Federal Register, Volume 59 Issue 32 (Wednesday, February 16, 1994)

[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]

_______________________________________________________________________

Part II

Environmental Protection Agency

_______________________________________________________________________

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)

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.

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.

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.

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
------------------------------------------------------------------------

------------------------------------------------------------------------
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
c2S^{2, 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.

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.

The performance of these fuels according to the complex model
(using the MOBILE4.1 baseline as previously discussed) is summarized in
Table IV-6.

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.

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.

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.

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.

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.

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 study^{3) 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 year^{4). 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 analysis^{5 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.

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 vehicles^{8 when using reformulated
gasoline shall be 25 percent below the aggregate emissions of ozone
forming volatile organic compounds from such vehicles when using
baseline gasoline^{9.'' 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 psi^{10, 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.

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
study^{26 and a study prepared for EPA^{27 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 EPA^{30
and others^{31 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.

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.

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 proposed^{37 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.
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\3\7As corrected in 58 FR 17175, Thursday, April 1, 1993.
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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.
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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.
---------------------------------------------------------------------------

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).
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\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:
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\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 period^{44). 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 standard^{46 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.
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\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.
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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.
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\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.
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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.
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\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).''
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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
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\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.
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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.
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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
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\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
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\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.
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\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
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\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.
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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.
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\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.''
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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.
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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 Commission^{62 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.
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\6\2Per telephone conversation with Charles Wagner, Deputy
Director, Operations and Enforcement Section, Office of Compliance
and Consumer Assistance, Interstate Commerce Commission.
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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
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\6\3 Liabilities and defenses for refiners and oxygenate
blenders are discussed generally in the section on refiners and
oxygenate blenders above.
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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.
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\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.
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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 costs^{65 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.
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\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.
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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
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\6\6The statutory baseline is intended to approximate the
national average gasoline parameter values for gasoline used in the
United States in 1990.
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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.
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\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.
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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.
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\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.
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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.
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\6\9 This issue is primarily of concern to foreign refiners
whose actual 1990 production characteristics exceed the statutory
baseline.
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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.
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\7\0 The end of the volatility control season each year is
September 15 at all facilities.
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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.
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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 refiner^{72 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.
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\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.
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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 parameters^{74 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.
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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.
Costle^{77 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
baselines^{78 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.
---------------------------------------------------------------------------

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 blendstocks^{80 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.
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\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.
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\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.
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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
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\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
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\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.
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C. Inclusion of Sub-Octane Blendstock in Compliance Calculations

EPA has included conventional gasoline and gasoline
blendstock^{86 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.
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\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

------------------------------------------------------------------------
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 County^{91
---------------------------------------------------------------------------

\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 County^{92
---------------------------------------------------------------------------

\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 County^{93
---------------------------------------------------------------------------

\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 businesses^{95.
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.
---------------------------------------------------------------------------

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:

(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:

(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:

(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:

(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:

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:

(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.

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:

(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.

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)

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
)

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:

(ii) For conventional gasolines:

(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.

(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)

(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:

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:

(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:

(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:

(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:

(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:

(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:

(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:

(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:

(ii) The levels of parameters other than the one being extended
shall be given by the following table for all three extension fuels:

(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:

(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:

(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.

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.

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.

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

Sec. 80.69 Requirements for downstream oxygenate blending.

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.

Sec. 80.76 Registration of refiners, importers or oxygenate blenders.

(a) Registration with the Administrator of EPA is required for any
refiner and importer, and any oxygenate blender that produces any
reformulated gasoline.
(b) Any person required to register shall do so by November 1,
1994, or not later than three months in advance of the first date that
such person will produce or import reformulated gasoline or RBOB, or
conventional gasoline or applicable blendstocks, whichever is later.
(c) Registration shall be on forms prescribed by the Administrator,
and shall include the following information:
(1) The name, business address, contact name, and telephone number
of the refiner, importer, or oxygenate blender;
(2) The address and physical location where the documents which are
required to be retained by Sec. 80.74 or 80.104 will be kept by the
refiner, importer, or oxygenate blender; and
(3) For each separate refinery and oxygenate blending facility:
(i) The facility name, physical location, contact name, telephone
number, type of facility, and whether the facility will produce
reformulated gasoline, RBOB, conventional gasoline or applicable
blendstocks;
(ii) The identity of each covered area which is supplied with any
reformulated gasoline or RBOB produced at the refinery or blending
facility or imported by the importer; and
(iii) The name, address, contact name and telephone number of the
independent laboratory used to meet the independent analysis
requirements of Sec. 80.65(f).
(d) 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, which
shall be used in all reports to the Administrator.
(e)(1) Any refiner, importer, or oxygenate blender shall submit
updated registration information to the Administrator within thirty
days of any occasion when the registration information previously
supplied becomes incomplete or inaccurate; except that
(2) EPA must be notified in writing of any change in designated
independent laboratory at least thirty days in advance of such change.

Sec. 80.77 Product transfer documentation.

On each occasion when any person transfers custody or title to any
reformulated gasoline or RBOB, other than when gasoline is sold or
dispensed for use in motor vehicles at a retail outlet or wholesale
purchaser-consumer facility, the transferor shall provide to the
transferee documents which include the following information:
(a) The name and address of the transferor;
(b) The name and address of the transferee;
(c) The volume of gasoline which is being transferred;
(d) The location of the gasoline at the time of the transfer;
(e) The date of the transfer;
(f) The proper identification of the gasoline as conventional or
reformulated;
(g) In the case of reformulated gasoline or RBOB:
(1) The proper identification as:
(i)(A) VOC-controlled for VOC-Control Region 1; or VOC-controlled
for VOC-Control Region 2; or Not VOC-controlled; or
(B) In the case of gasoline or RBOB that is VOC-controlled for VOC-
Control Region 1, the gasoline may be identified as suitable for use
either in VOC-Control Region 1 or VOC-Control Region 2;
(ii) Oxygenated fuels program reformulated gasoline; or Not
oxygenated fuels program reformulated gasoline; and
(iii) Prior to January 1, 1998, certified under the simple model
standards or certified under the complex model standards; and
(2) The minimum and/or maximum standards with which the gasoline or
RBOB conforms for:
(i) Benzene content;
(ii) Except for RBOB, oxygen content;
(iii) In the case of gasoline subject to the simple model
standards, RVP;
(iv) In the case of gasoline subject to the complex model
standards:
(A) Prior to January 1, 1998, the VOC and NOX emissions
performance minimums in milligrams per mile; and
(B) Beginning on January 1, 1998, the VOC and NOx emissions
performance reduction percentage minimums;
(h) Prior to January 1, 1998, in the case of gasoline or RBOB
subject to the complex model standards:
(1) The name and EPA registration number of the refinery at which
the gasoline was produced, or importer that imported the gasoline; and
(2) Instructions that the gasoline or RBOB may not be combined with
any other gasoline or RBOB that was produced at any other refinery or
was imported by any other importer;
(i) In the case of reformulated gasoline blendstock for which
oxygenate blending is intended:
(1) Identification of the product as RBOB and not reformulated
gasoline;
(2) The designation of the RBOB as suitable for blending with:
(A) Any-oxygenate;
(B) Ether-only; or
(C) Other specified oxygenate type(s) and amount(s); and
(3) The oxygenate type(s) and amount(s) which the RBOB requires in
order to meet the properties claimed by the refiner or importer of the
RBOB;
(4) Instructions that the RBOB may not be combined with any other
RBOB except other RBOB having the same requirements for oxygenate
type(s) and amount(s), or, prior to blending, with reformulated
gasoline; and
(j) In the case of transferrers or transferees who are refiners,
importers or oxygenate blenders, the EPA-assigned registration number
of those persons.

Sec. 80.78 Controls and prohibitions on reformulated gasoline.

Sec. 80.79 Liability for violations of the prohibited activities.

(a) Persons liable. Where the gasoline contained in any 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 described in Sec. 80.78(a), the following
persons shall be deemed in violation:
(1) Each refiner, importer, oxygenate blender, carrier,
distributor, reseller, retailer, or wholesale purchaser-consumer who
owns, leases, operates, controls or supervises the facility where the
violation is found;
(2) Each refiner or importer whose corporate, trade, or brand name,
or whose marketing subsidiary's corporate, trade, or brand name,
appears at the facility where the violation is found;
(3) Each refiner, importer, oxygenate blender, distributor, and
reseller who manufactured, imported, sold, offered for sale, dispensed,
supplied, offered for supply, stored, transported, or caused the
transportation of any gasoline which is in the storage tank containing
gasoline found to be in violation; and
(4) Each carrier who dispensed, supplied, stored, or transported
any gasoline which is in the storage tank containing gasoline found to
be in violation, provided that EPA demonstrates, by reasonably specific
showings by direct or circumstantial evidence, that the carrier caused
the violation.
(b) Defenses for prohibited activities. (1) In any case in which a
refiner, importer, oxygenate blender, carrier, distributor, reseller,
retailer, or wholesale purchaser-consumer would be in violation under
paragraph (a) of this section, it shall be deemed not in violation if
it can demonstrate:
(i) That the violation was not caused by the regulated party or its
employee or agent;
(ii) That product transfer documents account for all of the
gasoline in the storage tank found in violation and indicate that the
gasoline met relevant requirements; and
(iii)(A) That it has conducted a quality assurance sampling and
testing program, as described in paragraph (c) of this section; except
that
(B) A carrier may rely on the quality assurance program carried out
by another party, including the party that owns the gasoline in
question, provided that the quality assurance program is carried out
properly.
(2)(i) Where a violation is found at a facility which is operating
under the corporate, trade or brand name of a refiner, that refiner
must show, in addition to the defense elements required by paragraph
(b)(1) of this section, that the violation was caused by:
(A) An act in violation of law (other than the Act or this part),
or an act of sabotage or vandalism;
(B) The action of any reseller, distributor, oxygenate blender,
carrier, or a retailer or wholesale purchaser- consumer supplied by any
of these persons, in violation of a contractual undertaking imposed by
the refiner designed to prevent such action, and despite periodic
sampling and testing by the refiner to ensure compliance with such
contractual obligation; or
(C) The action of any carrier or other distributor not subject to a
contract with the refiner but engaged by the refiner for transportation
of gasoline, despite specification or inspection of procedures and
equipment by the refiner which are reasonably calculated to prevent
such action.
(ii) In this paragraph (b), to show that the violation ``was
caused'' by any of the specified actions the party must demonstrate by
reasonably specific showings, by direct or circumstantial evidence,
that the violation was caused or must have been caused by another.
(c) Quality assurance program. In order to demonstrate an
acceptable quality assurance program for reformulated gasoline at all
points in the gasoline distribution network, other than at retail
outlets and wholesale purchaser-consumer facilities, a party must
present evidence:
(1) Of a periodic sampling and testing program to determine if the
applicable maximum and/or minimum standards for oxygen, benzene, RVP,
or VOC or NOX emission performance are met; and
(2) That on each occasion when gasoline is found in noncompliance
with one of the requirements referred to in paragraph (c)(1) of this
section:
(i) The party immediately ceases selling, offering for sale,
dispensing, supplying, offering for supply, storing, transporting, or
causing the transportation of the violating product; and
(ii) The party promptly remedies the violation (such as by removing
the violating product or adding more complying product until the
applicable standards are achieved).

Sec. 80.80 Penalties.

(a) Any person that violates any requirement or prohibition of
subpart D, E, or F of this part shall be liable to the United States
for a civil penalty of not more than the sum of $25,000 for every day
of each such violation and the amount of economic benefit or savings
resulting from each such violation.
(b) Any violation of a standard for average compliance during any
averaging period, or for per-gallon compliance for any batch of
gasoline, shall constitute a separate violation for each and every
standard that is violated.
(c) Any violation of any standard based upon a multi-day averaging
period shall constitute a separate day of violation for each and every
day in the averaging period. Any violation of any credit creation or
credit transfer requirement shall constitute a separate day of
violation for each and every day in the averaging period.
(d)(1)(i) Any violation of any per- gallon standard or of any per-
gallon minimum or per-gallon maximum, other than the standards
specified in paragraph (e) of this section, shall constitute a separate
day of violation for each and every day such gasoline giving rise to
such violations remains any place in the gasoline distribution system,
beginning on the day that the gasoline that violates such per-gallon
standard is produced or imported and distributed and/or offered for
sale, and ending on the last day that any such gasoline is offered for
sale or is dispensed to any ultimate consumer for use in any motor
vehicle; unless
(ii) The violation is corrected by altering the properties and
characteristics of the gasoline giving rise to the violations and any
mixture of gasolines that contains any of the gasoline giving rise to
the violations such that the said gasoline or mixture of gasolines has
the properties and characteristics that would have existed if the
gasoline giving rise to the violations had been produced or imported in
compliance with all per-gallon standards.
(2) For the purposes of this paragraph (d), the length of time the
gasoline in question remained in the gasoline distribution system shall
be deemed to be twenty-five days; unless the respective party or EPA
demonstrates by reasonably specific showings, by direct or
circumstantial evidence, that the gasoline giving rise to the
violations remained any place in the gasoline distribution system for
fewer than or more than twenty-five days.
(e)(1) Any reformulated gasoline that is produced or imported and
offered for sale and for which the requirements to determine the
properties and characteristics under Sec. 80.65(f) is not met, or any
conventional gasoline for which the refiner or importer does not sample
and test to determine the relevant properties, shall be deemed:
(i)(A) Except as provided in paragraph (e)(1)(i)(B) of this section
to have the following properties:

Sulfur content--970 ppm
Benzene content--5 vol %
RVP (summer)--11 psi
50% distillation--250 deg.F
90% distillation--375 deg.F
Oxygen content--0 wt %
Aromatics content--50 vol %
Olefins content--26 vol %

(B) To have the following properties in paragraph (e)(1)(i)(A) of
this section unless the respective party or EPA demonstrates by
reasonably specific showings, by direct or circumstantial evidence,
different properties for the gasoline giving rise to the violations;
and
(ii) In the case of reformulated gasoline, to have been designated
as meeting all applicable standards on a per-gallon basis.
(2) For the purposes of paragraph (e)(1) of this section, any
refiner or importer that fails to meet the independent analysis
requirements of Sec. 80.65(f) may not use the results of sampling and
testing that is carried out by that refiner or importer as direct or
circumstantial evidence of the properties of the gasoline giving rise
to the violations, unless this failure was not caused by the refiner or
importer.
(f) Any violation of any affirmative requirement or prohibition not
included in paragraph (c) or (d) of this section shall constitute a
separate day of violation for each and every day such affirmative
requirement is not properly accomplished, and/or for each and every day
the prohibited activity continues. For those violations that may be
ongoing under subparts D, E, and F of this part, each and every day the
prohibited activity continues shall constitute a separate day of
violation.

Sec. 80.81 Enforcement exemptions for California gasoline.

Sec. 80.82 Conventional gasoline marker [Reserved]

Secs. 80.83-80.89 [Reserved]

Subpart E--Anti-Dumping

Sec. 80.90 Conventional gasoline baseline emissions determination.

(a) Annual average baseline values. For any facility of a refiner
or importer of conventional gasoline, the annual average baseline
values of the facility's exhaust benzene emissions, exhaust toxics
emissions, NOx emissions, sulfur, olefins and T90 shall be
determined using the following equation:

TR16FE94.012

where

BASELINE=annual average baseline value of the facility,
SUMRBASE=summer baseline value of the facility,
SUMRVOL=summer baseline gasoline volume of the facility, per
Sec. 80.91,
WNTRBASE=winter baseline value of the facility,
WNTRVOL=winter baseline gasoline volume of the facility, per
Sec. 80.91.
(b) Baseline exhaust benzene emissions--simple model. (1) Simple
model exhaust benzene emissions of conventional gasoline shall be
determined using the following equation:

EXHBEN=(1.884+0.949 x BX+0.113 x (AR-BZ))
where

EXHBEN=exhaust benzene emissions,
BZ=fuel benzene value in terms of volume percent (per Sec. 80.91), and
AR=fuel aromatics value in terms of volume percent (per Sec. 80.91).

(2) The simple model annual average baseline exhaust benzene
emissions for any facility of a refiner or importer of conventional
gasoline shall be determined as follows:
(i) The simple model baseline exhaust benzene emissions shall be
determined separately for summer and winter using the facility's
oxygenated individual baseline fuel parameter values for summer and
winter (per Sec. 80.91), respectively, in the equation specified in
paragraph (b)(1) of this section.
(ii) The simple model annual average baseline exhaust benzene
emissions of the facility shall be determined using the emissions
values determined in paragraph (b)(2)(i) of this section in the
equation specified in paragraph (a) of this section.
(c) Baseline exhaust benzene emissions--complex model. The complex
model annual average baseline exhaust benzene emissions for any
facility of a refiner or importer of conventional gasoline shall be
determined as follows:
(1) The summer and winter complex model baseline exhaust benzene
emissions shall be determined separately using the facility's
oxygenated individual baseline fuel parameter values for summer and
winter (per Sec. 80.91), respectively, in the appropriate complex model
for exhaust benzene emissions described in Sec. 80.45.
(2) The complex model annual average baseline exhaust benzene
emissions of the facility shall be determined using the emissions
values determined in paragraph (c)(1) of this section in the equation
specified in paragraph (a) of this section.
(d) Baseline exhaust toxics emissions. The annual average baseline
exhaust toxics emissions for any facility of a refiner or importer of
conventional gasoline shall be determined as follows:
(1) The summer and winter baseline exhaust emissions of benzene,
formaldehyde, acetaldehyde, 1,3-butadiene, and polycyclic organic
matter shall be determined using the oxygenated individual baseline
fuel parameter values for summer and winter (per Sec. 80.91),
respectively, in the appropriate complex model for each exhaust toxic
(per Sec. 80.45).
(2) The summer and winter baseline total exhaust toxics emissions
shall be determined separately by summing the summer and winter
baseline exhaust emissions of each toxic (per paragraph (d)(1) of this
section), respectively.
(3) The annual average baseline exhaust toxics emissions of the
facility shall be determined using the emissions values determined in
paragraph (d)(2) of this section in the equation specified in paragraph
(a) of this section.
(e) Baseline NOX emissions. The annual average baseline
NOX emissions for any facility of a refiner or importer of
conventional gasoline shall be determined as follows:
(1) The summer and winter baseline NOX emissions shall be
determined using the baseline individual baseline fuel parameter values
for summer and winter (per Sec. 80.91), respectively, in the
appropriate complex model for NOX (per Sec. 80.45).
(2) The annual average baseline NOX emissions of the facility
shall be determined using the emissions values determined in paragraph
(e)(2) of this section in the equation specified in paragraph (a) of
this section.
(3) The requirements specified in paragraphs (e) (1) and (2) of
this section shall be determined separately using the oxygenated and
nonoxygenated individual baseline fuel parameters, per Sec. 80.91.
(f) Applicability of Phase I and Phase II models. The requirements
of paragraphs (d) and (e) of this section shall be determined
separately for the applicable Phase I and Phase II complex models
specified in Sec. 80.45.
(g) Calculation accuracy. Emissions values calculated per the
requirements of this section shall be determined to four (4)
significant figures. Sulfur, olefin and T90 values calculated per the
requirements of this section shall be determined to the same number of
decimal places as the corresponding value listed in Sec. 80.91(c)(5).

Sec. 80.91 Individual baseline determination.

Benzene, volume percent--1.60
Aromatics, volume percent--28.6
Olefins, volume percent--10.8
RVP, psi--8.7
T50, degrees F--207
T90, degrees F--332
E200, percent--46
E300, percent--83
Sulfur, ppm--338
API Gravity, deg.API--59.1

(d) Data collection and testing requirements--(1) Minimum sampling
requirements.--(i) General requirements. (A) Data shall have been
obtained for at least three months of the refiner's or importer's
production of summer gasoline and at least three months of its
production of winter gasoline.
(1) A summer month shall be any month during which the refiner
produced any gasoline which met the federal summer gasoline volatility
requirements. Winter shall be any month which could not be considered a
summer month.
(2) The three months which compose the summer and the winter data
do not have to be consecutive nor within the same year.
(3) If, in 1990, a refiner marketed all of its gasoline only in an
area or areas which experience no seasonal changes relative to gasoline
requirements, e.g., Hawaii, only 3 months of data are required.
(B) Once the minimum sampling requirements have been met, data
collection may cease. Additional data may only be included for the
remainder of the calendar year in which the minimum sampling
requirements were met. In any case, all available data collected up
until the time data collection ceases must be utilized in the baseline
determination.
(C) Less than the minimum requirements specified in paragraph
(d)(1) of this section may be allowed, upon petition and approval (per
Sec. 80.93), if it can be shown that the available data is sufficient
in quality and quantity to use in the baseline determination.
(ii) Method 1 sampling requirements. At least half of the batches,
or shipments if not batch blended, in a calendar month shall have been
sampled over a minimum of six months in 1990.
(iii) Method 2 sampling requirements. (A) Continuous blendstock
streams shall have been sampled at least weekly over a minimum of six
months in 1990.
(B) For blendstocks produced on a batch basis, at least half of all
batches of a single blendstock type produced in a calendar month shall
have been sampled over a minimum of six months in 1990.
(iv) Method 3 sampling requirements--(A) Blendstock data. (1) Post-
1990 continuous blendstock streams shall have been sampled at least
weekly over a minimum of six months.
(2) For post-1990 blendstocks produced on a batch basis, at least
half of all batches of a single blendstock type produced in a calendar
month shall have been sampled over a minimum of six months.
(B) Gasoline data. At least half of the post-1990 batches, or
shipments if not batch blended, in a calendar month shall have been
sampled over a minimum of six months in order to use post-1990 gasoline
data.
(2) Sampling beyond today's date. The necessity and actual
occurrence of data collection after today's date must be shown.
(3) Negligible quantity sampling. Testing of a blendstock stream
for a fuel parameter listed in this paragraph (d)(3) is not required if
the refiner can show that the fuel parameter exists in the stream at
less than or equal to the amount, on average, shown in this paragraph
(d)(3) for that fuel parameter. Any fuel parameter shown to exist in a
refinery stream in negligible amounts shall be assigned a value of 0.0:

Aromatics, volume percent--1.0
Benzene, volume percent--0.15
Olefins, volume percent--1.0
Oxygen, weight percent--0.2
Sulfur, ppm--30.0

(4) Sample compositing. (i) Samples of gasoline or blendstock which
have been retained, but not analyzed, may be mixed prior to analysis
and analyzed, as described in paragraphs (d)(4)(iii) (A) through (H) of
this section, for the required fuel parameters. Samples must be from
the same season and year and must be of a single grade or of a single
type of batch-produced blendstock.
(ii) Blendstock samples of a single blendstock type obtained from
continuous processes over a calendar month may be mixed together in
equal volumes to form one blendstock sample and the sample subsequently
analyzed for the required fuel parameters.
(iii)(A) Samples shall have been collected and stored per the
method normally employed at the refinery in order to prevent change in
product composition with regard to baseline properties and to minimize
loss of volatile fractions of the sample.
(B) Properties of the retained samples shall be adjusted for loss
of butane by comparing the RVP measured right after blending with the
RVP determined at the time that the supplemental properties are
measured.
(C) The volume of each batch or shipment sampled shall have been
noted and the sum of the volumes calculated to the nearest hundred
(100) barrels.
(D) For each batch or shipment sampled, the ratio of its volume to
the total volume determined in paragraph (d)(4)(iii)(C) of this section
shall be determined to three (3) decimal places. This shall be the
volumetric fraction of the shipment in the mixture.
(E) The total minimum volume required to perform duplicate analyses
to obtain values of all of the required fuel parameters shall be
determined.
(F) The volumetric fraction determined in paragraph (d)(4)(iii)(D)
of this section for each batch or shipment shall be multiplied by the
value determined in paragraph (d)(4)(iii)(E) of this section.
(G) The resulting value determined in paragraph (d)(4)(iii)(F) of
this section for each batch or shipment shall be the volume of each
batch or shipment's sample to be added to the mixture. This volume
shall be determined to the nearest milliliter.
(H) The appropriate volumes of each shipment's sample shall be
thoroughly mixed and the solution analyzed per the methods normally
employed at the refinery.
(5) Test methods. (i) If the test methods used to obtain fuel
parameter values of gasoline and gasoline blendstocks differ or are
otherwise not equivalent in precision or accuracy to the corresponding
test method specified in Sec. 80.46, results obtained under those
procedures will only be acceptable, upon petition and approval (per
Sec. 80.93), if the procedures are or were industry-accepted procedures
for measuring the properties of gasoline and gasoline blendstocks at
the time the measurement was made.
(ii) Oxygen content may have been determined analytically or from
oxygenate blending records.
(A) The fuel parameter values, other than oxygen content, specified
in paragraph (a) of this section, must be established as for any
blendstock, per the requirements of this paragraph (d).
(B) All oxygen associated with allowable gasoline oxygenates per
Sec. 80.2(jj) shall be included in the determination of the baseline
oxygen content, if oxygen content was determined analytically.
(C) Oxygen content shall be assumed to be contributed solely by the
oxygenate which is indicated on the blending records, if oxygen content
was determined from blending records.
(6) Data quality. Data may be excluded from the baseline
determination if it is shown to the satisfaction of the Director of the
Office of Mobile Sources, or designee, that it is not within the normal
range of values expected for the gasoline or blendstock sample,
considering unit configuration, operating conditions, etc.; due to:
(i) Improper labeling; or
(ii) Improper testing; or
(iii) Other reasons as verified by the auditor specified in
Sec. 80.92.
(e) Baseline fuel parameter determination--(1) Closely integrated
gasoline producing facilities. Each refinery or blending facility must
determine a set of baseline fuel parameter values per this paragraph
(e). A single set of baseline fuel parameters may be determined, upon
petition and approval, for two or more facilities under either of the
following circumstances:
(i) Two or more refineries or sets of gasoline blendstock-producing
units of a refiner engaged in the production of gasoline per paragraph
(b)(1) of this section which are geographically proximate to each
other, yet not within a single refinery gate, and whose 1990 operations
were significantly interconnected.
(ii) A gasoline blending facility operating per paragraph (b)(3) of
this section received at least 75 percent of its 1990 blendstock volume
from a single refinery, or from one or more refineries which are part
of an aggregate baseline per Sec. 80.101(h). The blending facility and
associated refinery(ies) must be owned by the same refiner.
(2) Equations--(i) Parameter determinations. Average baseline fuel
parameters shall be determined separately for summer and winter using
summer and winter data (per paragraph (d)(1)(i)(A) of this section),
respectively, in the applicable equation listed in paragraphs (e)(2)
(ii) through (iv) of this section, except that average baseline winter
RVP shall be 8.7 psi.
(ii) Product included in parameter determinations. In each of the
equations listed in paragraphs (e)(2) (ii) through (iv) of this
section, the following shall apply:
(A) All gasoline produced to meet EPA's 1990 summertime volatility
requirements shall be considered summer gasoline. All other gasoline
shall be considered winter gasoline.
(B) (1) Baseline total annual 1990 gasoline volume shall be the
larger of the total volume of gasoline produced in or shipped from the
refinery in 1990.
(2) Baseline summer gasoline volume shall be the total volume of
low volatility gasoline which met EPA's 1990 summertime volatility
requirements. Baseline summer gasoline volume shall be determined on
the same basis (produced or shipped) as baseline total annual gasoline
volume.
(3) Baseline winter gasoline volume shall be the baseline total
annual gasoline volume minus the baseline summer gasoline volume.
(C) Fuel parameter values shall be determined in the same units and
at least to the same number of decimal places as the corresponding fuel
parameter listed in paragraph (c)(5) of this section.
(D) Volumes shall be reported to the nearest barrel or to the
degree at which historical records were kept.
(iii) Method 1. Summer and winter Method 1-type data, per paragraph
(c)(1) of this section, shall be evaluated separately according to the
following equation:

TR16FE94.013

where:

Xbs=summer or winter baseline value of fuel parameter X for the
refinery
s=season, summer or winter, per paragraph (d)(1)(i)(A)(1) of this
section
g=separate grade of season s gasoline produced by the refinery in 1990
ps=total number of different grades of season s gasoline produced
by the refinery in 1990
Tgs=total volume of season s grade g gasoline produced in 1990
Ns=total volume of season s gasoline produced by the refinery in
1990
i=separate batch or shipment of season s 1990 gasoline sampled
ngs=total number of season s samples of grade g gasoline
Xgis=parameter value of grade g gasoline sample i in season s
Vgis=volume of season s grade g gasoline sample i
SGgis=specific gravity of season s grade g gasoline sample i (used
only for fuel parameters measured on a weight basis)

(iv) Method 2. Summer and winter Method 2-type data, per paragraph
(c)(2) of this section, shall be evaluated separately according to the
following equation:

TR16FE94.014

where

Xbs=Summer or winter baseline value of fuel parameter X for the
refinery
s=season, summer or winter, per paragraph (d)(1)(i)(A)(1) of this
section
j=type of blendstock (e.g., reformate, isomerate, alkylate, etc.)
ms=total types of blendstocks in season s 1990 gasoline
Tjs=total 1990 volume of blendstock j produced in the refinery and
used in the refinery's season s gasoline
Ns=total volume of season s gasoline produced in the refinery in
1990
i=sample of blendstock j
njs=number of samples of season s blendstock j from continuous
process streams
Xijs=parameter value of sample i of season s blendstock j
pjs=number of samples of season s batch-produced blendstock j
Vijs=volume of batch of sample i of season s blendstock j
SGijs=specific gravity of sample i of season s blendstock j (used
only for fuel parameters measured on a weight basis)

(v) Method 3. (A) Post-1990 Blendstock. Summer and winter Method 3-
type data, per paragraph (c)(3) of this section, shall be evaluated
separately according to the following equation:

TR16FE94.015

where

Xbs=Summer or winter baseline value of fuel parameter X for the
refinery
s=season, summer or winter, per paragraph (d)(1)(i)(A)(1) of this
section
j=type of blendstock (e.g., reformate, isomerate, alkylate, etc.)
ms=total types of blendstocks in season s 1990 gasoline
Tjs=total 1990 volume of blendstock j produced in the refinery and
used in the refinery's season s gasoline
Ns=total volume of season s gasoline produced in the refinery in
1990
i=sample of post-1990 season s blendstock j
njs=number of samples of post-1990 season s blendstock j from
continuous process streams
Xijs=parameter value of sample i of post-1990 season s blendstock
j
pjs=number of samples of post-1990 season s batch-produced
blendstock j
Vijs=volume of post-1990 batch of sample i of season s blendstock
j
SGijs=specific gravity of sample i of season s blendstock j (used
only for fuel parameters measured on a weight basis)

(B) Post-1990 gasoline. Summer and winter Method 3-type gasoline
data, per paragraph (c)(3) of this section, shall be evaluated
separately according to the following equation:

TR16FE94.016

where:
Xbs=Summer or winter baseline value of fuel parameter X for the
refinery
s=season, summer or winter, per paragraph (d)(1)(i)(A)(1) of this
section
g=separate grade of season s gasoline produced by the refinery in 1990
ps=total number of different grades of season s gasoline produced
by the refinery in 1990
Tgs=total volume of season s grade g gasoline produced in 1990
Ns=total volume of season s gasoline produced by the refinery in
1990
i=separate batch or shipment of post-1990 season s gasoline sampled
ngs=total number of samples of post-1990 season s grade g gasoline
Xgis=parameter value of post-1990 grade g season s gasoline sample
i
Vgis=volume of post-1990 season s grade g gasoline sample i
SGgis=specific gravity of post-1990 season s grade g gasoline
sample i (used only for fuel parameters measured on a weight basis)

(3) Percent evaporated determination. (i) Baseline E200 and E300
values shall be determined directly from actual measurement data.
(ii) If the data per paragraph (e)(3)(i) of this section are
unavailable, upon petition and approval, baseline E200 and E300 values
shall be determined from the following equations using the baseline T50
and T90 values, if the baseline T50 and T90 values are otherwise
acceptable:

E200=147.91-(0.49 x T50)
E300=155.47-(0.22 x T90)

(4) Oxygen in the baseline. Baseline fuel parameter values shall be
determined on both an oxygenated and non-oxygenated basis.
(i) If baseline values are determined first on an oxygenated
basis, per paragraph (e) of this section, the calculations in
paragraphs (e)(4)(i) (A) through (C) of this section shall be performed
to determine the value of each baseline parameter on a non-oxygenated
basis.
(A) Benzene, aromatic, olefin and sulfur content shall be
determined on a non-oxygenated basis according to the following
equation:

TR16FE94.017

where

UV=non-oxygenated parameter value
AV=oxygenated parameter value
OV=1990 oxygenate volume as a percent of total production

(B) Reid vapor pressure (RVP) shall be determined on a non-
oxygenated basis according to the following equation:

TR16FE94.018

where

UR=non-oxygenated RVP (baseline value)
BR=oxygenated RVP
i=type of oxygenate used in 1990
n=total number of different types of oxygenates used in 1990
OVi=1990 volume, as a percent of total production, of oxygenate i
ORi=blending RVP of oxygenate i

(C) Test data and engineering judgement shall be used to estimate
T90, T50, E300 and E200 baseline values on a non-oxygenated basis.
Allowances shall be made for physical dilution and distillation effects
only, and not for refinery operational changes, e.g., decreased
reformer severity required due to the octane value of oxygenate which
would reduce aromatics.
(ii) If baseline values are determined first on a non-oxygenated
basis, the calculations in paragraphs (e)(4)(ii) (A) through (C) of
this section shall be performed to determine the value of each baseline
parameter on an oxygenated basis.
(A) Benzene, aromatic, olefin and sulfur content shall be
determined on an oxygenated basis according to the following equation:

AV=UV x (100-OV)
where

AV=oxygenated parameter value
UV=no-oxygenated parameter value
OV=1990 oxygenate volume as a percent of total production

(B) Reid vapor pressure (RVP) shall be determined on an oxygenated
basis according to the following equation:

TR16FE94.019

where

BR=oxygenated RVP
UR=non-oxygenated RVP
i=type of oxygenate
n=total number of different types of oxygenates
OVi=1990 volume, as a percent of total production, of oxygenate i
ORi=blending RVP of oxygenate i

(C) Test data and engineering judgement shall be used to estimate
T90, T50, E300 and E200 baseline values on an oxygenated basis.
Allowances shall be made for physical dilution and distillation effects
only, and not for refinery operational changes, e.g., decreased
reformer severity required due to the octane value of oxygenate which
would reduce aromatics.
(5) Work-in-progress. A refiner may, upon petition and approval
(per Sec. 80.93), be allowed to account for work- in-progress at one or
more of its refineries in 1990 in the determination of that refinery's
baseline fuel parameters using Method 1, 2 or 3-type data if it meets
the requirements specified in this paragraph (e)(5).
(i) Work-in-progress shall include:
(A) Refinery modification projects involving gasoline blendstock or
distillate producing units which were under construction in 1990; or
(B) Refinery modification projects involving gasoline blendstock or
distillate producing units which were contracted for prior to or in
1990 such that the refiner was committed to purchasing materials and
constructing the project.
(ii) The modifications discussed in paragraph (e)(5)(i) of this
section must have been initiated with intent of complying with a
legislative or regulatory environmental requirement enacted or
promulgated prior to January 1, 1991.
(iii) When comparing emissions or parameter values determined with
and without the anticipated work-in-progress adjustment, at least one
of the following situations results when comparing annual average
baseline values per Sec. 80.90:
(A) A 2.5 percent or greater difference in exhaust benzene
emissions (per Sec. 80.90); or
(B) A 2.5 percent or greater difference in total exhaust toxics
emissions (per Sec. 80.90(d)); or
(C) A 2.5 percent or greater difference in NOX emissions (per
Sec. 80.90(e)); or
(D) A 10.0 percent or greater difference in sulfur values; or
(E) A 10.0 percent or greater difference in olefin values; or
(F) A 10.0 percent or greater difference in T90 values.
(iv) The requirements of paragraph (e)(5)(iii) of this section
shall be determined according to the following equation:

TR16FE94.020

(v) The capital involved in the work-in-progress is at least:
(A) 10.0 percent of the refinery's depreciated book value as of the
work-in-progress start-up date; or
(B) $10 million.
(vi) Sufficient data shall have been obtained since reliable
operation of the work-in-progress was achieved. Such data shall be used
in the determination of the adjusted baseline fuel parameter and as
verification of the effect of the work-in-progress.
(vii) Increases in each of the annual average baseline values (per
Sec. 80.90) of exhaust benzene emissions, exhaust toxics emissions and
NOX emissions due to work-in-progress adjustments are limited to
the larger of:
(A) The unadjusted annual average baseline value of each emission
specified in this paragraph (e)(5)(vii); or
(B) The following values:
(1) Exhaust benzene emissions, simple model, 6.77;
(2) Exhaust benzene emissions, complex model, 34.68 mg/mile;
(3) Exhaust toxics emissions, 53.20 mg/mile in Phase I, 109.7 mg/
mile in Phase II;
(4) NOX emissions, 750.1 mg/mile in Phase I, 1534. mg/mile in
Phase II.
(viii) When compliance is achieved using the simple model (per
Sec. 80.101), increases in each of the annual average baseline values
(per Sec. 80.90) of sulfur, olefins and T90 due to work-in-progress
adjustments are limited to the larger of:
(A) The unadjusted annual average baseline value of each specified
fuel parameter specified in this paragraph (e)(5)(viii); or
(B) The following values:
(1) Sulfur, 355 ppm;
(2) Olefins, 11.3 volume percent;
(3) T90, 349 deg.F.
(ix) All work-in-progress adjustments must be accompanied by:
(A) Unadjusted and adjusted fuel parameters, emissions, and
volumes; and
(B) A description of the current status of the work-in-progress
(i.e., the refinery modification project) and the date on which normal
operations were achieved; and
(C) A narrative describing the situation, the types of
calculations, and the reasoning supporting the types of calculations
done to determine the adjusted values.
(6) Baseline adjustment for extenuating circumstances. (i) Baseline
adjustments may be allowed, upon petition and approval (per
Sec. 80.93), if a refinery had downtime of a gasoline blendstock
producing unit for 30 days or more in 1990 due to:
(A) Unplanned, unforeseen circumstances; or
(B) Non-annual maintenance (turnaround).
(ii) Fuel parameter and volume adjustments shall be made by
assuming that the downtime did not occur in 1990.
(iii) All extenuating circumstance adjustments must be accompanied
by:
(A) Unadjusted and adjusted fuel parameters, emissions, and
volumes; and
(B) A description of the current status of the extenuating
circumstance and the date on which normal operations were achieved; and
(C) A narrative describing the situation, the types of
calculations, and the reasoning supporting the types of calculations
done to determine the adjusted values.
(7) Baseline adjustments for 1990 JP-4 production. (i) Baseline
adjustments may be allowed, upon petition and approval (per
Sec. 80.93), if a refinery produced JP-4 jet fuel in 1990 and meets all
of the following requirements:
(A) The refinery is the only refinery of a refiner such that it
cannot form an aggregate baseline with another refinery (per paragraph
(f) of this section) or all of the refineries of a refiner produced JP-
4 in 1990 and each of the refineries also meets the requirements
specified in paragraphs (e)(7)(i) (B) and (C) of this section.
(B) The refinery will not produce reformulated gasoline. If the
refinery produces reformulated gasoline at any time in a calendar year,
its compliance baseline shall revert to its unadjusted baseline values
for that year and all subsequent years.
(C) The ratio of the refinery's 1990 JP-4 production to its 1990
gasoline production equals or exceeds 0.5.
(ii) Fuel parameter and volume adjustments shall be made by
assuming that no JP-4 was produced in 1990.
(iii) All adjustments due to 1990 JP-4 production must be
accompanied by:
(A) Unadjusted and adjusted fuel parameters, emissions, and
volumes; and
(B) A narrative describing the situation, the types of
calculations, and the reasoning supporting the types of calculations
done to determine the adjusted values.
(f) Baseline volume and emissions determination--(1) Individual
baseline volume. (i) The individual baseline volume of a refinery
described in paragraph (b)(1)(i) of this section shall be the larger of
the total gasoline volume produced in or shipped from the refinery in
1990, excluding gasoline blendstocks and exported gasoline, and
including the oxygenate volume associated with any product meeting the
requirements specified in paragraph (c)(1)(ii) of this section.
(ii) Gasoline brought into the refinery in 1990 which exited the
refinery, in 1990, unchanged shall not be included in determining the
refinery's baseline volume.
(iii) If a refiner is allowed to adjust its baseline per paragraphs
(e)(5) through (e)(7) of this section, its individual baseline volume
shall be the volume determined after the adjustment.
(iv) The individual baseline volume for facilities deemed closely
integrated, per paragraph (e)(1) of this section, shall be the combined
1990 gasoline production of the facilities, so long as mutual volumes
are not double-counted, i.e., volumes of blendstock sent from the
refinery to the blending facility should not be included in the
blending facility's volume.
(v) The baseline volume of a refiner, per paragraph (b)(3) of this
section, shall be the larger of the total gasoline volume produced in
or shipped from the refinery in 1990, excluding gasoline blendstocks
and exported gasoline.
(vi) The baseline volume of an importer, per paragraph (b)(4) of
this section, shall be the total gasoline volume imported into the U.S.
in 1990.
(2) Individual baseline emissions. (i) Individual annual average
baseline emissions (per Sec. 80.90) shall be determined for every
refinery, refiner or importer, as applicable.
(ii) For each individual summer or winter baseline fuel parameter
value (determined per paragraph (e) of this section) which is outside
of the complex model conventional gasoline valid range for that
parameter (per Sec. 80.45(f)(1)(ii)), the complex model range is
extended only for such fuel parameters, in both baseline and compliance
complex model emissions determinations, and only for the applicable
summer or winter models.
(iii) Facilities deemed closely integrated, per paragraph (e)(1) of
this section, shall have a single set of annual average individual
baseline emissions.
(iv) Aggregate baselines (per Sec. 80.101(h)) must have the
NOX emissions of all refineries in the aggregate determined on the
same basis, using either oxygenated or non-oxygenated baseline fuel
parameters.
(3) Geographic considerations requiring individual conventional
gasoline compliance baselines. (i) Anyone may petition EPA to establish
separate baselines for refineries located in and providing conventional
gasoline to an area with a limited gasoline distribution system if it
can show that the area is experiencing increased toxics emissions due
to an ozone nonattainment area opting into the reformulated gasoline
program pursuant to section 211(k)(6) of the Act.
(ii) If EPA agrees with the finding of paragraph (f)(4)(i) of this
section, it shall require that the baselines of such refineries be
separate from refineries not located in the area.
(iii) If two (2) or more of a refiner's refineries are located in
the geographic area of concern, the refiner may aggregate the baseline
emissions and sulfur, olefin and T90 values of the refineries or have
an individual baseline for one or more of the refineries, per paragraph
(f)(3) of this section.
(4) Baseline recalculations. Aggregate baseline exhaust emissions
(per Sec. 80.90) and baseline sulfur, olefin and T90 values and
aggregate baseline volumes shall be recalculated under the following
circumstances:
(i) A refinery included in an aggregate baseline is entirely
shutdown. If the shutdown refinery was part of an aggregate baseline,
the aggregate baseline emissions, aggregate baseline sulfur, olefin and
T90 values and aggregate volume shall be recalculated to account for
the removal of the shutdown refinery's contributions to the aggregate
baseline.
(ii) A refinery exchanges owners.
(A) All aggregate baselines affected by the exchange shall be
recalculated to reflect the addition or subtraction of the baseline
exhaust emissions, sulfur, olefin and T90 values and volumes of that
refinery.
(B) The new owner may elect to establish an individual baseline for
the refinery or to include it in an aggregate baseline.
(C) If the refinery was part of an aggregate of three or more
refineries, the remaining refineries in the aggregate from which that
refinery was removed will have a new aggregate baseline. If the
refinery was part of an aggregate of only two refineries, the remaining
refinery will have an individual baseline.
(g) Inability to meet the requirements of this section. If a
refiner or importer is unable to comply with one or more of the
requirements specified in paragraphs (a) through (f) of this section,
it may, upon petition and approval, accommodate the lack of compliance
in a reasonable, logical, technically sound manner, considering the
appropriateness of the alternative. A narrative of the situation, as
well as any calculations and results determined, must be documented.

Sec. 80.92 Baseline auditor requirements.

Sec. 80.93 Individual baseline submission and approval.

(a) Submission timing. (1) Each refiner, blender or importer shall
submit two copies of its individual baseline to EPA (Fuel Studies and
Standards Branch, Baseline Submission, U.S. EPA, 2565 Plymouth Rd., Ann
Arbor, MI 48105) not later than June 1, 1994.
(2) If a refiner must collect data after December 15, 1993 (per
Sec. 80.91(d)(2)), it shall submit two copies of its individual
baseline to EPA (per Sec. 80.93(a)(1)) by September 1, 1994.
(3)(i) All petitions required for baseline adjustments or
methodology deviations will be approved or disapproved by the Director
of the Office of Mobile Sources, or designee. All instances where a
``showing'' or other proof is required are also subject to approval by
the Director of the Office of Mobile Sources, or designee.
(ii) Auditor-verified petitions, ``showings'' and other associated
proof may be submitted to EPA (per Sec. 80.93(a)(1)) prior to the
official submittal of the entire baseline determination. EPA will
attempt to review and approve, disapprove or otherwise comment on the
petition, etc., prior to the deadline for baseline submittal.
(iii) In the event that EPA does not comment on the petition prior
to the deadline for baseline submittal, the refiner or importer must
still comply with the applicable baseline submittal deadline.
(4) If a baseline recalculation is required per Sec. 80.91(f),
documentation and recalculation of all affected baselines shall be
submitted to EPA within 30 days of the previous baseline(s) becoming
inaccurate due to the circumstances outlined in Sec. 80.91(f).
(b) Submission content. (1) Individual baseline submissions shall
include, at minimum, the information specified in this paragraph (b).
(i) During its review and evaluation of the baseline submission,
EPA may require a refiner or importer to submit additional information
in support of the baseline determination.
(ii) Additional information which may assist EPA during its review
and evaluation of the baseline may be included at the submitter's
discretion.
(2) Administrative information shall include:
(i) Name and business address of the refiner or importer;
(ii) Name, business address and business phone number of the
company contact;
(iii) Address and physical location of each refinery, terminal or
import facility;
(iv) Address and physical location where documents which are
supportive of the baseline determination for each facility are kept;
(3) The chief executive officer statement shall be:
(i) A statement signed by the chief executive officer of the
company, or designee, which states that:
(A) The company is complying with the requirements as a refiner,
blender or importer, as appropriate;
(B) The data used in the baseline determination is the extent of
the data available for the determination of all required baseline fuel
parameters;
(C) All calculations and procedures followed per Secs. 80.90
through 80.93 have been done correctly;
(D) Proper adjustments have been made to the data or in the
calculations, as applicable;
(E) The requirements and intentions of the rulemaking have been met
in determining the baseline fuel parameters; and
(F) The baseline fuel parameter values determined for each facility
represent that facility's 1990 gasoline to the fullest extent possible.
(ii) A refiner or importer which is permitted to utilize the
parameter values specified in Sec. 80.91(c)(5), and does so, shall
submit a statement signed by the chief executive officer of the
company, or designee, indicating that insufficient data exist for a
baseline determination by the types of data allowed for that entity, as
specified in Sec. 80.91.
(4) The auditor-related requirements are:
(i) Name, address, telephone number and date of hire of each
auditor hired for baseline verification, whether or not the auditor was
retained through the baseline approval process.
(ii) Identification of the auditor responsible for the
verification. A copy of this auditor's qualification statement, per
Sec. 80.92, must be included if the auditor has not been approved by
EPA, per Sec. 80.92;
(iii) Indication of the primary analyst(s) involved in each
refinery's baseline verification; and
(iv) The signed auditor verification statement, per Sec. 80.92.
(5) The following baseline information for each refinery, refiner
or importer, as applicable, shall be provided:
(i) Individual baseline fuel parameter values, on an oxygenated and
non-oxygenated basis, and on a summer and winter basis, per Sec. 80.91;
(ii) Individual baseline exhaust emissions shall be shown
separately, on a summer, winter and annual average basis (per
Sec. 80.90) as follows:
(A) Simple model exhaust benzene emissions;
(B) Complex model exhaust benzene emissions;
(C) Complex model exhaust toxics emissions, for Phase I;
(D) Complex model exhaust NOX emissions, for Phase I, using
oxygenated individual baseline fuel parameters;
(E) Complex model exhaust NOX emissions, for Phase I, using
non-oxygenated individual baseline fuel parameters;
(F) Complex model exhaust toxics emissions, for Phase II;
(G) Complex model exhaust NOX emissions, for Phase II, using
oxygenated individual baseline fuel parameters; and
(H) Complex model exhaust NOX emissions, for Phase II, using
non-oxygenated individual baseline fuel parameters;
(iii) Individual 1990 baseline gasoline volumes, per Sec. 80.91,
shall be shown separately on a summer, winter and annual average basis;
and
(iv) Blendstock-to-gasoline ratios for each calendar year 1990
through to 1993, per Sec. 80.102.
(6) Confidentiality claim.
(i) Upon approval of an individual baseline, EPA will publish the
individual standards for each refinery, blender or importer in the
Federal Register. Such information shall include baseline emissions as
specified in Sec. 80.90 and 125% of the individual baseline values for
sulfur, olefins and T90.
(ii) Information in the baseline submission which the submitter
desires be considered confidential business information (per 40 CFR
part 2, subpart B) must be clearly identified. Information specified in
paragraph (b)(5) of this section shall not be considered confidential.
(7) Information related to baseline determination as specified in
Sec. 80.91 and paragraph (c) of this section.
(c) Additional baseline submission requirements when Method 1-, 2-
and/or 3-type data is utilized. All requirements of this paragraph
shall be reported separately for each facility, unless the facilities
are closely integrated, per Sec. 80.91.
(1) General. The following information shall be provided:
(i) The number of months in 1990 during which the facility was
operating;
(ii) 1990 summer gasoline production volume, per Sec. 80.91, total
and by grade, for all gasoline produced but not exported;
(iii) 1990 winter gasoline production volume, per Sec. 80.91, total
and by grade, for all gasoline produced, excluding gasoline exported;
and
(iv) Whether this facility is actually two facilities which are
closely integrated, per Sec. 80.91.
(2) Baseline values. The following shall be included for each fuel
parameter for which a baseline value is required, per Sec. 80.91:
(i) Narrative of the development of the baseline value of the fuel
parameter, including discussion of the sampling and calculation
methodologies, technical judgment used, effects of petition results on
calculated values, and any additional information which may assist EPA
in its review of the baseline;
(ii) Identification of the data-type(s), per Sec. 80.91, used in
the determination of a given fuel parameter;
(iii) Identification of test method. If not per Sec. 80.46, include
a narrative, explain differences and describing adequacy, per
Sec. 80.91;
(iv) Documentation that the minimum sampling requirements per
Sec. 80.91 have been met;
(v) Petition and narrative, if needed, for use of less than the
minimum required data, per Sec. 80.91;
(vi) Identification of instances of sample compositing per
Sec. 80.91;
(vii) Identification of streams for which one or more parameter
values were deemed negligible per Sec. 80.91; and
(viii) Discussion of the calculation of oxygenated or non-
oxygenated fuel parameter values from non-oxygenated or oxygenated
values, respectively, per Sec. 80.91.
(3) Method 1. If Method 1-type data is utilized in the baseline
determination, the following information on 1990 batches of gasoline,
or shipments if not batch blended, are required by grade shall be
provided:
(i) First and last sampling dates;
(ii) The following shall be indicated separately on a summer and
winter basis, by month:
(A) Number of months sampled;
(B) Number of 1990 batches, or shipments if not batch blended;
(C) Total volume of all batches or shipments;
(D) Number of batches or shipments sampled;
(E) Total volume of all batches or shipments sampled;
(F) Baseline fuel parameter value, per Sec. 80.91; and
(iii) A showing that data was available on every batch of 1990
gasoline, if applicable, per Sec. 80.91 (b)(3) or (b)(4).
(4) Method 2. If Method 2-type data is utilized in the baseline
determination, the following information on each type of 1990
blendstock used in the refinery's gasoline are required, by blendstock
type shall be provided:
(i) First and last sampling dates; and
(ii) The following shall be indicated separately on a summer and
winter basis, by month:
(A) Number of months sampled;
(B) Each type of blendstock used in 1990 gasoline and total number
of blendstocks. Include all blendstocks produced, purchased or
otherwise received which were blended to produce gasoline within the
facility. Identify all blendstocks not produced in the facility but
used in the facility's 1990 gasoline;
(C) Total volume of each blendstock used in gasoline in 1990;
(D) Identification of blendstock streams as batch or continuous;
(E) Number of blendstock samples from continuous blendstock
streams;
(F) Number of blendstock samples from batch processes, including
volume of each batch sampled; and
(G) Baseline fuel parameter value, per Sec. 80.91.
(5) Method 3, blendstock data. The following information on each
type of post-1990 gasoline blendstock used in the refinery's gasoline
are required, by blendstock type shall be provided:
(i) First and last sampling dates;
(ii) The following shall be indicated separately on a summer and
winter basis, by month:
(A) Number of post-1990 months sampled;
(B) Each type of blendstock used in 1990 gasoline and total number
of blendstocks. Include all blendstocks produced, purchased or
otherwise received which were blended to produce gasoline within the
facility. Identify all blendstocks not produced in the facility but
used in the facility's 1990 gasoline;
(C) Total volume of each blendstock used in gasoline in 1990;
(D) Identification of post-1990 blendstock streams as batch or
continuous;
(E) Number of post-1990 blendstock samples from continuous
blendstock streams;
(F) Number of post-1990 blendstock samples from batch processes,
including volume of each batch sampled; and
(G) Baseline fuel parameter value, per Sec. 80.91; and
(iii) Support documentation showing that the criteria of Sec. 80.91
for using Method 3-type blendstock data are met.
(6) Method 3, post-1990 gasoline data. The following information on
post-1990 batches of gasoline, or shipments if not batch blended, are
required by grade:
(i) First and last sampling dates;
(ii) The following shall be indicated separately for summer and
winter production, by month:
(A) Number of post-1990 months sampled;
(B) Number of post-1990 batches, or shipments if not batch blended;
(C) Total volume of all post-1990 batches or shipments;
(D) Number of post-1990 batches or shipments sampled;
(E) Volume of each post-1990 batch or shipment sampled; and
(F) Baseline fuel parameter value, per Sec. 80.91; and
(iii) Support documentation showing that the criteria of Sec. 80.91
for using post-1990 gasoline data are met.
(7) Work-in-progress (WIP). All of the following must be included
in support of a WIP adjustment (per Sec. 80.91(e)(5)):
(i) Petition including identification of the specific baseline
emission(s) or parameter for which the WIP adjustment is desired;
(ii) Showing that all WIP criteria, per Sec. 80.91(e)(5), are met;
(iii) Unadjusted and adjusted baseline fuel parameters, emissions
and volume for the facility; and
(iv) Narrative, per Sec. 80.91 (e)(5).
(8) Extenuating circumstances. All of the following must be
included in support of an extenuating circumstance adjustment (per
Sec. 80.91 (e)(6) through (e)(7)):
(i) Petition including identification of the allowable
circumstance, per Sec. 80.91 (e)(6) through (e)(7);
(ii) Showing that all applicable criteria, per Sec. 80.91 (e)(6)
through (e)(7), are met;
(iii) Unadjusted and adjusted baseline fuel parameters, emissions
and volume for the facility; and
(iv) Narrative, per Sec. 80.91.
(9) Other baseline information. Narrative discussing any aspects of
the baseline determination not already indicated per the requirements
of this paragraph (c) shall be provided.
(10) Refinery information. The following information, on a summer
or winter basis, shall be provided:
(i) Refinery block flow diagram, showing principal refining units;
(ii) Principal refining unit charge rates and capacities;
(iii) Crude types utilized (names, gravities, and sulfur content)
and crude charge rates; and
(iv) Information on the following units, if utilized in the
refinery:
(A) Catalytic Cracking Unit: conversion, unit yields, gasoline fuel
parameter values (per Sec. 80.91(a)(2));
(B) Hydrocracking Unit: unit yields, gasoline fuel parameter values
(per Sec. 80.91(a)(2));
(C) Catalytic Reformer: unit yields, severities;
(D) Bottoms Processing Units (including, but not limited to,
coking, extraction and hydrogen processing): gasoline stream yields;
(E) Yield structures for other principal units in the refinery
(including but not limited to Alkylation, Polymerization,
Isomerization, Etherification, Steam Cracking).

Secs. 80.94-80.100 [Reserved]

Sec. 80.101 Standards applicable to refiners and importers.

Any refiner or importer of conventional gasoline shall meet the
standards specified in this section over the specified averaging
period, beginning on January 1, 1995.
(a) Averaging period. The averaging period for the standards
specified in this section shall be January 1 through December 31.
(b) Conventional gasoline compliance standards--(1) Simple model
standards. The simple model standards are the following:
(i) Annual average exhaust benzene emissions, calculated according
to paragraph (g)(1)(i) of this section, shall not exceed the refiner's
or importer's compliance baseline for exhaust benzene emissions;
(ii) Annual average levels of sulfur shall not exceed 125% of the
refiner's or importer's compliance baseline for sulfur;
(iii) Annual average levels of olefins shall not exceed 125% of the
refiner's or importer's compliance baseline for olefins; and
(iv) Annual average values of T-90 shall not exceed 125% of the
refiner's or importer's compliance baseline for T-90.
(2) Optional complex model standards. Annual average levels of
exhaust benzene emissions, weighted by volume for each batch and
calculated using the applicable complex model under Sec. 80.45, shall
not exceed the refiner's or importer's 1990 average exhaust benzene
emissions.
(3) Complex model standards. Annual average levels of exhaust
toxics emissions and NOX emissions, weighted by volume for each
batch and calculated using the applicable complex model under
Sec. 80.45, shall not exceed the refiner's or importer's 1990 average
exhaust toxics emissions and NOX emissions, respectively.
(c) Applicability of standards. (1) For each averaging period prior
to January 1, 1998, a refiner or importer shall be subject to either
the Simple Model or Optional Complex Model Standards, at their option,
except that any refiner or importer shall be subject to:
(i) The Simple Model Standards if the refiner or importer uses the
Simple Model Standards for reformulated gasoline; or
(ii) The Optional Complex Model Standards if the refiner or
importer used the Complex Model Standards for reformulated gasoline.
(2) Beginning January 1, 1998, each refiner and importer shall be
subject to the Complex Model Standards for each averaging period.
(d) Product to which standards apply. Any refiner for each
refinery, or any importer, shall include in its compliance
calculations:
(1) Any conventional gasoline produced or imported during the
averaging period;
(2) Any non-gasoline petroleum products that are produced or
imported and sold or transferred from the refinery or group of
refineries or importer during the averaging period, if required
pursuant to Sec. 80.102(e)(2), unless the refiner or importer is able
to establish in the form of documentation that the petroleum products
were used for a purpose other than the production of gasoline within
the United States;
(3) Any gasoline blending stock produced or imported during the
averaging period which becomes conventional gasoline solely upon the
addition of oxygenate;
(4)(i) Any oxygenate that is added to conventional gasoline, or
gasoline blending stock as described in paragraph (d)(3) of this
section, where such gasoline or gasoline blending stock is produced or
imported during the averaging period;
(ii) In the case of oxygenate that is added at a point downstream
of the refinery or import facility, the oxygenate may be included only
if the refiner or importer can establish the oxygenate was in fact
added to the gasoline or gasoline blendstock produced, by showing that
the oxygenate was added by:
(A) The refiner or importer; or
(B) By a person other than the refiner or importer, provided that
the refiner or importer:
(1) Has a contract with the oxygenate blender that specifies
procedures to be followed by the oxygenate blender that are reasonably
calculated to ensure blending with the amount and type of oxygenate
claimed by the refiner or importer; and
(2) Monitors the oxygenate blending operation to ensure the volume
and type of oxygenate claimed by the refiner or importer is correct,
through periodic audits of the oxygenate blender designed to assess
whether the overall volumes and type of oxygenate purchased and used by
the oxygenate blender are consistent with the oxygenate claimed by the
refiner or importer and that this oxygenate was blended with the
refiner's or importer's gasoline or blending stock, periodic sampling
and testing of the gasoline produced subsequent to oxygenate blending,
and periodic inspections to ensure the contractual requirements imposed
by the refiner or importer on the oxygenate blender are being met.
(e) Product to which standards do not apply. Any refiner for each
refinery, or any importer, shall exclude from its compliance
calculations:
(1) Gasoline that was not produced at the refinery or was not
imported by the importer;
(2) Blendstocks that have been included in another refiner's
compliance calculations, pursuant to Sec. 80.102(e)(2) or otherwise;
(3) Gasoline that meets the enforcement exemption for California
gasoline under Sec. 80.81; and
(4) Gasoline that is exported.
(f) Compliance baseline determinations. (1) In the case of any
refiner or importer for whom an individual baseline has been
established under Sec. 80.91, the individual baseline for each
parameter or emissions performance shall be the compliance baseline for
that refiner or importer.
(2) In the case of any refiner or importer for whom the anti-
dumping statutory baseline applies under Sec. 80.91, the anti-dumping
statutory baseline for each parameter or emissions performance shall be
the compliance baseline for that refiner or importer.
(3) In the case of a party that is both a refiner and an importer,
and for whom an individual 1990 baseline has not been established for
the imported product under Sec. 80.91(b)(4), the compliance baseline
for the imported product shall be the 1990 volume weighted average of
all of the refiner's individual refinery baselines.
(4) Any compliance baseline under paragraph (f) (1) or (3) of this
section shall be adjusted for each averaging period as follows:
(i) The 1990 equivalent conventional gasoline volume for an
averaging period is calculated according to the following formula:

TR16FE94.021

where

Veq=the 1990 equivalent conventional gasoline volume
V1990=the 1990 volume of gasoline as determined under
Sec. 80.91(f)(1)
Vr=the total volume of reformulated gasoline produced or imported
by a refiner or importer during the averaging period excluding gasoline
which meets the enforcement exemptions of Sec. 80.81
Vc=the total volume of conventional gasoline produced or imported
by a refiner or importer during the averaging period excluding gasoline
which meets the enforcement exemptions of Sec. 80.81

(ii)(A) If the total volume of the conventional gasoline produced
or imported by the refiner or importer during the averaging period is
equal to or less than that refiner's or importer's 1990 equivalent
conventional gasoline volume, the compliance baseline for each
parameter shall be that refiner's or importer's individual 1990
baseline; or
(B) If the total volume of the conventional gasoline produced or
imported by the refiner or importer is greater than that refiner's or
importer's 1990 equivalent conventional gasoline volume, the compliance
baseline for each parameter or emissions performance shall be
calculated according to the following formula:

TR16FE94.022

where

CBi=the compliance baseline value for parameter or emissions
product i
Bi=the refiner's or importer's individual baseline value for
parameter i calculated according to the methodology in Sec. 80.91
Veq=the 1990 equivalent conventional gasoline volume for the
averaging period, calculated pursuant to paragraph (f)(4)(iii) of this
section
DBi=the anti-dumping statutory baseline value for parameter i, as
specified at Sec. 80.91(c)(5)
Vc=the total volume of conventional gasoline and other products
included under paragraph (d) of this section produced or imported by a
refiner or importer during the averaging period

(g) Compliance calculations. (1) In the case of any refiner or
importer subject to an individual refinery baseline, the annual average
value for each parameter or emissions performance during the averaging
period, calculated according to the following methodologies, shall be
less than or equal to the refiner's or importer's standard under
paragraph (b) of this section for that parameter.
(i) Exhaust benzene emissions under the Simple Model for an
averaging period are calculated as follows:

EXHBEN=1.884+(0.949 x BZ)+(0.113 x (AR-BZ))

where

EXHBEN=the average exhaust benzene emissions for the averaging period
BZ=the average benzene content for the averaging period
AR=the average aromatics content for the averaging period

(ii) The average value for each parameter for an averaging period
shall be calculated as follows:

TR16FE94.023

where

APARM=the average value for the parameter being evaluated
Vi=the volume of conventional gasoline and other products included
under paragraph (d) of this section, in batch i
PARMi=the value of the parameter being evaluated for batch i as
determined in accordance with the test methods specified in Sec. 80.46
n=the number of batches of conventional gasoline and other products
included under paragraph (d) of this section produced or imported
during the averaging period
SG^{i=specific gravity of batch i (only applicable for properties
determined on a weight percent or ppm basis)

Sec. 80.102 Controls applicable to blendstocks.

(a) For the purposes of this subpart E:
(1) All of the following petroleum products that are produced by a
refiner or imported by an importer shall be considered ``applicable
blendstocks'':
(i) Reformate;
(ii) Light coker naphtha;
(iii) FCC naphtha;
(iv) Benzene/toluene/xylene;
(v) Pyrolysis gas;
(vi) Aromatics;
(vii) Polygasoline; and
(viii) Dimate; and
(2) Any gasoline blendstock with properties such that, if oxygenate
only is added to the blendstock the resulting blend meets the
definition of gasoline under Sec. 80.2(c), shall be considered
gasoline.
(b)(1) Any refiner or importer of conventional gasoline or
blendstocks shall determine the baseline blendstock-to-gasoline ratio
for each calendar year 1990 through 1993 according to the following
formula:

TR16FE94.024

Where:

BGby=Blendstock-to-gasoline ratio for base year
Vbs=Volume of applicable blendstock produced or imported and
transferred to others during the calendar year, and used in to produce
gasoline
Vg=Volume of gasoline produced or imported during the calendar
year

(2)(i) Only those volumes of applicable blendstocks for which the
refiner is able to demonstrate the blendstock was used in the
production of gasoline may be included in baseline blendstock-to-
gasoline ratios under paragraph (b)(1) of this section.
(ii) The baseline volume data for applicable blendstocks and
gasoline shall be confirmed through the baseline audit requirements
specified in Sec. 80.92 and submitted in accordance with the
requirements of Sec. 80.93.
(c) Any refiner or importer shall calculate the baseline cumulative
blendstock-to-gasoline ratio according to the following formula:

TR16FE94.025

Where:

BGCbase=Baseline cumulative blendstock-to-gasoline ratio
Vbs, i=Volume of applicable blendstock produced or imported and
transferred to others during calendar year i
Vg, i=Volume of gasoline produced or imported during calendar year
i
i=each year, 1990 through 1993, for which a blendstock-to-gasoline
ratio is calculated under paragraph (b) of this section

(d)(1) For each averaging period, any refiner or importer shall:
(i) Determine the averaging period blendstock-to-gasoline ratio
according to the following formula:

TR16FE94.026

Where:

BGa=Blendstock-to-gasoline ratio for the current averaging period
Vbs=Volume of applicable blendstock produced or imported during
the averaging period and subsequently transferred to others
Vg=Volume of conventional gasoline, reformulated gasoline, and
RBOB produced or imported during the averaging period

(ii) For each averaging period until January 1, 1998, calculate the
peak year blendstock-to-gasoline ratio percentage change according to
the following formula:

TR16FE94.027

Where:

PCp=Peak year blendstock-to-gasoline ratio percentage change
BGa=Blendstock-to-gasoline ratio for the averaging period
calculated under paragraph (d)(1)(i) of this section
BGp=Largest one year blendstock-to-gasoline ratio calculated under
paragraph (b) of this section

(2) Beginning on January 1, 1998, for each averaging period any
refiner or importer shall:
(i) Determine the running cumulative compliance period blendstock-
to-gasoline ratio according to the following formula:

TR16FE94.028

Where:

BGCcomp=Running cumulative compliance period blendstock-to-
gasoline ratio
Vbs, i=Volume of applicable blendstock produced or imported and
transferred to others during averaging period i
Vg, i=Volume of conventional gasoline, reformulated gasoline, and
RBOB produced or imported during averaging period i
i=The current averaging period, and each of the three immediately
preceding averaging periods

(ii) Calculate the cumulative blendstock-to-gasoline ratio
percentage change according to the following formula:

TR16FE94.029

Where:

PCc=Cumulative blendstock-to-gasoline ratio percentage change
BGCcomp=Running cumulative compliance period blendstock-to-
gasoline ratio as determined in paragraph (d)(2)(i) of this section
BGCbase=Baseline cumulative blendstock-to-gasoline ratio
calculated under paragraph (c) of this section

(3) For purposes of this paragraph (d), all applicable blendstocks
produced or imported shall be included, except those for which the
refiner or importer has sufficient evidence in the form of
documentation that the blendstocks were:
(i) Exported;
(ii) Used for other than gasoline blending purposes;
(iii) Transferred to a refiner that used the blendstock as a
``feedstock'' in a refining process during which the blendstock
underwent a substantial chemical or physical transformation; or
(iv) Transferred between refineries which have been grouped
pursuant to Sec. 80.101(h) by a refiner for the purpose of determining
compliance under this subpart.
(e)(1) Any refiner or importer shall have exceeded the blendstock-
to-gasoline ratio percentage change threshold if:
(i) The peak year blendstock-to-gasoline ratio percentage change
calculated under paragraph (d)(1)(ii) of this section is more than ten;
or
(ii) Beginning on January 1, 1998, the cumulative blendstock-to-
gasoline ratio percentage change calculated under paragraph (d)(2)(ii)
of this section is more than ten.
(2) Any refiner or importer that exceeds the blendstock-to-gasoline
ratio percentage change threshold shall, without further notification:
(i) Include all blendstocks produced or imported and transferred to
others in its compliance calculations for two averaging periods
beginning on January 1 of the averaging period subsequent to the
averaging period when the exceedance occurs;
(ii) Provide transfer documents to the recipient of such blendstock
that contain the language specified at Sec. 80. 106(b); and
(iii) Transfer such blendstock in a manner such that the ultimate
blender of such blendstocks has a reasonable basis to know that such
blendstock has been accounted for.
(3) Any refiner or importer that has previously exceeded the
blendstock-to-gasoline ratio percentage change threshold, and
subsequently exceeds the threshold for an averaging period and is not
granted a waiver pursuant to paragraph (f)(2)(i) of this section,
shall, without further notification, meet the requirements specified in
paragraphs (e)(2) (i) through (iii) of this section for four averaging
periods, beginning on January 1 of the averaging period following the
averaging period when the subsequent exceedance occurs.
(f)(1) The refiner or importer blendstock accounting requirements
specified under paragraph (e) of this section shall not apply in the
case of any refiner or importer:
(i) Whose 1990 baseline value for each regulated fuel property and
emission performance, as determined in accordance with Secs. 80.91 and
80.92, is less stringent than the anti-dumping statutory baseline value
for that parameter or emissions performance;
(ii) Whose averaging period blendstock-to-gasoline ratio,
calculated according to paragraph (d)(1)(i) of this section, is equal
to or less than .0300; or
(iii) Who obtains a waiver from EPA, provided that a petition for
such a waiver is filed no later than fifteen days following the end of
the averaging period for which the blendstock-to-gasoline ratio
percentage change threshold is exceeded.
(2)(i) EPA may grant the waiver referred to in paragraph
(f)(1)(iii) of his section if the level of blendstock production was
the result of extreme or unusual circumstances (e.g., a natural
disaster or act of God) which clearly are outside the control of the
refiner or importer, and which could not have been avoided by the
exercise of prudence, diligence, and due care.
(ii) Any petition filed under paragraph (f) of this section shall
include information which describes the extreme or unusual circumstance
which caused the increased volume of blendstock produced or imported,
the steps taken to avoid the circumstance, and the steps taken to
remedy or mitigate the effect of the circumstance.
(g) Notwithstanding the requirements of paragraphs (a) through (f)
of this section, any refiner or importer that transfers applicable
blendstock to another refiner or importer with a less stringent
baseline requirement, either directly or indirectly, for the purpose of
evading a more stringent baseline requirement, shall include such
blendstock(s) in determining compliance with the applicable
requirements of this subpart.

Sec. 80.103 Registration of refiners and importers.

Any refiner or importer of conventional gasoline must register with
the Administrator in accordance with the provisions specified at
Sec. 80.76.

Sec. 80.104 Record keeping requirements.

Any refiner or importer shall maintain records containing the
information as required by this section.
(a) Beginning in 1995, for each averaging period:
(1) Documents containing the information specified in paragraph
(a)(2) of this section shall be obtained for:
(i) Each batch of conventional gasoline, and blendstock if
blendstock accounting is required under Sec. 80.102(e)(2); or
(ii) Each batch of blendstock received in the case of any refiner
that determines compliance on the basis of blendstocks properties under
Sec. 80.101(g)(3).
(2)(i) The results of tests performed in accordance with
Sec. 80.101(i);
(ii) The volume of the batch;
(iii) The batch number;
(iv) The date of production, importation or receipt;
(v) The designation regarding whether the batch is summer or winter
gasoline;
(vi) The product transfer documents for any conventional gasoline
produced or imported;
(vii) The product transfer documents for any conventional gasoline
received;
(viii) For any gasoline blendstocks received by or transferred from
a refiner or importer, documents that reflect:
(A) The identification of the product;
(B) The date the product was transferred; and
(C) The volume of product;
(ix) In the case of any refinery-produced or imported products
listed in Sec. 80.102(a) that were transferred for other than gasoline
blending purposes, documents which demonstrate that other purpose; and
(x) In the case of oxygenate that is added by a person other than
the refiner or importer under Sec. 80.101(d)(4)(ii)(B), documents that
support the volume of oxygenate claimed by the refiner or importer,
including the contract with the oxygenate blender and records relating
to the audits, sampling and testing, and inspections of the oxygenate
blender operation.
(b) Any refiner or importer shall retain the documents required in
this section for a period of five years from the date the conventional
gasoline or blendstock is produced or imported, and deliver such
documents to the Administrator of EPA upon the Administrator's request.

Sec. 80.105 Reporting requirements.

(a) Beginning with the 1995 averaging period, and for each
subsequent averaging period, any refiner for each refinery or group of
refineries at which any conventional gasoline is produced, and any
importer that imports any conventional gasoline, shall submit to the
Administrator a report which contains the following information:
(1) The total gallons of conventional gasoline produced or
imported;
(2) The total gallons of applicable blendstocks produced or
imported and transferred to others;
(3) The total gallons of blendstocks included in compliance
calculations pursuant to Sec. 80.102(e)(2);
(4) The average exhaust benzene emissions, sulfur, olefins and T90
if using the Simple Model; exhaust benzene emissions if using the
optional Complex Model; or exhaust toxic emissions and NOX
emissions if using the Complex Model, as applicable, calculated in
accordance with Sec. 80.101;
(5) The following information for each batch of conventional
gasoline or batch of blendstock included under paragraph (a) 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); and
(v) The properties, pursuant to Sec. 80.101(i); and
(6) Such other information as EPA may require.
(b) The reporting requirements of paragraph (a) of this section do
not apply in the case of any conventional gasoline or gasoline
blendstock that is excluded from a refiner's or importer's compliance
calculation pursuant to Sec. 80.101(e).
(c) For each averaging period, each refiner and importer shall
cause to be submitted to the Administrator of EPA, by May 30 of each
year, a report in accordance with the requirements for the Attest
Engagements of Secs. 80.125 through 80.131.
(d) The report required by paragraph (a) of this section shall be:
(1) Submitted on forms and following procedures specified by the
Administrator of EPA;
(2) Submitted to EPA by the last day of February each year for the
prior calendar year averaging period; and
(3) Signed and certified as correct by the owner or a responsible
corporate officer of the refiner or importer.

Sec. 80.106 Product transfer documents.

(a)(1) On each occasion when any person transfers custody or title
to any conventional gasoline, the transferor shall provide to the
transferee documents which include the following information:
(i) The name and address of the transferor;
(ii) The name and address of the transferee;
(iii) The volume of gasoline being transferred;
(iv) The location of the gasoline at the time of the transfer;
(v) The date of the transfer;
(vi) In the case of transferors or transferees who are refiners or
importers, the EPA-assigned registration number of those persons; and
(vii) The following statement: ``This product does not meet the
requirements for reformulated gasoline, and may not be used in any
reformulated gasoline covered area.''
(2) The requirements of paragraph (a)(1) of this section apply to
product that becomes gasoline upon the addition of oxygenate only.
(b) On each occasion when any person transfers custody or title to
any blendstock that has been included in the refiner's or importer's
compliance calculations under Sec. 80.102(e)(2), the transferor shall
provide to the transferee documents which include the following
statement: ``For purposes of the Anti-Dumping requirements under 40 CFR
Part 80, Subpart E, this blendstock has been accounted for by the
refiner that produced it, and must be excluded from any subsequent
compliance calculations.''

Secs. 80.107-80.124 [Reserved]

Subpart F--Attest Engagements

Sec. 80.125 Attest engagements.

(a) Any refiner, importer, and oxygenate blender subject to the
requirements of this subpart F shall engage an independent certified
public accountant, or firm of such accountants (hereinafter referred to
in this subpart F as ``CPA''), to perform an agreed-upon procedures
attestation engagement of the underlying documentation that forms the
basis of the reports by Secs. 80.75 and 80.104.
(b) The CPA shall perform the attestation engagements in accordance
with the Statements on Standards for Attestation Engagements.
(c) The CPA may complete the requirements of this subpart F with
the assistance of internal auditors who are employees or agents of the
refiner, importer, or oxygenate blender, so long as such assistance is
in accordance with the Statements on Standards for Attestation
Engagements.
(d) Notwithstanding the requirements of paragraph (a) of this
section, any refiner, importer, or oxygenate blender may satisfy the
requirements of this subpart F if the requirements of this subpart F
are completed by an auditor who is an employee of the refiner,
importer, or oxygenate blender, provided that such employee:
(1) Is an internal auditor certified by the Institute of Internal
Auditors, Inc. (hereinafter referred to in this subpart F as ``CIA'');
and
(2) Completes the internal audits in accordance with the
Codification of Standards for the Professional Practice of Internal
Auditing.
(e) Use of a CPA or CIA who 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 in noncompliance with the
requirements of this section.
(f) The following documents are incorporated by reference: the
Statements on Standards for Attestation Engagements, Codification of
Statements on Auditing Standards, written by the American Institute of
Certified Public Accountants, Inc., 1991, and published by the Commerce
Clearing House, Inc., Identification Number 059021, and the
Codification of Standards for the Professional Practice of Internal
Auditing, written and published by the Institute of Internal Auditors,
Inc., 1989, Identification Number ISBN 0-89413-207-5. 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 of the Statements on Standards for Attestation Engagements may
be obtained from the American Institute of Certified Public
Accountants, Inc., 1211 Avenue of the Americas, New York, New York
10036, and copies of the Codification of Standards for the Professional
Practice of Internal Auditing may be obtained from the Institute of
Internal Auditors, Inc., 249 Maitland Avenue, Altamonte Springs,
Florida 32701-4201. Copies may be inspected at the U.S. Environmental
Protection Agency, Office of the Air Docket, 401 M Street, SW.,
Washington, DC., or at the Office of the Federal Register, 800 North
Capitol Street, NW., suite 700, Washington DC.

Sec. 80.126 Definitions.

The following definitions shall apply for the purposes of this
subpart F:
(a) Averaging compliance records shall include the calculations
used to determine compliance with relevant standards on average, for
each averaging period and for each quantity of gasoline for which
standards must be achieved separately.
(b) Credit trading records shall include worksheets and EPA reports
showing actual and complying totals for oxygen and benzene; credit
calculation worksheets; contracts; letter agreements; and invoices and
other documentation evidencing the transfer of credits.
(c) Designation records shall include laboratory analysis reports
that identify whether gasoline meets the requirements for a given
designation; operational and accounting reports of product storage; and
product transfer documents.
(d) Oxygenate blender records shall include laboratory analysis
reports; refiner, importer and oxygenate blender contracts; quality
assurance program records; product transfer documents; oxygenate
purchasing, inventory, and usage records; and daily tank inventory
gauging reports, meter tickets, and product transfer documents.
(e) Product transfer documents shall include documents that reflect
the transfer of ownership or physical custody of gasoline or
blendstock, including invoices, receipts, bills of lading, manifests,
and pipeline tickets.
(f) A tender means the physical transfer of custody of a volume of
gasoline or other petroleum product all of which has the same
identification (reformulated gasoline, conventional gasoline, RBOB, and
other non-finished gasoline petroleum products), and characteristics
(time and place of use restrictions for reformulated gasoline).
(g) Volume records shall include summaries of gasoline produced or
imported that account for the volume of each type of gasoline produced
or imported. The volumes shall be based on tank gauges or meter reports
and temperature adjusted to 60 degrees Fahrenheit.

Sec. 80.127 Sample size guidelines.

In performing the attest engagement, the auditor shall sample
relevant populations to which agreed-upon procedures will be applied
using the methods specified in this section, which shall constitute a
representative sample.
(a) Sample items shall be selected in such a way as to comprise a
simple random sample of each relevant population; and
(b) Sample size shall be determined using one of the following
options:
(1) Option 1. Determine the sample size using the following table:

Sample Size, Based Upon Population Size
------------------------------------------------------------------------
No. in population (N) Sample size
------------------------------------------------------------------------
66 and larger...................... 29
41-65.............................. 25
26-40.............................. 20
0-25............................... N or 19, whichever is smaller.
------------------------------------------------------------------------

(2) Option 2. Determine the sample size in such a manner that the
sample size is equal to that which would result by using the following
parameters and standard statistical methodologies:

Confidence Level--95%
Expected Error Rate--0%
Maximum Tolerable Error Rate--10%

(3) Option 3. The auditor may use some other form of sample
selection and/or some other method to determine the sample size,
provided that the resulting sample affords equal or better strength of
inference and freedom from bias (as compared with paragraphs (b)(1) and
(2) of this section), and that the auditor summarizes the substitute
methods and clearly demonstrates their equivalence in the final report
on the audit.

Sec. 80.128 Agreed upon procedures for refiners and importers.

Sec. 80.129 Agreed upon procedures for downstream oxygenate blenders.

The following are the procedures to be carried out at each
oxygenate blending facility that is subject to the requirements of this
subpart F:
(a) Read the blenders reports filed with the EPA for the previous
year as required by Sec. 80.75.
(b) Obtain a material balance analysis summarizing receipts of RBOB
and oxygenate to the blender, and the deliveries of reformulated
gasoline from the blender.
(1) Test the mathematical accuracy of the calculations contained in
the analysis.
(2) Agree the beginning and ending inventory to the blender's
perpetual inventory records.
(3) Agree the analysis, where applicable, to the EPA reports.
(c) Obtain a listing of all RBOB receipts for the previous year.
(1) Test the mathematical accuracy of the volumetric calculations
contained in the listing.
(2) Agree the volumetric calculations of RBOB receipts to the
calculations contained in the material balance analysis.
(3) Select a representative sample of RBOB receipts from the
listing. Review the product transfer documents for the indication of
the type and volume of oxygenate required to be added to the RBOB.
(d) Obtain a listing of all reformulated gasoline batches produced
by the blender during the previous year.
(1) Test the mathematical accuracy of the volumetric calculations
contained in the listing.
(2) Agree the volumetric calculations contained in the listing to
the calculations contained in the material balance analysis.
(3) Select a representative sample of the batches from the listing,
and for these batches:
(i) Obtain the blender's records that indicate the volume and type
of oxygenate that was blended, the volume of RBOB that was blended and
the product transfer documents for the RBOB, and the internal lab
analysis where applicable;
(ii) Agree the consistency of the type and volume of oxygenate
added to the RBOB with that indicated to be added in the RBOB's product
transfer documents;
(iii) Recalculate the actual oxygen content based on the volumes
blended and agree to the report to EPA on oxygen; and
(iv) Review the time and place designations in the product transfer
documents prepared for the batch by the blender, for consistency with
the time and place designations in the product transfer documents for
the RBOB (e.g., VOC-controlled or non-VOC-controlled, VOC region for
VOC-controlled, OPRG versus non-OPRG, and simple or complex model).
(e) Agree the sampling and testing frequency of the blender's
quality assurance program with the sampling and testing rates required
in Sec. 80.72.

Sec. 80.130 Agreed upon procedures reports.

(a) Reports. (1) The CPA or CIA shall issue to the refiner,
importer, or blender a report summarizing the procedures performed and
the findings in accordance with the attest engagement or internal audit
performed in compliance with this subpart.
(2) The refiner, importer or blender shall provide a copy of the
auditor's report to the EPA within the time specified in Sec. 80.75(m).
(b) Record retention. The CPA or CIA shall retain all records
pertaining to the performance of each agreed upon procedure and
pertaining to the creation of the agreed upon procedures report for a
period of five years from the date of creation and shall deliver such
records to the Administrator upon request.

Secs. 80.131-80.135 [Reserved]

[FR Doc. 94-20 Filed 2-15-94; 8:45 am]
BILLING CODE 6560-50-P}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}