1 INFORMATI ON COLLECTION REQUEST (ICR) United States Environmental Protection Agency (EPA) Part A of the Supporting Statement ( Draft

- November 2010 )
1. ID ENTI FI CATION OF THE INFORMATION COLLECTION 1(a) Title: Regulation of Fuels and Fuel Additives: Gasoline Volatility ; Reporting

Requirements for Parties Which Produce or Import Gasoline Containing Ethanol, and Reporting Requirements for Parties Seeking a Test ing Exemption (40 CFR 80.27) EPA I CR Number 1367.0 9 , OMB Control Number 2060

- 0178 1(b) Abstract Gasoline volatility , as measured b y Reid Vapor Pressure (RVP) in pounds per square inch (psi), is controlled in the spring and summer in order to minimi ze evaporative hydrocarbon emissions from motor vehicles. The standards, 7.8 psi or 9.0 psi, for each state (excluding Alaska and Hawaii) and the District of Columbia, are at 40 CFR 80.27(a). The addition of ethanol to gasoline increases the RVP by about one psi. Gasoline that contains at least nine volume percent ethanol , and no more than 10 volume percent ethanol, is subject to a standard that is 1.0 psi greater. As an aid to compliance and enforcement, the regulation at 40 CFR 80.27 (d)(3) requires that the product transfer document (PTD) which accompanies a shipment of gasoline containing ethanol shall contain a legible and conspicuous statement that the gasoline contains ethanol and the percentage concentration of ethanol. This is intended to deter the mixing within the distribution sy stem, particularly in retail storage tanks, of gasoline which contains ethanol in the 9

- 10 percent range with gasoline that does not contain ethanol in the 9

- 10 percent range . Such mixing would likel y result in a gaso line with an ethanol concentration outside the 9

- 10 percent range , but with an RVP above the applicable standard of 7.8 or 9.0 psi

. It is estimated that there are approximately 2,0 00 producers and importers (mostly blenders as opposed to refiners and impo rters) of gasoline blended with ethanol. These are the parties responsible for generating the PTDs. Parties wishing to conduct research or emissions certification on gasoline that does not meet the volatility standard are required to obtain a testing exe mption in accordance with 40 CFR 80.27(e). The EPA receives approximately two requests per year for testing exemptions. EPA has proposed additional PTD requirements for gasoline containing ethanol at 75 FR 68044 (November 4, 2010). Those requirements w ill be addressed in a separate IC R.
2. NEED FOR AND USE OF THE COLLECTION 2(a) Need/Authorit y for the Collection Section 211(h) of the Clean Air Act (Act) requires EPA to promulgate regulations prohibiting the sale or distribution of gasoline whose volat ility , as measured by RVP, exceeds certain standards during the high ozone season. The Act and regulations at 40 C.F.R. 80.27 and2

80.28 permit gasoline containing 9

- 10 percent ethanol to have an RVP that is one psi greater than the standard that would oth erwise appl y. Normally, the gasoline distribution sy stem treats gasoline as a fungible product. That is, gasolines from numerous sources are mixed together (also known as commingling) in tanks at terminals and retail outlets. Therefore, without the requ ired statement on the PTD, gasoline containing ethanol in the 9

- 10 percent range could easily be commingled with gasoline containing ethanol outside that range . This could result in gasoline that exceeds the applicable 7.8 psi or 9.0 psi standard, and not have ethanol in the 9

- 10 percent range to qualify

for the one psi exemption allowed by the Act and regulations. Thus, it is imperative that gasoline marketers, shippers, and distributors know if a shipment of gasoline contains ethanol, and in what concentration. The required statement on the PTD of gasoline blended with ethanol will significantl y aid industry compliance and EPA’s ability to enforce the volatility standards. Thus , the rule requires that the customary business practice (CBP) PTD for a shipment of gasoline containing ethanol state that the gasoline contains ethanol and the percentage concentration of ethanol. The rule does not have a recordkeeping requirement. However, PTDs are usuall y retained in the normal course of business for fi ve ye ars. The PTD is generated by any part y that produces or imports gasoline that contains ethanol. As required b y s ection 211(h) of the Act, the Agency promulgated a final rule in 1991. The reporting requirement in 40 C.F.R. 80.27(d)(3) was promulgat ed under authority of section 211(h) of the Act, 42 U.S.C. § 7545(h) and sections 114 and 208 of the Act, 42 U.S.C. §§ 7414 and 7542, and provides: "Each invoice, loading ticket, bill of lading, delivery ticket and other document which accompanies the shi pment of gasoline containing ethanol shall contain a legible and conspicuous statement that the gasoline being shipped contains ethanol and the percentage concentration of ethanol." These regulations provide for the enforcement of the standards for the maximum RVP that will be allowed during the high ozone portion of the y ear, extending from May 1 (suppliers) or June 1 (all other persons) through September 15. Regulatory control of volatility

stems from a recognition of the major impact that increases in the RVP of gasoline have on the emissions of volatile organic compounds (VOCs). Consequent to the excessive emission of VOCs is the formation of ozone in the ambient air, a major summertime health problem in many urban areas. The reporting (actua lly

labeling) requirement is necessary because the Act gave certain ethanol blends a one pound per square inch (psi) allowance above the otherwise applicable RVP standard. The records regarding the shipment of ethanol blends to a retailer or to any "midstream" distribution point will assist Agency enforcement officials, when inspecting those shipments, in identifying those gasoline blends that qualify for the one psi allowance , and those parties who may

be liable for v iolations if the blend is not in compl iance . The records are also necessary to assist regulated parties in avoiding violations when handling multiple shipments of gasoline during the high ozone season , and can be used by parties in establishing a legal defense.3

Parties wishing to conduct re search or emissions certification on gasoline that does not meet the volatility

standard may

obtain a testing exemption by providing the information specified at 40 CFR 80.27(e) to EPA. Thus, if a test facility w as inspected by

EPA, and gasoline was found that did not meet the standard, and the facility had an exemption, there would not be a violation. 2(b) Practical Utility

/Users of the Data The collection of information is necessary for the proper performance of the functions of the Agency

and has practical utility . The information contained in the PTDs for gasoline blended with ethanol is used to identify those gasoline blends that may qualify for the one psi allowance, as provided by the Act and b y the rule. The required record also helps pr event the commingling of gasoline containing the required amount of ethanol necessary to be eligible for the one psi waiver with gasoline that does not qualify . Such commingling would usually result in a violation. The testing exemption provides flexibil ity for research or emissions certification. Agency enforcement officers need this information to assist in identifying violations and violating parties. There is no recordkeeping requirement under this rule. Industry entities, including blenders of ethanol and gasoline, and distributors of gasoline containing ethanol, as well as retailers (who ultimately receive the gasoline but have no recordkeeping requirements under the rule) need the information in order to prevent violations that can occur from co mmingling multiple gasoline shipments during the high ozone season. 3. NONDUPLICATION, CONSUL TAT IONS, AND OTHER COLLECTION CRI TERIA 3(a) Nonduplication The information collection is not duplicative. The PTDs are the onl y records available to recipie nts of gasoline that document that ethanol has been blended into the gasoline. The reporting requirement for a testing exemption is the only practical approach. 3(b) Public Notice Required Prior to ICR Submission to OMB In compliance with the Paperw ork Reduction Act, a notice was published in the Federal Register

. 3(c) Consultations The general consensus is that the burden is very small. The information is generall y computer

- generated, pre

- printed, or hand stamped on the PTDs. The rule does no t require that the PTDs be retained. Only about two requests for testing exemptions are received annuall y. 3(d) Effects of Less Frequent Collection This labeling activity

is the minimum necessary to alert downstream distributors/marketers that a shipm ent of gasoline contains ethanol. The labeling requirement4

applies only

to those producing or importing gasoline blended with ethanol. The Agency allows maximum flexibility

in the form of the labeling. Neither record maintenance nor reporting to the Age ncy is required. No new documents are required since PTDs are routinely used in the gasoline distribution network. Testing exemptions are requested onl y as necessary. 3(e) General Guidelines The collection is in compliance with OMB guidelines. To t he extent that some affected companies may

be relatively

small businesses, their informational requirements do not change since the requirement is already the minimal possible in order to give other businesses and EPA information that is necessary for comp liance. 3(f) Confidentiality
In formation claimed as confidential is handled in accordance with EPA Freedom of In formation Act regulations at 40 CFR 2. 3(g) Sensitive Questions There are no sensitive questions.
4. THE RESPONDENTS AND THE INFORMATION REQUESTED 4(a) Respondents/SIC/NAI CS Codes The respondents are related to the following major group Standard Industrialization Classification (SI C) codes:
2869

- Denatured Alcohol Manufacturing
2911

- Petroleum Refineries
4212

- Gasoline Distributors
5171

- Gasoline Bulk Stations and Terminals
5172

- Gasoline Merchant Wholesalers (except bulk stations, terminals)
5541

- Retailers/Wholesale Purchaser

- consumers The respondents are related to the following major group NAICS co des:
324110

- Petroleum Refineries
325193

- Denatured Alcohol Manufacturing5

424710

- Gasoline Bulk Stations and Terminals
424720

- Gasoline Merchant Wholesalers (except bulk stations, terminals)
4(b) Information Requested (i) Data Items, Includi ng Recordkeeping Requirements This I CR covers the reporting/labeling requirement at 40 CFR 80.27(d)(3) for the PTDs for shipments of gasoline containing ethanol. Ethanol is generall y splash

- blended into a gasoline tanker truck at a terminal truck rack at ten volume percent. The blender creates a statement on the PTD that the product contains ten percent ethanol. The same is required for a refiner who produces gasoline blended with ethanol at a refinery and an importer of gasoline blended with ethanol. Each distributor/transferor transfers this PTD on to the next transferor and ultimatel y to the retail level. Man y refiners/blenders/importers already included this information on the PTDs prior to the EPA regulatory requirement (also, some states already required this information), and for them this requirement represented no new burden. Even where it did represent a new burden, in just about all cases the information is now encoded automatically by computer or otherwise routinel y stamped or entered on the PTD, resulting in an extremely small reporting burden. There is no burden for transferors, as they already had to transfer a PTD with each shipment of gasoline as a customary business practice (CBP). This rule has no recordkeeping requirement. Partie s needing a testing exemption must submit the information specified at 40 CFR 80.27(e). (ii) Respondent Activities The following are required: Read and comprehend the regulations. Train personnel to meet the requirements. Develop the information fo r the PTD and/or testing exemption. Gather and organize the information. Review the information, perform qualit y assurance, and take corrective action, if necessary , to meet the regulatory

requirements. Enter the information onto the PTD or submit the r equest for a testing exemption to EPA.

5. THE INFORMATION COLLECTED

-- AGENCY ACTIVITIES, COLLECTION6

METHODOLOGY AND INFORMATION MANAGEMENT 5(a) Agency

Activities The following are required: Develop a thorough understanding of the regu latory requirements. Convey the requirements and respond to inquiries in a clear manner. Provide access to the regulations and guidance documents. Timely process requests for testing exemptions. Monitor compliance with the PTD requirement.

5(b) Collection Methodology and Management The information collection, to the maximum extent practicable, uses appropriate information technology

to reduce burden and improve data quality , agency efficiency and responsiveness to the public. Ethanol blender/d istributors generall y use computer

- printed language stating that the product contains ethanol and the amount (usuall y1 0 percent) . This information is printed on PTDs, and in many cases the information itself was already printed prior to the rule. EPA als o allows the use of coded statements to reduce the space the statement requires on the PTD. EPA may examine these records during investigations regarding gasoline exceeding the applicable RVP standard. Requests for a testing exemption are routinel y revie wed and granted b y EPA. 5(c) Small Entity

Flexibility The information collection reduces to the extent practicable and appropriate the burden on persons who shall provide information to or for the Agency , including with respect to small entities, as defined b y the Regulatory Flexibility Act (5 U.S.C. § 601(6)), the use of such techniques as: (1) establishing differing compliance or reporting requirements or timetables that take into account the resources available to those who are to respon d; (2) the clarification, consolidation, or simplification of compliance and reporting requirements; or (3) an exemption from coverage of the collection of information, or any part thereof. The approach of this information collection holds burdens to the irreducible minimum consistent with obtaining the required compliance levels. The labeling requirement applies onl y to those entities that produce or import gasoline blend ed with ethanol . It enables those parties, as well as retail level entities, to comply with the law. However, retail entities have no requirement to make or maintain records. Therefore, the smallest entities have no burden under this collection and for those small blenders and importers who do have a burden, the burden is7

minimal. The information required is not in an y prescribed format, allowing for maximum flexibility in how to print the information, including the use of short codes, and does not necessitate an y new records. Therefore, no further flexibility is needed. 5(d) C ollection Schedule There is no reporting requirement to EPA and there is no required maintenance period. There is no collection schedule; the statement is added to the CBP transfer document when the blend is produced or imported

.

6. ESTIMATING THE BURDEN AND COST OF THE COLLECTION It is estimated that there are 2,0 00 producers and importers of gasoline blended with ethanol. The vast majority is blended at terminals. Som e ethanol is blended at a refinery or contained in imported gasoline Based on information received from respondents and from EPA experience, for most respondents the required information is automatically computer

- generated or preprinted on the PTDs. This means the reporting requirement is almost immeasurable for these parties. Other parties may

spend about ten seconds per transaction to stamp or otherwise enter the information on the PTDs. The average for all respondents is estimated to be about one second per transaction. There is no recordkeeping requirement . It is estimated to take four hours to prepare a request for a testing exemption. Based on data from the U.S. Department of Labor, Bureau of Labor Statistics, (200 8 data), EPA estimates that the hourly cost, including benefits and other employ ee costs, for this industry and for the period of this I CR, to be about $ 110 per hour for a ty pical labor mix. Almost all gasoline containing ethanol will be shipped by truck. Assume 95 percent of all gasoline contains ethanol. I f 95 percent of th e 140 billion gallons of gasoline that is consumed annuall y nationwide contains ethanol, this comes to 133 billion gallons of gasoline. If the average truck shipment is 3,000 gallons of gasoline, then about 44 million truckloads/shipments of gasoline with ethanol are produced/imported annually . Thus 44 million PTDs will receive the required statement on ethanol content annuall y. 6(a) Estimating Respondent Burden
For 44 million PTDs (responses), at and average burden of 1 second per PTD, the annual burden is 1 2,222 hours, or about six hours for each of the estimated 2,000 producers and importers. There is an additional hour of labor for each of the estimated 10 0 new producers or importers annuall y to implement the requirement, for a net annual burden for producers and importers of 1 2,222 + 10 0= 1 2,322 hours. The two requests for testing exemptions, at 4 hours each, add 8 hours annually, for an annual total of 44 , 0 00,002 responses and 1 2,322 +8= 1 2,3308

hours. There is no burden for transferors and recipi ents because the transmittal of PTDs is a customary

business practice. 6(b) Estimating Respondent Costs For producers and importers of gasoline containing ethanol, 1 2, 222 hours at $ 110 per hour gives a total of $ 1,344,420 , or about $ 672 per respondent ( 2,0 00 respondents) annuall y to generate the required statement on PTDs. For the estimated 10 0 new producers or importers each ye ar, there is an additional hour of labor for each, $ 110 per respondent, to implement the requirement, for a total of $ 11,000

. Thus, the total annual cost for producers and importers is $ 1,344,420+$11,000=$1,355,420 . For parties wishing a testing exemption, 8 hours at $ 110 per hour gives a total of $ 880 , or $ 44 0 per respondent (2 respondents) . There are no costs for transferors and recipients

. There are no Purchased Services Costs. There are no Annualized Startup Costs. There are no Annualized Capital Costs. Thus, the only non - labor costs are Operating and Maintenance (O&M) costs are for copyingand postage for the two exemption requests annually , and are estimated at $10 each for a total of $20. 6(c) Estimating EPA Burden and Cost The labeling activit y that is the subject of this I CR imposes no burden or costs on the Agency . The Agency

would conduct inspections even without the requirement but the required information facilitates the investigation of possible violations. 6(d) Reasons for Change of Burden The use of ethanol in gasoline has in creased since the previous ICR from 60 percent of the market to 9 5 percent of the market. Also, the average shipment size has been reevaluated from 8,500 gallons to 3,000 gallons. Thus, the estimated annual number of PTDs that will contain the required language has increased from 10 million in the previous I CR to 44 m illi o n. 6(e) Burden Statement There are no EPA forms on which to place a statement.

B. COLLECTION OF INFORMATION EMPLOYING STATI STI CALMETHODS This section is not applicable because statistical methods are not used in th is data collection a ssociated with the Gasoline Volatility Rule.