1

**SUPPORTING STATEMENT**

**– PART A**  **RECORDKEEPING AND REPORTING RELATED TO FUEL QUALITY REGULATIONS FOR DIESEL FUEL SOLD IN 2001 & LATER YEARS; FOR TAX** 
**** **EXEMPT (DYED) HIGHWAY DIESEL FUEL; AND NON** 
**- ROAD LOCOMOTIVE &**  **MARINE DIESEL FUEL: RENEWAL**  **DOCKET EPA**
**- HQ** 
**- OAR** 
**- 2007** 
**- 1121**  **EPA ICR N o.:**  **1718.09** 1. ID ENTIFICATION OF THE INFORMATION COLLECTION 1(a) Title of the Information Collection Fuel Quality Regulations for Diesel Fuel Sold in 2001 & Later Years; for Tax

- Exempt (Dyed) Highway Diesel Fuel; & Non

- Road Locomotive & Marine Diesel Fuel (Renewal) EPA Control Number 1718.0 9 , OMB Control Number: 2060

- 0308. 1(b) Short Characterization/Abstract This ICR renewal is related to EPA’s diesel fuel regulations under 40 CFR Part 80, Subpart I , applicable to highway (“motor vehicle” or “MV”) diesel fuel and non

- road, locomotive and marine diesel fuel (NRLM) and heating oil (HO). Most of the information collected under this ICR is used to evaluate compliance with the requirements of the regulations. Since virtually

all MV diesel fuel was required to meet a 15 part per million (ppm) standard as of June 1, 2010, very

little reporting related to MV diesel f uel remains. However, reporting related to NRLM and HO will continue throughout the course of this proposed ICR renewal. The activities associated with this ICR include: registration (all parties have registered; updates to existing registrations are still possible); compliance reports (mostl y covering NRLM and HO; updates to prior compliance reports for MV diesel are still possible); research and development (R&D) exemptions; generation and retention of quality assurance (QA) records; foreign refiner re cordkeeping and reporting; placement of Product Transfer Documents (PTD ) codes (a typicall y automated process, to indicate the presence of dye in tax

- exempt fuel and/or sulfur content). This ICR renewal contains provisions related to qualification of laboratories on performance

based test methods. Virtually all applications have already been received from laboratories and acted upon b y EPA.

2. NEED FOR AND USE OF THE COLLECTION 2(a) Need/Authority for the Collection2

This supporting statement covers the recordkeeping and reporting requirements and the associated costs to various parties (e.g., refiners, importers, distributors, and retailers of diesel fuel). These general recordkeeping and requirements are necessary to enable the Administrator to: (1) Identify

the sources of diesel fuel; and (2) Ensure that these sources compl y with the standards and limitations of the rules. An effective enforcement scheme is necessary to ensure that the environmental goals of the diesel program are met, and that those compl ying with the requirements in good faith are not disadvantaged b y non - complying parties. The diesel program requirements create a significant economic incentive for noncompliance.

For performance

- based qualification of test methods for diesel fuel, reported data will enable EPA to: 1) Qualify

laboratories to use test methods based upon accuracy and precision criteria supported by

industry

. 2) Ensure that diesel fuel and heating oil meet the standard s required under the regulations at 40 CFR Part 80 and that the associated benefits to human health and the environment are realized.
2(b) Practical Utility

/Users of the Data EPA will use the information contained in the reports required b y this information collection to evaluate the compliance of parties involved in the production and importation of diesel with the diesel fuel requirements. These reports will also be used by EPA to target compliance investigations. PTDs maintained by

parties in th e diesel fuel distribution system and records related to diesel blending will be used to evaluate the compliance of the parties that maintain the records, and to help evaluate upstream compliance. PTDs are normally generated and retained in the course of business (i.e., they are customary

business practices or “ CBP ” ). There is a small burden associated with the placement of sulfur content and/or dye notices, a process which is ty picall y automated. The automaticall y printed notice on tax

- exempt highway die sel product transfer documents (which EPA allows to be stated in coded form to save space), allows both EPA to determine if dyed product is intended for highway use or is high sulfur diesel for off

- road use only . It also helps industry to make this determination.3

The EPA's Office of Enforcement and Compliance Assurance, Air Enforcement Division is the governmental user of the information contained in the required records.

3. NONDUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA 3(a) Non

- Duplication Efforts have been made to eliminate duplication in this information collection. Where possible, information requirements from various organizations within the Agency have been combined to minimize the submittal of duplicate information in different formats. The information in this collection will not be available from another source.
3(b) Public Notice Prior to Submission to OMB EPA solicited public comment by means of a Federal Register Notice published o n August 1 8 , 2011, 76 FR 51362. The Notice requested public comment through October 17, 2011. No comments were received. 3(c) Consultations EPA will discuss this information collection with representatives of regulated industry

. We are soliciting comments via the Federal Register notice, as well. This supporting statement and our estimates are being placed in the public docket. On November 2 1 , 2011, we sent the estimates to members of the regulated community in an effort to solicit input. Currently we have received no comments. 3(d) Effect of Less Frequent Collection The diesel rule requires refiners and importers to submit annual reports which will, by the information contained therein, demonstrate a party ’s compliance with the applicable sulfur standards. Les s frequent submittal of such reports would severel y hinder EPA’s ability to monitor compliance, and would likely lead to noncompliance. In the case of the dye requirements, a less frequent collection is not practical, since the information must appear on p roduct transfer documents at the time custody is transferred 3(e) General Guidelines The requirement requires record retention for five (5) years. The Agency believes this is important to the success of the program. With the large economic incentive to not comply that exists because of the substantial difference in price that can exist between low sulfur diesel and high sulfur diesel, it is imperative that EPA maintain deterrence b y assuring that all parties know that EPA will be able to distinguish the difference between high sulfur and low sulfur deliveries4

via a review of records generated in the normal course of business (i.e., CBP). The requirement to retain for 5 ye ars is consistent with other record retention periods in the fuels regulations, with the applicable 5 ye ar statute of limitations, and CBP. Most entities already keep these records for 5 or more ye ars for tax and other business purposes. 3(f) Confidentiality Proprietary

information is routinely

submitted by

refiners and importers as part of annual reports and as part of requests for research and development or hardship exemptions. Confidentiality

for such information is covered b y established Agency procedures and the regulations at 40 CFR Part 2. 3(g) Sensitive Questi ons No questions of a sensitive nature are asked in this information collection. 4. THE RESPONDENTS AND THE INFORMATION COLLECTED 4(a) Respondents/SI C Codes The respondents to this information collection are:

- Refiners (both domestic and foreign refiners who manufacture diesel for use in the U.S.)

- Importers of diesel into the U. S.

- Diesel distributors, carriers, wholesale purchaser

- consumers, and retailers

- Testing laboratories Recordkeeping and, in some cases, reporting is required by th e following industries, with SIC Code/2002 NAICS Code indicated : Refiners (2911/324110), Importers (5172/424720), P ipelines (4613), P etroleum marketers and other distributors (5171 , 5172 /424710, 424720), T erminals (5171/424710), Fuel oil dealers (5172/424720), Fuel additive manufacturers (2911/424720), P etroleum retailers and wholesale purchaser

- consumer s (5171, 5172/424710 , 424720 ) L aboratories (8734/541380).
4(b) In formation Requested 1. Data Items5

Knowledge of the following definitions at 40 CFR Part 2 is important for a thorough understanding of the reporting and recordkeeping requirements: “Diesel fuel” means any fuel sold in any state or Territory

of the United States and suitable for use in diesel motor vehicles, diesel motor vehicle engines or diesel non

- road engines, and which is commonly

or commercially

known or sold as diesel fuel. “Motor vehicle diesel fuel” means any diesel fuel, or any distillate product, that is used, intended for use, or made avail able for use, as a fuel in diesel motor vehicles or diesel motor vehicle engines. “Refinery” means a plant in the United States at which gasoline or diesel fuel is produced. “Foreign refinery” means a refinery that is located outside the United States. “Refiner” means any person who owns leases, operates, controls, or supervises a refinery

. “Importer” means a person who imports gasoline, gasoline blending stocks or components, or diesel from a foreign country into the United States (including the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands. “Sulfur percentage” is the percentage of sulfur in diesel fuel b y weight, as determined using one of the test methods specified in the regulations. “Batch of motor vehicle diesel fuel” means a quantity of diesel fuel which is homogenous with regard to those properties that are specified for motor vehicle diesel fuel under 40 CFR subpart I.

2. Recordkeeping and Reporting Requirements Table I summarizes the information to be collected by form and respondent. I f no form exists, the information item is identified by party.

5. THE INFORMATION COLLECTED

- AGENCY ACTIVITIES, COLLECTION METHODOLOGY, AND INFORMATION MANAGEMENT 5(a) Agency

Activities

 All reported compliance data will be reviewed b y EPA.
 EPA will contact submitters about problem submissions.
 Where appropriate, we will prepare a written response to the submitter.
 The data will be stored.6

5(b) Collection Methodol ogy and Management EPA accepts common electronic formats for most of the reporting requirements

- for example, annual reports may be submitted in any

of several commercial spreadsheet formats or, more simply , as comma - delimited text/comma

- separated value fields. The product transfer document information can be included on standard transfer documentation customarily used in the ordinary

course of business (i.e., CBP) . EPA allows the information to be encoded by upstream parties (refiners, importers, and terminals) to facilitate reporting and save space. The information is carefully reviewed for compliance with the requirements. Most of the information submitted to the Agency is claimed as business confidential. It is stored in a secure area and in a secure database. 5(c) Small Entity

Flexibility The information collection reduces to the extent practicable and appropriate the burden on respondents, including small entities. The major reporting requirements apply to refiners and importers of diesel, which are not usuall y small businesses. 6. EST IMAT ING THE BURDEN AND COST OF THE COLLECTION 6. Estimating the Burden and Cost of Collection

a. Estimating the Respondent Universe We drew upon experience implementing similar regulations among the same and similar entities to develop estimates of the burden associated with this collection.

b. Estimating Respondent Costs (i) Estimating Labor Costs In discussions with industry , f our labor categories were identified as having involvement: managerial, legal, professional/technical (prof/tech) and clerical. According to the Bureau of Labor Statistics, May

2008 National Industry

- Specific Occupational Employ ment and Wage Estimates, me an wages were: Wages Managerial $6 1 .42 per hour7

Legal $8 5 .56 per hour Prof/Tech $6 1 .05 per hour Clerical $1 8 .34 per hour Doubling for company overhead and emplo ying a 2% annual inflation factor to bring the rates to the year 2011, and, for convenience, rounding up to the nearest dollar, gives the following rates that will be used for this ICR: Total Employer Cost Managerial $12 6 Legal $17 5 Prof/Tech $ 12 5 Clerical $ 3 8 The labor mix for each task is assumed to be about 0.05 hour managerial, 0.05 hour legal, 0.7 hour professional/technical, and 0.2 hour clerical . This gives an average labor cost of about $110 per hour, whi ch will be used in this ICR. Our estimates are summarized in the following table

. There are no Operations & Maintenance (O&M) costs associated with this Information Collection Request (ICR).8



## TABLE I **- ESTIMATES**  **EPA ICR 1718.09 (Renewal. Expires 12** 
**- 31**  **- 2011.)** 

**Collection Type of**  **No. of No. of**  **Total No. of Time Per**  **Cost Per Total**  **Hours Total Cost**  Assumes: **Ac tivity**  **Party Parties**  **Responses Responses**  **Response Hour**  **per Party Hours**  **REPORTING DSF0100 Form:**  **NRLM Diesel Fuel Sulfur**  **refiners 100**  **1 100**  **1 110**  **100 11000**  95 NRLM **Credit Banking and** refiners, **Generation Report** rounded **importers 50**  **1 50**  **1 110**  **50 5500**  up to 100.

**MV resub -**  **5 1**  **5 1**  **1 1**  **0 5**  **5 5**  **0** Nearly all **missions** MV reporting **DSF0200 Form: NRLM**  ends **Diesel Fuel Sulfur refiners**  **100 1**  **100 1**  **110 100**  **11000** with full **Credit Transfer** 15 ppm **Report** fully **importers 50**  **1 50**  **1 110**  **50 5500**  in place June 2010. **MV resub -**  **5 1**  **5 1**  **1 1**  **0 5**  **5 5**  **0 missions**  "All **DSF0301 Form: NRLM**  Other" **Diesel Fuel Sulfur refiners**  **100 1**  **100 1**  **110 100**  **11000** includes9

**Facility** terminals **Report** and **importers 50**  **1 50**  **1 110**  **50 5500**  pipeline facilities. **MV resub -**  **5 1**  **5 1**  **1 1**  **0 5**  **5 5**  **0 missions**  For DSF0200 **DSF0401 Form: NRLM**  and **Diesel Fuel Sulfur refiners**  **100 1**  **100 1**  **110 100**  **11000** DSF0504, **Batch** multiple **Report** transactions **importers 50**  **1 50**  **1 110**  **50 5500**  may be reported on **MV resub -**  **5 1**  **5 1**  **110 5**  **550** one form. **missions**

**DSF0504 Form: NRLM**  **Designate and refiners**  **100 1**  **100 1**  **110 100**  **11 ,**  **000 Track Handoff**  **Report importers**  **50 1**  **50 1**  **110 50**  **5 ,**  **500**

**MV resub -**  **5 1**  **5 1**  **110 5**  **550 missions** 

**Al l other**  **1,000 1**  **1000 1**  **1 1**  **0 1000**  **1 1**  **0 ,**  **000**

**DSF0601 NRLM**  **Designate and refiners**  **100 1**  **100 1**  **110 100**  **11 ,**  **000**10

**Track Tot. Vol. Report**  **importers 50**  **1 50**  **1 110**  **50 5**  **, 500** 

**MV resub -**  **5 1**  **5 1**  **110 5**  **550 missions** 

**Al l other**  **1,000 1**  **1 ,**  **000 1**  **1 1**  **0 1000**  **1 1**  **0 ,**  **000 parties** 

**DSF0700 NRLM**  **Designate and refiners**  **100 1**  **100 1**  **110 100**  **11 ,**  **000 Track Facility**  **Compliance Report**  **importers 50**  **1 50**  **1 110**  **50 5**  **, 500** 

**MV resub -**  **5 1**  **5 1**  **110 5**  **550 missions** 

**Al l other**  **1,000 1**  **1 ,**  **000 1**  **1 1**  **0 1000**  **1 1**  **0 ,**  **000 parties** 

**DSE0700 NRLM**  **Designate and refiners**  **100 1**  **100 1**  **110 100**  **11 ,**  **000 Track Entity**  **Compliance Report**  **importers 50**  **1 50**  **1 110**  **50 5**  **, 500** 

**MV resub -**  **5 1**  **5 1**  **110 5**  **550**11 **missions**

**Al l other**  **1,000 1**  **1 ,**  **000 1**  **1 1**  **0 1000**  **1 1**  **0 ,**  **000 parties** 

**DSF0900 Form: MV resub**  **- 5**  **1 5**  **1 1**  **1 0**  **5 5**  **5 0**  **Motor Vehicle missions**  **Diesel Sulfur Pre**  **- Compliance**  **Report**

**DSF0951 Form: NRLM**  **NRLM refiners**  **100 1**  **100 1**  **110 100**  **11 ,**  **000 Diesel Sulfur**  **Pre -**  **Compliance Report**  **importers 50**  **1 50**  **1 110**  **50 5**  **, 500** 

**DLQ001 Form: Testing**  **(Used for labs**  **1 1**  **1 180**  **110 180**  **19 ,**  **800 lab/test method**  **qualification.)**

**DFM001 Form: Testing**  **(Used for labs**  **1 1**  **1 180**  **110 180**  **19 ,**  **800 solvent/die**  **qualification.)**

**REGISTRA**

**TION & OTHER ITEMS Updates to** 12

**Existing Registrations**  **An y**  **party 2**  **1 2**  **0.5 110**  **1 110**  Includes MV and **R&D Exemptions Refiners**  **2 1**  **2 1**  **110 2**  **220** NRLM refiners, for **QA Refiners**  **150 100**  **15000 0.25**  **110 3750**  **412 ,**  **500** a total of **(Record Importers**  **50 100**  **5000 0.25**  **110 1250**  **137 ,**  **500** 150 parties. **Generation and Retention)** 
**Foreign Refiners**  **5 1**  **5 40**  **110 200**  **22 ,**  **000 refiners**  **record**   ** keeping** **and reporting** 

**Placement Various**  **1,200 200**  **240000 0.0333**  **110 7992**  **879 ,**  **120** "Various **of PTD codes parties in**  parties" **(dy e/content)**  **distribution** may incl. **sy stem**  refiners, importers, and others such as terminals and distributors.13



## TOTA **LS** 6 , 806 265 , 406 18 , 950 2 , 0 8 4 , 5 00 Parties Responses Hours Cost ($)14

6(c) Estimating Agency Burden and Cost The Agency

activities listed in 5(a) are part of an overall gasoline and diesel reporting system (including reformulated gasoline, conventional gasoline, and diesel). We estimate that this system costs approximately $1 2 0,000 in personnel costs per year (i .e. approximately 3⁄4 of a GS

- 13 employee with consideration of overhead and benefits). 6(d) and (e) Estimating the Respondent Universe and Total Burden and Costs, and Bottom Line Burden Hours and Costs This was incorporated into 6(a) and (b). 6(f) Reasons for Change in Burden For this renewal, we estimate a total annual burden of 265,406 responses, taking 18,950 hours, and costing $2,0 8 4, 5 00

. For the expiring approval, we had estimated 426, 2 75 responses, taking 2 85 , 261 hours, and costing $2, 626,000. Most MV diesel reporting has now ended, which was expected to reduce (and has reduced) the responses, hours, and costs. Likewise, laboratory qualifications have virtually all been submitted already. However, please note that we have changed how we accounted for the burden for this renewal. We have modeled our estimates to match the in

- use forms in order to assist interested parties in providing comments. Therefore, some of the change is associated with how we did the estimates in 2008 (expiring approval) and now. The Agency

burden has decreased because of a reduction in the number of reports filed. In the expiring approval, we estimated a total cost of $668,000. We estimate that the cost associated with this renewal is approximately $120,00 0.
6(g) Burden Statement The public reporting burden for this Environmental Protection Agency (EPA) collection of information is estimated to average .07 hour s per response. This includes time for reviewing instructions and regulations, searching company records, gathering the needed data, and completing, reviewing, copying, and transmitting the collection of information. Burden means the total time, effort, o r financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency . This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to compl y with any previously applicable instructions or requirements; train pers onnel to be able to response to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently15

valid OMB control number. The OMB control numbers for EPA’s regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15. To comment on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collection techniques, EPA has established a public docket for this ICR under Docket ID Number EPA

- HQ

- OAR

- 2007

- 1121 , which is available for online viewing at www.regulations.gov, or in person viewing at the Air and Radiation Docket and Information Center in the EPA Docket Center (EPA/DC), EPA West, Room 3334, 1301 Constitution Avenue, NW, Washington, D.C. The EPA Docket Center 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 Reading Room is (202) 566

- 1744, and the telephone number for the Air and Radiation Docket and Information Center is ( 202) 566

- 1742. An electronic version of the public docket is available at www.regulations.gov. This site can be used to submit or view public comments, access the index listing of the contents of the public docket, and to access those documents in the public docket that are available electronicall y. When in the system, select "search," then key in the Docket ID Number identified above. Also, yo u can send comments to the Office of In formation and Regulatory Affairs, Office of Management and Budget, 725 1 7th Street, NW, Washington, D.C. 20503, Attention: Desk Officer for EPA. Please include the EPA Docket ID Number EPA

- HQ

- OAR

- 2007

- 1121 and OMB Control Number 2060

- 03 08 in any correspondence.