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Regulatory

Announcement

 Printed on Recycled Paper

United States

Environmental Protection

Agency

Air and Radiation EPA420-F-97-012

March 1997

Office of Mobile Sources

An Overview of the Baseline

Adjustment Final Rulemaking

Background

Under the Clean Air Act as amended in l99O, EPA promulgated “antidumping” regulations for conventional gasoline (gasoline not certified as

reformulated gasoline). These regulations state that conventional gasoline cannot be more polluting than it was in 1990.

The anti-dumping regulations also include provisions for the development of individual refinery “baselines.” Specifically, an individual

refinery baseline is the set of fuel parameter values and emissions values

which represent the quality and quantity of a refiner’s 1990 gasoline. A

refiner’s individual baseline is the reference point against which changes

in post-1994 gasoline composition are compared. Additionally, the

regulations include provisions that allow a refiner to obtain an adjusted

baseline under certain limited circumstances.

The Environmental Protection Agency (EPA) recently promulgated the

Baseline Adjustment Final Rulemaking. This rule modifies the baseline

adjustment provisions of the December 1993 final reformulated

gasoline (RFG) and anti-dumping regulations. Specifically, this rule

provides relief in the form of baseline adjustments for refiners who meet

certain criteria and who would experience extreme economic burden

without such relief. In spite of these adjustments, the environmental

impact of this rule is negligible. Such negligible environmental impact is

commonly referred to as de minimis in the regulations.
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The Baseline Adjustment Rule

The baseline adjustment rule contains

modified requirements for obtaining one

baseline adjustment and specifies the

requirements of two new baseline adjustments.

First, the rule modifies requirements for

refiners who produced a specific type of jet

fuel in 1990.

Second, the rule provides a baseline adjustment for certain refiners who used extremely sweet crude oil (crude oil relatively

low in sulfur) in the production of gasoline

in 1990, and for whom such crude oil is no

longer available.

Finally, this rule establishes a baseline

adjustment for refineries that have extremely low baseline values for both sulfur

and olefins.

JP-4 Baseline Adjustment

In 1990, certain refiners produced JP-4 jet

fuel under contract with the U.S. Department of Defense. Now, however, this fuel is

being phased out by the Defense Department. To compensate for this change in

product demand, most producers of JP-4

are transferring the feedstocks for JP-4

production to gasoline production. These

feedstocks must be upgraded to be used in

gasoline. This upgrade, which boosts the

octane of the feedstocks, causes a subsequent increase in a refiner’s toxic emissions

relative to its individual baseline.

For certain refiners who produced significant quantities of JP-4 in 1990, the burden

of complying (via refinery chances or other

measures) with an individual baseline,

given the increased toxics emissions, is

severe, and could cause them to cease

operations.

The JP-4 baseline adjustment reduces the

regulatory burden of the anti-dumping

program for those refiners who produced

JP-4 jet fuel in 1990 and who meet certain

criteria. These criteria have been modified

from the original rule to allow more producers of JP-4 to qualify for an adjustment.

Low Sulfur Crude Baseline

Adjustment

Since 1990, a few refiners, particularly

those in certain Rocky Mountain states,

have experienced dramatic increases in the

sulfur content of the crude oil available to

them. Such increases generally lead to

increases in gasoline sulfur content which,

in turn, result in increased vehicle emissions. For these refiners, compliance with

their individual baselines, in the face of

increasing crude sulfur levels, could be

economically devastating.

The low sulfur crude baseline adjustment

reduces the regulatory burden of the antidumping program for those refiners who

have very low baseline sulfur levels and

whose access to alternative crude supplies

is geographically limited. Other criteria

specified in the rule must also be met to

ensure that only economically distressed

refineries receive the adjustment and that

the environmental impact of allowing the

adjustments is de minimis.
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Low Sulfur and Low Olefins

Baseline Adjustment

A few refiners have extremely low baseline

levels of both sulfur and olefins. Low levels

of these fuel parameters can cause compliance difficulties for these refiners since

both fuel parameters affect oxides of

nitrogen (NOx) emissions. Although other

refiners may be able to offset emissions

increases from one parameter by changing

other parameters, refiners with low levels

of multiple fuel parameters, such as sulfur

and olefins, have very limited maneuverability.

Compliance with the anti-dumping requirements depends on specific fuel parameter

test results. For very low baseline values of

fuel components, errors in lab analysis,

sample contamination, or equipment

accuracy can incorrectly result in measured

fuel parameter values which are greater

than the baseline values. Such results could

hinder a refiner’s compliance with the

annual-averaged limits on sulfur and olefin

values for both the RFG and antidumping

programs.

The low sulfur and low olefins baseline

adjustment reduces the regulatory burden

of the antidumping program for those

refiners who have very low baseline values

for both sulfur and olefins. Qualifying

refiners will have more maneuverability

about their baselines and more flexibility in

regard to the annual averaging of fuel

parameters.

Environmental Impact

EPA expects a negligible environmental

impact from allowing baseline adjustments

under the criteria of this rule because only

a few refiners are expected to qualify for

the adjustments (about 16) and the amount

of gasoline they produce is small (less than

3 percent of annual U.S. production).

Estimates made using the Complex Model

(a mathematical compliance model) show

less than a 0.1 percent increase in NOx

emissions, and less than a 1 percent increase in exhaust toxics emissions due to

these baseline adjustments.

For Further Information

For further information on this rulemaking,

please contact Christine Brunner at:

U.S. EPA

Office of Mobile Sources

2000 Traverwood Dr.

Ann Arbor, MI 48105

734-2 14-4287

Additional documents on this final rule and

RFG are available electronically from the

EPA Internet server at:

http://www.epa.gov/OMS/fuels.htm