9872 Federal Register / Vol. 62, No. 42 / Tuesday, March 4, 1997 / Rules and Regulations

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 80

[AMS–FRL–5696–2]

Regulation of Fuels and Fuel

Additives: Adjustments to Individual

Baselines for the Reformulated

Gasoline and Anti-Dumping Programs

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Final rulemaking.

SUMMARY: Under the Clean Air Act

(CAA or the Act), as amended in 1990,

the Environmental Protection Agency

(EPA or the Agency) promulgated antidumping regulations for conventional

gasoline, that is, gasoline not certified as

reformulated gasoline (RFG). These

regulations require that conventional

gasoline not be more polluting than it

was in 1990. They also include

provisions for the development of

individual refinery baselines. The

regulations also include provisions

which allow a refinery to obtain an

adjusted baseline under certain, limited

circumstances. Today’s regulations

modify the requirements of one baseline

adjustment and specify the

requirements of two new baseline

adjustments.

Specifically, today’s rulemaking

modifies the requirements for obtaining

a baseline adjustment due to the

production of JP–4 jet fuel in 1990. This

rule also allows a baseline adjustment

for refiners who are now unable to

acquire extremely sweet crude oil (that

is, crude oil relatively low in sulfur) that

had been available in 1990 and from

which the gasoline used to develop a

1990 individual baseline was obtained.

Finally, this rule allows a baseline

adjustment for refineries which have

both extremely low baseline sulfur and

olefin levels.

The criteria for obtaining any baseline

adjustment are stringent. As a result,

only those refineries which would

experience a severe economic burden

due to the regulations are allowed the

relief provided by a baseline

adjustment. Since few refineries qualify

for these adjustments and requiring

compliance without a baseline

adjustment would be of minimal benefit

to the environment, the environmental

impact of allowing the baseline

adjustments is negligible.

DATES: This rule will be effective on

April 22, 1997.

ADDRESSES: Materials relevant to this

final rulemaking (FRM) are contained in

Public Docket No. A–95–03. Materials

relevant to the RFG final rule are

contained in Public Dockets A–91–02

and A–92–12. These dockets are located

at Room M–1500, Waterside Mall

(ground floor), U.S. Environmental

Protection Agency, 401 M Street SW.,

Washington, DC 20460. The docket may

be inspected from 8:00 a.m. until 5:30

p.m. Monday through Friday. A

reasonable fee may be charged by EPA

for copying docket materials.

FOR FURTHER INFORMATION CONTACT:

Christine M. Brunner, U.S. EPA, Fuels

and Energy Division, 2565 Plymouth

Road, Ann Arbor, MI 48105. Telephone:

(313) 668–4287. To request copies of

this document, contact Delores Frank,

U.S. EPA, Fuels and Energy Division,

2565 Plymouth Road, Ann Arbor, MI

48105. Telephone: (313) 668–4295.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Electronic Copies of Rulemaking

Documents

A. Technology Transfer Network Bulletin

Board System (TTNBBS)

B. Internet

II. Regulated Entities

III. Introduction

IV. JP–4 Baseline Adjustment

A. Introduction

B. General Comments on the Proposal

C. Comments on the Proposed Ratio of JP–

4 Production to Gasoline Production

D. Comments on the Aggregation and RFG

Production Restrictions

E. Comments Regarding the Effect of JP–4

Production on Refinery Operation

V. Crude Oil Quality Baseline Adjustment

A. Introduction

B. General Comments on the Proposal

C. Comments on Crude Oil Quality

Changes Since 1990

D. Comments on the Proposed Criteria for

a Baseline Adjustment

E. Comments on the Proposed Options for

a Baseline Adjustment

VI. Low Sulfur, Low Olefin Baseline

Adjustment

A. Introduction

B. General Comments on the Proposal

C. Provisions of the Final Rule

VII. Environmental and Economic Impacts

VIII. Administrative Requirements

A. Administrative Designation

B. Impact on Small Entities

C. Paperwork Reduction Act

D. Unfunded Mandates Act

E. Submission to Congress and the General

Accounting Office

IX. Statutory Authority

I. Electronic Copies of Rulemaking

Documents

A. Technology Transfer Network

Bulletin Board System (TTNBBS)

An electronic copy of this notice is

available on the EPA’s Office of Air

Quality Planning and Standards

(OAQPS) Technology Transfer Network

Bulletin Board System (TTNBBS). The

service is free of charge, except for the

cost of the phone call. The TTNBBS can

be accessed with a phone line and a

high-speed modem per the following

information:

TTNBBS: 919–541–5742

(1200–14400 bps, no parity, 8 data bits,

1 stop bit)

Voice Help-line: 919–541–5384

Off-line: Mondays from 8:00 AM to

12:00 Noon ET

A user who has not called TTN

previously will first be required to

answer some basic informational

questions for registration purposes.

After completing the registration

process, proceed through the following

menu choices from the top menu to

access information on this rulemaking.

<T> GATEWAY TO TTN TECHNICAL

AREAS (Bulletin Boards)

<M> OMS—Mobile Sources Information

<K> Rulemaking and Reporting

<3> Fuels

<9> File Area #9 * * * Reformulated

gasoline

At this point, the system will list all

available files in the chosen category in

reverse chronological order with brief

descriptions. These files are compressed

(i.e., ZIPped). Today’s notice can be

identified by the following title:

JP4FRM.ZIP. To download this file, type

the instructions below and 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 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 dearchiving compressed files can be found

via <S>ystems Utilities from the top

menu, under <A>rchivers/de-archivers.

After you have downloaded the desired

files, you can quit the TTNBBS with the

<G>oodbye command. Please note that

due to differences between the software

used to develop the document and the

software to which the document is

downloaded, changes in page format

may occur.

B. Internet

Rulemaking documents can also be

located on the Internet as follows:

World Wide Web

http://www.epa.gov/omswww

Telnet

telnet ttnbbs.rtpnc.epa.gov
Federal Register / Vol. 62, No. 42 / Tuesday, March 4, 1997 / Rules and Regulations 9873

1 In general, the anti-dumping provisions apply to

refiners or importers of conventional gasoline. The

baseline adjustment provisions finalized in today’s

notice, however, are applicable only to refiners and

their refineries.

2 59 FR 7716, February 16, 1994.

3Alabama Power Company vs. Costle, 636 F.2d

323–357 (D.C. Cir. 1979).

4EPA withdrew this DFRM since EPA received

adverse comments on the changes specified in the

DFRM with regard to JP–4 baseline adjustments. As

announced in the DFRM, such provisions would

take effect only if no persons submitted adverse

comments or requested an opportunity to comment.

For more discussion, see the support document,

‘‘Regulation of Fuels and Fuel Additives: Standards

for Reformulated and Conventional Gasoline—

Detailed Discussion and Analysis’’, Air Docket A–

95–03.

FTP

ftp://ftp.epa.gov

Then change the directory (CD) to /pub/

gopher/OMS/

Gopher

gopher://gopher.epa.gov:70/11/Offices/

Air/OMS

Alternatively, go to the main EPA

gopher and follow the menus:

gopher.epa.gov

EPA Offices and Regions

Office of Air and Radiation

Office of Mobile Sources

II. Regulated Entities

Entities that could be regulated by

this action are those that produced

gasoline in 1990 and which have an

individual baseline per part 40 section

80.91 of the Code of Federal Regulations

(CFR). Regulated categories and entities

include:

Category Examples of regulated entities

Industry ............................ Oil refineries.

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

facility is regulated by this action, you

should carefully examine the

applicability criteria at 40 CFR 80.91. 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.

III. Introduction

The standards that a refiner must

comply with for certain aspects of the

reformulated and conventional gasoline

regulations are based on the refiner’s

individual baseline.1 An individual

baseline is the set of fuel parameter

values, emissions values, and

component volumes which represent

the quality and quantity of the refiner’s

1990 gasoline. (See 40 CFR 80.91.)

EPA’s regulations establish

requirements for developing an

individual baseline. For special

situations, the Agency has allowed the

baseline fuel parameters, emissions

values, and component volumes to be

adjusted. Such situations have included

unforeseen downtime of a gasoline

blendstock producing unit, non-annual

maintenance, work-in-progress, and JP–

4 jet fuel production.

This FRM allows baseline

adjustments for three situations where

parties would suffer an extreme

economic burden due to the original

regulations if relief were not granted.

Specifically, this rule (1) Revises the

requirements for a baseline adjustment

due to the production of JP–4 jet fuel in

1990, (2) provides an adjustment to the

baseline sulfur values of certain

refineries for instances where extremely

sweet crude oil (which is no longer

available) was used in 1990 gasoline

production, and (3) adds a provision for

adjusting refinery baselines which have

very low values for both sulfur and

olefins.

In general, for refiners who qualify for

one or more of the baseline adjustments

finalized today, EPA will apply the

adjustments to gasoline produced in

1996. In the August 1995 Notice of

Proposed Rulemaking (NPRM) EPA

indicated that any adjustments finalized

under this rulemaking would apply to a

refiner’s 1995 compliance

determination. However, EPA cannot

retroactively apply a rulemaking, even

one that provides a measure of

regulatory relief. Many refiners affected

by today’s rule received baseline

adjustments under the stay promulgated

at 60 FR 40006 (August 4, 1995).

Because these refiners have the same

adjusted baseline under the stay that

they would receive as a result of today’s

action, they are unaffected by whether

or not today’s rule applies to 1995

compliance determinations. For those

refiners who did not receive an adjusted

baseline, EPA will consider this rule in

its review of 1995 compliance

determinations.

IV. JP–4 Baseline Adjustment

A. Introduction

JP–4 jet fuel, the use of which is being

phased out by the U.S. Department of

Defense, was produced in 1990 by many

refiners under contract with the Defense

Department. Because refineries will

most likely use the JP–4 blendstock in

gasoline, the JP–4 fuel must first be

processed through a reformer to increase

its octane to suitable gasoline levels.

Due to the high aromatic content of the

reformer streams, the toxic emissions of

the ‘‘new’’ gasoline (calculated using the

Simple and Complex Models) will likely

increase relative to the gasoline’s 1990

values. In addition, it is possible that

gasoline production will increase

(relative to 1990 production) due to

movement of blendstocks directly and

indirectly from JP–4 to gasoline. The

impact of the increase in aromatic

content and/or additional volume due to

JP–4 phase-out will affect certain

refiners more than others.

The December 1993 regulations 2

already provide for an adjustment to a

refiner’s individual baseline due to

production of JP–4 in 1990 if three

criteria are met. These criteria were

designed to ensure that the original

adjustment would result in de minimis

environmental impact and would

remove the extreme burden on the

refiner.3 First, under the original

adjustment, JP–4 baseline adjustments

are allowed only for refiners who do not

or will not in the future produce RFG.

If a refiner granted such an adjustment

subsequently produces RFG, its

conventional gasoline compliance will

be subject to its original unadjusted

baseline during the current averaging

period and all subsequent years.

Second, a JP–4 baseline adjustment is

available primarily to qualifying singlerefinery refiners. A multi-refinery

refiner could also receive an adjustment

if each of its refineries produced JP–4 in

1990 and if each refinery also meets the

other requirements for obtaining the

adjustment. Third, to receive an

adjustment, the refiner is required to

show that a significant burden would

exist if no baseline adjustment was

allowed. The original regulations

require that the ratio of a refinery’s 1990

JP–4 production to its 1990 gasoline

production must equal or exceed 0.5 in

order to be defined as a significant

burden on the refiner.

In the August 4, 1995 NPRM (60 FR

40009), EPA proposed modified

provisions related to JP–4 baseline

adjustments. These provisions were

essentially the same as those contained

in a direct final rulemaking (DFRM)

which was published at 59 FR 36944,

July 20, 1994.4 Specifically, EPA

proposed the following three conditions

that would have to be met by a refiner

who petitions for a baseline adjustment

due to JP–4 production in 1990. The

first condition applies to multi-refinery

refiners while the second and third
9874 Federal Register / Vol. 62, No. 42 / Tuesday, March 4, 1997 / Rules and Regulations

conditions apply to all refining

companies.

(1) The Qualifying Refiner Must Have

Produced JP–4 at One or More of Its

Refineries in 1990

The original JP–4 baseline adjustment

provisions for multi-refinery refiners

require that each refinery must have

produced JP–4 in 1990. This revision

would allow a refiner to obtain this

baseline adjustment even if only one of

its refineries produced JP–4 in 1990

(and if the refiner and its refineries also

meet the other criteria specified for this

baseline adjustment). EPA believes it

may use its discretion to provide relief

for a multi-refinery refiner even if only

one of the refiner’s refineries produced

JP–4 in 1990 (provided that the refiner

or refinery meets the other requirements

required for a JP–4 baseline adjustment).

If a multi-refinery refiner qualifies for a

baseline adjustment under this criterion,

it must then calculate the adjusted

baseline of the refinery(ies) which

actually produced JP–4 in 1990 and

determine its anti-dumping compliance

on an aggregate basis.

(2) The Qualifying Refiner Must Have a

1990 JP–4 to Gasoline Ratio Greater

Than or Equal to 0.15 (See Discussion

Below Regarding JP–4 Baseline

Adjustment Ratio)

(a) For each individual refiner, if all

of its refineries produced JP–4 in 1990,

the refiner may comply with the antidumping requirements on an individual

or aggregate basis; or

(b) On a refiner-wide basis, in which

case the refiner must determine an

individual baseline for each of its

refineries but must comply with the

anti-dumping requirements on an

aggregate basis.

(3) The Qualifying Refiner Must Not

Produce Reformulated Gasoline (RFG) at

Any of Its Refineries Now or in the

Future

The comments received on this

proposal are discussed below. None of

the comments provided new

information or supportive data.

Therefore, EPA today finalizes this

provision as proposed, for the reasons

described in the NPRM.

B. General Comments on the Proposal

Summary of Comments

Generally, many commenters felt the

original eligibility requirements for

receiving a JP–4 baseline adjustment are

unnecessarily restrictive. They felt that

EPA’s overriding concern should be the

impact of the baseline adjustments on

the environment, and they suggested

that most refineries meeting the JP–4

criteria operate in rural, clean air (i.e.,

attainment) areas.

Several commenters opposed the

regulation change, stating that it would

be more equitable for all JP–4 producers

to get an adjustment, regardless of ratio,

aggregation, or RFG production.

Commenters stated that this position is

based on the fact that all JP–4 producers

were meeting a market demand, and

therefore should not be selectively

penalized. Furthermore, these

commenters felt that elimination of

post-1995 demand for JP–4 causes all

baselines to be unrepresentative of

current and future operations. Therefore

the JP–4 phase-out and anti-dumping

regulations may have unintended

adverse effects on the regulated

community of former JP–4 suppliers.

These commenters suggested that a

better approach would be to allow an

adjustment for all JP–4 producers, and

allow refiners to rethink aggregation

decisions. The commenters felt this

would ‘‘level the playing field’’ and

simplify the regulations.

Analysis and Conclusion

EPA’s authority to grant exceptions to

this requirement of the CAA is very

limited. EPA does not believe it is

appropriate, given the applicable facts

and this limitation, to allow adjustments

for all JP–4 producers. Exceptions to

this requirement of the Act should only

be allowed for cases of extreme

regulatory burden with minimal

environmental impact, and not all

refiners who produced JP–4 in 1990 are

extremely burdened by the requirements

of the RFG and anti-dumping programs.

Today’s action slightly broadens the JP–

4 baseline adjustment criteria, but

continues to allow adjustment only

where extreme burden is demonstrated.

C. Comments on the Proposed Ratio of

JP–4 Production to Gasoline Production

Summary of Comments

Some commenters opposed the

change in production ratio to 0.15,

stating that the 0.15 ratio is arbitrary

and that EPA has provided no evidence

of hardship for the three or four

refineries which would be affected. One

commenter felt that if the environmental

impacts are minimal at 0.15, they would

be even less for those below the 0.15

production ratio. They stated that as

little as two percent JP–4 production

can be a significant aspect of refining

operations; adjusting for production,

this low percentage may have little

impact on the baseline but would

provide necessary relief for refiners who

have experienced increasing levels of

benzene and aromatics. Commenters

also felt that refineries on the ‘‘wrong

side’’ of the ratio will continue to argue

for special exemptions; any ratio

arbitrarily provides relief to some while

denying it to others.

Commenters also stated that it is

impossible for the public to judge

whether a hardship even exists. They

felt that the ratio criterion is only one

of several criteria which should be used

to determine hardship. They argued that

the regulation should not be limited to

just one criterion, but rather it should

include alternative tests for hardship.

Several alternative criteria for

determining hardship were suggested by

commenters. One commenter suggested

that EPA should evaluate the financial

penalty of noncompliance relative to the

refiner’s size and profit to determine

extreme burden. One commenter

proposed that a straight production

volume of 100,000 gallons of JP–4,

rather than a jet fuel-to-gasoline

production ratio, would be a more

appropriate baseline adjustment

criterion. In addition, commenters

suggested that EPA should consider the

historical pattern of JP–4 production for

a refinery, stating that a refinery that

produces JP–4 over a long period will

have greater hardship converting that

product to gasoline.

Finally, it was suggested that EPA

needs to recognize that the industry is

capital-intensive and that refineries

should be encouraged to make the

necessary capital investments.

Analysis and Conclusion

As stated before, in addition to

minimal environmental impact,

regulatory burden must also be

considered before an exception to the

regulations can be made, and a baseline

adjustment allowed. As discussed in the

December 1993 Regulatory Impact

Analysis (RIA), the JP–4 to gasoline

production ratio is the best measure

found by EPA to estimate and quantify

this burden. However, based on

information received by EPA

subsequent to the initiation of the RFG

program, the original 0.5 ratio does not

provide the relief intended by the

Agency. Using industry data, EPA

proposed a more appropriate ratio of

0.15, and stated that a few more (three

or four) refineries could potentially

benefit from this change in the ratio.

Although EPA agrees with commenters

that other means of showing extreme

burden of the regulations may exist,

EPA has not found any which seem as

appropriate (particularly with respect to

providing a quantitative means of

establishing burden). Additionally, EPA

believes that such alternative tests

would be difficult to implement at this
Federal Register / Vol. 62, No. 42 / Tuesday, March 4, 1997 / Rules and Regulations 9875

5 However, as for all refiners, once the decision

to determine compliance on an aggregate basis is

made, compliance must be made on that basis for

all future compliance periods.

6E.J. Swain, ‘‘U.S. crude slate continues to get

heavier, higher in sulfur,’’ Oil & Gas Journal, p. 37,

January 9, 1995.

7 Ibid.

stage in the baseline approval process.

Finally, EPA believes that limiting this

analysis to 1990 situations is most

consistent with statutory structure.

D. Comments on the Aggregation and

RFG Production Restrictions

In the August 1995 NPRM, EPA

proposed that a multi-refinery refiner,

could qualify for a JP–4 baseline

adjustment even if only one of its

refineries produced JP–4 in 1990.

However, that refiner would have to

determine its compliance on an

aggregate basis and could produce no

RFG at any of its refineries. A detailed

discussion of the basis of these

requirements can be found in the

support document for this rule,

‘‘Regulation of Fuels and Fuel

Additives: Standards for Reformulated

and Conventional Gasoline-Detailed

Discussion and Analysis,’’ Air Docket

A–95–03.

Summary of Comments

Commenters supporting the proposed

modifications to the regulation provided

several points to support the changes.

Primarily, they stated that without these

changes, it would be impossible for a

multi-refinery refiner to qualify for an

adjustment. Thus, according to

commenters, the regulation would not

provide the relief intended by EPA.

Some commenters supporting the

proposed changes to the regulation

endorsed the need for change in the

aggregation requirements of the JP–4

adjustment. Commenters felt that such

requirements would further restrict the

business decisions of a multi-refinery

refiner.

Many commenters addressed the RFG

production restrictions placed on a

refiner that receives a JP–4 adjustment.

Commenters felt that prohibiting RFG

production by these refiners may cause

a refiner not to produce RFG for areas

where it is needed. Also, commenters

argued that some refiners who qualify

for the JP–4 adjustment may have

already produced RFG. These

commenters felt that the environmental

impact of allowing RFG production

would be minimal.

Analysis and Conclusion

EPA is retaining the proposed

requirement that a multi-refinery refiner

qualifying for a JP–4 baseline

adjustment, for which not all of its

refineries produced JP–4 in 1990, must

determine its compliance on an

aggregate basis. Under the regulations

promulgated today, such a refiner is

able to obtain a JP–4 baseline

adjustment because it has determined

its JP–4 to gasoline ratio on an aggregate

basis. EPA continues to believe that it is

appropriate to thus require such a

refiner to determine its anti-dumping

compliance on an aggregate basis as

well. A multi-refinery refiner for which

each of its refineries meets the JP–4

baseline adjustment criteria

individually may determine its

compliance on an aggregate or nonaggregate basis.5

EPA continues to believe that

prohibiting RFG production is a critical

criteria for this baseline adjustment as it

is the best way to ensure that no

‘‘dumping’’ will occur. EPA does not

consider this requirement to be unduly

restrictive.

E. Comments Regarding the Effect of JP–

4 Production on Refinery Operation

Summary of Comments

Several commenters, including both

those supporting the regulation changes

and those opposing them, stated that

EPA should give full consideration to

the effects of JP–4 production on

refinery operations. These commenters

pointed out that 1990 JP–4 production

can limit gasoline production at a

refinery, and that premium gasoline, the

most profitable gasoline to produce, is

most affected by baseline limitations.

Commenters stated that JP–4 production

limited small refiners with low

conversion configurations who could

not fractionate excess gasoline into

distillate.

Analysis and Conclusion

EPA recognizes that there are

difficulties in the conversion of refinery

operations from JP–4 production to

gasoline production, and that

production volumes may also be

limited. EPA also recognizes that the

burden of the conversion and

compliance with the RFG and antidumping requirements differs from

refiner to refiner. However, as stated

previously, EPA’s authority in allowing

exceptions to the regulations in the form

of baseline adjustments is limited.

Environmental impact and regulatory

burden are the only factors EPA

considered in determining what type of

baseline adjustment, if any, should be

allowed. EPA believes that the most

appropriate measure of the regulatory

burden in this context is the JP–4 to

gasoline ratio, discussed above.

V. Crude Oil Quality Baseline

Adjustment

A. Introduction

Crude sulfur content is increasing

nationwide.6 The ability of refiners to

deal with this change varies. EPA is

aware that the quality of the crude oil

(with regard to sulfur content) available

to refiners in PADD IV has been

deteriorating faster than crude oil in

other regions of the U.S. since 1990.7 In

addition, refiners in this region do not

have access to foreign crude oil imports

other than those from Canada. Thus, the

quality of crude oil available to these

refiners, from conventional or

alternative sources, is limited. Prior to

promulgation of the December 1993

final rule, EPA was not aware that the

deterioration of crude oil available to

certain refiners (in regard to increasing

sulfur content) might force them to

cease operation since the burden of

compliance might be prohibitively

expensive.

The anti-dumping requirements

contained in the December 1993

regulations generally do not allow

baseline adjustments for changing crude

oil quality or availability. However, as

discussed in the preamble to the

December 1993 final rule, EPA

recognized that a refiner’s ability to

comply with its individual baseline can

be difficult due to changes in crude oil

supplies, markets, and fuel

specifications. As with the work-inprogress baseline adjustment (40 CFR

80.91) and the original JP–4 baseline

adjustment (40 CFR 80.91), EPA

believes it is appropriate to provide

baseline adjustments in situations

where the anti-dumping regulatory

burden is extremely onerous and where

requiring compliance would yield little

or no environmental benefit. Thus, EPA

is finalizing such a baseline adjustment

where a dramatic increase in crude

sulfur content has occurred which could

severely affect the anti-dumping

compliance of refiners with extremely

low baseline sulfur levels.

EPA expects a minimal environmental

impact from allowing the low-sulfur

crude baseline adjustment (based on the

criteria finalized today) for two reasons.

First, only a few refineries are expected

to qualify for the adjustment and

second, the total production volume of

these refineries is marginal.
9876 Federal Register / Vol. 62, No. 42 / Tuesday, March 4, 1997 / Rules and Regulations

B. General Comments on the Proposal

Summary of Comments

Several commenters felt that EPA was

unjustified in granting a small number

of refiners special treatment for what is

a ‘‘fact of life’’ for all refiners. They felt

this proposal appears to satisfy certain

refiners at the expense of others. Some

commenters claimed that since sour

crude oil is typically less expensive

than sweet crude oil, refiners can invest

in the appropriate level of

desulfurization capacity to refine the

crude into a competitive crude slate. On

the other hand, one commenter asserted

that it is not appropriate to grant a

waiver to purchase sour crude oil

supplies, and then allow the production

of gasoline which would not meet the

anti-dumping standards.

Other commenters opposing the

proposal felt that, although it is very

restrictive, they could not support

concessions for only a few regulated

parties. They contended that EPA

should force a capital solution by the

affected refiners, and not allow the

adjustment.

Analysis and Conclusion

In finalizing the low-sulfur crude

baseline adjustment, EPA is using the

authority granted to it by Congress to

allow limited exceptions under narrow

circumstances. As with the other

baseline adjustments mentioned above,

the appropriate criteria for obtaining an

adjustment are designed to be stringent

in order to provide relief only in cases

of extreme burden and to maintain the

environmental benefits of the (antidumping) program. EPA is not allowing

adjustments for all refiners who have

experienced increasing crude sulfur

levels since 1990 or for refiners who

will experience such increases in the

future. Thus, the existing provisions in

part 40, section 80.91 of the regulations

still apply, i.e., no adjustments for crude

oil quality or availability changes are

allowed unless the criteria finalized

today are met.

C. Comments on Crude Oil Quality

Changes Since 1990

In the NPRM, EPA requested

comments on inherent crude oil

properties, other than sulfur, which

have significantly deteriorated since

1990 and which directly and

significantly affect the values of any fuel

parameters for which an individual

baseline value must be determined. In

addition, EPA requested comments on

future crude oil trends (i.e. whether

crude sulfur content will continue to

increase or stabilize), specifically on a

regional or PADD basis.

Summary of Comments

No commenter specified crude oil

properties, other than sulfur, which

have significantly deteriorated since

1990 and which directly and

significantly affect the values of any fuel

parameters for which an individual

baseline value must be determined.

Additionally, no commenter discussed

future crude oil property trends.

Commenters did discuss the RFG and

anti-dumping programs, specifically

with regard to individual baselines, as

indicated below.

One commenter in support of a

baseline adjustment commented that the

existing anti-dumping regulations have

the unintended consequence of placing

a disproportionately heavy burden on

producers of clean gasoline which

ultimately could lead to a deterioration

of air quality. Specifically, the

commenter stated that refiners who

produced clean gasoline in 1990 are

held to stricter standards than those

who produced dirtier gasoline in 1990.

Furthermore, the difficulties of the more

stringent standards become more acute

when the quality of a refiner’s gasoline

is affected by circumstances beyond the

refiner’s control.

Another commenter indicated that

driving the cleanest refiners out of

business was not an intended effect of

the RFG and anti-dumping programs,

and would not promote protection of

public health or the environment. This

commenter felt the regulations should

recognize the needs of the cleanest

refiners and afford them the opportunity

for continued operation, by allowing a

low sulfur crude adjustment. The

commenter stated that despite increased

sulfur content, clean refiners would still

produce very clean gasoline.

Furthermore, the commenter indicated

that without an appropriate and

sufficient baseline adjustment, clean

refiners may have to cease operation

which could subsequently lead to fewer

clean refineries in the petroleum

industry.

In regard to standard pipeline

procedures, one commenter felt that

certain crude oil properties were beyond

the control of downstream refiners.

Therefore, the commenter stated that

refiners should be allowed to adjust

baselines annually. As an example, the

commenter stated that perhaps such an

adjustment would be based on the

naphtha fraction of the crude oil

received from the Alaska North Slope.

Analysis and Conclusion

EPA disagrees with the comment that

refiners who produced relatively cleaner

gasoline in 1990 are held to a stricter

standard than those who produced

relatively dirtier gasoline in 1990. The

same basic standard applies to all

refiners with an individual baseline,

that is, they must produce gasoline as

clean as the gasoline they produced in

1990.

As indicated above, the original

regulations generally do not allow

baseline adjustments for changing crude

oil quality or availability. However,

during the review and approval of

baselines, EPA was informed that the

depleted supply of very sweet crude oil

which had been processed in 1990

could force one or more refiners to cease

gasoline production. If a refiner

processed a very sweet crude (e.g., less

than 500 ppm) in 1990, its baseline

sulfur level could be 50 ppm or lower.

Because of increasing sulfur content in

the crude oil supply, if that refiner

currently processes relatively sweet

crude oil (e.g., less than 1200 ppm

sulfur), it would likely be unable to

comply with its individual baseline

without severe economic burden due to

its extremely low baseline sulfur level.

It may also be extremely expensive for

refiners to add refinery units in order to

ensure compliance. For example,

gasoline sulfur may be lowered by

hydro-desulfurization of gasoline

components and/or by charging the

gasoline to blendstock producing units.

This option is expensive and could

require the installation of considerable

new refining equipment. It could also

require extensive volumes of hydrogen,

which may be hard to produce within

a given refinery. Thus, compliance

options for such a refiner might be

prohibitively expensive.

In response to the comment on

standard pipeline procedures, the

purpose of the low-sulfur crude baseline

adjustment is to provide refiners limited

relief in situations where the antidumping regulatory burden is extremely

onerous and where requiring

compliance would yield little or no

environmental benefit. Although a few

refiners will be granted the low-sulfur

crude baseline adjustment, these

refiners must realize that they (like all

other refiners) will be responsible for

future adaptations to changing crude

sulfur levels. Baseline adjustments are

intended to reduce, not eliminate, the

burden associated with regulatory

compliance. If the burden were

completely eliminated, then the

required criteria would no longer be met

and the goals of the anti-dumping

program would no longer be fulfilled.
Federal Register / Vol. 62, No. 42 / Tuesday, March 4, 1997 / Rules and Regulations 9877

D. Comments on the Proposed Criteria

for a Baseline Adjustment

In the NPRM, EPA proposed seven

criteria that a refiner would have to

meet to qualify for the low-sulfur crude

baseline adjustment. Comments on

these criteria are discussed below.

Criterion 1: The refinery produces no

reformulated gasoline.

The anti-dumping requirements, in

general, apply to all conventional

gasoline whether or not RFG is

produced. Under this adjustment,

however, no dumping will result from

RFG production. If a refiner who

receives this baseline adjustment

subsequently produces RFG, the

refiner’s conventional gasoline

compliance will be subject to its original

unadjusted baseline during the current

averaging period and in all subsequent

years. However, in the NPRM, EPA also

proposed that the eligibility of any

refinery of a multi-refinery company for

this baseline adjustment is not

dependent on the RFG production of the

refining company’s other refineries.

Summary of Comments

Some commenters stated that if a

baseline adjustment were made, the

prohibition of RFG production would be

unnecessary and overly restrictive.

Commenters added that restrictions on

baseline adjustment qualification may

limit a refiner’s ability to adapt to

future, unforeseen market changes.

Commenters stated that this restriction

would have an adverse impact on

cleaner operations by limiting flexibility

and competition, and could lead to a

future shortage of RFG. It was pointed

out that many refiners would be

prevented from producing RFG if they

were forced to revert back to their

unadjusted baselines. Commenters

argued that, if refiners were forced to

choose between RFG and conventional

fuel production based on artificial

factors rather than a response to market

demand, refiners with higher sulfur

baselines would be able to compete in

both markets simultaneously with less

competition. Therefore, the commenters

suggested that EPA should allow the

baseline adjustment for refiners that

meet the other proposed criteria,

regardless of their RFG production.

Analysis and Conclusion

EPA considered the above comments

in its decision, but maintains that a

refiner must not produce RFG to qualify

for a baseline adjustment. EPA believes

that refiners who were able to adjust

refinery operations (through capital

investment or process modifications) to

produce RFG should be able to

accommodate increases in crude sulfur

content. In addition, the Agency

believes that prohibiting RFG

production is the best way to ensure

that ‘‘no dumping’’ will occur. EPA does

not believe that this requirement is

unduly restrictive. Therefore, EPA is

finalizing the proposed criterion that a

refiner must not produce RFG to qualify

for this baseline adjustment.

Criterion 2: A refiner has an unadjusted

baseline sulfur value less than or

equal to 50 ppm.

EPA believes that requiring a

threshold sulfur content of 50 ppm is

appropriate because higher baseline

levels would indicate that the refiner’s

1990 crude slate was not extremely low

in sulfur. In addition, a refiner with a

higher baseline sulfur level should have

sufficient leeway, e.g., types of crude oil

supplies used or available and

processing flexibility, to comply with its

individual baseline. In the NPRM, EPA

requested comments on the

appropriateness of requiring a threshold

sulfur content, and on the suitability of

50 ppm or another concentration as a

threshold level.

Summary of Comments

Most commenters opposing the

baseline adjustment were concerned

that such an adjustment would not

result in equal treatment for all, and

would give some refiners an unfair

advantage. These commenters

contended that the rule should not be

applied to only those with sulfur levels

below 50 ppm or any other number,

because increased crude sulfur impacts

every refiner regardless of its baseline.

Commenters added that all refiners are

faced with changing crude oil quality;

refiners must consider these changes

when planning future capital

investments and product slates.

Furthermore, many commenters

asserted that there is no basis for the 50

ppm threshold proposed by EPA. They

indicated that this level should be

significantly raised or eliminated. In

addition, one commenter argued that

requests for adjustment could go beyond

crude sulfur content, though the

commenter did not specify which other

crude oil parameters could be

investigated. Finally, commenters

contended that this rule could be

challenged based on the competitive

advantage gained by exempt parties.

Analysis and Conclusion

As with any baseline adjustment,

EPA’s authority to allow adjustments is

limited. As stated previously,

exceptions to this requirement of the

Act will only be allowed for cases of

extreme economic burden with minimal

environmental impact. Not all refiners

who have experienced increases in

crude oil sulfur levels are unduly

burdened. In order to quantify this

burden, and for the reasons stated

earlier, EPA proposed a 50 ppm

threshold value for the crude oil sulfur

content of a refiner’s unadjusted

baseline. Because commenters did not

suggest another threshold value and

EPA is not aware of another value that

would be more appropriate, the Agency

is finalizing an unadjusted baseline

sulfur level of 50 ppm. Refiners must

comply with this sulfur criterion to

qualify for a low-sulfur crude baseline

adjustment.

Criterion 3: The affected refinery of a

multi-refinery refiner may not be

aggregated with the refiner’s other

refineries for compliance purposes.

EPA proposed that this baseline

adjustment would be available to

refineries of both single-refinery and

multi-refinery companies. However,

EPA also proposed that the affected

refinery of a multi-refinery refining

company may not be aggregated with

the company’s other refineries for

compliance purposes. If a refinery that

is granted a low-sulfur crude baseline

adjustment is subsequently included in

an aggregate baseline, its conventional

gasoline compliance will be subject to

its original unadjusted baseline during

the current averaging period and in all

subsequent years. Therefore, to qualify

for a low-sulfur crude baseline

adjustment, the affected refinery of a

multi-refinery company may not be

aggregated with the refining company’s

other refineries for compliance

purposes.

Summary of Comments

Commenters opposing the baseline

adjustment proposal suggested that EPA

should not tie eligibility for the

adjustment to aggregation. If there is a

need for adjustment, it should affect the

refinery only, without the need to revert

back to the unadjusted baseline.

Analysis and Conclusion

EPA agrees that allowing refiners to

comply with the anti-dumping

requirements on an aggregate basis

provides flexibility. However, the

Agency still believes that refiners

should not be able to aggregate and also

receive a low-sulfur crude baseline

adjustment for one of its refineries.

Because the ability to aggregate is

limited to multi-refinery refiners, such

refiners have more flexibility than single

refiners in regard to baseline

compliance. Thus, they already have
9878 Federal Register / Vol. 62, No. 42 / Tuesday, March 4, 1997 / Rules and Regulations

some means of reducing the effect of

increasing crude sulfur on their

compliance. EPA believes it would be

inappropriate, and possibly anticompetitive, to allow a refinery

receiving this baseline adjustment to

also be included in an aggregate

baseline.

Criterion 4: The installation of the

refinery units necessary to process

higher sulfur crude oil supplies to

comply with the refinery’s actual

(i.e., unadjusted) baseline would

cost $10 million or be greater than

or equal to 10 percent of the

depreciated book value of the

refinery as of January 1, 1995.

The purpose of this provision is to

ensure that baseline adjustments are

limited to cases of extreme burden or

economic hardship. (This is the same

requirement for economic burden that

must be met by a refiner seeking a workin-progress baseline adjustment.) EPA

requested comments on this criterion

and whether the specified values of $10

million or 10 percent are adequate given

the type of unit (e.g., hydrotreater) that

a refiner would have to install in order

to comply. EPA also requested

comments on (1) the economic burden,

if any, of producing and selling gasoline

blendstocks in lieu of finished gasoline,

and (2) the economic burden of

complying with an unadjusted baseline

under the circumstances described

above by modifying refinery operations

in ways other than installing major

refinery units.

Summary of Comments

Most commenters supported the

proposed criterion of $10 million or 10

percent and stated that this criterion is

fair and appropriate. One commenter

stated that refining equipment is

expensive and it is not difficult for a

refiner to spend $10 million.

Furthermore, the commenter indicated

that the 10 percent depreciation value

was not a significant hurdle either.

Commenters also expressed concern

that if this adjustment were not allowed,

refiners would be forced by the

regulation to produce blendstocks in

lieu of gasoline. They stated that the

discounts refiners would be forced to

give for at least some of those

blendstocks would be too great to

remain viable; refiners could not

profitably produce blendstocks in lieu

of gasoline. The commenters contended

that the decision to produce gasoline is

dictated by refinery design and

marketing. One commenter added that

restricting the ability to freely choose

the most profitable product mix would

be an economic disadvantage.

In response to the second request,

nearly all commenters agreed that

increases in crude sulfur directly (but

not linearly) lead to increases in

gasoline sulfur, unless major structural

and operational modifications are made

to the refinery (assuming the necessary

equipment is not already in place.)

Whether and how EPA should address

this situation, though, is a point of

contention.

One commenter, however, stated that

changes in crude sulfur are a poor

indicator of gasoline sulfur levels. This

commenter suggested that it would be

more appropriate to consider catalytic

cracking unit (catcracker) feed sulfur.

This suggestion applies to refineries

without vacuum units, which catcrack

reduced crude. Catcracker sulfur can

only be reduced by either lowering the

distillation end point or hydrotreating

the feed or the blendstock. The

commenter also stated, though, that

lowering the end point artificially forces

a refiner to operate at less than optimum

conditions. Furthermore, hydrotreating

the blendstock stream is impractical

since it reduces the octane value of the

blendstock and forces higher reformer

severity. The commenter added that

feed stream hydrotreatment is

expensive.

Analysis and Conclusion

EPA agrees that a refiner could be

subject to an extreme economic burden

if it were forced to produce blendstocks

in lieu of gasoline or to significantly

modify refinery operations in order to

comply with the anti-dumping

regulations (although some refiners may

produce blendstocks or modify

operations at a high cost for other

reasons). As a result, EPA believes that

limited relief from these potential

burdens is necessary and can be

provided through a low-sulfur crude

baseline adjustment which the Agency

is finalizing today.

EPA agrees that it may not be difficult

for a refiner who meets the other criteria

specified for this baseline adjustment to

spend $10 million to reduce sulfur in

order to comply with the anti-dumping

requirements. Nonetheless, EPA

believes this economic criteria is

essential for showing extreme economic

burden, and thus is retaining this

provision as proposed.

EPA generally agrees with the

comment that changes in crude sulfur

are a poor indicator of gasoline sulfur

levels. However, given the other criteria

that a refiner must meet to obtain this

baseline adjustment, particularly the

low threshold values for baseline

gasoline sulfur and crude sulfur

changes, EPA believes that it is

appropriate to consider the influence of

extremely low crude sulfur levels on

extremely low baseline sulfur levels. As

will be discussed below, EPA is not

basing the actual adjustment on the

relationship between crude sulfur and

baseline sulfur levels.

Criterion 5: The refiner has access to a

geographically-limited crude oil

supply.

EPA proposed that a refiner must

show that it could not reasonably or

economically obtain crude oil from an

alternative source that could be refined

into conventional gasoline in

compliance with the refiner’s

unadjusted baseline. EPA requested

comment on this proposed provision

and on criteria that should be used to

evaluate ‘‘reasonably and economically

available’’.

Summary of Comments

Small refiners with restricted

operational flexibility and limited

financial access supported the proposal.

They felt that without more than the 125

percent flexibility given in the original

regulation (i.e., simple model antidumping compliance for sulfur), crude

sulfur increases would force very clean

small refiners with low baselines out of

business. One commenter stated that

refiners in the Rocky Mountains have

traditionally relied on very sweet crude

oil supplies which have historically

been available in the area. However, the

sulfur content of Rocky Mountain crude

oil has increased at a greater rate than

that of crude oil in the rest of the

country. This commenter stated that

these refiners realistically only have

access, due to geography and

economics, to crude oil supplies

imported at the Canadian border.

One commenter suggested that EPA

should provide examples of refiners

meeting this requirement (e.g., all

single-refinery refiners in land-locked

states). This commenter also suggested

additional criteria EPA could consider

in allowing this adjustment, such as the

distance from a particular refinery to

alternative sources of low sulfur crude

supplies, the size of the refinery, the

ability of the refiner to access and

transport such crude oil supplies, and

the extent to which the viability of the

refiner is threatened by the cost of

obtaining alternative crude oil supplies.

Another criterion that was suggested

would be the increase in the average

sulfur content of the crude slate used for

gasoline production between 1990 and

1994.

Analysis and Conclusion

Although EPA agrees with the

importance of evaluating the
Federal Register / Vol. 62, No. 42 / Tuesday, March 4, 1997 / Rules and Regulations 9879

information described in the above

suggestion, it does not believe it is

necessary to impose additional specific

criteria for determining who should

qualify for a low-sulfur crude baseline

adjustment. EPA will consider these

factors in determining whether a

refinery meets this criterion and will

evaluate petitions for this low-sulfur

crude baseline adjustment on a case-by

case basis. EPA is finalizing this

provision as proposed.

Criterion 6: The refiner has experienced

an average crude sulfur increase

greater than or equal to 25 percent

since 1990.

EPA proposed that the highest

annual-average crude sulfur slate used

during the period 1991–1994, inclusive,

be compared to the 1990 sulfur level to

determine if the ‘‘25 percent’’ criterion

is met. Comments were requested

concerning the level of difference

between 1990 and post-1990 crude

sulfur contents that should exist in

order to obtain an adjustment, and

whether 1991–1994 is an appropriate

comparison period or whether some

other comparison should be established.

The Agency also requested comments as

to whether it would be appropriate, and

feasible, to distinguish crude oil

supplies used solely for gasoline

production from crude oil supplies used

to produce other refinery products. If

such distinction were possible, EPA

believes it would be appropriate to base

all calculations (pertaining to this

adjustment) only on the volumes of each

crude used to produce gasoline.

Summary of Comments

Opponents to the proposal were

concerned that this adjustment rewards

refiners that purchased higher sulfur

crude oil supplies after 1990. They

indicated that the trend toward sour

crude oil supplies was recognized

during the Regulatory Negotiation, and

that the annual averaging and 125

percent compliance provisions for

conventional gasoline were created to

address the situation. These

commenters felt that if the 125 percent

compliance level is not sufficient, it

should be changed for all parties.

Some commenters supporting this

baseline adjustment indicated that it is

feasible to distinguish crude oil supplies

used solely for gasoline production from

crude oil supplies used to produce other

refinery products, and that it would be

appropriate to evaluate this criterion

based only on the crude used for

gasoline production.

Analysis and Conclusion

Although the trend toward sour crude

oil supplies was recognized in the

Regulatory Negotiation, the quality of

the crude oil available to refiners in

PADD IV has been deteriorating faster

than the rest of the U.S. since 1990. As

a result, some refiners with very clean

baselines have found it very difficult to

comply with the anti-dumping

regulations. EPA is finalizing the lowsulfur crude baseline adjustment for

those refiners who qualify for the

adjustment based on the criteria

finalized today. However, EPA believes

that the criteria are necessarily stringent

so that only those refiners who are

extremely burdened will qualify. In

addition, EPA believes that because the

program is so restrictive, the

environmental impact of the adjustment

will be minimal and will not negate the

benefits of the anti-dumping program.

Commenters supported EPA’s belief

(as stated in the NPRM) that it is

appropriate and feasible to base the lowsulfur crude baseline adjustment only

on crude used for gasoline production.

EPA is finalizing this criterion as

proposed, with a correction to the

regulations (contained in the proposal)

which reflects the Agency’s intent in

both the proposal and today’s final rule,

as follows. In the proposed regulations,

one aspect of the equation associated

with this criterion was incorrectly

defined, namely, the definition of the

variable ‘‘CSHI’’. In the proposed

regulations, ‘‘CSHI’’ was defined as the

‘‘highest annual average crude slate per

paragraph (e)(8)(ii)(B) of this section.’’

Paragraph (e)(8)(ii)(B) of that section

referenced the ‘‘* * * highest crude

sulfur level (ppm) of the crude slate

utilized in the production of gasoline in

the refinery in 1994 * * *.’’ Thus, the

definition of ‘‘CSHI’’ in the proposed

regulations was not consistent with the

discussion contained in the proposal

preamble (60 FR 40012. August 4, 1995)

which referenced the years 1991–1994,

as does today’s regulation. Today’s

regulation corrects this error to reflect

the Agency’s intent in both the NPRM

and today’s final rulemaking preambles.

Criterion 7: Gasoline sulfur changes are

directly and solely attributable to

the crude sulfur change, and not

due to alterations in refinery

operation nor choice of products.

No comments were received on this

proposed criterion. EPA is thus

finalizing this requirement.

E. Comments on the Proposed Options

for a Baseline Adjustment

EPA requested comments on the

options proposed for determining the

adjusted baseline sulfur level if a refiner

meets the proposed criteria and is

approved for a baseline adjustment.

These options are summarized below.

EPA also requested comments on its

view that a refiner should not be exempt

from its other anti-dumping compliance

baselines, i.e., all other simple model

requirements as well as exhaust benzene

and exhaust toxics emissions under the

complex model since those emissions

are minimally affected by sulfur. See the

support document for this rule for more

discussion related to the various

proposed options. (‘‘Regulation of Fuels

and Fuel Additives: Standards for

Reformulated and Conventional

Gasoline—Detailed Discussion and

Analysis’’, Air Docket A–95–03.)

Option 1: EPA proposed that the

adjusted baseline sulfur value be related

to the ratio of the sulfur content of the

highest sulfur crude utilized in 1994 to

the average sulfur content of the crude

slate utilized in 1990. Under this option,

if a refiner used two crude oil supplies

in its gasoline production in 1994 with

sulfur levels of 1000 ppm and 2100

ppm, the higher sulfur crude would be

used in the determination of the

adjusted baseline sulfur value. If, for

example, the 1990 average crude sulfur

content was 500 ppm (resulting in a

baseline sulfur value of approximately

20 ppm), the adjusted baseline sulfur

value would be 84 ppm {20 ppm ×

(2100/500)}. EPA specifically requested

comments on whether the highest sulfur

crude from 1991–1994 should be used

rather than just considering 1994.

Option 2: EPA proposed that the

adjusted baseline sulfur value be related

to the ratio of the highest average sulfur

content of the crude slate used in 1991,

1992, 1993 or 1994 to the average sulfur

content of the crude slate used in 1990.

Incorporating the 1990 baseline and

crude sulfur levels from Option 1, and

average crude sulfur contents of 1000,

1100, 1400, and 1300 ppm for years

1991, 1992, 1993 and 1994, respectively,

the adjusted baseline sulfur value would

be 56 ppm, i.e., 20 ppm×(1400/500).

Option 3: EPA proposed that an

adjusted baseline sulfur value be

determined for each year through 1999.

Beginning January 1, 2000, the adjusted

baseline sulfur value would be the same

as it was in 1999. EPA proposed that the

annual adjusted value be determined

over the four years prior to the year

before the new value takes effect, except

for 1995 and 1996 which would be

determined as specified in Option 1

above (and for which the adjusted

baseline sulfur value would be the

same). EPA also proposed that if less

than a 25 percent difference occurs

between the 1990 average crude sulfur

level and the average crude sulfur level

over a four-year period, the refiner

would receive no additional
9880 Federal Register / Vol. 62, No. 42 / Tuesday, March 4, 1997 / Rules and Regulations

adjustments, and its most recent

adjusted baseline sulfur value would

become its permanent baseline sulfur

value at that point. For example, the

standard for 1997 would be based on the

ratio of the average sulfur content of the

crude oil used in 1992, 1993, 1994 or

1995 to the average sulfur content of the

crude slate used in 1990. EPA proposed

that the resulting adjusted baseline

sulfur value be submitted to the Agency

for evaluation and approval by June 1 of

the year preceding the year for which it

would be the standard. In the example

given, the adjusted baseline value (and

all supporting information) would have

to be submitted by June 1, 1996.

Option 4: For this option, EPA

proposed requirements similar to those

presented for Option 3 except that

adjustments would only be allowed

through 1997, i.e., the simple model

years. Beginning in 1998, the adjusted

baseline sulfur value would be equal to

the value in 1997.

Option 5: EPA proposed that the

adjusted baseline sulfur value be the

unadjusted baseline sulfur value plus 50

ppm. EPA specifically solicited

comments on the appropriateness of

using 100 ppm or 150 ppm instead of

50 ppm.

In order to show that increasing

gasoline sulfur is due solely to

increasing crude sulfur, EPA also

requested comments as to whether

changes in refinery configuration or

refinery operation should be prohibited.

Summary of Comments

Commenters suggested that if a onetime baseline adjustment is granted,

refiners should be given the opportunity

to estimate the compliance burden over

a five to ten year period. According to

commenters this concession would

accommodate someone who meets the

requirements in the short term, but who

would require more substantial

investment to implement a long term

solution. Another commenter felt a onetime adjustment would only benefit the

refiner if it were large enough to provide

relief for the foreseeable future.

Commenters indicated that the EPA

proposals did not provide adequate time

for adjustment. Furthermore, one

commenter argued that proposing a onetime adjustment for a dynamic situation

(changing crude oil sulfur) is illogical.

The commenter explained that other

adjustments allowed by the regulation,

such as the work-in-progress, were for

temporary events.

Of the options presented in the

NPRM, most commenters who

supported any adjustment felt that

Option 1 was too restrictive and would

offer little relief. They preferred Option

5 as the simplest and most flexible

approach. One commenter stated that

Options 1 and 2 were inappropriate

since they include the assumption that

crude sulfur and gasoline sulfur

increase at a constant ratio, which is not

correct. The commenter added that the

sulfur content of gasoline depends on

several factors such as the crude oil

composition, refinery operation, and the

type of gasoline produced. This

commenter contended that Options 3

and 4 were also inappropriate, although

Option 3 was preferable to Option 4

because of the additional time provided

for obtaining a final adjustment. This

commenter supported continuing relief,

but did not support a limit beginning in

1997 or 1999. The commenter

considered Option 5 to be the most

appropriate option for making a sulfur

adjustment, if the added amount was

150 ppm. This commenter also

expressed concern regarding the low

repeatability of tests for sulfur below

100 ppm. The commenter claimed that

EPA appears to recognize the low

repeatability by defining a negligible

quantity limit of 30 ppm. Finally, this

commenter proposed that EPA provide

another opportunity for adjustment in

five years, if crude sulfur levels

continue to increase at faster rates than

anticipated.

One commenter felt that if a refiner

does not produce RFG, does not

aggregate, has a limited crude supply,

and meets the ‘‘financial hurdles’’, there

is no need for arbitrary numbers, and

such refiners should be given the

statutory baseline of 338 ppm.

In addition to these concerns, other

commenters opposed the continuation

of the adjustment beyond the simple

model time frame. They stated the

complex model provides enough

flexibility for refiners, and that EPA has

neither the expertise to evaluate nonsulfur control options for complying

with NOX requirements nor the ability

to shift from the simple model to the

complex model for exhaust benzene.

Commenters also stated that the simple

model sulfur cap can be avoided by

using the complex model. One

commenter suggested that if EPA feels

that more flexibility is needed, it could

allow separate use of the simple and

complex models for conventional fuel

and RFG sulfur, olefins, and T90. This

approach would provide industry-wide

flexibility and would minimize the need

to provide special relief to a limited

number of refiners.

EPA also received a suggested option

from a commenter who proposed that a

refiner should be able to produce

conventional gasoline which does not

meet, on average, the requirements of its

individual baseline if the refiner could

show that deviation from its baseline

was directly and solely attributable to

crude sulfur change, and not due to

alterations in refinery operation or

choice of products. The suggested

option also contained other

requirements, which are essentially

those finalized today by EPA, that are

necessary for determining baseline

adjustment eligibility.

Analysis and Conclusion

All five proposed options would

determine the adjusted baseline sulfur

value prior to the period of production,

thus treating an affected refiner like all

other refiners. Although today’s rule

provides some relief for refiners who are

unduly burdened by baseline

compliance, these refiners may have to

modify refinery operations in the future

to accommodate increasing crude sulfur

levels. In the future, however, refinery

modifications will likely be required of

most refiners, without the benefit of a

baseline adjustment.

After careful analysis of the proposed

options, sulfur distribution data, and

comments, EPA is finalizing essentially

Option 5 in today’s rule. Under this

option, a refiner’s one-time adjusted

baseline sulfur value will be equal to the

refiners unadjusted baseline sulfur

value plus 100 ppm. EPA believes that

a 100 ppm sulfur adjustment is

appropriate for the following reasons.

First, 50 ppm, as suggested in the

NPRM, is too low. Upon further

consideration, especially regarding the

criteria which must be met in order to

obtain this adjustment, EPA believes

that a sulfur adjustment of 50 ppm

would not provide sufficient relief.

Refiners who are severely burdened by

the anti-dumping regulations, and who

meet the criteria, will likely need more

than a 50 ppm baseline adjustment in

order to reduce the extreme burden of

the regulations. Second, a baseline

adjustment value of 150 ppm sulfur is

too high. Although this value was

proposed in the NPRM, the Agency

believes that an adjustment of this

magnitude would negate the intentions

of this regulation (which is to provide

reasonable relief for extremely burdened

refiners) and the goals of the antidumping program. If an adjustment of

150 ppm sulfur was permitted, several

refiners not qualifying for the

adjustment (due to the 50 ppm

threshold required in Criterion 2) would

have lower baseline sulfur values than

some refiners who do qualify for the

adjustment. Finally, EPA believes that a

sulfur adjustment of 100 ppm will

provide adequate relief for qualifying

refiners while maintaining the
Federal Register / Vol. 62, No. 42 / Tuesday, March 4, 1997 / Rules and Regulations 9881

environmental benefits of the antidumping program.

Based on the above decision, 150 ppm

is the maximum adjusted baseline sulfur

value that a refiner could be granted

under today’s final rule (50 ppm

threshold + 100 ppm additional sulfur

= 150 ppm maximum adjusted baseline

value for sulfur). The Agency believes

that this option will provide refiners

maximum flexibility with minimal anticompetitive effects.

Regarding the comment that EPA

should provide another opportunity for

adjustment in five years if crude sulfur

levels continue to increase at faster rates

than expected, EPA believes this action

would be inappropriate. Baseline

adjustments are intended to provide

relief where the burden is extreme. EPA

expects that the refining industry will

develop means of dealing with

increasing crude sulfur levels. The cost

of such means may be high, but given

the lead time, and the industry’s

knowledge of crude oil exploration and

production, it is unlikely that a wellprepared refiner would be extremely

burdened by future high sulfur levels.

As with other baseline adjustments,

refiners receiving this baseline

adjustment will retain the adjustment

even after the Simple Model years, i.e.,

after 1997. Although the Complex

Model does provide more compliance

flexibility than the Simple Model, EPA,

via the baseline adjustments, is

providing relief for compliance with

anti-dumping requirements as a whole,

and not just the Simple or Complex

Model requirements. In some cases,

even the Complex Model does not

provide enough flexibility such that an

extreme burden (when evaluated under

the Simple Model) is reduced. EPA also

disagrees with commenters who

suggested that EPA allow compliance to

be determined under one model for

conventional gasoline and under the

other model for RFG. The reasons for

requiring the use of the same models for

both conventional and RFG were

discussed at length in the December

1993 final rule. Additionally, as stated

several times previously, EPA does not

have authority and does not believe it is

appropriate to provide a broad, i.e.,

industry-wide, adjustment program.

EPA considered the suggested option,

but is not finalizing it due to some

concerns about the concept and detail of

the option. This option would exempt a

qualifying refiner from complying with

its anti-dumping compliance baseline if

the refiner can show, at the end of the

compliance period, that deviation from

its baseline was directly and solely

attributable to crude sulfur change.

Thus, unlike all other refiners, a

qualifying refiner would have no clearly

defined standard prior to year of

production. Furthermore, if EPA was

not satisfied that deviation from its

baseline was directly and solely

attributable to crude sulfur change, the

refiner would have to determine

compliance relative to its unadjusted

baseline and would likely be out of

compliance.

VI. Low Sulfur, Low Olefin Baseline

Adjustment

A. Introduction

Certain very clean individual

baselines, i.e., those with extremely low

values for one or more fuel parameters,

can make compliance for refiners

extremely difficult or impossible due to

(1) limited maneuverability about the

clean baseline and (2) limited flexibility

with regard to annual averaging. During

the review and approval of individual

baselines, EPA was informed that

extremely low baseline sulfur and olefin

values could force a refiner to cease

gasoline production. In addition,

refiners with very clean baselines

presumably produce the least polluting

gasoline. It would be environmentally

harmful if these refiners ceased

production and their volumes were then

produced by refiners with relatively

dirtier baselines.

EPA believes it is appropriate to

provide limited relief in the form of a

baseline adjustment in those few cases

where the regulatory burden is

extremely onerous and where requiring

compliance would yield little or no

environmental benefit.

B. General Comments on the Proposal

To provide some relief for those

refiners who are severely burdened by

the combination of extremely low sulfur

and olefin levels, EPA proposed a

baseline adjustment which set the

annual average sulfur and olefin values

to 30 ppm and 1.0 volume percent

(vol%), respectively. To receive this

adjustment, EPA proposed that a refiner

must meet the following criteria:

(1) Have an individual baseline sulfur

level less than or equal to 30 ppm and

an individual olefin level less than or

equal to 1.0 vol%;

(2) Show that installation of the

refinery units necessary for compliance

with an unadjusted baseline would cost

$10 million or be at least 10 percent of

the depreciated book value of the

refinery as of January 1, 1995.

Additionally, EPA proposed that such

an adjustment would be available to

both single-refinery and multi-refinery

refining companies. However, the

affected refinery of a multi-refinery

company would not be allowed to be

aggregated with the company’s other

refineries for compliance purposes. If at

any time a given refinery’s baseline is

aggregated with another refinery’s

baseline for compliance purposes, EPA

proposed that the applicable individual

baselines will revert to the unadjusted

baselines.

EPA also proposed that the summer

and winter individual baseline values

for sulfur and olefins be set to 30 ppm

and 1.0 vol%, respectively.

Summary and Analysis of Comments

Several commenters supported this

proposed adjustment and EPA’s

statement that no environmental

impacts would occur due to this rule.

Additionally, many commenters cited

problems with the accuracy of

laboratory test methods at very low

sulfur and olefin levels as further

justification for this baseline

adjustment. Commenters stated that

errors in lab analysis, sample

contamination, or product commingling

can incorrectly result in fuel parameter

values which are greater than the

baseline values when those baseline

values are extremely low. EPA agrees

that this baseline adjustment will

provide flexibility for qualifying refiners

and will reduce the complications

associated with testing low sulfur and

olefin levels.

While the majority of commenters

supported this proposal, many of them

suggested changes in the criteria for the

adjustment. One commenter suggested

that EPA remove the aggregation

requirement. This commenter stated

that a conflict arises when a refiner also

qualifies for a JP–4 baseline adjustment

(under the JP–4 baseline adjustments, in

certain instances, a qualifying multirefinery refiner must determine its antidumping compliance on an aggregate

basis). EPA agrees with this comment.

EPA proposed the aggregation

requirement because it believed that, as

for certain other baseline adjustments, it

would be inappropriate to provide a

baseline adjustment and to also allow a

refinery receiving such an adjustment to

be included in an aggregate baseline for

compliance purposes. Refiners who can

comply with the reformulated and antidumping regulations on an aggregate

basis (i.e., multi-refinery refiners)

already have a degree of flexibility over

single-refinery refiners, and EPA

believed that allowing a refinery both a

baseline adjustment and the ability to be

included in an aggregate baseline might

provide a competitive advantage to

certain refiners. However, EPA did not

intend that one baseline adjustment

would eliminate use of another baseline
9882 Federal Register / Vol. 62, No. 42 / Tuesday, March 4, 1997 / Rules and Regulations

adjustment, and believes that this

particular adjustment (because of the

extremely low sulfur and olefin levels

involved), when coupled with the

ability to aggregate, would not create a

significant competitive advantage. Thus,

EPA is not finalizing the requirement

that refiners who receive this low

sulfur/low olefin adjustment must revert

to the unadjusted baseline if that

refinery is included in an aggregate

baseline.

Several commenters suggested

removing the economic criterion.

Commenters stated that requiring large

capital expenditures as a condition for

this adjustment is unfair and devalues

the investment in all such refineries.

Commenters felt that refinery

modifications would not guarantee

compliance with an ultra-clean baseline.

Commenters stated that even the

allowed 125 percent of such ultra-low

values could be less than the

reproducibility and could approach the

lower limit of the test method.

Additionally, commenters said that

subtle changes in the crude slate could

affect compliance for these refiners.

EPA agrees that for extremely low

sulfur or olefin values, it may be almost

impossible to install additional

equipment or take other actions to

ensure compliance with 100 percent or

even 125 percent of the baseline values.

In such cases, the burden would most

likely exceed $10 million or 10 percent

of the depreciated refinery value as

proposed in the NPRM. To require

demonstration of this would be of little

additional value. Thus, EPA is not

finalizing that provision of this baseline

adjustment.

EPA proposed two options for

assigning seasonal adjusted sulfur and

olefins values for summer and winter.

The first option was to set these values

to 30 ppm and 1.0 vol%, respectively,

as for the annual average values. The

other option was to use the refiner’s

own ratio of summer and winter values

to determine the seasonal values. Few

commenters indicated a preference for

assigning seasonal baseline sulfur and

olefin levels. EPA is thus promulgating

its first option, that is, values of 30 ppm

sulfur and 1.0 vol% olefins for both the

annual average and seasonal values.

EPA believes this choice is appropriate

since, under this rule, baseline values

for these two fuel parameters are

different from the actual unadjusted

baseline values of qualifying refiners.

Additionally, based on comments

mentioned earlier, testing of extremely

low sulfur and low olefin values could

have resulted in inaccurate unadjusted

baseline values. Thus any ratio

calculated from those values would also

be inaccurate.

One commenter felt that refiners

should be allowed to use the 30 ppm

sulfur and 1.0 vol% olefin levels as

threshold values which would also

curtail testing of these trace parameters.

This rule is only concerned with

baseline development, for which all

testing has been completed, and does

not address compliance issues.

C. Provisions of the Final Rule

To obtain this baseline adjustment, a

refinery must have a baseline sulfur

value less than or equal to 30 ppm and

a baseline olefin value less than or equal

to 1.0 vol%. A refinery that meets this

criteria will have an adjusted baseline

sulfur value of 30 ppm and an adjusted

baseline olefin value of 1.0 vol% as its

summer, winter and annual average

values. Although for most baseline

adjustments refiners are required to

petition EPA for the adjustment, in this

case, since baselines are already

established, it is more efficient for EPA

to determine which refineries qualify for

this baseline adjustment, rather than

require such refineries to petition EPA.

Thus, refiners with refineries that

qualify for this adjustment will receive

notification from EPA in a timely

manner.

VII. Environmental and Economic

Impacts

EPA expects a negligible

environmental impact from allowing

baseline adjustments under the criteria

of this rule because (1) only a few

refiners are expected to qualify for the

adjustments (about 16), and (2) the total

gasoline production of the qualifying

refiners is small (less than three percent

of annual gasoline production).

To quantitatively illustrate this

negligible impact, EPA used the

Complex Model (an emissions model

that indicates changes in in-use motor

vehicle emissions based on changes in

one or more of the gasoline fuel

parameters evaluated by the model) to

determine the adjustments’ effects on

harmful exhaust toxics and NOX

emissions. Results from the model

indicate less than a one percent increase

in exhaust toxics emissions due to these

three baseline adjustments (primarily

due to the JP–4 adjustment), and less

than a 0.1 percent increase in NOX

emissions (primarily due to the low

sulfur crude and low sulfur/low olefins

adjustments). The low sulfur crude and

low sulfur/low olefins baseline

adjustments have almost no impact on

exhaust toxics emissions, and the JP–4

baseline adjustment will likely yield a

decrease in annual NOX emissions.

Refineries affected by this rule are

geographically dispersed throughout the

United States, mostly in ozone

attainment areas.

The economic impacts of this rule are

generally beneficial to affected refiners

due to the additional flexibility

provided by this action. Minimal anticompetitive effects are expected.

A more comprehensive description of

the environmental and economic

impacts of the RFG program is described

in the Regulatory Impact Analysis (RIA)

supporting the December 1993 rule.

This RIA is available in Public Docket

A–92–12 located at Room M–1500,

Waterside Mall (ground floor), U.S.

Environmental Protection Agency, 401

M Street S.W., Washington, D.C. 20460.

VIII. Administrative Requirements

A. Administrative Designation

Pursuant to Executive Order 12866,

(58 FR 51735, October 4, 1993) the

Agency must determine whether this

regulatory action is ‘‘significant’’ and

therefore subject to OMB review and the

requirements of the Executive Order.

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 or

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 entitlement, 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 the Executive Order.

Pursuant to the terms of Executive

Order 12866, it has been determined

that this FRM is not a ‘‘significant

regulatory action.’’

B. Impact on Small Entities

EPA has determined that this rule will

not have a significant economic impact

on a substantial number of small

entities, and that it is therefore not

necessary to prepare a regulatory

flexibility analysis in conjunction with

this final rule. Because today’s rule

provides for less stringent requirements

than the December 1993 regulations for

qualifying refiners, small entities which

qualify for one or more of the baseline

adjustments contained herein will find
Federal Register / Vol. 62, No. 42 / Tuesday, March 4, 1997 / Rules and Regulations 9883

it easier to comply with the

requirements of the RFG and antidumping programs.

C. Paperwork Reduction Act

The Paperwork Reduction Act of

1980, 44 U.S.C. 3501 et seq., and

implementing regulations, 5 CFR Part

1320, do not apply to this action as it

does not involve the collection of

information as defined therein.

D. Unfunded Mandates Act

Under section 202 of the Unfunded

Mandates Reform Act of 1995

(‘‘Unfunded Mandates Act’’), signed

into law on March 22, 1995, EPA must

prepare a budgetary impact statement to

accompany any proposed or final rule

that includes a Federal mandate that

may result in expenditure by State,

local, and tribal governments, in the

aggregate; or by the private sector, of

$100 million or more. Under section

205, EPA must select the most costeffective and least burdensome

alternative that achieves the objectives

of the rule and is consistent with

statutory requirements. Section 203

requires EPA to establish a plan for

informing and advising any small

governments that may be significantly

or uniquely impacted by the rule.

EPA has determined that today’s

action does not include a Federal

mandate that may result in estimated

costs of $100 million or more to either

State, local or tribal governments in the

aggregate, or to the private sector. This

action has the net effect of reducing

burden of the RFG program on regulated

entities. Therefore, the requirements of

the Unfunded Mandates Act do not

apply to this action.

E. Submission to Congress and the

General Accounting Office

Under 5 U.S.C. 801(a)(1)(A) as added

by the Small Business Regulatory

Enforcement Fairness Act of 1996, EPA

submitted a report containing this rule

and other required information to the

U.S. Senate, the U.S. House of

Representatives and the Comptroller

General of the General Accounting

Office prior to publication of the rule in

today’s Federal Register. This rule is

not a ‘‘major rule’’ as defined by 5

U.S.C. 804(2).

IX. Statutory Authority

The statutory authority for the action

promulgated today is granted to EPA by

sections 211 (c) and (k) and 301 of the

Clean Air Act, as amended; 42 U.S.C.

7545 (c) and (k), and 7601.

List of Subjects in 40 CFR Part 80

Environmental protection, Air

pollution control, Fuel additives,

Gasoline, Motor vehicle pollution,

Reporting and recordkeeping

requirements.

Dated: February 21, 1997.

Carol M. Browner,

Administrator.

For the reasons set out in the

preamble, part 80 of title 40 of the Code

of Federal Regulations is amended as

follows:

PART 80—REGULATION OF FUELS

AND FUEL ADDITIVES

1. The authority citation for part 80

continues to read as follows:

Authority: Sections 114, 211 and 301 of the

Clean Air Act as amended (42 U.S.C. 7414,

7545 and 7601).

2. Section 80.91 is amended by

revising paragraph (e)(7)(i); removing

paragraph (e)(7)(iv) and by adding

paragraphs (e)(8) and (e)(9) to read as

follows:

§ 80.91 Individual baseline determination.

* * * * *

(e) * * *

(7) * * *

(i) Baseline adjustments may be

allowed, upon petition and approval

(per § 80.93), if a refinery produced JP–

4 jet fuel in 1990 and all of the following

requirements are also met:

(A) Refinery type.

(1) The refinery is the only refinery of

a refiner such that it cannot form an

aggregate baseline with another refinery

(per § 80.101(h)); or

(2) The refinery is one refinery of a

multi-refinery refiner for which all of

the refiner’s refineries produced JP–4 in

1990; or

(3) The refinery is one refinery of a

multi-refinery refiner for which not all

of the refiner’s refineries produced JP–

4 in 1990.

(B) No refinery of a given refiner

produces reformulated gasoline. If any

refinery of the refiner produces

reformulated gasoline at any time in a

calendar year, the compliance baselines

of all the refiner’s refineries receiving a

baseline adjustment per this paragraph

(e)(7) shall revert to the unadjusted

baselines of each respective refinery for

that year and all subsequent years.

(C) 1990 JP–4 to gasoline ratio.

(1) For a refiner per paragraph

(e)(7)(i)(A)(1) of this section, the ratio of

its refinery’s 1990 JP–4 production to its

1990 gasoline production must be

greater than or equal to 0.15.

(2) For a refiner per paragraph

(e)(7)(i)(A)(2) of this section, the ratio of

each of its refinery’s 1990 JP–4

production to its 1990 gasoline

production must be greater than or

equal to 0.15.

(3) For a refiner per paragraph

(e)(7)(i)(A)(3) of this section, the ratio of

the refiner’s 1990 JP–4 production to its

1990 gasoline production must be

greater than or equal to 0.15, when

determined across all of its refineries.

Such a refiner must comply with its

anti-dumping requirements on an

aggregate basis, per § 80.101(h), across

all of its refineries.

* * * * *

(8) Baseline adjustments due to

increasing crude sulfur content.

(i) Baseline adjustments may be

allowed, upon petition and approval

(per § 80.93), if a refinery meets all of

the following requirements:

(A) The refinery does not produce

reformulated gasoline. If the refinery

produces reformulated gasoline at any

time in a calendar year, its compliance

baseline shall revert to its unadjusted

baseline for that year and all subsequent

years;

(B) Has an unadjusted baseline sulfur

value which is less than or equal to 50

parts per million (ppm);

(C) Is not aggregated with one or more

other refineries (per § 80.101(h)). If a

refinery which received an adjustment

per this paragraph (e)(8) subsequently is

included in an aggregate baseline, its

compliance baseline shall revert to its

unadjusted baseline for that year and all

subsequent years;

(D) Can show that installation of the

refinery units necessary to process

higher sulfur crude oil supplies to

comply with the refinery’s unadjusted

baseline would cost at least $10 million

or be greater than or equal to 10 percent

of the depreciated book value of the

refinery as of January 1, 1995;

(E) Can show that it could not

reasonably or economically obtain crude

oil from an alternative source that

would permit it to produce

conventional gasoline which would

comply with its unadjusted baseline;

(F) Has experienced an increase of

greater than or equal to 25 percent in the

average sulfur content of the crude oil

used in the production of gasoline in the

refinery since 1990, calculated as

follows:

( ) %CSHI CS

CS

CS CHG − × =

90

90

100

Where:

CSHI=highest annual average crude

sulfur (in ppm), of the crude slates

used in the production of gasoline,

determined over the years 1991–

1994;
9884 Federal Register / Vol. 62, No. 42 / Tuesday, March 4, 1997 / Rules and Regulations

CS90=1990 annual average crude slate

sulfur (in ppm), of the crude slates

used in the production of gasoline;

CS%CHG=percent change in average

sulfur content of crude slate;

(G) Can show that gasoline sulfur

changes are directly and solely

attributable to the crude sulfur change,

and not due to alterations in refinery

operation nor choice of products.

(ii) The adjusted baseline sulfur value

shall be the actual baseline sulfur value,

in ppm, plus 100 ppm.

(iii) All adjustments made pursuant to

this paragraph (e)(8) must be

accompanied by:

(A) Unadjusted and adjusted fuel

parameters and emissions; and

(B) A narrative describing the

situation, the types of calculations, and

the reasoning supporting the types of

calculations done to determine the

adjusted values.

(9) Baseline adjustment for low sulfur

and olefins.

(i) Baseline adjustments may be

allowed if a refinery meets all of the

following requirements:

(A) The unadjusted annual average

baseline sulfur value of the refinery is

less than or equal to 30 parts per million

(ppm);

(B) The unadjusted annual average

baseline olefin value of the refinery is

less than or equal to 1.0 percent by

volume (vol%).

(ii) Adjusted baseline values.

(A) The adjusted baseline shall have

an annual average sulfur value of 30

ppm, and an annual average olefin value

of 1.0 vol%.

(B) The adjusted baseline shall have a

summer sulfur value of 30 ppm, and a

summer olefin value of 1.0 vol%.

(C) The adjusted baseline shall have a

winter sulfur value of 30 ppm, and a

winter olefin value of 1.0 vol%.

* * * * *

§ 80.10 [Amended]

3. Section 80.101 is amended by

removing paragraph (b)(1)(v).

[FR Doc. 97–5197 Filed 3–3–97; 8:45 am]

BILLING CODE 6560–50–P