c. Negligible parameter values. On February 26, 1993, EPA proposed to exempt refinery streams from testing for one or more specific parameters if a stream contains negligible amounts of those parameters. The affected fuel parameters are benzene, aromatics, olefins and sulfur. EPA also proposed threshold criteria for each fuel parameter, i.e., the amount of the fuel parameter in a stream at or below which the parameter would be considered negligible. EPA has changed the values of some of the threshold criteria based on comment. Specifically, the benzene threshold value was reduced and the sulfur threshold value increased. A full discussion of these changes can be found in the RIA; the actual values are also listed in Sec. 80.91. Oxygen was added to the list of parameters that may be considered negligible under certain circumstances. Other than those modifications, the requirements are being promulgated as proposed. d. Test methods. Many commenters were concerned that the test methods they had used to analyze samples would be invalid because they were not the same as the required test methods being promulgated today for reformulated gasoline. EPA had proposed, on April 16, 1992, that sampling and measurement techniques used to determine baseline parameters must yield results which are equivalent to the results obtained per the techniques and methodologies specified for the reformulated gasoline program. However, because of constantly evolving test methods, in addition to the fact that the final regulations concerning reformulated gasoline test methods will only be known today, it would be inappropriate to disallow data because it was not tested according to certain methods when there were no requirements to do so. Nonetheless, EPA is concerned that the test methods used be adequate. In a modification of the proposal, EPA will accept data determined using methods other than those required under the reformulated gasoline program, upon petition and approval, as long as the methodology or technique was a standard industry-accepted measurement technique at the time the measurement was taken. If data to be used in the baseline determination was, somehow, obtained via a more accurate test method prior submission of the baseline to EPA, it may be acceptable. The baseline auditor will verify that the techniques used to determine the baseline data meet the requirements discussed above. Although not previously discussed, EPA is allowing oxygen content, as well as oxygenate volume, to be determined from oxygenate blending records. The composition of the oxygenate, with regard to the other required fuel parameters, must still be determined. 5. Baseline Fuel Parameter Determination a. Closely integrated gasoline producing facilities. Based on earlier comments, on February 26, 1993 EPA proposed to allow blending facilities (or terminal operations) to be included in a refinery's baseline determination if a closely integrated relationship could be shown between the refinery and the terminal. EPA also requested comments as to what criteria would constitute ``closely integrated''. Many commenters supported allowing a single baseline for such a situation. Requiring 60-75 percent of a blending facility's blendstocks to have come from a single refinery was suggested for defining a closely integrated refinery-terminal relationship. EPA is promulgating the proposal with the requirement that at least 75 percent of the blendstock received at the terminal in 1990 must have come from the associated refinery. EPA believes this is a reasonable number, as explained in the RIA, considering that oxygenates and butane, among others, are blended into gasoline after the refinery, while constituting much less than 20 percent of gasoline by volume. In the case of an aggregate refiner baseline, as discussed in paragraph 6.d, a terminal or terminals may be included in the aggregate baseline if each terminal received at least 75 percent of its blendstock from one or more of the aggregated refineries with which it is associated. For instance, the 75 criteria is satisfied if the terminal received 25 percent of its 1990 blendstock from refinery A and 50 percent from refinery B, refinery A and B being part of an aggregate baseline. Alternatively, it may also have received the entire 75 percent from either refinery A or B. Although not previously proposed, some comments were received regarding other types of closely integrated facility relationships. EPA is thus allowing a single individual baseline to be determined for two or more refineries (or sets of gasoline blendstock-producing units) which are geographically near each other but are not within a single refinery gate, and whose 1990 operations were significantly interconnected. The burden is placed on the refiner to show that its two facilities are ``significantly interconnected''. In this case, the two facilities will have a single set of baseline parameter values and associated emissions. Some commenters suggested that U.S. refiners with import operations also be allowed to develop a single baseline covering their refining and importing operations. EPA rejected this suggestion because it would be difficult for EPA to track a fuel's production location before the fuel is or was imported, particularly when considering 1990 production. Also, allowing such a situation would amount to trading between foreign and domestic refineries, which was not mandated nor intended by Congress. b. Seasonal weighting. In the February 26, 1993 proposal, EPA proposed that a refinery's own production volumes of summer and winter gasoline (based on RVP) be used in the weighting of data on a summer and winter basis. This change from the previous proposal received a lot of support, and is being promulgated as proposed on February 26, 1993. As discussed in paragraph 6.a, the 1990 annual baseline volume is the larger of the gasoline volume produced in or shipped from the refinery in 1990. Thus, a refinery's own baseline volumes of summer and winter gasoline (either on a produced or shipped basis) shall be used for weighting the summer and winter anti-dumping emissions and sulfur, olefins and T90 values. As proposed, all volume which is not summer volume is considered winter volume. c. Grade weighting. On February 26, 1993, EPA proposed that average fuel parameter values be determined first for each grade of gasoline produced, and the resulting values weighted by the fraction of each grade sold in the period over which the value is determined. Based on comments, the proposal has been modified and, for this final rule, ``grade'' shall mean each traditional grade of gasoline produced in the refinery in 1990, e.g., regular, midgrade, and premium, not each different integer octane number. d. Equations. The equations have been modified slightly from the February 1993 proposal to require that specific gravity be included in the determination of baseline sulfur and oxygen contents. Because both of these fuel parameters are determined on a weight basis, and because gasoline and blendstocks vary, sometimes significantly, in weight-to- volume ratio, correct accounting of such terms must include a weight- to-volume conversion. Additionally, separate average baseline fuel parameter values must be determined for summer and winter, as discussed previously. e. Oxygen in the baseline. In the April 16, 1992 proposal, EPA discussed several methods of accounting for oxygen in the baseline determination. Several commenters suggested that the baseline be determined on a nonoxygenate basis so as not to penalize those who ``reformulated'', i.e., produced cleaner gasoline, early. Others supported including only the positive difference (i.e., an increase in oxygen use) between 1990 and post-1994 oxygenate use. Others suggested variations--excluding it in the baseline but including it in compliance, and including it as is in both the baseline and compliance calculations. Others argued that oxygenate used in conventional gasoline designated for areas for CO reduction purposes should not be considered. The anti-dumping provisions of section 211(k)(8) are based on a comparison of 1990 and post-1994 emissions, and use of an oxygenated baseline for compliance determination would be the most appropriate baseline. EPA is therefore requiring baseline fuel parameter values to be determined on an oxygenated basis. Section 211(k)(8)(C) of the Act also requires that increases in NOX emissions, due to conventional gasoline oxygenate use, be offset by reductions in the other three pollutants. As stated earlier, significant VOC and CO reductions will occur even without the reformulated gasoline rulemaking. To ensure that an increase in NOX emissions is not associated with the use of oxygen, EPA is allowing refiners to choose to use either an oxygenated or nonoxygenated baseline when determining NOX emissions. Compliance would be measured on the same basis. Under this provision, a refiner could choose to switch from a nonoxygenated to an oxygenated baseline, beginning with the next averaging period. The initial choice to use an oxygenated baseline, or the switch from a nonoxygenated to an oxygenated baseline is, however, permanent. EPA expects a refiner to operate its refinery to its advantage, and thus it is not likely to make such decisions (of whether to use a nonoxygenated or an oxygenated baseline for NOX purposes) lightly. Additionally, Congress intended that the anti-dumping program compare a refiner's 1990 emissions with its post-1994 emissions, based on its fuels' actual average composition, i.e., its actual oxygenated baseline or oxygenated compliance value. EPA is allowing refiners to use a nonoxygenated or an oxygenated baseline when determining NOX emissions in order to fulfill the provision that NOX increases due to oxygenates be offset. However, to minimize unnecessary administrative complications due to every refiner potentially changing its baseline NOX value annually, EPA is allowing only the one-time change. In determining the nonoxygenated parameter values from the oxygenated values, only the physical dilution and distillation effects of the oxygenate shall be considered. Adjustments to refinery operations that would have been different had oxygenates not been used (i.e., octane) shall not be included because many potential adjustments are possible. For instance, if a refiner's actual (oxygenated) baseline aromatics were 30 volume percent and actual oxygenate use was 5 volume percent, the nonoxygenated baseline aromatics value would be 31.6 volume percent, or 30/(100%-5%). While it is likely that reformer severity may have been higher had oxygenates not been used (thus resulting in perhaps even a higher aromatics baseline value) such operational effects due to oxygenate use shall not be considered because they cannot be known with certainty. Additionally, while the oxygen content and the effects of oxygenate volume on parameters will be excluded from the nonoxygenated baseline determination, the total gasoline volume (including actual 1990 oxygenate use and the volume of oxygenate assumed or shown to have been blended with gasoline blendstock as discussed in paragraph 3.b) will be used to determine the individual 1990 baseline volume. A few commenters suggested that oxygenate volume be excluded from conventional gasoline volumes. EPA disagrees--Congress specified that certain NOX emissions increases be offset, but did not specify how to deal with baseline volumes, leaving it to EPA's discretion. Additionally, the reason for allowing NOX emissions to be evaluated on a nonoxygenate basis in the first place is so as not to penalize refiners whose emissions increase due to oxygenate use. It is possible that restricting baseline volumes by excluding oxygenate volumes could penalize some refiners. Thus, it would be inappropriate for EPA to restrict the applicability of the individual baseline to the nonoxygenated gasoline volume. f. Work-in-progress. EPA proposed criteria for allowing a work-in- progress (WIP) adjustment on April 16, 1992. In the February 26, 1993 proposal, EPA expanded the proposed criteria in several areas. A WIP adjustment allows the refiner to modify its baseline volumes and fuel parameter values (which affect emissions) to account for the WIP. A more detailed discussion of the rationale and background concerning WIP adjustments may be found in the RIA. Several comments reiterated a concern expressed in the regulatory negotiation discussions that a WIP adjustment should be a limited exception, structured so that few refiners would qualify. EPA agrees that the criteria for a WIP adjustment should be fairly stringent, as the adjustment was intended only for those for whom a significant investment had already been made in order to comply with another government mandate. Additionally, a broad program of adjustments could indicate that EPA exceeded its equitable discretion under Alabama Power, as discussed in the RIA. Nonetheless, most commenters supported allowing WIP adjustments for significant differences between unadjusted and WIP-adjusted values of exhaust benzene emissions, exhaust toxics emissions, NOX emissions, sulfur, olefin or T90, instead of just exhaust benzene emissions as proposed in April 1992. A few commenters suggested reducing the threshold comparison criteria (between WIP- unadjusted and adjusted values) of 5 percent for emissions and 25 percent for sulfur, T90 and olefins. EPA agreed with the substance of these comments and is reducing the thresholds between WIP and non-WIP values. A discussion of the proposed and final threshold criteria is presented in the RIA. EPA's final threshold values under this requirement are that WIP-unadjusted and adjusted emissions values must differ by 2.5 percent, and sulfur, olefins and T90 values by 10 percent. Again, only one of the thresholds has to be met in order to meet this requirement. A few comments were received regarding the requirement that the WIP be associated with other regulatory requirements, specifically, the type of the regulatory requirement that would be acceptable to EPA. EPA is clarifying this, and WIP based on a legislative or regulatory environmental requirement enacted or promulgated prior to 1/1/91 will be deemed as meeting the ``associated with other regulatory requirement'' criterion. In the February 26, 1993 proposal, EPA clarified its definition of WIP as * * * projects under construction in 1990 and projects which were contracted for and which will be completed in time for the refiner to comply with the regulatory requirement * * *76 --------------------------------------------------------------------------- \7\6From Sec. 80.91(d)(5) of the February 1993 proposal. This language was included to ensure that the WIP was completed in a timely manner, since the WIP was ostensibly being done to comply with a regulatory requirement. Less than timely completion would indicate that the regulatory requirement was not a driving factor in initiating the WIP. However, EPA is not promulgating such a completion requirement because if the WIP project was not completed in a timely manner, the refiner is likely to be losing money since it cannot produce a certain fuel or meet certain emission requirements, etc. The contractual requirement discussed below will ensure that the refiner was committed to the WIP project. Additionally, EPA is specifying that an adjustment will only be allowed for WIP projects involving installation or modification of one or more gasoline blendstock- or distillate- producing units in the refinery. As stated, EPA also proposed (and is promulgating) that WIP shall include projects under construction in 1990 and projects for which contracts were signed prior to or in 1990 such that the refiner was financially committed to permanently changing refinery operations. Clarification was requested as to what types of contracts would be considered to have committed the refiner to the WIP. EPA believes that the contracts should have committed the refiner to purchasing materials and construction of the WIP. As such, a process engineering design contract does not commit the refiner to actually implementing the WIP and would not be considered a WIP contract under this provision. Other suggestions included allowing WIP adjustments for work not necessarily associated with a regulatory requirement, including WIP which would have a beneficial effect on a refinery's overall environmental performance. Again, WIP adjustments were intended to apply only to specific situations, i.e., those relatively costly projects undertaken for mandated environmental betterment. Thus, it would not be appropriate to expand the criteria (as suggested) for qualifying for a WIP adjustment. On February 26, 1993, EPA proposed allowing either the ``10 percent'' criteria from the April 16, 1992 proposal or a $10 million minimum cost of the WIP to satisfy the capital-at-risk criteria. Some commenters suggested that the requirements be more stringent--one suggested a threshold value of $50 million. Others suggested reducing the threshold value to $5 million (possibly a more appropriate value for small refiners) or 5 percent, or eliminating any ``dollar'' amount because no one should be penalized because its investment fails to meet arbitrary time or cost criteria. EPA believes that such criteria must be specified in order to prevent a proliferation of adjustments for other than true hardship cases. Additionally, the proposed criteria are fairly stringent requirements, and more stringent requirements could threaten the viability of some refiners. EPA could have relaxed the criteria, i.e., set a lower dollar amount. However, as stated, the WIP provision was included to provide relief for those projects that would significantly financially impact the refiner, and not for inconsequential modifications. Thus either the ``10 percent'' criteria or the $10 million criteria will be allowed to satisfy this requirement. Many comments and suggested language were received concerning EPA's February 26, 1993 proposal that a WIP adjustment would simultaneously cap a refiner's anti-dumping emissions and sulfur, T90 and olefin values at five (5) percent over the corresponding statutory baseline values. Most commenters opposed such simultaneous caps. EPA also proposed that a refiner whose WIP-adjusted baseline emissions exceeded 105 percent of anti-dumping statutory baseline emissions did not have to reduce its emissions further (to 105 percent of the anti-dumping statutory baseline) if its WIP-adjusted baseline emissions were less than its pre-WIP baseline emissions. EPA believes though that some limit on the adjustment must be included to minimize environmental harm. The limit must apply to all who are allowed a WIP adjustment. Thus, EPA is limiting WIP increases in baseline exhaust benzene, exhaust toxics and NOX emissions and sulfur, olefins and T90 values to the larger of (1) the unadjusted individual baseline value of each emission or fuel parameter or (2) 105 percent of the corresponding anti-dumping statutory baseline value. Note that sulfur, olefins and T90 are only constrained when compliance is determined using the simple model. When compliance is determined using the complex model, the WIP- adjusted values of these three fuel parameters are not subject to the caps. Given EPA's discretion in even granting WIP adjustments, EPA believes this provision provides an acceptable balance between allowing WIP adjustments and ensuring that increases in emissions over 1990 levels are minimized. g. Baseline adjustment for extraordinary circumstances. In the February 26, 1993 proposal, EPA requested comments on allowing the baseline fuel parameters, volumes and emissions of a refinery to be adjusted due to the occurrence of specific extraordinary or extenuating circumstances which caused its 1990 gasoline production to be different than it would have been had the circumstance not occurred. Many commenters felt that baseline adjustments should be allowed for the proposed situations as well as for others. One commenter stated that every site is unique, thus baseline adjustments should be evaluated on a case-by-case basis. Still others suggested that EPA allow adjustments only for small refiners, or for several other specific circumstances. Several commenters, however, felt that no extenuating circumstance baseline adjustment should be allowed. Among the reasons cited for not allowing adjustments were: competitive inequities; Congressional intent to account for 1990 only; difficulty in defining extenuating circumstances; use of this provision as a method of voiding work-in- progress requirements. While EPA's policy objective is not to establish a broad adjustment program, EPA is allowing adjustments for specific extenuating circumstances. Allowable circumstances include unforeseen, unplanned downtime of at least 30 days of one or more gasoline blendstock producing units due to equipment failure or natural cause beyond the control of the refiner, or for nonannual maintenance (turnaround) downtime which occurred in 1990. These types of adjustments reflect instances where the 1990 baseline truly deviated from the otherwise expected baseline (historic and future), had the incident not occurred. EPA is also permitting baseline adjustments for certain refiners which produced JP-4 jet fuel in 1990. As discussed in the RIA, EPA believes that it has authority to allow such adjustments due to the discretion afforded EPA by Congress. Additionally, Alabama Power v. Costle77 gives EPA ``case-by-case discretion'' to grant variances or even dispensation from a rule where imposition of the requirement would result in minimal environmental benefit but the would extremely burden a regulated party. While the anti-dumping requirements, in general, apply to all conventional gasoline whether or not reformulated gasoline is also produced, under the criteria mentioned above, no ``dumping'' will occur since no reformulated gasoline will be produced by such refiners. Congressional intent with regard to the anti-dumping program will be met while not unduly burdening those that meet the specified criteria. --------------------------------------------------------------------------- \7\7Alabama Power Company v. Costle, 636 F.2d 323.357 (D.C. Cir 1979). --------------------------------------------------------------------------- JP-4 baseline adjustments are generally limited to single-refinery refiners because such refiners have no way to aggregate baselines78 so as to reduce the combined burden of JP-4 phaseout and the anti-dumping requirements on their operations. In some cases, if no relief were granted in this area, the viability of a refinery could be at stake. EPA is also allowing baseline adjustments for multi- refinery refiners as long as each of the refineries meets all of the specified criteria. --------------------------------------------------------------------------- \7\8As discussed in paragraph 6.d, a refiner with more than one refinery may determine an aggregate baseline, i.e., a conventional gasoline compliance baseline, which consists of the volume-weighted emissions or fuel parameters, as applicable, of two or more refineries. --------------------------------------------------------------------------- JP-4 production must have also constituted a significant portion of a refiner's 1990 production in order for a significant burden to exist. In its February 1993 proposal, EPA requested comment on what minimum portion of a refinery's 1990 production JP-4 should have constituted for the circumstance to be extenuating, and several different ratio options were suggested by commenters, as discussed in the RIA. As discussed in the RIA, EPA is requiring that the ratio of the refinery's 1990 JP-4 production to its 1990 gasoline production must equal or exceed 0.5. While the adjusted emission baselines of those approved for JP-4 adjustments are likely to be higher than their actual 1990 baselines (primarily due to increased benzene and aromatics) EPA expects minimal negative environmental affects. Because the number of refineries meeting the criteria is expected to be small and the total production of all such refineries is also small, less gasoline is affected by any baseline adjustments than if the criteria were less stringent. In this situation, EPA believes that any negative environmental effects resulting from the allowed adjustments are justifiably balanced by the reduced burden on qualifying refiners. Although EPA is allowing baseline adjustments for the specific circumstances described above, it in no way means this to be a precedent to allow adjustments for actual or so-called extenuating circumstances now or in the future. The language of the Act does not allow EPA to broadly permit baseline adjustments. Additionally, a baseline is neither unrepresentative of 1990, nor incalculable, because of post-1990 changes in crude availability, fuel specifications, fuel markets, etc. Congress certainly knew that such changes could affect baseline determinations, yet in creating the anti-dumping requirements it did not require EPA to consider such factors in determining baselines. In fact, no direction was given to account for two mandated fuel changes, Phase II volatility control and lead phaseout. It is likely that circumstances for which baseline adjustments are not allowed may negatively affect some refiners. However, every refiner will be subject to future changes in markets, fuel quality requirements, etc., all of which will affect the refiner's gasoline quality and ability to comply with its anti-dumping baseline. Thus, except in extreme cases, baseline adjustments due to post-1990 changes which affect refiners would not be practical (due to the myriad circumstances which may exist) nor necessarily fair, and are definitely not supported by the language of the Act nor the intent of Congress. EPA is appropriately not providing for such adjustments. h. Inability to meet these requirements. Although not previously discussed, EPA realizes that many unique circumstances will arise regarding the baseline determination. As such, if a refiner or importer is unable to comply with one or more of the requirements specified for baseline determination, it may be allowed to accommodate the lack of compliance in a reasonable, technically sound manner. It must petition EPA for such a variance, and the alternative must be verified by the baseline auditor. The petition may or may not be approved by EPA. 6. Baseline Volume and Emissions Determination a. Individual baseline volumes for refiners, blenders and importers. The individual baseline volume of a refiner which utilizes Methods 1, 2 and or 3-type data to determine its baseline fuel parameters shall be the larger of the total volume of gasoline produced in or shipped from the refinery in 1990, excluding volumes exported. This provision is added because 1990 shipments and production could differ. As discussed in the RIA, while 1990 gasoline shipments actually contributed to emissions, data is available (by Methods 1, 2 or 3) on 1990 gasoline production. The difference between the shipped and produced gasoline is expected to be negligible with respect to baseline determination. Volumes of oxygenates blended into gasoline at the refinery and oxygenate assumed or shown to have been blended into gasoline downstream of the refinery, as discussed in paragraph 3.b, shall be included. The baseline volume shall be determined after all adjustments, such as for work-in-progress or extenuating circumstances, have been performed. The individual baseline volume of a blender utilizing only Method 1-type data or having the anti-dumping statutory baseline as its individual baseline shall be also the larger of the volume of 1990 gasoline produced in or shipped from the refinery (blending facility). The individual baseline volume of an importer utilizing only Method 1 or having the anti-dumping statutory baseline as its individual baseline shall be the total volume of gasoline imported into the U.S. in 1990. b. Limitations on applicability of individual baselines. In the April 16, 1992 proposal, EPA proposed to limit the applicability of a refiner's or importer's individual baseline to a certain portion of its post-1994 conventional gasoline production or imports and apply the anti-dumping statutory baseline parameter values to the volume in excess of this amount. This excess amount would reflect the portion of the post-1994 growth in gasoline production over 1990 volumes that is attributed to conventional gasoline. The refiner or importer would comply with the production weighted average of the two resulting baseline emission figures. Most of the commenters agreed that the increase in conventional gasoline production over this baseline volume should be subject to the statutory baseline. However, commenters disagreed as to whether the increase should be determined relative to actual production or relative to capacity. In addition to agreeing with the proposal, those favoring production as the basis cited the difficulty in determining gasoline refining capacity. Those favoring capacity as the basis commented that if baselines are applied on a production basis, conventional gasoline production could be limited below capacity and reduce the capability to supply conventional gasoline to some markets. Also, commenters claimed that factors such as the Persian Gulf war and the phaseout of JP-4 jet fuel made 1990 production unrepresentative of normal industry refining activity. While EPA agrees that 1990 production may have been unrepresentative of normal operations in some ways, it believes that some unusual circumstances occur every year and the limitation of individual baselines to 1990 production, as described above and in the RIA, is the better choice for minimizing emission increases and market distortions. Thus EPA is promulgating this requirement as proposed except that baseline volume shall be based on 1990 gasoline shipments rather than production. Gasoline shipments better reflect volumes actually in the market in 1990. For a refiner, its 1990 total volume would be its 1990 actual gasoline shipments, including adjustments to account for WIP or extenuating circumstances, and including oxygenate volume. c. Baseline emissions determination. Every refinery must develop a set of individual baseline parameters, volume and emissions. Prior to 1/1/98, compliance with baseline emissions must be determined using either the simple or complex model equations for exhaust benzene. In the case of the simple model, only fuel benzene and fuel aromatics are considered--VOC changes which may affect benzene emissions are not considered. Beginning 1/1/98, compliance with baseline emissions must be determined using the complex model for total exhaust toxics and NOX. As discussed in Section IV, there are separate complex models from which to determine summer and winter emissions. As such, average baseline fuel parameters must be determined separately for summer and winter. Conventional gasoline baseline emissions (and sulfur, olefins and T90 values) will first be determined separately, on a summer and winter basis, using summer and winter fuel parameter values (except that average winter RVP will be 8.7 psi, as discussed in the RIA). The summer and winter emissions (and sulfur, olefins and T90 values) will then be weighted by the respective summer and winter baseline volumes to determine annual average baseline emissions (and sulfur, olefins and T90 values). Compliance is determined in a similar manner. As also discussed in Section IV, there are two complex models--one for use prior to 2000 and one for use in 2000 and beyond. As such, every refinery will have two sets of baseline total exhaust toxics and NOX emissions--one set applicable prior to 2000, and one in 2000 and beyond. Note that baseline fuel parameter values and volume do not change, only the emissions determined from those parameters. In the case of NOX, it is likely that every refinery will actually have four potential baseline NOX emissions values, depending on whether a nonoxygenated or an oxygenated baseline is used to evaluate NOx emissions (see discussion in paragraph 5.e). Many commenters were also concerned about the effect of future revisions to the complex model on 1990 baseline emissions and future compliance, particularly should additional fuel parameters be added to the model. In the event of revisions to the complex model, EPA will promulgate additional regulations which will consider the impact on conventional gasoline, including consideration of lead time, cost and other factors. d. Conventional gasoline compliance baselines. The Clean Air Act refers to gasoline sold by a refiner, blender or importer (section 211(k)(8)(A)), but does not specify an averaging unit for baseline determination nor whether gasoline and the resulting emissions should be treated on a refinery or refiner basis, thus authorizing EPA to adopt the most appropriate method of complying with the anti-dumping requirements. EPA considered three possible options for baseline determination--refinery basis, refiner basis, or some combination of the two. During the regulatory negotiation, it was agreed that EPA would propose allowing a refiner to elect to establish an individual baseline. In the April 1992 proposal, EPA proposed that refiners could choose either refiner-wide averaging or refinery-by-refinery averaging, but not a combination of the two. This was to avoid situations where multi-refinery refiners could game the system and potentially gain a significant competitive advantage over single-refinery refiners. Although, as stated, EPA expressed concern about multi-refinery refiners' having an advantage over single-refinery refiners, few commenters agreed with EPA's April 1992 proposal. Of those that did agree, some suggested that all refineries should be required to comply with their individual baselines, to minimize any advantages for multi- refinery companies over single refinery companies. However, most of the comments received on this issue claimed that EPA had not interpreted this provision correctly from the Agreement-in- Principle. The agreement, according to the commenters, allowed refiners to decide how to aggregate their refineries' baselines. Some suggested that if aggregations are only allowed as proposed, compliance with the simple model, complex model and/or anti-dumping requirements would be difficult. Upon further consideration of this issue, EPA is allowing refiners to choose to have one or more individual refinery conventional gasoline compliance baselines and one or more ``refiner'' baselines (i.e., more than one grouping of two or more refineries to form a compliance baseline). Because the decision to group or not group refineries is a onetime decision, and because a refiner's total emissions will be conserved, the possibility of gaming will be reduced. When two or more refineries are grouped for the purpose of having a single conventional gasoline compliance baseline, the refineries shall be considered ``aggregated'', and the resulting baseline shall be an ``aggregate'' baseline. Aggregate baselines are determined by volume-weighting the baseline emissions and sulfur, olefin and T90 values of the aggregated facilities. If aggregated, all NOX baselines in an aggregate must be determined either on a nonoxygenated or an oxygenated basis, using the corresponding nonoxygenated or oxygenated baseline parameters. The choice of whether a refinery has its own individual baseline or is part of an aggregate baseline is a one-time decision, i.e., refineries cannot be re-aggregated annually. Also, an individual baseline (including both parameter and emission values) must be calculated for each refinery, whether that refinery will be part of an aggregate baseline or not. This is required because reformulated gasoline compliance under either the simple model or early use of the complex model is on a refinery basis. Also, individual baselines must be known in the event that a refinery is sold or shut down, or other reason why the baseline would need to be recalculated. EPA also proposed to require individual refinery baselines for refineries located in specific isolated geographic areas where localized dumping was occurring. EPA is retaining this proposal in the final rule. Few comments were received on this issue and are addressed in the RIA. e. Baseline recalculation. In its April 16, 1992 proposal, EPA proposed certain instances when baselines would have to be recalculated. Few adverse comments were received. In the case of a refinery which is shut down after 1990, EPA had proposed that an aggregate baseline which contained the shutdown refinery would not change unless the shutdown refinery was sold. However, upon further consideration, EPA believes that it is more appropriate, and more consistent with the other recalculation requirements, to remove a shutdown refinery's contributions to an aggregate baseline. EPA is thus promulgating this requirement with the other proposed requirements. D. Baseline Auditor In the February 26, 1993 proposal, EPA expanded on the qualifications and responsibilities of the baseline auditor which each refiner or importer must utilize to verify its baseline. Refiners and importers utilizing the anti-dumping statutory baseline, if so allowed, are not required to have a baseline auditor. 1. Auditor Qualifications EPA proposed specific criteria for determining the independence and technical capability of the auditor (and where applicable, the auditor's organization and/or certain persons working with or for the auditor). A few commenters suggested minor changes in the proposed criteria as discussed in the RIA, and some of these recommendations are incorporated in the final rule. EPA also proposed that the auditor retained by a refiner or importer may also have developed the baseline for the same refiner or importer as long as all other auditor qualification requirements were met. Several commenters who addressed this issue agreed that the auditor should be allowed to also be the baseline preparer, mostly from a cost savings point-of-view. Other commenters pointed out that the independence of the review would be lost. While this may diminish to some extent the value of an independent audit, the cost and time savings are relevant considerations. In balancing these concerns, EPA is allowing the auditor to also have prepared the baseline. 2. Auditor Certification EPA proposed two options by which potential auditors could be approved by EPA as qualified to audit baselines. One option involved precertification by EPA; under this option, a statement of the auditor's qualifications would be submitted to EPA. EPA would officially certify an auditor, or if no comment were received from EPA within a specified time, the auditor would be considered certified by default. The other option required the refiner or importer to ensure that the auditor is qualified, and to provide a qualification statement for the auditor with the baseline submission. In this case, the auditor would not be pre-certified by EPA. Most commenters agreed with allowing both options. One commenter thought that EPA should notify auditors of approval rather than letting them be certified by default, and that they should be pre-certified. EPA believes that, in most cases, it will respond in some form, not necessarily approval or disapproval, prior to the end of the allowable time period. In the proposal, EPA allowed the auditor to be certified by default after 30 days. However, EPA now believes that it should not allow an auditor to be certified by default until 45 days after application or today's date, whichever is later, because of possible delays, e.g., mail delivery, in receiving an auditor's qualification statement. EPA had also proposed that within thirty (30) days of hiring a baseline auditor or today's date, whichever is later, each refiner and importer must inform EPA of the name, organization address and telephone number of the auditor hired. EPA now believes this information is not critical and thus is eliminating this requirement. This information is only required in the baseline submission. 3. Auditor Responsibilities The major issues raised by commenters concerning auditor responsibilities was whether the auditor was to verify the baseline determination or recalculate the baseline itself. EPA agrees that the auditor should independently verify the baseline determination, and is not required to develop a second baseline determination. However, the auditor must take whatever action is necessary to ensure that all baseline submission requirements are fulfilled. EPA is also requiring that a refiner's baseline submission include a statement prepared and signed by the primary analyst stating that, to the best of its knowledge, it has thoroughly reviewed the sampling methodology and baseline calculations, and that they meet the requirements and intentions of the rulemaking, and that it agrees with the final baseline parameter and emission values listed in the baseline submission. EPA is not requiring auditors to submit (to EPA) an audit plan prior to beginning the baseline verification process. E. Baseline Submission and Approval 1. Timing Few comments were received concerning the timing of baseline submissions, and EPA is promulgating its requirements that baselines be submitted to EPA within 6 months of today's date and that baselines determined using data collected after today be submitted to EPA by September 1, 1994. EPA will consider petitions for an extension of these deadlines, however, submitters should take note that late submissions could cause delays in receiving EPA decisions on approval of their baselines. EPA is promulgating such timing requirements in order to give the industry sufficient time to generate and audit individual baselines. EPA is well aware of the need for expeditious review of submitted baselines, and encourages submission of baselines as soon as possible after today. 2. Petitions In many situations in the baseline determination, a refiner or importer is required to petition EPA in order to be allowed to account for a variance from a requirement. In other situations, the refiner or importer is required to ``show'' that it meets certain criteria. In either of these situations, approval will be given by the Director of the EPA's Office of Mobile Sources, or designee. As will be discussed below, all petitions must be included in the baseline submission--in fact, in most cases, baseline calculations have to be determined both with and without the requested variance, since the outcome of the request would be unknown. Although not previously proposed, EPA is allowing petitions and ``showings'' to be submitted prior to the baseline submission deadline although an early decision on the request is not guaranteed. Nonetheless, the baseline submission must be submitted by the applicable deadline, whether or not EPA has decided to approve or disapprove the request. 3. Submission Requirements Based on comments to its proposals, EPA has determined that a number of its proposed baseline submission requirements were not pertinent to a baseline determination. EPA is thus requiring that, at minimum, the information described in Sec. 80.93 be included in the baseline submission. Information on crudes and refinery unit operations is still required because EPA may wish to evaluate baseline submissions using a refinery flow simulation system. EPA plans to develop a sample baseline submission document which should be available soon after today. Although not previously required in the baseline submission, the blendstock-to-gasoline ratio for each calendar year 1990 through 1993 must now be included. The blendstock-to-gasoline ratio is discussed further in Section IX, and is defined in Sec. 80.102. Determination of this ratio is also subject to auditor verification, as is the entire baseline submission. EPA may require submittal of more extensive data if such data is required to aid EPA in its review of the baseline submission, or if discrepancies in any part of the baseline submission are found. Additional information that may be useful to EPA in its evaluation of the baseline submission may be included, at the refiner's discretion. EPA is slightly expanding the content required in the statement signed by the chief executive officer which is included in the baseline submission. The statement must state that the data submitted is the extent of the data available for the determination of each of the required baseline fuel parameter values, that sampling methodology and baseline calculations meet the requirements and intentions of the rulemaking, and that the final baseline parameter and emission values listed represent its 1990 gasoline, to the best of his or her knowledge. If a refiner or importer desires that certain information in the baseline submission not be publicly available, it must a assert a claim of confidentiality, as discussed below, and include this request in the baseline submission. 4. Baseline Approval EPA will approve baselines and upon approval publish, in the Federal Register, the standards for each applicable gasoline producing or importing facility of a refiner, blender or importer. Because a party's baseline will become its standard for compliance with the anti- dumping and early reformulated gasoline requirements, EPA believes the standard should be publicly known, and as discussed below, there are no compelling reasons not to publish such information. Additionally, such standards are not entitled to confidential treatment (40 CFR 2.301(e), special confidentiality rules applicable to Clean Air Act cases). Thus, upon Agency approval of a baseline, the baseline exhaust benzene, exhaust toxics and NOX emissions values and 125 percent of the baseline sulfur, olefins and T90 values shall be published. This information is required on a refinery or facility basis because the reformulated gasoline requirements are on a refinery-basis, and because this information needs to be known in the event a refinery changes owners. While EPA previously proposed that it would publish baseline parameter values by refinery, it now believes that no substantive comments could result from publishing such information because of the complexity of the baseline determination. Additionally, EPA realizes that certain aspects of the baseline determination must necessarily remain confidential in order to prevent serious, negative competitive effects. Thus EPA is allowing any person or organization providing information to EPA in connection with the determination of a baseline, including establishing a baseline or investigating possible baseline discrepancies, to assert that some or all of the information submitted, except the baseline emissions or parameter values which are the standard for a refiner, refinery or importer, is entitled to confidential treatment as provided in 40 CFR part 2, subpart 2. Such confidential information shall be clearly distinguished from other information to the greatest extent possible, and clearly labeled ``Confidential Business Information.'' Information covered by a claim of confidentiality will be released by EPA only to the extent allowed by procedures set forth in 40 CFR part 2, subpart B. Failure to submit a claim of confidentiality with submission of the baseline, however, may lead to release of information by EPA without further notice to the submitter (40 CFR 2.203 (a) and (c)). Most comments on this topic addressed the publication of individual baseline information. Several commenters suggested publishing a refiner's or importer's anti-dumping index (ADI), a ratio of the individual baseline emissions to the statutory baseline emissions. However, there is little difference between this value and the actual value if the statutory baseline emissions are known. Another suggestion included providing such information only upon request. Again, there is little difference between ``on request'' and publishing such information at one time. One commenter stated that no where in the statute was publication of baseline data required. While that is true, EPA must release the standards (and any other non-CBI information) upon request, and there are benefits from publishing them, e.g., citizen suit enforcement, more information to the general public about EPA's standards, better deterrence to noncompliance. Commenters did not provide any clear or compelling reason for not publishing the standards, and there are benefits from publishing them, as discussed. Additional comments, which did not affect the final rule, and EPA responses can be found in the RIA. IX. Anti-Dumping Compliance and Enforcement Requirements for Conventional Gasoline The final rule implements section 211(k)(8) of the Clean Air Act which provides that beginning January 1, 1995, average per gallon emissions of specified pollutants from non-reformulated or conventional gasoline use must not deteriorate relative to emissions from 1990 gasoline on a refiner or importer basis. This could occur, for example, if fuel components or properties that cause harmful emissions and that are removed from or limited in reformulated gasoline, are ``dumped'' into conventional (non-reformulated) gasoline. As a result, the ``anti- dumping'' program limits the emissions of specified pollutants from conventional gasolines, and under certain circumstances from blendstocks (based on EPA's authority under section 211(k)(c) of the Act). The final rule differs from the earlier proposals primarily in the area of blendstock accounting. These changes are discussed in greater detail below. Refiners and importers must establish individual 1990 baselines in order to compare the emissions characteristics of gasoline they produced or imported in 1990 with the emissions characteristics of conventional gasoline produced or imported in 1995 and later. See section VIII for a discussion of the methods required for development of an individual baseline. The baseline for refiners who were not in business in 1990, and in certain cases for other importers and refiner- blenders, is the statutory baseline found at Sec. 80.91(c)(5) of the regulations. Refiners who operate more than one refinery have the option of demonstrating compliance with the anti-dumping provisions for each refinery separately, or the refiner may group its refineries and show compliance for each group separately provided that each refinery's performance is accounted for either separately or as part of a refinery group. The refiner's refinery-grouping election may not be changed after the initial election. Blendstock tracking and accounting as discussed below, must be determined in accordance with the same refinery grouping as chosen for compliance purposes. The final rule has three separate sets of compliance standards for determining compliance with the anti-dumping requirements, however, only one set applies to a refiner or importer at any one time. These are the Simple Model standards and Optional Complex Model standards, that apply in 1995, 1996, and 1997; and the Mandatory Complex Model standards that apply in 1998 and thereafter. All three sets of standards require refiners and importers to average certain properties of conventional gasoline and demonstrate compliance with prescribed standards, which in some cases are actual fuel properties and in others are emissions products calculated from specific fuel properties.79 --------------------------------------------------------------------------- \7\9 For a discussion of issues concerning which properties or pollutants are covered in the federal anti-dumping program, see section VIII of this preamble and the Notice of Proposed Rulemaking, published July 9, 1991 (56 FR 31219-31222). --------------------------------------------------------------------------- Under the Simple Model standards, a refiner or importer is required to demonstrate on an annual basis that average exhaust benzene emissions of conventional gasoline do not exceed the refiner's or importer's 1990 compliance baseline for exhaust benzene emissions, and that average sulfur, olefins and T90 each do not exceed 125% of the refiner's or importer's 1990 average levels for each of these parameters. Under the Optional Complex Model standards, annual average levels of exhaust benzene emissions, volume weighted for each batch as determined under the applicable model, may not exceed the refiner's or importer's 1990 average exhaust benzene emissions calculated in the same manner. Under the Mandatory Complex Model standards, annual average levels of exhaust toxic emissions and NOX emissions, volume weighted for each batch as determined under the applicable model, may not exceed the refiner's or importer's 1990 average levels for exhaust toxic emissions and NOX emissions calculated in the same manner. Refiners and importers are required to determine the emissions performance for each batch of gasoline in either the applicable summer or winter model based on whether or not the batch has been designated to comply with EPA volatility requirements. The final rule provides that in 1995, 1996, and 1997, refiners and importers may determine compliance based on either the Simple Model standards or the Optional Complex Model standards, at their option. However, a refiner that produces reformulated gasoline under the Simple Model must use the Simple Model anti-dumping standards, and a refiner that produces reformulated gasoline under the optional complex model must use with the Optional Complex Model anti-dumping standards. Refiners and importers are required to include the following products, which are produced or imported during each averaging period, in anti-dumping compliance calculations: conventional gasoline; non- gasoline petroleum products if required under the blendstock accounting provisions (discussed below); and gasoline blending stock which becomes conventional gasoline upon the addition of oxygenate (discussed below). In addition, oxygenate that is added to a refiner's or importer's gasoline or blendstock downstream of the refinery or import facility may be included in the refiner's or importer's compliance calculations only if the refiner or importer is able to demonstrate with certainty that the oxygenate has been added to that party's gasoline. Provisions are included in the final rule for the manner in which refiners and importers must make this demonstration. Oxygenate blended downstream may be counted by a refiner or importer if the refiner or importer demonstrates that it performed the oxygenate blending. In addition, the oxygenate may be counted if the blending is conducted by a blender with whom the refiner or importer has a contract that specifies procedures intended to ensure proper blending, and the refiner or importer monitors the downstream blending operation through audits, inspections, and sampling and testing of the gasoline produced at the blending operation. These downstream oxygenate blending provisions are discussed more fully below. Refiners and importers also have the option of determining compliance for exhaust NOX emissions performance either with or without the inclusion of oxygenates provided that the baseline NOX performance is determined in the same manner. Refiners and importers may elect to switch one time under certain conditions which are discussed more fully in Section VIII of the Regulatory Impact Analysis. Enforcement of the anti-dumping standards under this rule consists of a combination of mechanisms to monitor compliance with the regulations, including: refiner/importer sampling and testing of gasoline produced or imported; record keeping; reporting; annual audits by refiners and importers; and Agency audits. The final rule specifies the manner in which penalties will be determined for violations of the anti-dumping requirements of the final rule. These penalty provisions include calculations of the number of days of violation, and presumptions regarding the properties of gasoline. Under the anti-dumping requirements in the final rule, certain refiners are also required to account for blendstocks that are produced. The principal policy reason for imposing blendstock tracking and accounting is that, unless proscribed, certain refiners will have an incentive to transfer blendstocks based on the differences in baselines that will exist. These differences thus could result in the transfer of the ``production'' of gasoline from a refinery with a more rigorous baseline to another refinery with a less rigorous baseline, through the transfer of blendstocks. This transfer-of-blendstocks concern is described more fully below. Refiners and importers are required to establish a baseline of the volume of certain specified blendstocks80 produced and transferred to others, relative to the volume of gasoline produced (the ``blendstock-to-gasoline ratio''). This baseline is established by determining, for each calendar year 1990 through 1993, the volumes of blendstocks produced and transferred, the volumes of gasoline produced, and calculating the annual and four-year average blendstock-to-gasoline ratios. Refiners may include in baseline calculations only those volumes of blendstocks for which the refiner is able to demonstrate the blendstock was used in the production of gasoline. This baseline blendstock-to-gasoline ratio must be established using the baseline auditing procedures described in Sec. 80.93. --------------------------------------------------------------------------- \8\0The blendstock tracking requirements apply only to certain blendstocks that have properties that are ``dirtier'' than the 1990 Clean Air Act average fuel parameters for anti-dumping. Use of the term ``blendstock'' also means that tracking applies only to non- gasoline petroleum products that are used in the production of gasoline (see 40 CFR 80.2(s)). As a result, refiners and importers are not required to track non-gasoline petroleum products where the refiner or importer can demonstrate these products are used for a purpose other than gasoline blending. --------------------------------------------------------------------------- Beginning in 1995, refiners are required to determine the blendstock-to-gasoline ratio for each calendar year compliance period. This compliance period ratio is then compared with the baseline ratio. During each year 1995 through 1997, the annual compliance period ratio is compared with the largest ratio of the individual annual baseline ratios. Beginning in 1998, the compliance period ratio will be the running four-year average of the annual ratios,81 instead of an annual ratio. This is then compared with the baseline four-year average ratio. --------------------------------------------------------------------------- \8\1 In 1998, the compliance period ratio consists of the average of the ratios for 1995 through 1998; in 1999, the compliance period ratio consists of the average of the ratios for 1996 through 1999; etc. --------------------------------------------------------------------------- In the case of both the annual comparisons before 1998, and the average comparisons beginning in 1998, if the compliance period ratio exceeds the baseline ratio by ten percent or more special blendstock accounting must be carried out by the refiner, unless certain exemptions are met or the refiner has been granted a waiver by EPA.82 These exceptions to blendstock accounting are discussed more fully below. --------------------------------------------------------------------------- \8\2 For example, if the largest baseline annual ratio for a refinery is 5%, and the 1995 ratio for that refinery is 10%, this increase would be 100%, and special blendstock accounting would be required for that refinery unless exempted for other reasons. --------------------------------------------------------------------------- In a case where special blendstock accounting is required, the refiner must include the properties of all blendstocks produced in its compliance calculations for the two subsequent averaging periods. In addition, the refiner must notify any recipients of such ``accounted- for'' blendstocks that the downstream party may not include the properties in that party's calculations. The second and subsequent times that the compliance period ratio exceeds the ten percent threshold, special blendstock accounting is required for the four years subsequent to the second exceedance. The final rule includes a provision that allows a refiner to petition for a waiver from special blendstock accounting in a case where the volume of blendstock produced is the result of extreme or unusual circumstances which are clearly outside the control of the refiner and could not have been avoided, such as fire, accident, or natural disaster. Blendstock tracking is limited under the final rule. Refiners with an annual compliance period blendstock-to-gasoline ratio of three percent or less are exempt from special blendstock accounting, regardless of how the compliance period ratio compares with the baseline ratio. This exemption is included because, in such a circumstance, there are limited environmental effects, and the party has a limited ability to gain economic advantage from transferring production to a less rigorous baseline. The final rule also excludes from the blendstock tracking and accounting requirements blendstocks that are exported, transferred to a refiner for use as a refinery feedstock, or are transferred between refineries that have been aggregated under a common baseline. Also excluded are transfers for other than gasoline blending purposes, e.g., transfers of product for use in a chemical process, because such other- than-gasoline-blending use renders the product non-blendstock by definition. Such transactions are not indicative of an attempt by a refiner to gain an improper baseline. A. Blendstock Accounting EPA's 1991 Notice Of Proposed Rulemaking for the anti-dumping program proposed compliance based on the properties of finished gasoline only and did not address accounting for blendstocks. Commenters on this Notice stated that the proposed anti-dumping regulations would create the opportunity for certain refiners to avoid the normally-applicable baseline through the transfer of gasoline blendstocks to another refiner with a more lenient baseline. This opportunity derives from the fact that the 1990 individual baseline for a large percentage of the refiners is more stringent than the 1990 average. According to the commenters, a refiner who operates a refinery with such a more-stringent-than-average baseline could effectively achieve an easier baseline by shifting blendstocks produced at that refinery to another refinery with a less stringent baseline. Gasoline could then be ``produced'' at the blendstock-transferee refinery using blendstocks produced at the blendstock-transferor refinery. This strategy could be accomplished, for example, through the transfer of blendstocks to a refiner-blender who would use the statutory average baseline, such as a new business. Commenters stated concern that refiners using this strategy would achieve a significant competitive advantage. EPA agreed with these concerns, and in the 1992 Supplemental Notice of Proposed Rulemaking proposed requirements on the methods of accounting for gasoline blendstocks. This blendstock accounting proposal was included to limit the adverse environmental effects of such production transfers, by ensuring that each refiner meets the anti-dumping standards using the baseline that properly applies to the refiner. In order to avoid the baseline-shifting possibility, EPA proposed that refiners would be required to either include in the refinery compliance calculations all blendstocks produced at a refinery, or the products would be prohibited for subsequent use in blending gasoline. Under this proposal, refiners would be required, with certain exceptions, to chemically mark un-accounted-for products to ensure they are not used by downstream parties for gasoline blending. This proposal included provisions intended to ensure that blendstock would be included in anti-dumping compliance calculations by only one refiner, and prohibitions intended to prevent the use of marked petroleum products in gasoline production. Commenters on the 1992 proposal objected to the blendstock accounting/marking scheme because of its impact on the refining industry. Commenters raised concerns regarding the liability scheme and the paperwork requirements associated with the accounting and the marking of blendstocks. Commenters also contended that the marking of blendstocks would be disruptive to the chemical industry. In response to these comments, EPA proposed a significantly revised blendstock accounting mechanism in the 1993 Supplemental Notice of Proposed Rulemaking. This proposal eliminated the requirement that refiners account-for or mark blendstocks and eliminated the prohibitions and liabilities associated with the use of marked blendstock. Under this revised mechanism, refiners would be required to monitor the volume of certain blendstocks produced at each refinery relative to the volume of gasoline produced. If for any year the proportion of a refinery's production that is blendstock (the ``blendstock-to-gasoline ratio'') increased relative to the refinery's baseline blendstock-to-gasoline ratio by ten percent or more, with certain exceptions the refinery would be required to account for all blendstocks produced at the refinery during the year of the failure, or in the alternative any blender-recipient of blendstock produced at that refinery would be required to use the refinery's baseline when accounting for such blendstock during the year of the failure. Under the proposal, a refiner would be exempt from special blendstock accounting if the refiner's blendstock-to-gasoline ratio for any compliance year is three percent or less, regardless of how the increase compares with the baseline ratio. Blendstock tracking would be required only for refiners having a 1990 baseline more stringent than the anti-dumping statutory baseline. These provisions were designed to limit the blendstock accounting provisions to those circumstances where there is likely to be an environmental problem. This also would help to avoid unnecessary costs and burdens on the regulated community. In any case where EPA can show that a refiner transferred blendstocks in order to evade a more stringent baseline, however, the special blendstock accounting would be required. The proposed regulations would require refiners to track only specified blendstocks that have properties that are ``dirtier'' than normal anti-dumping baseline properties; a list of such blendstocks was included. In addition, tracking would not be required under the proposal for petroleum products the refiner could establish are used for non-gasoline-blending purposes. EPA received substantial comments on the blendstock accounting mechanism included in the 1993 proposal. Several comments addressed the manner in which the compliance period blendstock-to-gasoline ratios are compared to the baseline ratios. Several commenters said that the blendstock-to-gasoline ratio for any annual averaging period should be compared to the largest single-year ratio during the baseline period, and not to a multi-year averaging period as proposed. This change is necessary, according to one commenter, because refinery equipment is shut-down for maintenance during normal refinery operations (or a refinery equipment ``turnaround''), and that such turnarounds often will result in increased blendstock shipments from a refinery. An industry group commenter further stated that most refinery equipment goes through a maintenance turnaround every four years. Other commenters suggested that the possibility of triggers due to erratic blendstock-to-gasoline ratios should be solved by enlarging the ten percent ratio threshold. EPA agrees with the concerns raised by these comments, and has modified the manner in which blendstock-to-gasoline ratios are compared in the final rule. During 1995 through 1997, the annual compliance period blendstock-to-gasoline ratio is compared to the largest one-year ratio during the baseline period. Beginning in 1998, however, because of data availability due to the implementation of the reformulated gasoline regulations the compliance period ratio is a running average consisting of the average of the current year's ratio and the ratios from the three previous years. This four-year compliance period ratio is compared to the similar four-year baseline ratio. EPA believes this approach to evaluating blendstock-to-gasoline ratios responds to the concerns raised by the commenters, and will minimize if not eliminate the chance that the ten percent threshold will be exceeded because of maintenance, turnarounds and other like events that do not indicate a transfer of production to achieve a less stringent baseline. For example, any increase in blendstock sales volume during the compliance period that is due to refinery equipment turnaround should be matched by blendstock sales volume during the baseline period that also is due to a turnaround. Beginning in 1998 the comparison of four-year averages should further dampen any unusual, short-term deviations from the normal proportion of refinery sales that is blendstock. EPA believes comparing the blendstock-to-gasoline ratio of a four- year compliance period with a four-year baseline period provides the best indication of a refiner's overall approach to blendstock production, because of its correlation with the normal period of refinery equipment turnarounds. During the first three years of the program when a four-year compliance period is not possible, however, the approach of comparing each compliance year's blendstock-to-gasoline ratio with the largest single year's ratio during the baseline period is the best alternative. EPA believes the one-year ratio comparison approach is inferior to the four-year ratio comparison approach as a long-term program mechanism, because under the one-year approach there is the potential for refiners to have large blendstock-to-gasoline ratios in each year that are not due to normal refinery operations, yet these ratios would be acceptable if smaller than the largest one-year ratio from the baseline period. The final rule nevertheless includes the one-year approach for 1995 through 1997, because refiners will be required to include 1995 through 1997 blendstock ratios in their 1998 four-year average ratio. Any refiner who has produced excess blendstock in order to ``game'' the one-year comparison approach during the first three program years is likely to fail the more appropriate four-year comparison in 1998. EPA believes the likelihood such a refiner would violate the ten percent threshold and incur the consequent blendstock accounting requirements will constrain refiner gaming of this type. EPA has retained the ten percent blendstock-to-gasoline ratio trigger in the final rule, however, because a trigger at this level is appropriate for the like-time-period comparisons used in the final rule. With the promulgated approach, EPA believes that blendstock sales increases in excess of the trigger are only likely to occur in cases where a refiner attempts to improperly gain use of a less stringent baseline. Several comments focused on the two options proposed for special blendstock accounting, the first option with the refiner accounting for the blendstock and the second option with the downstream refiner- blender using the baseline of the blendstock producer-refiner. These commenters stated that refiners using the refiner-accounting option would have difficulty if it became apparent late in the year that the ratio threshold would be exceeded, because the required adjustment must reflect the total volume of all blendstocks produced and sold during the entire year. These commenters stated that the refiner-accounting option also would be difficult to implement because downstream refiner- blenders of the blendstock, who would have included blendstock received during the year in compliance planning, would have to recalculate compliance with the refiner-accounted blendstock excluded. Similar timing and complexity concerns were expressed in the case of a refiner who selected the option of shifting the refiner's baseline to blendstock recipients. EPA agrees with these comments, and has modified the final rule as a result. In any case where the blendstock-to-gasoline threshold is exceeded, special blendstock accounting is required beginning in the subsequent averaging period. This change will avoid the timing and complexity problems of requiring refiners and downstream blendstock recipients to recalculate compliance retroactively for the compliance period during which the threshold is exceeded. In addition, EPA has rethought the option of allowing refiners to pass the refiner baseline to blendstock recipients, and has excluded this option from the final rule. EPA believes that the burden of special blendstock accounting should fall on the refiner that produces the excess blendstock, and such parties should not be allowed to pass the accounting responsibility to downstream parties. EPA proposed the option of allowing refiners to pass the refiner-baseline to downstream blender- refiners in order to allow more flexibility in meeting the anti-dumping requirements. EPA now believes that this flexibility advantage is outweighed by countervailing considerations, including the complexity that results from this option, the equity in placing the blendstock accounting responsibility only on the refiner who has control over the volume of blendstocks that is produced, and the inequity that could result if a refiner imposed a more stringent baseline on downstream blender-refiners. One commenter expressed concern that the reason EPA proposed blendstock accounting measures was to prevent new blender-refiners from entering the market in order to correct a perceived ``loophole'' in the proposed rules, and that such market manipulation by EPA is inappropriate. EPA agrees that the anti-dumping program should not preclude new blenders from entering the market, and does not believe that the final regulations have such a result. Any refiner who enters the market beginning in 1995 will have the same regulatory requirements as refiners who were in business before that date. They of course will have the statutory baseline and not a baseline that is more stringent than the statutory baseline. A new refiner would therefore not be subject to the blendstock accounting requirements. EPA has implemented the following changes in the final rule in response to comments: (1) The gasoline portion of the compliance period blendstock-to-gasoline ratio has been expanded to include all gasoline produced, including reformulated gasoline and RBOB, because a comparison to conventional gasoline alone would more likely cause the trigger to be exceeded and not represent true incidences of dumping; (2) straight run naphtha has been excluded from the list of applicable blendstocks that are included in the blendstock portion of the blendstock-to-gasoline ratio, because properties of this product are cleaner than the anti-dumping statutory baseline; and (3) feedstocks, exported blendstocks, and blendstocks transferred between refineries that are aggregated for compliance purposes are excluded from the blendstock portion of the ratio, as they are not indicative of a transfer of production to avoid a more stringent baseline. EPA proposed that refiners would be exempt from special blendstock accounting if the compliance period blendstock-to-gasoline ratio is three percent or less, regardless of how this ratio compares with the baseline ratio. One commenter stated that EPA should either reduce the three percent threshold for this exemption, or eliminate the exemption altogether. The commenter claimed that refiners could produce primarily dirty blendstocks (e.g., benzene) within the three percent limit for sale into the downstream market, which would result in environmental degradation. This commenter further stated that with the three percent exemption, only approximately fifteen percent of refiners would be required to monitor the blendstock-to-gasoline ratio under EPA's proposed scheme. This commenter also stated that the blendstock tracking provisions should apply to all refiners and not only to parties with more-rigorous-than-statutory baselines, because all parties have the opportunity to sell dirty blendstocks into the downstream market. EPA disagrees with the concern raised by this comment. Any party who combines blendstocks to produce conventional gasoline, or who combines blendstocks (other than oxygenate) with conventional gasoline, is considered to be a ``refiner'' under the anti-dumping regulations, and is required to meet all anti-dumping standards and requirements. Moreover, such a blender-refiner is required to meet anti-dumping standards only on the basis of the volume and properties of the blendstock used, and may not include in compliance calculations the volume and properties of any gasoline used in blending. Any blender- refiner must, therefore, offset any ``dirty'' blendstocks used with sufficient ``clean'' blendstocks to meet the anti-dumping standards on average. Most downstream blender-refiners will be subject to the anti- dumping statutory baseline. EPA believes these requirements on blender-refiners will limit the opportunities for refiners to produce and sell ``dirty'' blendstocks. In addition, because any ``dirty'' blendstocks must be offset with ``clean'' blendstocks the gasoline produced will cause no environmental degradation. EPA does not agree with the comment that all refiners could gain an advantage from shifting blendstocks regardless of their baseline. Only refiners with a baseline more-stringent-than-statutory could shift blendstocks to another refiner with the average baseline and thereby circumvent the anti-dumping requirements. For a refiner with a less- stringent-than-statutory baseline, the statutory baseline is more stringent. As a result, blendstock shifted by such a refiner to another refiner with the statutory baseline would have to meet standards as measured against a more stringent baseline. A refiner with a less- stringent-than-statutory baseline similarly would not be able to circumvent the baseline provisions merely by shifting blendstock to another refiner with an even less stringent individual refinery 1990 baseline, because the volume of gasoline that may be produced against the individual refinery 1990 baseline is limited to the second refiner's 1990 equivalent gasoline volume.83 Compliance for any gasoline produced in excess of the 1990 equivalent gasoline volume is measured against the Clean Air Act statutory baseline. In consequence, if blendstocks are shifted by one refiner to another with a more lenient baseline, in effect the shifted blendstock must meet standards measured against the statutory baseline. --------------------------------------------------------------------------- \8\3The 1990 equivalent gasoline volume is a calculated volume that subtracts from the refiner's 1990 total gasoline volume the volume of reformulated gasoline produced by the refiner during the compliance period. --------------------------------------------------------------------------- As a result, EPA has not included in the final rule any provisions that would limit the volumes of blendstocks that are produced and sold, except for the provisions intended to address the baseline-shifting strategy. B. Inclusion of Oxygenate in Anti-Dumping Compliance Calculations Oxygenates are included in the set of products that may be included in anti-dumping compliance calculations under certain conditions, because the oxygenate used in the production of conventional gasoline alters the results of the anti-dumping compliance calculations. As a result, where a refiner or importer is able to establish that oxygenate is in fact added to gasoline or blendstock produced or imported by that party, it is appropriate to allow the refiner or importer to include the oxygenate in compliance calculations. This approach to oxygenate use under anti-dumping is consistent with the proposals, but the final rule clarifies the manner in which parties must demonstrate that oxygenate is in fact used. In the SNPRM 92 and SNPRM 93, EPA proposed that the inclusion of oxygenate volume in compliance calculations by refiners and importers would be optional, except as required in the calculation of other exhaust emission products under the applicable model. These proposals did not, however, specify the manner in which the oxygenate use showing must be made. EPA believes the provisions included in the final rule dealing with the oxygenate use showing during compliance periods is necessary in order to ensure conventional gasoline emissions are accurately reported.84 --------------------------------------------------------------------------- \8\4EPA proposed that any refiner or importer who elects to include oxygenate in its compliance calculations would be required to include oxygenates in its 1990 baseline as well. Under the final rule, however, refiners and importers are required to include oxygenate in anti-dumping baselines whether or not oxygenate is included in compliance calcuations. The baseline-setting process, including the treatment of oxygenate, is discussed in preamble section VIII. --------------------------------------------------------------------------- Oxygenate blenders are not required to demonstrate compliance with anti-dumping standards because the blending of oxygenate has only a positive effect on the quality of gasoline or blendstock with which oxygenate is blended with regard to the properties or emission products regulated under anti-dumping.85 --------------------------------------------------------------------------- \8\5Under 40 CFR 80.2(ll), an oxygenate blending facility is ``any facility (including a truck) at which oxygenate is added to gasoline or blendstock, and at which the quality or quantity of gasoline is not altered in any other manner except for the addition of deposit control additives.'' Under 40 CFR 80.2(mm), an oxygenate blender is ``any person who owns, leases, operates, controls, or supervises an oxygenate blending facility, or who owns or controls the blendstock or gasoline used or the gasoline produced at an oxygenate blending facility.'' Oxygenate blenders are regulated under the anti-dumping provisions, inter alia, to the extent the oxygenate they blend is used in the compliance calculations of the refiner or importer who produces or imports the base gasoline used by the oxygenate blender. In this situation, the oxygenate blender is required, with regard to this oxygenate blending, to maintain records and to allow EPA inspections. --------------------------------------------------------------------------- Oxygenate that is blended at a refinery or import facility would be included in compliance calculations as a matter of course because the oxygen (along with all other gasoline constituents) would be reflected in the batch analyses conducted of the gasoline using samples collected before the gasoline left the refinery or import facility. The requirements that must be met in order for refiners and importers to be allowed to claim oxygenates which are blended downstream are similar to the requirements relating to reformulated gasoline blendstock for oxygenate blending (RBOB) in the reformulated gasoline program. The thrust of these requirements is that the refiner or importer must show that the oxygenate claimed was in fact added to the refiner's or importer's gasoline. This could be shown if the refiner or importer is able to demonstrate that it blended the oxygenate while the gasoline (or gasoline blendstock) is still owned by the refiner or importer. If the downstream blending is carried out by a person other than the refiner or importer, in order to include the oxygenate in its compliance calculations the refiner or importer must have a contract with the downstream blender which mandates procedures that are necessary for proper blending. In addition, the refiner or importer must monitor the downstream blending operation in a manner reasonably calculated to ensure the oxygenate use claimed by the refiner or importer is accurate. Such monitoring must include audits, inspections, and sampling and testing of gasoline produced by the downstream blender. The provisions that must be included in the contract with the oxygenate blender are those which the refiner or importer believes are necessary to ensure the oxygenate claimed by the refiner or importer is in fact added. At a minimum, the contract should provide for the inspections, sampling and testing, and audits by the refiner or importer over the oxygenate blending operation, as well as any quality assurance measures the refiner or importer feels the oxygenate blender should carry out. The contract also could specify the technical manner in which oxygenate is blended, if necessary to support the refiner's or importer's oxygenate use claims. The inspections and periodic sampling and testing oversight requirement is intended to ensure any oxygenate-use claims by a refiner or importer are supported by the actual oxygenate blending that occurs. The sampling and testing must be of the gasoline that is produced at the oxygenate blending operation, using base gasoline that was produced or imported by the refiner or importer. If the volume percent oxygenate found through sampling and testing is inconsistent with the refiner's or importer's claimed oxygenate volume, the refiner or importer must resolve the inconsistency in order to include the oxygenate in its compliance calculations. EPA believes the sampling and testing should be unannounced, should occur at different times during the portion of the averaging period when oxygenate is blended, and that the overall frequency is dependent on the situation. The sampling and testing should increase in frequency as the oxygenate volume increases, with oxygenate blenders who are less sophisticated, or where the refiner has any reason to question the oxygenate blending operation. Inspections by refiners and importers should be calculated to determine if the oxygenate blender is complying with the procedures included in the contract with the oxygenate blender, such as quality assurance by the blender. EPA believes that audits must occur at least annually, and more frequently if there is any reason for the refiner or importer to question the oxygenate blending operation. EPA further believes that audits must include, at a minimum, review of records that reflect the types and volumes of oxygenate purchased and used by the downstream blender to ensure they are consistent with the refiner's or importer's claims. In a case where the oxygenate blender is using base gasoline that is produced or imported by more than one refiner or importer, the audit must distinguish the oxygenate blended with the different refiner's or importer's base gasoline. In a case where the base gasoline is fungibly mixed with gasolines from other refiners or importers prior to its receipt by the downstream blender, the audit must account for the portion of the fungible mixture that is the gasoline produced by the refiner or imported by the importer. As a result of the complexities inherent in tracking gasoline through the fungible distribution system, EPA believes in most cases it will be impracticable for refiners or importers to effectively monitor downstream oxygenate blending with gasoline that is shipped fungibly, and as a result the refiner or importer normally would be precluded from including the oxygenate in compliance calculations. In any case where the downstream oxygenate use claims by a refiner or importer are not supported by the inspections, sampling and testing, or audits, or where EPA is able to establish that the oxygenate use claims by the refiner or importer are incorrect, the refiner or importer would not be allowed to include the oxygenate in compliance calculations. If the error is discovered subsequent to the conclusion of an averaging period, moreover, the refiner or importer would be required to recalculate its compliance calculations for the averaging period ab initio without including the oxygenate, even if this recalculation results in the refiner or importer being out of compliance with the anti-dumping standards. C. Inclusion of Sub-Octane Blendstock in Compliance Calculations EPA has included conventional gasoline and gasoline blendstock86 that is intended for downstream oxygenate blending in the set of products that must be included in the compliance calculations of refiners and importers. --------------------------------------------------------------------------- \8\640 CFR 80.2(s) defines gasoline blending stock or component as ``any liquid compound which is blended with other liquid compounds or with lead additives to produce gasoline.'' --------------------------------------------------------------------------- Most base gasoline that is used in downstream oxygenate blending operations meets the definition of gasoline and as a result must be included in refiner/importer compliance calculations without regard to the provisions related to blendstock.87 Base gasoline meets the gasoline definition where the gasoline has the properties of gasoline that also is sold for use without oxygenate blending. For example, one common practice is to blend 10 vol% ethanol with 87 octane gasoline to produce 89.6 octane gasoline, and 87 octane gasoline is commonly sold for use without oxygenate blending. 87 octane base gasoline therefore meets the definition of gasoline. --------------------------------------------------------------------------- \8\740 CFR 80.2(c) defines gasoline as ``any fuel sold in any State for use in motor vehicles and motor vehicle engines, and commonly or commercially known or sold as gasoline.'' (footnote omitted). --------------------------------------------------------------------------- Most ``sub-octane'' blendstock specifically designed for oxygenate blending also meets the definition of gasoline, because gasoline having similar properties is sold in certain regions of the country and at certain times of the year.88 For example, 85 octane blendstock--a ``sub-octane'' blendstock--is sometimes produced with the intention that with the addition of 10 vol% ethanol this blendstock will become 87 octane gasoline. However, because 85 octane gasoline is sold in the mountain states in the winter, 85 octane blendstock meets the definition of ``gasoline'' and is not a ``blendstock'' under the definition of that term even when it is blended with ethanol. --------------------------------------------------------------------------- \8\8For purposes of this discussion, ``sub-octane'' blendstock is blendstock that has an octane below 87. --------------------------------------------------------------------------- Potentially there are ``sub-octane'' blendstocks that become gasoline solely through the addition of oxygenate and that have octanes that are lower than the octane of any gasoline sold anywhere in the United States. Such a product would not meet the definition of gasoline, but would be a blendstock. EPA nevertheless believes that the refiner or importer who produces or imports ``sub-octane'' base gasoline product, rather than the oxygenate blender, should include the product in its compliance calculations for several reasons. First, the emissions performance of such products is determined primarily through its basic properties and not by the addition of oxygenate. Second, to the extent that a refiner or importer produced or imported ``sub-octane'' base gasoline in 1990, thus contributing to the quality of the gasoline pool in 1990, such product should be part of that refiner's or importer's conventional gasoline pool in 1995. Third, the refiner or importer of such product is likely to be more sophisticated than oxygenate blenders in defining the quality of conventional gasoline necessary to meet the requirements of the anti-dumping program, and in meeting the range of anti-dumping requirements that apply to refiners. Oxygenate blenders, who often are truck splash blender-distributors, are not required to meet anti- dumping standards (for reasons discussed above), but placing the responsibility of accounting for ``sub-octane'' base gasoline on oxygenate blenders would result in these parties becoming ``refiners'' who are subject to the full scope of anti-dumping requirements. Finally, if refiners and importers who produce or import ``sub- octane'' blendstock could avoid including this product in their compliance calculations, the anti-dumping enforcement requirements would have to be expanded to include complex (and expensive) product tracking and accounting mechanisms designed to ensure product of this type ultimately is accounted for, and is included in the compliance calculations of only a single party. EPA believes, therefore, that it is appropriate for the refiners and importers of ``sub-octane'' blendstocks to include such products in their compliance calculations under the anti-dumping program. This requirement for refiners and importers to include sub-octane ``blendstock'' in compliance calculations is consistent with, but less far-reaching than, the proposal contained in the 1992 SNPRM that refiners and importers would be required to account for all blendstock produced or imported. D. Compliance Calculations for Blendstock That Is Blended With Gasoline In the SNPRM 93, EPA proposed that parties who produce gasoline solely by combining different blendstocks could determine compliance on the basis of the properties and volumes of the blendstocks without performing a full analysis of the final blends. This compliance determination approach also was intended to apply to parties who add blendstocks to finished gasoline which has been included in another party's compliance calculations. Under this proposal, refiners and importers would insert the properties and values of the blendstocks into the equations for the complex and simple model standards. EPA now believes this compliance calculation approach is appropriate only for simple model standards, but not for complex model standards because blendstocks have parameters that are outside the range of the complex model. This approach is included in the final rule for refiners and importers subject to the simple model because a blender-refiner can calculate the volume-weighted averages of sulfur, T-90, olefins, and exhaust benzene using blendstock analyses only. For example, consider a blender-refiner who has the anti-dumping statutory baseline, which for olefins is 10.6 vol%. The simple model anti-dumping standard for olefins is no greater than 125% times 10.8, or 13.50 vol%. In this example the blender-refiner used two blendstocks during the averaging period, 10,000 gallons of light FCC naphtha which the blender-refiner sampled and tested and determined to contain 39.8 vol% olefins. The blender-refiner also used 25,000 gallons of reformate that through the blender-refiner's sampling and testing was determined to contain 1.0 vol% olefins. The blender-refiner in this example determined the annual average olefin content of its blendstock by calculating the volume-weighted average olefin content of these two blendstocks, or (10,000 * 39.8) plus (25,000 * 1.0) divided by 35,000, or 11.8 vol% olefins. Because 11.8 vol% is less than the 13.25 vol% olefin standard, the blender-refiner in this example would meet the anti-dumping olefin standard. Annual averages for the blender-refiner for sulfur, T-90, and exhaust benzene under the simple model would be calculated in a similar manner. EPA believes that compliance with complex model standards cannot be determined using the volume-weighted properties of blendstock as described above, because such an approach would not provide meaningful results for exhaust benzene, or toxics or NOX emissions performance. EPA has, however, included a method in the final rule for calculating compliance under the complex model in the case of blendstock that is added to gasoline whereby compliance is determined on the basis of blendstocks blended with gasoline. This results in a calculation method that is consistent with the technical limitations inherent with the complex model. Under this calculation method, the blender-refiner determines the fuel parameters of the blendstock or blendstocks that are to be added to a base gasoline, by testing a representative sample of each blendstock. The blender-refiner then calculates the properties of the gasoline that would result if the blendstock or blendstocks were blended, in the volume-ratio used in the blending operation, with a gasoline having parameters that are equal to anti-dumping baseline applicable to the blender-refiner, except that properties measured on a weight or ppm basis, such as sulfur, must be corrected for the specific gravities of the products blended. In most cases, the anti-dumping statutory baseline would be the applicable baseline for blender- refiners. This mathematical calculation thus models the fuel parameters of the gasoline that would result if the blendstock in question were in fact blended with gasoline having properties equal to the blender- refiner's baseline in the volume-ratio used in the blending operation. The emissions performance (exhaust benzene, or toxics or NOX emissions performance) of the mathematically-created gasoline is determined through the appropriate complex model, as is the emissions performance of the blender-refiner's baseline gasoline. The emissions performance effect of the blendstock is calculated by subtracting the emissions performance of the blender-refiner's baseline gasoline from the emissions performance of the mathematically-calculated gasoline. The anti-dumping standard is met if the volume-weighted emissions performance for all blendstock used in blends during the averaging period is equal to or less than zero. For example, consider a blender-refiner who has the anti-dumping statutory baseline, and who is subject to the complex model standards (toxics and NOX emissions performance). This blender-refiner uses two blendstocks during a certain portion of the averaging period, a light FCC naphtha and a reformate, and these blendstocks are blended at the rate of 10 vol% FCC naphtha, 25 vol% reformate, and 65 vol% base gasoline. A partial list of the properties of these blendstocks, as determined by the blender-refiner through sampling and testing, are as follows: ------------------------------------------------------------------------ Anti- FCC dumping naphtha Reformate statutory gasoline ------------------------------------------------------------------------ Aromatics (vol%).................... 13.5 31.1 28.6 Olefins (vol%)...................... 39.8 1.0 10.8 Sulfur (ppm)........................ 289 10 338 Specific gravity.................... 0.753 0.801 0.742 ------------------------------------------------------------------------ The blender-refiner determines the properties of the blends that would result if these blendstocks were blended at these rates with gasoline having properties equal to the anti-dumping statutory baseline. In the case of aromatics, the calculation would be the following: aromatics (vol%)=(13.5 x 0.10)+31.1 x 0.25)+(28.6 x 0.65)=27.72 As stated earlier, fuel properties measured on a weight percent or ppm basis would have to be adjusted for specific gravity as follows: TR16FE94.000 All other parameters required for the complex model would be calculated in a similar manner to create a list of calculated parameters except for the determination of RVP for ethanol blends. Because of the high RVP of ethanol and its non-linear blending characteristics, gasoline blends with at least 1.50% ethanol by volume should be entered into the appropriate complex model with an assumed RVP 1.0 psi greater than that of the base gasoline and other blendstocks. Below 1.50% ethanol concentration, the RVP of the base gasoline and blendstock should be unchanged for calculation purposes in the complex model. These parameters are then applied to the complex model to generate the values of the exhaust benzene, toxics and NOX emissions performance for the hypothetical calculated blend. In this example, the complex model yields a NOX emissions performance for this gasoline of 640 mg/mile. The properties of the anti-dumping statutory gasoline are then applied to the complex model to determine that this gasoline has a NOX emissions performance of 660 mg/mile. The blender-refiner in this example then subtracts the NOX emissions performance of anti- dumping statutory gasoline from the NOX emissions performance of the hypothetical calculated blend, to yield the NOX emissions performance effect of the blendstocks used of -20 mg/mile (640-660=-20 mg/mile). The blender-refiner would then repeat this process for all blends produced during the averaging period where blendstock was added to base gasoline. These per-batch NOX emissions performance effects are then combined on a volume-weighted basis, and the blender-refiner would have met the NOX anti-dumping standard if this net value is equal to or less than zero. A similar analysis was performed for toxics emissions performance. X. Provisions for Opt-in by Other Ozone Non-Attainment Areas Section 211(k)(6) of the Act allows certain areas to opt into the reformulated gasoline (RFG) program. Thus, such areas may choose to participate in the RFG program, unlike the nine areas with the highest ozone design values which are required to participate. The following is a list of all areas either required to be covered by the reformulated gasoline program or which have opted into the program to date: Connecticut--Entire State Areas Classified as Severe Ozone Nonattainment Areas 1. Fairfield County (part) 2. Litchfield County (part) Areas Classified as Serious Ozone Nonattainment Areas 1. Fairfield County (part) 2. Hartford County 3. Litchfield County (part) 4. Middlesex County 5. New Haven County 6. New London County 7. Tolland County 8. Windham County Delaware Areas Classified as Severe Ozone Nonattainment Areas 1. Kent County 2. New Castle County Areas Classified as Marginal Ozone Nonattainment Areas 1. Sussex County District of Columbia Areas Classified as Serious Ozone Nonattainment Areas 1. Washington (entire area) Kentucky Areas Classified as Moderate Ozone Nonattainment Areas 1. Boone County 2. Bullitt County (part) 3. Campbell County 4. Jefferson County 5. Kenton County 6. Oldham County (part) Maine Areas Classified as Moderate Ozone Nonattainment Areas 1. Androscoggin County 2. Cumberland County 3. Kennebec County 4. Knox County 5. Lincoln County 6. Sagadahoc County 7. York County Areas Classified as Marginal Ozone Nonattainment Areas 1. Hancock County 2. Waldo County Maryland Areas Classified as Severe Ozone Nonattainment Areas 1. Anne Arundel County 2. Baltimore County 3. Carroll County 4. Cecil County 5. Harford County 6. Howard County Areas Classified as Serious Ozone Nonattainment Areas 1. Calvert County 2. Charles County 3. Frederick County 4. Montgomery County 5. Prince Georges County Areas Classified as Marginal Ozone Nonattainment Areas 1. Kent County 2. Queen Annes County Massachusetts--Entire State Areas Classified as Serious Ozone Nonattainment Areas 1. Barnstable County 2. Berkshire County 3. Bristol County 4. Dukes County 5. Essex County 6. Franklin County 7. Hampden County 8. Hampshire County 9. Middlesex County 10. Nantucket County 11. Norfolk County 12. Plymouth County 13. Suffolk County 14. Worcester County New Hampshire Areas Classified as Serious Ozone Nonattainment Areas 1. Hillsborough County (part)89 --------------------------------------------------------------------------- \8\9Part of Hillsborough County is classified as serious, the other part as marginal. --------------------------------------------------------------------------- 2. Rockingham County (part)90 --------------------------------------------------------------------------- \9\0Part of Rockingham County is classified as serious, the other part as marginal. --------------------------------------------------------------------------- 3. Strafford County Areas Classified as Marginal Ozone Nonattainment Areas 1. Hillsborough County (part) 2. Merrimack County 3. Rockingham County (part) New Jersey Areas Classified as Severe Ozone Nonattainment Areas 1. Bergen County 2. Burlington County 3. Camden County 4. Cumberland County 5. Essex County 6. Gloucester County 7. Hudson County 8. Hunterdon County 9. Mercer County 10. Middlesex County 11. Monmouth County 12. Morris County 13. Ocean County 14. Passaic County 15. Salem County 16. Somerset County 17. Sussex County 18. Union County Areas Classified as Moderate Ozone Nonattainment Areas 1. Atlantic County 2. Cape May County Areas Classified as Marginal Ozone Nonattainment Areas 1. Warren County New York Areas Classified as Severe Nonattainment Areas 1. Bronx County91 --------------------------------------------------------------------------- \9\1The state requested time to study the boundaries and classification under Section 107(d)(4)(A)(iv). The boundaries and classification of Orange and Putnam Counties will be determined based upon evaluation of that study by EPA. --------------------------------------------------------------------------- 2. Kings County 3. Nassau County 4. New York County 5. Queens County 6. Richmond County 7. Rockland County 8. Suffolk County 9. Westchester County Areas Classified as Marginal Nonattainment Areas 1. Albany County 2. Dutchess County 3. Erie County 4. Essex County92 --------------------------------------------------------------------------- \9\2This area is a rural transport area. --------------------------------------------------------------------------- 5. Greene County 6. Jefferson County 7. Montgomery County 8. Niagara County 9. Rensselaer County 10. Saratoga County 11. Schenectady County Pennsylvania Areas Classified as Severe Ozone Nonattainment Areas 1. Bucks County93 --------------------------------------------------------------------------- \9\3These counties are already defined as ``covered areas'' and are subjected to the federal reformulated fuel program under Section 211(k)(10)(D). --------------------------------------------------------------------------- 2. Chester County 3. Delaware County 4. Montgomery County 5. Philadelphia County Areas Classified as Moderate Ozone Nonattainment Areas 1. Allegheny County 2. Armstrong County 3. Beaver County 4. Berks County 5. Butler County 6. Fayette County 7. Washington County 8. Westmoreland County Areas Classified as Marginal Ozone Nonattainment Areas 1. Adams County 2. Blair County 3. Cambria County 4. Carbon County 5. Columbia County 6. Cumberland County 7. Dauphin County 8. Erie County 9. Lackawanna County 10. Lancaster County 11. Lebanon County 12. Lehigh County 13. Luzerne County 14. Mercer County 15. Monroe County 16. Northampton County 17. Perry County 18. Somerset County 19. Wyoming County 20. York County Rhode Island--Entire State Areas Classified as Serious Ozone Nonattainment Areas 1. Bristol County 2. Kent County 3. Newport County 4. Providence County 5. Washington County Texas--Houston/Galveston area Area Classified As Moderate Ozone Nonattainment Area 1. Collin County 2. Dallas County 3. Denton County 4. Tarrant County Virginia Areas Classified as Serious Ozone Nonattainment Areas 1. Alexandria 2. Arlington County 3. Fairfax 4. Fairfax County 5. Falls Church 6. Loudoun County 7. Manassas 8. Manassas Park 9. Prince William County 10. Stafford County Areas Classified as Moderate Ozone Nonattainment Areas 1. Charles City County 2. Chesterfield County 3. Colonial Heights 4. Hanover County 5. Henrico County 6. Hopewell 7. Richmond County Areas Classified as Marginal Ozone Nonattainment Areas 1. Chesapeake 2. Hampton 3. James City County 4. Newport News 5. Norfolk 6. Poquoson 7. Portsmouth 8. Smyth County (part)94 --------------------------------------------------------------------------- \9\4This is a rural transport area. --------------------------------------------------------------------------- 9. Suffolk 10. Virginia Beach 11. Williamsburg 12. York County Vermont and portions of other areas in Pennsylvania and New Hampshire have formally requested to opt-in to the reformulated gasoline program, although the designated areas in these states are categorized as unclassified/attainment. Because of statutory limitations, attainment areas will not be allowed to opt-in to the program, with a limited exception given to some areas in established ozone transport regions as authorized by section 184 of the Act. The reader is referred to the RIA for further discussion of the statutory limitations. Other ozone nonattainment areas that are not listed herein may also opt-in to the reformulated gasoline program as permitted by section 211(k)(6), under constraints such as sufficient lead-time domestic fuel availability. Several key issues were brought to EPA's attention in the form of comments, and EPA's response is summarized below. More detailed discussion of these opt-in issues can be found in Section IX of the Final Regulatory Impact Analysis (RIA). Several commenter inquiries pertained to opting out of the reformulated gasoline program. Once an area has opted into the reformulated gasoline program, the issue arises whether it may, at a later date, decide to opt out of the program. While EPA is currently considering opt-out provisions, section 211(k) does not give EPA the authority to develop an opt-out procedure. Thus, EPA is not including any opt-out provisions in this rulemaking, but may pursue a separate action in the future that would allow states to opt-out of the RFG program, provided sufficient notice is given. In its April 1993 NPRM, EPA requested comment on whether to permit areas to opt-in to only Phase I (1995-99) of the RFG program, and not require them to receive Phase II RFG starting in 2000. Several commenters supported allowing states to opt-in to Phase I only, but cited a number of concerns regarding the logistics of producing and distributing Phase I and Phase II reformulated gasolines concurrently. Because of these potential fuel proliferation problems (i.e., many types of fuels available or required in the marketplace at one time), as well as enforcement problems and weak statutory authority (which is discussed further in the RIA), EPA will not allow nonattainment areas to opt-in to only Phase I. Opt-in areas must be willing to commit to the change to Phase II RFG in the year 2000. As discussed above, EPA may undertake a separate action which would give opted-in areas the opportunity to opt-out of the RFG program. In this case if a state desired to maintain the Phase I RFG standards beyond the year 1999, the state could promulgate its own regulations requiring this. Such a program would have to be enforced by the state, however, and would also have to be approved by EPA as part of the State Implementation Plan review process. As discussed briefly above, some of the comments received by EPA included a request that attainment areas be permitted to opt-in to the RFG program. The Act does not allow participation by attainment areas into the reformulated gasoline program. EPA also received suggestions that it modify the opt-in application procedure to allow more lead time for refiners. EPA feels that its existing application procedure for opt-in and its lead time provisions are adequate, and do not require revision. Finally, one commenter suggested that opt-in should be allowed only after a nonattainment area has adopted Stage II controls and enhanced inspection and maintenance. EPA favors giving eligible areas freedom to opt-in to the RFG provisions, and will not require that areas first implement Stage II controls and enhanced inspection and maintenance. The NOX standard for Phase II reformulated gasoline (see Section VI above) will be required in all current and future opt-in areas. As discussed in the Section VI of the RIA, NOX control is believed to be necessary to ensure that all opt-in areas realize a reduction in ozone levels. Since future opt-in areas are likely to be similar to some current reformulated gasoline areas (including current opt-in) in terms of geographical location, meteorological conditions, and other factors affecting ozone formation, it is reasonable to assume that future opt-in areas will similarly benefit from NOX control. Furthermore, as discussed in Section VI of the RIA, applying the NOX standard to the same areas as the reformulated gasoline standard is considered to be the most appropriate and cost effective manner in which to achieve ozone benefits through fuel reformulation. Since refiners will already be producing reformulated gasoline controlling both VOC and NOX, the addition of new areas to the reformulated gasoline program will only require an increase in the volume of RFG produced and will not pose any leadtime problems. XI. Federal Preemption Whenever the federal government regulates in an area, the issue of preemption of State action in the same area is raised. The regulations proposed here will affect virtually all of the gasoline sold in the United States. As opposed to commodities that are produced and sold in the same area of the country, gasoline produced in one area is often distributed to other areas. The national scope of gasoline production and distribution suggests that federal rules should preempt State action to avoid an inefficient patchwork of potentially conflicting regulations. Indeed, Congress provided in the 1977 Amendments to the Clean Air Act that federal fuels regulations preempt non-identical State controls except under certain specified circumstances (see, section 211(c)(4) of the Clean Air Act). EPA believes that the same approach to federal preemption is desirable for the reformulated gasoline and anti-dumping programs. EPA, therefore, is issuing today's final rule under the authority of sections 211 (k) and (c), and promulgate under section 211(c)(4) that dissimilar State controls be preempted unless either of the exceptions to federal preemption specified by section 211(c)(4) applies. Those exceptions are sections 211(c)(4) (B) and (C). As raised in some of comments received by the Agency, the Regulatory Negotiation agreement was not intended to modify the provisions of section 211(c)(4)(B). Under this provision, once the State of California has received a waiver under section 209(b) of the Clean Air Act, it has the ability to regulate fuels and fuel additives without the need for a waiver under section 211 of the Clean Air Act. In accordance with the intent of Congress in enacting sections 209(b) and 211(c)(4)(B) of the Clean Air Act, California has used, and EPA understands will continue to use, these provisions to design a program to meet its unique needs. EPA believes that the limited federal preemption promulgated here appropriately balances the utility and efficacy of uniform national rules with States' needs to address their unique pollution problems. XII. Environmental and Economic Impacts A. Environmental Impact Section 211(k) of the Clean Air Act indicates that the primary purposes of reformulated gasoline are to reduce ozone-forming VOC emissions during the high ozone season and emissions of toxic air pollutants during the entire year. Reductions in VOCs are environmentally significant because of the associated reductions in ozone formation and in secondary formation of particulate matter, with the associated improvements in human health and welfare. Reductions in emissions of toxic air pollutants are environmentally important because they carry significant benefits for human health and welfare primarily by reducing the number of cancer cases each year. 1. Phase I Reformulated Gasoline Beginning in 1995, reformulated gasoline certified during Phase I of the program must achieve a nominal emissions reduction of 15 percent for VOCs, 16.5 percent for air toxics on average, and NOX emissions are not allowed to increase beyond levels evident in baseline gasoline. EPA expects simple model fuels to meet these Clean Air Act standards. As discussed in the section IV, high ozone season fuels certified using the complex model during Phase I of the reformulated gasoline program in VOC control region I must provide a VOC emission reduction from baseline levels of 36.6 percent when complying on average and 35.1 percent when complying on a per-gallon basis. Similarly, high ozone season fuels certified using the complex model during Phase I in VOC Control Region 2 must provide a VOC emission reduction from baseline levels of 17.1 percent when complying on average and 15.6 percent when complying on a per-gallon basis. The Agency projects that VOC emission reductions for Phase I of reformulated gasoline will be approximately 90-140 thousand tons during the summer period for the ``nine cities'' and the other areas that have currently opted into the program. Assuming a one year exposure to both the baseline and controlled level of toxic emissions, the number of cancer incidences is estimated to decrease by approximately 16 (assuming enhanced I/M in place) or 24 (assuming basic I/M in place) incidences per each year that the program is in place, in the nine cities and the opt-in areas (refer to section V of the RIA for an explanation and methodology of these numbers). These reductions will naturally increase to the extent that other areas opt into the program. 2. Phase II Reformulated Gasoline Beginning in the year 2000, reformulated gasoline certified on average must meet a VOC emission reduction standard of 27.4 percent in VOC control region 2 and 29.0 percent in VOC control region 1, as well as a toxic emission reduction standard on average of 21.5 percent. In addition, a NOX emission reduction standard of 6.8 percent on average is required for Phase II of reformulated gasoline. The Agency projects that under Phase II, there will be 3-4 fewer incidences of cancer per year, summertime VOC emissions will be reduced by approximately 42,000 tons, and summertime NOX emissions will be reduced by approximately 22,000 tons in the nine cities and other areas currently opted into the RFG program (incremental to Phase I). B. Economic Impact 1. Phase I Reformulated Gasoline Due to the required addition of oxygenates to gasoline and to refinery processing changes that will be needed to reduce fuel benzene and RVP levels and to meet the VOC, NOX and toxic emission standards, the cost of producing reformulated gasoline certified under Phase I, is expected to increase by approximately 3-5 cents per gallon in 1995 above the cost of conventional gasoline. We project annual costs of $700 to $940 million for both those areas mandated to be part of the program and those that have chosen to opt-in. Additionally, there will be costs due to testing, enforcement and recordkeeping. 2. Phase II Reformulated Gasoline As discussed in Section VI, The overall cost of the Phase II reformulated gasoline VOC standards and NOX standards for Phase II RFG is approximately 1.2 cents per gallon (incremental to Phase I RFG) during the VOC control period when the more stringent VOC and NOX standards are in effect. There should be no additional cost during the non-VOC control period, since only the toxics standard changes, and there is not expected to be a cost for year-round toxics control above that required for Phase I RFG. In addition, EPA does not expect non- production related costs, such as distribution costs, recordkeeping and reporting costs, etc., to increase significantly relative to Phase I reformulated gasoline. The environmental and economic impacts of the reformulated gasoline program are described in more detail in the Section V and VI of the Final Regulatory Impact Analysis. XIII. Public Participation During the reformulated gasoline rulemaking, EPA encouraged and welcomed full public participation in arriving at its final decisions and developing its final rule. EPA met with representatives of the automobile, petroleum, and oxygenate industries as well as environmental and citizen organizations. Their concerns and ideas were considered in the development in this final rule for reformulated gasoline. Public workshops to discuss and resolve a variety of issues on several aspects of the reformulated gasoline program were sponsored by the Agency. Additionally, EPA solicited, reviewed, and considered written comments on all aspects of its three previous proposals and Phase II correction notice. All comments received by the Agency are located in the EPA Air Docket, Dockets A-91-02 and A-92-12 (See ADDRESSES). As mentioned above, all significant comments were used to revise the previous proposals and/or are responded to in the Regulatory Impact Analysis contained in Docket A-91-02. XIV. Compliance With the Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) of 1980 requires federal agencies to examine the effects of the reformulated gasoline regulation and to identify significant adverse impacts of federal regulations on a substantial number of small entities. Because the RFA does not provide concrete definitions of ``small entity,'' ``significant impact,'' or ``substantial number,'' EPA has established guidelines setting the standards to be used in evaluating impacts on small businesses95. For purposes of the reformulated gasoline regulations, a small entity is any business which is independently owned and operated and not dominant in its field as defined by SBA regulations under section 3 of the Small Business Act. --------------------------------------------------------------------------- \9\5U.S. Environmental Protection Agency, Memorandum to Assistant Administrators, ``Compliance With the Regulatory Flexibility Act,'' EPA Office of Policy, Planning, and Evaluation, 1984. In addition, U.S. Environmental Protection Agency, Memorandum to Assistant Administrators, ``Agency's Revised Guidelines for Implementing the Regulatory Flexibility Act,'' Office of Policy, Planning, and Evaluation, 1992. --------------------------------------------------------------------------- The Agency has found that the reformulated gasoline and anti- dumping regulations may possibly have some economic impact on a substantial number of small refiners. However, these regulations may not significantly affect gasoline blenders, terminal operators, service stations and ethanol blenders under the same EPA criteria. Small business entities are not required by the Clean Air Act to manufacture reformulated gasoline. Since most small refiners are located in the mountain states or in California, which has its own (more stringent) reformulated gasoline program, the vast majority of small refiners are unaffected by the federal reformulated gasoline requirements. Furthermore, all businesses (both large and small) maintain the option to produce conventional gasoline to be sold in areas not obligated by the Act to receive reformulated gasoline or those areas which have not chosen to opt into the program. All refiners will be affected by the anti-dumping requirements, which are less stringent than those for the reformulated gasoline portion of the program. The anti-dumping regulations affecting conventional gasoline are not expected to disproportionately impact small refiners of conventional gasoline. In addition, all refiners have the option to use either the simple or complex model during the first years of the reformulated gasoline program. Refiners have greater flexibility under the complex model than under the simple model (which focuses primarily on volatility control) in choosing the least-cost method of compliance. The component of the reformulated gasoline program most likely to unfavorably impact small entities is the fundamental necessity that reformulated gasoline meet more stringent emission standards and thus processing requirements. The Agency is unaware of any alternative options which might relieve the regulatory burden on small entities while simultaneously maintaining the program benefits required by the statute. Exempting small refiners from the reformulated gasoline regulations would result in the failure of meeting CAA performance standards, which is illegal. All reformulated gasoline is required to meet the same performance and compositional standards. Additionally, enforcement of a reformulated gasoline program (with exemptions or less stringent standards for some fuel producers), in-use, would be virtually impossible to enforce due to the inherent nature of the fungible gasoline distribution system in existence. Despite the inability to exempt small businesses from the requirements of the reformulated gasoline program, EPA has made accommodations where possible. One example of the versatility embedded in the reformulated gasoline regulations, by EPA, is the flexibility available to all refiners, both small and large, to choose to have one or more individual refinery conventional gasoline compliance baselines and one or more ``refiner'' baselines (i.e., more than one grouping of two or more refineries to form a compliance baseline). Another example of the flexibility of the regulations is the ability to produce reformulated gasoline on a per gallon or averaging basis. Also, certain small refiners who produced JP-4 jet fuel in 1990 may be able to adjust their baselines so as to reduce the compliance burden. It is worthy to note that although EPA has received several comments which claim that the reformulated gasoline regulations will result in closing the small business entities affected by this rule, convincing evidence supporting this claim has not been submitted. In accordance with section 604 of the Regulatory Flexibility Act, EPA has prepared a regulatory flexibility analysis which includes a comprehensive justification for the determination briefly reviewed above, as well as a summary and assessment of the issues raised by public comments on the Initial Regulatory Flexibility Analysis. The complete analysis is contained within the Regulatory Impact Analysis which has been placed in the docket for this rulemaking: EPA Air Docket A-92-12. XV. Statutory Authority The statutory authority for the rules finalized 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. XVI. Administrative Designation and Regulatory Analysis Pursuant to Executive Order 12866, (58 FR 51735 (October 4, 1993)) the Agency must determine whether the regulatory action is ``significant'' and therefore subject to OMB review and the requirements of the Executive Order. The Order defines ``significant regulatory action'' as one that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communitites; (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. Pursuant to the terms of Executive Order 12866, it has been determined that this rule is a ``significant regulatory action'' because the Administrator has determined that reformulated gasoline will cost well in excess of $100 million per year and therefore should be classified as a significant regulatory action. As such, this action was submitted to OMB for review. Changes made in response to OMB suggestions or recommendations will be documented in the public record: EPA Air Docket A-92-12. A Regulatory Impact Analysis (RIA) for the reformulated gasoline program has been prepared and placed in Public Docket No. A-92-12 to accompany this EPA notice of final rulemaking. A draft version of the Regulatory Impact Analysis was submitted to the Office of Management and Budget (OMB) for review as required by Executive Order 12866. Written comments from OMB and EPA response to those comments have also been placed in the public docket for this rulemaking. EPA has made subsequent updates and revisions to the draft version pertinent to the use of the simple model. A final version of the analysis is available in the docket cited above. XVII. Compliance With the Paperwork Reduction Act The information collection requirements in this rule have been submitted for approval to the Office of Management and Budget (OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. An Information Collection Request document has been prepared by EPA (ICR No.1591.03) and a copy may be obtained from Sandy Farmer, Information Policy Branch; EPA, 401 M Street, SW. (Mail Code 2136); Washington, DC 20460 or by calling (202) 260-2740. These requirements are not effective until OMB approves them and a technical amendment to that effect is published in the Federal Register. This collection of information has an estimated reporting burden averaging 8 hours per response and an estimated annual recordkeeping burden averaging 38 hours per respondent. These estimates include time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding the burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to Chief, Information Policy Branch; EPA; 401 M St., SW. (Mail Code 2136); Washington, DC 20460; and to the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503, marked ``Attention: Desk Officer for EPA.'' XVIII. Notice Regarding Registration of Reformulated Gasolines EPA is in the process of establishing new requirements for the registration of motor vehicle fuels and fuel additives (F/FAs) as authorized by sections 211(b) and 211(e) of the Clean Air Act (CAA).96 A proposal was published on April 15, 1992 (57 FR 13168). Pursuant to court order, EPA is scheduled to issue the final rule on or before April 29, 1994. The new registration regulations would supplement existing requirements and would apply to all F/FAs designated for registration, including reformulated gasoline and oxygenated gasolines. This new rule would require manufacturers of designated F/FAs to conduct certain tests and submit information regarding the composition and the potential health and welfare effects of the emissions produced by such F/FAs. Consistent with statutory requirements, for products registered prior to the promulgation of the F/FA final rule the proposal would allow a period of three years for the submission of certain data required by the rule. Under this proposal, manufacturers of designated F/FAs not registered prior to the promulgation of the F/FA final rule would be required to submit the requisite information prior to registration. This would mean that products not registered at the time of promulgation of the final F/FA testing rule would not be allowed to be registered and sold until EPA receives the requisite health effects information. In view of this proposed provision, EPA is advising manufacturers of reformulated gasoline and oxygenated gasolines to promptly register their products (or update their current gasoline registrations) so they can enter the marketplace and make use of the three-year time window allowed by the statute to conduct the required tests. The purpose of this section is to provide some guidance to fuel producers on the registration process. --------------------------------------------------------------------------- \9\6Under section 211(a) registration of designated fuels and fuel additives is required as a precondition to introduction into the marketplace. --------------------------------------------------------------------------- To make the registration process more flexible and convenient, current registration procedures allow a fuel producer to include in the original registration a list of additives that might be used in the marketed fuel, along with the applicable range of concentration-in-use for each alternative. Manufacturers are also allowed to revise existing fuel registrations to accommodate expected changes in their formulations. These provisions allow fuel producers to respond quickly to fluctuations in price, availability, and other market or technical factors when they formulate their fuel products. Consistent with this current practice, EPA will permit fuel producers to register their oxygenated gasoline formulations (including reformulated gasoline) by simply revising their existing gasoline registrations to include the pertinent oxygenating compound(s). Fuel producers who are uncertain about their future fuel formulations could potentially list an unlimited number of oxygenates which they might, under some conceivable circumstances, blend into gasoline. However, EPA would generally advise against the strategy of including every possible alternative oxygenate. The fact that, for the sake of convenience, registrations are permitted to be modified to cover oxygenated gasolines does not mean that all potential formulations which fit under this broad compositional umbrella will necessarily be considered equivalent to a single fuel product. In fact, the F/FA final rule is expected to consider each gasoline/oxygenate blend as a different formulation. Thus, fuel producers would be responsible for the testing of each gasoline/oxygenate blend covered by the respective fuel registration. Furthermore, oxygenated compounds that are listed but not tested within the allotted time period (i.e., three years) could not be used by the manufacturer. Thus, in determining which oxygenate compounds to include in the registration, each producer should carefully consider the tradeoff between the additional flexibility which a comprehensive list of potential oxygenates might provide and the additional testing responsibility which might result. For more information about registration procedures, please contact the registration office at (202) 233-9755. For information on the testing requirements of the F/FA rule contact Ines Figueroa at (313) 668-4575. List of Subjects in 40 CFR Part 80 Environmental protection, Fuel additives, Gasoline, Incorporation by reference, Motor vehicle pollution, Penalties, Reporting and recordkeeping requirements. Dated: December 15, 1993. Carol M. Browner, Administrator. For the reasons set forth in the preamble, part 80 of title 40 of the Code of Federal Regulations is amended as follows: PART 80--REGULATION OF FUELS AND FUEL ADDITIVES 1. The authority citation for part 80 continues to read as follows: Authority: Sections 114, 211 and 301(a) of the Clean Air Act as amended (42 U.S.C. 7414, 7545, and 7601(a)). 2. Section 80.2 is amended by adding paragraphs (ee), (ff), (gg), (hh), (ii), (jj), (kk), (ll), (mm), and (nn) to read as follows: Sec. 80.2 Definitions. * * * * * (ee) Reformulated gasoline means any gasoline whose formulation has been certified under Sec. 80.40, which meets each of the standards and requirements prescribed under Sec. 80.41, and which contains less than the maximum concentration of the marker specified in Sec. 80.82 that is allowed for reformulated gasoline under Sec. 80.82. (ff) Conventional gasoline means any gasoline which has not been certified under Sec. 80.40. (gg) Batch of reformulated gasoline means a quantity of reformulated gasoline which is homogeneous with regard to those properties which are specified for reformulated gasoline certification. (hh) Covered area means each of the geographic areas specified in Sec. 80.70 in which only reformulated gasoline may be sold or dispensed to ultimate consumers. (ii) Reformulated gasoline credit means the unit of measure for the paper transfer of oxygen or benzene content resulting from reformulated gasoline which contains more than 2.1 weight percent of oxygen or less than 0.95 volume percent benzene. (jj) Oxygenate means any substance which, when added to gasoline, increases the oxygen content of that gasoline. Lawful use of any of the substances or any combination of these substances requires that they be ``substantially similar'' under section 211(f)(1) of the Clean Air Act, or be permitted under a waiver granted by the Administrator under the authority of section 211(f)(4) of the Clean Air Act. (kk) Reformulated gasoline blendstock for oxygenate blending, or RBOB means a petroleum product which, when blended with a specified type and percentage of oxygenate, meets the definition of reformulated gasoline, and to which the specified type and percentage of oxygenate is added other than by the refiner or importer of the RBOB at the refinery or import facility where the RBOB is produced or imported. (ll) Oxygenate blending facility means any facility (including a truck) at which oxygenate is added to gasoline or blendstock, and at which the quality or quantity of gasoline is not altered in any other manner except for the addition of deposit control additives. (mm) Oxygenate blender means any person who owns, leases, operates, controls, or supervises an oxygenate blending facility, or who owns or controls the blendstock or gasoline used or the gasoline produced at an oxygenate blending facility. (nn) Oxygenated fuels program reformulated gasoline, or OPRG means reformulated gasoline which is intended for use in an oxygenated fuels program control area, as defined at paragraph (pp) of this section, during an oxygenated fuels program control period, as defined at paragraph (qq) of this section. * * * * * 3. New subpart D, consisting of Secs. 80.40 through 80.89, subpart E, consisting of Secs. 80.90 through 80.124, and subpart F, consisting of Secs. 80.125 through 80.135, are added to read as follows: Subpart D--Reformulated Gasoline Sec. 80.40 Fuel certification procedures. 80.41 Standards and requirements for compliance. 80.42 Simple emissions model. 80.43-80.44 [Reserved] 80.45 Complex emissions model. 80.46 Measurement of reformulated gasoline fuel parameters. 80.47 [Reserved] 80.48 Augmentation of the complex emission model by vehicle testing. 80.49 Fuels to be used in augmenting the complex emission model through vehicle testing. 80.50 General test procedure requirements for augmentation of the emission models. 80.51 Vehicle test procedures. 80.52 Vehicle preconditioning. 80.53-80.54 [Reserved] 80.55 Measurement methods for benzene and 1,3-butadiene 80.56 Measurement methods for formaldehyde and acetaldehyde. 80.57-80.58 [Reserved] 80.59 General test fleet requirements for vehicle testing. 80.60 Test fleet requirements for exhaust emission testing. 80.61 [Reserved] 80.62 Vehicle test procedures to place vehicles in emitter group sub-fleets. 80.63-80.64 [Reserved] 80.65 General requirements for refiners, importers, and oxygenate blenders. 80.66 Calculation of reformulated gasoline properties. 80.67 Compliance on average. 80.68 Compliance surveys. 80.69 Requirements for downstream oxygenate blending. 80.70 Covered areas. 80.71 Descriptions of VOC-control regions. 80.72 [Reserved] 80.73 Inability to produce conforming gasoline in extraordinary circumstances. 80.74 Record keeping requirements. 80.75 Reporting requirements. 80.76 Registration of refiners, importers or oxygenate blender. 80.77 Product transfer documentation. 80.78 Controls and prohibitions on reformulated gasoline. 80.79 Liability for violations of the prohibited activities. 80.80 Penalties. 80.81 Enforcement exemptions for California gasoline. 80.82 Conventional gasoline marker. [Reserved] 80.83-80.89 [Reserved] Subpart E--Anti-Dumping 80.90 Conventional gasoline baseline emissions determination. 80.91 Individual baseline determination. 80.92 Baseline auditor requirements. 80.93 Individual baseline submission and approval. 80.94-80.100 [Reserved] 80.101 Standards applicable to refiners and importers. 80.102 Controls applicable to blendstocks. 80.103 Registration of refiners and importers. 80.104 Record keeping requirements. 80.105 Reporting requirements. 80.106 Product transfer documents. 80.107-80.124 [Reserved] Subpart F--Attest Engagements 80.125 Attest engagements. 80.126 Definitions. 80.127 Sample size guidelines. 80.128 Agreed upon procedures for refiners and importers. 80.129 Agreed upon procedures for downstream oxygenate blenders. 80.130 Agreed upon procedures reports. 80.131-80.135 [Reserved] Subpart D--Reformulated Gasoline Sec. 80.40 Fuel certification procedures. (a) Gasoline that complies with one of the standards specified in Sec. 80.41 (a) through (f) that is relevant for the gasoline, and that meets all other relevant requirements prescribed under Sec. 80.41, shall be deemed certified. (b) Any refiner or importer may, with regard to a specific fuel formulation, request from the Administrator a certification that the formulation meets one of the standards specified in Sec. 80.41 (a) through (f). Sec. 80.41 Standards and requirements for compliance. (a) Simple model per-gallon standards. The ``simple model'' standards for compliance when achieved on a per-gallon basis are as follows: Simple Model Per-Gallon Standards Reid vapor pressure (in pounds per square inch): Gasoline designated for VOC-Control Region 1................ X emissions performance reduction (percent)................. X emissions performance reduction (percent): Standard.................................................. X emissions performance reduction (percent): Gasoline designated as VOC-controlled....................... X emissions performance reduction (percent): Gasoline designated as VOC-controlled: Standard.................................................. X emissions performance standards for any refinery or importer subject to the Phase I complex model standards shall be determined by evaluating all of the following parameter levels in the Phase I complex model (specified in Sec. 80.45) at one time: (1) The simple model values for benzene, RVP, and oxygen specified in Sec. 80.41 (a) or (b), as applicable; (2) The aromatics value which, together with the values for benzene, RVP, and oxygen determined under paragraph (j)(1)(i) of this section, meets the simple model toxics requirement specified in Sec. 80.41 (a) or (b), as applicable; (3) The refinery's or importer's individual baseline values for sulfur, E-300, and olefins, as established under Sec. 80.91; and (4) The appropriate seasonal value of E-200 specified in Sec. 80.45(b)(2). (k) Effect of VOC survey failure. (1) On each occasion during 1995 or 1996 that a covered area fails a simple model VOC emissions reduction survey conducted pursuant to Sec. 80.68, the RVP requirements for that covered area beginning in the year following the failure shall be adjusted to be more stringent as follows: (i) The required average RVP level shall be decreased by an additional 0.1 psi; and (ii) The maximum RVP level for each gallon of averaged gasoline shall be decreased by an additional 0.1 psi. (2) On each occasion that a covered area fails a complex model VOC emissions reduction survey conducted pursuant to Sec. 80.68, or fails a simple model VOC emissions reduction survey conducted pursuant to Sec. 80.68 during 1997, the VOC emissions performance standard for that covered area beginning in the year following the failure shall be adjusted to be more stringent as follows: (i) The required average VOC emissions reduction shall be increased by an additional 1.0%; and (ii) The minimum VOC emissions reduction, for each gallon of averaged gasoline, shall be increased by an additional 1.0%. (3) In the event that a covered area for which required VOC emissions reductions have been made more stringent passes all VOC emissions reduction surveys in two consecutive years, the averaging standards VOC emissions reduction for that covered area beginning in the year following the second year of passed survey series shall be made less stringent as follows: (i) The required average VOC emissions reduction shall be decreased by 1.0%; and (ii) The minimum VOC emissions reduction shall be decreased by 1.0%. (4) In the event that a covered area for which the required VOC emissions reductions have been made less stringent fails a subsequent VOC emissions reduction survey: (i) The required average VOC emission reductions for that covered area beginning in the year following this subsequent failure shall be made more stringent by increasing the required average and the minimum VOC emissions reduction by 1.0%; and (ii) The required VOC emission reductions for that covered area thereafter shall not be made less stringent regardless of the results of subsequent VOC emissions reduction surveys. (l) Effect of toxics survey failure. (1) On each occasion during 1995 or 1996 that a covered area fails a simple model toxics emissions reduction survey series, conducted pursuant to Sec. 80.68, the simple model toxics emissions reduction requirement for that covered area beginning in the year following the year of the failure is made more stringent by increasing the average toxics emissions reduction by an additional 1.0%. (2) On each occasion that a covered area fails a complex model toxics emissions reduction survey series, conducted pursuant to Sec. 80.68, or fails a simple model toxics emissions reduction survey series conducted pursuant to Sec. 80.68 during 1997, the complex model toxics emissions reduction requirement for that covered area beginning in the year following the year of the failure is made more stringent by increasing the average toxics emissions reduction by an additional 1.0%. (3) In the event that a covered area for which the toxics emissions standard has been made more stringent passes all toxics emissions survey series in two consecutive years, the averaging standard for toxics emissions reductions for that covered area beginning in the year following the second year of passed survey series shall be made less stringent by decreasing the average toxics emissions reduction by 1.0%. (4) In the event that a covered area for which the toxics emissions reduction standard has been made less stringent fails a subsequent toxics emissions reduction survey series: (i) The standard for toxics emissions reduction for that covered area beginning in the year following this subsequent failure shall be made more stringent by increasing the average toxics emissions reduction by 1.0%; and (ii) The standard for toxics emissions reduction for that covered area thereafter shall not be made less stringent regardless of the results of subsequent toxics emissions reduction surveys. (m) Effect of NOX survey failure. (1) On each occasion that a covered area fails a NOX emissions reduction survey conducted pursuant to Sec. 80.68, except in the case Phase II complex model NOX standards for VOC-controlled gasoline, the NOX emissions reduction requirements for that covered area beginning in the year following the failure shall be adjusted to be more stringent as follows: (i) The required average NOX emissions reduction shall be increased by an additional 1.0%; and (ii) The minimum NOX emissions reduction, for each gallon of averaged gasoline, shall be increased by an additional 1.0%. (2) In the event that a covered area for which required NOX emissions reductions have been made more stringent passes all NOX emissions reduction surveys in two consecutive years, the averaging standards for NOX emissions reduction for that covered area beginning in the year following the second year of passed survey series shall be made less stringent as follows: (i) The required average NOX emissions reduction shall be decreased by 1.0%; and (ii) The minimum NOX emissions reduction shall be decreased by 1.0%. (3) In the event that a covered area for which the required NOX emissions reductions have been made less stringent fails a subsequent NOX emissions reduction survey: (i) The required average NOX emission reductions for that covered area beginning in the year following this subsequent failure shall be made more stringent by increasing the required average and the minimum NOX emissions reduction by 1.0%; and (ii) The required NOX emission reductions for that covered area thereafter shall not be made less stringent regardless of the results of subsequent NOX emissions reduction surveys. (n) Effect of benzene survey failure. (1) On each occasion that a covered area fails a benzene content survey series, conducted pursuant to Sec. 80.68, the benzene content standards for that covered area beginning in the year following the year of the failure shall be made more stringent as follows: (i) The average benzene content shall be decreased by 0.05% by volume; and (ii) The maximum benzene content for each gallon of averaged gasoline shall be decreased by 0.10% by volume. (2) In the event that a covered area for which the benzene standards have been made more stringent passes all benzene content survey series conducted in two consecutive years, the benzene standards for that covered area beginning in the year following the second year of passed survey series shall be made less stringent as follows: (i) The average benzene content shall be increased by 0.05% by volume; and (ii) The maximum benzene content for each gallon of averaged gasoline shall be increased by 0.10% by volume. (3) In the event that a covered area for which the benzene standards have been made less stringent fails a subsequent benzene content survey series: (i) The standards for benzene content for that covered area beginning in the year following this subsequent failure shall be the more stringent standards which were in effect prior to the operation of paragraph (n)(2) of this section; and (ii) The standards for benzene content for that covered area thereafter shall not be made less stringent regardless of the results of subsequent benzene content surveys. (o) Effect of oxygen survey failure. (1) In any year that a covered area fails an oxygen content survey series, conducted pursuant to Sec. 80.68, the minimum oxygen content requirement for that covered area beginning in the year following the year of the failure is made more stringent by increasing the minimum oxygen content standard, for each gallon of averaged gasoline, by an additional 0.1%; however, in no case shall the minimum oxygen content standard be greater than 2.0%. (2) In the event that a covered area for which the minimum oxygen content standard has been made more stringent passes all oxygen content survey series in two consecutive years, the minimum oxygen content standard for that covered area beginning in the year following the second year of passed survey series shall be made less stringent by decreasing the minimum oxygen content standard by 0.1%. (3) In the event that a covered area for which the minimum oxygen content standard has been made less stringent fails a subsequent oxygen content survey series: (i) The standard for minimum oxygen content for that covered area beginning in the year following this subsequent failure shall be made more stringent by increasing the minimum oxygen content standard by 0.1%; and (ii) The minimum oxygen content standard for that covered area thereafter shall not be made less stringent regardless of the results of subsequent oxygen content surveys. (p) Effective date for changed minimum or maximum standards. In the case of any minimum or maximum standard that is changed to be more stringent by operation of paragraphs (k), (m), (n), or (o) of this section, the effective date for such change shall be ninety days following the date EPA announces the change. (q) Refineries, importers, and oxygenate blenders subject to adjusted standards. Standards for average compliance that are adjusted to be more or less stringent by operation of paragraphs (k), (l), (m), (n), or (o) of this section apply to averaged reformulated gasoline produced at each refinery or oxygenate blending facility, or imported by each importer as follows: (1) Adjusted standards for a covered area apply to averaged reformulated gasoline that is produced at a refinery or oxygenate blending facility if: (i) Any averaged reformulated gasoline from that refinery or oxygenate blending facility supplied the covered area during any year a survey was conducted which gave rise to a standards adjustment; or (ii) Any averaged reformulated gasoline from that refinery or oxygenate blending facility supplies the covered area during any year that the standards are more stringent than the initial standards; unless (iii) The refiner or oxygenate blender is able to show that the volume of averaged reformulated gasoline from a refinery or oxygenate blending facility that supplied the covered area during any year under paragraphs (q)(1) (i) or (ii) of this section was less than one percent of the reformulated gasoline produced at the refinery or oxygenate blending facility during that year, or 100,000 barrels, whichever is less. (2) Adjusted standards for a covered area apply to averaged reformulated gasoline that is imported by an importer if: (i) The covered area with the adjusted standard is located in Petroleum Administration for Defense District (PADD) I, and the gasoline is imported at a facility located in PADDs I, II or III; (ii) The covered area with the adjusted standard is located in PADD II, and the gasoline is imported at a facility located in PADDs I, II, III, or IV; (iii) The covered area with the adjusted standard is located in PADD III, and the gasoline is imported at a facility located in PADDs II, III, or IV; (iv) The covered area with the adjusted standard is located in PADD IV, and the gasoline is imported at a facility located in PADDs II, or IV; or (v) The covered area with the adjusted standard is located in PADD V, and the gasoline is imported at a facility located in PADDs III, IV, or V; unless (vi) Any gasoline which is imported by an importer at any facility located in any PADD supplies the covered area, in which case the adjusted standard also applies to averaged gasoline imported at that facility by that importer. (3) Any gasoline that is transported in a fungible manner by a pipeline, barge, or vessel shall be considered to have supplied each covered area that is supplied with any gasoline by that pipeline, or 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. (4) Adjusted standards apply to all averaged reformulated gasoline produced by a refinery or imported by an importer identified in this paragraph (q), except: (i) In the case of adjusted VOC standards for a covered area located in VOC Control Region 1, the adjusted VOC standards apply only to averaged reformulated gasoline designated as VOC-controlled intended for use in VOC Control Region 1; and (ii) In the case of adjusted VOC standards for a covered area located in VOC Control Region 2, the adjusted VOC standards apply only to averaged reformulated gasoline designated as VOC-controlled intended for use in VOC Control Region 2. (r) Definition of PADD. For the purposes of this section only, the following definitions of PADDs apply: (1) The following states are included in PADD I: Connecticut Delaware District of Columbia Florida Georgia Maine Maryland Massachusetts New York New Hampshire New Jersey North Carolina Pennsylvania Rhode Island South Carolina Vermont Virginia West Virginia (2) The following states are included in PADD II: Illinois Indiana Iowa Kansas Kentucky Michigan Minnesota Missouri Nebraska North Dakota Ohio Oklahoma South Dakota Tennessee Wisconsin (3) The following states are included in PADD III: Alabama Arkansas Louisiana Mississippi New Mexico Texas (4) The following states are included in PADD IV: Colorado Idaho Montana Utah Wyoming (5) The following states are included in PADD V: Arizona California Nevada Oregon Washington Sec. 80.42 Simple emissions model. (a) VOC emissions. The following equations shall comprise the simple model for VOC emissions. The simple model for VOC emissions shall be used only in determining toxics emissions: Summer=The period of May 1 through September 15 Winter=The period of September 16 through April 30 EXHVOCS1=Exhaust nonmethane VOC emissions from the fuel in question, in grams per mile, for VOC control region 1 during the summer period EXHVOCS2=Exhaust nonmethane VOC emissions from the fuel in question, in grams per mile, for VOC control region 2 during the summer period EXHVOCW=Exhaust nonmethane VOC emissions from the fuel in question, in grams per mile, for the winter period EVPVOCS1=Evaporative VOC emissions from the fuel in question, in grams per mile for VOC control region 1 during the summer period EVPVOCS2=Evaporative VOC emissions from the fuel in question, in grams per mile for VOC control region 2 during the summer period RLVOCS1=Running loss VOC emissions from the fuel in question, in grams per mile for VOC control region 1 during the summer period RLVOCS2=Running loss VOC emissions from the fuel in question, in grams per mile for VOC control region 2 during the summer period REFVOCS1=Refueling VOC emissions from the fuel in question, in grams per mile for VOC control region 1 during the summer period REFVOCS2=Refueling VOC emissions from the fuel in question, in grams per mile for VOC control region 2 during the summer period OXCON=Oxygen content of the fuel in question, in terms of weight percent (as measured under Sec. 80.46) RVP=Reid vapor pressure of the fuel in question, in pounds per square inch (psi) (1) The following equations shall comprise the simple model for VOC emissions in VOC Control Region 1 during the summer period: EXHVOCS1=0.444 x (1-(0.127/2.7) x OXCON) EVPVOCS1=0.7952-0.2461 x RVP +0.02293 x RVP x RVP RLVOCS1=-0.734+0.1096 x RVP +0.002791 x RVP x RVP REFVOCS1=0.04 x ((0.1667 x RVP)-0.45) (2) The following equations shall comprise the simple model for VOC emissions in VOC Control Region 2 during the summer period: EXHVOCS2=0.444 x (1-(0.127/2.7) x OXCON) EVPVOCS2=0.813-0.2393 x RVP +0.021239 x RVP x RVP RLVOCS2=0.2963-0.1306 x RVP +0.016255 x RVP x RVP REFVOCS2=0.04 x ((0.1667 x RVP)-0.45) (3) The following equation shall comprise the simple model for VOC emissions during the winter period: EXHVOCW=0.656 x (1-(0.127/2.7) x OXCON) (b) Toxics emissions. The following equations shall comprise the simple model for toxics emissions: EXHBEN=Exhaust benzene emissions from the fuel in question, in milligrams per mile EVPBEN=Evaporative benzene emissions from the fuel in question, in milligrams per mile HSBEN=Hot soak benzene emissions from the fuel in question, in milligrams per mile DIBEN=Diurnal benzene emissions from the fuel in question, in milligrams per mile RLBEN=Running loss benzene emissions from the fuel in question, in milligrams per mile REFBEN=Refueling benzene emissions from the fuel in question, in milligrams per mile MTBE=Oxygen content of the fuel in question in the form of MTBE, in terms of weight percent (as measured under Sec. 80.46) ETOH=Oxygen content of the fuel in question in the form of ethanol, in terms of weight percent (as measured under Sec. 80.46) ETBE=Oxygen content of the fuel in question in the form of ETBE, in terms of weight percent (as measured under Sec. 80.46) FORM=Formaldehyde emissions from the fuel in question, in milligrams per mile ACET=Acetaldehyde emissions from the fuel in question, in milligrams per mile POM=Emissions of polycyclic organic matter from the fuel in question, in milligrams per mile BUTA=Emissions of 1,3-Butadiene from the fuel in question, in milligrams per mile FBEN=Fuel benzene of the fuel in question, in terms of volume percent (as measured under Sec. 80.46) FAROM=Fuel aromatics of the fuel in question, in terms of volume percent (as measured under Sec. 80.46) TOXREDS1=Total toxics reduction of the fuel in question during the summer period for VOC control region 1 in percent TOXREDS2=Total toxics reduction of the fuel in question during the summer period for VOC control region 2 in percent TOXREDW=Total toxics reduction of the fuel in question during the winter period in percent (1) The following equations shall comprise the simple model for toxics emissions in VOC control region 1 during the summer period: TOXREDS1=[100 x (53.2-EXHBEN -EVPBEN-RLBEN-REFBEN -FORM-ACET-BUTA -POM)]/53.2 EXHBEN=[1.884+0.949 x FBEN+0.113 x (FAROM-FBEN))/100] x 1000 x EXHVOCS1 EVPBEN=HSBEN+DIBEN HSBEN=FBEN x (EVPVOCS1 x 0.679) x 1000 x [(1.4448-(0.0684 x MTBE/2.0)-(0.080274 x RVP))/100] DIBEN=FBEN x (EVPVOCS1 x 0.321) x 1000 x [(1.3758-(0.0579 x MTBE/2.0)-(0.080274 x RVP))/100] RLBEN=FBEN x RLVOCS1 x 1000 x [(1.4448-(0.0684 x MTBE/ 2.0)-(0.080274 x RVP))/100] REFBEN=FBEN x REFVOCS1 x 1000 x [(1.3972-(0.0591xMTBE/ 2.0)-(0.081507 x RVP))/100] BUTA=0.00556xEXHVOCS1x1000 POM=3.15 x EXHVOCS1 (i) For any oxygenate or mixtures of oxygenates, the formaldehyde and acetaldehyde shall be calculated with the following equations: FORM=0.01256 x EXHVOCS1 x 1000 x [1+(0.421/2.7) x MTBE+TAME)+(0.358/3.55) x ETOH + (0.137/2.7) x (ETBE+ETAE)] ACET=0.00891 x EXHVOCS1 x 1000 x [1 + (0.078/2.7) x (MTBE+TAME)+(0.865/3.55) x ETOH+(0.867/2.7) x (ETBE+ETAE)] (ii) When calculating formaldehyde and acetaldehyde emissions using the equations in paragraph (b)(1)(i) of this section, oxygen in the form of alcohols which are more complex or have higher molecular weights than ethanol shall be evaluated as if it were in the form of ethanol. Oxygen in the form of methyl ethers other than TAME and MTBE shall be evaluated as if it were in the form of MTBE. Oxygen in the form of ethyl ethers other than ETBE shall be evaluated as if it were in the form of ETBE. Oxygen in the form of non-methyl, non-ethyl ethers shall be evaluated as if it were in the form of ETBE. (2) The following equations shall comprise the simple model for toxics emissions in VOC control region 2 during the summer period: TOXREDS2=100 x (52.1 - EXHBEN - EVPBEN - RLBEN - REFBEN - FORM - ACET - BUTA - POM)/52.1 EXHBEN=[(1.884+0.949 x FBEN+0.113 x (FAROM-FBEN))/100] x 1000 x EXHVOCS2 EVPBEN=HSBEN+DIBEN HSBEN=FBEN x (EVPVOCS2 x 0.679) x 1000 x [(1.4448-(0.0684 x MTBE/2.0)-(0.080274 x RVP))/100] DIBEN=FBEN x (EVPVOCS2 x 0.321) x 1000 x [(1.3758-(0.0579 x MTBE/2.0)-(0.080274 x RVP))/100] RLBEN=FBEN x RLVOCS2 x 1000 x [(1.4448-(0.0684 x MTBE/ 2.0)-(0.080274 x RVP))/100] REFBEN=FBEN x REFVOCS2 x 1000 x [(1.3972-(0.0591 x MTBE/ 2.0)-(0.081507 x RVP))/100] BUTA=0.00556 x EXHVOCS2 x 1000 POM=3.15 x EXHVOCS2 (i) For any oxygenate or mixtures of oxygenates, the formaldehyde and acetaldehyde shall be calculated with the following equations: FORM=0.01256 x EEXHVOCS2 x 1000 x [1+(0.421/2.7) x (MTBE+TAME)+(0.358/3.55) x ETOH+(0.137/2.7) x (ETBE+ETAE)] ACET=0.00891 x EXHVOCS2 x 1000 x [1+(0.078/2.7) x (MTBE+TAME)+(0.865/3.55) x ETOH+(0.867/2.7) x (ETBE+ETAE)] (ii) When calculating formaldehyde and acetaldehyde emissions using the equations in paragraph (b)(2)(i) of this section, oxygen in the form of alcohols which are more complex or have higher molecular weights than ethanol shall be evaluated as if it were in the form of ethanol. Oxygen in the form of methyl ethers other than TAME and MTBE shall be evaluated as if it were in the form of MTBE. Oxygen in the form of ethyl ethers other than ETBE shall be evaluated as if it were in the form of ETBE. Oxygen in the form of non-methyl, non-ethyl ethers shall be evaluated as if it were in the form of ETBE. (3) The following equations shall comprise the simple model for toxics emissions during the winter period: TOXREDW=100 x (55.5-EXHBEN-FORM-ACET -BUTA-POM) /55.5 EXHBEN=[(1.884+0.949 x FBEN+0.113 x (FAROM-FBEN)) /100] x 1000 x EXHVOCW BUTA=0.00556 x EXHVOCW x 1000 POM=2.13 x EXHVOCW (i) For any oxygenate or mixtures of oxygenates, the formaldehyde and acetaldehyde shall be calculated with the following equations: FORM=0.01256 x EXHVOCS1 x 1000 x [1+(0.421/2.7) x (MTBE+TAME)+(0.358/3.55) x ETOH+(0.137/2.7) x (ETBE+ETAE)] ACET=0.00891 x EXHVOCS1 x 1000 x [1+(0.078/2.7) x (MTBE+TAME)+(0.865/3.55) x ETOH+(0.867/2.7) x (ETBE+ETAE)] (ii) When calculating formaldehyde and acetaldehyde emissions using the equations in paragraph (b)(3)(i) of this section, oxygen in the form of alcohols which are more complex or have higher molecular weights than ethanol shall be evaluated as if it were in the form of ethanol. Oxygen in the form of methyl ethers other than TAME and MTBE shall be evaluated as if it were in the form of MTBE. Oxygen in the form of ethyl ethers other than ETBE shall be evaluated as if it were in the form of ETBE. Oxygen in the form of non-methyl, non-ethyl ethers shall be evaluated as if it were in the form of ETBE. (c) Limits of the model. (1) The model given in paragraphs (a) and (b) of this section shall be used as given to determine VOC and toxics emissions, respectively, if the properties of the fuel being evaluated fall within the ranges shown in this paragraph (c). If the properties of the fuel being evaluated fall outside the range shown in this paragraph (c), the model may not be used to determine the VOC or toxics performance of the fuel: ------------------------------------------------------------------------ Fuel parameter Range ------------------------------------------------------------------------ Benzene content.................... 0-2.5 vol % RVP................................ 6.6-9.0 psi Oxygenate content.................. 0-3.5 vol % Aromatics content.................. 10-45 vol % ------------------------------------------------------------------------ (2) The model given in paragraphs (a) and (b) of this section shall be effective from January 1, 1995 through December 31, 1997, unless extended by action of the Administrator. Secs. 80.43-80.44 [Reserved] Sec. 80.45 Complex emissions model. (a) Definition of terms. For the purposes of this section, the following definitions shall apply: Target fuel=The fuel which is being evaluated for its emissions performance using the complex model OXY=Oxygen content of the target fuel in terms of weight percent SUL=Sulfur content of the target fuel in terms of parts per million by weight RVP=Reid Vapor Pressure of the target fuel in terms of pounds per square inch E200=200 deg.F distillation fraction of the target fuel in terms of volume percent E300=300 deg.F distillation fraction of the target fuel in terms of volume percent ARO=Aromatics content of the target fuel in terms of volume percent BEN=Benzene content of the target fuel in terms of volume percent OLE=Olefins content of the target fuel in terms of volume percent MTB=Methyl tertiary butyl ether content of the target fuel in terms of weight percent oxygen ETB=Ethyl tertiary butyl ether content of the target fuel in terms of weight percent oxygen TAM=Tertiary amyl methyl ether content of the target fuel in terms of weight percent oxygen ETH=Ethanol content of the target fuel in terms of weight percent oxygen exp=The function that raises the number e (the base of the natural logarithm) to the power in its domain Phase I=The years 1995-1999 Phase II=Year 2000 and beyond (b) Weightings and baselines for the complex model. (1) The weightings for normal and higher emitters (w1 and w2, respectively) given in Table 1 shall be used to calculate the exhaust emission performance of any fuel for the appropriate pollutant and Phase: Table 1.--Normal and Higher Emitter Weightings for Exhaust Emissions ------------------------------------------------------------------------ Phase I Phase II ----------------------------------- VOC & VOC & toxics NOX toxics NOX ------------------------------------------------------------------------ Normal Emitters (w1)................ 0.52 0.82 0.444 0.738 Higher Emitters (w2)................ 0.48 0.18 0.556 0.262 ------------------------------------------------------------------------ (2) The following properties of the baseline fuels shall be used when determining baseline mass emissions of the various pollutants: Table 2.--Summer and Winter Baseline Fuel Properties ------------------------------------------------------------------------ Fuel property Summer Winter ------------------------------------------------------------------------ Oxygen (wt %)..................................... 0.0 0.0 Sulfur (ppm)...................................... 339 338 RVP (psi)......................................... 8.7 11.5 E200 (%).......................................... 41.0 50.0 E300 (%).......................................... 83.0 83.0 Aromatics (vol %)................................. 32.0 26.4 Olefins (vol %)................................... 9.2 11.9 Benzene (vol %)................................... 1.53 1.64 ------------------------------------------------------------------------ (3) The baseline mass emissions for VOC, NOX and toxics given in Tables 3, 4 and 5 of this paragraph (b)(3) shall be used in conjunction with the complex model during the appropriate Phase and season: Table 3.--Baseline Exhaust Emissions ------------------------------------------------------------------------ Phase I Phase II ------------------------------------------- Exhaust pollutant Summer Winter Summer (mg/mile) (mg/mile) (mg/mile) Winter (mg/mile) ------------------------------------------------------------------------ VOC......................... 446 660 907 1341 NOX......................... 660 750 1340 1540 Benzene..................... 26.10 37.57 53.54 77.62 Acetaldehyde................ 2.19 3.57 4.44 7.25 Formaldehyde................ 4.85 7.73 9.70 15.34 1,3-Butadiene............... 4.31 7.27 9.38 15.84 POM......................... 1.50 2.21 3.04 4.50 ------------------------------------------------------------------------ Table 4.--Baseline Non-Exhaust Emissions (Summer Only) ------------------------------------------------------------------------ Phase I Phase II ------------------------------------------- Non-exhaust pollutant Region 1 Region 2 Region 1 (mg/mile) (mg/mile) (mg/mile) Region 2 (mg/mile) ------------------------------------------------------------------------ VOC......................... 860.48 769.10 559.31 492.07 Benzene..................... 9.66 8.63 6.24 5.50 ------------------------------------------------------------------------ Table 5.--Total Baseline VOC, NOX and Toxics Emissions -------------------------------------------------------------------------------------------------------------------------------------------------------- Summer (mg/mile) Winter (mg/mile) ----------------------------------------------------------------------------------------------- Pollutant Phase I Phase II Phase I Phase II ----------------------------------------------------------------------------------------------- Region 1 Region 2 Region 1 Region 2 Region 1 Region 2 Region 1 Region 2 -------------------------------------------------------------------------------------------------------------------------------------------------------- NOX..................................................... 660.0 660.0 1340.0 1340.0 750.0 750.0 1540.0 1540.0 VOC..................................................... 1306.5 1215.1 1466.3 1399.1 660.0 660.0 1341.0 1341.0 Toxics.................................................. 48.61 47.58 86.34 85.61 58.36 58.36 120.55 120.55 -------------------------------------------------------------------------------------------------------------------------------------------------------- (c) VOC performance. (1) The exhaust VOC emissions performance of gasolines shall be given by the following equations: VOCE=VOC(b)+(VOC(b) x Yvoc(t)/100) Yvoc(t)=[(w1 x Nv)+(w2 x Hv)-1] x 100 where VOCE=Exhaust VOC emissions in milligrams/mile Yvoc(t)=Exhaust VOC performance of the target fuel in terms of percentage change from baseline VOC(b)=Baseline exhaust VOC emissions as defined in paragraph (b)(2) of this section for the appropriate Phase and season Nv=[exp v1(t)]/[exp v1(b)] Hv=[exp v2(t)]/[exp v2(b)] w1=Weighting factor for normal emitters as defined in paragraph (b)(1) of this section for the appropriate Phase w2=Weighting factor for higher emitters as defined in paragraph (b)(1) of this section for the appropriate Phase v1(t)=Normal emitter VOC equation as defined in paragraph (c)(1)(i) of this section, evaluated using the target fuel's properties subject to paragraphs (c)(1) (iii) and (iv) of this section v2(t)=Higher emitter VOC equation as defined in paragraph (c)(1)(ii) of this section, evaluated using the target fuel's properties subject to paragraphs (c)(1) (iii) and (iv) of this section v1(b)=Normal emitter VOC equation as defined in paragraph (c)(1)(i) of this section, evaluated using the base fuel's properties v2(b)=Higher emitter VOC equation as defined in paragraph (c)(1)(ii) of this section, evaluated using the base fuel's properties (i) Consolidated VOC equation for normal emitters. v1=(-0.003641 x OXY)+(0.0005219 x SUL)+(0.0289749 x RVP)+(-0.014470 x E200)+(-0.068624 x E300)+(0.0323712 x ARO)+(-0.002858 x OLE)+(0.00010 72 x E2002)+(0.0004087 x E3002)+(-0.0003481 x ARO x E300) (ii) VOC equation for higher emitters. v2=(-0.003626 x OXY)+(-5.40X10- \5\ x SUL)+(0.043295 x RVP)+(-0.013504 x E200)+(-0.062327 x E300)+(0.028 2042 x ARO)+(-0.002858 x OLE)+(0.000106 x E200\2\)+(0.000408 x E300\2\)+ (-0.000287 x ARO x E300) (iii) Flat line extrapolations. (A) During Phase I, fuels with E200 values greater than 65.83 percent shall be evaluated with the E200 fuel parameter set equal to 65.83 percent when calculating Yvoc(t) and VOCE using the equations described in paragraphs (c)(1) (i) and (ii) of this section. Fuels with E300 values greater than E300* (calculated using the equation E300*=80.32+[0.390 x ARO]) shall be evaluated with the E300 parameter set equal to E300* when calculating VOCE using the equations described in paragraphs (c)(1) (i) and (ii) of this section. For E300* values greater than 94, the linearly extrapolated model presented in paragraph (c)(1)(iv) of this section shall be used. (B) During Phase II, fuels with E200 values greater than 65.52 percent shall be evaluated with the E200 fuel parameter set equal to 65.52 percent when calculating VOCE using the equations described in paragraphs (c)(1) (i) and (ii) of this section. Fuels with E300 values greater than E300* (calculated using the equation E300*=79.75+[0.385 x ARO]) shall be evaluated with the E300 parameter set equal to E300* when calculating VOCE using the equations described in paragraphs (c)(1) (i) and (ii) of this section. For E300* values greater than 94, the linearly extrapolated model presented in paragraph (c)(1)(iv) of this section shall be used. (iv) Linear extrapolations. (A) The equations in paragraphs (c)(1) (i) and (ii) of this section shall be used within the allowable range of E300, E200, and ARO for the appropriate Phase, as defined in Table 6: Table 6.--Allowable Ranges of E200, E300, and ARO for the Exhaust VOC Equations in Paragraphs (c)(1)(i) and (ii) of This Section ------------------------------------------------------------------------ Phase I Phase II ----------------------------------------- Fuel parameter Lower Higher Lower Higher limit limit limit limit ------------------------------------------------------------------------ E200.......................... 33.00 65.83 33.00 65.52 E300.......................... 72.00 \1\Variabl e 72.00 \2\Variabl e ARO........................... 18.00 46.00 18.00 46.00 ------------------------------------------------------------------------ \1\Higher E300 Limit=80.32+[0.390 x (ARO)]. \2\Higher E300 Limit=79.75+[0.385 x (ARO)]. (B) For fuels with E200, E300 and ARO levels outside the ranges defined in Table 6, Yvoc(t) shall be defined as: For Phase I: Yvoc(t)=100% x 0.52 x [exp(v1(et)) /exp(v1(b))-1] +100% x 0.48 x [exp(v2(et)) /exp(v2(b))-1] +{[100% x 0.52 x exp(v1(et)) /exp(v1(b))] x [{[(0.0002144 x E200et) -0.014470] x E200} +{[(0.0008174 x E300et) -0.068624-(0.000348 x AROet)] x E300}+{[(-0.000348 x E300et) +0.0323712] x ARO}]} +{[100% x 0.48 x exp(v2(et)) / exp(v2(b))] x [{[(0.000212 x E200et) -0.01350] x E200} +{[(0.000816 x E300et) -0.06233-(0.00029 x AROet)] x E300}+{[(-0.00029 x E300et) +0.028204] x ARO}]} For Phase II: Yvoc(t)=100% x 0.444 x [exp(v1(et)) /exp(v1(b))-1] +100% x 0.556 x [exp(v2(et)) /exp(v2(b))-1] +{[100% x 0.444 x exp(v1(et)) /exp(v1(b))] x [{[(0.0002144 x E200et) 0.014470] x E200} +{[(0.0008174 x E300et) -0.068624-(0.000348 x AROet)] x E300}+{[(-0.000348 x E300et) +0.0323712] x ARO}]} +{[100% x 0.556 x exp(v2(et)) / exp(v2(b))] x [{[(0.000212 x E200et) -0.01350] x E200}+ {[(0.000816 x E300et) -0.06233-(0.00029 x AROet)] x E300}+{[(-0.00029 x E300et) +0.028204] x ARO}]} where v1, v2=The equations defined in paragraphs (c)(1) (i) and (ii) of this section et=Collection of fuel parameters for the ``edge target'' fuel. These parameters are defined in paragraphs (c)(1)(iv)(C) and (D) of this section v1(et)=The function v1 evaluated with ``edge target'' fuel parameters, which are defined in paragraphs (c)(1)(iv)(C) and (D) of this section v2(et)=The function v2 evaluated with ``edge target'' fuel parameters, which are defined in paragraphs (c)(1)(iv)(C) and (D) of this section v1(b)=The function v1 evaluated with the appropriate baseline fuel defined in paragraph (b)(2) of this section v2(b)=The function v2 evaluated with the appropriate baseline fuel defined in paragraph (b)(2) of this section E200et=The value of E200 for the ``edge target'' fuel, as defined in paragraphs (c)(1)(iv)(C) and (D) of this section E300et=The value of E300 for the ``edge target'' fuel, as defined in paragraphs (c)(1)(iv)(C) and (D) of this section AROet=The value of ARO for the ``edge target'' fuel, as defined in paragraphs (c)(1)(iv)(C) and (D) of this section. (C) During Phase I, the ``edge target'' fuel shall be identical to the target fuel for all fuel parameters, with the following exceptions: (1) If the E200 level of the target fuel is less than 33 volume percent, then the E200 value for the ``edge target'' fuel shall be set equal to 33 volume percent. (2) If the aromatics level of the target fuel is less than 18 volume percent, then the ARO value for the ``edge target'' fuel shall be set equal to 18 volume percent. (3) If the aromatics level of the target fuel is greater than 46 volume percent, then the ARO value for the ``edge target'' fuel shall be set equal to 46 volume percent. (4) If the E300 level of the target fuel is less than 72 volume percent, then the E300 value for the ``edge target'' fuel shall be set equal to 72 volume percent. (5) If the E300 level of the target fuel is greater than 95 volume percent, then the E300 value for the ``edge target'' fuel shall be set equal to 95 volume percent. (6) If [80.32+(0.390 x ARO)] exceeds 94 for the target fuel, then the E300 value for the ``edge target'' fuel shall be set equal to 94 volume percent. (7) If the E200 level of the target fuel is less than 33 volume percent, then E200 shall be set equal to (E200-33 volume percent). (8) If the E200 level of the target fuel equals or exceeds 33 volume percent, then E200 shall be set equal to zero. (9) If the aromatics level of the target fuel is less than 18 volume percent, then ARO shall be set equal to (ARO-18 volume percent). If the aromatics level of the target fuel is less than 10 volume percent, then ARO shall be set equal to 8 volume percent. (10) If the aromatics level of the target fuel is greater than 46 volume percent, then ARO shall be set equal to (ARO-46 volume percent). (11) If neither of the conditions established in paragraphs (c)(1)(iv)(C)(8) and (9) of this section are met, then ARO shall be set equal to zero. (12) If the E300 level of the target fuel is less than 72 volume percent, then E300 shall be set equal to (E300-72 volume percent). (13) If the E300 level of the target fuel is less than 94 volume percent and [80.32+(0.390 x ARO)] also is greater than 94, then E300 shall be set equal to (E300-94 volume percent). If the E300 level of the target fuel is greater than 95 volume percent and [80.32+(0.390 x ARO)] also is greater than 94, then E300 shall be set equal to 1 volume percent. (14) If neither of the conditions established in paragraphs (c)(1)(iv)(C)(11) and (12) of this section are met, then E300 shall be set equal to zero. (D) During Phase II, the ``edge target'' fuel is identical to the target fuel for all fuel parameters, with the following exceptions: (1) If the E200 level of the target fuel is less than 33 volume percent, then the E200 value for the ``edge target'' fuel shall be set equal to 33 volume percent. (2) If the aromatics level of the target fuel is less than 18 volume percent, then the ARO value for the ``edge target'' fuel shall be set equal to 18 volume percent. (3) If the aromatics level of the target fuel is greater than 46 volume percent, then the ARO value for the ``edge target'' fuel shall be set equal to 46 volume percent. (4) If the E300 level of the target fuel is less than 72 volume percent, then the E300 value for the ``edge target'' fuel shall be set equal to 72 volume percent. (5) If the E300 level of the target fuel is greater than 95 volume percent, then the E300 value for the ``edge target'' fuel shall be set equal to 95 volume percent. (6) If [79.75+(0.385 x ARO)] exceeds 94 for the target fuel, then the E300 value for the ``edge target'' fuel shall be set equal to 94 volume percent. (7) If the E200 level of the target fuel is less than 33 volume percent, then E200 shall be set equal to (E200-33 volume percent). (8) If the E200 level of the target fuel equals or exceeds 33 volume percent, then E200 shall be set equal to zero. (9) If the aromatics level of the target fuel is less than 18 volume percent and greater than or equal to 10 volume percent, then ARO shall be set equal to (ARO-18 volume percent). If the aromatics level of the target fuel is less than 10 volume percent, then ARO shall be set equal to 8 volume percent. (10) If the aromatics level of the target fuel is greater than 46 volume percent, then ARO shall be set equal to (ARO-46 volume percent). (11) If neither of the conditions established in paragraphs (c)(1)(iv)(D)(8) and (9) of this section are met, then ARO shall be set equal to zero. (12) If the E300 level of the target fuel is less than 72 volume percent, then E300 shall be set equal to (E30'0-72 volume percent). (13) If the E300 level of the target fuel is less than 94 volume percent and [79.75+(0.385 x ARO)] also is greater than 94, then E300 shall be set equal to (E300-94 volume percent). If the E300 level of the target fuel is greater than 95 volume percent and [79.75+(0.385 x ARO)] also is greater than 94, then E300 shall be set equal to 1 volume percent. (14) If neither of the conditions established in paragraphs (c)(1)(iv)(D)(11) and (12) of this section are met, then E300 shall be set equal to zero. (2) The winter exhaust VOC emissions performance of gasolines shall be given by the equations presented in paragraph (c)(1) of this section with the RVP value set to 8.7 psi for both the baseline and target fuels. (3) The nonexhaust VOC emissions performance of gasolines in VOC Control Region 1 shall be given by the following equations, where: VOCNE1=Total nonexhaust emissions of volatile organic compounds in VOC Control Region 1 in grams per mile VOCDI1=Diurnal emissions of volatile organic compounds in VOC Control Region 1 in grams per mile VOCHS1=Hot soak emissions of volatile organic compounds in VOC Control Region 1 in grams per mile VOCRL1=Running loss emissions of volatile organic compounds in VOC Control Region 1 in grams per mile VOCRF1=Refueling emissions of volatile organic compounds in VOC Control Region 1 in grams per mile (i) During Phase I: VOCNE1=VOCDI1+VOCHS1+ VOCRL1+VOCRF1 VOCDI1=[0.00736 x (RVP\2\)]-[0.0790 x RVP]+0.2553 VOCHS1=[0.01557 x (RVP\2\)]-[0.1671 x RVP]+0.5399 VOCRL1=[0.00279 x (RVP\2\)]-[0.1096 x RVP]-0.7340 VOCRF1=[0.006668 x RVP]-0.0180 (ii) During Phase II: VOCNE1=VOCDI1+VOCHS1+ VOCRL1+VOCRF1 VOCDI1=[0.007385 x (RVP\2\)]-[0.08981 x RVP]+0.3158 VOCHS1=[0.006654 x (RVP\2\)]-[0.08009 x RVP]+0.2846 VOCRL1=[0.017768 x (RVP\2\)]-[0.18746 x RVP]+0.6146 VOCRF1=[0.0004767 x RVP]+0.011859 (4) The nonexhaust VOC emissions performance of gasolines in VOC Control Region 2 shall be given by the following equations, where: VOCNE2=Total nonexhaust emissions of volatile organic compounds in VOC Control Region 2 in grams per mile VOCDI2=Diurnal emissions of volatile organic compounds in VOC Control Region 2 in grams per mile VOCHS2=Hot soak emissions of volatile organic compounds in VOC Control Region 2 in grams per mile VOCRL2=Running loss emissions of volatile organic compounds in VOC Control Region 2 in grams per mile VOCRF2=Refueling emissions of volatile organic compounds in VOC Control Region 2 in grams per mile (i) During Phase I: VOCNE2=VOCDI2+VOCHS2 +VOCRL2+VOCRF2 VOCDI2=[0.006818 x (RVP\2\)]-[0.07682 x RVP]+0.2610 VOCHS2=[0.014421 x (RVP\2\)]-[0.16248 x RVP]+0.5520 VOCRL2=[0.016255 x (RVP\2\)]-[0.1306 x RVP]+0.2963 VOCRF2=[0.006668 x RVP]-0.0180 (ii) During Phase II: VOCNE2=VOCDI2+VOCHS2+ VOCRL2+VOCRF2 VOCDI2=[0.004775 x (RVP\2\)]-[0.05872 x RVP]+0.21306 VOCHS2=[0.006078 x (RVP\2\)]-[0.07474 x RVP]+0.27117 VOCRL2=[0.016169 x (RVP\2\)][0.17206 x RVP]+0.56724 VOCRF2=[0.004767 x RVP]+0.011859 (5) Winter VOC emissions shall be given by VOCE, as defined in paragraph (c)(2) of this section, using the appropriate baseline emissions given in paragraph (b)(3) of this section. Total nonexhaust VOC emissions shall be set equal to zero under winter conditions. (6) Total VOC emissions. (i) Total summer VOC emissions shall be given by the following equations: VOCS1=(VOCE/1000)+VOCNE1 VOCS2=(VOCE/1000)+VOCNE2 VOCS1=Total summer VOC emissions in VOC Control Region 1 in terms of grams per mile VOCS2=Total summer VOC emissions in VOC Control Region 2 in terms of grams per mile (ii) Total winter VOC emissions shall be given by the following equations: VOCW=(VOCE/1000) VOCW=Total winter VOC emissions in terms of grams per mile (7) Phase I total VOC emissions performance. (i) The total summer VOC emissions performance of the target fuel in percentage terms from baseline levels shall be given by the following equations during Phase I: VOCS1%=[100% x (VOCS1-1.306 g/mi)]/(1.306 g/mi) VOCS2%=[100% x (VOCS2-1.215 g/mi)]/(1.215 g/mi) VOC1%=Percentage change in VOC emissions from baseline levels in VOC Control Region 1 VOC2%=Percentage change in VOC emissions from baseline levels in VOC Control Region 2 (ii) The total winter VOC emissions performance of the target fuel in percentage terms from baseline levels shall be given by the following equations during Phase I: VOCW%=[100% x (VOCW-0.660 g/mi)]/(0.660 g/mi) VOCW%=Percentage change in winter VOC emissions from baseline levels (8) Phase II total VOC emissions performance. (i) The total summer VOC emissions performance of the target fuel in percentage terms from baseline levels shall be given by the following equations during Phase II: VOCS1%=[100% x (VOCS1-1.4663 g/mi)]/(1.4663 g/mi) VOCS2%=[100% x (VOCS2-1.3991 g/mi)]/(1.3991 g/mi) (ii) The total winter VOC emissions performance of the target fuel in percentage terms from baseline levels shall be given by the following equation during Phase II: VOCW%=[100% x (VOC-1.341 g/mi)]/(1.341 g/mi) for (d) NOX performance. (1) The summer NOX emissions performance of gasolines shall be given by the following equations: NOX=NOX(b)+[NOX(b) x Y(t)/100] YNOX(t)=[(w1 x Nn)+(w2 x Hn)-1] x 100 where NOX=NOX emissions in milligrams/mile YNOx(t)=NOX performance of target fuel in terms of percentage change from baseline NOX(b)=Baseline NOX emissions as defined in paragraph (b)(2) of this section for the appropriate phase and season Nn=exp n1(t)/exp n1(b) Hn=exp n2(t)/exp n2(b) w1=Weighting factor for normal emitters as defined in paragraph (b)(1) of this section for the appropriate Phase w2=Weighting factor for higher emitters as defined in paragraph (b)(1) of this section for the appropriate Phase n1(t)=Normal emitter NOX equation as defined in paragraph (d)(1)(i) of this section, evaluated using the target fuel's properties subject to paragraphs (d)(1)(iii) and (iv) of this section n2(t)=Higher emitter NOX equation as defined in paragraph (d)(1)(ii) of this section, evaluated using the target fuel's properties subject to paragraphs (d)(1)(iii) and (iv) of this section n1(b)=Normal emitter NOX equation as defined in paragraph (d)(1)(i) of this section, evaluated using the base fuel's properties n2(b)=Higher emitter NOX equation as defined in paragraph (d)(1)(ii) of this section, evaluated using the base fuel's properties (i) Consolidated equation for normal emitters. n1=(0.0018571 x OXY)+ (0.0006921 x SUL) +(0.0090744 x RVP)+ (0.0009310 x E200)+ (0.0008460 x E300)+ (0.0083632 x ARO)+ (-0.002774 x OLE)+ (-6.63X10-7 x SUL\2\)+ (-0.000119 x ARO\2\)+ (0.0003665 x OLE\2\) (ii) Equation for higher emitters. n2=(-0.00913 x OXY)+ (0.000252 x SUL)+ (-0.01397 x RVP) +(0.000931 x E200)+ (-0.00401 x E300)+ (0.007097 x ARO) +(-0.00276 x OLE) +(0.0003665 x OLE\2\)+ (-7.995x10-5 x ARO\2\) (iii) Flat line extrapolations. (A) During Phase I, fuels with olefin levels less than 3.77 volume percent shall be evaluated with the OLE fuel parameter set equal to 3.77 volume percent when calculating NOX performance using the equations described in paragraphs (d)(1)(i) and (ii) of this section. Fuels with aromatics levels greater than 36.2 volume percent shall be evaluated with the ARO fuel parameter set equal to 36.2 volume percent when calculating NOX performance using the equations described in paragraphs (d)(1)(i) and (ii) of this section. (B) During Phase II, fuels with olefin levels less than 3.77 volume percent shall be evaluated with the OLE fuel parameter set equal to 3.77 volume percent when calculating NOX performance using the equations described in paragraphs (d)(1)(i) and (ii) of this section. Fuels with aromatics levels greater than 36.8 volume percent shall be evaluated with the ARO fuel parameter set equal to 36.8 volume percent when calculating NOX performance using the equations described in paragraphs (d)(1)(i) and (ii) of this section. (iv) Linear extrapolations. (A) The equations in paragraphs (d)(1)(i) and (ii) of this section shall be used within the allowable range of SUL, E300, OLE, and ARO for the appropriate Phase, as defined in the following Table 7: Table 7.--Allowable Ranges of SUL, OLE, and ARO for the NOX Equations in Paragraphs (d)(1)(i) and (ii) of This Section ------------------------------------------------------------------------ Phase I Phase II Fuel parameter ------------------------------------------- Low end High end Low end High end ------------------------------------------------------------------------ SUL......................... 10.0 450.0 10.0 450.0 E300........................ 70.0 95.0 70.0 95.0 OLE......................... 3.77 19.0 3.77 19.0 ARO......................... 18.0 36.2 18.0 36.8 ------------------------------------------------------------------------ (B) For fuels with SUL, E300, OLE and ARO levels outside the ranges defined in Table 7 of paragraph (d)(1)(iv)(A) of this section, YNOx(t) shall be defined as: For Phase I: YNOx(t) = 100% x 0.82 x [exp(n1(et)) / exp(n1(b)) - 1] + 100% x 0.18 x [exp(n2(et) / exp(n2(b)) - 1] + {[100% x 0.82 x [exp(n1(et)) / exp(n1(b))] x [{[(-0.00000133 x SULet) + 0.000692] x SUL} + {[(-0.000238 x AROet) + 0.0083632] x ARO} + {[(0.000733 x OLEet) - 0.002774] x OLE}]} + {[100% x 0.18 x [exp(n2(et)) / exp(n2(b))] x [{[(-0.0001599 x AROet) + 0.007097] x ARO} + {[(0.000732 x OLEet) - 0.00276] x OLE}]} For Phase II: YNOx(t) = 100% x 0.738 x [exp(n1(et)) / exp(n1(b)) - 1] + 100% x 0.262 x [exp(n2(et) / exp(n2(b)) - 1] + {[100% x 0.738 x [exp(n1(et)) / exp(n1(b))] x [{[(-0.00000133 x SULet) + 0.000692] x SUL} + {[(-0.000238 x AROet) + 0.0083632] x ARO} + {[(0.000733 x OLEet) - 0.002774] x OLE}]} + {[100% x 0.262 x [exp(n2(et)) / exp(n2(b))] x [{[(-0.0001599 x AROet) + 0.007097] x ARO} + {[(0.000732 x OLEet) - 0.00276] x OLE}]} where n1, n2=The equations defined in paragraphs (d)(1) (i) and (ii) of this section. et=Collection of fuel parameters for the ``edge target'' fuel. These parameters are defined in paragraphs (d)(1)(iv) (C) and (D) of this section. n1(et)=The function n1 evaluated with ``edge target'' fuel parameters, which are defined in paragraph (d)(1)(iv)(C) of this section. n2(et)=The function n2 evaluated with ``edge target'' fuel parameters, which are defined in paragraph (d)(1)(iv)(C) of this section. n1(b)=The function n1 evaluated with the appropriate baseline fuel parameters defined in paragraph (b)(2) of this section. n2(b)=The function n2 evaluated with the appropriate baseline fuel parameters defined in paragraph (b)(2) of this section. SULet=The value of SUL for the ``edge target'' fuel, as defined in paragraph (d)(1)(iv)(C) of this section. AROet=The value of ARO for the ``edge target'' fuel, as defined in paragraph (d)(1)(iv)(C) of this section. OLEet=The value of OLE for the ``edge target'' fuel, as defined in paragraph (d)(1)(iv)(C) of this section. (C) For both Phase I and Phase II, the ``edge target'' fuel is identical to the target fuel for all fuel parameters, with the following exceptions: (1) If the sulfur level of the target fuel is less than 10 parts per million, then the value of SUL for the ``edge target'' fuel shall be set equal to 10 parts per million. (2) If the sulfur level of the target fuel is greater than 450 parts per million, then the value of SUL for the ``edge target'' fuel shall be set equal to 450 parts per million. (3) If the aromatics level of the target fuel is less than 18 volume percent, then the value of ARO for the ``edge target'' fuel shall be set equal to 18 volume percent. (4) If the olefins level of the target fuel is greater than 19 volume percent, then the value of OLE for the ``edge target'' fuel shall be set equal to 19 volume percent. (5) If the E300 level of the target fuel is greater than 95 volume percent, then the value of E300 for the ``edge target'' fuel shall be equal to 95 volume percent. (6) If the sulfur level of the target fuel is less than 10 parts per million, then SUL shall be set equal to (SUL-10 parts per million). (7) If the sulfur level of the target fuel is greater than 450 parts per million, then SUL shall be set equal to (SUL-450 parts per million). (8) If the sulfur level of the target fuel is neither less than 10 parts per million nor greater than 450 parts per million, SUL shall be set equal to zero. (9) If the aromatics level of the target fuel is less than 18 volume percent and greater than 10 volume percent, then ARO shall be set equal to (ARO-18 volume percent). If the aromatics level of the target fuel is less than 10 volume percent, then ARO shall be set equal to 8 volume percent. (10) If the aromatics level of the target fuel is greater than or equal to 18 volume percent, then ARO shall be set equal to zero. (11) If the olefins level of the target fuel is greater than 19 volume percent, then OLE shall be set equal to (OLE-19 volume percent). (12) If the olefins level of the target fuel is less than or equal to 19 volume percent, then OLE shall be set equal to zero. (2) The winter NOX emissions performance of gasolines shall be given by the equations presented in paragraph (d)(1) of this section with the RVP value set to 8.7 psi. (3) The NOX emissions performance of the target fuel in percentage terms from baseline levels shall be given by the following equations: For Phase I: Summer NOX%=[100% x (NOX-0.660 g/mi)]/(0.660 g/mi) Winter NOX%=[100% x (NOX-0.750 g/mi)]/(0.750 g/mi) For Phase II: Summer NOX%=[100% x (NOX-1.340 g/mi)]/(1.340 g/mi) Winter NOX%=[100% x (NOX-1.540 g/mi)]/(1.540 g/mi) Summer NOX%=Percentage change in NOX emissions from summer baseline levels Winter NOX%=Percentage change in NOX emissions from winter baseline levels (e) Toxics performance--(1) Summer toxics performance. (i) Summer toxic emissions performance of gasolines in VOC Control Regions 1 and 2 shall be given by the following equations: TOXICS1=EXHBZ + FORM + ACET + BUTA + POM + NEBZ1 TOXICS2=EXHBZ + FORM + ACET + BUTA + POM + NEBZ2 where TOXICS1=Summer toxics performance in VOC Control Region 1 in terms of milligrams per mile. TOXICS2=Summer toxics performance in VOC Control Region 2 in terms of milligrams per mile. EXHBZ=Exhaust emissions of benzene in terms of milligrams per mile, as determined in paragraph (e)(4) of this section. FORM=Emissions of formaldehyde in terms of milligrams per mile, as determined in paragraph (e)(5) of this section. ACET=Emissions of acetaldehyde in terms of milligrams per mile, as determined in paragraph (e)(6) of this section. BUTA=Emissions of 1,3-butadiene in terms of milligrams per mile, as determined in paragraph (e)(7) of this section. POM=Polycyclic organic matter emissions in terms of milligrams per mile, as determined in paragraph (e)(8) of this section. NEBZ1=Nonexhaust emissions of benzene in VOC Control Region 1 in milligrams per mile, as determined in paragraph (e)(9) of this section. NEBZ2=Nonexhaust emissions of benzene in VOC Control Region 2 in milligrams per mile, as determined in paragraph (e)(10) of this section. (ii) The percentage change in summer toxics performance in VOC Control Regions 1 and 2 shall be given by the following equations: For Phase I: TOXICS1%=[100% x (TOXICS1-48.61 mg/mi)]/(48.61 mg/mi) TOXICS2%=[100% x (TOXICS2-47.59 mg/mi)]/(47.59 mg/mi) For Phase II: TOXICS1%=[100% x (TOXICS1-86.35 mg/mi)]/(86.35 mg/mi) TOXICS2%=[100% x (TOXICS2-85.61 mg/mi)]/(85.61 mg/mi) where TOXICS1%=Percentage change in summer toxics emissions in VOC Control Region 1 from baseline levels. TOXICS2%=Percentage change in summer toxics emissions in VOC Control Region 2 from baseline levels. (2) Winter toxics performance. (i) Winter toxic emissions performance of gasolines in VOC Control Regions 1 and 2 shall be given by the following equation, evaluated with the RVP set at 8.7 psi: TOXICW=[EXHBZ + FORM + ACET + BUTA + POM] where TOXICW=Winter toxics performance in VOC Control Regions 1 and 2 in terms of milligrams per mile. EXHBZ=Exhaust emissions of benzene in terms of milligrams per mile, as determined in paragraph (e)(4) of this section. FORM=Emissions of formaldehyde in terms of milligrams per mile, as determined in paragraph (e)(5) of this section. ACET=Emissions of acetaldehyde in terms of milligrams per mile, as determined in paragraph (e)(6) of this section. BUTA=Emissions of 1,3-butadiene in terms of milligrams per mile, as determined in paragraph (e)(7) of this section. POM=Polycyclic organic matter emissions in terms of milligrams per mile, as determined in paragraph (e)(8) of this section. (ii) The percentage change in winter toxics performance in VOC Control Regions 1 and 2 shall be given by the following equation: For Phase I: TOXICW%=[100% x (TOXICW-58.36 mg/mi)] / (58.36 mg/mi) For Phase II: TOXICW%=[100% x (TOXICW-120.55 mg/mi)] / (120.55 mg/mi) where TOXICW%=Percentage change in winter toxics emissions in VOC Control Regions 1 and 2 from baseline levels. (3) Year-round toxics performance. (i) Year-round toxics performance in VOC Control Regions 1 and 2 shall be given by the following equation for reformulated and Clean Air Act baseline gasolines: TOXICY1=[(0.396 x TOXICS1)+ (0.604 x TOXICW) ] TOXICY2=[(0.396 x TOXICS2)+ (0.604 x TOXICW) ] where TOXICY1=Year-round toxics performance in VOC Control Region 1 in terms of milligrams per mile. TOXICS1=Summer toxics performance in VOC Control Region 1 in terms of milligrams per mile, as determined in paragraph (e)(1)(i) of this section. TOXICY2=Year-round toxics performance in VOC Control Region 2 in terms of milligrams per mile. TOXICS2=Summer toxics performance in VOC Control Region 2 in terms of milligrams per mile, as determined in paragraph (e)(1)(i) of this section. TOXICW=Winter toxics performance in VOC Control Regions 1 and 2 in terms of milligrams per mile, as determined in paragraph (e)(2)(i) of this section. (ii) The percentage change in year-round toxics performance in VOC Control Regions 1 and 2 shall be given by the following equations: For Phase I: TOXICY1%=[100% x (TOXICY1-54.50 mg/mi)] / (54.50 mg/mi) TOXICY2%=[100% x (TOXICY2-54.09 mg/mi)] / (54.09 mg/mi) For Phase II: TOXICY1%=[100% x (TOXICY1-107.00 mg/mi)] / (107.00 mg/mi) TOXICY2%=[100% x (TOXICY2-106.71 mg/mi)] / (106.71 mg/mi) TOXICY1%=Percentage change in year-round toxics emissions in VOC Control Region 1 from baseline levels. TOXICY2%=Percentage change in year-round toxics emissions in VOC Control Region 2 from baseline levels. (4) Exhaust benzene emissions shall be given by the following equation, subject to paragragh (e)(4)(iii) of this section: EXHBZ=BENZ(b) + (BENZ(b) x YBEN(t)/100) YBEN(t)=[(w1 x Nb) + (w2 x Hb) - 1] x 100 where EXHBZ=Exhaust benzene emissions in milligrams/mile YBEN(t)=Benzene performance of target fuel in terms of percentage change from baseline. BENZ(b)=Baseline benzene emissions as defined in paragraph (b)(2) of this section for the appropriate phase and season. Nb=exp b1(t)/exp b1(b) Hb=exp b2(t)/exp b2(b) w1=Weighting factor for normal emitters as defined in paragraph (b)(1) of this section for the appropriate Phase. w2=Weighting factor for higher emitters as defined in paragraph (b)(1) of this section for the appropriate Phase. b1(t)=Normal emitter benzene equation, as defined in paragraph (e)(4)(i) of this section, evaluated using the target fuel's properties subject to paragraph (e)(4)(iii) of this section. b2(t)=Higher emitter benzene equation as defined in paragraph (e)(4)(ii) of this section, evaluated using the target fuel's properties subject to paragraph (e)(4)(iii) of this section. b1(b)=Normal emitter benzene equation as defined in paragraph (e)(4)(i) of this section, evaluated for the base fuel's properties. b2(b)=Higher emitter benzene equation, as defined in paragraph (e)(4)(ii) of this section, evaluated for the base fuel's properties. (i) Consolidated equation for normal emitters. b1=(0.0006197 x SUL)+(-0.003376 x E200)+(0.0265500 x ARO)+(0.222390 0 x BEN) (ii) Equation for higher emitters. b2=(-0.096047 x OXY)+(0.0003370 x SUL)+(0.0112510 x E300)+(0.011882 0 x ARO)+(0.2223180 x BEN) (iii) If the aromatics value of the target fuel is less than 10 volume percent, then an aromatics value of 10 volume percent shall be used when evaluating the equations given in paragraphs (e)(4) (i) and (ii) of this section. If the E300 value of the target fuel is greater than 95 volume percent, then E300 value of 95 volume percent shall be used when evaluating the equations given in paragraphs (e)(4) (i) and (ii) of this section. (5) Formaldehyde mass emissions shall be given by the following equation, subject to paragraphs (e)(5) (iii) and (iv) of this section: FORM=FORM(b)+(FORM(b) x YFORM(t)/100) YFORM(t)=[(w1 x Nf)+(w2 x Hf)-1] x 100 where FORM=Exhaust formaldehyde emissions in terms of milligrams/mile. YFORM(t)=Formaldehyde performance of target fuel in terms of percentage change from baseline. FORM(b)=Baseline formaldehyde emissions as defined in paragraph (b)(2) of this section for the appropriate Phase and season. Nf=exp f1(t)/exp f1(b) Hf=exp f2(t)/exp f2(b) w1=Weighting factor for normal emitters as defined in paragraph (b)(1) of this section for the appropriate Phase. w2=Weighting factor for higher emitters as defined in paragraph (b)(1) of this section for the appropriate Phase. f1(t)=Normal emitter formaldehyde equation as defined in paragraph (e)(5)(i) of this section, evaluated using the target fuel's properties subject to paragraphs (e)(5) (iii) and (iv) of this section. f2(t)=Higher emitter formaldehyde equation as defined in paragraph (e)(5)(ii) of this section, evaluated using the target fuel's properties subject to paragraphs (e)(5) (iii) and (iv) of this section. f1(b)=Normal emitter formaldehyde equation as defined in paragraph (e)(5)(i) of this section, evaluated for the base fuel's properties. f2(b)=Higher emitter formaldehyde equation as defined in paragraph (e)(5)(ii) of this section, evaluated for the base fuel's properties. (i) Consolidated equation for normal emitters. f1=(-0.010226 x E300)+(-0.007166 x ARO)+(0.0462131 x MTB) (ii) Equation for higher emitters. f2=(-0.010226 x E300)+(-0.007166 x ARO)+(-0.031352 x OLE)+(0.046213 1 x MTB) (iii) If the aromatics value of the target fuel is less than 10 volume percent, then an aromatics value of 10 volume percent shall be used when evaluating the equations given in paragraphs (e)(5) (i) and (ii) of this section. If the E300 value of the target fuel is greater than 95 volume percent, then an E300 value of 95 volume percent shall be used when evaluating the equations given in paragraphs (e)(5) (i) and (ii) of this section. (iv) When calculating formaldehyde emissions and emissions performance, oxygen in the form of alcohols which are more complex or have higher molecular weights than ethanol shall be evaluated as if it were in the form of ethanol. Oxygen in the form of methyl ethers other than TAME and MTBE shall be evaluated as if it were in the form of MTBE. Oxygen in the form of ethyl ethers other than ETBE shall be evaluated as if it were in the form of ETBE. Oxygen in the form of non- methyl, non-ethyl ethers shall be evaluated as if it were in the form of ETBE. (6) Acetaldehyde mass emissions shall be given by the following equation, subject to paragraphs (e)(6) (iii) and (iv) of this section: ACET=ACET(b)+(ACET(b) x YACET(t)/100) YACET(t)=[(w1 x Na)+(w2 x Ha)-1] x 100 where ACET=Exhaust acetaldehyde emissions in terms of milligrams/mile YACET(t)=Acetaldehyde performance of target fuel in terms of percentage change from baseline ACET(b)=Baseline acetaldehyde emissions as defined in paragraph (b)(2) of this section for the appropriate phase and season Na=exp a1(t)/exp a1(b) Ha=exp a2(t)/exp a2(b) w1=Weighting factor for normal emitters as defined in paragraph (b)(1) of this section for the appropriate phase w2=Weighting factor for higher emitters as defined in paragraph (b)(1) of this section for the appropriate phase a1(t)=Normal emitter acetaldehyde equation as defined in paragraph (e)(6)(i) of this section, evaluated using the target fuel's properties, subject to paragraphs (e)(6) (iii) and (iv) of this section a2(t)=Higher emitter acetaldehyde equation as defined in paragraph (e)(6)(ii) of this section, evaluated using the target fuel's properties, subject to paragraphs (e)(6) (iii) and (iv) of this section a1(b)=Normal emitter acetaldehyde equation as defined in paragraph (e)(6)(i) of this section, evaluated for the base fuel's properties f2(b)=Higher emitter acetaldehyde equation as defined in paragraph (e)(6)(ii) of this section, evaluated for the base fuel's properties (i) Consolidated equation for normal emitters. a1=(0.0002631 x SUL)+ (0.0397860 x RVP)+(-0.012172 x E300)+(-0.005525 x ARO)+(-0.009594 x MTB) +(0.3165800 x ETB)+(0.2492500 x ETH) (ii) Equation for higher emitters. a2=(0.0002627 x SUL)+ (-0.012157 x E300)+(-0.005548 x ARO)+(-0.055980 x MTB)+(0.3164665 x ETB) +(0.2493259 x ETH) (iii) If the aromatics value of the target fuel is less than 10 volume percent, then an aromatics value of 10 volume percent shall be used when evaluating the equations given in paragraphs (e)(6) (i) and (ii) of this section. If the E300 value of the target fuel is greater than 95 volume percent, then an E300 value of 95 volume percent shall be used when evaluating the equations given in paragraphs (e)(6) (i) and (ii) of this section. (iv) When calculating acetaldehyde emissions and emissions performance, oxygen in the form of alcohols which are more complex or have higher molecular weights than ethanol shall be evaluated as if it were in the form of ethanol. Oxygen in the form of methyl ethers other than TAME and MTBE shall be evaluated as if it were in the form of MTBE. Oxygen in the form of ethyl ethers other than ETBE shall be evaluated as if it were in the form of ETBE. Oxygen in the form of non- methyl, non-ethyl ethers shall be evaluated as if it were in the form of ETBE. (7) 1,3-butadiene mass emissions shall be given by the following equations, subject to paragraph (e)(7)(iii) of this section: BUTA=BUTA(b)+(BUTA(b) x YBUTA(t)/100) YBUTA(t)=[(w1 x Nd)+(w2 x Hd)-1] x 100 where BUTA=Exhaust 1,3-butadiene emissions in terms of milligrams/mile YBUTA(t)=1,3-butadiene performance of target fuel in terms of percentage change from baseline BUTA(b)=Baseline 1,3-butadiene emissions as defined in paragraph (b)(2) of this section for the appropriate phase and season Nd=exp d1(t)/exp d1(b) Hd=exp d2(t)/exp d2(b) w1=Weighting factor for normal emitters as defined in paragraph (b)(1) of this section for the appropriate phase w2=Weighting factor for higher emitters as defined in paragraph (b)(1) of this section for the appropriate Phase. d1(t)=Normal emitter 1,3-butadiene equation as defined in paragraph (e)(7)(i) of this section, evaluated using the target fuel's properties, subject to paragraph (e)(7)(iii) of this section. d2(t)=Higher emitter 1,3-butadiene equation as defined in paragraph (e)(7)(ii) of this section, evaluated using the target fuel's properties, subject to paragraph (e)(7)(iii) of this section. d1(b)=Normal emitter 1,3-butadiene equation as defined in paragraph (e)(7)(i) of this section, evaluated for the base fuel's properties. d2(b)=Higher emitter 1,3-butadiene equation as defined in paragraph (e)(7)(ii) of this section, evaluated for the base fuel's properties. (i) Consolidated equation for normal emitters. d1=(0.0001552 x SUL)+ (-0.007253 x E200)+(-0.014866 x E300)+(-0.004005 x ARO)+(0.0282350 x OLE ) (ii) Equation for higher emitters. d2=(-0.060771 x OXY)+ (-0.007311 x E200)+(-0.008058 x E300)+(-0.004005 x ARO)+(0.0436960 x OLE ) (iii) If the aromatics value of the target fuel is less than 10 volume percent, then an aromatics value of 10 volume percent shall be used when evaluating the equations given in paragraphs (e)(7) (i) and (ii) of this section. If the E300 value of the target fuel is greater than 95 volume percent, then an E300 value of 95 volume percent shall be used when evaluating the equations given in paragraphs (e)(7) (i) and (ii) of this section. (8) Polycyclic organic matter mass emissions shall be given by the following equation: POM=0.003355 x VOCE POM=Polycyclic organic matter emissions in terms of milligrams per mile VOCE=Non-methane, non-ethane exhaust emissions of volatile organic compounds in grams per mile. (9) Nonexhaust benzene emissions in VOC Control Region 1 shall be given by the following equations for both Phase I and Phase II: NEBZ1=DIBZ1+HSBZ1+RLBZ1+RFBZ1 HSBZ1=10 x BEN x HSVOC1 x [(-0.0342 x MTB)+(-0.080274 x RVP)+1.4448] DIBZ1=10 x BEN x DIVOC1 x [(-0.0290 x MTB)+(-0.080274 x RVP)+1.3758] RLBZ1=10 x BEN x RLVOC1 x [(-0.0342 x MTB)+(-0.080274 x RVP)+1.4448] RFBZ1=10 x BEN x RFVOC1 x [(-0.0296 x MTB)+(-0.081507 x RVP)+1.3972] where NEBZ1=Nonexhaust emissions of volatile organic compounds in VOC Control Region 1 in milligrams per mile. DIBZ1=Diurnal emissions of volatile organic compounds in VOC Control Region 1 in milligrams per mile. HSBZ1=Hot soak emissions of volatile organic compounds in VOC Control Region 1 in milligrams per mile. RLBZ1=Running loss emissions of volatile organic compounds in VOC Control Region 1 in milligrams per mile. RFBZ1=Refueling emissions of volatile organic compounds in VOC Control Region 1 in grams per mile. VOCDI1=Diurnal emissions of volatile organic compounds in VOC Control Region 1 in milligrams per mile, as determined in paragraph (c)(3) of this section. VOCHS1=Hot soak emissions of volatile organic compounds in VOC Control Region 1 in milligrams per mile, as determined in paragraph (c)(3) of this section. VOCRL1=Running loss emissions of volatile organic compounds in VOC Control Region 1 in milligrams per mile, as determined in paragraph (c)(3) of this section. VOCRF1=Refueling emissions of volatile organic compounds in VOC Control Region 1 in milligrams per mile, as determined in paragraph (c)(3) of this section. (10) Nonexhaust benzene emissions in VOC Control Region 2 shall be given by the following equations for both Phase I and Phase II: NEBZ2=DIBZ2+HSBZ2+RLBZ2+RFBZ2 HSBZ2=10 x BEN x HSVOC2 x [(-0.0342 x MTB)+(-0.080274 x RVP)+1.4448] DIBZ2=10 x BEN x DIVOC2 x [(-0.0290 x MTB)+(-0.080274 x RVP)+1.3758] RLBZ2=10 x BEN x RLVOC2 x [(-0.0342 x MTB)+(-0.080274 x RVP)+1.4448] RFBZ2=10 x BEN x RFVOC2 x [(-0.0296 x MTB)+(-0.081507 x RVP)+1.3972] where NEBZ2=Nonexhaust emissions of volatile organic compounds in VOC Control Region 2 in milligrams per mile. DIBZ2=Diurnal emissions of volatile organic compounds in VOC Control Region 2 in milligrams per mile. HSBZ2=Hot soak emissions of volatile organic compounds in VOC Control Region 2 in milligrams per mile. RLBZ2=Running loss emissions of volatile organic compounds in VOC Control Region 2 in milligrams per mile. RFBZ2=Refueling emissions of volatile organic compounds in VOC Control Region 2 in grams per mile. VOCDI2=Diurnal emissions of volatile organic compounds in VOC Control Region 2 in milligrams per mile, as determined in paragraph (c)(4) of this section. VOCHS2=Hot soak emissions of volatile organic compounds in VOC Control Region 2 in milligrams per mile, as determined in paragraph (c)(4) of this section. VOCRL2=Running loss emissions of volatile organic compounds in VOC Control Region 2 in milligrams per mile, as determined in paragraph (c)(4) of this section. VOCRF2=Refueling emissions of volatile organic compounds in VOC Control Region 2 in milligrams per mile, as determined in paragraph (c)(4) of this section. (f) Limits of the model. (1) The equations described in paragraphs (a), (c), and (d) of this section shall be valid only for fuels with fuel properties that fall in the following ranges for reformulated gasolines and conventional gasolines: (i) For reformulated gasolines: ------------------------------------------------------------------------ Fuel property Acceptable range ------------------------------------------------------------------------ Oxygen.............. 0.00-3.70 weight percent. Sulfur.............. 0.0-500.0 parts per million by weight. RVP................. 6.4-10.0 pounds per square inch. E200................ 30.0-70.0 volume percent. E300................ 70.0-100.0 volume percent. Aromatics........... 0.0-50.0 volume percent. Olefins............. 0.00-25.0 volume percent. Benzene............. 0.0-2.0 volume percent. ------------------------------------------------------------------------ (ii) For conventional gasolines: ------------------------------------------------------------------------ Fuel property Acceptable range ------------------------------------------------------------------------ Oxygen.............. 0.00-3.70 weight percent. Sulfur.............. 0.0-1000.0 parts per million by weight. RVP................. 6.4-11.0 pounds per square inch. E200................ 30.0-70.0 volume percent. E300................ 70.0-100.0 volume percent. Aromatics........... 00.0-55.0 volume percent. Olefins............. 0.00-30.0 volume percent. Benzene............. 0.0-4.9 volume percent. ------------------------------------------------------------------------ (2) Fuels with one or more properties that do not fall within the ranges described in above shall not be certified or evaluated for their emissions performance using the complex emissions model described in paragraphs (c), (d), and (e) of this section. Sec. 80.46 Measurement of reformulated gasoline fuel parameters. (a) Sulfur. Sulfur content shall be determined using American Society for Testing and Materials (ASTM) standard method D-2622-92, entitled ``Standard Test Method for Sulfur in Petroleum Products by X- Ray Spectrometry.'' (b) Olefins. Olefin content shall be determined using ASTM standard method D-1319-93, entitled ``Standard Test Method for Hydrocarbon Types in Liquid Petroleum Products by Fluorescent Indicator Adsorption.'' (c) Reid vapor pressure (RVP). Reid Vapor Pressure (RVP) shall be determined using the procedure described in 40 CFR part 80, appendix E, Method 3. (d) Distillation. (1) Distillation parameters shall be determined using ASTM standard method D-86-90, entitled ``Standard Test Method for Distillation of Petroleum Products''; except that (2) The figures for repeatability and reproducibility given in degrees Fahrenheit in Table 9 in the ASTM method are incorrect, and shall not be used. (e) Benzene. (1) Benzene content shall be determined using ASTM standard method D-3606-92, entitled ``Standard Test Method for Determination of Benzene and Toluene in Finished Motor and Aviation Gasoline by Gas Chromatography''; except that (2) Instrument parameters must be adjusted to ensure complete resolution of the benzene, ethanol and methanol peaks because ethanol and methanol may cause interference with ASTM standard method D-3606-92 when present. (f) Aromatics. Aromatics content shall be determined by gas chromatography identifying and quantifying each aromatic compound as set forth in paragraph (f)(1) of this section. (1) (i) Detector. The detector is an atomic mass spectrometer detector (MSD). The detector may be set for either selective ion or scan mode. (ii) Method A. (A) The initial study of this method used a three component internal standard using the following calculations. (B) The calibration points are constructed by calculating an amount ratio and response ratio for each level of a particular peak in the instrument's calibration table. (C) The amount ratio is the amount of the compound divided by the amount of the internal standard for a given level. (D) The response ratio is the response of the compound divided by the response of the internal standard at this level. (E) The equation for the curve through the calibration points is calculated using the type fit and origin handling specified in the instrument's calibration table. In the initial study the fit was a second degree polynomial including a forced zero for the origin. (F) The response of the compound in a sample is divided by the response of the internal standard to provide a response ratio for that compound in the sample. (G) A corrected amount ratio for the unknown is calculated using the curve fit equation determined in paragragh (f)(1)(ii)(E) of this section. (H) The amount of the aromatic compound is equal to the corrected amount ratio times the Amount of Internal Standard. (I) The total aromatics in the sample is the sum of the amounts of the individual aromatic compounds in the sample. (J) An internal standard solution can be made with the following compounds at the listed concentrations in volume percent. Also listed is the Chemical Abstracts Service Registry Number (CAS), atomic mass unit (amu) on which the detector must be set at the corresponding retention time if used in the selective ion mode, retention times in minutes, and boiling point in deg.C. (Other, similar, boiling point materials can be used which are not found in gasoline.) Retention times are approximate and apply only to a 60 meter capillary column used in the initial study. Other columns and retention times can be used. (1) 4-methyl-2-pentanone, 50 vol% [108-10-1], 43.0 amu, 22.8 min., bp 118; (2) benzyl alcohol, 25 vol%, [100-51-6], 108 amu, 61.7 min., bp 205; (3) 1-octanol, [111-87-5], 25 vol%, 56.0 amu, 76.6 min., bp 196; (K) At least two calibration mixtures which bracket the measured total aromatics concentration must be made with a representative mixture of aromatic compounds. The materials and concentrations used in the highest concentration calibration level in the initial study for this method are listed in this paragraph (f)(1)(ii)(K). Also listed is the Chemical Abstracts Service Registry Number (CAS), atomic mass unit (amu) on which the detector must be set for the corresponding retention time if used in the selective ion mode, retention times in minutes, and in some cases boiling point in deg.C. The standards are made in 2,2,4- trimethylpentane (iso-octane), [540-84-1]. Other aromatic compounds, and retention times may be acceptable as long as the aromatic values produced meet the criteria found in the quality assurance section for the aromatic methods. ---------------------------------------------------------------------------------------------------------------- Boiling Compound Concentrations CAS No. AMU Retention point, vol % time, min. deg.C ---------------------------------------------------------------------------------------------------------------- Benzene..................................... 2.25 71-43-2 78 18.9 80.1 Methylbenzene............................... 2.5 108-88-3 91 25.5 111 Ethylbenzene................................ 2.25 100-41-4 91 34.1 136.2 1,3-Dimethylbenzene 1,4-Dimethylbenzene..... 5 108-38-3 91 35.1 136-138 1,2-dimethylbenzene......................... 10 95-47-6 91 38.1 144 (1-methylethyl)-benzene..................... 2.25 620-14-4 105 42.8 ............ Propylbenzene............................... 2.25 103-65-1 91 48.0 159.2 1-ethyl-2-methylbenzene..................... 2.25 611-14-3 105 49.3 165 1,2,4-trimethylbenzene...................... 2.25 95-63-6 105 50.9 169 1-ethyl-2-methylbenzene..................... 2.25 611-14-4 105 53.3 165 1,3-diethylbenzene.......................... 2.25 141-93-5 119 56.6 181 Butylbenzene................................ 2.25 104-51-8 91 60.7 183 1-methyl-2-(1-methylethyl)-benzene.......... 2.25 933-98-2 119 63.9 ............ 1-ethyl-3-methylbenzene..................... 2.25 620-14-4 105 64.2 ............ 1-methyl-4-iso-propylbenzene................ 2.25 99-87-6 119 69.0 177 2-ethyl-1,3-dimethylbenzene................. 2.25 2870-04-4 119 73.0 ............ 2-methylpropylbenzene....................... 2.25 538-93-2 91 75.0 ............ 1-methyl-3-(1-methylethyl)-benzene.......... 2.25 535-77-3 119 75.6 ............ 1-methyl-3-propylbenzene.................... 2.25 1074-43-7 105 78.9 ............ 2-ethyl-1,4-dimethylbenzene................. 2.25 1758-88-9 119 83.2 187 1-methyl-4-(methylethyl)-benzene............ 2.25 934-80-9 119 83.4 ............ 1-ethyl-2,4-dimethylbenzene................. 2.25 874-41-9 119 85.7 ............ (1,1-dimethylethy)-3-methylbenzene.......... 2.25 27138-21-2 133 87.3 ............ 1-ethyl-2,3-dimethylbenzene................. 2.25 933-98-2 119 88.7 ............ 1-(1,1-dimethylethyl)-3-methylbenzene....... 2.25 175-38-3 133 89.4 ............ 1-ethyl-1,4-dimethylbenzene................. 2.25 874-41-9 119 94.9 ............ 2-ethyl-1,3-dimethylbenzene................. 2.25 2870-04-4 119 100.9 ............ 1-ethyl-3,5-dimethylbenzene................. 2.25 934-74-7 119 102.5 ............ 1-2,4,5-tetramethylbenzene.................. 2.25 95-93-2 119 115.9 197 Pentylbenzene............................... 2.25 538-68-1 91 116 ............ Naphthalene................................. 2.25 191-20-3 128 118.4 198 3,5 dimethyl-iso-butylbenzene............... 2.25 98-19-1 147 118.5 205.5 ---------------------------------------------------------------------------------------------------------------- (iii) Method B. (A) Use a percent normalized format to determine the concentration of the individual compounds. No internal standard is used in this method. (B) The calculation of the aromatic compounds is done by developing calibration curves for each compound using the type fit and origin handling specified in the instrument's calibration table. (C) The amount of compound in a sample (the corrected amount) is calculated using the equation determined in paragraph (f)(1)(ii) of this section for that compound. (D) The percent normalized amount of a compound is calculated using the following equation: TR16FE94.001 where: An = percent normalized amount of a compound Ac = corrected amount of the compound As = sum of all the corrected amounts for all identified compounds in the sample (E) The total aromatics is the sum of all the percent normalized aromatic amounts in the sample. (F) This method allows quantification of non-aromatic compounds in the sample. However, correct quantification can only be achieved if the instrument's calibration table can identify the compounds that are responsible for at least 95 volume percent of the sample and meets the following quality control criteria. (2) Quality assurance. (i) The performance standards will be from repeated measurement of the calibration mixture, standard reference material, or process control gasoline. The uncertainty in the measured aromatics percentages in the standards must be less than 2.0 volume percent in the fuel at a 95% confidence level. (ii) If the bias of the standard mean is greater than 2% of the theoretical value, then the standard measurement and measurements of all samples measured subsequent to the previous standard measurement that met the performance criteria must be repeated after re-calibrating the instrument. (iii) Replicate samples must be within 3.0 volume percent of the previous sample or within 2.0 volume percent of the mean at the 95% confidence level. (3) Alternative test method. (i) Prior to January 1, 1997, any refiner or importer may determine aromatics content using ASTM standard method D-1319-93, entitled ``Standard Test Method for Hydrocarbon Types in Liquid Petroleum Products by Fluorescent Indicator Adsorption,'' for purposes of meeting any testing requirement involving aromatics content; provided that (ii) The refiner or importer test result is correlated with the method specified in paragraph (f)(1) of this section. (g) Oxygen and oxygenate content analysis. Oxygen and oxygenate content shall be determined by the gas chromatographic procedure using an oxygenate flame ionization detector (GC-OFID) as set out in paragraphs (g) (1) through (8) of this section. (1) Introduction; scope of application. (i) The following single- column, direct-injection gas chromatographic procedure is a technique for quantifying the oxygenate content of gasoline. (ii) This method covers the quantitative determination of the oxygenate content of gasoline through the use of an oxygenate flame ionization detector (OFID). It is applicable to individual organic oxygenated compounds (up to 20 mass percent each) in gasoline having a final boiling point not greater than 220 deg.C. Samples above this level should be diluted to fall within the specified range. (iii) The total concentration of oxygen in the gasoline, due to oxygenated components, may also be determined with this method by summation of all peak areas except for dissolved oxygen, water, and the internal standard. Sensitivities to each component oxygenate must be incorporated in the calculation. (iv) All oxygenated gasoline components (alcohols, ethers, etc.) may be assessed by this method. (v) The total mass percent of oxygen in the gasoline due to oxygenated components also may be determined with this method by summing all peak areas except for dissolved oxygen, water, and the internal standard. (vi) Where trade names or specific products are noted in the method, equivalent apparatus and chemical reagents may be used. Mention of trade names or specific products is for the assistance of the user and does not constitute endorsement by the U.S. Environmental Protection Agency. (2) Summary of method. A sample of gasoline is spiked to introduce an internal standard, mixed, and injected into a gas chromatograph (GC) equipped with an OFID. After chromatographic resolution the sample components enter a cracker reactor in which they are stoichiometrically converted to carbon monoxide (in the case of oxygenates), elemental carbon, and hydrogen. The carbon monoxide then enters a methanizer reactor for conversion to water and methane. Finally, the methane generated is determined by a flame ionization detector (FID). (3) Sample handling and preservation. (i) Samples shall be collected and stored in containers which will protect them from changes in the oxygenated component contents of the gasoline, such as loss of volatile fractions of the gasoline by evaporation. (ii) If samples have been refrigerated they shall be brought to room temperature prior to analysis. (iii) Gasoline is extremely flammable and should be handled cautiously and with adequate ventilation. The vapors are harmful if inhaled and prolonged breathing of vapors should be avoided. Skin contact should be minimized. (4) Apparatus. (i) A GC equipped with an oxygenate flame ionization detector. (ii) An autosampler for the GC is highly recommended. (iii) A 60-m length, 0.25-mm ID, 1.0-m film thickness, nonpolar capillary GC column (J&W DB-1 or equivalent) is recommended. (iv) An integrator or other acceptable system to collect and process the GC signal. (v) A positive displacement pipet (200 L) for adding the internal standard. (5) Reagents and materials. Gasoline and many of the oxygenate additives are extremely flammable and may be toxic over prolonged exposure. Methanol is particularly hazardous. Persons performing this procedure must be familiar with the chemicals involved and all precautions applicable to each. (i) Reagent grade oxygenates for internal standards and for preparation of standard solutions. (ii) Supply of oxygenate-free gasoline for blank assessments and for preparation of standard solutions. (iii) Calibration standard solutions containing known quantities of suspected oxygenates in gasoline. (iv) Calibration check standard solutions prepared in the same manner as the calibration standards. (v) Reference standard solutions containing known quantities of suspected oxygenates in gasoline. (vi) Glass standard and test sample containers (between 5 and 100 Ml capacity) fitted with a self-sealing polytetrafluoroethlene (PTFE) faced rubber septum crimp-on or screw-down sealing cap for preparation of standards and samples. (6) Calibration.--(i)(A) Calibration standards of reagent-grade or better oxygenates (such as methanol, absolute ethanol, methyl t-butyl ether (MTBE), di-i-propyl ether (DIPE), ethyl t-butyl ether (ETBE), and t-amyl methyl ether (TAME)) are to be prepared gravimetrically by blending with gasoline that has been previously determined by GC/OFID to be free of oxygenates. Newly acquired stocks of reagent grade oxygenates shall be analyzed for contamination by GC/FID and GC/OFID before use. (B) Required calibration standards (percent by volume in gasoline): ------------------------------------------------------------------------ Number of Range standards Oxygenate (percent) (minimum) ------------------------------------------------------------------------ Methanol..................................... 0.25-12.00 5 Ethanol...................................... 0.25-12.00 5 t-Butanol.................................... 0.25-12.00 5 MTBE......................................... 0.25-15.00 5 ------------------------------------------------------------------------ (ii) Take a glass sample container and its PTFE faced rubber septum sealing cap. Transfer a quantity of an oxygenate to the sample container and record the mass of the oxygenate to the nearest 0.1 mg. Repeat this process for any additional oxygenates of interest except the internal standard. Add oxygenate-free gasoline to dilute the oxygenates to the desired concentration. Record the mass of gasoline added to the nearest 0.1 mg, and determine and label the standard according to the mass percent quantities of each oxygenate added. These standards are not to exceed 20 mass percent for any individual pure component due to potential hydrocarbon breakthrough and/or loss of calibration linearity. (iii) Inject a quantity of an internal standard (such as 2-butanol) and weigh the contents again. Record the difference in masses as the mass of internal standard to the nearest 0.1 mg. The mass of the internal standard shall amount to between 2 and 6 percent of the mass of the test sample (standard). The addition of an internal standard reduces errors caused by variations in injection volumes. (iv) Ensure that the prepared standard is thoroughly mixed and transfer approximately 2 Ml of the solution to a vial compatible with the autosampler if such equipment is used. (v) At least five concentrations of each of the expected oxygenates should be prepared. The standards should be as equally spaced as possible within the range and may contain more than one oxygenate. A blank for zero concentration assessments is also to be included. Additional standards should be prepared for other oxygenates of concern. (vi) Based on the recommended chromatographic operating conditions specified in paragraph (g)(7)(i) of this section, determine the retention time of each oxygenate component by analyzing dilute aliquots either separately or in known mixtures. Reference should be made to the Chemical Abstracts Service (CAS) registry number of each of the analytes for proper identification. Approximate retention times for selected oxygenates under these conditions are as follows: ------------------------------------------------------------------------ Retention time Oxygenate CAS (minutes) ------------------------------------------------------------------------ Dissolved oxygen............................. 7782-44-7 5.50 Water........................................ 7732-18-5 7.20 Methanol..................................... 67-56-1 9.10 Ethanol...................................... 64-17-5 12.60 Propanone.................................... 67-64-1 15.00 2-Propanol................................... 67-63-0 15.70 t-Butanol.................................... 75-65-0 18.00 n-Propanol................................... 71-23-8 21.10 MTBE......................................... 1634-04-4 23.80 2-Butanol.................................... 15892-23-6 26.30 i-Butanol.................................... 78-83-1 30.30 ETBE......................................... 637-92-3 31.10 n-Butanol.................................... 71-36-3 33.50 TAME......................................... 994-05-8 35.30 i-Pentanol................................... 137-32-6 38.10 ------------------------------------------------------------------------ (vii) By GC/OFID analysis, determine the peak area of each oxygenate and of the internal standard. (viii) Obtain a calibration curve by performing a least-squares fit of the relative area response factors of the oxygenate standards to their relative mass response factors as follows: Rao=boRmo+b1(Rmo)2 where: Rao = relative area response factor of the oxygenate, Ao/ Ai Rmo = relative mass response factor of the oxygenate, M/ Mi Ao = area of the oxygenate peak Ai = area of the internal standard peak Mo = mass of the oxygenate added to the calibration standard Mi = mass of internal standard added to the calibration standard b0 = linear regression coefficient b1 = quadratic regression coefficient (7) Procedure. (i) GC operating conditions: (A) Oxygenate-free helium carrier gas: 1.1 Ml/min (2 bar), 22.7 cm/ sec at 115 deg.C; (B) Carrier gas split ratio: 1:100; (C) Zero air FID fuel: 370 Ml/min (2 bar); (D) Oxygenate free hydrogen FID fuel: 15 Ml/min (2 bar); (E) Injector temperature: 250 deg.C; (F) Injection volume: 0.5 L; (G) Cracker reactor temperature: sufficiently high enough temperature to ensure reduction of all hydrocarbons to the elemental states (i.e., CxH2x -> C + H2, etc.); (H) FID temperature: 400 deg.C; and (I) Oven temperature program: 40 deg.C for 6 min, followed by a temperature increase of 5 deg.C/min to 50 deg.C, hold at 50 deg.C for 5 min, followed by a temperature increase of 25 deg.C/min to 175 deg.C, and hold at 175 deg.C for 2 min. (ii) Prior to analysis of any samples, inject a sample of oxygenate-free gasoline into the GC to test for hydrocarbon breakthrough overloading the cracker reactor. If breakthrough occurs, the OFID is not operating effectively and must be corrected before samples can be analyzed. (iii) Prepare gasoline test samples for analysis as follows: (A) Tare a glass sample container and its PTFE faced rubber septum sealing cap. Transfer a quantity of the gasoline sample to the sample container and record the mass of the transferred sample to the nearest 0.1 mg. (B) Inject a quantity of the same internal standard (such as 2- butanol) used in generating the standards and weigh the contents again. Record the difference in masses as the mass of internal standard to the nearest 0.1 mg. The mass of the internal standard shall amount to between 2 and 6 percent of the mass of the test sample (standard). The addition of an internal standard reduces errors caused by variations in injection volumes. (C) Ensure that this test sample (gasoline plus internal standard) is thoroughly mixed and transfer approximately 2 mL of the solution to a vial compatible with the autosampler if such equipment is used. (iv) After GC/OFID analysis, identify the oxygenates in the sample based on retention times, determine the peak area of each oxygenate and of the internal standard, and calculate the relative area response factor for each oxygenate. (v) Monitor the peak area of the internal standard. A larger than expected peak area for the internal standard when analyzing a test sample may indicate that this oxygenate is present in the original sample. Prepare a new aliquot of the sample without addition of the oxygenate internal standard. If the presence of the oxygenate previously used as the internal standard can be detected, then either: (A) The concentration of this oxygenate must be assessed by the method of standard additions; or (B) An alternative internal standard, based on an oxygenate that is not present in the original sample, must be utilized with new calibration curves. (vi) Calculate the relative mass response factor (Rmo) for each oxygenate based on the relative area response factor (Rao) and the calibration equation in paragraph (g)(6)(viii) of this section. (vii) Calculate the mass percent of the oxygenate in the test sample according to the following equation: TR16FE94.002 where: Mo% = mass percent of the oxygenate in the test sample Ms = mass of sample to which internal standard is added (viii) If the mass percent exceeds the calibrated range, gravimetrically dilute a portion of the original sample to a concentration within the calibration range and analyze this sample starting with paragraph (g)(7)(iii) of this section. (ix) Report the total weight percent oxygen as follows: (A) Subtract the peak areas due to dissolved oxygen, water, and the internal standard from the total summed peak areas of the chromatogram. (B) Assume the total summed peak area solely due to one of the oxygenates that the instrument is calibrated for and determine the total mass percent as that oxygenate based on paragraph (g)(7)(vii) of this section. For simplicity, chose an oxygenate having one oxygen atom per molecule. (C) Multiply this concentration by the molar mass of oxygen and divide by the molar mass of the chosen oxygenate to determine the mass percent oxygen in the sample. For example, if the total peak area is based on MTBE, multiply by 16.00 (the molar mass of atomic oxygen) and divide by 88.15 (the molar mass of MTBE). (x) Sufficient sample should be retained to permit reanalysis. (8) Quality control procedures and accuracy. (i) The laboratory shall routinely monitor the repeatability (precision) of its analyses. The recommendations are: (A) The preparation and analysis of laboratory duplicates at a rate of one per analysis batch or at least one per ten samples, whichever is more frequent. (B) Laboratory duplicates shall be carried through all sample preparation steps independently. (C) The range (R) for duplicate samples should be less than the following limits: ------------------------------------------------------------------------ Concentration Upper limit for Oxygenate mass percent range mass percent ------------------------------------------------------------------------ Methanol........................... 0.27-1.07 0.010+0.043C Methanol........................... 1.07-12.73 0.053C Ethanol............................ 1.01-12.70 0.053C MTBE............................... 0.25-15.00 0.069+0.029C DIPE............................... 0.98-17.70 0.048C ETBE............................... 1.00-18.04 0.074C TAME............................... 1.04-18.59 0.060C ------------------------------------------------------------------------ where: C=(Co+Cd)/2 Co=concentration of the original sample Cd=concentration of the duplicate sample R=Range, |Co-Cd| (D) If the limits in paragraph (g)(8)(i)(C) of this section are exceeded, the sources of error in the analysis should be determined, corrected, and all analyses subsequent to and including the last duplicate analysis confirmed to be within the compliance specifications must be repeated. The specification limits for the range and relative range of duplicate analyses are minimum performance requirements. The performance of individual laboratories may indeed be better than these minimum requirements. For this reason it is recommended that control charts be utilized to monitor the variability of measurements in order to optimally detect abnormal situations and ensure a stable measurement process. (E) (1) For reference purposes, a single laboratory study of repeatability was conducted on approximately 27 replicates at each of five concentrations for each oxygenate. The variation of MTBE analyses as measured by standard deviation was very linear with respect to concentration. Where concentration is expressed as mass percent, over the concentration range of 0.25 to 15.0 mass percent this relationship is described by the equation: standard deviation=0.00784 x C+0.0187 (2) The other oxygenates of interest, methanol, ethanol, DIPE, ETBE, and TAME, had consistent coefficients of variation at one mass percent and above: ------------------------------------------------------------------------ Coefficient of Oxygenate Concentration variation mass percent percent of point ------------------------------------------------------------------------ Methanol................................... 1.07-12.73 1.43 Ethanol.................................... 1.01-12.70 1.43 DIPE....................................... 0.98-17.70 1.29 ETBE....................................... 1.00-18.04 2.00 TAME....................................... 1.04-18.59 1.62 ------------------------------------------------------------------------ (3) The relationship of standard deviation and concentration for methanol between 0.27 and 1.07 mass percent was very linear and is described by the equation: standard deviation=0.0118 x C+0.0027 (4) Based on these relationships, repeatability for the selected oxygenates at 2.0 and 2.7 mass percent oxygen were determined to be as follows, where repeatability is defined as the half width of the 95 percent confidence interval (i.e., 1.96 standard deviations) for a single analysis at the stated concentration: ------------------------------------------------------------------------ Concentration -------------------------------- Mass Repeatability Oxygenate Mass percent Volume mass percent percent oxygenate percent oxygen oxygenate ------------------------------------------------------------------------ Methanol................. 2.0 4.00 3.75 0.11 Ethanol.................. 2.0 5.75 5.41 0.16 MTBE..................... 2.00 11.00 11.00 0.21 DIPE..................... 2.0 12.77 13.00 0.32 ETBE..................... 2.0 12.77 12.74 0.50 TAME..................... 2.0 12.77 12.33 0.41 Methanol................. 2.7 5.40 5.07 0.15 Ethanol.................. 2.7 7.76 7.31 0.21 MTBE..................... 2.7 14.88 14.88 0.26 DIPE..................... 2.7 17.24 17.53 0.43 ETBE..................... 2.7 17.24 17.20 0.67 TAME..................... 2.7 17.24 16.68 0.55 ------------------------------------------------------------------------ (ii) The laboratory shall routinely monitor the accuracy of its analyses. The recommendations are: (A) Calibration check standards and calibration standards may be prepared from the same oxygenate stocks and by the same analyst. However, calibration check standards and calibration standards must be prepared from separate batches of the final diluted standards. For the specification limits listed in paragraph (g)(8)(ii)(C) of this section, the concentration of the check standards should be in the range given in paragraph (g)(8)(i)(C) of this section. (B) Calibration check standards shall be analyzed at a rate of at least one per analysis batch and at least one per 10 samples, whichever is more frequent. (C) If the measured concentration of a calibration check standard is outside the range of 100.0% 6.0% of the theoretical concentration for a selected oxygenate of 1.0 mass percent or above, the sources of error in the analysis should be determined, corrected, and all analyses subsequent to and including the last standard analysis confirmed to be within the compliance specifications must be repeated. The specification limits for the accuracy of calibration check standards analyses are minimum performance requirements. The performance of individual laboratories may indeed be better than these minimum requirements. For this reason it is recommended that control charts be utilized to monitor the variability of measurements in order to optimally detect abnormal situations and ensure a stable measurement process. (D) Independent reference standards should be purchased or prepared from materials that are independent of the calibration standards and calibration check standards, and must not be prepared by the same analyst. For the specification limits listed in paragraph (g)(8)(ii)(F) of this section, the concentration of the reference standards should be in the range given in paragraph (g)(8)(i)(C) of this section. (E) Independent reference standards shall be analyzed at a rate of at least one per analysis batch and at least one per 100 samples, whichever is more frequent. (F) If the measured concentration of an independent reference standard is outside the range of 100.0% 10.0% of the theoretical concentration for a selected oxygenate of 1.0 mass percent or above, the sources of error in the analysis should be determined, corrected, and all analyses subsequent to and including the last independent reference standard analysis confirmed to be within the compliance specifications in that batch must be repeated. The specification limits for the accuracy of independent reference standards analyses are minimum performance requirements. The performance of individual laboratories may be better than these minimum requirements. For this reason it is recommended that control charts be utilized to monitor the variability of measurements in order to optimally detect abnormal situations and ensure a stable measurement process. (G) The preparation and analysis of spiked samples at a rate of one per analysis batch and at least one per ten samples. (H) Spiked samples shall be prepared by adding a volume of a standard to a known volume of sample. To ensure adequate method detection limits, the volume of the standard added to the sample shall be limited to 5% or less than the volume of the sample. The spiked sample shall be carried through the same sample preparation steps as the background sample. (I) The percent recovery of the spiked sample shall be calculated as follows: TR16FE94.003 where: Vo=Volume of sample (Ml) Vl=Volume of spiking standard added (Ml) Cm=Measured concentration of spiked sample Co=Measured background concentration of sample Cs=Known concentration of spiking standard (J) If the percent recovery of any individual spiked sample is outside the range 100% 10% from the theoretical concentration, then the sources of error in the analysis must be determined and corrected, and all analyses subsequent to and including the last analysis confirmed to be within the compliance specifications must be repeated. The maintenance of control charts is one acceptable method or ensuring compliance with this specification. (K) (1) Either the range (absolute difference) or relative range (but not necessarily both) for duplicate samples shall be less than the following limits: ------------------------------------------------------------------------ Relative Concentration range Oxygenate (volume Range (volume percent) percent) ------------------------------------------------------------------------ Methanol.............................. 1.0-12.0 ....... 7.2 Ethanol............................... 3.0-12.0 ....... 7.1 t-Butanol............................. 3.0-12.0 ....... 9.4 MTBE.................................. 3.0-15.0 0.55 9.2 ------------------------------------------------------------------------ (2) Relative range is calculated as follows: TR16FE94.004 where: Rr=relative range R=range Co=concentration of the original sample Cd=concentration of the duplicate sample (3) If the limits in paragraph (g)(8)(ii)(K)(1) of this section are exceeded, the sources of error in the analysis should be determined, corrected, and all analyses subsequent to and including the last duplicate analysis confirmed to be within the compliance specifications must be repeated. The specification limits for the range and relative range of duplicate analyses are minimum performance requirements. The performance of individual laboratories may indeed be better than these minimum requirements. For this reason it is recommended that control charts be utilized to monitor the variability of measurements in order to optimally detect abnormal situations and ensure a stable measurement process. For reference purposes, a single laboratory study of precision (approximately 35 replicates) yielded the following estimates of method precision: ------------------------------------------------------------------------ Concentration Repeatability Oxygenate (weight (volume (Percent) percent) percent) ------------------------------------------------------------------------ Methanol....................... 2.0 3.7 0.11 Ethanol........................ 2.0 5.4 0.24 t-Butanol...................... 2.0 8.8 0.39 MTBE........................... 2.0 11.0 0.37 ------------------------------------------------------------------------ (4) Repeatability is defined as the half width of the 95 percent confidence interval for a single analysis at the stated concentration. (iii) The laboratory shall routinely monitor the accuracy of its analyses. At a minimum this shall include: (A) Calibration check standards and calibration standards may be prepared from the same oxygenate stocks and by the same analyst. However, calibration check standards and calibration standards must be prepared from separate batches of the final diluted standards. For the specification limits listed in paragraph (g)(8)(iii)(C) of this section, the concentration of the check standards should be in the range given in paragraph (g)(8)(iii)(C) of this section. (B) Calibration check standards shall be analyzed at a rate of one per analysis batch or at least one per ten samples, whichever is more frequent. (C) If the measured concentration of a calibration check standard is outside the range of 100%10% percent of the theoretical concentration for methanol and ethanol, or 100%13% for t- butanol and MTBE, the sources of error in the analysis should be determined, corrected, and all analyses subsequent to and including the last standard analysis confirmed to be within the compliance specifications must be repeated. The specification limits for the accuracy of calibration check standards analyses are minimum performance requirements. The performance of individual laboratories may indeed be better than these minimum requirements. For this reason it is recommended that control charts be utilized to monitor the variability of measurements in order to optimally detect abnormal situations and ensure a stable measurement process. (D) Independent reference standards shall be purchased or prepared from materials that are independent of the calibration standards and calibration check standards, and must not be prepared by the same analyst. For the specification limits listed in paragraph (g)(8)(iii)(F) of this section, the concentration of the reference standards should be in the range given in paragraph (g)(8)(iii)(C) of this section. (E) Independent reference standards shall be analyzed at a rate of one per analysis batch or at least one per 100 samples, whichever is more frequent. (F) If the measured concentration of an independent reference standard is outside the range of 100%10% of the theoretical concentration for methanol and ethanol, or 100%13% for t- butanol and MTBE, the sources of error in the analysis should be determined, corrected, and all analyses subsequent to and including the last independent reference standard analysis confirmed to be within the compliance specifications in that batch must be repeated. The specification limits for the accuracy of independent reference standards analyses are minimum performance requirements. The performance of individual laboratories may indeed be better than these minimum requirements. For this reason it is recommended that control charts be utilized to monitor the variability of measurements in order to optimally detect abnormal situations and ensure a stable measurement process. (G) If matrix effects are suspected, then spiked samples shall be prepared and analyzed as follows: (1) Spiked samples shall be prepared by adding a volume of a standard to a known volume of sample. To ensure adequate method detection limits, the volume of the standard added to the sample should be minimized to 5% or less of the volume of the sample. The spiked sample should be carried through the same sample preparation steps as the background sample. (2) The percent recovery of spiked samples should be calculated as follows: TR16FE94.005 where: Cc=concentration of spiked sample Co=concentration of sample without spiking Cs=known concentration of spiking standard Vo=volume of sample Vs=volume of spiking standard added to the sample (3) If the percent recovery of a spiked sample is outside the range of 100% 13% of the theoretical concentration for methanol and ethanol, or 100% 16% for t-butanol and MTBE, the sources of error in the analysis should be determined, corrected, and all analyses subsequent to and including the last analysis confirmed to be within the compliance specifications must be repeated. The specification limits for the accuracy of the percent recovery of spiked sample analyses are minimum performance requirements. The performance of individual laboratories may indeed be better than these minimum requirements. For this reason it is recommended that control charts be utilized to monitor the variability of measurements in order to optimally detect abnormal situations and ensure a stable measurement process. (9)(i) Prior to January 1, 1997, and when the oxygenates present are limited to MTBE, ETBE, TAME, DIPE, tertiary-amyl alcohol, and C1 to C4 alcohols, any refiner, importer, or oxygenate blender may determine oxygen and oxygenate content using ASTM standard method D-4815-93, entitled ``Standard Test Method for Determination of MTBE, ETBE, TAME, DIPE, tertiary-Amyl Alcohol and C1 to C4 Alcohols in Gasoline by Gas Chromatography,'' for purposes of meeting any testing requirement; provided that (ii) The refiner or importer test result is correlated with the method set forth in paragraphs (g)(1) through (g)(8) of this section. (h) Incorporations by reference. ASTM standard methods D-3606-92, D-1319-93, D-4815-93, D-2622-92, and D-86-90 with the exception of the degrees Fahrenheit figures in Table 9 of D-86-90, are incorporated by reference. These incorporations by reference were approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(A) and 1 CFR part 51. Copies may be obtained from the American Society of Testing Materials, 1916 Race Street, Philadelphia, PA 19103. Copies may be inspected at the Air Docket Section (LE-131), room M-1500, U.S. Environmental Protection Agency, Docket No. A-92-12, 401 M Street SW., Washington, DC 20460 or at the Office of the Federal Register, 800 North Capitol Street, NW., suite 700, Washington, DC. Sec. 80.47 [Reserved] Sec. 80.48 Augmentation of the complex emission model by vehicle testing. (a) The provisions of this section apply only if a fuel claims emission reduction benefits from fuel parameters that are not included in the complex emission model or complex emission model database, or if the values of fuel parameters included in the complex emission model set forth in Sec. 80.45 fall outside the range of values for which the complex emission model is deemed valid. (b) To augment the complex emission model described at Sec. 80.45, the following requirements apply: (1) The petitioner must obtain prior approval from the Administrator for the design of the test program before beginning the vehicle testing process. To obtain approval, the petitioner must at minimum provide the following information: the fuel parameter to be evaluated for emission effects; the number and description of vehicles to be used in the test fleet, including model year, model name, vehicle identification number (VIN), mileage, emission performance (exhaust THC emission level), technology type, and manufacturer; a description of the methods used to procure and prepare the vehicles; the properties of the fuels to be used in the testing program (as specified at Sec. 80.49); the pollutants and emission categories intended to be evaluated; the precautions used to ensure that the effects of the parameter in question are independent of the effects of other parameters already included in the model; a description of the quality assurance procedures to be used during the test program; the statistical analysis techniques to be used in analyzing the test data, and the identity and location of the organization performing the testing. (2) Exhaust emissions shall be measured per the requirements of this section and Sec. 80.49 through Sec. 80.62. (3) The nonexhaust emission model (including evaporative, running loss, and refueling VOC and toxics emissions) shall not be augmented by vehicle testing. (4) The Agency reserves the right to observe and monitor any testing that is performed pursuant to the requirements of this section. (5) The Agency reserves the right to evaluate the quality and suitability of data submitted pursuant to the requirements of this section and to reject, re-analyze, or otherwise evaluate such data as is technically warranted. (6) Upon a showing satisfactory to the Administrator, the Administrator may approve a petition to waive the requirements of this section and Sec. 80.49, Sec. 80.50(a), Sec. 80.60(d)(3), and Sec. 80.60(d)(4) in order to better optimize the test program to the needs of the particular fuel parameter. Any such waiver petition should provide information justifying the requested waiver, including an acceptable rationale and supporting data. Petitioners must obtain approval from the Administrator prior to conducting testing for which the requirements in question are waived. The Administrator may waive the noted requirements in whole or in part, and may impose appropriate conditions on any such waiver. (c) In the case of petitions to augment the complex model defined at Sec. 80.45 with a new parameter, the effect of the parameter being tested shall be determined separately, for each pollutant and for each emitter class category. If the parameter is not included in the complex model but is represented in whole or in part by one or more parameters included in the model, the petitioner shall be required to demonstrate the emission effects of the parameter in question independent of the effects of the already-included parameters. The petitioner shall also have to demonstrate the effects of the already-included parameters independent of the effects of the parameter in question. The emission performance of each vehicle on the fuels specified at Sec. 80.49, as measured through vehicle testing in accordance with Sec. 80.50 through Sec. 80.62, shall be analyzed to determine the effects of the fuel parameter being tested on emissions according to the following procedure: (1) The analysis shall fit a regression model to the natural logarithm of emissions measured from addition fuels 1, 2, and 3 only (as specified at Sec. 80.49(a)) and adjusted as per paragraph (c)(1)(iv) of this section that includes the following terms: (i) A term for each vehicle that shall reflect the effect of the vehicle on emissions independent of fuel compositions. These terms shall be of the form Di x Vi, where Di is the coefficient for the term and Vi is a dummy variable which shall have the value 1.0 for the ith vehicle and the value 0 for all other vehicles. (ii) A linear term in the parameter being tested for each emitter class, of the form Ai x (P1-P1 (avg)) x Ei, where Ai is the coefficient for the term, P1 is the level of the parameter in question, P1 (avg) is the average level of the parameter in question for all seven test fuels specified at Sec. 80.49(a)(1), and Ei is a dummy variable representing emitter class, as defined at Sec. 80.62. For normal emitters, E1=1 and E2=0. For higher emitters, E1=0 and E2=1. (iii) For the VOC and NOx models, a squared term in the parameter being tested for each emitter class, of the form Bi x (P1-P1 (avg))\2\ x Ei, where Bi is the coefficient for the term and where P1 , P1 (avg), and Ei are as defined in paragraph (c)(1)(ii) of this section. (iv) To the extent that the properties of fuels 1, 2, and 3 which are incorporated in the complex model differ in value among the three fuels, the complex model shall be used to adjust the observed emissions from test vehicles on those fuels to compensate for those differences prior to fitting the regression model. (v) The Ai and Bi terms and coefficients developed by the regression described in this paragraph (c) shall be evaluated against the statistical criteria defined in paragraph (e) of this section. If both terms satisfy these criteria, then both terms shall be retained. If the Bi term satisfies these criteria and the Ai term does not, then both terms shall be retained. If the Bi term does not satisfy these criteria, then the Bi term shall be dropped from the regression model and the model shall be re-estimated. If, after dropping the Bi term, the Ai term does not satisfy these criteria, then both terms shall be dropped, all test data shall be reported to EPA, and the augmentation request shall be denied. (2) After completing the steps outlined in paragraph (c)(1) of this section, the analysis shall fit a regression model to a combined data set that includes vehicle testing results from all seven addition fuels specified at Sec. 80.49(a), the vehicle testing results used to develop the model specified at Sec. 80.45, and vehicle testing results used to support any prior augmentation requests which the Administrator deems necessary. (i) The analysis shall fit the regression models described in paragraphs (c)(2) (ii) through (v) of this section to the natural logarithm of measured emissions. (ii) All regressions shall include a term for each vehicle that shall reflect the effect of the vehicle on emissions independent of fuel compositions. These terms shall be of the form Di x Vi, where Di is the coefficient for the term and Vi is a dummy variable which shall have the value 1.0 for the ith vehicle and the value 0 for all other vehicles. Vehicles shall be represented by separate terms for each test program in which they were tested. The vehicle terms for the vehicles included in the test program undertaken by the petitioner shall be calculated based on the results from all seven fuels specified at Sec. 80.49(a). Note that the Di estimates for the petitioner's test vehicles in this regression are likely to differ from the Di estimates discussed in paragraph (c)(1)(i) of this section since they will be based on a different set of fuels. (iii) All regressions shall include existing complex model terms and their coefficients, including those augmentations that the Administrator deems necessary. All terms and coefficients shall be expressed in centered form. (iv) All regressions shall include the linear and squared terms, and their coefficients, estimated in the final regression model described in paragraph (c)(1) of this section. (v) The VOC and NOx regressions shall include those interactive terms with other fuel parameters, of the form Ci(1,j) x (P1-P1 (avg)) x (Pj-Pj (avg)) x Ei, where Ci(1,j) is the coefficient for the term, P1 is the level of the parameter being added to the model, P1 (avg) is the average level of the parameter being added for all seven addition fuels specified at Sec. 80.49(a), Pj is the level of the other fuel parameter, Pj (avg) is the centering value for the other fuel parameter used to develop the complex model or used in the other parameter's augmentation study, and Ei is as defined in paragraph (c)(1) of this section, which are found to satisfy the statistical criteria defined in paragraph (e) of this section. Such terms shall be added to the regression model in a stepwise manner. (3) The model described in paragraphs (c) (1) and (2) of this section shall be developed separately for normal-emitting and higher- emitting vehicles. Each emitter class shall be treated as a distinct population for the purposes of determining regression coefficients. (4) Once the augmented models described in paragraphs (c) (1) through (3) of this section have been developed, they shall be converted to an uncentered form through appropriate algebraic manipulation. (5) The augmented model described in paragraph (c)(4) of this section shall be used to determine the effects of the parameter in question at levels between the levels in Fuels 1 and 3, as defined at Sec. 80.49(a)(1), for all fuels which claim emission benefits from the parameter in question. (d)(1) In the case of petitions to augment the complex model defined at Sec. 80.45 by extending the range of an existing complex model parameter, the effect of the parameter being tested shall be determined separately, for each pollutant and for each technology group and emitter class category, at levels between the extension level and the nearest limit of the core of the data used to develop the unaugmented complex model as follows: ------------------------------------------------------------------------ Data core limits Fuel parameter ------------------- Lower Upper ------------------------------------------------------------------------ Sulfur, ppm......................................... 10 450 RVP, psi............................................ 7 10 E200, vol %......................................... 33 66 E300, vol %......................................... 72 94 Aromatics, vol %.................................... 18 46 Benzene, vol %...................................... 0.4 1.8 Olefins, vol %...................................... 1 19 Oxygen, wt %........................................ As ethanol........................................ 0 3.4 All others:....................................... 0 2.7 ------------------------------------------------------------------------ (2) The emission performance of each vehicle on the fuels specified at Sec. 80.49(b)(2), as measured through vehicle testing in accordance with Secs. 80.50 through 80.62, shall be analyzed to determine the effects of the fuel parameter being tested on emissions according to the following procedure: (i) The analysis shall incorporate the vehicle testing data from the extension fuels specified at Sec. 80.49(b), the vehicle testing results used to develop the model specified at Sec. 80.45, and vehicle testing results used to support any prior augmentation requests which the Administrator deems necessary. A regression incorporating the following terms shall be fitted to the natural logarithm of emissions contained in this combined data set: (A) A term for each vehicle that shall reflect the effect of the vehicle on emissions independent of fuel compositions. These terms shall be of the form Di x Vi, where Di is the coefficient for the term and Vi is a dummy variable which shall have the value 1.0 for the ith vehicle and the value 0 for all other vehicles. Vehicles shall be represented by separate terms for each test program in which they were tested. The vehicle terms for the vehicles included in the test program undertaken by the petitioner shall be calculated based on the results from all three fuels specified at Sec. 80.49(b)(2). (B) Existing complex model terms that do not include the parameter being extended and their coefficients, including those augmentations that the Administrator deems necessary. The centering values for these terms shall be identical to the centering values used to develop the complex model described at Sec. 80.45. (C) Existing complex model terms that include the parameter being extended. The coefficients for these terms shall be estimated by the regression. The centering values for these terms shall be identical to the centering values used to develop the complex model described at Sec. 80.45. (D) If the unaugmented VOC or NOx complex models do not contain a squared term for the parameter being extended, such a term should be added in a stepwise fashion after completing the model described in paragraphs (d)(2)(i)(A) through (C) of this section. The coefficient for this term shall be estimated by the regression. The centering value for this term shall be identical to the centering value used to develop the complex model described at Sec. 80.45. (E) The terms defined in paragraphs (d)(2)(i)(C) and (D) of this section shall be evaluated against the statistical criteria defined in paragraph (e) of this section. (ii) The model described in paragraph (d)(2)(i) of this section shall be developed separately for normal-emitting and higher-emitting vehicles, as defined at Sec. 80.62. Each emitter class shall be treated as a distinct population for the purposes of determining regression coefficients. (e) Statistical criteria. (1) The petitioner shall be required to submit evidence with the petition which demonstrates the statistical validity of the regression described in paragraph (c) or (d) of this section, including at minimum: (i) Evidence demonstrating that colinearity problems are not severe, including but not limited to variance inflation statistics of less than 10 for the second-order and interactive terms included in the regression model. (ii) Evidence demonstrating that the regression residuals are normally distributed, including but not limited to the skewness and Kurtosis statistics for the residuals. (iii) Evidence demonstrating that overfitting and underfitting risks have been balanced, including but not limited to the use of Mallow's Cp criterion. (2) The petitioner shall be required to submit evidence with the petition which demonstrates that the appropriate terms have been included in the regression, including at minimum: (i) Descriptions of the analysis methods used to develop the regressions, including any computer code used to analyze emissions data and the results of regression runs used to develop the proposed augmentation, including intermediate regressions produced during the stepwise regression process. (ii) Evidence demonstrating that the significance level used to include terms in the model was equal to 0.90. (f) The complex emission model shall be augmented with the results of vehicle testing as follows: (1) The terms and coefficients determined in paragraph (c) or (d) of this section shall be used to supplement the complex emission model equation for the corresponding pollutant and emitter category. These terms and coefficients shall be weighted to reflect the contribution of the emitter category to in-use emissions as shown at Sec. 80.45. (2) If the candidate parameter is not included in the unaugmented complex model and is not represented in whole or in part by one or more parameters included in the model, the modification shall be accomplished by adding the terms and coefficients to the complex model equation for that pollutant, technology group, and emitter category. (3) If the parameter is included in the complex model but is being tested at levels beyond the current range of the model, the terms and coefficients determined in paragraph (d) of this section shall be used to supplement the complex emission model equation for the corresponding pollutant. (i) The terms and coefficients of the complex model described at Sec. 80.45 shall be used to evaluate the emissions performance of fuels with levels of the parameter being tested that are within the valid range of the model, as defined at Sec. 80.45. (ii) The emissions performance of fuels with levels of the parameter that are beyond the valid range of the unaugmented model shall be given in percentage change terms by 100-[(100+A) x (100+C)/ (100+B)], where: (A) ``A'' shall be set equal to the percentage change in emissions for a fuel with identical fuel property values to the fuel being evaluated except for the parameter being extended, which shall be set equal to the nearest limit of the data core, using the unaugmented complex model. (B) ``B'' shall be set equal to the percentage change in emissions for the fuel described in paragraph (f)(3)(i) of this section according to the augmented complex model. (C) ``C'' shall be set equal to the percentage change in emissions of the actual fuel being evaluated using the augmented complex model. (g) EPA reserves the right to analyze the data generated during vehicle testing, to use such analyses to determine the validity of the augmentation petition, and to use such data to update the complex model for use in certifying all reformulated gasolines. (h) Duration of acceptance of emission effects determined through vehicle testing: (1) If the Agency does not accept, modify, or reject a particular augmentation for inclusion in an updated complex model (performed through rulemaking), then the augmentation shall remain in effect until the next update to the complex model takes effect. (2) If the Agency does reject or modify a particular augmentation for inclusion in an updated complex model, then the augmentation shall no longer be able to be used as of the date the updated complex model is deemed to take effect, unless the following conditions and limitations apply: (i) The augmentation in question may continue to be used by those fuel suppliers which can prove, to the Administrator's satisfaction, that the fuel supplier had already begun producing a fuel utilizing the augmentation at the time the revised model is promulgated. (ii) The augmentation in question may only be used to evaluate the emissions performance of fuels in conjunction with the complex emission model in effect as of the date of production of the fuels. (iii) The augmentation may only be used for three years of fuel production, or a total of five years from the date the augmentation first took effect, whichever is shorter. (3) The Administrator shall determine when sufficient new information on the effects of fuel properties on vehicle emissions has been obtained to warrant development of an updated complex model. Sec. 80.49 Fuels to be used in augmenting the complex emission model through vehicle testing. (a) Seven fuels (hereinafter called the ``addition fuels'') shall be tested for the purpose of augmenting the complex emission model with a parameter not currently included in the complex emission model. The properties of the addition fuels are specified in paragraphs (a) (1) and (2) of this section. The addition fuels shall be specified with at least the same level of detail and precision as in Sec. 80.43(c), and this information must be included in the petition submitted to the Administrator requesting augmentation of the complex emission model. (1) The seven addition fuels to be tested when augmenting the complex model specified at Sec. 80.45 with a new fuel parameter shall have the properties specified as follows: Properties of Fuels To Be Tested When Augmenting the Model With a New Fuel Parameter ---------------------------------------------------------------------------------------------------------------- Fuels Fuel property ----------------------------------------------------------------------------------- 1 2 3 4 5 6 7 ---------------------------------------------------------------------------------------------------------------- Sulfur, ppm................. 150 150 150 35 35 500 500 Benzene, vol %.............. 1.0 1.0 1.0 0.5 0.5 1.3 1.3 RVP, psi.................... 7.5 7.5 7.5 6.5 6.5 8.1 8.1 E200, %..................... 50 50 50 62 62 37 37 E300, %..................... 85 85 85 92 92 79 79 Aromatics, vol %............ 27 27 27 20 20 45 45 Olefins, vol %.............. 9.0 9.0 9.0 2.0 2.0 18 18 Oxygen, wt %................ 2.1 2.1 2.1 2.7 2.7 1.5 1.5 Octane, (R+M)/2............. 87 87 87 87 87 87 87 New Parameter\1\............ C C+B/2 B C B C B ---------------------------------------------------------------------------------------------------------------- \1\C=Candidate level, B=Baseline level. (i) For the purposes of vehicle testing, the ``baseline'' level of the parameter shall refer to the level of the parameter in Clean Air Act baseline gasoline. The ``candidate'' level of the parameter shall refer to the most extreme value of the parameter, relative to baseline levels, for which the augmentation shall be valid. (ii) If the fuel parameter for which the fuel supplier is petitioning EPA to augment the complex emission model (hereinafter defined as the ``candidate parameter'') is not specified for Clean Air Act summer baseline fuel, then the baseline level for the candidate parameter shall be set at the levels found in typical gasoline. This level and the justification for this level shall be included in the petitioner's submittal to EPA prior to initiating the test program, and EPA must approve this level prior to the start of the program. (iii) If the candidate parameter is not specified for Clean Air Act summer baseline fuel, and is not present in typical gasoline, its baseline level shall be zero. (2) The addition fuels shall contain detergent control additives in accordance with section 211(l) of the Clean Air Act Amendments of 1990 and the associated EPA requirements for such additives. (3) The addition fuels shall be specified with at least the same level of detail and precision as in Sec. 80.43(c), and this information shall be included in the petition submitted to the Administrator requesting augmentation of the complex emission model. (i) Paraffin levels in Fuels 1 and 2 shall be altered from the paraffin level in Fuel 3 to compensate for the addition or removal of the candidate parameter, if necessary. Paraffin levels in Fuel 4 shall be altered from the paraffin level in Fuel 5 to compensate for the addition or removal of the candidate parameter, if necessary. Paraffin levels in Fuel 6 shall be altered from the paraffin level in Fuel 7 to compensate for the addition or removal of the candidate parameter, if necessary. (ii) Other properties of Fuels 4 and 6 shall not vary from the levels for Fuels 5 and 7, respectively, unless such variations are the naturally-occurring result of the changes described in paragraphs (a)(1) and (2) of this section. Other properties of Fuels 1 and 2 shall not vary from the levels for Fuel 3, unless such variations are the naturally- occurring result of the changes described in paragraphs (a)(1) and (2) of this section. (iii) The addition fuels shall be specified with at least the same level of detail and precision as defined in paragraph (a)(5)(i) of this section, and this information must be included in the petition submitted to the Administrator requesting augmentation of the complex emission model. (4) The properties of the addition fuels shall be within the blending tolerances defined in this paragraph (a)(4) relative to the values specified in paragraphs (a)(1) and (2) of this section. Fuels that do not meet these tolerances shall require the approval of the Administrator to be used in vehicle testing to augment the complex emission model: ------------------------------------------------------------------------ Fuel parameter Blending tolerance ------------------------------------------------------------------------ Sulfur content..................... 25 ppm. Benzene content.................... 0.2 vol %. RVP................................ 0.2 psi. E200 level......................... 2 %. E300 level......................... 4 %. Oxygenate content.................. 1.0 vol %. Aromatics content.................. 2.7 vol %. Olefins content.................... 2.5 vol %. Saturates content.................. 2.0 vol %. Octane............................. 0.5. Detergent control additives........ 10% of the level required by EPA's detergents rule. Candidate parameter................ To be determined as part of the augmentation process. ------------------------------------------------------------------------ (5) The composition and properties of the addition fuels shall be determined by averaging a series of independent tests of the properties and compositional factors defined in paragraph (a)(5)(i) of this section as well as any additional properties or compositional factors for which emission benefits are claimed. (i) The number of independent tests to be conducted shall be sufficiently large to reduce the measurement uncertainty for each parameter to a sufficiently small value. At a minimum the 95% confidence limits (as calculated using a standard t-test) for each parameter must be within the following range of the mean measured value of each parameter: ------------------------------------------------------------------------ Fuel parameter Measurement uncertainty ------------------------------------------------------------------------ API gravity........................ 0.2 deg.API. Sulfur content..................... 10 ppm. Benzene content.................... 0.02 vol %. RVP................................ 0.05 psi. Octane............................. 0.2 (R+M/2). E200 level......................... 2%. E300 level......................... 2%. Oxygenate content.................. 0.2 vol %. Aromatics content.................. 0.5 vol %. Olefins content.................... 0.3 vol %. Saturates content.................. 1.0 vol %. Detergent control additives........ 2% of the level required by EPA's detergents rule. Candidate parameter................ To be determined as part of the augmentation process. ------------------------------------------------------------------------ (ii) The 95% confidence limits for measurements of fuel parameters for which emission reduction benefits are claimed and for which tolerances are not defined in paragraph (a)(5)(i) of this section must be within 5% of the mean measured value. (iii) Each test must be conducted in the same laboratory in accordance with the procedures outlined at Sec. 80.46. (b) Three fuels (hereinafter called the ``extension fuels'') shall be tested for the purpose of extending the valid range of the complex emission model for a parameter currently included in the complex emission model. The properties of the extension fuels are specified in paragraphs (b)(2) through (4) of this section. The extension fuels shall be specified with at least the same level of detail and precision as in Sec. 80.43(c), and this information must be included in the petition submitted to the Administrator requesting augmentation of the complex emission model. Each set of three extension fuels shall be used only to extend the range of a single complex model parameter. (1) The ``extension level'' shall refer to the level to which the parameter being tested is to be extended. The three fuels to be tested when extending the range of fuel parameters already included in the complex model or a prior augmentation to the complex model shall be referred to as ``extension fuels.'' (2) The composition and properties of the extension fuels shall be as described in paragraphs (b)(2) (i) and (ii) of this section. (i) The extension fuels shall have the following levels of the parameter being extended: Level of Existing Complex Model Parameters Being Extended ------------------------------------------------------------------------ Fuel property being Extension Extension extended Extension fuel No. 1 fuel No. 2 fuel No. 3 ------------------------------------------------------------------------ Sulfur, ppm........... Extension level....... 80 450 Benzene, vol %........ Extension level....... 0.5 1.5 RVP, psi.............. Extension level....... 6.7 8.0 E200, %............... Extension level....... 38 61 E300, %............... Extension level....... 78 92 Aromatics, vol %...... Extension level....... 20 45 Olefins, vol %........ Extension level....... 3.0 18 Oxygen, wt %.......... Extension level....... 1.7 2.7 Octane, R+M/2......... 87.................... 87 87 ------------------------------------------------------------------------ (ii) The levels of parameters other than the one being extended shall be given by the following table for all three extension fuels: Levels for Fuel Parameters Other Than Those Being Extended ------------------------------------------------------------------------ Extension Extension Extension Fuel property fuel No. fuel No. fuel No. 1 2 3 ------------------------------------------------------------------------ Sulfur, ppm............................ 150 150 150 Benzene, vol %......................... 1.0 1.0 1.0 RVP, psi............................... 7.5 7.5 7.5 E200, %................................ 50 50 50 E300, %................................ 85 85 85 Aromatics, vol %....................... 25 25 25 Olefins, vol %......................... 9.0 9.0 9.0 Oxygen, wt %........................... 2.0 2.0 2.0 Octane, R+M/2.......................... 87 87 87 ------------------------------------------------------------------------ (3) If the Complex Model for any pollutant includes one or more interactive terms involving the parameter being extended, then two additional extension fuels shall be required to be tested for each such interactive term. These additional extension fuels shall have the following properties: (i) The parameter being tested shall be present at its extension level. (ii) The interacting parameter shall be present at the levels specified in paragraph (b)(2)(i) of this section for extension Fuels 2 and 3. (iii) All other parameters shall be present at the levels specified in paragraphs (b)(2)(ii) and (b)(3) of this section. (4) All extension fuels shall contain detergent control additives in accordance with Section 211(l) of the Clean Air Act Amendments of 1990 and the associated EPA requirements for such additives. (c) The addition fuels defined in paragraph (a) of this section and the extension fuels defined in paragraph (b) of this section shall meet the following requirements for blending and measurement precision: (1) The properties of the test and extension fuels shall be within the blending tolerances defined in this paragraph (c) relative to the values specified in paragraphs (a) and (b) of this section. Fuels that do not meet the following tolerances shall require the approval of the Administrator to be used in vehicle testing to augment the complex emission model: ------------------------------------------------------------------------ Fuel parameter Blending tolerance ------------------------------------------------------------------------ Sulfur content..................... 25 ppm. Benzene content.................... 0.2 vol %. RVP................................ 0.2 psi. E200 level......................... 2 %. E300 level......................... 4 %. Oxygenate content.................. 1.5 vol %. Aromatics content.................. 2.7 vol %. Olefins content.................... 2.5 vol %. Saturates content.................. 2.0 vol %. Octane............................. 0.5. Candidate parameter................ To be determined as part of the augmentation process. ------------------------------------------------------------------------ (2) The extension and addition fuels shall be specified with at least the same level of detail and precision as defined in paragraph (c)(2)(ii) of this section, and this information must be included in the petition submitted to the Administrator requesting augmentation of the complex emission model. (i) The composition and properties of the addition and extension fuels shall be determined by averaging a series of independent tests of the properties and compositional factors defined in paragraph (c)(2)(ii) of this section as well as any additional properties or compositional factors for which emission benefits are claimed. (ii) The number of independent tests to be conducted shall be sufficiently large to reduce the measurement uncertainty for each parameter to a sufficiently small value. At a minimum the 95% confidence limits (as calculated using a standard t-test) for each parameter must be within the following range of the mean measured value of each parameter: ------------------------------------------------------------------------ Fuel parameter Measurement uncertainty ------------------------------------------------------------------------ API gravity........................ 0.2 deg.API. Sulfur content..................... 5 ppm. Benzene content.................... 0.05 vol %. RVP................................ 0.08 psi. Octane............................. 0.1 (R+M/2). E200 level......................... 2 %. E300 level......................... 2 %. Oxygenate content.................. 0.2 vol %. Aromatics content.................. 0.5 vol %. Olefins content.................... 0.3 vol %. Saturates content.................. 1.0 vol.% Octane............................. 0.2. Candidate parameter................ To be determined as part of the augmentation process. ------------------------------------------------------------------------ (iii) Petitioners shall obtain approval from EPA for the 95% confidence limits for measurements of fuel parameters for which emission reduction benefits are claimed and for which tolerances are not defined in paragraph (c)(2)(i) of this section. (iv) Each test must be conducted in the same laboratory in accordance with the procedures outlined at Sec. 80.46. (v) The complex emission model described at Sec. 80.45 shall be used to adjust the emission performance of the addition and extension fuels to compensate for differences in fuel compositions that are incorporated in the complex model, as described at Sec. 80.48. Compensating adjustments for naturally-resulting variations in fuel parameters shall also be made using the complex model. The adjustment process is described in paragraph (d) of this section. (d) The complex emission model described at Sec. 80.45 shall be used to adjust the emission performance of addition and extension fuels to compensate for differences in fuel parameters other than the parameter being tested. Compensating adjustments for naturally- resulting variations in fuel parameters shall also be made using the complex model. These adjustments shall be calculated as follows: (1) Determine the exhaust emissions performance of the actual addition or extension fuels relative to the exhaust emissions performance of Clean Air Act baseline fuel using the complex model. For addition fuels, set the level of the parameter being tested at baseline levels for purposes of emissions performance evaluation using the complex model. For extension fuel #1, set the level of the parameter being extended at the level specified in extension fuel #2. Also determine the exhaust emissions performance of the addition fuels specified in paragraph (a)(1) of this section with the level of the parameter being tested set at baseline levels. (2) Calculate adjustment factors for each addition fuel as follows: (i) Adjustment factors shall be calculated using the formula: TR16FE94.006 where A=the adjustment factor P(actual)=the performance of the actual fuel used in testing according to the complex model P(nominal)=the performance that would have been achieved by the test fuel defined in paragraph (a)(1) of this section according to the complex model (as described in paragraph (d)(1) of this section). (ii) Adjustment factors shall be calculated for each pollutant and for each emitter class. (3) Multiply the measured emissions from each vehicle by the corresponding adjustment factor for the appropriate addition or extension fuel, pollutant, and emitter class. Use the resulting adjusted emissions to conduct all modeling and emission effect estimation activities described in Sec. 80.48. (e) All fuels included in vehicle testing programs shall have an octane number of 87.5, as measured by the (R+M)/2 method following the ASTM D4814 procedures, to within the measurement and blending tolerances specified in paragraph (c) of this section. (f) A single batch of each addition or extension fuel shall be used throughout the duration of the testing program. Sec. 80.50 General test procedure requirements for augmentation of the emission models. (a) The following test procedure must be followed when testing to augment the complex emission model described at Sec. 80.45. (1) VOC, NOX, CO, and CO2 emissions must be measured for all fuel-vehicle combinations tested. (2) Toxics emissions must be measured when testing the extension fuels per the requirements of Sec. 80.49(a) or when testing addition fuels 1, 2, and 3 per the requirements of Sec. 80.49(a). (3) When testing addition fuels 4, 5, 6, and 7 per the requirements of Sec. 80.49(a), toxics emissions need not be measured. However, EPA reserves the right to require the inclusion of such measurements in the test program prior to approval of the test program if evidence exists which suggests that adverse interactive effects of the parameter in question may exist for toxics emissions. (b) The general requirements per 40 CFR 86.130-96 shall be met. (c) The engine starting and restarting procedures per 40 CFR 86.136-90 shall be followed. (d) Except as provided for at Sec. 80.59, general preparation of vehicles being tested shall follow procedures detailed in 40 CFR 86.130-96 and 86.131-96. Sec. 80.51 Vehicle test procedures. The test sequence applicable when augmenting the emission models through vehicle testing is as follows: (a) Prepare vehicles per Sec. 80.50. (b) Initial preconditioning per Sec. 80.52(a)(1). Vehicles shall be refueled randomly with the fuels required in Sec. 80.49 when testing to augment the complex emission model. (c) Exhaust emissions tests, dynamometer procedure per 40 CFR 86.137-90 with: (1) Exhaust Benzene and 1,3-Butadiene emissions measured per Sec. 80.55; and (2) Formaldehyde and Acetelaldehyde emissions measured per Sec. 80.56. Sec. 80.52 Vehicle preconditioning. (a) Initial vehicle preconditioning and preconditioning between tests with different fuels shall be performed in accordance with the ``General vehicle handling requirements'' per 40 CFR 86.132-96, up to and including the completion of the hot start exhaust test. (b) The preconditioning procedure prescribed at 40 CFR 86.132-96 shall be observed for preconditioning vehicles between tests using the same fuel. Secs. 80.53-80.54 [Reserved] Sec. 80.55 Measurement methods for benzene and 1,3-butadiene. (a) Sampling for benzene and 1,3-butadiene must be accomplished by bag sampling as used for total hydrocarbons determination. This procedure is detailed in 40 CFR 86.109. (b) Benzene and 1,3-butadiene must be analyzed by gas chromatography. Expected values for benzene and 1,3-butadiene in bag samples for the baseline fuel are 4.0 ppm and 0.30 ppm respectively. At least three standards ranging from at minimum 50% to 150% of these expected values must be used to calibrate the detector. An additional standard of at most 0.01 ppm must also be measured to determine the required limit of quantification as described in paragraph (d) of this section. (c) The sample injection size used in the chromatograph must be sufficient to be above the laboratory determined limit of quantification (LOQ) as defined in paragraph (d) of this section for at least one of the bag samples. A control chart of the measurements of the standards used to determine the response, repeatability, and limit of quantitation of the instrumental method for 1,3-butadiene and benzene must be reported. (d) As in all types of sampling and analysis procedures, good laboratory practices must be used. See, Lawrence, Principals of Environmental Analysis, 55 Analytical Chemistry 14, at 2210-2218 (1983) (copies may be obtained from the publisher, American Chemical Society, 1155 16th Street NW., Washington, DC 20036). Reporting reproducibility control charts and limits of detection measurements are integral procedures to assess the validity of the chosen analytical method. The repeatability of the test method must be determined by measuring a standard periodically during testing and recording the measured values on a control chart. The control chart shows the error between the measured standard and the prepared standard concentration for the periodic testing. The error between the measured standard and the actual standard indicates the uncertainty in the analysis. The limit of detection (LOD) is determined by repeatedly measuring a blank and a standard prepared at a concentration near an assumed value of the limit of detection. If the average concentration minus the average of the blanks is greater than three standard deviations of these measurements, then the limit of detection is at least as low as the prepared standard. The limit of quantitation (LOQ) is defined as ten times the standard deviation of these measurements. This quantity defines the amount of sample required to be measured for a valid analysis. (e) Other sampling and analytical techniques will be allowed if they can be proven to have equal specificity and equal or better limits of quantitation. Data from alternative methods that can be demonstrated to have equivalent or superior limits of detection, precision, and accuracy may be accepted by the Administrator with individual prior approval. Sec. 80.56 Measurement methods for formaldehyde and acetaldehyde. (a) Formaldehyde and acetaldehyde will be measured by drawing exhaust samples from heated lines through either 2,4- Dinitrophenylhydrazine (DNPH) impregnated cartridges or impingers filled with solutions of DNPH in acetonitrile (ACN) as described in Secs. 86.109 and 86.140 of this chapter for formaldehyde analysis. Diluted exhaust sample volumes must be at least 15 L for impingers containing 20 ml of absorbing solution (using more absorbing solution in the impinger requires proportionally more gas sample to be taken) and at least 4 L for cartridges. As required in Sec. 86.109 of this chapter, two impingers or cartridges must be connected in series to detect breakthrough of the first impinger or cartridge. (b) In addition, sufficient sample must be drawn through the collecting cartridges or impingers so that the measured quantity of aldehyde is sufficiently greater than the minimum limit of quantitation of the test method for at least a portion of the exhaust test procedure. The limit of quantitation is determined using the technique defined in Sec. 80.55(d). (c) Each of the impinger samples are quantitatively transferred to a 25 mL volumetric flask (5 mL more than the sample impinger volume) and brought to volume with ACN. The cartridge samples are eluted in reversed direction by gravity feed with 6mL of ACN. The eluate is collected in a graduated test tube and made up to the 5mL mark with ACN. Both the impinger and cartridge samples must be analyzed by HPLC without additional sample preparation. (d) The analysis of the aldehyde derivatives collected is accomplished with a high performance liquid chromatograph (HPLC). Standards consisting of the hydrazone derivative of formaldehyde and acetaldehyde are used to determine the response, repeatability, and limit of quantitation of the HPLC method chosen for acetaldehyde and formaldehyde. (e) Other sampling and analytical techniques will be allowed if they can be proven to have equal specificity and equal or better limits of quantitation. Data from alternative methods that can be demonstrated to have equivalent or superior limits of detection, precision, and accuracy may be accepted by the Administrator with individual prior approval. Secs. 80.57-80.58 [Reserved] Sec. 80.59 General test fleet requirements for vehicle testing. (a) The test fleet must consist of only 1989-91 MY vehicles which are technologically equivalent to 1990 MY vehicles, or of 1986-88 MY vehicles for which no changes to the engine or exhaust system that would significantly affect emissions have been made through the 1990 model year. To be technologically equivalent vehicles must have closed- loop systems and possess adaptive learning. (b) No maintenance or replacement of any vehicle component is permitted except when necessary to ensure operator safety or as specifically permitted in Sec. 80.60 and Sec. 80.61. All vehicle maintenance procedures must be reported to the Administrator. (c) Each vehicle in the test fleet shall have no fewer than 4,000 miles of accumulated mileage prior to being included in the test program. Sec. 80.60 Test fleet requirements for exhaust emission testing. (a) Candidate vehicles which conform to the emission performance requirements defined in paragraphs (b) through (d) of this section shall be obtained directly from the in-use fleet and tested in their as-received condition. (b) Candidate vehicles for the test fleet must be screened for their exhaust VOC emissions in accordance with the provisions in Sec. 80.62. (c) On the basis of pretesting pursuant to paragraph (b) of this section, the test fleet shall be subdivided into two emitter group sub- fleets: the normal emitter group and the higher emitter group. (1) Each vehicle with an exhaust total hydrocarbon (THC) emissions rate which is less than or equal to twice the applicable emissions standard shall be placed in the normal emitter group. (2) Each vehicle with an exhaust THC emissions rate which is greater than two times the applicable emissions standard shall be placed in the higher emitter group. (d) The test vehicles in each emitter group must conform to the requirements of paragraphs (d)(1) through (4) of this section. (1) Test vehicles for the normal emitter sub-fleet must be selected from the list shown in this paragraph (d)(1). This list is arranged in order of descending vehicle priority, such that the order in which vehicles are added to the normal emitter sub-fleet must conform to the order shown (e.g., a ten-vehicle normal emitter group sub-fleet must consist of the first ten vehicles listed in this paragraph (d)(1)). If more vehicles are tested than the minimum number of vehicles required for the normal emitter sub-fleet, additional vehicles are to be added to the fleet in the order specified in this paragraph (d)(1), beginning with the next vehicle not already included in the group. The vehicles in the normal emitter sub-fleet must possess the characteristics indicated in the list. If the end of the list is reached in adding vehicles to the normal emitter sub-fleet and additional vehicles are desired then they shall be added beginning with vehicle number one, and must be added to the normal emitter sub-fleet in accordance with the order in Table A: Table A--Test Fleet Definitions ---------------------------------------------------------------------------------------------------------------- Tech. Veh. No. Fuel system Catalyst Air injection EGR group Manufacturer ---------------------------------------------------------------------------------------------------------------- 1............... Multi.......... 3W............. No Air......... EGR............ 1 GM. 2............... Multi.......... 3W............. No Air......... No EGR......... 2 Ford. 3............... TBI............ 3W............. No Air......... EGR............ 3 GM. 4............... Multi.......... 3W+OX.......... Air............ EGR............ 4 Ford. 5............... Multi.......... 3W............. No Air......... EGR............ 1 Honda. 6............... Multi.......... 3W............. No Air......... No EGR......... 2 GM. 7............... TBI............ 3W............. No Air......... EGR............ 3 Chrysler. 8............... Multi.......... 3W+OX.......... Air............ EGR............ 4 GM. 9............... TBI............ 3W+OX.......... Air............ EGR............ 7 Chrysler. 10.............. Multi.......... 3W............. Air............ EGR............ 5 Toyota. 11.............. Multi.......... 3W............. No Air......... EGR............ 1 Ford. 12.............. Multi.......... 3W............. No Air......... No EGR......... 2 Chrysler. 13.............. Carb........... 3W+OX.......... Air............ EGR............ 9 Toyota. 14.............. TBI............ 3W............. No Air......... EGR............ 3 Ford. 15.............. Multi.......... 3W+OX.......... Air............ EGR............ 4 GM. 16.............. Multi.......... 3W............. No Air......... EGR............ 1 Toyota. 17.............. Multi.......... 3W............. No Air......... No EGR......... 2 Mazda. 18.............. TBI............ 3W............. No Air......... EGR............ 3 GM. 19.............. Multi.......... 3W+OX.......... Air............ EGR............ 4 Ford. 20.............. Multi.......... 3W............. No Air......... EGR............ 1 Nissan. ---------------------------------------------------------------------------------------------------------------- Table B--Tech Group Definitions in Table A ---------------------------------------------------------------------------------------------------------------- Tech group Fuel system Catalyst Air injection EGR ---------------------------------------------------------------------------------------------------------------- 1................ Multi................. 3W.................... No Air................ EGR. 2................ Multi................. 3W.................... No Air................ No EGR. 3................ TBI................... 3W.................... No Air................ EGR. 4................ Multi................. 3W+OX................. Air................... EGR. 5................ Multi................. 3W.................... Air................... EGR. 6................ TBI................... 3W.................... Air................... EGR. 7................ TBI................... 3W+OX................. Air................... EGR. 8................ TBI................... 3W.................... No Air................ No EGR. 9................ Carb.................. 3W+OX................. Air................... EGR. ---------------------------------------------------------------------------------------------------------------- Legend: Fuel system: Multi=Multi-point fuel injection TBI=Throttle body fuel injection Carb=Carburetted Catalyst: 3W=3-Way catalyst 3W+OX=3-Way catalyst plus an oxidation catalyst Air Injection: Air=Air injection EGR=Exhaust gas recirculation (2) Test vehicles for the higher emitter sub-fleet shall be selected from the in-use fleet in accordance with paragraphs (a) and (b) of this section and with Sec. 80.59. Test vehicles for the higher emitter sub-fleet are not required to follow the pattern established in paragraph (d)(1) of this section. (3) The minimum test fleet size is 20 vehicles. Half of the vehicles tested must be included in the normal emitter sub-fleet and half of the vehicles tested must be in the higher emitter sub-fleet. If additional vehicles are tested beyond the minimum of twenty vehicles, the additional vehicles shall be distributed equally between the normal and higher emitter sub-fleets. (4) For each emitter group sub-fleet, 70 9.5% of the sub-fleet must be LDVs, & 30 9.5% must be LDTs. LDTs include light-duty trucks class 1 (LDT1), and light-duty trucks class 2 (LDT2) up to 8500 lbs GVWR. Sec. 80.61 [Reserved] Sec. 80.62 Vehicle test procedures to place vehicles in emitter group sub-fleets. One of the two following test procedures must be used to screen candidate vehicles for their exhaust THC emissions to place them within the emitter group sub-fleets in accordance with the requirements of Sec. 80.60. (a) Candidate vehicles may be tested for their exhaust THC emissions using the federal test procedure as detailed in 40 CFR part 86, with gasoline conforming to requirements detailed in 40 CFR 86.113- 90. The results shall be used in accordance with the requirements in Sec. 80.60 to place the vehicles within their respective emitter groups. (b) Alternatively, candidate vehicles may be screened for their exhaust THC emissions with the IM240 short test procedure.\1\ The results from the IM240 shall be converted into results comparable with the standard exhaust FTP as detailed in this paragraph (b) to place the vehicles within their respective emitter groups in accordance with the requirements of Sec. 80.60. --------------------------------------------------------------------------- \1\EPA Technical Report EPA-AA-TSS-91-1. Copies may be obtained by ordering publication number PB92104405 from the National Technical Information Service, 5285 Port Royal Road, Springfield, Virginia 22161. --------------------------------------------------------------------------- (1) A candidate vehicle with IM240 test results <0.367 grams THC per vehicle mile shall be classified as a normal emitter. (2) A candidate vehicle with IM240 test results 0.367 grams THC per vehicle mile shall be classified as a higher emitter. Secs. 80.63-80.64 [Reserved] Sec. 80.65 General requirements for refiners, importers, and oxygenate blenders. (a) Date requirements begin. The requirements of this subpart D apply to all gasoline produced, imported, transported, stored, sold, or dispensed: (1) At any location other than retail outlets and wholesale purchaser-consumer facilities on or after December 1, 1994; and (2) At any location on or after January 1, 1995. (b) Certification of gasoline and RBOB. Gasoline or RBOB sold or dispensed in a covered area must be certified under Sec. 80.40. (c) Standards must be met on either a per-gallon or on an average basis. (1) Any refiner or importer, for each batch of reformulated gasoline or RBOB it produces or imports, shall meet: (i) Those standards and requirements it designated under paragraph (d) of this section for per-gallon compliance on a per-gallon basis; and (ii) Those standards and requirements it designated under paragraph (d) of this section for average compliance on an average basis over the applicable averaging period; except that (iii) Refiners and importers are not required to meet the oxygen standard for RBOB. (2) Any oxygenate blender, for each batch of reformulated gasoline it produces by blending oxygenate with RBOB shall, subsequent to the addition of oxygenate, meet the oxygen standard either per-gallon or average over the applicable averaging period. (3)(i) For each averaging period, and separately for each parameter that may be met either per-gallon or on average, any refiner shall designate for each refinery, and any importer or oxygenate blender shall designate, its gasoline or RBOB as being subject to the standard applicable to that parameter on either a per-gallon or average basis. For any specific averaging period and parameter all batches of gasoline or RBOB shall be designated as being subject to the per-gallon standard, or all batches of gasoline and RBOB shall be designated as being subject to the average standard. For any specific averaging period and parameter a refiner for a refinery, or any importer or oxygenate blender, may not designate certain batches as being subject to the per-gallon standard and others as being subject to the average standard. (ii) In the event any refiner for a refinery, or any importer or oxygenate blender, fails to meet the requirements of paragraph (c)(3)(i) of this section and for a specific averaging period and parameter designates certain batches as being subject to the per-gallon standard and others as being subject to the average standard, all batches produced or imported during the averaging period that were designated as being subject to the average standard shall, ab initio, be redesignated as being subject to the per- gallon standard. This redesignation shall apply regardless of whether the batches in question met or failed to meet the per-gallon standard for the parameter in question. (d) Designation of gasoline. Any refiner or importer of gasoline shall designate the gasoline it produces or imports as follows: (1) All gasoline produced or imported shall be properly designated as either reformulated or conventional gasoline, or as RBOB. (2) All gasoline designated as reformulated or as RBOB shall be further properly designated as: (i) Either VOC-controlled or not VOC-controlled; (ii) In the case of gasoline or RBOB designated as VOC-controlled, either intended for use in VOC-Control Region 1 or VOC-Control Region 2 (as defined in Sec. 80.71); (iii) Either oxygenated fuels program reformulated gasoline, or not oxygenated fuels program reformulated gasoline. Gasoline or RBOB must be designated as oxygenated fuels program reformulated gasoline if such gasoline: (A) Contains more than 2.0 weight percent oxygen; and (B) Arrives at a terminal from which gasoline is dispensed into trucks used to deliver gasoline to an oxygenated fuels control area within five days prior to the beginning of the oxygenated fuels control period for that control area; (iv) For gasoline or RBOB produced, imported, sold, dispensed or used during the period January 1, 1995 through December 31, 1997, either as being subject to the simple model standards, or to the complex model standards; (v) For each of the following parameters, either gasoline or RBOB which meets the standard applicable to that parameter on a per-gallon basis or on average: (A) Toxics emissions performance; (B) NOx emissions performance; (C) Benzene content; (D) With the exception of RBOB, oxygen content; (E) In the case of VOC-controlled gasoline or RBOB certified using the simple model, RVP; and (F) In the case of VOC-controlled gasoline or RBOB certified using the complex model, VOC emissions performance; and (vi) In the case of RBOB, either as RBOB that may be blended with any oxygenate, or RBOB that may be blended with an ether only. (3) Each batch of reformulated or conventional gasoline or RBOB produced or imported at each refinery or import facility, or each batch of blendstock produced and sold or transferred if blendstock accounting is required under Sec. 80.101(d)(1)(ii), shall be assigned a number (the ``batch number''), consisting of the EPA-assigned refiner, importer, or oxygenate blender registration number, the EPA- assigned facility registration number, the last two digits of the year in which the batch was produced, and a unique number for the batch, beginning with the number one for the first batch produced or imported each calendar year and each subsequent batch during the calendar year being assigned the next sequential number (e.g., 4321-4321-95-001, 4321-4321- 95-002, etc.). (e) Determination of properties. (1) Each refiner or importer shall determine the value of each of the properties specified in paragraph (e)(2)(i) of this section for each batch of reformulated gasoline it produces or imports prior to the gasoline leaving the refinery or import facility, by collecting and analyzing a representative sample of gasoline taken from the batch, using the methodologies specified in Sec. 80.46. This collection and analysis shall be carried out either by the refiner or importer, or by an independent laboratory. A batch of simple model reformulated gasoline may be released by the refiner or importer prior to the receipt of the refiner's or importer's test results except for test results for oxygen, benzene, and RVP. (2) In the event that the values of any of these properties is determined by the refiner or importer and by an independent laboratory in conformance with the requirements of paragraph (f) of this section: (i) The results of the analyses conducted by the refiner or importer for such properties shall be used as the basis for compliance determinations unless the absolute value of the differences of the test results from the two laboratories is larger than the following values: ------------------------------------------------------------------------ Fuel property Range ------------------------------------------------------------------------ Sulfur content..................... 25 ppm Aromatics content.................. 2.7 vol % Olefins content.................... 2.5 vol % Benzene content.................... 0.21 vol % Ethanol content.................... 0.4 vol % Methanol content................... 0.2 vol % MTBE (and other methyl ethers) 0.6 vol % content. ETBE (and other ethyl ethers) 0.6 vol % content. TAME............................... 0.6 vol % t-Butanol content.................. 0.6 vol % RVP................................ 0.3 psi 50% distillation................... 5 deg.F 90% distillation................... 5 deg.F API Gravity........................ 0.3 deg.API ------------------------------------------------------------------------ (ii) In the event the values from the two laboratories for any property fall outside these ranges, the refiner or importer shall use as the basis for compliance determinations: (A) The larger of the two values for the property, except the smaller of the two results shall be used for MTBE, ethanol, methanol, or ETBE for calculating compliance with all requirements and standards except RVP; or (B) The refiner shall have the gasoline analyzed for the property at one additional independent laboratory. If this second independent laboratory obtains a result for the property that is within the range, as listed in paragraph (e)(2)(i) of this section, of the refiner's or importer's result for this property, then the refiner's or importer's result shall be used as the basis for compliance determinations. (f) Independent analysis requirement. (1) Any refiner or importer of reformulated gasoline or RBOB shall carry out a program of independent sample collection and analyses for the reformulated gasoline it produces or imports, which meets the requirements of one of the following two options: (i) Option 1. The refiner or importer shall, for each batch of reformulated gasoline or RBOB that is produced or imported, have the value for each property specified in paragraph (e)(2)(i) of this section determined by an independent laboratory that collects and analyzes a representative sample from the batch using the methodologies specified in Sec. 80.46. (ii) Option 2. The refiner or importer shall have a periodic independent testing program carried out for all reformulated gasoline produced or imported, which shall consist of the following: (A) An independent laboratory shall collect a representative sample from each batch of reformulated gasoline that the refiner or importer produces or imports; (B) EPA will identify up to ten percent of the total number of samples collected under paragraph (f)(1)(ii)(A) of this section; and (C) The designated independent laboratory shall, for each sample identified by EPA under paragraph (f)(1)(ii)(B) of this section, determine the value for each property using the methodologies specified in Sec. 80.46. (2)(i) Any refiner or importer shall designate one independent laboratory for each refinery or import facility at which reformulated gasoline or RBOB is produced or imported. This independent laboratory will collect samples and perform analyses in compliance with the requirements of this paragraph (f) of this section. (ii) Any refiner or importer shall identify this designated independent laboratory to EPA under the registration requirements of Sec. 80.76. (iii) In order to be considered independent: (A) The laboratory shall not be operated by any refiner or importer, and shall not be operated by any subsidiary or employee of any refiner or importer; (B) The laboratory shall be free from any interest in any refiner or importer; and (C) The refiner or importer shall be free from any interest in the laboratory; however (D) Notwithstanding the restrictions in paragraphs (f)(2)(iii) (A) through (C) of this section, a laboratory shall be considered independent if it is owned or operated by a gasoline pipeline company, regardless of ownership or operation of the gasoline pipeline company by refiners or importers, provided that such pipeline company is owned and operated by four or more refiners or importers. (iv) Use of a laboratory that is debarred, suspended, or proposed for debarment pursuant to the Governmentwide Debarment and Suspension regulations, 40 CFR part 32, or the Debarment, Suspension and Ineligibility provisions of the Federal Acquisition Regulations, 48 CFR part 9, subpart 9.4, shall be deemed noncompliance with the requirements of this paragraph (f). (v) Any laboratory that fails to comply with the requirements of this paragraph (f) shall be subject to debarment or suspension under Governmentwide Debarment and Suspension regulations, 40 CFR part 32, or the Debarment, Suspension and Ineligibility regulations, Federal Acquisition Regulations, 48 CFR part 9, subpart 9.4. (3) Any refiner or importer shall, for all samples collected or analyzed pursuant to the requirements of this paragraph (f), cause its designated independent laboratory: (i) At the time the designated independent laboratory collects a representative sample from a batch of reformulated gasoline, to: (A) Obtain the refiner's or importer's assigned batch number for the batch being sampled; (B) Determine the volume of the batch; (C) Determine the identification number of the gasoline storage tank or tanks in which the batch was stored at the time the sample was collected; (D) Determine the date and time the batch became finished reformulated gasoline, and the date and time the sample was collected; (E) Determine the grade of the batch (e.g., premium, mid-grade, or regular); and (F) In the case of reformulated gasoline produced through computer- controlled in-line blending, determine the date and time the blending process began and the date and time the blending process ended, unless exempt under paragraph (f)(4) of this section; (ii) To retain each sample collected pursuant to the requirements of this paragraph (f) for a period of 30 days, except that this period shall be extended to a period of up to 180 days upon request by EPA; (iii) To submit to EPA periodic reports, as follows: (A) A report for the period January through March shall be submitted by May 31; a report for the period April through June shall be submitted by August 31; a report for the period July through September shall be submitted by November 30; and a report for the period October through December shall be submitted by February 28; (B) Each report shall include, for each sample of reformulated gasoline that was analyzed pursuant to the requirements of this paragraph (f): (1) The results of the independent laboratory's analyses for each property; and (2) The information specified in paragraph (f)(3)(i) of this section for such sample; and (iv) To supply to EPA, upon EPA's request, any sample collected or a portion of any such sample. (4) Any refiner that produces reformulated gasoline using computer- controlled in-line blending equipment is exempt from the independent sampling and testing requirements specified in paragraphs (f) (1) through (3) of this section, provided that such refiner: (i) Obtains from EPA an exemption from these requirements. In order to seek such an exemption, the refiner shall submit a petition to EPA, such petition to include: (A) A description of the refiner's computer-controlled in-line blending operation, including a description of: (1) The location of the operation; (2) The length of time the refiner has used the operation; (3) The volumes of gasoline produced using the operation since the refiner began the operation or during the previous three years, whichever is shorter, by grade; (4) The movement of the gasoline produced using the operation to the point of fungible mixing, including any points where all or portions of the gasoline produced is accumulated in gasoline storage tanks; (5) The physical lay-out of the operation; (6) The automated control system, including the method of monitoring and controlling blend properties and proportions; (7) Any sampling and analysis of gasoline that is conducted as a part of the operation, including on-line, off-line, and composite, and a description of the methods of sampling, the methods of analysis, the parameters analyzed and the frequency of such analyses, and any written, printed, or computer-stored results of such analyses, including information on the retention of such results; (8) Any sampling and analysis of gasoline produced by the operation that occurs downstream from the blending operation prior to fungible mixing of the gasoline, including any such sampling and analysis by the refiner and by any purchaser, pipeline or other carrier, or by independent laboratories; (9) Any quality assurance procedures that are carried out over the operation; and (10) Any occasion(s) during the previous three years when the refiner adjusted any physical or chemical property of any gasoline produced using the operation downstream from the operation, including the nature of the adjustment and the reason the gasoline had properties that required adjustment; and (B) A description of the independent audit program of the refiner's computer-controlled in-line blending operation that the refiner proposes will satisfy the requirements of this paragraph (f)(4); and (ii) Carries out an independent audit program of the refiner's computer-controlled in-line blending operation, such program to include: (A) For each batch of reformulated gasoline produced using the operation, a review of the documents generated that is sufficient to determine the properties and volume of the gasoline produced; (B) Audits that occur no less frequently than annually; (C) Reports of the results of such audits submitted to the refiner, and to EPA by the auditor no later than February 28 of each year; (D) Audits that are conducted by an auditor that meets the non- debarred criteria specified in Sec. 80.125 (a) and/or (d); and (iii) Complies with any other requirements that EPA includes as part of the exemption. (g) Marking of conventional gasoline. [Reserved] (h) Compliance audits. Any refiner, importer, and oxygenate blender of any reformulated gasoline or RBOB shall have the reformulated gasoline or RBOB it produced, imported, or blended during each calendar year audited for compliance with the requirements of this subpart D, in accordance with the requirements of subpart F of this part, at the conclusion of each calendar year. (i) Exclusion from compliance calculations of gasoline received from others. Any refiner for each refinery, any oxygenate blender for each oxygenate blending facility, and any importer shall exclude from all compliance calculations the volume and properties of any reformulated gasoline that is produced at another refinery or oxygenate blending facility or imported by another importer. Sec. 80.66 Calculation of reformulated gasoline properties. (a) All volume measurements required by these regulations shall be temperature adjusted to 60 degrees Fahrenheit. (b) The percentage of oxygen by weight contained in a gasoline blend, based upon its percentage oxygenate by volume and density, shall exclude denaturants and water. (c) The properties of reformulated gasoline consist of per-gallon values separately and individually determined on a batch-by-batch basis using the methodologies specified in Sec. 80.46 for each of those physical and chemical parameters necessary to determine compliance with the standards to which the gasoline is subject, and per-gallon values for the VOC, NOX, and toxics emissions performance standards to which the gasoline is subject. (d) Per-gallon oxygen content shall be determined based upon the weight percent oxygen of a representative sample of gasoline, using the method set forth in Sec. 80.46(g). The total oxygen content associated with a batch of gasoline (in percent-gallons) is calculated by multiplying the weight percent oxygen content times the volume. (e) Per-gallon benzene content shall be determined based upon the volume percent benzene of a representative sample of a batch of gasoline by the method set forth in Sec. 80.46(e). The total benzene content associated with a batch of gasoline (in percent-gallons) is calculated by multiplying the volume percent benzene content times the volume. (f) Per-gallon RVP shall be determined based upon the measurement of RVP of a representative sample of a batch of gasoline by the sampling methodologies specified in Appendix D of this part and the testing methodology specified in Appendix E of this part. The total RVP value associated with a batch of gasoline (in RVP-gallons) is calculated by multiplying the RVP times the volume. (g) (1) Per-gallon values for VOC and NOX emissions reduction shall be calculated using the methodology specified in Sec. 80.46 that is appropriate for the gasoline. (2) Per-gallon values for toxic emissions performance reduction shall be established using: (i) For gasoline subject to the simple model, the methodology under Sec. 80.42 that is appropriate for the gasoline; and (ii) For gasoline subject to the complex model, the methodology specified in Sec. 80.46 that is appropriate for the gasoline. (3) The total VOC, NOX, and toxic emissions performance reduction values associated with a batch of gasoline (in percent reduction-gallons) is calculated by multiplying the per-gallon percent emissions performance reduction times the volume of the batch. Sec. 80.67 Compliance on average. The requirements of this section apply to all reformulated gasoline and RBOB produced or imported for which compliance with one or more of the requirements of Sec. 80.41 is determined on average (``averaged gasoline''). (a) Compliance survey required in order to meet standards on average. (1) Any refiner, importer, or oxygenate blender that complies with the compliance survey requirements of Sec. 80.68 has the option of meeting the standards specified in Sec. 80.41 for average compliance in addition to the option of meeting the standards specified in Sec. 80.41 for per-gallon compliance; any refiner, importer, or oxygenate blender that does not comply with the survey requirements must meet the standards specified in Sec. 80.41 for per-gallon compliance, and does not have the option of meeting standards on average. (2)(i)(A) A refiner or importer that produces or imports reformulated gasoline that exceeds the average standards for oxygen or benzene (but not for other parameters that have average standards) may use such gasoline to offset reformulated gasoline which does not achieve such average standards, but only if the reformulated gasoline that does not achieve such average standards is sold to ultimate consumers in the same covered area as was the reformulated gasoline which exceeds average standards; provided that (B) Prior to the beginning of the averaging period when the averaging approach described in paragraph (a)(2)(i)(A) of this section is used, the refiner or importer obtains approval from EPA. In order to seek such approval, the refiner or importer shall submit a petition to EPA, such petition to include: (1) The identification of the refiner and refinery, or importer, the covered area, and the averaging period; and (2) A detailed description of the procedures the refiner or importer will use to ensure the gasoline is produced by the refiner or is imported by the importer and is used only in the covered area in question and is not used in any other covered area, and the record keeping, reporting, auditing, and other quality assurance measures that will be followed to establish the gasoline is used as intended; and (C) The refiner or importer properly completes any requirements that are specified by EPA as conditions for approval of the petition. (ii) Any refiner or importer that meets the requirements of paragraph (a)(2)(i) of this section will be deemed to have satisfied the compliance survey requirements of Sec. 80.68 for the covered area in question. (b) Scope of averaging. (1) Any refiner shall meet all applicable averaged standards separately for each of the refiner's refineries; (2)(i) Any importer shall meet all applicable averaged standards on the basis of all averaged reformulated gasoline and RBOB imported by the importer; except that (ii) Any importer to whom different standards apply for gasoline imported at different facilities by operation of Sec. 80.41(i), shall meet the averaged standards separately for the averaged reformulated gasoline and RBOB imported into each group of facilities that is subject to the same standards; and (3) Any oxygenate blender shall meet the averaged standard for oxygen separately for each of the oxygenate blender's oxygenate blending facilities, except that any oxygenate blender may group the averaged reformulated gasoline produced at facilities at which gasoline is produced for use in a single covered area. (c) RVP and VOC emissions performance reduction compliance on average. (1) The VOC-controlled reformulated gasoline and RBOB produced at any refinery or imported by any importer during the period January 1 through September 15 of each calendar year which is designated for average compliance for RVP or VOC emissions performance on average must meet the standards for RVP (in the case of a refinery or importer subject to the simple model standards) or the standards for VOC emissions performance reduction (in the case of a refinery or importer subject to the complex model standards) which are applicable to that refinery or importer as follows: (i) Gasoline and RBOB designated for VOC Control Region 1 must meet the standards for that Region which are applicable to that refinery or importer; and (ii) Gasoline and RBOB designated for VOC Control Region 2 must meet the standards for that Region which are applicable to that refinery or importer. (2) In the case of a refinery or importer subject to the simple model standards, each gallon of reformulated gasoline and RBOB designated as being VOC-controlled may not exceed the maximum standards for RVP specified in Sec. 80.41(b) which are applicable to that refiner or importer. (3) In the case of a refinery or importer subject to the complex model standards, each gallon of reformulated gasoline designated as being VOC-controlled must equal or exceed the minimum standards for VOC emissions performance specified in Sec. 80.41 which are applicable to that refinery or importer. (d) Toxics emissions reduction and benzene compliance on average. (1) The averaging period for the requirements for benzene content and toxics emission performance is January 1 through December 31 of each year. (2) The reformulated gasoline and RBOB produced at any refinery or imported by any importer during the toxics emissions performance and benzene averaging periods that is designated for average compliance for these parameters shall on average meet the standards specified for toxics emissions performance and benzene in Sec. 80.41 which are applicable to that refinery or importer. (3) Each gallon of reformulated gasoline may not exceed the maximum standard for benzene content specified in Sec. 80.41 which is applicable to that refinery or importer. (e) NOX compliance on average. (1) The averaging period for NOX emissions performance is January 1 through December 31 of each year. (2) The requirements of this paragraph (e) apply separately to reformulated gasoline and RBOB in the following categories: (i) All reformulated gasoline and RBOB that is designated as VOC- controlled; and (ii) All reformulated gasoline and RBOB that is not designated as VOC-controlled. (3) The reformulated gasoline and RBOB produced at any refinery or imported by any importer during the NOX averaging period that is designated for average compliance for NOX shall on average meet the standards for NOX specified in Sec. 80.41 that are applicable to that refinery or importer. (4) Each gallon of reformulated gasoline must equal or exceed the minimum standards for NOX emissions performance specified in Sec. 80.41 which are applicable to that refinery or importer. (f) Oxygen compliance on average. (1) The averaging period for the oxygen content requirements is January 1 through December 31 of each year. (2) The requirements of this paragraph (f) apply separately to reformulated gasoline in the following categories: (i) All reformulated gasoline; (ii) All reformulated gasoline that is not designated as being OPRG; and (iii) In the case of reformulated gasoline certified under the simple model, that which is designated as VOC- controlled. (3) The reformulated gasoline produced at any refinery or imported by any importer during the oxygen averaging period that is designated for average compliance for oxygen shall on average meet the standards for oxygen specified in Sec. 80.41 that is applicable to that refinery or importer. (4) The reformulated gasoline that is produced at any oxygenate blending facility by blending RBOB with oxygenate that is designated for average compliance for oxygen shall on average meet the standards for oxygen specified in Sec. 80.41 that is applicable to that oxygenate blending facility. (5) Each gallon of reformulated gasoline must meet the applicable minimum requirements, and in the case of simple model reformulated gasoline the minimum and maximum requirements, for oxygen content specified in Sec. 80.41. (g) Compliance calculation. To determine compliance with the averaged standards in Sec. 80.41, any refiner for each of its refineries at which averaged reformulated gasoline or RBOB is produced, any oxygenate blender for each of its oxygenate blending facilities at which oxygen averaged reformulated gasoline is produced, and any importer that imports averaged reformulated gasoline or RBOB shall, for each averaging period and for each portion of gasoline for which standards must be separately achieved, and for each relevant standard, calculate: (1)(i) The compliance total using the following formula: TR16FE94.007 where Vi=the volume of gasoline batch i std=the standard for the parameter being evaluated n=the number of batches of gasoline produced or imported during the averaging period and (ii) The actual total using the following formula: TR16FE94.008 where Vi=the volume of gasoline batch i parmi=the parameter value of gasoline batch i n=the number of batches of gasoline produced or imported during the averaging period (2) For each standard, compare the actual total with the compliance total. (3) For the VOC, NOX, and toxics emissions performance and oxygen standards, the actual totals must be equal to or greater than the compliance totals to achieve compliance. (4) For RVP and benzene standards, the actual total must be equal to or less than the compliance totals to achieve compliance. (5) If the actual total for the oxygen standard is less than the compliance total, or if the actual total for the benzene standard is greater than the compliance total, credits for these parameters must be obtained from another refiner, importer or (in the case of oxygen) oxygenate blender in order to achieve compliance: (i) The total number of oxygen credits required to achieve compliance is calculated by subtracting the actual total from the compliance total oxygen; and (ii) The total number of benzene credits required to achieve compliance is calculated by subtracting the compliance total from the actual total benzene. (6) If the actual total for the oxygen standard is greater than the compliance total, or if the actual total for the benzene standard is less than the compliance totals, credits for these parameters are generated: (i) The total number of oxygen credits which may be traded to another refinery, importer, or oxygenate blender is calculated by subtracting the compliance total from the actual total for oxygen; and (ii) The total number of benzene credits which may be traded to another refinery or importer is calculated by subtracting the actual total from the compliance total for benzene. (h) Credit transfers. (1) Compliance with the averaged standards specified in Sec. 80.41 for oxygen and benzene (but for no other standards or requirements) may be achieved through the transfer of oxygen and benzene credits provided that: (i) The credits were generated in the same averaging period as they are used; (ii) The credit transfer takes place no later than fifteen working days following the end of the averaging period in which the reformulated gasoline credits were generated; (iii) The credits are properly created; (iv) The credits are transferred directly from the refiner, importer, or oxygenate blender that creates the credits to the refiner, importer, or oxygenate blender that uses the credits to achieve compliance; (v) Oxygen credits are generated, transferred, and used: (A) In the case of gasoline subject to the simple model standards, only in the following categories: (1) VOC-controlled, non-OPRG; (2) Non-VOC-controlled, non-OPRG; (3) Non-VOC-controlled, OPRG; and (4) VOC-controlled, OPRG; and (B) In the case of gasoline subject to the complex model standards, only in the following categories: (1) OPRG; and (2) Non-OPRG; (vi) Oxygen credits generated from gasoline subject to the complex model standards are not used to achieve compliance for gasoline subject to the simple model standards; (vii) Oxygen credits are not used to achieve compliance with the minimum oxygen content standards in Sec. 80.41; and (viii) Benzene credits are not used to achieve compliance with the maximum benzene content standards in Sec. 80.41. (2) No party may transfer any credits to the extent such a transfer would result in the transferor having a negative credit balance at the conclusion of the averaging period for which the credits were transferred. Any credits transferred in violation of this paragraph are improperly created credits. (3) In the case of credits that were improperly created, the following provisions apply: (i) Improperly created credits may not be used to achieve compliance, regardless of a credit transferee's good faith belief that it was receiving valid credits; (ii) No refiner, importer, or oxygenate blender may create, report, or transfer improperly created credits; and (iii) Where any credit transferor has in its balance at the conclusion of any averaging period both credits which were properly created and credits which were improperly created, the properly created credits will be applied first to any credit transfers before the transferor may apply any credits to achieve its own compliance. (i) Average compliance for reformulated gasoline produced or imported before January 1, 1995. In the case of any reformulated gasoline that is intended to be used beginning January 1, 1995, but that is produced or imported prior to that date: (1) Any refiner or importer may meet standards specified in Sec. 80.41 for average compliance for such gasoline, provided the refiner or importer has the option of meeting standards on average for 1995 under paragraph (a) of this section, and provided the refiner or importer elects to be subject to average standards under Sec. 80.65(c)(3); and (2) Any average compliance gasoline under paragraph (i)(1) of this section shall be combined with average compliance gasoline produced during 1995 for purposes of compliance calculations under paragraph (g) of this section. Sec. 80.68 Compliance surveys. (a) Compliance survey option 1. In order to satisfy the compliance survey requirements, any refiner, importer, or oxygenate blender shall properly conduct a program of compliance surveys in accordance with a survey program plan which has been approved by the Administrator of EPA in each covered area which is supplied with any gasoline for which compliance is achieved on average that is produced by that refiner or oxygenate blender or imported by that importer. Such approval shall be based upon the survey program plan meeting the following criteria: (1) The survey program shall consist of at least four surveys which shall occur during the following time periods: one survey during the period January 1 through May 31; two surveys during the period June 1 through September 15; and one survey during the period September 16 through December 31. (2) The survey program shall meet the criteria stated in paragraph (c) of this section. (3) In the event that any refiner, importer, or oxygenate blender fails to properly carry out an approved survey program, the refiner, importer, or oxygenate blender shall achieve compliance with all applicable standards on a per-gallon basis for the calendar year in which the failure occurs, and may not achieve compliance with any standard on an average basis during this calendar year. This requirement to achieve compliance per-gallon shall apply ab initio to the beginning of any calendar year in which the failure occurs, regardless of when during the year the failure occurs. (b) Compliance survey option 2. A refiner, importer, or oxygenate blender shall be deemed to have satisfied the compliance survey requirements described in paragraph (a) of this section if a comprehensive program of surveys is properly conducted in accordance with a survey program plan which has been approved by the Administrator of EPA. Such approval shall be based upon the survey program plan meeting the following criteria: (1) The initial schedule for the conduct of surveys shall be as follows: (i) 120 surveys shall be conducted in 1995; (ii) 80 surveys shall be conducted in 1996; (iii) 60 surveys shall be conducted in 1997; (iv) 50 surveys shall be conducted in 1998 and thereafter. (2) This initial survey schedule shall be adjusted as follows: (i) In the event one or more ozone nonattainment areas in addition to the nine specified in Sec. 80.70, opt into the reformulated gasoline program, the number of surveys to be conducted in the year the area or areas opt into the program and in each subsequent year shall be increased according to the following formula: TR16FE94.009 where: ANSi = the adjusted number of surveys for year i; i = the opt-in year and each subsequent year NSi = the number of surveys according to the schedule in paragraph (b)(1) of this section in year i; i = the opt-in year and each subsequent year Vopt-in = the total volume of gasoline supplied to the opt-in covered areas in the year preceding the year of the opt-in Vorig = the total volume of gasoline supplied to the original nine covered areas in the year preceding the year of the opt-in (ii) In the event that any covered area fails a survey or survey series according to the criteria set forth in paragraph (c) of this section, the annual decreases in the numbers of surveys prescribed by paragraph (b)(1) of this section, as adjusted by paragraph (b)(2)(i) of this section, shall be adjusted as follows in the year following the year of the failure. Any such adjustment to the number of surveys shall remain in effect so long as any standard for the affected covered area has been adjusted to be more stringent as a result of a failed survey or survey series. The adjustments shall be calculated according to the following formula: TR16FE94.010 where: ANSi = the adjusted number of surveys in year i; i = the year after the failure and each subsequent year Vfailed = the total volume of gasoline supplied to the covered area which failed the survey or survey series in the year of the failure Vtotal = the total volume of gasoline supplied to all covered areas in the year of the failure NSi = the number of surveys in year i according to the schedule in paragraph (b)(1) of this section and as adjusted by paragraph (b)(2)(i) of this section; i = the year after the failure and each subsequent year (3) The survey program shall meet the criteria stated in paragraph (c) of this section. (4) On each occasion the comprehensive survey program does not occur as specified in the approved plan with regard to any covered area: (i) Each refiner, importer, and oxygenate blender who supplied any reformulated gasoline or RBOB to the covered area and who has not satisfied the survey requirements described in paragraph (a) of this section shall be deemed to have failed to carry out an approved survey program; and (ii) The covered area will be deemed to have failed surveys for VOC and NOX emissions performance, and survey series for benzene and oxygen, and toxic and NOX emissions performance. (c) General survey requirements. (1) During the period January 1, 1995 through December 31, 1997: (i) Any sample taken from a retail gasoline storage tank for which the three most recent deliveries were of gasoline designated as meeting: (A) Simple model standards shall be considered a ``simple model sample''; or (B) Complex model standards shall be considered a ``complex model sample.'' (ii) A survey shall consist of the combination of a simple model portion and a complex model portion, as follows: (A) The simple model portion of a survey shall consist of all simple model samples that are collected pursuant to the applicable survey design in a single covered area during any consecutive seven-day period and that are not excluded under paragraph (c)(6) of this section. (B) The complex model portion of a survey shall consist of all complex model samples that are collected pursuant to the applicable survey design in a single covered area during any consecutive seven-day period and that are not excluded under paragraph (c)(6) of this section. (iii) (A) The simple model portion of each survey shall be representative of all gasoline certified using the simple model which is being dispensed in the covered area. (B) The complex model portion of each survey shall be representative of all gasoline certified using the complex model which is being dispensed in the covered area. (2) Beginning on January 1, 1998: (i) A survey shall consist of all samples that are collected pursuant to the applicable survey design in a single covered area during any consecutive seven-day period and that are not excluded under paragraph (c)(6) of this section. (ii) A survey shall be representative of all gasoline which is being dispensed in the covered area. (3) A VOC survey, and prior to January 1, 2000, a NOX survey, shall consist of any survey conducted during the period June 1 through September 15. (4) (i) A toxics, oxygen, and benzene survey series shall consist of all surveys conducted in a single covered area during a single calendar year. (ii) A NOX survey series shall consist of all surveys conducted in a single covered area during the periods January 1 through May 31, and September 16 through December 31 during a single calendar year. (5) (i) Each simple model sample included in a survey shall be analyzed for oxygenate type and content, benzene content, aromatic hydrocarbon content, and RVP in accordance with the methodologies specified in Sec. 80.46; and (ii) Each complex model sample included in a survey shall be analyzed for oxygenate type and content, olefins, benzene, sulfur, and aromatic hydrocarbons, E-200, E-300, and RVP in accordance with the methodologies specified in Sec. 80.46. (6) (i) The results of each survey shall be based upon the results of the analysis of each sample collected during the course of the survey, unless the sample violates the applicable per-gallon maximum or minimum standards for the parameter being evaluated plus any enforcement tolerance that applies to the parameter (e.g., a sample that violates the benzene per-gallon maximum plus any benzene enforcement tolerance but meets other per-gallon maximum and minimum standards would be excluded from the benzene survey, but would be included in the surveys for parameters other than benzene). (ii) Any sample from a survey that violates any standard under Sec. 80.41, or that constitutes evidence of the violation of any prohibition or requirement under this subpart D, may be used by the Administrator in an enforcement action for such violation. (7) Each laboratory at which samples in a survey are analyzed shall participate in a correlation program with EPA to ensure the validity of analysis results. (8) (i) The results of each simple model VOC survey shall be determined as follows: (A) For each simple model sample from the survey, the VOC emissions reduction percentage shall be determined based upon the tested values for RVP and oxygen for that sample as applied to the VOC emissions reduction equation at Sec. 80.42(a)(1) for VOC-Control Region 1 and Sec. 80.42(a)(2) for VOC-Control Region 2; (B) The VOC emissions reduction survey standard applicable to each covered area shall be calculated by using the VOC emissions equation at Sec. 80.42(a)(1) with RVP=7.2 and OXCON=2.0 for covered areas located in VOC-Control Region 1 and using the VOC emissions equation at Sec. 80.42(a)(2) with RVP=8.1 and OXCON=2.0 for covered areas located in VOC-Control Region 2; and (C) The covered area shall have failed the simple model VOC survey if the VOC emissions reduction average of all survey samples is less than VOC emissions reduction survey standard calculated under paragraph (c)(8)(i)(B) of this section. (ii) The results of each complex model VOC emissions reduction survey shall be determined as follows: (A) For each complex model sample from the survey, the VOC emissions reduction percentage shall be determined based upon the tested parameter values for that sample and the appropriate methodology for calculating VOC emissions reduction at Sec. 80.47; and (B) The covered area shall have failed the complex model VOC survey if the VOC emissions reduction percentage average of all survey samples is less than the applicable per-gallon standard for VOC emissions reduction. (9) (i) The results of each simple model toxics emissions reduction survey series conducted in any covered area shall be determined as follows: (A) For each simple model sample from the survey series, the toxics emissions reduction percentage shall be determined based upon the tested parameter values for that sample and the appropriate methodology for calculating toxics emissions performance reduction at Sec. 80.42. (B) The annual average of the toxics emissions reduction percentages for all samples from a survey series shall be calculated according to the following formula: TR16FE94.011 where AATER = the annual average toxics emissions reduction TER1,i = the toxics emissions reduction for sample i of gasoline collected during the high ozone season TER2,i = the toxics emissions reduction for sample i of gasoline collected outside the high ozone season n1 = the number of samples collected during the high ozone season n2 = the number of samples collected outside the high ozone season 0(C) The covered area shall have failed the simple model toxics survey series if the annual average toxics emissions reduction is less than the simple model per-gallon standard for toxics emissions reduction. (ii) The results of each complex model toxics emissions reduction survey series conducted in any covered area shall be determined as follows: (A) For each complex model sample from the survey series, the toxics emissions reduction percentage shall be determined based upon the tested parameter values for that sample and the appropriate methodology for calculating toxics emissions reduction at Sec. 80.47; (B) The annual average of the toxics emissions reduction percentages for all samples from a survey series shall be calculated according to the formula specified in paragraph (c)(8)(i)(B) of this section; and (C) The covered area shall have failed the complex model toxics survey series if the annual average toxics emissions reduction is less than the applicable per-gallon complex model standard for toxics emissions reduction. (10) The results of each NOX emissions reduction survey and survey series shall be determined as follows: (i) For each sample from the survey and survey series, the NOX emissions reduction percentage shall be determined based upon the tested parameter values for that sample and the appropriate methodology for calculating NOX emissions reduction at Sec. 80.47; and (ii) The covered area shall have failed the NOX survey or survey series if the NOX emissions reduction percentage average for all survey samples is less than the applicable Phase I or Phase II complex model per-gallon standard for NOX emissions reduction. (11) For any benzene content survey series conducted in any covered area the average benzene content for all samples from the survey series shall be calculated. If this annual average is greater than 1.000 percent by volume, the covered area shall have failed a benzene survey series. (12) For any oxygen content survey series conducted in any covered area the average oxygen content for all samples from the survey series shall be calculated. If this annual average is less than 2.00 percent by weight, the covered area shall have failed an oxygen survey series. Each survey program shall: (i) Be planned and conducted by a person who is independent of the refiner or importer (the surveyor). In order to be considered independent: (A) The surveyor shall not be an employee of any refiner or importer; (B) The surveyor shall be free from any obligation to or interest in any refiner or importer; and (C) The refiner or importer shall be free from any obligation to or interest in the surveyor; and (ii) Include procedures for selecting sample collection locations, numbers of samples, and gasoline compositions which will result in: (A) Simple model surveys representing all gasoline certified using the simple model being dispensed at retail outlets within the covered area during the period of the survey; and (B) Complex model surveys representing all gasoline certified using the complex model being dispensed at retail outlets within the covered area during the period of the survey; and (iii) Include procedures such that the number of samples included in each survey assures that: (A) In the case of simple model surveys, the average levels of oxygen, benzene, RVP, and aromatic hydrocarbons are determined with a 95% confidence level, with error of less than 0.1 psi for RVP, 0.05% for benzene (by volume), and 0.1% for oxygen (by weight); and (B) In the case of complex model surveys, the average levels of oxygen, benzene, RVP, aromatic hydrocarbons, olefins, T-50, T-90, and sulfur are determined with a 95% confidence level, with error of less than 0.1 psi for RVP, 0.05% for benzene (by volume), 0.1% for oxygen (by weight), 0.5% for aromatic hydrocarbons (by volume), 0.5% for olefins (by volume), 5 deg.F. for T-50 and T-90, and 10 ppm for sulfur; and (iv) Require that the surveyor shall: (A) Not inform anyone, in advance, of the date or location for the conduct of any survey; (B) Upon request by EPA made within thirty days following the submission of the report of a survey, provide a duplicate of any gasoline sample taken during that survey to EPA at a location to be specified by EPA each sample to be identified by the name and address of the facility where collected, the date of collection, and the classification of the sample as simple model or complex model; and (C) At any time permit any representative of EPA to monitor the conduct of the survey, including sample collection, transportation, storage, and analysis; and (v) Require the surveyor to submit to EPA a report of each survey, within thirty days following completion of the survey, such report to include the following information: (A) The identification of the person who conducted the survey; (B) An attestation by an officer of the surveyor company that the survey was conducted in accordance with the survey plan and that the survey results are accurate; (C) If the survey was conducted for one refiner or importer, the identification of that party; (D) The identification of the covered area surveyed; (E) The dates on which the survey was conducted; (F) The address of each facility at which a gasoline sample was collected, the date of collection, and the classification of the sample as simple model or complex model; (G) The results of the analyses of simple model samples for oxygenate type and oxygen weight percent, benzene content, aromatic hydrocarbon content, and RVP, and the calculated toxics emission reduction percentage; (H) The results of the analyses of complex model samples for oxygenate type and oxygen weight percent, benzene, aromatic hydrocarbon, and olefin content, E-200, E-300, and RVP, and the calculated VOC, NOX, and toxics emissions reduction percentages; (I) The name and address of each laboratory where gasoline samples were analyzed; (J) A description of the methodology utilized to select the locations for sample collection and the numbers of samples collected; (K) For any samples which were excluded from the survey, a justification for such exclusion; and (L) The average toxics emissions reduction percentage for simple model samples and the percentage for complex model samples, the average benzene and oxygen percentages, for each survey conducted during the period June 1 through September 15, the average VOC emissions reduction percentage for simple model samples and the percentage for complex model samples, and beginning on January 1, 2000, the average NOX emissions reduction percentage. (14) Each survey shall be conducted at a time and in a covered area selected by EPA no earlier than two weeks before the date of the survey. (15) The procedure for seeking EPA approval for a survey program plan shall be as follows: (i) The survey program plan shall be submitted to the Administrator of EPA for EPA's approval no later than September 1 of the year preceding the year in which the surveys will be conducted; and (ii) Such submittal shall be signed by a responsible corporate officer of the refiner, importer, or oxygenate blender, or in the case of a comprehensive survey program plan, by an officer of the organization coordinating the survey program. (16) (i) No later than December 1 of the year preceding the year in which the surveys will be conducted, the contract with the surveyor to carry out the entire survey plan shall be in effect, and an amount of money necessary to carry out the entire survey plan shall be paid to the surveyor or placed into an escrow account with instructions to the escrow agent to pay the money over to the surveyor during the course of the conduct of the survey plan. (ii) No later than December 15 of the year preceding the year in which the surveys will be conducted, the Administrator of EPA shall be given a copy of the contract with the surveyor, proof that the money necessary to carry out the plan has either been paid to the surveyor or placed into an escrow account, and if placed into an escrow account, a copy of the escrow agreement. Sec. 80.69 Requirements for downstream oxygenate blending. The requirements of this section apply to all reformulated gasoline blendstock for oxygenate blending, or RBOB, to which oxygenate is added at any oxygenate blending facility. (a) Requirements for refiners and importers. For any RBOB produced or imported, the refiner or importer of the RBOB shall: (1) Produce or import the RBOB such that, when blended with a specified type and percentage of oxygenate, it meets the applicable standards for reformulated gasoline; (2) In order to determine the properties of RBOB for purposes of calculating compliance with per-gallon or averaged standards, conduct tests on each batch of the RBOB by: (i) Adding the specified type and amount of oxygenate to a representative sample of the RBOB; and (ii) Determining the properties and characteristics of the resulting gasoline using the methodology specified in Sec. 80.65(e); (3) Carry out the independent analysis requirements specified in Sec. 80.65(f); (4) Determine properties of the RBOB which are sufficient to allow parties downstream from the refinery or import facility to establish, through sampling and testing, if the RBOB has been altered or contaminated such that it will not meet the applicable reformulated gasoline standards subsequent to the addition of the specified type and amount of oxygenate; (5) Transfer ownership of the RBOB only to an oxygenate blender who is registered with EPA as such, or to an intermediate owner with the restriction that it only be transferred to a registered oxygenate blender; (6) Have a contract with each oxygenate blender who receives any RBOB produced or imported by the refiner or importer that requires the oxygenate blender, or, in the case of a contract with an intermediate owner, that requires the intermediate owner to require the oxygenate blender to: (i) Comply with blender procedures that are specified by the contract and are calculated to assure blending with the proper type and amount of oxygenate; (ii) Allow the refiner or importer to conduct quality assurance sampling and testing of the reformulated gasoline produced by the oxygenate blender; (iii) Stop selling any gasoline found to not comply with the standards under which the RBOB was produced or imported; and (iv) Carry out the quality assurance sampling and testing that this section requires the oxygenate blender to conduct; (7) Conduct a quality assurance sampling and testing program to be carried out at the facilities of each oxygenate blender who blends any RBOB produced or imported by the refiner or importer with any oxygenate, to determine whether the reformulated gasoline which has been produced through blending complies with the applicable standards, using the methodology specified in Sec. 80.46 for this determination. (i) The sampling and testing program shall be conducted as follows: (A) All samples shall be collected subsequent to the addition of oxygenate, and either: (1) Prior combining the resulting gasoline with any other gasoline; or (2) In the case of truck splash blending, subsequent to the delivery of the gasoline to a retail outlet or wholesale purchaser- consumer facility provided that the three most recent deliveries to the retail outlet or wholesale purchaser facility were of gasoline produced using that refiner's or importer's RBOB, and provided that any discrepancy found through the retail outlet or wholesale purchaser facility sampling is followed-up with measures reasonably designed to discover the cause of the discrepancy; and (B) Sampling and testing shall be at one of the following rates: (1) In the case of RBOB which is blended with oxygenate in a gasoline storage tank, a rate of not less than one sample for every 400,000 barrels of RBOB produced or imported by that refiner or importer that is blended by that blender, or one sample every month, whichever is more frequent; or (2) In the case of RBOB which is blended with oxygenate in gasoline delivery trucks through the use of computer-controlled in-line blending equipment, a rate of not less than one sample for every 200,000 barrels of RBOB produced or imported by that refiner or importer that is blended by that blender, or one sample every three months, whichever is more frequent; or (3) In the case of RBOB which is blended with oxygenate in gasoline delivery trucks without the use of computer-controlled in-line blending equipment, a rate of not less than one sample for each 50,000 barrels of RBOB produced or imported by that refiner or importer which is blended, or one sample per month, whichever is more frequent; (ii) In the event the test results for any sample indicate the gasoline does not comply with applicable standards (within the ranges specified in Sec. 80.70(b)(2)(i)), the refiner or importer shall: (A) Immediately take steps to stop the sale of the gasoline that was sampled; (B) Take steps which are reasonably calculated to determine the cause of the noncompliance and to prevent future instances of noncompliance; (C) Increase the rate of sampling and testing to one of the following rates: (1) In the case of RBOB which is blended with oxygenate in a gasoline storage tank, a rate of not less than one sample for every 200,000 barrels of RBOB produced or imported by that refiner or importer that is blended by that blender, or one sample every two weeks, whichever is more frequent; or (2) In the case of RBOB which is blended with oxygenate in gasoline delivery trucks through the use of computer-controlled in-line blending equipment, a rate of not less than one sample for every 100,000 barrels of RBOB produced or imported by that refiner or importer that is blended by that blender, or one sample every two months, whichever is more frequent; or (3) In the case of RBOB which is blended with oxygenate in gasoline delivery trucks without the use of computer-controlled in-line blending equipment, a rate of not less than one sample for each 25,000 barrels of RBOB produced or imported by that refiner or importer which is blended, or one sample every two weeks, whichever is more frequent; (D) Continue the increased frequency of sampling and testing until the results of ten consecutive samples and tests indicate the gasoline complies with applicable standards, at which time the sampling and testing may be conducted at the original frequency; (iii) This quality assurance program is in addition to any quality assurance requirements carried out by other parties; (8) A refiner or importer of RBOB may, in lieu of the contractual and quality assurance requirements specified in paragraphs (a) (6) and (7) of this section, base its compliance calculations on the following assumptions: (i) In the case of RBOB designated for any-oxygenate, assume that ethanol will be added; (ii) In the case of RBOB designated for ether-only, assume that MTBE will be added; and (iii) In the case of any-oxygenate and ether-only designated RBOB, assume that the volume of oxygenate added will be such that the resulting reformulated gasoline will have an oxygen content of 2.0 weight percent; (9) Any refiner or importer who does not meet the contractual and quality assurance requirements specified in paragraphs (a) (6) and (7) of this section, and who does not designate its RBOB as ether-only or any-oxygenate, shall base its compliance calculations on the assumption that 4.0 volume percent ethanol is added to the RBOB; and (10) Specify in the product transfer documentation for the RBOB each oxygenate type or types and amount or range of amounts which is consistent with the designation of the RBOB as any-oxygenate, or ether- only, and which, if blended with the RBOB will result in reformulated gasoline which: (i) Has VOC, toxics, or NOX emissions reduction percentages which are no lower than the percentages that formed the basis for the refiner's or importer's compliance determination for these parameters; (ii) Has a benzene content and RVP level which are no higher than the values for these characteristics that formed the basis for the refiner's or importer's compliance determinations for these parameters; and (iii) Will not cause the reformulated gasoline to violate any standard specified in Sec. 80.41. (b) Requirements for oxygenate blenders. For all RBOB received by any oxygenate blender, the oxygenate blender shall: (1) Add oxygenate of the type(s) and amount (or within the range of amounts) specified in the product transfer documents for the RBOB; (2) Designate each batch of the resulting reformulated gasoline as meeting the oxygen standard per-gallon or on average; (3) Meet the standard requirements specified in Sec. 80.65(c) and Sec. 80.67(e), the record keeping requirements specified in Sec. 80.74, and the reporting requirements specified in Sec. 80.75; and (4) In the case of each batch of reformulated gasoline which is designated for compliance with the oxygen standard on average: (i) Determine the volume and the weight percent oxygen of the batch using the testing methodology specified in Sec. 80.46; (ii) Assign a number to the batch (the ``batch number''), beginning with the number one for the first batch produced each calendar year and each subsequent batch during the calendar year being assigned the next sequential number, and such numbers to be preceded by the oxygenate blender's registration number, the facility number, and the second two digits of the year in which the batch was produced (e.g., 4321-4321-95- 001, 4321-4321-95-002, etc.); and (iii) Meet the compliance audit requirements specified in Sec. 80.65(h). (c) Additional requirements for terminal storage tank blending. Any oxygenate blender who produces reformulated gasoline by blending any oxygenate with any RBOB in any gasoline storage tank, other than a truck used for delivering gasoline to retail outlets or wholesale purchaser-consumer facilities, shall, for each batch of reformulated gasoline so produced determine the oxygen content and volume of this gasoline prior to the gasoline leaving the oxygenate blending facility, using the methodology specified in Sec. 80.46. (d) Additional requirements for distributors dispensing RBOB into trucks for blending. Any distributor who dispenses any RBOB into any truck which delivers gasoline to retail outlets or wholesale purchaser- consumer facilities, shall for such RBOB so dispensed: (1) Transfer the RBOB only to an oxygenate blender who has registered with the Administrator of EPA as such; (2) Transfer any RBOB designated as ether-only RBOB only if the distributor has a reasonable basis for knowing the oxygenate blender will blend an oxygenate other than ethanol with the RBOB; and (3) Obtain from the oxygenate blender the oxygenate blender's EPA registration number. (e) Additional requirements for oxygenate blenders who blend oxygenate in trucks. Any oxygenate blender who obtains any RBOB in any gasoline delivery truck shall: (1) On each occasion it obtains RBOB from a distributor, supply the distributor with the oxygenate blender's EPA registration number; (2) Conduct a quality assurance sampling and testing program to determine whether the proper type and amount of oxygenate is added to RBOB. The program shall be conducted as follows: (i) All samples shall be collected subsequent to the addition of oxygenate, and either: (A) Prior combining the resulting gasoline with any other gasoline; or (B) Subsequent to the delivery of the gasoline to a retail outlet or wholesale purchaser-consumer facility provided that the three most recent deliveries to the retail outlet or wholesale purchaser facility were of gasoline that was produced by that oxygenate blender and that had the same oxygenate requirements, and provided that any discrepancy in oxygenate type or amount found through the retail outlet or wholesale purchaser facility sampling is followed-up with measures reasonably designed to discover the cause of the discrepancy; (ii) Sampling and testing shall be at one of the following rates: (A) In the case computer-controlled in-line blending is used, a rate of not less than one sample per each five hundred occasions RBOB and oxygenate are loaded into a truck by that oxygenate blender, or one sample every three months, whichever is more frequent; or (B) In the case computer-controlled in-line blending is not used, a rate of not less than one sample per each one hundred occasions RBOB and oxygenate are blended in a truck by that oxygenate blender, or one sample per month, whichever is more frequent; (iii) Sampling and testing shall be of the gasoline produced through one of the RBOB-oxygenate blends produced by that oxygenate blender; (iv) Samples shall be analyzed for oxygenate type and oxygen content using the testing methodology specified at Sec. 80.46; and (v) In the event the testing results for any sample indicate the gasoline does not contain the specified type and amount of oxygenate (within the ranges specified in Sec. 80.70(b)(2)(i)): (A) Immediately stop selling (or where possible, to stop any transferee of the gasoline from selling) the gasoline which was sampled; (B) Take steps to determine the cause of the noncompliance; (C) Increase the rate of sampling and testing to one of the following rates: (1) In the case computer-controlled in-line blending is used, a rate of not less than one sample per each two hundred and fifty occasions RBOB and oxygenate are loaded into a truck by that oxygenate blender, or one sample every six weeks, whichever is more frequent; or (2) In the case computer-controlled in-line blending is not used, a rate of not less than one sample per each fifty occasions RBOB and oxygenate are blended in a truck by that oxygenate blender, or one sample every two weeks, whichever is more frequent; and (D) This increased frequency shall continue until the results of ten consecutive samples and tests indicate the gasoline complies with applicable standards, at which time the frequency may revert to the original frequency. (f) Oxygenate blending with OPRG. Notwithstanding the requirements for and restrictions on oxygenate blending provided in this section, any oxygenate blender may blend oxygenate with reformulated gasoline that is designated as OPRG, without meeting the record keeping and reporting requirements that otherwise apply to oxygenate blenders, provided that the reformulated gasoline so produced is: (1) Used in an oxygenated fuels program control area during an oxygenated fuels program control period; and (2) ``Substantially similar'' under section 211(f)(1) of the Clean Air Act, or is permitted under a waiver granted by the Administrator under the authority of section 211(f)(4) of the Clean Air Act. Sec. 80.70 Covered areas. For purposes of subparts D, E, and F of this part, the covered areas are as follows: (a) The Los Angeles-Anaheim-Riverside, California, area, comprised of: (1) Los Angeles County; (2) Orange County; (3) Ventura County; (4) That portion of San Bernadino County that lies south of latitude 35 degrees, 10 minutes north and west of longitude 115 degrees, 45 minutes west; and (5) That portion of Riverside County, which lies to the west of a line described as follows: (i) Beginning at the northeast corner of Section 4, Township 2 South, Range 5 East, a point on the boundary line common to Riverside and San Bernadino Counties; (ii) Then southerly along section lines to the centerline of the Colorado River Aqueduct; (iii) Then southeasterly along the centerline of said Colorado River Aqueduct to the southerly line of Section 36, Township 3 South, Range 7 East; (iv) Then easterly along the township line to the northeast corner of Section 6, Township 4 South, Range 9 East; (v) Then southerly along the easterly line of Section 6 to the southeast corner thereof; (vi) Then easterly along section lines to the northeast corner of Section 10, Township 4 South, Range 9 East; (vii) Then southerly along section lines to the southeast corner of Section 15, Township 4 South, Range 9 East; (viii) Then easterly along the section lines to the northeast corner of Section 21, Township 4 South, Range 10 East; (ix) Then southerly along the easterly line of Section 21 to the southeast corner thereof; (x) Then easterly along the northerly line of Section 27 to the northeast corner thereof; (xi) Then southerly along section lines to the southeast corner of Section 34, Township 4 South, Range 10 East; (xii) Then easterly along the township line to the northeast corner of Section 2, Township 5 South, Range 10 East; (xiii) Then southerly along the easterly line of Section 2, to the southeast corner thereof; (xiv) Then easterly along the northerly line of Section 12 to the northeast corner thereof; (xv) Then southerly along the range line to the southwest corner of Section 18, Township 5 South, Range 11 East; (xvi) Then easterly along section lines to the northeast corner of Section 24, Township 5 South, Range 11 East; (xvii) Then southerly along the range line to the southeast corner of Section 36, Township 8 South, Range 11 East, a point on the boundary line common to Riverside and San Diego Counties. (b) San Diego County, California. (c) The Greater Connecticut area, comprised of: (1) The following Connecticut counties: (i) Hartford; (ii) Middlesex; (iii) New Haven; (iv) New London; (v) Tolland; and (vi) Windham; and (2) Portions of certain Connecticut counties, described as follows: (i) In Fairfield County, the City of Shelton; and (ii) In Litchfield County, all cities and townships except the towns of Bridgewater and New Milford. (d) The New York-Northern New Jersey-Long Island-Connecticut area, comprised of: (1) Portions of certain Connecticut counties, described as follows: (i) In Fairfield County, all cities and townships except Shelton City; and (ii) In Litchfield County, the towns of Bridgewater and New Milford; (2) The following New Jersey counties: (i) Bergen; (ii) Essex; (iii) Hudson; (iv) Hunterdon; (v) Middlesex; (vi) Monmouth; (vii) Morris; (viii) Ocean; (ix) Passaic; (x) Somerset; (xi) Sussex; and (xii) Union; and (3) The following New York counties: (i) Bronx; (ii) Kings; (iii) Nassau; (iv) New York (Manhattan); (v) Queens; (vi) Richmond; (vii) Rockland; (viii) Suffolk; and (ix) Westchester. (e) The Philadelphia-Wilmington-Trenton area, comprised of: (1) The following Delaware counties: (i) New Castle; and (ii) Kent; and (2) Cecil County, Maryland; and (3) The following New Jersey counties: (i) Burlington; (ii) Camden; (iii) Cumberland; (iv) Gloucester; (v) Mercer; and (vi) Salem; and (4) The following Pennsylvania counties: (i) Bucks; (ii) Chester; (iii) Delaware; (iv) Montgomery; and (v) Philadelphia. (f) The Chicago-Gary-Lake County, Illinois-Indiana-Wisconsin area, comprised of: (1) The following Illinois counties: (i) Cook; (ii) Du Page; (iii) Kane; (iv) Lake; (v) McHenry; and (vi) Will; and (2) Portions of certain Illinois counties, described as follows: (i) In Grundy County, the townships of Aux Sable and Goose Lake; and (ii) In Kendall County, Oswego township; and (3) The following Indiana counties: (i) Lake; and (ii) Porter. (g) The Baltimore, Maryland area, comprised of: (1) The following Maryland counties: (i) Anne Arundel; (ii) Baltimore; (iii) Carroll; (iv) Harford; and (v) Howard; and (2) The City of Baltimore. (h) The Houston-Galveston-Brazoria, Texas area, comprised of the following Texas counties: (1) Brazoria; (2) Fort Bend; (3) Galveston; (4) Harris; (5) Liberty; (6) Montgomery; (7) Waller; and (8) Chambers. (i) The Milwaukee-Racine, Wisconsin area, comprised of the following Wisconsin counties: (1) Kenosha; (2) Milwaukee; (3) Ozaukee; (4) Racine; (5) Washington; and (6) Waukesha. (j) The ozone nonattainment areas listed in this paragraph (j) are covered areas beginning on January 1, 1995. 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: (1) Sussex County, Delaware; (2) District of Columbia portion of the Washington ozone nonattainment area; (3) The following Kentucky counties: (i) Boone; (ii) Campbell; (iii) Jefferson; and (iv) Kenton; (4) Portions of the following Kentucky counties: (i) Bullitt; and (ii) Oldham; (5) The following Maine counties: (i) Androscoggin; (ii) Cumberland; (iii) Kennebec; (iv) Knox; (v) Lincoln; (vi) Sagadahoc; (vii) York; (viii) Hancock; and (ix) Waldo; (6) The following Maryland counties: (i) Calvert; (ii) Charles; (iii) Frederick; (iv) Montgomery; (v) Prince Georges; (vi) Queen Anne's; and (vii) Kent; (7) The entire State of Massachusetts; (8) The following New Hampshire counties: (i) Strafford; (ii) Merrimack; (iii) Hillsborough; and (iv) Rockingham; (9) The following New Jersey counties: (i) Atlantic; (ii) Cape May; and (iii) Warren; (10) The following New York counties: (i) Albany; (ii) Dutchess; (iii) Erie; (iv) Essex; (v) Greene; (vi) Jefferson; (vii) Montgomery; (viii) Niagara; (ix) Rensselaer; (x) Saratoga; and (xi) Schenectady; (11) The following Pennsylvania counties: (i) Alleheny; (ii) Armstrong; (iii) Beaver; (iv) Berks; (v) Butler; (vi) Fayette; (vii) Washington; (viii) Westmoreland; (ix) Adams; (x) Blair; (xi) Cambria; (xii) Carbon; (xiii) Columbia; (xiv) Cumberland; (xv) Dauphin; (xvi) Erie; (xvii) Lackawanna; (xviii) Lancaster; (xix) Lebanon; (xx) Lehigh; (xxi) Luzerne; (xxii) Mercer; (xxiii) Monroe; (xxiv) Northampton; (xxv) Perry; (xxvi) Somerset; (xxvii) Wyoming; and (xxviii) York; (12) The entire State of Rhode Island; (13) The following Texas counties: (i) Collin; (ii) Dallas; (iii) Denton; and (iv) Tarrant; (14) The following Virginia areas: (i) Alexandria; (ii) Arlington County; (iii) Fairfax; (iv) Fairfax County; (v) Falls Church; (vi) Loudoun County; (vii) Manassas; (viii) Manassas Park; (ix) Prince William County; (x) Stafford County; (xi) Charles City County; (xii) Chesterfield County; (xiii) Colonial Heights; (xiv) Hanover County; (xv) Henrico County; (xvi) Hopewell; (xvii) Richmond County; (xviii) Chesapeake; (xix) Hampton; (xx) James City County; (xxi) Newport News; (xxii) Norfolk; (xxiii) Poquoson; (xxiv) Portsmouth; (xxv) Suffolk; (xxvi) Virginia Beach; (xxvii) Williamsburg; and (xxviii) York County; and (15) Portions of Smyth County of Virginia. (k) Any other area classified under 40 CFR part 81, subpart C as a marginal, moderate, serious, or severe ozone nonattainment area may be included on petition of the governor of the state in which the area is located. Effective one year after an area has been reclassified as a severe ozone nonattainment area, such severe area shall also be a covered area for purposes of this subpart D. Sec. 80.71 Descriptions of VOC-control regions. (a) Reformulated gasoline covered areas which are located in the following states are included in VOC-Control Region 1: Alabama Arizona Arkansas California Colorado District of Columbia Florida Georgia Kansas Louisiana Maryland Mississippi Missouri Nevada New Mexico North Carolina Oklahoma Oregon South Carolina Tennessee Texas Utah Virginia (b) Reformulated gasoline covered areas which are located in the following states are included in VOC-Control Region 2: Connecticut Delaware Idaho Illinois Indiana Iowa Kentucky Maine Massachusetts Michigan Minnesota Montana Nebraska New Hampshire New Jersey New York North Dakota Ohio Pennsylvania Rhode Island South Dakota Vermont Washington West Virginia Wisconsin Wyoming (c) Reformulated gasoline covered areas which are partially in VOC Control Region 1 and partially in VOC Control Region 2 shall be included in VOC Control Region 1, except in the case of the Philadelphia-Wilmington-Trenton CMSA which shall be included in VOC Control Region 2. Sec. 80.72 [Reserved] Sec. 80.73 Inability to produce conforming gasoline in extraordinary circumstances. In appropriate extreme and unusual circumstances (e.g., natural disaster or Act of God) which are clearly outside the control of the refiner, importer, or oxygenate blender and which could not have been avoided by the exercise of prudence, diligence, and due care, EPA may permit a refiner, importer, or oxygenate blender, for a brief period, to distribute gasoline which does not meet the requirements for reformulated gasoline, if: (a) It is in the public interest to do so (e.g., distribution of the nonconforming gasoline is necessary to meet projected shortfalls which cannot otherwise be compensated for); (b) The refiner, importer, or oxygenate blender exercised prudent planning and was not able to avoid the violation and has taken all reasonable steps to minimize the extent of the nonconformity; (c) The refiner, importer, or oxygenate blender can show how the requirements for reformulated gasoline will be expeditiously achieved; (d) The refiner, importer, or oxygenate blender agrees to make up air quality detriment associated with the nonconforming gasoline, where practicable; and (e) The refiner, importer, or oxygenate blender pays to the U.S. Treasury an amount equal to the economic benefit of the nonconformity minus the amount expended, pursuant to paragraph (d) of this section, in making up the air quality detriment. Sec. 80.74 Record keeping requirements. All parties in the gasoline distribution network, as described in this section, shall maintain records containing the information as required in this section. These records shall be retained for a period of five years from the date of creation, and shall be delivered to the Administrator of EPA or to the Administrator's authorized representative upon request. (a) All regulated parties. Any refiner, importer, oxygenate blender, carrier, distributor, reseller, retailer, or wholesale- purchaser who sells, offers for sale, dispenses, supplies, offers for supply, stores, transports, or causes the transportation of any reformulated gasoline or RBOB, shall maintain records containing the following information: (1) The product transfer documentation for all reformulated gasoline or RBOB for which the party is the transferor or transferee; and (2) For any sampling and testing on RBOB or reformulated gasoline: (i) The location, date, time, and storage tank or truck identification for each sample collected; (ii) The identification of the person who collected the sample and the person who performed the testing; (iii) The results of the tests; and (iv) The actions taken to stop the sale of any gasoline found not to be in compliance, and the actions taken to identify the cause of any noncompliance and prevent future instances of noncompliance. (b) Refiners and importers. In addition to other requirements of this section, any refiner and importer shall, for all reformulated gasoline and RBOB produced or imported, maintain records containing the following information: (1) Results of the tests to determine reformulated gasoline properties and characteristics specified in Sec. 80.65; (2) Results of the tests for the presence of the marker specified in Sec. 80.82; (3) The volume of gasoline associated with each of the above test results using the method normally employed at the refinery or import facility for this purpose; (4) In the case of RBOB: (i) The results of tests to ensure that, following blending, RBOB meets applicable standards; and (ii) Each contract with each oxygenate blender to whom the refiner or importer transfers RBOB; or (iii) Compliance calculations described in Sec. 80.69(a)(8) based on an assumed addition of oxygenate; (5) In the case of any refinery or importer subject to the simple model standards, the calculations used to determine the 1990 baseline levels of sulfur, T-90, and olefins, and the calculations used to determine compliance with the standards for these parameters; and (6) In the case of any refinery or importer subject to the complex model standards before January 1, 1998, the calculations used to determine the baseline levels of VOC, toxics, and NOx emissions performance. (c) Refiners, importers and oxygenate blenders of averaged gasoline. In addition to other requirements of this section, any refiner, importer, and oxygenate blender who produces or imports any reformulated gasoline for which compliance with one or more applicable standard is determined on average shall maintain records containing the following information: (1) The calculations used to determine compliance with the relevant standards on average, for each averaging period and for each quantity of gasoline for which standards must be separately achieved; and (2) For any credits bought, sold, traded or transferred pursuant to Sec. 80.67(h), the dates of the transactions, the names and EPA registration numbers of the parties involved, and the number(s) and type(s) of credits transferred. (d) Oxygenate blenders. In addition to other requirements of this section, any oxygenate blender who blends any oxygenate with any RBOB shall, for each occasion such terminal storage tank blending occurs, maintain records containing the following information: (i) The date, time, location, and identification of the blending tank or truck in which the blending occurred; (ii) The volume and oxygenate requirements of the RBOB to which oxygenate was added; and (iii) The volume, type, and purity of the oxygenate which was added, and documents which show the source(s) of the oxygenate used. (e) Distributors who dispense RBOB into trucks. In addition to other requirements of this section, any distributor who dispenses any RBOB into a truck used for delivering gasoline to retail outlets shall, for each occasion RBOB is dispensed into such a truck, obtain records identifying: (1) The name and EPA registration number of the oxygenate blender that received the RBOB; and (2) The volume and oxygenate requirements of the RBOB dispensed. (f) Conventional gasoline requirement. In addition to other requirements of this section, any refiner and importer shall, for all conventional gasoline produced or imported, maintain records showing the blending of the marker required under Sec. 80.82 into conventional gasoline, and the results of the tests showing the concentration of this marker subsequent to its addition. (g) Retailers before January 1, 1998. Prior to January 1, 1998 any retailer that sells or offers for sale any reformulated gasoline shall maintain at each retail outlet the product transfer documentation for the most recent three deliveries to the retail outlet of each grade of reformulated gasoline sold or offered for sale at the retail outlet, and shall make such documentation available to any person conducting any gasoline compliance survey pursuant to Sec. 80.68. Sec. 80.75 Reporting requirements. Any refiner, importer, and oxygenate blender shall report as specified in this section, and shall report such other information as the Administrator may require. (a) Quarterly reports for reformulated gasoline. Any refiner or importer that produces or imports any reformulated gasoline or RBOB, and any oxygenate blender that produces reformulated gasoline meeting the oxygen standard on average, shall submit quarterly reports to the Administrator for each refinery or oxygenate blending facility at which such reformulated gasoline or RBOB was produced and for all such reformulated gasoline or RBOB imported by each importer. (1) The quarterly reports shall be for all such reformulated gasoline or RBOB produced or imported during the following time periods: (i) The first quarterly report shall include information for reformulated gasoline or RBOB produced or imported from January 1 through March 31, and shall be submitted by May 31 of each year beginning in 1995; (ii) The second quarterly report shall include information for reformulated gasoline or RBOB produced or imported from April 1 through June 30, and shall be submitted by August 31 of each year beginning in 1995; (iii) The third quarterly report shall include information for reformulated gasoline or RBOB produced or imported from July 1 through September 30, and shall be submitted by November 30 of each year beginning in 1995; and (iv) The fourth quarterly report shall include information for reformulated gasoline or RBOB produced or imported from October 1 through December 31, and shall be submitted by the last day of February of each year beginning in 1996. (2) The following information shall be included in each quarterly report for each batch of reformulated gasoline or RBOB which is included under paragraph (a)(1) of this section: (i) The batch number; (ii) The date of production; (iii) The volume of the batch; (iv) The grade of gasoline produced (i.e., premium, mid-grade, or regular); (v) For any refiner or importer: (A) Each designation of the gasoline, pursuant to Sec. 80.65; and (B) The properties, pursuant to Secs. 80.65 and 80.66; (vi) For any importer, the PADD in which the import facility is located; and (vii) For any oxygenate blender, the oxygen content. (3) Information pertaining to gasoline produced or imported during 1994 shall be included in the first quarterly report in 1995. (b) RVP averaging reports. (1) Any refiner or importer that produced or imported any reformulated gasoline or RBOB under the simple model that was to meet RVP standards on average (``averaged reformulated gasoline'') shall submit to the Administrator, with the third quarterly report, a report for each refinery or importer for such averaged reformulated gasoline or RBOB produced or imported during the previous RVP averaging period. This information shall be reported separately for the following categories: (i) Gasoline or RBOB which is designated as VOC-controlled intended for areas in VOC-Control Region 1; and (ii) Gasoline or RBOB which is designated as VOC-controlled intended for VOC-Control Region 2. (2) The following information shall be reported: (i) The total volume of averaged reformulated gasoline or RBOB in gallons; (ii) The compliance total value for RVP; and (iii) The actual total value for RVP. (c) VOC emissions performance averaging reports. (1) Any refiner or importer that produced or imported any reformulated gasoline or RBOB under the complex model that was to meet the VOC emissions performance standards on average (``averaged reformulated gasoline'') shall submit to the Administrator, with the third quarterly report, a report for each refinery or importer for such averaged reformulated gasoline produced or imported during the previous VOC averaging period. This information shall be reported separately for the following categories: (i) Gasoline or RBOB which is designated as VOC-controlled intended for areas in VOC-Control Region 1; and (ii) Gasoline or RBOB which is designated as VOC-controlled intended for VOC-Control Region 2. (2) The following information shall be reported: (i) The total volume of averaged reformulated gasoline or RBOB in gallons; (ii) The compliance total value for VOC emissions performance; and (iii) The actual total value for VOC emissions performance. (d) Benzene content averaging reports. (1) Any refiner or importer that produced or imported any reformulated gasoline or RBOB that was to meet the benzene content standards on average (``averaged reformulated gasoline'') shall submit to the Administrator, with the fourth quarterly report, a report for each refinery or importer for such averaged reformulated gasoline that was produced or imported during the previous toxics averaging period. (2) The following information shall be reported: (i) The volume of averaged reformulated gasoline or RBOB in gallons; (ii) The compliance total content of benzene; (iii) The actual total content of benzene; (iv) The number of benzene credits generated as a result of actual total benzene being less than compliance total benzene; (v) The number of benzene credits required as a result of actual total benzene being greater than compliance total benzene; (vi) The number of benzene credits transferred to another refinery or importer; and (vii) The number of benzene credits obtained from another refinery or importer. (e) Toxics emissions performance averaging reports. (1) Any refiner or importer that produced or imported any reformulated gasoline or RBOB that was to meet the toxics emissions performance standards on average (``averaged reformulated gasoline'') shall submit to the Administrator, with the fourth quarterly report, a report for each refinery or importer for such averaged reformulated gasoline that was produced or imported during the previous toxics averaging period. (2) The following information shall be reported: (i) The volume of averaged reformulated gasoline or RBOB in gallons; (ii) The compliance value for toxics emissions performance; and (iii) The actual value for toxics emissions performance. (f) Oxygen averaging reports. (1) Any refiner, importer, or oxygenate blender that produced or imported any reformulated gasoline that was to meet the oxygen standards on average (``averaged reformulated gasoline'') shall submit to the Administrator, with the fourth quarterly report, a report for each refinery and oxygenate blending facility at which such averaged reformulated gasoline was produced and for all such averaged reformulated gasoline imported by each importer during the previous oxygen averaging period. (2)(i) The following information shall be included in each report required by paragr