[Federal Register Volume 62, Number 32 (Tuesday, February 18, 1997)]
[Proposed Rules]
[Pages 7197-7200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3927]


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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80

[FRL-5689-3]


Regulations of Fuels and Fuel Additives: Extension of the 
Reformulated Gasoline Program to the Phoenix, Arizona Moderate Ozone 
Nonattainment Area

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: Under section 211(k)(6) of the Clean Air Act, as amended 
(Act), the Administrator of EPA shall require the sale of reformulated 
gasoline in an ozone nonattainment area classified as Marginal, 
Moderate, Serious, or Severe upon the application of the governor of 
the state in which the nonattainment area is located. This action 
proposes to extend the prohibition set forth in section 211(k)(5) 
against the sale of conventional (i.e., non-reformulated) gasoline to 
the Phoenix, Arizona moderate ozone nonattainment area. The Agency is 
proposing the implementation date of the prohibition described herein 
to take effect on the effective date of this rule or June 1, 1997, 
whichever is later, for all persons other than retailers and wholesale 
purchaser-consumers (i.e., refiners, importers, and distributors). For 
retailers and wholesale purchaser-consumers, EPA is proposing the 
implementation of the prohibition described herein to take effect 30 
days after the effective date of this rule, or July 1, 1997, whichever 
is later. As of the implementation date for retailers and wholesale 
purchaser-consumers, the Phoenix ozone nonattainment area will be a 
covered area for all purposes in the federal RFG program.

DATES: If a public hearing is held on today's proposal, comments must 
be received by April 10, 1997. If a hearing is not held, comments must 
be received by March 20, 1997. Please direct all correspondence to the 
address shown below. The Agency will hold a public hearing on today's 
proposal if one is requested by February 25, 1997. If a public hearing 
is held, it will take place on March 11, 1997. To request a hearing, or 
to find out if and where a hearing will be held, please call Janice 
Raburn at (202) 233-9000.

ADDRESSES: Comments should be submitted (in duplicate, if possible) to 
Air Docket Section, Mail Code 6102, U.S. Environmental Protection 
Agency, 401 M Street, SW, Washington, DC 20460. A copy should also be 
sent to Janice Raburn at U.S. Environmental Protection Agency, Office 
of Air and Radiation, 401 M Street, SW (6406J), Washington, DC 20460. A 
copy should also be sent to EPA Region IX, 75 Hawthorne Street, AIR-2, 
17th Floor, San Francisco, CA 94105.
    Materials relevant to this notice have been placed in Docket A-97-
02. The docket is located at the Air Docket Section, Mail Code 6102, 
U.S. Environmental Protection Agency, 401 M Street, SW, Washington, DC 
20460, in room M-1500 Waterside Mall. Documents may be inspected from 
8:00 a.m. to 5:30 p.m. A reasonable fee may be charged for copying 
docket material. An identical docket is also located in EPA's Region IX 
office in Docket A-AZ-97. The docket is located at 75 Hawthorne Street, 
AIR-2, 17th Floor, San Francisco, California 94105. Documents may be 
inspected from 9:00 a.m. to noon and from 1:00--4:00 p.m. A reasonable 
fee may be charged for copying docket material.

FOR FURTHER INFORMATION CONTACT: Janice Raburn or Paul Argyropoulos at 
U.S. Environmental Protection Agency Office of Air and Radiation, 401 M 
Street, SW (6406J), Washington, DC 20460, (202) 233-9000.

SUPPLEMENTARY INFORMATION: A copy of this action is available on the 
OAQPS Technology Transfer Network Bulletin Board System (TTNBBS) and on 
the Office of Mobile Sources' World Wide Web cite, <a href="http://www.epa.gov/
OMSWWW">http://www.epa.gov/
OMSWWW</a>. The TTNBBS can be accessed with a dial-in phone line and a 
high-speed modem (PH# 919-541-5742). The parity of your modem should be 
set to none, the data bits to 8, and the stop bits to 1. Either a 1200, 
2400, or 9600 baud modem should be used. When first signing on, the 
user will be required to answer some basic informational questions for 
registration purposes. After completing the registration process, 
proceed through the following series of menus:
    (M) OMS
    (K) Rulemaking and Reporting
    (3) Fuels
    (9) Reformulated gasoline
    A list of ZIP files will be shown, all of which are related to the 
reformulated gasoline rulemaking process. Today's action will be in the 
form of a ZIP file and can be identified by the following title: 
OPTOUT.ZIP. To download this file, type the instructions below and

[[Page 7198]]

transfer according to the appropriate software on your computer:

<D>ownload, <P>rotocol, <E>xamine, <N>ew, <L>ist, or <H>elp
Selection or <CR> to exit: D filename.zip

    You will be given a list of transfer protocols from which you must 
choose one that matches with the terminal software on your own 
computer. The software should then be opened and directed to receive 
the file using the same protocol. Programs and instructions for de-
archiving compressed files can be found via <S>ystems Utilities from 
the top menu, under <A>rchivers/de-archivers. Please note that due to 
differences between the software used to develop the document and the 
software into which the document may be downloaded, changes in format, 
page length, etc. may occur.
    Regulated entities. Entities potentially regulated by this action 
are those which produce, supply or distribute motor gasoline. Regulated 
categories and entities include:

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             Category                  Examples of regulated entities   
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Industry..........................  Petroleum refiners, motor gasoline  
                                     distributors and retailers.        
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    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that EPA is now aware 
could potentially be regulated by this action. Other types of entities 
not listed in the table could also be regulated. To determine whether 
your business is regulated by this action, you should carefully examine 
the list of areas covered by the reformulated gasoline program in 
Sec. 80.70 of title 40 of the Code of Federal Regulations. If you have 
questions regarding the applicability of this action to a particular 
entity, consult the person listed in the preceding FOR FURTHER 
INFORMATION CONTACT section.

I. Background

    As part of the Clean Air Act Amendments of 1990, Congress added a 
new subsection (k) to section 211 of the Act. Subsection (k) prohibits 
the sale of gasoline that EPA has not certified as reformulated 
(``conventional gasoline'') in the nine worst ozone nonattainment areas 
beginning January 1, 1995. Section 211(k)(10)(D) defines the areas 
covered by the reformulated gasoline (RFG) program as the nine ozone 
nonattainment areas having a 1980 population in excess of 250,000 and 
having the highest ozone design values during the period 1987 though 
1989. <SUP>1 Under section 211(k)(10)(D), any area reclassified as a 
severe ozone nonattainment area under section 181(b) is also to be 
included in the RFG program. EPA published final regulations for the 
RFG program on February 16, 1994. See 59 FR 7716.
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    \1\ Applying these criteria, EPA has determined the nine covered 
areas to be the metropolitan areas including Los Angeles, Houston, 
New York City, Baltimore, Chicago, San Diego, Philadelphia, Hartford 
and Milwaukee.
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    Any other ozone nonattainment area classified as Marginal, 
Moderate, Serious, or Severe may be included in the program at the 
request of the Governor of the state in which the area is located. 
Section 211(k)(6)(A) provides that upon the application of a Governor, 
EPA shall apply the prohibition against selling conventional gasoline 
in any area requested by the Governor which has been classified under 
subpart 2 of Part D of Title I of the act as a Marginal, Moderate, 
Serious or Severe ozone nonattainment area. Subparagraph 211(k)(6)(A) 
further provides that EPA is to apply the prohibition as of the date 
the Administrator ``deems appropriate, not later than January 1, 1995, 
or 1 year after such application is received, whichever is later.'' In 
some cases the effective date may be extended for such an area as 
provided in section 211(k)(6)(B) based on a determination by EPA that 
there is ``insufficient domestic capacity to produce'' RFG. Finally, 
EPA is to publish a governor's application in the Federal Register.

II. The Governor's Request

    EPA received an application from the Honorable Fife Symington, 
Governor of the State of Arizona, for the Phoenix moderate ozone 
nonattainment area to be included in the reformulated gasoline program. 
The Governor's letter is set out in full below.
January 17, 1997.
Ms. Carol Browner, Administrator,
U.S. Environmental Protection Agency, 401 M. Street, S.W. (1101) 
Washington, D.C. 20460.

    Dear Ms. Browner: The purpose of this letter is to request, 
under section 211(k)(6) of the Clean Air Act and 40 CFR Sec. 81.303, 
that the U.S. E.P.A. extend the requirement for reformulated 
gasoline (RFG) to the Phoenix Ozone Nonattainment Area beginning 
June 1, 1997. This ``opt-in'' request is made in accordance with the 
guidance provided by your agency in letters to me of December 31, 
1996 and January 13, 1997.
    Furthermore, I am requesting waivers related to summertime Reid 
Vapor Pressure (RVP) and wintertime oxygenated fuels:

--From June 1 through September 30 of each year, that the current 
State standard of 7.0 pounds per square inch (psi) RVP be enforced 
in the Phoenix Ozone Nonattainment Area; and
--That the U.S.E.P.A. preserve existing State standards for 
oxygenated gasoline blends.

    These unique gasoline standards were submitted by Arizona in the 
1993 ozone and carbon monoxide State Implementation Plan revisions 
required under the Clean Air Act, but no action was taken on our 
waiver request. I urge EPA to expeditiously approve these waivers in 
accordance with Sec. 211(c)(4)(C) of the Act.
    As you know, Arizona has made a good faith effort to implement 
its ozone nonattainment plan in compliance with all of the 
requirements of the Clean Air Act. Regardless, a significant 
proportion of the emissions reductions included in this plan were 
not realized due to the difficulties the State has experienced in 
attempting to fully implement the federal enhanced vehicular 
inspection and maintenance program. This problem, and continued 
violations of the ozone standard in Maricopa County have motivated 
the State to voluntarily develop and submit an ozone plan, which 
will include a variety of enforceable control programs designed to 
reduce pollution and bring about attainment of the ozone standard by 
1999. Reformulated gasoline is critical to the success of this plan, 
and will probably provide the largest pollution reduction of any 
single control program contemplated in this plan.
    The State will continue to evaluate gasoline formulations and 
other strategies for reducing ozone, carbon monoxide and particulate 
pollution, and may determine that another gasoline formulation 
provides equivalent or better emissions reductions, and is more 
cost-effective or represents a better overall solution to our 
pollution problems in the long term. In such case, the State will 
submit a complete opt-out request by December 31, 1997, or take 
other appropriate action, as described in the December 31, 1996 and 
January 13, 1997 letters previously mentioned.
    I appreciate the prompt assistance that your Region IX staff 
provided on this issue. Thank you for your attention to this matter.

        Sincerely,
s/Fife Symington
Governor.

FS:sae
cc: Felicia Marcus, EPA, Region IX, Russell F. Rhoades, Arizona 
Department of Environmental Quality, John Hays, Arizona Department 
of Weights and Measures

III. Action

    Pursuant to the governor's letter and the provisions of section 
211(k)(6), EPA is proposing to apply the prohibitions of subsection 
211(k)(5) to the Phoenix, Arizona ozone nonattainment area as of the 
effective date of this rule, or June 1, 1997 whichever is later, for 
all persons other than retailers and wholesale purchaser-consumers. 
This date applies to the refinery level and all other points in the 
distribution system other than the retail level. For retailers and 
wholesale

[[Page 7199]]

purchaser-consumers, EPA is proposing to apply the prohibitions of 
subsection 211(k)(5) to the Phoenix, Arizona ozone nonattainment area 
30 days after the effective date for this rule, or July 1, 1997, 
whichever is later. As of the implementation date for retailers and 
wholesale purchaser-consumers, this area will be treated as a covered 
area for all purposes of the federal RFG program.
    The application of the prohibition of section 211(k)(5) to the 
Phoenix ozone nonattainment area could take effect no later than 
January 17, 1998 under section 211(k)(6)(A), which stipulates that the 
effective program date must be no ``later than January 1, 1995 or 1 
year after [the Governor's] application is received, whichever is 
later.'' For the Phoenix nonattainment area, EPA could establish an 
effective date for the start of the RFG program anytime up to this 
date. EPA considers that January 17, 1998 would be the latest possible 
effective date, since EPA expects there to be sufficient domestic 
capacity to produce RFG and therefore has no current reason to extend 
the effective date beyond one year after January 17, 1998. EPA believes 
that there is adequate domestic capability to support the current 
demand for RFG nationwide as well as the addition of the Phoenix area.
    Like the federal volatility program, the RFG program includes 
seasonal requirements. Summertime RFG must meet certain VOC control 
requirements to reduce emissions of VOCs, an ozone precursor. Under the 
RFG program, there are two compliance dates for VOC-controlled RFG. At 
the refinery level, and all other points in the distribution system 
other than the retail level, compliance with RFG VOC-control 
requirements is required from May 1 to September 15. At the retail 
level (service stations and wholesale purchaser-consumers), compliance 
is required from June 1 to September 15. See 40 CFR 80.78 (a)(1)(v). 
Pipeline requirements and demands for RFG from the supply industry 
drive refineries to establish their own internal compliance date 
earlier than May so that they can then assure that terminals are 
capable of meeting the RFG VOC-control requirements by May 1. Based on 
past success with this implementation strategy, EPA proposes to stagger 
the implementation dates for the Phoenix opt-in to the RFG program.
    The Governor's request seeks an implementation date of June 1 for 
the RFG program in the Phoenix area. However, pursuant to its 
discretion to set an effective date under Sec. 211(k)(6), EPA is 
proposing two implementation dates. For all persons other than 
retailers and wholesale purchaser-consumers (i.e., refiners, importers, 
and distributors), EPA is proposing the implementation to take effect 
on the effective date of this rule, or June 1, 1997, whichever is 
later. For retailers and wholesale purchaser-consumers, EPA is 
proposing the implementation to take effect 30 days after the effective 
date of this rule or July 1, 1997, whichever is later. EPA believes 
these proposed implementation dates achieve a reasonable balance 
between requiring the earliest possible start date and providing 
adequate lead time for industry to prepare for program implementation. 
These dates are consistent with the state's request that EPA require 
that the RFG program begin in the Phoenix area as early as possible in 
the high ozone season, which begins June 1. These dates would provide 
environmental benefits by allowing Phoenix to achieve VOC reduction 
benefits for some of the 1997 VOC-controlled season. EPA believes these 
dates provide adequate lead time for the distribution industry to set 
up storage and sales agreements to ensure supply. EPA asks for comment 
on whether retailers and wholesale purchaser-consumers believe they 
could comply with federal RFG in less than 30 days from the effective 
date set for persons other than retailers and wholesale purchaser-
consumers.

IV. Public Participation and Effective Date

    The Agency is publishing this action both as a proposed rulemaking 
and as a direct final rule because it views setting the effective date 
for the addition of the Phoenix ozone nonattainment area to the federal 
RFG program as non-controversial and anticipates no adverse or critical 
comments. The Agency will hold a public hearing on today's proposal if 
one is requested by February 25, 1997.
    The Governor of Arizona established in May 1996 an Air Quality 
Strategies Task Force to develop a report describing long- and short-
term strategies that would contribute to attainment of the federal 
national ambient air quality standards for ozone, carbon monoxide and 
particulates. In July 1996, this task force recommended establishment 
of a Fuels Subcommittee to evaluate potential short-term and long-term 
fuels options for the Phoenix ozone nonattainment area. The Fuels 
Subcommittee was composed of representatives of a diverse mixture of 
interests including gasoline-related industries, public health 
organizations, and both in-county and out-of-county interests. Several 
members of the refining industry supported the opt into the federal RFG 
program for Phoenix for the onset of the 1997 VOC control season. The 
subcommittee submitted its final report to the Air Quality Strategies 
Task Force on November 26, 1996.
    Section 211(k)(6) states that, ``[u]pon the application of the 
Governor of a State, the Administrator shall apply the prohibition'' 
against the sale of conventional gasoline in any area of the State 
classified as Marginal, Moderate, Serious, or Severe for ozone. 
Although Sec. 211(k)(6) provides EPA discretion to establish the 
effective date for this prohibition to apply to such areas, and allows 
EPA to consider whether there is sufficient domestic capacity to 
produce RFG in establishing the effective date, EPA does not have 
discretion to deny a Governor's request. Therefore, the scope of this 
action is limited to setting an effective date for Phoenix's opt-in to 
the RFG program, and not to decide whether Phoenix should in fact opt 
in. For this reason, EPA is only soliciting comments addressing the 
implementation date and is not soliciting comments that support or 
oppose Phoenix participating in the program.

V. Environmental Impact

    The federal RFG program provides reductions in ozone-forming VOC 
emissions, oxides of nitrogen (NO<INF>X), and air toxics. Reductions in 
VOCs are environmentally significant because of the associated 
reductions in ozone formation and in secondary formation of particulate 
matter, with the associated improvements in human health and welfare. 
Exposure to ground-level ozone (or smog) can cause respiratory 
problems, chest pain, and coughing and may worsen bronchitis, 
emphysema, and asthma. Animal studies suggest that long-term exposure 
(months to years) to ozone can damage lung tissue and may lead to 
chronic respiratory illness. Reductions in emissions of toxic air 
pollutants are environmentally important because they carry significant 
benefits for human health and welfare primarily by reducing the number 
of cancer cases each year.
    The Arizona Governor's Task Force estimates that if federal RFG is 
required to be sold in Phoenix, VOC emissions will be be cut by more 
than nine tons/day. In addition, all vehicles would have improved 
emissions and the area would also get reductions in toxic emissions.

VI. Statutory Authority

    The Statutory authority for the action proposed today is granted to 
EPA by sections 211(c) and (k) and 301 of the

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Clean Air Act, as amended; 42 U.S.C. 7545(c) and (k) and 7601.

VII. Regulatory Flexibility

    For the following reasons, EPA has determined that it is not 
necessary to prepare a regulatory flexibility analysis in connection 
with this proposed rule. EPA has also determined that this rule will 
not have a significant economic impact on a substantial number of small 
entities. In promulgating the RFG and anti-dumping regulations, the 
Agency analyzed the impact of the regulations on small businesses. The 
Agency concluded that the regulations may possibly have some economic 
effect on a substantial number of small refiners, but that the 
regulations may not significantly affect other small entities, such as 
gasoline blenders, terminal operators, service stations and ethanol 
blenders. See 59 FR 7810-7811 (February 16, 1994). As stated in the 
preamble to the final RFG/anti-dumping rule, exempting small refiners 
from the RFG regulations would result in the failure of meeting CAA 
standards. 59 FR 7810. However, since most small refiners are located 
in the mountain states or in California, which has its own RFG program, 
the vast majority of small refiners are unaffected by the federal RFG 
requirements (although all refiners of conventional gasoline are 
subject to the anti-dumping requirements). Moreover, all businesses, 
large and small, maintain the option to produce conventional gasoline 
to be sold in areas not obligated by the Act to receive RFG or those 
areas which have not chosen to opt into the RFG program. A complete 
analysis of the effect of the RFG/anti-dumping regulations on small 
businesses is contained in the Regulatory Flexibility Analysis which 
was prepared for the RFG and anti-dumping rulemaking, and can be found 
in the docket for that rulemaking. The docket number is: EPA Air Docket 
A-92-12.
    Today's proposed rule will affect only those refiners, importers or 
blenders of gasoline that choose to produce or import RFG for sale in 
the Phoenix ozone nonattainment area, and gasoline distributors and 
retail stations in those areas. As discussed above, EPA determined 
that, because of their location, the vast majority of small refiners 
would be unaffected by the RFG requirements. For the same reason, most 
small refiners will be unaffected by today's action. Other small 
entities, such as gasoline distributors and retail stations located in 
Phoenix, which will become a covered area as a result of today's 
action, will be subject to the same requirements as those small 
entities which are located in current RFG covered areas. The Agency did 
not find the RFG regulations to significantly affect these entities.
    Therefore, for the reasons dated in this section the Agency 
certifies that this action will not have a significant impact on a 
substantial number of entities.

VIII. Executive Order 12866

    Under Executive Order 12866 <SUP>2, the Agency must determine 
whether a regulation is ``significant'' and therefore subject to OMB 
review and the requirements of the Executive Order.
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    \2\ See 58 FR 51735 (October 4, 1993).
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    The Order defines ``significant regulatory action'' as one that is 
likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more, 
or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local or tribal governments of communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof, or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
this Executive Order. <SUP>3
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    \3\ Id. at section 3(f)(1)-(4).
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    It has been determined that this rule is not a ``significant 
regulatory action'' under the terms of Executive Order 12866 and is 
therefore not subject to OMB review.

IX. Unfunded Mandates

    Under Section 202 of the Unfunded Mandates Reform Act of 1995 
(``UMRA''), P.L. 104-4, EPA must prepare a budgetary impact statement 
to accompany any general notice of proposed rulemaking or final rule 
that includes a Federal mandate which may result in estimated costs to 
State, local, or tribal governments in the aggregate, or to the private 
sector, of $100 million or more in any one year. Under Section 205, for 
any rule subject to Section 202 EPA generally must select the least 
costly, most cost-effective, or least burdensome alternative that 
achieves the objectives of the rule and is consistent with statutory 
requirements. Under Section 203, before establishing any regulatory 
requirements that may significantly or uniquely affect small 
governments, EPA must take steps to inform and advise small governments 
of the requirements and enable them to provide input.
    EPA has determined that today's proposed rule does not trigger the 
requirements of UMRA. The rule does not include a Federal mandate that 
may result in estimated annual costs to State, local or tribal 
governments in the aggregate, or to the private sector, of $100 million 
or more, and it does not establish regulatory requirements that may 
significantly or uniquely affect small governments.

List of Subjects in 40 CFR Part 80

    Environmental protection, Air pollution control, Fuel additives, 
Gasoline, Motor vehicle pollution.

    Dated: February 7, 1997.
Carol M. Browner,
Administrator.

    40 CFR part 80 is proposed to be amended as follows:

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

    1. The authority citation for part 80 is revised to read as 
follows:

    Authority: Secs. 114, 211, and 301(a) of the Clean Air Act, as 
amended (42 U.S.C. 7414, 7545 and 7601(a)).

    2. Section 80.70 is amended by adding paragraph (m) to read as 
follows:


Sec. 80.70  Covered areas.

* * * * *
    (m) The prohibitions of section 211(k)(5) will apply to all persons 
other than retailers and wholesale purchaser-consumers June 1, 1997. 
The prohibitions of section 211(k)(5) will apply to retailers and 
wholesale purchaser-consumers July 1, 1997. As of the effective date 
for retailers and wholesale purchaser-consumers, the Phoenix, Arizona 
ozone nonattainment area is a covered area. The geographical extent of 
the covered area listed in this paragraph shall be the nonattainment 
boundaries for the Phoenix ozone nonattainment area as specified in 40 
CFR 81.303.

[FR Doc. 97-3927 Filed 2-14-97; 8:45 am]
BILLING CODE 6560-50-P