Page 1 of 1 enclosed is the widespread use analysisDuane Yantornoto:Jefferson Wehling, Joanne Wells10/25/2010 01:27 PMCc:“Martinkovic.Deborrah”, Jeffrey Buss, Wienke TaxShow Details Jeff and Joanne, Enclosed is the clean copy of the widespread use analysis we conducted for E85 you have the report and the

supporting documentation. I am still working to look for the documentation on the Racing event and proving

ground stuff. Duane M. Yantorno Director Transportation Fuels and Air Quality Programs Phone (602) 771-4933 Fax (623) 939-7825 Cellular (602) 920-4218 file://C:\Documents and Settings\jwehling\Lpcal Settings\Temp\notesBAAA25\--’web9662.... 11/2/2010Widespread Use Analysis for E85 Stage II Waiver Request December 5, 2008 On December 12, 2006 the Environmental Protection Agency (EPA) issued a

letter on widespread use of Onboard Vapor Recovery Systems (ORVR). EPA

said it believed that Flex-Fuel vehicles, being relatively new, would include

ORVR, and therefore should not be required to comply with Stage II

requirements. The letter also suggested that a State could submit an analysis to

EPA and request a waiver of stage II requirements for E85 dispensers. This analysis is intended to serve as Arizona’s request for such a waiver for E85

dispensers in Area A, based on data showing that a majority of Flex-Fuel

vehicles operating in the Phoenix Metropolitan Area are equipped with Onboard

Vapor Recovery Systems (ORVR). Issue:Given the rising price differential between ethanol and gasoline, more motoristsare

looking for alternatives to conventional fuel. In addition many automakers

have responded by increasing the number of Flex-Fuel vehicles they produce. As

a

result of both trends, a growing number of consumers are looking to use E85

instead of traditional fuels. E85 consumption has risen sharply throughout Arizona, especially in the

southern portion of the state, where efforts by the Clean Cities Coordinator for

the City of Tucson have encouraged its use. Stage Il emissions controls are mandated in Area A, which includes the Phoenix

Metropolitan Area, as a control measure for VOC. The State of Arizona would

like to encourage the use of E85 in area A, but this is difficult, given the lack of a

certified stage II system for E85. Currently E85 stage Il systems are balance systems. This adds to the cost of

developing an alternative fuels infrastructure, since it restricts the development of

the market. The California Air Resources Board (CARB) has made an effort to

certify stage II equipment bUt manufacturers currently are unwilling to submit a

complete system for certification. Background:The Arizona Department of Weights and Measures conducted a widespread use

analysis for Flex-Fuel Vehicles. The analysis started with an analysis of data on

model year vehicles, based on a database for 2008 provided by the Arizona

Department of Transportation’s Motor Vehicles Division (MVD). Page 1The MVD database included VIN numbers, Year, Make, Model and Zip Code for

all vehicles registered in Arizona. Using information provided by the Ethanol Vehicle Coalition and Auto manufactures, the data basewas sortedas follows:

•First by zip code to isolate vehicles registered inarea A

•Then by the make and model of these vehicles.

•Using the VIN number and information provided by the Ethanol Vehicle Coalition, the datawere then sorted by the 8 thcharacter in the VIN number

to identify Flex-Fuel vehicles. The analysis was conducted to quantify the number of Flex-Fuel vehicles within area A, and the number of Flex-Fuel vehicles that do not have ORVR. A conservative approach was taken touse the cutoff dates the EPA used for requiring ORVR. The portion of Flex-Fuel vehicle without ORVR will be the group generating VOC Emission when fueling. Data Issues: The following issueswere encountered:

•MVD Data entry is inconsistent. Inmany cases different abbreviations apparently were used to enter the vehicle model.

•Zip codes did not always match the county. Thus the data included 10,847 Null values in the zip code data base.

•The key used to identify Flex-Fuel vehicleswas not always correct.

•The volume of the datawas overwhelming. Analysis: The initial data base included 4,611,827 vehicles in the state. The initial data sort

by zip codes narrowed the database to 2,693,847 vehicles registered in Area A. The next data sort looked at vehicles built after 1998, which reduced the number

of vehicles to 2,058,824. The datawere then sorted by make and model, resulting ina data set that included 398,014 vehicles witha NULL value in the model field.

Inan effort to identify these 398,014 vehicles, the Department used VIN numbers, along with information supplied by the National Ethanol Vehicles Coalition and EPA data, Dated February 28, 2008, to identify the specific Flex Fuel models. This provided the key to identifying Flex-Fuel vehicles by make and model, (see attachment 1). The result of this analysis is presented in Attachment 2. The analysis identified 66,231 Flex-Fuel vehicles in Area A, or 2.5% of the total Area

A vehicle inventory. Page 2The next step was to identify which of the 66,231 Flex-Fuel vehicles were

equipped with ORVR. The EPA schedule for fleet conversion requires all light-

duty vehicles to come equipped with ORVR by the 2000 model year, and all light

duty trucks were required to have QRVR by the 2003 model year. Table I below

lays out the percentage of vehicles that must have ORVR, based on these EPA

mandates. Table IPhase-in ScheduleFor ORVR by Vehicle Class for overall Fleet Vehicle Class 40% 80% 100%

•

Light Duty Vehicles 1998 1999 2000

•

Light Duty Trucks 2001 2002 2003 Using the phase-in schedule for light duty trucks, the analysis found the data

presented in table 2 below: Table 2Breakdown of Area A FFV Fleet,ORVR and Non-ORVR vehicles Vehicle Total Number of Number of % Of Total of % Of Total of

Type Number of vehicles Vehicles with Class Without Class WithVehicles

in without ORVR ORVR ORVRClass

ORVRLight DutyVehicle 11,090 18 11,072 <1% 99%

Light DutyTrucks 55,141 8,604 46,537 16% 84% Total for 66,231 8,622 57,609 13% 87%

Fleet As this table shows, 13% of the Flex-Fuel fleet does not have ORVR. The

majority, 99%, are light-duty trucks. The next step in this analysis is to determine the frequency of those vehicles

obtaining fuel at an E85 pump that is not equipped with stage II vapor recovery

systems. In 2007 the department licensed 2,051 service stations statewide.

Currently the Department has permitted 3 stations that dispense E85 in area A.

This represents less than 0.2% of all the station in area A dispense gasoline

dispense E85. This demonstrates that an overwhelming majority of the FFV Page 3vehicles without ORVR will obtain gasoline ata station that does dispense E85 but does havea stage II system. This analysis assumes that Flex-Fuel vehicles will need refueling ata lower rate than vehicles without QRVR. Thus, if 13% of Flex-Fuel vehicles do not have ORVR, emissions from this cadre of Flex-Fuel vehiclesappear to be small. Going forward, E85 fueling location will continue to bea small portion of the total number of stations within Area A, which will restrict the public’s ability to obtain E85. Currently there isa high level of demand for E85 from State, city, county and private sector fleets. In general these fleetsare comprised of newer-model vehicles thatare equipped with ORVR. The EPA letter of December 12 states that EPA believes that these fleets will have minimum impact on emissions and would not require stage II. Page 4