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# OAR Box 1772 Prepped by Charmelle Mathews



### Document

Number: 

# m jtf IV-H-02 Docket Number: 

# A-86-0 3

Printed 12/2/20089:45:12 AM

Sheet 42 of 117

# m r



## TO:AN N ARBO R JUL-02-'9 3 MO

N13=5 7 I_D:_OM

S UJ90 1 TE L NO:202^245-373 0 A-86-^ 3 800 9 P0 2 change i

naromatics . Additionally , aromatics-contro l optic s rangin g fro m n o contro l t

o a reductio

nto 2 0 volum

e percent wer e evaluated , Base

dupo nanalyse s o

f costs , benefit s an dcos t effectiveness , th

e Agency

decide

dt o propos e sulfu

r contro l t

o 0,0 5 weigh t percent . Significan t aromatic s contro l belo w curren t level s wa s not proposedsinc e th e analysi s of th e benefit s o f associatedparticulat e reductions , whic hdi dnot include cance r benefits / di dno t demonstrat e th e cos t effectiveness , fro m a nationa l perspective , o f reducin g th e conten t o f aromatic s i ndiese l fuel^ja

t thi s time , EP A proposed instea dto caparomatic s a t current level s so a s t o prevent a ris e i

nth e future . *' f 'i ; hi s wa s proposedt o b e done b

y establishin

g a minimu

m cetane inde

xspecificationof 40 . The cos t of controllin g diesel-fue l qualit y i s dependen t o

n a numbe r o f things , mos t notabl e th e degre e to whic hsegregatio n woul doccur betweenon-highwa y an doff-highwa

y diese l fue l an

d th e amoun t o f desulfurizationequipmen t currentl y inplac e i

n th e refinin

g industry . Inth e NPR M th e cos t o f sulfu

r contro l (to 0.0 5 weigh t percent ) wa s projectedto b e about 2. 3 cent s pe r gallo na t curren t rate s o

f segregatio

nan d1. 6 cent s per gallo n fo r th e complet e (10 0 percent ) segregatio nscenario . Thes e figure s represent annua l cost s to th e refinin

g industr

y of $83 0 millionan

d$36 0 million , respectively . Ther e are a number of benefit s (bot hfinancia l an

d environmental ) whichca nb e attributedto diese l fue l sulfu r control . The firs t area o f benefit s i s inexhaus t aftertreatmen t technology . The 0. 1 g/BHP-h r particulat e stnadardpromulgatedfo r heavy-duty

diese l vehicle s fo r th e 

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Th e resulting ai r qualit yimpact s o f fue l contro l wer e als o analyze d i n th e NPRM . I t wa s projecte d tha t b yth e yea r 2015 , i n larg e metropolita n area s (greate r tha n 1,000,00 0 residents) , sulfur contro l woul d reduc e annua l arithmeti c mea n 3 concentration s o f particulat e b y2. 3 - 6. 3 yg/ m(i n

3 compariso n t o curren t level s o f 1 8 - 9 0 Pg/ m) an d S0 2 b

y 7. 0 - 16. 7 yg/m . (i n compariso n t o curren t level s o f up t o

3 6 7 Pg/ m

) . Ai r qualit ybenefit s i n t ! effect s an

d visibilit ywer e als o described . 3 6 7 Pg/ m

) . Ai r qualit ybenefit s i n th e area s o f healt h

Th e fina l environmenta l analysi s doe s no t contai n a n assessmen t o f th e potentia l fo r affecting cance r risk s b y regulating diese l fue l quality . Th e Draf t RegulatoryImpac t Analysi s di d contai n a preliminaryanalysis ; however , thi s analysi s ha s bee n remove d du e t o significan t error s foun d i n th e methodology . Th e effec t o f diese l fue l qualit yo n cance r risk s wil l b e addresse d b yth e Agenc yi n a stud yo f th e healt h effect s an

d contro l cost s o f fuel

- relate d ai r toxics . Th e result s o f thi s stud ywil l serv e a s th e basi s fo r an y subsequen t regulatoryaction . Cost-effectivenes s o f pollutio n contro l i s define d a s th e contro l cos t (ne t o f cos t credits ) pe r to n o f pollutan t removed . I t ca n b e use d t o identif yth e leas t cos t wayo f achieving a give n pollutio n contro l objective . I n thi s regulation , cost-effectivenes s analysi s i s use d t o ran k 

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# 22m

# f' 1 

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refiner s argue d tha t th e cost s fo r majo r refiner s t o remov e sulfur fro

mth e fue l mayhav e bee n underestimate d also . EP Aha s no t undertake n ne wanalyse s t o confirmo r den yan y o f th e cos t estimate s presented . However , i t i s apparen t tha t eve n i f th e fue l cost s wer e substantiall yhigher , th e rul e woul d stil l b e quit e cos t effective . Regardles s o f uncertaintie s o n costs , EP Aconcur s wit h smal l refine r group s arguing tha t smal l refiner s ma ynee d mor e leadtime beyond 199 4 t o compl ywit h th e rule . Eve n fo r majo r refineries , th e leadtime i s alread yshort . API , Chevron , an

d Phillip s al l indicate d i n comment s submitte d t o th e docke t tha t th e failur e t o finaliz e th e rul e prio r t o 199 0 ha s alread

ymad e i t difficul t fo r large r refinerie s t o purchas e an

d instal l th e necessarycapita l equipmen t i n tim e t o mee t th e requirement s o f th e rule . I n fact , i n a January10 , 199 0 lette r t o EPA , Phillip s furthe r indicate d it s belie f tha t continuin g delay s wil l forc e refiner s t o purchas e foreign-mad e equipment . Accordin g t o Phillips , "US engineers , sho p fabricator s an d constructor s wil l b e straine d t o simultaneousl yfil l al l order s resultin g from EPA' s fina l rule. "

EPAbelieve s tha t i n suc h an environmen t smal l refiner s woul d b e a t a definit e disadvantag e an d ma yindee d fac e greate r delay s i n arranging fo r constructio n an d

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covere d b

yth e exemption , a s wel l a s fo r th e othe r provision s include d i n thi s Fina l Rule . Th e abov e extensio n t o th e rul e shoul d provid e smal l refiner s wit h sufficien t additiona l leadtime s o tha t thos e refiner s actuall yintending t o compl ywit h th e rul e wil l b e abl e t o d o so . Therefore , a sulfu r bankin g an d tradin g programi s no t necessar yt o assis t smal l refiner s i n complyin g wit h th e rule . Suc h a programi s als o undesirabl e fro

mth e standpoin t tha t i t woul d b e difficul t t o implemen t an

d enforc e i n thi s setting wher e differen t type s o f fue l ar e availabl e a t th e same time . Th e propose d extensio n shoul d als o alleviat e som e o f th e problem s face d b yrefiner s locate d i n region s wit h limite d off-highwaymarkets . However , i t shoul d als o b e pointe d ou t tha t lac k o f a loca l marke t fo r off-highway fue l woul d no t necessaril ypreclud e a refine r fro msellin g fue l intende d fo r off-highwayuses . A s ESP Aan d IFTO Ahav e pointe d out , region s wit h larg e demand s fo r off-highway fue l als o ten

d t o impor t larg e amount s o f suc h fue l ove r grea t distances . Wit h th e conversio n o f man yo f th e large r refinerie s t o productio n o f low-sulfu r fuel , i t shoul d b e possibl e fo r smal l refiner s t o shi p off-highwayfuel s t o thes e region s an

d stil l b e abl e t o recaptur e th e increase d shippin g costs .

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neede d t o showcomplianc e i s outsid e th e agreemen t reache d b yth e concerne d industries . Amoc o state d tha t man y refiner s wil l us e les s expensiv e instrument s whic h wil l hav e precisio n an d reproducibilit yinferio r t o tha t require d b

yASTM tes t metho d D-2622 . Th e fina l regulation s therefor e neede d a statemen t t o establis h a confidenc e leve l s o refiner s coul d establis h qualit ycontro l specifications . AP I suggeste d tha t refiner s o r supplier s substantiate , through record keeping , tha t eac h blend teste d i s les s tha n th e EPAstandard , an d i n addition , th e averag e o f al l blend s wa s belo wth e standar d b yth e tes t complianc e margin . AP I believe d thi s woul d b e a reasonabl e an d effectiv e basi s fo r compliance . Analysi s o f th e Comment s
Th e Agenc yrecognize s tha t tes t variabilit yexist s wit h th e ASTM tes t metho d D-2622 . Th e issu e o f wha t enforcemen t toleranc e shoul d b e allowe d whe n usin g thes e method s wil l b e addresse d i n a manne r consisten t wit h othe r mobil e sourc e relate d standards . Th e diese l fue l refiner s an d othe r regulate d partie s wil l b e expecte d t o mee t th e applicabl e sulfur an d cetan e limit s a s establishe d b yth e regulations . The ymus t tak e tes t variabilit yint o accoun t i n producing an

d marketin g diese l fue l an d canno t rel yo n th e Agenc yt o automaticall yprovid e an enforcemen t

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toleranc e i n additio n t o th e absolut e standard s establishe d fo r sulfur o r cetan e limits . Fo r example , i f th e sulfu r conten t o f moto r vehicl e diese l fue l wer e foun d t o contai n 0.0 6 weigh t percen t sulfur , thi s woul d b e considere d a violatio n o f th e regulatorystandar d tha t coul d subjec t liabl e partie s t o enforcemen t action .
Issue : Enforcemen t fo r Misfuelin g

EPApropose d a

n enforcemen t scheme whic h woul d requir e tha t al l partie s i n th e distributio n chai n compl ywit h th e diese l fue l standard s fo r sulfu r weigh t percen t an d cetan e index . No t explicitl yinclude d wer e person s wh o may misfue l b

yusing noncomplyin g fue l i n thei r equipmen t designe d t o operat e o n complying fuel . Summaryo f th e Comment s
Th e America n Petroleu mInstitut e (API) , th e Rocky Mountai n Oi l an

d Ga s Associatio n (RMOGA) , an d th e Nationa l Petroleu

mRefiner s Associatio n (NPRA ) al l believe d tha t enforcemen t o f th e fue l standard s shoul d focu s o n potentia l misfuelers . NPR

Awa s disappointe d tha t EP Adi d no t includ e i n th e propose d rul e an yenforcemen t mechanism s fo r reducing intentiona l misfueling . The ypointe d ou t tha t EP A di d no t addres s wha t enforcemen t actio n i t plan s t o tak e

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