***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 1 of 34 **6560 -**  **50 -**  **P ENVIRONMENTAL PROTECTION AGENCY** 

**40 CFR Part 51 [EPA**  **- HQ**  **- OAR** **- 2010**  **- 1076; FRL**  **- ]** 

**RIN 2060 -** **AQ97 Air Quality: Widespread Use for Onboard Refueling Vapor Recovery and Stage II Waiver**  **AGENCY:** Environmental Protection Agency (EPA). **ACTION:** Final rule. **SUMMARY:** The EPA has determined that onboard refueling vapor recovery (ORVR) technology

is in widespread use throughout the motor vehicle fleet for purposes of controlling motor vehicle refueling emissions, and , therefore , by this action, the EPA is waiving the requirement for states to implement Stage II gasoline vapor recovery s ys tems at gasoline dispensing facilities in nonattainment areas classified as Serious and above for the ozone national ambient air quality standards (NAAQS). This fin ding will be effective **[INSERT DATE OF PUBLICATION IN THE FEDERAL REGISTER]** . After the effective date of this notice, a state previously required to implement a Stage II program may take appropriate action to remove the program from its State Implementatio n Plan (SIP). Phasing out the use of Stage II s ys tems may lead to long - term cost savings for gas station owners and operators while air quality protections are maintained . **DATES:** This rule is effective on **[INSERT DATE OF PUBLICATION IN THE FEDERAL REGISTER** **]** . **ADDRESSES:** The EPA has established a docket for this rule, identified by Docket ID No. EPA - HQ OAR - 2010 - 1076. All documents in the docket are listed in www.regulations.gov . Although listed in the index, some information is not publicly available, i.e. , confidential business information or other information whose disclosure is restricted b y statute. Certain other material, such as cop yri ghted***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 2 of 34 material, is not placed on the Internet and will be publicly available only

in hard copy

form. Publicly available docket materials are available either electronically in www.regulations.gov or in hard cop y at the Air and Radiation Docket and Information Center, EPA Headquarters Library , Room Number 3334 in the EPA West Building, located at 1301 Constitution Ave., NW, Washington, D.C. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566 - 1744. **FOR FURTHER INFORMATION CONTACT:** Mr. Ly nn Dail , Office of Air Quality Planning and Standards, Air Quality Policy Division, Mail code C539 - 0 1 , Research Triangle Park, NC 27711, telephone (919) 541 - 2363; fax number: 919 - 541 - 0824; email address: dail.ly nn@epa.gov . **SUPPLEMENTARY INFORMATION: I. Purpose of Regulatory Action**  Since 1990, Stage II gasoline vapor recovery s ys tems have been a required emissions control measure in Serious, Severe, and Extreme ozone nonattainment areas. Beginning with model year 1998, ORVR equipment has been phased in for new vehicles, and has been a required control on nearl y all new highway

vehicles since 2006. Over time, non - ORVR vehicles will continue to be replaced with ORVR vehicles. Stage II and ORVR emission control sy stems are redundant, and the EPA has determined that emission reductions from ORVR are essentially equal to and will soon surpass the emission reductions achieved b y Stage II alone. In this action, the EPA is eliminating the largely redundant Stage II requirement in ord er to ensure that refueling vapor control regulations are beneficial without being unnecessarily burdensome to American business. This action allows, but does not require, states to discontinue Stage II vapor recovery programs. **II. Summary of the Major Pr ovisions of this Final**  **R ule**  Clean Air Act (CAA) section 202(a)(6) provides discretionary authority to the EPA Administrator to, by

rule, revise or waive the section 182(b)(3) Stage II requirement for Serious, Severe***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 3 of 34 and Extreme ozone nonattainment area s after the Administrator determines that ORVR is in widespread use throughout the motor vehicle fleet. Based on criteria that the EPA proposed last year (76 FR 41731, July 15, 2011), the EPA is determining that ORVR is in widespread use. As of the effective date of today ’s action, states that are implementing mandatory Stage II programs under section 182(b)(3) of the CAA may

submit revisions to their SIPs to remove this program. Today , EPA is also issuing guidance on developing and submitting approvable SIP revisions 1

. This guidance also addresses SIP requirements for states in the Ozone Transport Region (OTR), which are separately

required under section 184(b)(2) of the CAA to adopt and implement control measures capable of achieving emissions reductions comparable to those achievable by Stage II. The EPA has updated its guidance for estimating what Stage II comparable emissions reductions co uld be, in light of the ORVR widespread use determination. The EPA now expects Stage II comparable emissions reductions to be substantially less than what was estimated in the past before ORVR use became widespread. Therefore, the EPA encourages states to consult the updated guidance before submitting a SIP revision removing Stage II controls. **III. Costs and Benefits** The primary

purpose of this final rule is to promulgate a determination that ORVR is in widespread use as permitted in section 202(a)(6) of the CAA. This in turn gives states that were required to implement Stage II vapor recovery under section 182(b)(3) of the CAA the option to submit for the EPA’s review and approval revised ozone SIPs to remove this requirement. The EP A projects that during 2013 - 2015, gasoline dispensing facilities (GDFs) in up to 19 states and the District of Columbia could seek to decommission and remove Stage II sy stems from their dispensers. There are about 3 0 , 6 00

1 “Guidance on Removing Stage II Gasoline Vapor Control Programs from SIPs and Assessing Comparable Measures.” U.S . EPA Office of Air and Radiation , issued at the same time as the final rule.***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 4 of 34 GDFs with Stage II in these 2 0 area s. If the states submit and EPA approves SIP revisions to remove Stage II s ys tems from these GDFs , the EPA projects savings of about $10. 2 million in the first year, $4 0.5 million in the second year, and $7 0.9 million in the third year. Long term savings are projected to be about $9 1 million per year , compared to the current use of Stage II s ys tems in these areas . No significant emission increases or decreases are expected from this action. **IV. General Informa tion**  A. Does this action apply to me? Entities directly

affected by

this action include states (ty picall y state air pollution control agencies) and, in some cases, local governments that develop air pollution control rules that appl y t o areas classified as Serious and above for nonattainment of the ozone NAAQS. Individuals and companies that operate gasoline dispensing facilities may be indirectly

affected by

virtue of state action in SIPs that implement provisions resulting from final rulemaking on this action; many of these sources are in the following groups: Industry group SI C a NAI CS b Gasoline stations 5541 447110, 447190

a Standard Industrial Classification. b North American Industry Classification S ys tem. B . Where can I get a copy of this document and other related information? In addition to being available in the docket, an electronic cop y of this notice will be posted at http://www.epa.gov/air/ozonepollution/actions.html#impl under “recent actions **.** ” C. How is this notice organized? The information presented in this preamble is organized as follows. I. Purpose of Regulatory Action II. Summary

of the Major Provisions of This Final Rule III. Costs and Benefits IV . General Information***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 5 of 34 A. Does this action appl y to me? B. Where can I get a copy of this document and other related information? C. How is this notice organized? V. Background A. What requirements for Stage II gasoline vapor recovery appl y for ozone nonattainment areas? B. Stage II V apor R ecovery S ys tems C. Onbo ard R efueling V apor R ecovery (ORVR) S ys tems D. Incompatibility B etween S ome V apor R ecovery S ys tems E . Proposed R

ule to D etermine W idespread U se of ORVR VI . This Action A. Anal yt ical R ationale for F inal R ule B. Updated Anal ys is of W idespread U se C. Widespread U se D ate D. Implementation of the R ule P rovisions E. Implementation of Rule Revisions the Ozone Transport Region F. Comments on O ther W aiver Implementation I ssues VII. Estimated Cost VI I I. Statutory

and Executive Order Reviews A. Executive Orders 12866 : Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review B. Paperwork Reduction Act C. Regulatory

Flexibility

Act D. Unfunded Mandates Reform Act E. Executive Order 13132: Federalism F. Executive Order 13175: Con sultation and Coordination with Indian Tribal Governments G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks H. Executive Order 13211: Actions that Significantly Affect Energy

Suppl y, Distribution, or Use I. National Technol ogy

Transfer and Advancement Act J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and L ow - Income Populations K. Congressional Review Act IX . Statutory

Authority **V. Background** A. What requirements for Stage II gasoline vapor recovery appl y in ozone nonattainment areas? The requirements in the 1990 CAA Amendments regarding Stage II vapor recovery are contained in Title I : Provisions for Attainment and Maintenance of National Ambient Air Quality Standards. Under CAA section 182(b)(3), Stage II gasoline vapor recovery sy stems are required to be used at higher throughput GDFs located in Serious, Severe, and Extreme nonattainment areas for***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 6 of 34 ozone. 2 States were required to adopt a Stage II program into their SIPs , and the controls were to be installed according to specified deadlines following state rule adoption. 3 Since the earl y 1990s, Stage 2 gasoline vapor controls have provided substantial emissions reductions and have contributed to improved air quality over time. B. Stage II Vapor Recovery Sy stems When a gasoline - powered automobile or other vehicle is brought into a GDF to be refueled, the empty portion of the fuel tank on the vehicle contains gasoline vapors. When liquid gasoline is pumped into the partiall y empty gas tank, gasoline vapors are forced out of the tank and fill pipe as the tank fills with liquid gasoline. Where air pollution control technology is not used, these vapors are emitted into the ambient air. In the atmosphere, these vapors can react with sunlight, nitrogen oxides and other volatile organic compounds to form ozone. There are two basic technical approaches to Stage II vapor recovery : a “balance” sy stem, and a vacuum assist sy stem. A balance typ e Stage II control sy stem has a rubber boot around the gasoline nozzle spout that fits snugl y up to a vehicle’s gasoline fill pipe during refueling of the vehicle. With a balance s ys tem, when gasoline in the underground storage tank (UST) is pumped into a vehicle, a positive pressure differential is created between the vehicle tank and the UST. This pressure differential 2 Originall y, the section 182(b)(3) Stage II requirement also applied in all Moderate ozone nonattainment areas. However, under section 202(a)(6) of the CAA, 42 U.S.C. 7521(a)(6) , the requirements of section 182(b)(3) no longer appl y in Moderate ozone nonattainment areas after EPA promulgated ORVR standards on April 6, 1994, 59 FR 16262, codified at 40 CFR parts 86 (including 86.098 - 8), 88 and 600. Under implementation rules issue d in 2002 for the 1997 8 - hour ozone standard, EPA retained the Stage II - related requirements under section 182(b)(3) as they applied for the now revoked 1 - hour ozone standard . 40 CFR 51.900(f)(5) and 40 CFR 51.916(a). 3 This requirement onl y applies to fa cilities that sell more than a specified number of gallons per month and is set forth in sections 182(b)(3)(A) - (C) and 324(a) - (c). Section 182(b)(3)(B) has the following effective date requirements for implementation of Stage II after the adoption date b y a state of a Stage II rule: 6 months after adoption of the state rule, for GDFs built after the enactment date (which for newly designated areas would be the designation date); 1 year after adoption date, for gas stations pumping at least 100,000 gal/month based on average monthly sales over 2 - ye ar period before adoption date; 2 ye ars after adoption, for all others.***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 7 of 34 draws th e gasoline vapors from the vehicle fill pipe through the rubber boot and the concentric hoses and underground piping into the UST. This is known as a balance s ys tem because gasoline vapors from the vehicle tank flow into the UST tank to balance pressures. About 30 percent of GDFs nationwide use the balance ty

pe Stage II sy stem. The vacuum assist s ys tem is the other primary type of Stage II s ys tem currently in operation. This ty pe of Stage II s ys tem uses a vacuum pump on the vapor return line to help draw vapors from the vehicle fill pipe into the UST. An advantage of this ty pe of s ys tem is that the rubber boot around the nozzle can be smaller and lighter (or not used at all) and still draw the vapors into the vapor return hose. This makes for an easier - to - handle nozzle, which is popular with customers. About 70 percent of GDFs nationwide use the vacuum assist approach. New Stage II equipment is normally required to achieve 95 percent control effectiveness at certification. However, studies have shown that in - use control efficiency depends on the proper installation, operation, and maintenance of the control equipment at the GDF. 4 Damaged, missing, or improperly

operating components or sy stems can significantl y degrade the control effectiveness of a Stage II s ys tem. In - use effectiveness ultimately depends on the consistency of inspections, follow - up review b y state agencies, and actions by operators to perform inspections and field tests and conduct maintenance in a correct and timel y manner. The EPA gu idance specifies minimum training, inspection, and testing criteria, and most states have adopted and supplemented these criteria as deemed necessary for balance and vacuum assist s ys tems. 5 Insome cases , states have strictl y followed the EPA guidance b ut other states have required a lesser level of inspection and enforcement efforts. The EPA studies have 4 The Petroleum Equipment Institute has published recommended installation practices (PEI/RP300 - 93) and most states require inspection, testing, and evaluation before a sy stem is commissioned for use. 5 “Enforcement Guidance for Stage II Vehicle Refueling C ontrol Programs , ” U.S. EPA, Office of Air and Radiation, Office of Mobile Sources, December 1991.***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 8 of 34 estimated Stage II in - use efficiencies of 92 percent with semi - annual inspections, 86 percent with annual inspections and 62 percent with minimal or less frequent state inspections. 6 T he in - use effectiveness of Stage II control s ys tems may vary from state to state, and may vary over time within any

state or nonattainment area because the in - use efficiency of Stage II vapor recovery sy stems depends he avil y on the ongoing maintenance and oversight b y GDF owners/operators and the state/local agencies . . C. Onboard R efueling V apor R ecovery (ORVR) S ys tems In addition to Stage II controls, the 1990 CAA Amendments required another method of controlling emis sions from dispensing gasoline. Section 202(a)(6) of the CAA requires an onboard sy stem of capturing vehicle refueling emissions, commonly referred to as an ORVR sy stem. 7 ORVR consists of an activated carbon canister installed on the vehicle into which vap ors are routed from the vehicle fuel tank during refueling. There the vapors are captured b y the activated carbon in the canister. To prevent the vapors from escaping through the fill pipe opening, the vehicle employ s a seal in the fill pipe which allows l iquid gasoline to enter but blocks vapor escape. In most cases these are “liquid seals” created b y the incoming liquid gasoline slightl y backing near the bottom of the fill pipe. When the engine is started, the vapors are purged from the activated carbon a nd into the engine where they are burned as fuel. The EPA promulgated ORVR standards on April 6, 1994 (59 FR 16262). Section 202(a)(6) of the CAA required that the EPA’s ORVR standards apply to light - duty

vehicles manufactured beginning in the fourth model year after the model year in which the standards were promulgated, and that ORVR sy stems provide a minimum evaporative emission capture efficiency of 95 percent.

6 “Technical Guidance

– Stage II Vapor Recovery Sy stems for Control of Vehicle Refueling at Gasoline Dispensing Facilities Volume I : Chapters , ” EPA - 450/3 - 91 - 022a, November 1991. 7 Unlike Stage II, which is a requirement only in ozone nonattainment areas, ORVR requirements apply to vehicles every

where. More detail on ORVR is available at http://www.epa.gov/otaq/orvr.htm .***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 9 of 34 Automobile manufacturers began installing ORVR on new passenger cars in 1998 when 40 percent of new cars were required to have ORVR. The regulation required the percentage of new cars with ORVR increase to 80 percent in 1999 and 100 percent in 2000 . The regulation also required that ORVR for light duty trucks and vans (<6000 pounds (lbs) gross vehicle weight rating (GVWR)) was to be phase d - in during 2001 with 40 percent of such new vehicles required to have ORVR in 2001, 80 percent in 2002 and 100 percent in 2003. New heavier light - duty trucks (6001

– 8500 lbs GVW R) were required to have 40 percent with ORVR by 2004, 80 percent b y 2005 and 100 percent b y 2006. New trucks up to 10,000 lbs GVWR manufactured as a complete chassis were all required to have ORVR by 2006. Complete vehicle chassis for heav y- duty gasoline vehicles between 10,001 and 14,000 lbs GVWR (Class 3) are very

similar to those between 8,501 and 10,000 lbs GVWR. For model consistency purposes , manufacturers began installing ORVR on Class 3 complete chassis in 2006 as well. So, after 2006, essentially all new gasoline - powered vehicles less than 14,000 lbs GVWR are ORVR - equipped. ORVR does not apply

to all vehicles, but those not covered b y the ORVR requirement comprise a small percentage of the gasoline - powered highway vehicle fleet (approximately 1.5 percent of gasoline consumption). The EPA estimates that by the end of 2012 , more than 71percent of vehicles currentl y on the road will have ORVR. 8 This percentage will increase over time as older cars and trucks are replaced by new models. However, under the current regulatory construct, motorcycles and heav y- duty gasoline vehicles not manufactured as a complete chassis are not required to install ORVR, so it is likely that there will be some very

small percentage of gasoline refueling emissions not captur ed b y ORVR controls. Even prior to the EPA’s adoption of ORVR requirements, in 1993 EPA adopted Onboard Diagnostic (OBD) S ys tem requirements for passenger cars and light trucks, and eventuall y did so for 8 See EPA Memorandum “Onboard Refueling Vapor Recovery Widespread Use Assessment.” A copy of this memorandum is located in the docket for this action EPA - HQ - OAR - 2010 - 1076.***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 10 of 34 heav y- duty gasoline vehicles up to 14,000 lbs GVWR. 9 These s ys tems are designed to monitor the in use performance of various vehicle emission control sy stems and components, including protocols for finding problems in the purge s ys tems and large and small vapor leaks in ORVR/evaporative emission controls. 10 OBD II s ys tems were phased in for these vehicle classes over the period from 1994 - 1996 for lighter vehicles and 2005 - 2007 for heav y- duty gasoline vehicles, so , during the same time frame that manufacturers were implementing ORVR into their vehicles , they already had implemented or were implementing OBD II s ystems. In 2000, the EPA published a report addressing the effectiveness of OBD II control s ys tems. 11 This study

concluded that enhanced evaporative and ORVR emission control sy stems are durable an d low emitting relative to the FTP (Federal Test Procedure) enhanced evaporative emission standards, and that OBD II evaporative emissions checks are a suitable replacement for functional evaporative emission tests in state inspection and maintenance (I/M) programs. OBD sy stem codes are interrogated and evaluated in a 30 vehicle emission I/M program. A recent EPA review of OBD data gathered from I/M programs from four states indicated relativel y few vehicles had any evaporative sy stem - related OBD codes that would indicate a potential problem with the vapor management sy stem. Based on tests of over 1 , 100 in - use ORVR - equipped vehicles, the average in - use efficiency of ORVR is 98 percent. The legal requirement for ORVR is 95 percent efficiency . Thus, the actual reported control achieved in practice is greater than the statutorily required level of control. D. C ompatibility B etween S ome V apor R ecovery S ys tems

9 See Federal Register at 58 FR 9468 published February 19, 1993, and subsequent amendments and the latest OBD regulations at 40 CFR part 86.1806 - 05 for program requirements in various years. 10 ORVR sy stems are basically a subset of evaporative emission sy stems because they share the same vapor lines, purge valves, purge lines, and activated carbon canister. 11 “E ffectiveness of OBD II Evaporative Emission Monitors - 30 Vehicle Study , ” EPA 420 - R - 00 - 018, October 2000.***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 11 of 34 Even though the per - vehicle vapor recovery efficiency

of ORVR exceeds that of Stage II, Stage II vapor recovery

s ys tems have provided valuable reductions in ozone precursors and air toxics as ORVR has been phased into the motor vehicle fleet. Infact, overall refueling emissions from vehicle fuel tanks are minimized by having both ORVR and Stage II in place, but the incremental gain from retaining Stage II decreases relativel y quickl y as ORVR penetration surpasses 75 percent of dispensed gasoline. T his o ccurs not only because of a decreasing amount of gasoline being dispensed to non ORVR equipped vehicles, but also because differences in operational design characteristics between ORVR and vacuum assist Stage II s ys tems may in some cases cause a reduction in the overall control sy stem efficiency

compared to what could have been achieved relative to the individual control efficiencies of either ORVR or Stage II emissions from the vehicle fuel tank. The problem arises because the ORVR canister captures the ga soline vapor emissions from the motor vehicle fuel tank rather than the vapors being drawn off b y the vacuum assist Stage II s ys tem. This occurs because the fill pipe seal blocks the vapor from reaching the Stage II nozzle. Thus, instead of drawing vapor- l aden air from the vehicle fuel tank into the underground storage tank (UST), the vacuum pump of the Stage II sy stem draws mostly

fresh air into the UST. This fresh air causes gasoline in the UST to evaporate inside the UST and creates an internal increase in UST pressure. As the proportion of ORVR vehicles increases, the amount of fresh air, void of gasoline vapors, pumped into the UST also increases. Even with pressure/vacuum valves in place this eventually leads to gasoline vapors being forced out of the UST vent pipe into the ambient air. These new UST vent - stack emissions detract from the overall recovery efficiency

at the GDF. The level of these UST vent stack emissions varies based on several factors but can result in a net 1 to 10 percent decrease in overall control efficiency of vehicle fuel tank emissions at any

given GDF. The decrease in efficiency varies depending on the vacuum assist technology

design (including the use of a mini - boot for the nozzle and the ratio of volume of air drawn into the UST compared to the volume of gasoline dispensed (A/L) ratio), the gasoline Reid vapor***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 12 of 34 pressure, the air and gasoline temperatures, and the fraction of throughput dispensed to ORVR vehicles. There are various technologies that address these UST vent - stack emissions and can extend the utility of Stage II to further minimize the overall control of gasoline vapor emissions at the GDF. These technologies include nozzles that sense when fresh air is being drawn into the UST and stop or reduce the air flow. These ORVR - compatible nozzles are now required in California and Texas. Another solution is the addition of processors on the UST vent pipe that capture or destroy the gasoline vapor emissions from the vent pipe . A number of these sy stems were presented in comments on the proposed rule. While they

may have merit, installing these technologies a dds to the expense of the control sy stems. E. Proposed R

ule to D etermine W idespread U se of ORVR Section 202(a)(6) of the CAA provides discretionary authority to the EPA Administrator to, by rule, revise or waive the section 182(b)(3) Stage II requirement for Serious, Severe, and Extreme ozone nonattainment areas after the Administrator determines that ORVR is in widespread use throughout the motor vehicle fleet. Th e percentage of non - ORVR vehicles and the percentage of gasoline dispensed to those vehicles grow s smaller each ye ar as these older vehicles wear out and are replaced by new ORVR equipped models. Given the predictable nature of this trend, the EPA propose d a date for ORVR widespread use. In the Notice of Proposed Rulemaking (76 FR 41731, July 15, 2011), the EPA proposed that ORVR widespread use will occur at the mid - point in the 2013 calendar year, relying upon certain criteria outlined in the proposed rule. This date was also proposed as the effective date for the waiver of the CAA section 182(b)(3) Stage II requirements for Serious, Severe and Extreme ozone nonattainment areas. The EPA used two basic approaches in determining when ORVR would be in widespread use in the motor vehicle fleet. Both approaches focused on the penetratio n of ORVR - equipped vehicles in the***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 13 of 34 gasoline - powered highway motor vehicle fleet. The first proposed approach focused on the volume of gasoline that is dispensed into vehicles equipped with ORVR, and compared the emissions reductions achieved b y ORVR alone to the reductions that can be achieved b y Stage II controls alone. The second approach focused on the fraction of highway motor gasoline dispensed to ORVR - equipped vehicles. In the proposal, the EPA included Table 1 (republished below). This work was based on outputs from EPA’s MOVES 2010 motor vehicle emissions model, which showed information related to the penetration of ORVR in the national motor vehicle fleet projected to 2020. These model outputs have been updated for the final rule based on ... . Overall , ORVR efficiency was shown in column 5 of Table 1 and was determined b y multiplying the fraction of gasoline dispensed into ORVR - equipped vehicles by ORVR’s 98 percent in - use control efficiency . Table 1 - Projected Penetration of ORVR in the National V ehicle Fleet b y Year

– based on MOVES 2010 1 2 3 4 5 Calendar Year Vehicle

Population Percentage VMT

Percentage Gasoline

Dispensed Percentage ORVR

Efficiency 2006 39.5% 48.7% 46.2% 45.3% 2007 45.3% 54.9% 52.5% 51.5% 2008 50.1% 60.0% 57.6% 56.4% 2009 54.3% 64.5% 62.1% 60.9% 2010 59.0% 69.3% 66.9% 65.6% 2011 63.6% 73.9% 71.5% 70.1% 2012 67.9% 78.0% 75.6% 74.1% 2013 71.7% 81.6% 79.3% 77.7% 2014 75.2% 84.6% 82.6% 80.9% 2015 78.4% 87.2% 85.3% 83.6% 2016 81.2% 89.4% 87.7% 85.9% 2017 83.6% 91.2% 89.7% 87.9% 2018 85.6% 92.7% 91.3% 89.5% 2019 87.5% 93.9% 92.7% 90.8% 2020 89.0% 94.9% 93.9% 92.0% See EPA Memorandum “Onboard Refueling Vapor Recovery Widespread Use Assessment” in the docket (number EPA - HQ - OAR - 2010 - 1076) addressing details on issues related to values in this table. Note: In this table, the columns have the following meaning. 1. Calendar ye ar that corresponds to the percentages in the row associated with the year.***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 14 of 34 2. Percentage of the gasoline - powered highway vehicle fleet that have ORVR. 3. Percentage of vehicle miles traveled (VMT) b y vehicles equipped with ORVR. 4. Amount of gasoline dispensed into ORVR - equipped vehicles as a percentage of all gasoline dispensed to highway motor vehicles. 5. Percentage from the same row in column 4 multiplied by 0.98. In the proposal, the EPA estimated that ORVR would need to achieve in - use emission reductions of about 77.4 percent to be equivalent to the amount of control Stage II alone would achieve. This estimate was based on the in - use control efficiency of Stage II s ys tems and exemptions for Stage II for lower throughput GDFs. In the NPRM, the EPA assumed that in areas where basic Stage II s ys tems are used the control efficiency of Stage II gasoline vapor control s ys tems is 86 percent. The use of this value depends on the assumption that daily and annual inspections, periodic testing, and appropriate maintenance are conducted in a correct and timely manner. In the NPRM, the EPA estimated that the percentage of gasoline dispensed in an area that is covered b y Stage II controls is 90 percent. Multiplying the e stimated efficiency of Stage II s ys tems (86 percent) b y the estimated fraction of gasoline dispensed in nonattainment areas from Stage II - equipped gasoline pumps yi elded an estimate of the area - wide control efficiency of Stage II programs of 77.4 percent (0.90 x 0.86 = 0.774 or 77.4 percent) for emissions displaced from vehicle fuel tanks. 12 13 Table 1 indicated this level of ORVR control efficiency is expected to be achieved during calendar ye ar 2013. 12 See section 4.4.3 (especially Figure 4 - 14 and Table 4 - 4) in “Technical Guidance - Stage II Vapor Recovery S ys tems for Control of Vehicle Refueling Emissions at Gasoline Dispensing Facilities, Volume I : Chapters,” EPA - 450/3 - 91 - 022a, November 1991. A copy of this document is located in the docket for this action EPA - HQ - OAR - 2010 - 1076. This is based on annual enforcement inspections and on allowable exemp tions of 10,000/50,000 gallons per month as described in section 324(a) of the CAA. The EPA recognizes that these two values vary by state and that in some cases actual in - use efficiencies, prescribed exemption levels, or both may be either higher or lower. 13 AP - 42, The EPA’s emission factors document, identifies three sources of refueling emissions: displacement, spillage, and breathing losses. In the EPA Memorandum “Onboard Refueling Vapor Recovery Widespread Use Assessment” ( available in the public docket), the EPA determined that for separate Stage II and ORVR refueling events, spillage and breathing loss emission rates are similar. Thus, this analy sis focuses on differences in controlled displacement emissions. Incompatibility effects related to ORVR and Stage II vacuum assist sy stems are addressed separately .***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 15 of 34 In the second approach for estimating when ORVR is in widespread use, we also observed from Table 1 that b y the end of calendar ye ar 2012 more than 75 percent of gasoline will be dispensed into ORVR - equipped vehicles. As discussed in the NPRM, the EPA beli eved that this percentage of ORVR coverage ( > 75 percent) is substantial enough to inherentl y be viewed as “widespread” under any ordinary understanding of that term. Furthermore, in Table 1, the percentage of VMT b y ORVR equipped vehicles (column 3) and th e amount of gasoline dispensed into ORVR - equipped vehicles (column 4) reached or exceeded 75 percent between the end of ye ar 2011 and end of 2012. The EPA believed this provided further support for establishing a widespread use date after the end of calend ar ye ar 2012. Based on the dates derived from these two basic approaches, the EPA proposed to determine that ORVR will be in widespread use b y June 30, 2013, or the midpoint of calendar year 2013. Projecting forward, this date was about two years after the publication of the NPRM. **VI. This Action** A. Anal yt ical R ationale for F inal R ule Section 202(a)(6) of the CAA provides discretionary authority to the EPA Administrator to, by rule, revise or waive the section 182(b)(3) Stage II requirement after the Administrator determines that ORVR is in widespread use throughout the motor vehicle fl eet. As discussed in the NPRM, the EPA has broad discretion in how it defines widespread use and the manner in which any final determination is implemented. In our review of the public comments received on the proposal, no commenter indicated that a widesp read use determination was inappropriate or took issue with the EPA’s two - pronged anal yt ical approach. We have integrated responses to many comments throughout the preamble to this final rule. A more detailed set of responses is in a document titled, “ Det ermination of Widespread Use of Onboard Refueling Vapor Recovery (ORVR) and Waiver of Stage II Vapor Recovery , Summary o f Public Comments and Responses” that can be found in the docket, EPA - HQ - OAR - 2010 - 1076.***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 16 of 34 The anal yt ical approaches used by the EPA to det ermine the widespread use date are influenced by several key

input parameters that affect the estimates of the emission reduction benefits of Stage II alone versus the benefits of ORVR alone and the phase - in of ORVR - equipped vehicles. We received several c omments on the assumptions and parameters used b y the EPA in the NPRM, and in some cases we have updated the information used in calculations that support the final rule, as discussed in the following paragraphs. 1. ORVR Parameters

 ORVR efficiency . The EPA used an in - use control efficiency of ORVR of 98 percent in the proposal. This was based on the testing of 1,160 vehicles drawn from the field. EPA has updated its analy sis to include an additional 478 refueling emission test results for ORVR - equipped vehi cles that were conducted in calendar ye ars 2010 and 2011. The data set, which now includes over 1,600 vehicle tests for vehicles from model years 2000 - 2010 with mileages ranging from 10,000 to over 100,000, continues to support the conclusion that the 98 p ercent in - use efficiency values remain appropriate. 14

 Modeling program inputs . The NPRM relied on EPA’s MOVES 2010 model for estimating ORVR vehicle fleet penetration, VMT by ORVR vehicles, and gallons of gasoline dispensed to ORVR vehicles. Since the development of the NPRM, the EPA has publicly released MOVES 2010a. The updated model incorporates many improvements. Those relevant here include updates in ORVR vehicle sales, sales projections, scrappage, fleet m ix, annual VMT, and fuel efficiency . The E PA believes that the modeling undertaken to determine the widespread use date for the final rule should employ the EPA’s latest MOVES modeling program because it contains updated information that bears on the subject of this rulemaking, and because the EPA expects 14 See the EPA m emorandum “Updated ORVR In - Use Efficiency .” A copy of this memorandum is located in the docket for this action EPA - HQ - OAR - 2010 - 1076.***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 17 of 34 states to also use it in any state - specific demonstrations supporting future SIP revisions, including revisions that seek to remove Stage II programs. 2. Stage II Parameters

 Stage II efficiency . The EPA used an in - use control efficiency of 86 percent for Stage II in the proposal. As discussed above, Stage II control efficiency depends on inspection, testing, and maintenance b y GDF owner/operators, and inspection and enforcement b y state/local agencies. Ty pical values range from 62 percent to 86 pe rcent. The public comments referred the EPA to additional reported information directly related to in - use effectiveness of Stage II vapor recovery . 15 The reports indicate that for balance and vacuum - assist ty pe Stage II s ys tems in use in many states today , the in - use effectiveness of Stage II is typicall y near 70 percent. Nonetheless, the EPA has elected to retain the use of a 86 percent efficiency value in the anal ys es supporting the final rule. This is because many state programs have included the maintenance and inspection provisions needed to achieve this level of efficiency in their initial SIPs that original ly

incorporated Stage II controls. 16 Current in - use efficiency values may

well be lower based on the performance of the Stage II technology itself or for other reasons related to maintenance and enforcement. We are not rejecting the additional information from commenters or the possibility

th at Stage II efficiency

may be lower in some states or nonattainment areas. However, the EPA believes these issues are best examined in the SIP review process. If real in use efficiency

across all existing Stage II programs is, in fact, lower than 86 percent, the EPA’s

15 See “Draft Vapor Recovery Test Report , ” April 1999 by CARB and CAPCOA (now cleared for public use), and “Performance of Balance Vapor Recovery S ys tems at Gasoline Dispensing Facilities”, prepared b y the San Diego Air Pollution Control District, May 18, 2000. Both reports are available in the publ ic docket. 16 The EPA report , “Enforcement Guidance for Stage II Vehicle Refueling Control Programs,” U.S. EPA, Office of Air and Radiation, Office of Mobile Sources, December 1991 , lay s out basic EPA guidance on what a state SIP and accompan yi ng regulation s should include to achieve high efficiency .***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 18 of 34 final anal ys is overestimates the length of time required for emissions reductions from ORVR alone to eclipse the reductions that can be achieved by Stage II alone.

 Stage II exemption rate . In sections 182(b)(3) and 324 of the CAA, Congress permitted exemptions from Stage II controls for GDFs of less than 10,000 gallons/month (privates) and 50,000 gallons/month (independent small business marketers). The EPA analy sis indicated that these GDF throughput values exempted about 10 percent of annual throughput in any given area. Some states included more strict exemption rates, most commonly 10,000 gallons per month ( 3 percent of throughput) for both privates and independent small business marketers. A few other states’ exemption provisions used value s that fell within or outside this range. Of the 21 states and the District of Columbia with areas classified as Serious, Severe, or Extreme for ozone and/or within the Ozone Transport Region, the plurality incorporated exemption provisions in their state regulations which exempted about 10 percent of throughput. 17 Therefore, we believe it remains reasonable to use that value within this analy sis .  In compatibility

factor for vacuum assist Stage II systems . The EPA discussed the incompatibility factor at length in the NPRM and provided relevant materials in the docket. Several commenters asked that the EPA provide guidance on how the incompatibility factor should be incorporated into any similar analy sis conducted by a state for purposes of future SIP revisi ons involving Stage II programs. The magnitude of the incompatibility factor for an y gi ven area varies depending on ORVR penetration, fraction of vacuum assist nozzles relative to balance nozzles, and excess A/L for vacuum assist nozzles. Two states have adopted measures to reduce this effect through the use of ORVR - compatible nozzles and one state prohibits vacuum assist nozzles completely . Due to these significant variables, the EPA is electing not to include the 17 See the EPA memorandum “ Summary of Stage II E xemption P rogram V alues. ” A cop y of this memorandum is located in the docket for this action in EPA - HQ - OAR - 2010 - 1076.***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 19 of 34 incompatibility

factor in the widespread u se date determination anal ys is, but will provide the guidance requested b y the commenters for use future SIP revisions. To the extent that incompatibility

emissions across all existing Stage II programs as a whole are significant, the EPA’s final anal ys is overestimates the length of time required for emissions reductions from ORVR alone to eclipse the reductions that can be achieved b y Stage II alone. B. Updated Anal ys is of W idespread U se As discussed previousl y, the EPA has used two approaches for deter mining when ORVR is in widespread use on a nationwide basis. After reviewing our methodology and reviewing the related comments on the NPRM, we are retaining three of the four basic anal yt ical input parameters and updating one. The in - use ORVR efficiency , the in - use Stage II efficiency , and the Stage II exemption rate parameters are the same as in the NPRM. However, we have updated the modeling program inputs as discussed previousl y, and the results are reflected in Table 2. Table 2 - Projected Penetration of ORVR in the National Vehicle Fleet b y Year

– based on MOVES 2010 ( a) 1 2 3 4 5 End of Calendar Year Vehicle Population

Percentage VMT

Percentage Gasoline Dispensed

Percentage ORVR

Efficiency 2006 42.6% 51.2% 49.2% 48.2% 2007 48.4% 57.3% 55.5% 54.4% 2008 53.3 62.3% 60.5% 59.2% 2009 57.7% 66.8% 64.8% 63.5% 2010 62.4% 71.6% 69.5% 68.1% 2011 67.1% 76.0% 73.9% 72.4% 2012 71.4% 80.0% 77.7% 76.1% 2013 75.3% 83.4% 81.0% 79.4% 2014 78.7% 86.3% 84.0% 82.3% 2015 81.8% 88.8% 86.5% 84.8% 2016 84.5% 90.9% 88.6% 86.8% 2017 86.8% 92.5% 90.3% 88.5% 2018 88.8% 93.9% 91.9% 90.0% 2019 90.5% 95.0% 93.2% 91.3% 2020 92.0% 95.9% 94.3% 92.4% See EPA Memorandum “Onboard Refueling Vapor Recovery Widespread Use Assessment” in the***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 20 of 34 docket (number EPA - HQ - OAR - 2010 - 1076 ) addressing details on issues related to values in this table. Note: In this table, the columns have the following meaning. 1. Calendar ye ar that corresponds to the percentages in the row associated with the year. 2. Percentage of the gasoline - powered highway vehicle fleet that have ORVR. 3. Percentage of vehicle miles traveled (VMT) b y vehicles equipped with ORVR. 4. Amount of gasoline dispensed into ORVR - equipped vehicles as a percentage of all gasoline dispensed to highway

motor vehicles. 5. Perce ntage from the same row in column 4 multiplied by 0.98. The results in Table 2 are applied in the context of the two basic anal yt ical approaches used in the NPRM for supporting the final date associated with the EPA’s widespread use determination. First , using the analy sis based on equal reductions for Stage II and ORVR, the 77.4 percent in - use emission reduction efficiency

for ORVR will occur in May 2013 (See column 5 of Table 2). Second, 75 percent of gasoline will be dispensed to ORVR - equipped vehicle s by April 2012 (See column 4 of Table 2). C. Widespread U se D ate The updated anal ys is indicates that the two benchmarks will occur about a year apart, and that one benchmark of April 2012 has already passed . At the time of the NPRM, both of the benchmark dates for the ORVR widespread use determination were in the future, many months after the EPA’s expected final action. Thus, given the basic merits of both approaches, the EPA believed it was reasonable to propose a date between the dates associated w ith the two anal yt ical approaches. The EPA’s updated analy sis presents a somewhat different picture. The April 2012 benchmark date has alre a dy

passed, and the May

2013 benchmark date is less than 1 year away. W e believe it is reasonable for the EPA Administrator to determine that ORVR is in widespread use in the motor vehicle fleet as of the date this final action is published in the Federal Register because this final rule is being promulgated within the window bounded b y the two benchmark dates deriv ed from the updated anal ys es . As discussed previousl y in this notice and in the NPRM, the EPA has discretion in setting the widespread use date. Itis evident from the public comments on the NPRM from states and members of***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 21 of 34 the regulated industry , and from recent state actions, that there is a desire to curtail Stage II installations at newl y constructed GDFs, and to initiate an orderly phase - out of Stage II controls at existing GDFs. 18 Since one of the two analy tical benchmark dates (April 2012) has passed , and we expect in most cases the second analy

tical benchmark date (May 2013) will have passed b y the time the EPA is able to complete approvals of SIP revisions removing Stage II programs and pass any revised regulations , and in response to comments asking us to expedite the ORVR widespread use finding, the EPA Administrator is determining that ORVR is in widespread use in the motor vehicle fleet as of **[ INSERT**  **DATE OF PUBLICATION IN THE FEDERAL REGISTER]** . Accordingl y, as of **[INSERT DATE**  **OF PUBLICATION IN THE FEDERAL REGISTER]** th e requirement to implement a Stage II emissions control program under section 182(b)(3) of the CAA is waived. D. Implementation of the R ule P rovisions In this final action, the ORVR widespread use determi nation and waiver of the section 182(b)(3) requirement applies to the entire country . This includes areas that are now classified as Serious or above for ozone nonattainment, as well as those that may be classified or reclassified as Serious or above in th e future. In the NPRM , we indicated that states could potentially demonstrate that ORVR was in widespread use in specific areas sooner than the general, national date. Such a provision is no longer needed because today ’s action provides for a nationwide de termination of widespread use effective on **[INSERT DATE OF PUBLICATION IN FEDERAL REGISTER]** .

18 For example, in November 2011, New Hampshir e put new regulations in place which eliminate the need for new GDFs to install Stage II, allows current GDFs with Stage II to decommission the sy stems, and requires all sy stems to be decommissioned by December 22, 2015. In May of 2011, New York issued an enforcement discretion directive which curtailed the need for new stations to install Stage II and permitted current installations to be decommissioned.***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 22 of 34 As stated in this final action and as pointed out by several commenters, the ORVR widespread use determination and section 182(b)(3) waiver determination does not obligate states to remove any existing Stage II vapor recovery requirements. It is possible that a state would determine it beneficial to continue implementation of a Stage II program. For example, in an area where ORVR- equipped fleet penetration is consi derably less than the national average, or where Stage II exemptions are significantly more restrictive than the national assumptions used in this analy sis, a state may determine that it would not be appropriate to modify its program immediately , but that it would be more appropriate to do so at a later date. In assessing whether and how to phase out Stage II requirements, states are encouraged to review, and as needed revise the area - specific assumptions about taking into consideration their inspection an d enforcement resource commitments as well as ORVR/vacuum - assist Stage II incompatibility . A state that chooses to remove the program must submit a SIP revision requesting EPA to approve such action and provide, as appropriate, a demonstration that the S IP revision is consistent with CAA section 110(1). The EPA guidance on conducting assessments to support Stage II - related SIP revisions was issued at the same time as this final rule. 19 The EPA encourages states to review this guidance and consult with the EPA Regional Offices on developing SIP revisions seeking EPA approval for phasing out existing Stage II programs in a manner that ensures air quality protections are maintained. Section 110(l) precludes the Administrator from approving a SIP revision if it would interfere with applicable CAA requirements (including, but not limited to, attainment and maintenance of the ozone NAAQS and achieving reasonable further progress). A state may demonstrate through anal ys is

19 “Guidance on Removing Stage II Gasoline Vapor Control Programs from SIPs and Assessing Comparable Mea sures.” U.S. EPA Office of Air and Radiation, issued at the same time as the final rule.***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 23 of 34 that removing a Stage II program in an area as of a specific date will not result in an emissions increase in the area, or that the small and ever - declining increase is offset by other simultaneous changes in the implementation plan. However, a state may find that by

removing Stage II requirements , they are reducing the overall level of emissions reductions they have previously

applied toward meeting CAA rate of progress (ROP) or reasonable further progress (RFP) requirements, or demonstrating attainment. If so, the state should explain how removing Stage II controls in the area would not interfere with attaining and maintaining the ozone NAAQS in the area. In such circumstances , it is possible that additional emissions reductions from other measures may be needed to offset the removal of Stage II. S tate and local agencies should also consider any transportation conformity impacts related to removing Stage II if emissions reductions from Stage II are included in a SIP - approved on - road motor vehicle emissions budget. States may need to adjust conformity budgets or the components of the budget if removing Stage II requirements would alter expected air quality benefits. In previous memoranda, the EPA provided guidance to states on removing Stage II at refueling facilities dedicated to certain segments of the motor vehicle fleet (e.g., new automobile assembly plants, rental car facilities, E85 dispensing pumps, and corporate fleet facilities). In these specific cases where all or nearl y all of the vehicles being refueled are ORVR - equipped, the EPA could con servativel y conclude that widespread use of ORVR had occurred in these fleets. 20 E. Implementation of rule provisions in the Ozone Transport Region States and the District of Columbia in the OTR in the northeastern U.S. are also subject to a separate Stag e II - related requirement. Under section 184(b)(2) of the CAA (42 U.S.C. § 7511c(b)(2)), all areas in the OTR, both attainment and nonattainment areas, must implement control measures

20 “ Removal of Stage II Vapor Recovery in Situation where Widespread Use of Onboard Refueling Vapor Recovery

is Demonstrated,” from Stephen D. Page and Margo Tsirigotis Oge, EPA, December 12, 2006.***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 24 of 34 capable of achieving emissions reductions comparable to those achievable through Stage II controls. The CAA does not contain specific provisions giving authority to the EPA Administrator to waive this independent requirement. The section 184(b)(2) requirement does not impose Stage II per se , but rather is a requirement that OTR states achieve an amount of emissions reductions comparable to the amount that Stage II would achieve. Moreover, section 202(a)(6), in allowing for a waiver of the section 182(b)(3) Stage II requirement for nonattainment areas, does not refer to the indep endent section 184(b)(2) requirements. Therefore, the section 184(b)(2) Stage II - related requirement for the OTR will continue to remain in place even after the ORVR widespread use determination and section 182(b)(3) waiver effective date. In the mid - 1990s , the EPA issued guidance on estimating what levels of emissions reductions would be “comparable” to those reductions achieved by Stage II. 21 In response, most OTR states simply adopted Stage II programs rather than identify other measures that got the same degree of emissions reductions. Given the continued penetration of ORVR - equipped vehicles into the overall vehicle fleet, Stage II - comparable emissions are significantl y less than in the past, and continue to decline. Accordingl y, the EPA has updated the guidance on determining “comparable measures.” States in the OTR should refer to that guidance if preparing a SIP revision to remove Stage II programs in areas of the OTR. 22 Commenters on the NPRM urged the EPA to revise its previous interpretation of secti on 184(b)(2) to permit ORVR to be recognized as a Stage II comparable emission reduction measure. S imply treating the ORVR requirements under section 202(a)(6) as a comparable measure that an OTR 21 "Stage II Comparability Study for the Northeast Ozone Transport Region," (EPA - 452/R - 94 - 011; January 1995) . 22 “Guidance on Removing Stage II Gasoline Vapor Control Programs from SIPs and Assessing Comparable Measures.” U.S. E PA Office of Air and Radiation, issued at the same time as the final rule.***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 25 of 34 SIP must additionally

contain would render the 184(b)(2) requirement a nullity , which is not a permissible statutory

interpretation . However, the expected level of emissions reductions that Stage II programs can obtain has changed significantly in the past 15 years with ORVR - equipped vehicles phasing in at the rate of 3 - 4 percent of the fleet each calendar year. Therefore, the EPA has updated guidance on estimating the emissions reductions needed to be comparable to those achievable through Stage II controls. We note that the CAA calls for emissions reductions that are “comparable , ” and not necessarily

Stage II - equivalent reductions. Therefore, comparable measures could in some areas mean no additional control beyond ORVR is required if Stage II is achieving no additional emission reduction benefit in the area, or has reached a point of providing onl y a declining de minimis benefit. Thi s issue is more fully

addressed in the EPA’s updated guidance titled “Guidance on Removing Stage II Gasoline Vapor Control Programs from SIPs and Assessing Comparable Measures.” for the OTR issued at the same time as this final rule . F. Comments on O ther W aiver Implementation I ssues Numerous commenters on the NPRM urged the EPA to adopt provisions in the final rule that would exempt new gasoline dispensing facilities with construction occurring between the final rule publication and the effective Stage II waiver date from installing Stage II equipment. The timing issue is now largel y moot since widespread use is deemed to have occurred on the effective date of this action . However , under the CAA , states adopt state - specific or area - specific rules, which are then submitted to the EPA for approval into the SIP. These rules are independentl y enforceable under state law, and also become federally

enforceable when the EPA approves them into the SIP. The EPA cannot unilaterally change legally- adopted state statut es or rules or otherwise revise an approved SIP that was not erroneousl y approved. The EPA’s only authority to establish requirements that would apply in lieu of approved SIPs is its authority under CAA section 110(c) to promulgate a Federal Implementation Plan (FIP) . To trigger FIP authority , the EPA must first determine that a state has failed to submit a required***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 26 of 34 SIP or that the state’s SIP must be disapproved. The circumstances of this ORVR widespread use finding and waiver of the section 182(b)(3) Stag e II requirement to do not present either of those situations. According to requirements established by the CAA that are applicable here, states will need to develop and submit SIP revisions to the EPA in order to change or eliminate SIP - approved state rul es that set forth the compliance dates for newl y constructed GDFs. Commenters also urged EPA to simply allow states to eliminate all active Stage II programs from certain nonattainment areas after the widespread use date, without requiring SIP revisions from states. While the EPA has discretion to determine the widespread use date, the EPA cannot simply nullify states’ rules that are binding and enforceable under state law. In order to change the federal enforceability

of SIPs, states must go through the SIP revision process, and the EPA can approve the SIP revision only

i f the provisions of section 110(l) and any other applicable requirements, such as the comparable measures requirement for OTR states, are satisfied. Today ’s final rule takes no action in implementing CAA section 184(b)(2), and any future final actions regarding “comparable measures” SIPs will be fact - specific in response to individual state submissi ons. Also, s ubsequent to the effective waiver date of the section 182(b)(3) Stage II requirements, areas currentl y implementing the EPA approved Stage II program s in their SIPs as a result of obligations under the 1 - hour or 1997 8 - hour ozone NAAQS, would be required to continue implementing these programs until the EPA approves a SIP revision adopted under state law removing the requirement from the state’s ozone implementation plan. **VII. Estimated Cost** As part of the NPRM, the EPA conducted an initial assessment of the costs and savings to gasoline dispensing facility owners related to this proposed action. The report titled, “Draft Regulatory Support Document, Decommissioning Stage II Vapor Recovery , Financial Benefits and Costs,” is available in the public docket for this action. The report examines the initial costs and savings to facility***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 27 of 34 owners incurred in the decommissioning of Stage II vapor recovery s ys te ms, as well as changes in recurring costs associated with above ground hardware maintenance, operations, and administrative tasks. The EPA received no substantive comment on the draft report, other than a concern that the savings identified therein may not come to pass as quickly as envisioned in the draft report if the EPA does not provide updated guidance on comparabl e measures for the OTR states. We have addressed this concern b y issuing guidance for the states concomitantly23 As part of the re - anal ys is following the NPRM, the EPA reviewed the input values used for the proposal draft. Most input values were confirmed as reasonable and representative but it was concluded that two of the values should be updated. These include: ( 1) the pre - tax price of gasoline used in the foregone vapor recovery

savings calculation, which increased from $2.30 in 2010 to $3.04 in 2011 (average price per gallon), and (2) the number of Stage II facilities potentially affected by

SIP revisions removi ng Stage II requirements in non - California Serious, Severe and Extreme ozone nonattainment areas which increased from 26,900 to 3 0 , 6 00 in 19 states and the District of Columbia . As discussed in our final regulatory

support document, the EPA estimates recur ring cost savings of about $3,000 per ye ar for a typical gasoline dispensing facility, and an annual nationwide savings of up to $9 1 million if Stage II is phased out of the approximately 3 0 , 6 00 dispensing facilities outside of California that are requi red to have Stage II vapor recovery s ys tems under section 182(b)(3) of the CAA. 24 The 2013 net present value of these long term annual savings over a ## ye ar period is $83 million at a 3 percent discount rate and $74 million at a 7 percent discount rate. **VIII . Statutory and Executive Order Reviews** 

23 “ Guidance on Removing Stage II Gasoline Vapor Control Programs from SIPs and Assessing Comparable Measures.” U.S. EPA Office of Air and Radiation, issued at the same time as the final rule. 24 See “Final Regulatory

Support Document, Decommissioning Stage II Vapor Recovery , Financial Benefits and Costs,” available in public docket, EPA - HQ - OAR - 2010 - 1076.***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 28 of 34 A. Executive Orders 12866 : Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), this action is a “significant regulatory

action” because it raises novel legal or policy issues arising out of legal mandates. Accordingl y, the EPA submitted this action to the Office of Mana gement and Budget (OMB) for review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011) and any changes made in response to OMB recommendations have been documented in the docket for this action. B. Paperwork Reduction Act This action doe s not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. Burden is defined at 5 CFR 1320.3(b). It does not contain any recordkeeping or reporting requirements. C. Regulatory

Flexibility

Act The Regulatory

Flexibility

Act (RFA) generall y requires an agency to prepare a regulatory flexibility anal ys is of an y rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency c ertifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of this action on small entities, small entity is defined as: (1) a small business as defined in the Small Business Administration’s (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city , county, town, school dis trict or special district with a population of less than 50,000; and (3) a small organization that is any not - for - profit enterprise which is independentl y owned and operated and is not dominant in its field. After considering the economic impacts of this action on small entities, Icertify that this action will not have a significant economic impact on a substantial number of small entities. This rule will not***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 29 of 34 impose any

new requirements on small entities. Rather, it provides criteria for reducing existing regulatory

requirements on gasoline dispensing facilities, some of which may qualify as small businesses. D. Unfunded Mandates Reform Act This action contains no federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531 - 1538 for state, local, or tribal governments or the private sector . The action imposes no enforceable duty on an y state, local or tribal governments, or the private sector. Therefore, this action i s not subject to the requirements of sections 202 and 205 of the UMRA. This action is also not subject to the requirements of section 203 of UMRA because it contains no regulatory

requirements that might significantly or uniquely

affect small governments. This action addresses the removal of a requirement regarding gasoline vapor recovery equipment, but does not impose any

obligations to remove these programs. E. Executive Order 13132: Federalism This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This action does not impose any new mandates on state or local governments. Thus, Executive Order 13132 does not apply to this rule. F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000) . Itwill not have substantial direct effects on tribal governments, on the relationship between the federal government and Indian tribes, or on the distribution of power and***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 30 of 34 respo nsibilities between the federal government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule. G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks The EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying onl y to those regulatory

actions that concern health or safety risks, such that the analy sis required under section 5 - 501 of the Executive Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it does not establish an environmental standard intended to mitigate health or safety

risks. H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energ y Supply, Distribution, or Use This action is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355 (May

22, 2001)), because it is not likely to have a significant adverse effect on the suppl y, distribution, or use of energy . It does not impose additional costs on gasoline distribution, but rather promises to lower operating and maintenance costs for gasoline dispensing facilities by facilitating removal of redundant gasoline refueling vapor controls. I. National Technology

Transf er Advancement Act Section 12(d) of the National Technology Transfer and Advancement Act of 1995 ("NTTAA"), Public L aw 104 - 113, 12(d), (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory

activities unless to do so woul d be inconsistent with applicable law or otherwise impractical. Voluntary

consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary

con sensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 31 of 34 This rulemaking does not involve technical standards. Therefore, EPA is not considering the use of an y voluntary consensus standards. J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and L ow - In come Populations Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes f ederal executive policy

on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by

law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low - income populations in the United States. The EPA has determined that this final rule will not have disproportionately high and adverse human health or environmental effects on minority or low - income populations because it does not directly affect the level of protection provided to human health or the environment under the EPA’s NAAQS for ozone. This action propo ses to waive the requirement for states to adopt largel y redundant Stage II programs, based on a determination of widespread use of ORVR in the motor vehicle fleet. K. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 et seq ., as added b y the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a cop y of the rule, to each House of the Congress and to the Co mptroller General of the United States. The EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 day s after it is published in the Federal Register . This action is not a***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 32 of 34 “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective upon publication in the Federal Register .***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 33 of 34 **Page 33**  **of 34**  **- Air Quality:**  **Widespread Use for Onboard Refueling Vapor Recovery and Stage II Waiver**  **IX . Statutory Authority**  The statutory

authority for this action is provided by the CAA, as amended (42 U.S.C. 7401, et seq.); relevant provisions of the C AA include, but are not limited to sections 182(b)(3), 202(a)(6), 301(a)(1), and 307(b), and 307(d)(42 U.S.C._7511a(b)(3), 7521(a)(6), 7601(a)(1), 7607(b), and 7607(d)). List of Subjects in 40 CFR Part 51 Environmental protection, Administrative practice and procedure, Air pollution control, Ozone, Particulate matter, Volatile organic compounds.

_________________________ Dated:

_________________________ Lisa P. Jackson, Administrator.***** E.O. 12866 Review –**  **Draft –**  **Do Not Cite, Quote or Release During Review** *** **EO12866_Vapor Recovery_2060 -** **AQ97_Final_FRN_20120 307** 

Page 34 of 34 For reasons set forth in the preamble, part 51 of chapter I of title 40 of the Code of Federal Regulations is amended as follows: Part 51 - REQUIREMENTS FOR PREPARATI ON, ADOPTION, AND SUBMITTAL OF IMPLEMENTATION PLANS. 1. The authority citation for part 51 continues to read as follows: Authority : **23 U.S.C. 101 ; 42 U.S.C. 7401**  **- 7671q**  **Subpart 6 –**  **[Amended] to read as follows:** 2. Section 51.126 is added. **§ 51.126 Determination of widespread use of ORVR and waiver of CAA section 182(b)(3) Stage II gasoline vapor recovery requirements**  (a) Pursuant to section 202 (a)(6) of the Clean Air Act, the Administrator has determined that, effective **[INSERT DATE OF PUBLICATION IN THE FEDERAL REGISTER]** , onboard refueling vapor recovery (ORVR) s ys tems are in widespread use in the motor vehicle fleet within the United States. (b) Effective **[INSERT DATE OF PUBLICATION IN THE FEDERAL REGISTER]** , the Administrator waives the requirement of Clean Air Act section 182(b)(3) for Stage II vapor recovery sy stems in ozone nonattainment areas regardless of classification. States must submi t and receive EPA approval of a revision to their approved State Implementation Plans before removing Stage II requirements that are contained therein.