From: Sargeant, Kathryn To: Whiteman, Chad Cc: Charmley, William ; Stewart, Lori ; hannon, john ; Ghanta, Venu ; Davidson, Ken ; Jutras, Nathaniel ; Nickerson, William ; Nagelhout, Peter ; Brunner, Christine ; Yanca, Catherine ; Zawacki, Margaret ; Helfand, Gloria Subject: Part 3 of EPA Response to 2/13 Interagency Comments on Tier 3
Date: Friday, March 01, 2013 4:00:22 PM Attachments: EO 12866_Tier_3_2060_AQ86_RIA_Ch8_20130301.doc EPA response part 2 to EO_12866_Tier 3_Summary Comments_2_13_2013.docx EPA Response to EO_12866_ Tier 3_Summary Comments_2_13_2013.docx EO_12866_ Tier 3_Summary Comments_2_13_2013.docx

In further response to the comments from February 13, we have identified a way to quantitatively explore OMB ’ s interest in Tier 3 program benefits excluding California

. We have added language to RIA Chapter 8 .1.2

— relevant excerpt is pasted below, and the chapter is attached in full with changes tracked (the redlined version we sent yesterday, with this additional language also redlined)

.

***********************

We note that of necessity decisions on the emissions and other elements used in the air quality modeling were made early in the analytical process for this proposal. For this reason, the Tier 3 emission control scenario used in the air quality and benefits modeling includes emission reductions from Tier 3 across the nation, assuming no reductions associated with California's LEV III program (as opposed to including California’s LEV III program and its associated emission reductions in the baseline scenario). This was because EPA had not granted California a waiver of preemption under CAA section 209 for the LEV III program at the time EPA conducted the air quality modeling. EPA did include California’s fuel program, which independent of LEV III was already resulting in average gasoline sulfur levels of 10 ppm, in the baseline scenario. Since then, EPA granted a waiver for California's LEV III program (78 FR 2112, January 9, 2013). Based on this change in circumstances, we will conduct new air quality modeling for the final rule that will include emission reductions from California’s LEV III program in the baseline scenario.

Had we modeled the California LEV III emission impacts in the Tier 3 air quality baseline, we estimate that benefits would decrease by approximately 12-16 percent, depending on the particular health impact functions used to characterize both PM- and ozone-related premature mortality. As a result, we estimate that in 2030, using the most conservative premature mortality estimates (Pope et al., 2002 for PM 2.5 and Bell et al., 2004 for ozone), , the proposed standards would reduce approximately 820 premature mortalities annually and yield approximately $8.0 billion in total annual benefits. The upper end of the range of avoided premature mortality estimates associated with the proposed standards (based on Laden et al., 2006 for PM 2.5 and Levy et al., 2005 for ozone) , results in approximately 2,400 premature mortalities avoided in 2030 and yields approximately $23 billion in total
benefits. These are rough estimates since, without new photochemical air quality modelingto reflect the revised baseline and control scenarios, we are unable to account for crossstate transport of pollution. However, we believe this is a reasonable characterization ofthe small reduction in benefits had we modeled California in the baseline; our overall costbenefit conclusions do not materially change with or without the inclusion of California emissions in our analysis. We will conduct new air quality modeling for the final rule that will include emission reductions from California’s LEV III program in the baseline scenario. The rest of this Chapter presents benefits that include California LEV III emission
reductions.

To conduct this sensitivity analysis, we simply assumed no air quality change in the California portion of the CMAQ domain. We then exported the reference and control air quality surfaces to be used as inputs to BenMAP. Note that this simple approach is unable to account for legitimate emissions impacts related to cross-state transport of pollution.

2 Pope, C.A., III, R.T. Burnett, M.J. Thun, E.E. Calle, D. Krewski, K. Ito, and G.D. Thurston. (2002). Lung Cancer, Cardiopulmonary Mortality, and Long-term Exposure to Fine
Particulate Air Pollution. Journal of the American Medical Association, 287, 1132-1141.

3 Bell, M.L., et al. (2004). Ozone and short-term mortality in 95 US urban communities,
1987-2000. Journal of the American Medical Association

, 292(19) , 2372-2378.

4 Laden, F., J. Schwartz, F.E. Speizer, and D.W. Dockery. (2006). Reduction in Fine Particulate Air Pollution and Mortality. American Journal of Respiratory and Critical Care Medicine

. 173 , 667-672.

5 Levy, J.I., S.M. Chemerynski, and J.A. Sarnat. (2005). Ozone exposure and mortality: an empiric bayes metaregression analysis. Epidemiology. 16(4) , 458-68.

_____________________________________________ From: Sargeant, Kathryn Sent: Thursday, February 28, 2013 11:24 AM To: 'Whiteman, Chad' Cc: Stewart, Lori; Charmley, William; Ghanta, Venu; Machiele, Paul; Olechiw, Michael; Wysor, Tad; Yanca, Catherine; Davidson, Ken; Moran, Robin; Zawacki, Margaret; Helfand, Gloria; hannon, john; Kataoka, Mark; Okoye, Winifred; Nam, Ed; Beardsley, Megan; Brunner, Christine Subject: Part 2 of EPA Response to 2/13 Interagency Comments on Tier 3

Chad, in response to our phone conversation on February 25, attached please find our further response to the comments from February 13 (specifically related to analysis of proposed Tier 3 fuel sulfur standards in isolation of the proposed Tier 3 vehicle standards).

_____________________________________________ From: Sargeant, Kathryn Sent: Friday, February 15, 2013 4:48 PMTo: Whiteman, Chad Cc: Stewart, Lori; Charmley, William; Ghanta, Venu; Machiele, Paul; Olechiw, Michael; Wysor, Tad; Yanca, Catherine; Davidson, Ken; Moran, Robin; Zawacki, Margaret; Helfand, Gloria; hannon, john; Kataoka, Mark; Okoye, Winifred; Nam, Ed; Beardsley, Megan; Brunner, Christine Subject: EPA Response to 2/13 Interagency Comments on Tier 3

Chad, I'm attaching EPA's response to your written comments from Feb. 13. Hope you have a good long weekend.

From: "Whiteman, Chad" < Chad_S_Whiteman@omb.eop.gov >

To: Kathryn Sargeant/AA/USEPA/US@EPA

Cc: Lori Stewart/DC/USEPA/US@EPA

Date: 02/13/2013 05:55 PM

Subject: RE: Follow-up to Feb. 11 Tier 3 call
Kathryn,

Thank you for the follow-up to our conversation on Monday. I’ve attached a follow-up request. Please let me know if you have any questions.

Thanks,

Chad

From: Sargeant.Kathryn@epamail.epa.gov [ mailto:Sargeant.Kathryn@epamail.epa.gov ]

Sent: Wednesday, February 13, 2013 2:57 PM

To: Whiteman, Chad

Cc: Yanca.Catherine@epamail.epa.gov ; Brunner.Christine@epamail.epa.gov ; Nam.Ed@epamail.epa.gov ; hannon.john@epamail.epa.gov ; Davidson.Ken@epamail.epa.gov ; Stewart.Lori@epamail.epa.gov ; Beardsley.Megan@epamail.epa.gov ; Olechiw.Michael@epamail.epa.gov ; Machiele.Paul@epamail.epa.gov ; Moran.Robin@epamail.epa.gov ; Wysor.Tad@epamail.epa.gov ; Ghanta.Venu@epamail.epa.gov ; Charmley.William@epamail.epa.gov ; Zawacki.Margaret@epamail.epa.gov ; Helfand.Gloria@epamail.epa.gov ; Wyborny.Lester@epamail.epa.gov

Subject: Follow-up to Feb. 11 Tier 3 call

In response to a question during the Feb. 11 call, I wanted to follow up with the following information:

Of the 35 small refineries, 5 of them are projected to require the installation of a grassroots FCC posttreater tocomply with Tier 3, which is the same proportion as we project are required for the larger refineries. Those that are small, however, would be provided with a 3-year delay in their compliance deadline.

I also understand that you passed along some additional questions, which we answer below:

1) Do the Tier 3 benefits include California's LEV III program?

A. Yes. EPA granted the waiver for California's program in December 2012, and the Tier 3 analysis was initiated and completed before that time.

2) Are the benefits of PM versus NOx reductions broken out in the rule?

A: The PM, NOx, and other emission reductions are presented in preamble section III.B (see pp. 64-66). The photochemical air quality modeling conducted for the NPRM estimates the total changes in ambient PM

, ozone and air toxics that result from changes in their emission precursors (and directly emitted PM). We are not able to present air quality impacts and related health impacts separately for these precursors. We model the entire program's impacts simultaneously to accurately characterize the total air quality impact of the proposal. We do have health-related benefits broken out by ambient PM versus ambient ozone in preamble section VIII (p. 359 - 367)

3) What emission reductions are achievable from the existing fleet with the Tier 3 gasoline sulfur requirements?

A: See preamble section III.B (pp. 64-68). Tables III-2 through III-7 present the emissions reductions that result from the pre-Tier 3 fleet due to the sulfur standard.