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OAR Box 1772 

Prepped by Charmelle Mathews 

Document Number: 

m jtf IV-H-02 

Docket Number: 

A-86-03 

Printed 12/2/2008 9:45:12 AM Sheet 42 of 117 
m 

r 

TO:ANN ARBOR 

JUL-02-'93 MON 13=57 I_D:_OMS UJ901 TEL NO:202^245-3730 

A-86-^ 3 

8009 P02 

change in aromatics. Additionally, aromatics-control optics 

ranging from no control to a reduction to 20 volume percent were 

evaluated, Based upon analyses of costs, benefits and cost 

effectiveness, the Agency decided to propose sulfur control to 

0,05 weight percent. Significant aromatics control below 

current levels was not proposed since the analysis of the 

benefits of associated particulate reductions, which did not 

include cancer benefits/ did not demonstrate the cost 

effectiveness, from a national perspective, of reducing the 

content of aromatics in diesel fuel^jat this time, EPA proposed 

instead to cap aromatics at current levels so as to prevent a 

rise in the future. *'f'i;his was proposed to be done by 

establishing a minimum cetane index specification of 40. 

The cost of controlling diesel-fuel quality is dependent on 

a number of things, most notable the degree to which segregation 

would occur between on-highway and off-highway diesel fuel and 

the amount of desulfurization equipment currently in place in 

the refining industry. In the NPRM the cost of sulfur control 

(to 0.05 weight percent) was projected to be about 2.3 cents per 

gallon at current rates of segregation and 1.6 cents per gallon 

for the complete (100 percent) segregation scenario. These 

figures represent annual costs to the refining industry of $830 

million and $360 million, respectively. 

There are a number of benefits (both financial and 

environmental) which can be attributed to diesel fuel sulfur 

control. The first area of benefits is in exhaust 

aftertreatment technology. The 0.1 g/BHP-hr particulate 

stnadard promulgated for heavy-duty diesel vehicles for the 

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The resulting air quality impacts of fuel control were 

also analyzed in the NPRM. It was projected that by the year 

2015, in large metropolitan areas (greater than 1,000,000 

residents), sulfur control would reduce annual arithmetic mean 

3 

concentrations of particulate by 2.3 - 6.3 yg/m (in 

3 

comparison to current levels of 18 - 90 Pg/m ) and S02 by 

7.0 - 16.7 yg/m. (in comparison to current levels of up to 

3 

67 Pg/m ). Air quality benefits in t! 

effects and visibility were also described. 

3 

67 Pg/m ). Air quality benefits in the areas of health 

The final environmental analysis does not contain an 

assessment of the potential for affecting cancer risks by 

regulating diesel fuel quality. The Draft Regulatory Impact 

Analysis did contain a preliminary analysis; however, this 

analysis has been removed due to significant errors found in 

the methodology. The effect of diesel fuel quality on cancer 

risks will be addressed by the Agency in a study of the health 

effects and control costs of fuel- related air toxics. The 

results of this study will serve as the basis for any 

subsequent regulatory action. 

Cost-effectiveness of pollution control is defined as the 

control cost (net of cost credits) per ton of pollutant 

removed. It can be used to identify the least cost way of 

achieving a given pollution control objective. In this 

regulation, cost-effectiveness analysis is used to rank 

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refiners argued that the costs for major refiners to remove 

sulfur from the fuel may have been underestimated also. 

EPA has not undertaken new analyses to confirm or deny any 

of the cost estimates presented. However, it is apparent 

that even if the fuel costs were substantially higher, the 

rule would still be quite cost effective. 

Regardless of uncertainties on costs, EPA concurs with 

small refiner groups arguing that small refiners may need 

more leadtime beyond 1994 to comply with the rule. Even 

for major refineries, the leadtime is already short. API, 

Chevron, and Phillips all indicated in comments submitted 

to the docket that the failure to finalize the rule prior 

to 1990 has already made it difficult for larger refineries 

to purchase and install the necessary capital equipment in 

time to meet the requirements of the rule. In fact, in a 

January 10, 1990 letter to EPA, Phillips further indicated 

its belief that continuing delays will force refiners to 

purchase foreign-made equipment. According to Phillips, 

"US engineers, shop fabricators and constructors will be 

strained to simultaneously fill all orders resulting from 

EPA's final rule." 

EPA believes that in such an environment small 

refiners would be at a definite disadvantage and may indeed 

face greater delays in arranging for construction and 

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covered by the exemption, as well as for the other 

provisions included in this Final Rule. 

The above extension to the rule should provide small 

refiners with sufficient additional leadtime so that those 

refiners actually intending to comply with the rule will be 

able to do so. Therefore, a sulfur banking and trading 

program is not necessary to assist small refiners in 

complying with the rule. Such a program is also 

undesirable from the standpoint that it would be difficult 

to implement and enforce in this setting where different 

types of fuel are available at the same time. 

The proposed extension should also alleviate some of 

the problems faced by refiners located in regions with 

limited off-highway markets. However, it should also be 

pointed out that lack of a local market for off-highway 

fuel would not necessarily preclude a refiner from selling 

fuel intended for off-highway uses. As ESPA and IFTOA have 

pointed out, regions with large demands for off-highway 

fuel also tend to import large amounts of such fuel over 

great distances. With the conversion of many of the larger 

refineries to production of low-sulfur fuel, it should be 

possible for small refiners to ship off-highway fuels to 

these regions and still be able to recapture the increased 

shipping costs. 

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needed to show compliance is outside the agreement reached 

by the concerned industries. Amoco stated that many 

refiners will use less expensive instruments which will 

have precision and reproducibility inferior to that 

required by ASTM test method D-2622. The final regulations 

therefore needed a statement to establish a confidence 

level so refiners could establish quality control 

specifications. API suggested that refiners or suppliers 

substantiate, through record keeping, that each blend 

tested is less than the EPA standard, and in addition, the 

average of all blends was below the standard by the test 

compliance margin. API believed this would be a reasonable 

and effective basis for compliance. 

Analysis of the Comments 

The Agency recognizes that test variability exists 

with the ASTM test method D-2622. The issue of what 

enforcement tolerance should be allowed when using these 

methods will be addressed in a manner consistent with other 

mobile source related standards. The diesel fuel refiners 

and other regulated parties will be expected to meet the 

applicable sulfur and cetane limits as established by the 

regulations. They must take test variability into account 

in producing and marketing diesel fuel and cannot rely on 

the Agency to automatically provide an enforcement 

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tolerance in addition to the absolute standards established 

for sulfur or cetane limits. For example, if the sulfur 

content of motor vehicle diesel fuel were found to contain 

0.06 weight percent sulfur, this would be considered a 

violation of the regulatory standard that could subject 

liable parties to enforcement action. 

Issue: Enforcement for Misfueling 

EPA proposed an enforcement scheme which would require 

that all parties in the distribution chain comply with the 

diesel fuel standards for sulfur weight percent and cetane 

index. Not explicitly included were persons who may 

misfuel by using noncomplying fuel in their equipment 

designed to operate on complying fuel. 

Summary of the Comments 

The American Petroleum Institute (API), the Rocky 

Mountain Oil and Gas Association (RMOGA), and the National 

Petroleum Refiners Association (NPRA) all believed that 

enforcement of the fuel standards should focus on potential 

misfuelers. NPRA was disappointed that EPA did not include 

in the proposed rule any enforcement mechanisms for 

reducing intentional misfueling. They pointed out that EPA 

did not address what enforcement action it plans to take 

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