UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. 20460

OFFICE OF AIR AND RADIATION

The Honorable Heidi Heitkamp United States Senate Washington, D.C. 20510

Dear Senator Heitkamp:

Thank you for your letter of March 19, 2013, co-signed by three of your colleagues, expressing concerns with the U.S. Environmental Protection Agency's proposed "Tier 3" regulations for motor vehicle emissions and gasoline standards.

The proposed Tier 3 standards, which were signed by Acting Administrator Bob Perciasepe on March 29, 2013, would set new vehicle emission standards and lower the sulfur content of gasoline, in a manner that addresses the vehicle and its fuel as an integrated system. The Tier 3 proposed rulemaking package contains extensive, detailed analyses of the rule's anticipated health and air quality benefits as well as its potential impacts on the refining and automotive industries.

Your letter urges the EPA to issue an advance notice of proposed rulemaking prior to initiating rulemaking. We appreciate your concern but note that the Administration has already provided significant advance notice to the public and opportunity for public input since the May 2010 Presidential Memorandum that requested the EPA's reevaluation of the motor vehicle and gasoline sulfur standards. For example, in the rulemaking that established light-duty vehicle greenhouse gas emissions standards for model year 2017 and later (finalized in October 2012), the EPA described its intention to propose Tier 3 vehicle and fuel standards and received public comment. The EPA has also already sought and received broad stakeholder input, which is reflected in the Tier 3 proposal, including from the automotive, oil and gas industries as well as environmental and public health organizations. It is important to emphasize that the Tier 3 proposal is subject to stakeholder and public input through the notice and comment process. The EPA will carefully consider and respond to all timely comments on the proposed rule before promulgating a final rule.

The air quality benefits of the Tier 3 standards are important for the American public. Over 158 million Americans are currently experiencing unhealthy levels of air pollution that are linked to adverse health impacts such as hospital admissions, emergency room visits and premature mortality. Motor vehicles are a particularly important source of air pollution, especially in urban areas. Emission reductions from the Tier 3 program would lead to immediate air quality improvements that are critically important for states to attain and maintain the existing health-based National Ambient Air Quality Standards (NAAQS) and would yield substantial health benefits. By 2030, the EPA estimates the proposed Tier 3 standards would annually prevent up to 2,400 premature deaths, 23,000 cases of respiratory ailments in children, 3,200 hospital admissions and asthma-related emergency room visits, and 1.8 million lost school days, work days and days when activities would be restricted due to air pollution. The benefits of the program

Internet Address (URL) http//wwwepa gov Recycled/Recyclable Printed with Vegetable Oil Based Inks on 1000 Postconsumer, Process Chlorine Free Recycled Paperwould continue to increase since Tier 3 would not be fully implemented until 2025, and fleet turnover to

Tier 3 vehicles would continue beyond 2030.

The EPA understands the importance of potential cost impacts on refineries and automakers, and we included extensive analyses of the costs associated with the proposed Tier 3 standards in the proposed rulemaking, including refinery-by-refinery analyses. We estimate the Tier 3 program would cost about a penny per gallon of gasoline and about $130 per vehicle, and yield health benefits between $8 and $23 billion annually by 2030. Our evaluation of gasoline sulfur control costs has undergone independent peer review and is corroborated by two independent studies (by Mathpro Inc. and Navigant Economics). The Baker & O'Brien study cited in your letter estimates a slightly higher average cost increase of 2.1 cents per gallon, but is based on a number of problematic assumptions that bias the study towards overstatement of costs. Simple adjustments to the Baker & O'Brien study to reflect plausible capital costs and accepted rates of return on investment bring the study's costs in line with those of the EPA.

Again, thank you for your letter. If you have further questions, please contact me or your staff may call Patricia Haman in the EPA's Office of Congressional and Intergovernmental Relations at (202) 564- 2806.

Gina McCarthy Assistant Administrator^ EDSTA 7



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### °^^°^ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. 20460

OFFICE OF
AIR AND RADIATION

The Honorable Mary L. Landrieu United States Senate Washington, D.C. 20510

Dear Senator Landrieu:

Thank you for your letter of March 19, 2013, co-signed by three of your colleagues, expressing concerns with the U.S. Environmental Protection Agency's proposed "Tier 3" regulations for motor vehicle emissions and gasoline standards.

The proposed Tier 3 standards, which were signed by Acting Administrator Bob Perciasepe on March 29, 2013, would set new vehicle emission standards and lower the sulfur content of gasoline, in a maimer that addresses the vehicle and its fuel as an integrated system. The Tier 3 proposed rulemaking package contains extensive, detailed analyses of the rule's anticipated health and air quality benefits as well as its potential impacts on the refining and automotive industries.

Your letter urges the EPA to issue an advance notice of proposed rulemaking prior to initiating rulemaking. We appreciate your concern but note that the Administration has already provided significant advance notice to the public and opportunity for public input since the May 2010 Presidential Memorandum that requested the EPA's reevaluation of the motor vehicle and gasoline sulfur standards. For example, in the rulemaking that established light-duty vehicle greenhouse gas emissions standards for model year 2017 and later (finalized in October 2012), the EPA described its intention to propose Tier 3 vehicle and fuel standards and received public comment. The EPA has also already sought and received broad stakeholder input, which is reflected in the Tier 3 proposal, including from the automotive, oil and gas industries as well as environmental and public health organizations. It is important to emphasize that the Tier 3 proposal is subject to stakeholder and public input through the notice and comment process. The EPA will carefully consider and respond to all timely comments on the proposed rule before promulgating a final rule.

The air quality benefits of the Tier 3 standards are important for the American public. Over 158 million Americans are currently experiencing unhealthy levels of air pollution that are linked to adverse health impacts such as hospital admissions, emergency room visits and premature mortality. Motor vehicles are a particularly important source of air pollution, especially in urban areas. Emission reductions from the Tier 3 program would lead to immediate air quality improvements that are critically important for states to attain and maintain the existing health-based National Ambient Air Quality Standards (NAAQS) and would yield substantial health benefits. By 2030, the EPA estimates the proposed Tier 3 standards would annually prevent up to 2,400 premature deaths, 23,000 cases of respiratory ailments in children, 3,200 hospital admissions and asthma-related emergency room visits, and 1.8 million lost school days, work

Internet Address (URL)

.http /Iwww epagov Recycled/Recyclable . Printed with Vegetable Oil Based Inks on 100% Postconsumer. Process Chlorine Free Recycled Paperdays and days when activities would be restricted due to air pollution. The benefits of the program

would continue to increase since Tier 3 would not be fully implemented until 2025, and fleet turnover to Tier 3 vehicles would continue beyond 2030.

The EPA understands the importance of potential cost impacts on refineries and automakers, and we included extensive analyses of the costs associated with the proposed Tier 3 standards in the proposed rulemaking, including refinery-by-refinery analyses. We estimate the Tier 3 program would cost about a penny per gallon of gasoline and about $130 per vehicle, and yield health benefits between $8 and $23 billion annually by 2030. Our evaluation of gasoline sulfur control costs has undergone independent peer review and is corroborated by two independent studies (by Mathpro Inc. and Navigant Economics). The Baker & O'Brien study cited in your letter estimates a slightly higher average cost increase of 2.1 cents per gallon, but is based on a number of problematic assumptions that bias the study towards overstatement of costs. Simple adjustments to the Baker & O'Brien study to reflect plausible capital costs and accepted rates of return on investment bring the study's costs in line with those of the EPA.

Again, thank you for your letter. If you have further questions, please contact me or your staff may call Patricia Haman in the EPA's Office of Congressional and Intergovernmental Relations at (202) 564- 2806.

Gina McCarthy Assistant AdministratorUNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. 20460

OFFICE OF AIR AND RADIATION

The Honorable Mark Begich United States Senate Washington, D.C. 20510

Dear Senator Begich:

Thank you for your letter of March 19, 2013, co-signed by three of your colleagues, expressing concerns with the U.S. Environmental Protection Agency's proposed "Tier 3" regulations for motor vehicle emissions and gasoline standards.

The proposed Tier 3 standards, which were signed by Acting Administrator Bob Perciasepe on March 29, 2013, would set new vehicle emission standards and lower the sulfur content of gasoline, in a manner that addresses the vehicle and its fuel as an integrated system. The Tier 3 proposed rulemaking package contains extensive, detailed analyses of the rule's anticipated health and air quality benefits as well as its potential impacts on the refining and automotive industries.

Your letter urges the EPA to issue an advance notice of proposed rulemaking prior to initiating rulemaking. We appreciate your concern but note that the Administration has already provided significant advance notice to the public and opportunity for public input since the May 2010 Presidential Memorandum that requested the EPA's reevaluation of the motor vehicle and gasoline sulfur standards. For example, in the rulemaking that established light-duty vehicle greenhouse gas emissions standards for model year 2017 and later (finalized in October 2012), the EPA described its intention to propose Tier 3 vehicle and fuel standards and received public comment. The EPA has also already sought and received broad stakeholder input, which is reflected in the Tier 3 proposal, including from the automotive, oil and gas industries as well as environmental and public health organizations. It is important to emphasize that the Tier 3 proposal is subject to stakeholder and public input through the notice and comment process. The EPA will carefully consider and respond to all timely comments on the proposed rule before promulgating a final rule.

The air quality benefits of the Tier 3 standards are important for the American public. Over 158 million Americans are currently experiencing unhealthy levels of air pollution that are linked to adverse health impacts such as hospital admissions, emergency room visits and premature mortality. Motor vehicles are a particularly important source of air pollution, especially in urban areas. Emission reductions from the Tier 3 program would lead to immediate air quality improvements that are critically important for states to attain and maintain the existing health-based National Ambient Air Quality Standards (NAAQS) and would yield substantial health benefits. By 2030, the EPA estimates the proposed Tier 3 standards would annually prevent up to 2,400 premature deaths, 23,000 cases of respiratory ailments in children, 3,200 hospital admissions and asthma-related emergency room visits, and 1.8 million lost school days, work

Internet Address (URL) . http //wwwepa gov Recycled/Recyclable . Printed with Vegetable Oil Based Inks on 100% Postconsumer, Process Chlorine Free Recycled Paperdays and days when activities would be restricted due to air pollution. The benefits of the program

would continue to increase since Tier 3 would not be fully implemented until 2025, and fleet turnover to Tier 3 vehicles would continue beyond 2030.

The EPA understands the importance of potential cost impacts on refineries and automakers, and we included extensive analyses of the costs associated with the proposed Tier 3 standards in the proposed rulemaking, including refinery-by-refinery analyses. We estimate the Tier 3 program would cost about a penny per gallon of gasoline and about $130 per vehicle, and yield health benefits between $8 and $23 billion annually by 2030. Our evaluation of gasoline sulfur control costs has undergone independent peer review and is corroborated by two independent studies (by Mathpro Inc. and Navigant Economics). The Baker & O'Brien study cited in your letter estimates a slightly higher average cost increase of 2.1 cents per gallon, but is based on a number of problematic assumptions that bias the study towards overstatement of costs. Simple adjustments to the Baker & O'Brien study to reflect plausible capital costs and accepted rates of return on investment bring the study's costs in line with those of the EPA.

Again, thank you for your letter. If you have further questions, please contact me or your staff may call Patricia Haman in the EPA's Office of Congressional and Intergovernmental Relations at (202) 564- 2806.

Gina McCarthy Assistant AdministratorOFOCE OF AIR AND RADIATION \ D S?. (5

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Lii 0 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. 20460

The Honorable Joe Manchin United States Senate Washington, D.C. 20510

Dear Senator Manchin:

Thank you for your letter of March 19, 2013, co-signed by three of your colleagues, expressing concerns with the U.S. Environmental Protection Agency's proposed "Tier 3" regulations for motor vehicle emissions and gasoline standards.

The proposed Tier 3 standards, which were signed by Acting Administrator Bob Perciasepe on March 29, 2013, would set new vehicle emission standards and lower the sulfur content of gasoline, in a maimer that addresses the vehicle and its fuel as an integrated system. The Tier 3 proposed rulemaking package contains extensive, detailed analyses of the rule's anticipated health and air quality benefits as well as its potential impacts on the refining and automotive industries.

Your letter urges the EPA to issue an advance notice of proposed rulemaking prior to initiating rulemaking. We appreciate your concern but note that the Administration has already provided significant advance notice to the public and opportunity for public input since the May 2010 Presidential Memorandum that requested the EPA's reevaluation of the motor vehicle and gasoline sulfur standards. For example, in the rulemaking that established light-duty vehicle greenhouse gas emissions standards for model year 2017 and later (finalized in October 2012), the EPA described its intention to propose Tier 3 vehicle and fuel standards and received public comment. The EPA has also already sought and received broad stakeholder input, which is reflected in the Tier 3 proposal, including from the automotive, oil and gas industries as well as environmental and public health organizations. It is important to emphasize that the Tier 3 proposal is subject to stakeholder and public input through the notice and comment process. The EPA will carefully consider and respond to all timely comments on the proposed rule before promulgating a final rule.

The air quality benefits of the Tier 3 standards are important for the American public. Over 158 million Americans are currently experiencing unhealthy levels of air pollution that are linked to adverse health impacts such as hospital admissions, emergency room visits and premature mortality. Motor vehicles are a particularly important source of air pollution, especially in urban areas. Emission reductions from the Tier 3 program would lead to immediate air quality improvements that are critically important for states to attain and maintain the existing health-based National Ambient Air Quality Standards (NAAQS) and would yield substantial health benefits. By 2030, the EPA estimates the proposed Tier 3 standards would annually prevent up to 2,400 premature deaths, 23,000 cases of respiratory ailments in children, 3,200 hospital admissions and asthma-related emergency room visits, and 1.8 million lost school days, work

Internet Address (URL) http://wwwepagov Recycled/Recyclable . Printed with Vegetable Oil Based Inks on 100% Postconsumer, Process Chlorine Free Recycled Paperdays and days when activities would be restricted due to air pollution. The benefits of the program

would continue to increase since Tier 3 would not be fully implemented until 2025, and fleet turnover to Tier 3 vehicles would continue beyond 2030.

The EPA understands the importance of potential cost impacts on refineries and automakers, and we included extensive analyses of the costs associated with the proposed Tier 3 standards in the proposed rulemaking, including refinery-by-refinery analyses. We estimate the Tier 3 program would cost about a penny per gallon of gasoline and about $130 per vehicle, and yield health benefits between $8 and $23 billion annually by 2030. Our evaluation of gasoline sulfur control costs has undergone independent peer review and is corroborated by two independent studies (by Mathpro Inc. and Navigant Economics). The Baker & O'Brien study cited in your letter estimates a slightly higher average cost increase of 2.1 cents per gallon, but is based on a number of problematic assumptions that bias the study towards overstatement of costs. Simple adjustments to the Baker & O'Brien study to reflect plausible capital costs and accepted rates of return on investment bring the study's costs in line with those of the EPA.

Again, thank you for your letter. If you have further questions, please contact me or your staff may call Patricia Haman in the EPA's Office of Congressional and Intergovernmental Relations at (202) 564- 2806.

ma McCarthy Assistant Administrator