OAR Box 1818 

Prepped by Ollie Stewart 

p.1 

Document Number: 

62) ll-F-4 

Docket Number: 

A-87-11 

Printed 11/6/2008 3:12:45 PM Sheet 62 of 79 
P.2 

TL-f -•( . f\-.n-n 

;•• *:./r\ T-r-f 

\ sf 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

JUL 8 1987 omcEOF 

AIR AND RADIATION 

NOTE TO ART FRAAS, OMB 

Enclosed are additional write-ups for the Refueling and 

Volatility preambles as we discussed. I believe the points 

address the concerns OMB has raised. 

As I mentioned, Lee Thomas would very much like to have 

these packages published before he testifies to the Senate on 

July 22. Please call me if you have any questions. 

Ri-dnaFd Wilson 

Director, Office of Mobile Sources 

Enclosures 
P.3 

•*'' OMBOflRD PRE/MB LE (I0SER.T 

• « 

To be inserted following Onboard decision rationale 

presentation: 

III. Key Analytical Issues Affecting EPA's Decision 

The above discussion has attempted to fully set forth 

the analyses and interpretations used by EPA in arriving at 

its decision to propose the onboard control program 

contained in today's notice. The Agency has expended 

considerable effort in its analyses and is convinced that 

it has fairly considered the many issues and uncertainties 

involved. At the same time, EPA is cognizant that there is 

disagreement regarding the refueling control issue and is 

desirous of obtaining the fullest degree of public 

participation in the rulemaking process. To assist 

commenters, this section will again review the main options 

considered by the Agency and then present a discussion of 

the analytical issues which may be most important in 

affecting the outcome of EPA's final decision. 

A. Options 

EPA's first decision concerning refueling was to 

choose between controlling or not controlling refueling 

emissions. As described earlier in this preamble, the 

Agency believes that control is appropriate. Refueling 
P.4 

control is important for reducing the generation of ozone 

pre-cursors in non-attainment areas. In addition, today's 

proposal will provide additional benefits in terms of 

cancer incidence reductions and in terms of ozone 

reductions in attainment areas. 

Given the need for refueling control, Agency analyses 

indicate that both onboard and Stage II are cost effective 

approaches. Thus, the second decison facing the Agency was 

between competing technologies for control. As already 

indicated, the onboard control approach has been selected 

for proposal. Stage II has a potential advantage in terms 

of total cost because it could be applied selectively in 

non-attainment areas only. It also has the potential for 

implementation in the shortest overall leadtime (although 

that advantage is not completely clear) . However, 

onboard's greater total cost arises largely from its 

nationwide character, which brings substantially greater 

overall benefits than Stage II (maintaining a comparable 

cost effectiveness) . Thus, even if onboard required 

somewhat greater implementation time than Stage II,, it 

would be preferable in the long run. 

Given the decision to propose onboard controls, the 

option to propose Stage II control for the short term was 

considered. This approach could provide emission 
P.5 

reductions in the short term while new cars with onboard 

controls were being phased into the fleet. However, the 

realization of these short term benefits is unclear, because 

of uncertainty over the timetable for implementing Stage 

II. They would also be substantially more costly than the 

benefits of either onboard or Stage II alone since they 

would be short term benefits and incremental to onboard. 

Thus, as descibed earlier in Section II, EPA believes that 

decisions about the use of Stage II in the short term 

should be included in the State Implementation Plan 

development process. 

B. Analytical Issues 

The decision between onboard and Stage II has relied 

upon an extensive body of analysis which has been conducted 

over a several year period. These analyses are quite 

complex and by their nature involve a great number of 

projections, judgements and assumptions. Some of these 

areas are generally agreed upon, while others are not. In 

addition, some matters have more impact on the outcome of 

the analyses than others. The following sections review 

assumptions which are either controversial or known by EPA 

to have a significant impact on its analyses. • They are 

being described here for the purpose of inviting public 

scrutiny and comment. 
P.6 

The Agency wishes to caution commenters however, that 

it is quite possible that important analytical issues exist 

which are not identified below. ' fflPVMMIiHnBafl l 

Ife Thus, the Agency 

encourages all parties to carefully review all of its 

analyses and not to confine comments solely to issues 

raised below. 

1. Fuel Volatility 

The impact of fuel volatility on the analysis of 

refueling controls will be reviewed further in Section V, 

therefore it will not be described in depth here. As 

noted, the analyses described in today's proposal have been 

conducted under the assumption of in-use fuels being at 

current ASTM limits (11.5 RVP for summertime months in 

Class C areas) . These conditions pose the most difficult 

technical challenge and greatest cost to manufacturers. If 

the Agency finalizes its proposed reduction of fuel 

volatility to 9.0 RVP for Class C areas, then manufacturer 

costs would decline while cost effectiveness values would 

increase. As described above, the cost effectiveness of 

onboard controls would increase about 22 percent while 

Stage-II would increase about 13 percent. 

4 
P.7 

The single best volatility asssumption to use is 

difficult to determine at this point, since EPA has not yet 

finalized its volatility regulation. The presentation in* 

today's notice indicates that EPA would expect to proceed 

with onboard controls regardless of whether or not 

volatility is controlled to the levels proposed. At the 

same time, interactions between the two proposals dictate 

that the question of fuel volatility be resolved before 

final action on refueling. Thus, at the time of final 

rulemaking, EPA intends to present its refueling analyses 

under the volatility conditions being promulgated at that 

time. In the meanwhile, commenters are requested to 

consider the effect of varying fuel volatility in their 

comments on this proposal. 

2. Number of Non-Attainment Areas 

Based upon 1982 through 1984 (the latest data for 

which modeling is completed), there are currently 61 urban 

non-attainment areas outside of California. In valuing 

ozone reductions, EPA has credited reductions in all 61 of 

these areas as contributing to solution of the 

non-attainment problem. However, the projections of future 

conditions used in analyzing the effects of control show 

that the number of non-attainment areas may drop 

significantly in the mid-1990s. For example, the analysis 

5" 
P.8 

supporting the volatility proposal indicates that there may 

be as few as 29 non-attainment areas in 1995 with the 

adoption of both volatility control and onboard 

controls.[1] Thus, it might be argued that ozone 

reductions should be counted in as few as about 30 areas. 

There are several important reasons why the Agency has 

not followed the above approach in its analyses. First, 

the same projections which indicate a decline in the number 

on non-attainment areas to 29 also predict an increase to 

39 again by the year 2010, the period when onboard controls 

will be fully phased in and come to their maximum level of 

control. Thus, at least 40 areas must be used. Second, 

and more importantly, a closer look at the modeling results 

indicates that almost none of the modeled areas ever gain a 

substantial margin of compliance against the ozone air 

[1] The volatility air quality analysis, which is more 

recent than the onboard analysis, is based upon 

somewhat different assumptions concerning the future 

of stationary source controls. There is considerable 

uncertainty about how much new VOC control is 

available from stationary sources for the future. The 

onboard analysis assumes no additional stationary 

source controls, while the volatility analysis 

includes some moderate gains. For the same 

conditions, this causes the onboard analysis to 

predict 4 to 8 more non-attainment areas than the 

volatility analysis. EPA is unsure which of these 

approaches is the more accurate. For this discussion, 

the lower numbers from the volatility analysis are 

being used. 
P.9 

quality standard. For example, even assuming volatility 

control to 9 RVP and the adoption of onboard controls, 58 

of the 61 areas modeled remain at or above 0.11 ppm ozone 

throughout the period of analysis. This represents only 

about a 12 percent margin below the 0.12 ppm standard. 

Such levels are well within the uncertainty of EPA's 

models, which have historically, tended to overpredict 

reductions.[2] Thus, EPA believes that reductions in all 

the modeled areas have value in controlling non-attainment 

conditions. It is also worth noting that the ambient air 

quality standard for ozone is currently under review by the 

Agency, with the consequent possibility that the standard 

might be lowered from its present level. If this were to 

happen, there would also be an increase in the number of 

non-attainment areas. 

[2] The Agency has consistently stressed the need for 

caution in interpreting modeling results of this 

sort. Year to year meteorology variations can rapidly 

change the number of non-attainment areas when so many 

areas lie very close to the standard. One indication 

of this effect is found in recent data estimating the 

number of non-attainment areas. Based upon 1983 

through 1985 data, the number of non-attainment areas 

appears to have increased from 61 to 65 while modelinc 

would predict some decline 
P.10 

There is another reason arguing for considering an 

even larger number of areas than the 61 which EPA has 

identified. Ozone is a broad regional phenomena, not 

confined within the specific geographic boundaries of 

non-attainment areas. The transport of ozone forming 

precursors into non-attainment areas from adjacent 

attainment areas is a significant contributor to 

non-attainment problems. Thus, emissions in areas adjacent 

to the 61 non-attainment areas should also be valued for 

attainment of the standard (the inherent ability of onboard 

to control such emissions is one of the advantages of this 

technology) . EPA is not in a position at this time to 

quantify this ovelap, but believes it could be 

substantial. Comments on estimating this effect would be 

helpful. 

Examination of a few different assumptions about the 

number of non-attainment areas to use indicates that the 

sensitivity of onboard cost effectiveness to this parameter 

is small for most combinations (Table 7) . For example, 

Table 7 indicates that decreasing the number of areas from 

61 to 50 increases the cost effectivness of onboard 

controls by 9 to 13 percent (depending upon which sets of 

benefits are being valued, see Table 6) . Using 40 areas 

represents a 19 to 27 percent increase. (It should be 

noted that if all gas vapor related incidences are 

8 
P.11 

credited, the non-attainment area VOC cost effectiveness 

remains negative for all selected sets of non-attainment 

areas.) 

Increasing the number of non-attainment areas has a 

similar effect. Here, because the exact identification of 

adjacent areas which might be directly involved in 

transport is difficult, EPA lacks a specific set of areas 

to include. In the alternative, an increase in the 

fraction of fuel assumed consumed in non-attainment areas 

(which identifies benefits to be counted) has been used. 

The current 61 areas represent 35 percent of nationwide 

fuel Consumption. Assuming an increase in the amount of 

controlled fuel to 50 percent would improve the cost 

effectiveness of onboard by 20 to 30 percent. 

3. Value of Health Benefits and Attainment Area 

Ozone Reductions 

Closely related to the question of how many 

non-attainment areas to use is the question of the value of 

the benefits of reducing cancer incidences and the ozone 

reductions from attainment areas. Lacking clearly defined 

values for these factors, EPA's analysis examined the 

overall cost effectiveness of onboard assuming values of 

$7.5MM per incidence avoided (for various assumed incidence 

levels) and $250 per ton of VOC reduction in attainment 

areas (whice EPA believes is conservative). To illustrate 
P.12 

the effect of changing the assumed values, some alternate 

values have been considered. The cost per incidence 

avoided (assuming only benzene plus C6 and above gasoline 

vapor incidences) has been assumed to range from $3.5MM per 

incidence avoided to as high as $10MM. For attainment area 

benefits, a value of $500 per ton has been used in addition 

to $250 per ton. 

Table 8 presents the results of: this sensitivity 

analysis. From Table 8, it can be seen that the overall 

attainment area VOC cost effectiveness of onboard ranges 

from a low of $150 per ton for the maximum valuation of all 

benefits up to as high as $2200 per ton if no value is 

assigned to either attainment area VOC reductions or 

incidence reductions. 

Table 8 does not include the case where incidences 

attributable to including all gasoline vapors are valued. 

They have been omitted from the table to indicate the 

cost-effective nature of onboard controls even if this more 

controversial source of incidences is excluded. If all gas 

vapors were included, the cost effectiveness of VOC control 

in non-attainment areas would remain negative for most of 

the cases given in Table 8. 

-**- io 
4. In-use Efficiency of Onboard Controls 

There are three factors affecting the average in-use 

efficiency of onboard systems: the theoretical efficiency, 

the rate of tampering with in-use systems and the rate of 

malmaintenance and defects for in-use systems. For all of 

these areas, the Agency has had to derive appropriate 

values to use based upon indirect data, since onboard 

systems are not yet in routine production. Since the 

overall control efficiency directly affects emission 

reductions to be gained, EPA's approach to these areas is 

important. 

The theoretical efficiency used for EPA's analysis 

corresponds to a 97 percent reduction of uncontrolled 

emissions. By comparison, the reductions required to 

attain the standard of today's proposal are about 99 

percent. The reason for the difference in values comes 

from the fact that the basic analysis of onboard impacts 

was conducted based upon earlier estimates of onboard 

control efficiency than that eventually embodied in the 

proposed standard. The impacts analyses have not been 

updated to reflect this more recent assessment, largely 

because the impact is small and because any error can be 

considered conservative (i.e., underestimating benefits 

rather than overestimating them). A revised analysis would 

reflect about a two percent improvement in cost 

/I 
P.M 

effectiveness due to the inclusion of this change. EPA.'s 

analysis for its final rule will reflect the efficiency of 

the standard adopted. 

Tampering rates for onboard systems were derived from 

EPA's experience with evaporative controls. Those 

components of onboard systems directly accessible to the 

operator (vapor lines, purge lines, canisters, etc.) are 

essentially the same as components on current evaporative 

controls. Thus, EPA assumed that tampering with these 

components would occur at the same rate as currently occurs 

on evaporative systems. This tampering rate, on a fleet 

weighted average basis, amounts to 2.8 percent. Assuming 

that tampered systems are completely disabled, there is a 

corresponding 2.8 percent loss in average control 

efficiency. 

EPA's analysis has been conducted based upon the 

assumptions as just described. However, there is reason to 

believe that these assumptions are overly conservative. 

Recent indications from some manufacturers indicate that 

onboard canisters, in at least some applications, will be 

less accessible than evaporative canisters. That is, some 

manufacturers have indicated that they may locate refueling 

canisters in underbody locations or toward the rear of the 

vehicle. The degree to which this will occur is currently 

unclear. However, if such approaches are used, they will 
P.15 

likely reduce the degree of tampering which occurs. This 

effect has not been estimated, and comments on the 

appropriate approach to this question would be valuable. 

The third factor affecting in-use efficiency 

identified above is the effect of malmaintenance and 

defects (M&D) on emissions. As for tampering rates, EPA 

has relied on experience with evaporative systems to 

estimate the effect of M&D on onboard systems. However, 

the translation of M&D effects from evaporative systems to 

onboard systems is more problematic than tampering, as will 

be described below. 

In its approach, EPA examined M&D data for evaporative 

systems to identify problems which are common to onboard 

systems. For example, problems such as missing gas caps or 

damaged air cleaner gaskets will cause excess evaporative 

emissions to occur, but will not alter the performance of 

onboard systems. These were therefore excluded from the 

onboard analysis. After these exclusions, 7.9 percent of 

the vehicles were found to have M&D problems. Next, using 

test data gathered using commercial (high RVP) fuel, the 

evaporative emissions of these problem vehicles were 

compared to the emissions of problem free vehicles. When 

weighted into the fleet average, this comparison indicated 

a 10.9 percent increase in evaporative emissions was 

occurring due to relevant M&D problems when tested on 

& 13 
P.16 

commercial fuel. EPA then applied this percent increase to 

onboard emissions, and related this amount to an equivalent 

loss in control efficiency. That is, the M&D problems 

would increase emissions from onboard equipped cars from 

approximately 0.177 grams per gallon to 0.196 grams per 

gallon (compared to uncontrolled rates of about 5.9 grams 

per gallon). This increase in emission corresponded to a 

change in control efficiency from 97 percent to 96.7 

percent. Being so small, the M&D impact was considered 

negligible and not considered further in the analyses. 

An alternative approach to evaluating M&D impacts has 

been advanced which indicates a greater possible effect. 

Under this alternative approach, rather than computing a 

proportional increase in emissions, M&D vehicles are 

evaluated for an indicated loss in overall evaporative 

control efficiency, and this loss is applied directly to 

the corresponding onboard control efficiency. Operating on 

the most current M&D data for M&D problem rates and 

emission impacts on commercial fuel, this approach has been 

argued to produce a loss in efficiency of three to four 

percent. However, there are several considerations which 

must be addressed before a reasonable estimate can be 

determined using this approach. 

The viability of using a direct transfer of efficiency 

effects depends upon establishing equivalent conditions for 

^ 14 
evaluating impacts for the two technologies. First is the 

need to evaluate the effect of M&D impacts on evaporative 

systems under conditions these systems were designed to 

manage. This means that the M&D impacts must be evaluated 

with 9 RVP fuel. Even problem free vehicles have excess 

emissions when tested on commercial fuel, because the 

evaporative controls are operating beyond their design 

capacity. Thus, a small disablement might . increase 

emissions on commercial fuel but have no impact with 9 RVP 

fuel. Since onboard controls will be designed to properly 

operate on whatever commercial fuel is eventually 

established through EPA's volatility proposal, design fuel 

must be used to evaluate evaporative emission effects. 

When results on 9 RVP fuel are considered, the impact 

of M&D problems on evaporative emissions is different. The 

number of vehicles which can be considered to have M&D 

problems is reduced because some of the problem vehicles 

meet the evaporative standard when tested on 9 RVP fuel. 

The absolute amount of excess emissions is also greatly 

decreased. However, emissions from problem free vehicles 

decline even further and, expressed as a percentage change, 

M&D problems have a greater effect at 9 • RVP than at 11.5, 

increasing average emissions by 30 percent (comparable to 

the 10.9 percent value given above). Using EPA's original 

methodology, this would mean a reduction of onboard control 

efficiency to 96.3 percent. 

#3- \\f 
P.18 

To apply this data to an estimated loss of control 

efficiency, the emission levels of the M&D vehicles on 9 

RVP fuel were compared to expected uncontrolled levels. 

Expressed on this basis, the M&D vehicles experienced a 

loss of control of about 35 percent. Averaged over the 

fleet this amounts to about a 2.5 percent loss of 

efficiency and changes the onboard control efficiency to 

94.5 percent. 

This value represents an estimate of the maximum 

impact M&D problems could have on onboard systems. 

However, the actual impact is likely to be much less. For 

example, 45 percent of the M&D problems were the result of 

clogged or dirty filters on the evaporative canister. EPA 

expects that most, if not all, onboard systems will use 

closed bottom canisters which do not have such filters. 

Furthermore, there is an essential difference between how 

manufacturers will approach the design of onboard systems 

compared to evaporative systems which is imposed by the 

proposed test procedure. The evaporative procedure tests 

systems under near average conditions while the onboard 

procedure uses a near "worst case" set of conditions. This 

difference will result in onboard systems which have a 

substantial degree of excess capacity for average 

conditions. Thus, partial disablements as represented by 

the M&D problems on evaporative systems will have little or 

no impact on refueling emissions under most conditions. In 

\l 
P.19 

fact, EPA believes it quite reasonable to assume that 

currently known M&D problems will not noticeably affect 

onboard 'emissions, which was the result of EPA's original 

approach to estimating the effect of this problem. 

There is actually a potential benefit of onboard 

controls related to M&D problems which has yet to be 

quantified. This benefit is tine likely elimination, of 

evaporative excess emissions caused by M&D problems. Given 

the excess capacity to be designed into onboard systems, 

and given the fact that for most of its driving miles the 

onboard canister will be in a highly purged condition, 

onboard systems will have the ability to absorb M&D effects 

without any corresponding loss of evaporative emissions 

control. This means that onboard systems could capture 

excess evaporative emissions which are not expected to be 

eliminated by the proposed controls of fuel volatility or 

other changes to the evaporative emission test procedure 

being considered to make it more effective. 

There are other conditions besides M&D problems which 

are currently believed to cause excess evaporative 

emissions which will also be affected by- onboard controls. 

In general, they consist of those conditions which result 

in cumulative evaporative emissions which will exceed the 

capacity of even a well designed system. This would 

include such things as vehicles which are not driven 

'** 17 
P.20 

regularly and undergo repeated diurnal emission loads 

without adequate opportunity to purge the canister. An 

onboard canister would be able to absorb several diurnals 

before emissions breakthrough would occur. A similar 

situation would occur for vehicles driven on mostly short 

trips, again allowing insufficient opportunity for the 

evaporative system to purge. An onboard system would be 

much more tolerant of such deviations than would current 

evaporative systems. The Agency has no quantitative 

estimate of this benefit at present, but believes it could 

be significant. 

The question of the appropriate level of in-use 

efficiency to use for analysis of onboard systems is an 

important matter. The Agency therefore requests comment 

directed at this issue, especially dealing with the points 

discussed above. Any assistance from commenters in 

quantifying these impacts would be most helpful. 

5. Fuel Recovery Credits for Onboard 

The net cost for onboard or Stage II systems includes 

a credit for the fuel value of recovered vapors. For 

onboard this credit is partially offset by the' impact of 

the added weight of the onboard hardware on the fuel 

economy of affected vehicles. Some manufacturers have 

argued that when the added weight of the onboard hardware 

•4? iy 
P.21 

is incorporated into new vehicle designs there will be an 

added weight increase through the effect of the onboard 

component weights on the design of other vehicle systems 

(e.g., frame members, springs, engine and drive train 

components, etc.). 

For every pound increase in payload, this argument 

goes, there will be an additional 0.7 pounds added to the 

rest of the vehicle. Thus, the impact of the onboard 

weight must be increased by a factor of 1.7 before 

computing its effect on fuel consumption. Manufacturers 

have also argued that the fuel economy sensitivity of newly 

designed vehicles to changes in weight will be greater than 

that assumed by EPA because the engine displacement would 

be adjusted to maintain a constant driving performance 

characteristic. In addition, additional cost must be 

associated with this added weight and counted as part of 

the onboard control cost. 

EPA's current analysis assumes that the onboard 

hardware on future vehicles will not impact the weight of 

any other parts of new vehicles. It is appropriate in some 

contexts to relate overall vehicle weight to "payload" 

weight, since the design of frames, springs, etc., is 

clearly determined by the required payload. However, in 

the range of four to five pounds of net weight change as 

involved here, the vehicle platform design should not be 

t* I? 
sensitive to such small changes. This is a change 

comparable to the weight of a set of floor mats. There are 

undoubtedly changes of greater magnitude than this made to 

new vehicle components as the vehicle design evolves, and 

EPA does not believe it is reasonable to argue that changes 

are made in, for example, how big the springs will be each 

time this happens. Indeed, this value undoubtedly falls 

well within the range of normal design tolerance and even 

random vehicle to vehicle weight variability. The 

allocation of total vehicle weight to payload item weights 

in this range is more an accounting technique than a 

reflection of actual effects. 

While EPA does not necessarily feel that the weight 

multiplication argument is appropriate in the onboard 

situation because of the small weight changes involved, it 

has done a sensitivity analysis to assess the impact of 

such an assumption. This analysis has been done using a 

weight multiplying factor of 1.3 instead of the 1.7 value 

advanced by some manufacturers. The 1.7 value has been 

developed by NHTSA in connection with the development of 

bumper standards, and used for weight changes generally 

twice or more those being considered here. The range of 

possible values for this parameter according to the NHTSA 

analysis was from 1.3 to 2.0. Given the minimal weight 

change involved, EPA has selected 1.3 for its sensitivity 

analysis. A recent industry sponsored analysis by 

ZO 
P.23 

Multinational Business Services has used a value of 1.4 for 

this factor. In addition, any effect for light-duty trucks 

or heavy-duty vehicles would be lower than for passenger 

cars, because truck design is more heavily determined by 

cargo weight requirements. 

EPA has made no adjustment to the sensitivity factor 

for fuel economy versus weight change. The changes 

involved are simply too small to be reasonably able to 

impact engine design. For example, the change in 0 to 60 

miles per hour acceleration time associated with the weight 

of onboard controls would amount to an acceleration loss of 

some 0.03 seconds. Such a small change would not even be 

detectable. EPA finds little basis to assume that such 

small impacts would actually effect engine design decisions. 

In determining a cost value to assign to the added 

weight the Agency began with representative costs for steel 

purchased by the automobile industry (20jz5/lb) , assumed 100 

percent in value added and 26 percent for overhead and 

profit to arrive at a value of 50^ per pound. Since the 

effect is being assumed to only affect newly designed 

vehicles, a phase-in schedule was developed assuming a two 

year lag following implementation of the new standards, and 

a fleet turn-over of six years following that. 

u 
P.24 

Based upon the above assumptions, EPA estimates that 

the overall cost of onboard controls on newly designed 

vehicles" would increase by about 10 percent ($1.40). The 

fleet average impact considering the phase-in schedule 

would be to increase the overall onboard cost effectiveness 

by about 5.5 percent. 

There is another factor in the calculation of fuel 

recovery credits which directly affects their overall 

value. That is the assumed price for a gallon of 

gasoline. The value used in EPA's current analysis is 

$1.20, which relates approximately to a crude oil price of 

$30 per barrel. Some forecasts of future crude oil prices 

indicate costs rising above the $30 per barrel level. 

Based upon an increase in the crude oil price to $33 per 

barrel, there would be a 6-z? per gallon increase in the cost 

of gasoline. If such an increase is applied to the fuel 

recovery credits for onboard, there is a net reduction in 

the onboard cost effectiveness of about 3 percent. In a 

similar fashion, a 6-zf per gallon increase in fuel cost 

would improve stage II cost effectiveness about 3 percent. 

6. Control of Spillage Emissions 

One source of gasoline vapor emissions associated with 

refueling operations is the spillage of fuel. What might 

generally be considered spillage can come from several 

22-
causes. Spitback spillage can occur when fuel is 

discharged from the fillpipe due to excess pressure buildup 

in the fuel tank vapor space. This can happen near the end 

of a fillup as the tank is nearly full. It can also occur 

earlier when in-use fuel dispensing rates exceed the rates 

that the fillpipe and fuel tank are able to accept. 

Overflow spillage can also occur from the operator's 

attempt to "top off" the fuel tank following automatic 

nozzle shutoff, or if the nozzle malfunctions and fails to 

shut off. Taken as a whole spillage emissions have been 

estimated to represent about 5 percent of total refueling 

emissions and have been considered unchanged by either 

onboard or Stage II controls. 

Although not yet considered, both onboard and Stage II 

equipment are likely to affect spillage. The onboard test 

procedure requirements will require vehicles to be able to 

refuel at the maximum in-use dispensing rate, thus 

eliminating spitback. Finally, given the improved 

fillability this represents, it is likely that reduced 

topping off operations will occur. 

Stage II equipment will not directly bring about the 

elimination of spillage sources. However, since the fuel 

would be contained within the vapor collection boot on the 

Stage II nozzle, spillage would be contained somewhat. 

However, since some of that fuel could subsequently be 
P.26 

spilled as the operator replaced the nozzle on the 

dispenser, the degree of possible control is difficult to 

estimate. In addition, since the operator cannot visually 

observe the refueling operation, attempts to top off the 

tank may cause increased spillage. 

Overall, it appears that onboard and Stage II will 

help reduce spillage. Onboard appears likely to control 

spillage better than will Stage II, but the Agency has not 

incorporated these benefits into its analysis. Based upon 

the estimates of spillage noted above, without any fuel 

recovery credit for the recovered fuel the total control of 

spillage could improve cost effectiveness as much as 5 

percent. 

7. Control of Emptying Losses 

Another component of overall refueling emisisons is 

that category of emissions known as emptying losses. These 

emissions, which contribute about 5 percent of overall 

levels, are considered to be generated as part of the 

process in which ambient air is drawn into the gasoline 

underground storage tank to replace the lost volume of fuel 

having been dispensed. The air, as it becomes saturated 

with the gasoline vapors in the underground tank, expands 

slightly. This expansion is then presumed to give rise to 

emissions back out the underground tank's vent pipe. 

24 
P.27 

Emptying losses have not been measured, but have been 

estimated based upon the theoretical considerations just 

outlined. EPA believes that there is reason to believe 

that emptying losses may actually be either much smaller 

than estimated or essentially non-existent. The process of 

drawing out fuel is relatively slow compared to the whole 

volume of the underground tank, and it appears likely that 

air drawn into the tank during the early portion of a 

refueling event will come into equilibrium while the 

refueling operation is continuing. In this event, rather 

than causing an actual release of vapor saturated air, the 

expansion process would merely reduce the amount of 

replacement air needed to be drawn in during the later 

portions of the refueling event. Thus, the only likely 

emissions would come at the very end of the refueling event. 

Beyond this, since refueling is an ongoing process 

wherein multiple refueling events are generally occuring in 

overlapping fashion, even the potential emptying loss 

emissions at the end of one refueling event would tend to 

be eliminated by entrainment demands from other, continuing 

refuelings. 

Thus, it appears that emptying losses may, in fact, be 

very small. In EPA's current analysis, these emissions are 

assumed to be controlled by Stage II, which recirculates 

vapor back from the vehicle fuel tank to the underground 
P.28 

tank, eliminating air entrainment. Onboard, on the other 

hand, is assumed to have no effect on emptying losses. 

Thus, eliminating the 5 percent of emptying loss emissions 

from the analysis would not change onboard cost 

effectiveness, but would increase the Stage II value about 

5 percent. 

8. Stage II Exemption Levels and Inconvenience Costs 

Both exemption levels and inconvenience costs have 

been discussed earlier in this preamble and their effects 

upon Stage II performance and cost effectiveness 

described. The exemption level used by EPA corresponds to 

approximately the most cost effective level for Stage II. 

Reducing exemptions would increase the fraction of vapors 

captured by Stage II, but would do so at high marginal cost 

effectiveness. For example, VOC reductions from including 

stations between 2,000 and 10,000 gal/mo would cost more 

than nine times those included in EPA's primary analysis 

and would increase the average cost effectiveness of Stage 

II about 55 percent. 

Inconvenience costs have been shown to have a dramatic 

impact upon Stage II cost effectiveness even at a very low 

valuation. At only lOjzf per refueling event, inconvenience 

Uo 
P.29 

costs more than triple the Stage II cost effectiveness. 

While the Agency does not have an exact estimate for actual 

inconvenience costs for Stage II, the use of Stage II 

systems requires the involvement of the public and will 

result in some inconvenience to them. 

9. Coordination of Stage II and EPA's Underground 

Storage Tank Program 

The Agency's recently proposed Underground Storage 

Tank (UST) program could potentially reduce the overall 

cost of a Stage II vapor recovery program. The UST program 

is designed to detect and replace or repair, as needed, 

leaking storage tanks that cause groundwater 

contamination. If the installation of Stage II controls 

were coordinated with underground tank repair or 

replacement, the trenching and paving costs associated with 

Stage II vapor recovery lines potentially could be reduced. 

The Agency's sensitivity analysis of a . coordinated 

Stage II/UST program is contained in Volume 1 of the draft 

RIA. In essence, EPA assumed a five-year phase-in period 

for the coordinated program to correspond to the UST 

provisions requiring that all underground storage tank 

systems must be tested for leaks within that time. 

Further, it was assumed that 35 percent of the tanks would 

be found leaking and that immediate corrective action at 

- ^7 
service stations would occur at a relatively linear rate 

over the five-year period. Based on these principle 

assumptions, combining the Stage II program with the UST 

program would improve the cost effectiveness of Stage II by 

about six percent. 

Nonetheless, even this small improvement may be overly 

optimistic. The assumption that 35 percent of the 

underground storage tanks will need repair or replacement 

is a worst-case estimate. Information that is only 

recently becoming available suggests this value is too 

high, perhaps by a factor of three. If the final value is 

closer to 10 percent, the resulting improvement in Stage II 

cost effectiveness would be only two percent. These 

results are also predicated on fully coordinating the two 

programs. In reality, it is doubtful that Stage II 

installation and UST repairs would occur simultaneously in 

every instance. 

Finally, it is important to note that a coordinated 

Stage II/UST program could delay the environmental benefits 

of vapor recovery controls. The Agency's "optimum" 

phase-in schedule for Stage II in non-attainment areas is 

three years, but as discussed above this could be extended 

to five years if coordinated with the UST requirements. 

Then again, even this latter phase-in schedule assumes that 

leak detection and corrective action occur at a relative 

zS 
P.31 

linear rate over the five-year period. This may be 

unrealistic, because many tank owners are likely to wait 

until the last moment to conduct leak tests. If this is 

the case, a shortage of . contractors to perform the 

necessary work may develop, leading to a delay in 

corrective action and a stretch-out of Stage II 

implementation. The longer Stage II implementation takes, 

the more it approaches the onboard phase-in schedule, 

erroding or eliminating the potential short-term emissions 

reduction advantage of Stage II. 

C. Summary of Sensitivity Issues 

The previous section has reviewed a number of issues 

affecting onboard and Stage II cost effectiveness values, 

and attempted to identify the possible impacts associated 

with each. Most of the impacts are small, except for Stage 

II inconvenience costs. Some items improve cost 

effectiveness and some items worsen it. Overall, EPA 

believes that it has fairly considered these matters in its 

analyses and conclusions. However, as noted at the outset 

of this Section, the Agency encourages comment on all of 

these factors, along with any others .which commenters 

believe to be of importance. Clearly, specific 

quantitative analysis with supporting data will be of most 

use to the Agency in completing its final study. 

-&- 2-1 
P.32 

Table 7 

Effect of Varying the Number of 

Non-Attainment Areas on 

Onboard Cost Effectiveness 

N/A Area VOC Cost Effectiveness 

40 Areas 50 Areas 61 Areas >61 Areas 

Benefits Included (28%)* (31%)* (35%) * (50%) * 

N/A Area VOC Only 2800 2400 2200 1500 • 

N/A Area VOC + BZ 1000 924 850 670 

and C6 GV Incidences 

+ AA VOC Reductions 

Percent of national gasoline consumption. 

30 
P.33 

Table 8 

ONBOARD COST EFFECTIVENESS ($/Mg) 

VOC Value in N/A Areas 

Considering BZ+C6 GV 

Benefit Value Incidence and A/A VOC 

$MM/INCID $/Mg of A/A VOC Reduction Benefits 

0 

3.5 

7.5 

10 

3.5 

7.5 

10 

0 

•250 

250 

250 

500 

500 

500 

2200 

1300 

350 

540 

950 

460 

150 

- 31 
P.34 

Docket A-87-11 

Category IV-H 

Interagency Review Materials 

Document 

Number 

Date Sent to 

Docket 

Commenter, Addressee, or Title (as applicable) Date ot Document 

IV-H-21 

IV-H-22 

01/13/94 

01/13/94 

Letter to Barry Felrice, NHTSA, from Richard Wilson, EPA. 

Letter from Richard Wilson, EPA, to Barry Felrice, NHTSA. 

01/05/94 

01/05/94