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Environmental

Fact Sheet

 Printed on Recycled Paper

United States

Environmental Protection

Agency

Air and Radiation EPA420-F-01-033

November 2001

Office of Transportation and Air Quality

Proposed Change to Requirements

for Transition from Winter to Summer

Grade RFG

Today’s Action

The Environmental Protection Agency (EPA) today proposed an action

that will make it easier for tank terminals to make the transition from

winter to summer grade reformulated gasoline (RFG). This action will

require tank terminals to accept only summer grade RFG beginning

April 15 of each year. The EPA is also proposing to simplify existing

regulations to improve refiners’ flexibility to sell gasoline blendstocks.

Currently, there is no date by which terminals must begin receiving

summer grade RFG. However, tanks at terminals must contain only

summer grade RFG by May 1. As a result, terminal operators typically

draw down their levels of winter grade gasoline as May 1 approaches,

causing an abrupt reduction in inventories of gasoline and higher gas

prices. Today’s proposal would essentially increase the amount of time

terminals have to make the changeover from winter to summer grade

RFG.

We are also proposing to eliminate the existing blendstock accounting

regulations and replace them with simpler regulations. This action will

allow refineries more flexibility to sell gasoline blendstocks and improve refiners’ overall ability to produce gasoline by eliminating significant reporting required by the current blendstock account regulations.
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Background

In the Clean Air Act, Congress specified EPA develop emission performance standards for RFG for the ozone season. EPA promulgated the

performance standards in a February 16, 1994 Federal Register notice.

With the exception of the air toxics standard which is in effect yearround, all other emission performance standards are in effect for the

summertime (i.e., the ozone season). Such RFG is referred to as summer

RFG.

There are some important differences between winter and summer

gasoline. Most notably, winter grade gasoline has a higher Reid Vapor

Pressure (RVP) than summer grade gasoline. RVP is a measure of a

gasoline’s volatility, or the tendency for a gasoline to evaporate.

Each spring, refiners must reduce gasoline RVP to comply with federal

summer emissions requirements. Refiners, gasoline terminal facilities

and retail stations must replace high RVP winter grade gasoline in

storage tanks with lower RVP summer grade gasoline. EPA regulations

stipulate that gasoline retailers must be selling only summer grade RFG

by June 1 of each year. In order to meet the June 1 compliance date,

EPA regulations stipulate that by May 1 terminals and all other facilities

upstream of the retailer must have only those gasolines that meet the

summertime requirements.

Currently, some terminals wait until very late in April to drain as much

winter grade RFG as possible from their tanks before refilling the tanks

with summer grade RFG. This practice can potentially cause low inventories of RFG. Requiring all terminals to begin receiving summer grade

RFG by a fixed date will allow terminals to more gradually turn over

their tanks from winter to summer grade RFG, and help spread out the

turn over the last two weeks in April, instead of many terminals turning

over their tanks simultaneously at the end of April.

The blendstock accounting regulations were originally meant to restrict

emissions by preventing excessive transfers of high-emissions gasoline

blendstocks (“dirty” blendstocks) from refineries which produced relatively low-emissions gasoline (refineries with “clean” baselines) to

refineries which produced relatively high-emissions gasoline (refineries

with “dirty” baselines). These regulations required significant additional

reporting by a refinery which transferred more than a certain percentage

of its gasoline production. However, individual refinery baselines apply

only to that volume of conventional gasoline (CG) production equivalent

to the individual refinery’s 1990 CG production. Any volume of CG
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produced by a refinery greater than its 1990 CG production must meet

the average emissions of all gasoline produced in 1990 (the statutory

baseline).

Because nearly all refineries currently produce significantly more gasoline than they produced in 1990, a significant portion of every refinery’s

CG today is produced to meet the statutory baseline. Given this situation,

the opportunities to benefit from the transfer of blendstocks based upon

differences in individual baselines is significantly decreased. That is,

shifting volumes from one refinery to another when both refineries

produce more gasoline than they did in 1990 has very little potential to

cause any adverse environmental impact. In addition, restrictions placed

on refiners by the recent Mobile Source Air Toxics rule makes refineries

much less likely to accept high toxics-emissions gasoline blendstocks

from other refineries. Thus, this action should make it easier for refiners

to transfer gasoline blendstocks without worsening emissions.

Health and Environmental Impacts

The clean air benefits of the RFG program will continue to be realized.

The goal of the RFG program is to reduce motor vehicle emissions of the

pollutants that contribute to ozone, or smog, and toxic pollutants, such as

benzene. Smog is formed when VOCs, NOx, and other pollutants such

as CO react in the presence of sunlight. The RFG program sets limits for

these pollutants that refiners must meet, regardless of the oxygenate they

choose.

The clean air benefits of the RFG program are significant. The reformulated gasoline program reduces smog-forming pollutants by 105,000 tons

and toxic pollutants by 24,000 tons annually. This is equivalent to

eliminating the pollution from 16 million cars every year.

Gasoline Supply Benefits

This proposed rule should help increase the inventory of RFG at storage

terminals during the annual spring transition from winter grade to summer grade RFG. The April 15th date will reduce the market pressure that

causes terminals to delay accepting summer grade RFG for as long as

possible and encourage terminals to begin turning over their tanks from

winter grade RFG to summer grade RFG earlier than they do today. This

should lead to greater use of the blend down method to meet the date by

which terminals must be in compliance (currently May 1).
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The proposed rule should also facilitate the transfer of gasoline

blendstocks by eliminating the current blendstock accounting regulations and replacing them with much simpler regulations. This should

allow refiners more flexibility to sell gasoline blendstocks and improve

refiners’ overall ability to produce gasoline.

The RFG program is aimed at reducing pollution in the smoggiest cities

in the U.S. Smog threatens millions of Americans each year with

respiratory problems, and is particularly dangerous to children, who are

increasingly at risk to asthma attacks. In response to recommendations

in the President’s recent National Energy Policy, EPA has undertaken a

study, in consultation with the Departments of Energy and Agriculture,

of so-called “boutique fuels”, focusing on the various types of fuels, the

motivation and causes for states to implement boutique fuels, the impact

of these fuels on the fuel production and distribution system, and potential ways to mitigate the impact of disruptions (i.e., refinery fires, pipeline shutdowns) to allow for a more fungible gasoline fuel system.

During the course of this study, requirements concerning the “transition”

from winter to summer fuels were identified as a concern and EPA

listened to issues raised by various groups. As a result of these discussions, EPA developed today’s proposal which should provide more

flexibility during the transition season.

For Further Information

The proposed rule may be downloaded from our web site at http://

www.epa.gov/otaq/rfg.htm

For further information about the proposed rule, contact Chris McKenna

at (202) 564-9037.