[Federal Register Volume 75, Number 91 (Wednesday, May 12, 2010)]
[Rules and Regulations]
[Pages 26653-26662]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-11005]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2009-0344; FRL-9112-7]


Approval and Promulgation of Air Quality Implementation Plans; 
Reformulated Gasoline and Diesel Fuels; California

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: This final rule approves state implementation plan (SIP) 
revisions submitted by the State of California on June 15, 2004 and 
February 3, 2009, relating to reformulated gasoline (RFG) and diesel 
fuel sold or supplied as motor vehicle fuels in California. The 
revisions relating to RFG include California Phase 3 RFG (CaRFG3) 
regulations, correction of errors and streamlined requirements for 
compliance with and enforcement of the CaRFG3 standards, and an update 
to the State's predictive model to mitigate permeation emissions 
associated with the use of ethanol as a fuel additive. The revisions 
relating to diesel fuel include test methods for determining the 
aromatic hydrocarbon content in diesel fuel and reductions in the 
maximum allowable sulfur content for motor vehicle diesel fuel. The 
effect of today's action is to make these revisions federally 
enforceable as part of the California SIP.

DATES: This final rule is effective June 11, 2010.

ADDRESSES: EPA has established a docket for this action under EPA-R09-
OAR-2009-0344. The index to the docket for this action is available 
electronically at http://www.regulations.gov and in hard copy at EPA 
Region IX, 75 Hawthorne Street, San Francisco, California. While all 
documents in the docket are listed in the index, some information may 
be publicly available only at the hard copy location (e.g., copyrighted 
material), and some may not be publicly available in either location 
(e.g., CBI). To inspect the hard copy materials, please schedule an 
appointment during normal business hours with the contact listed in the 
FOR FURTHER INFORMATION CONTACT section.
    Although listed in the index, some information is not publicly 
available, i.e., CBI or other information the disclosure of which is 
restricted by statute. Certain other material, such as copyrighted 
material, is not placed on the Internet and will be publicly available 
only in hard copy form.

FOR FURTHER INFORMATION CONTACT: Jeffrey Buss, EPA Region IX, (415) 
947-4152, <a href="/cdn-cgi/l/email-protection#bfddcacccc91d5dad9d9cddac6ffdacfde91d8d0c9"><span class="__cf_email__" data-cfemail="97f5e2e4e4b9fdf2f1f1e5f2eed7f2e7f6b9f0f8e1">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: Throughout this document, ``we'' ``us'' and 
``our'' refer to EPA.

I. Summary of Proposed Actions

    On July 10, 2009 (74 FR 33196), EPA proposed to approve revisions 
to the California regulations for reformulated gasoline (RFG) sold or 
supplied in California, as submitted on June 15, 2004 and February 3, 
2009, and revisions to the regulations for diesel fuel sold or supplied 
in California, as submitted on February 3, 2009, as revisions to the 
California SIP. On July 21, 2009 (74 FR 35838), EPA issued a correction 
to the proposed approval and on August 11, 2009 (74 FR 40123), EPA 
extended the comment period on the proposed approval to August 31, 
2009. For a detailed discussion of the rule revisions that California 
submitted, please refer to EPA's proposed rule and Technical Support 
Document which can be found in the docket for this rulemaking.

II. EPA's Response to Comments

    We received one comment letter on August 31, 2009 from the Center 
on Race, Poverty & the Environment (CRPE or ``the commenter'') on 
behalf of the Association of Irritated Residents, Comit[eacute] West 
Goshen, Comit[eacute] Unido de Plainview, Comit[eacute] Residentes 
Organizados al Servicio del Ambiente, Committee for a Better Arvin, La 
Nueva Esperanza deAlpaugh, El Quinto Sol de America, South Shafter 
Project Committee, Shafter Chapter League of United Latin American 
Citizens, United for a Change in Tooleville, and La Voz de Tonyville.
    We have summarized the comments and provided responses below.
    Comment 1: CRPE stated that EPA must determine that CaRFG3 is 
enforceable before approving the SIP revision. Specifically, the 
commenter asserted that EPA is inappropriately relying on a federal RFG 
enforcement exemption granted in 2005 to support its conclusion that 
the CaRFG3 amendments to the SIP satisfy the requirements of CAA 
section 110(a).
    The commenter summarized portions of the rationale EPA provided in 
our proposed approval (74 FR 33198), and stated that ``EPA must 
evaluate the final rule to determine whether the rule is enforceable 
under Sec.  110(a), not whether the rule is equivalent in practice to 
federal requirements.'' The commenter asserted that EPA has neither 
``made the requisite finding that the provisions are enforceable,'' nor 
``made the case that equivalence in practice to federal requirements 
constitutes enforceability for the purposes of Sec.  110(a).''
    Response 1: Section 110(a)(2)(A) of the CAA requires that each SIP 
include ``enforceable emission limitations and other control measures, 
means, or techniques * * * as may be necessary or appropriate to meet 
the applicable requirements of this chapter.'' See also CAA section 
172(c)(6) (requiring enforceable measures in nonattainment area plans). 
EPA has stated in interpretive guidance that to be enforceable in 
practice, a measure must ``specify clear, unambiguous, and measurable 
requirements'' and must include a legal means to ensure that sources 
are in compliance.\1\ For example, an enforceable SIP regulation must 
clearly spell out the requirements, the regulated sources or 
activities, the recordkeeping and monitoring requirements, and test 
procedures to determine whether sources are in compliance.\2\ We 
continue to believe that the revisions to the California RFG 
regulations that we are approving today satisfy these enforceability 
requirements of CAA section 110(a).
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    \1\ ``State Implementation Plans; General Preamble for the 
Implementation of Title I of the Clean Air Act Amendments of 1990,'' 
57 FR 13498 at 13568 (April 16, 1992) (General Preamble).
    \2\ Id. at 13502.
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    First, as the commenter notes, in 2005 EPA exempted refiners, 
blenders and importers of CaRFG3 sold for use within California from 
certain enforcement provisions in the Federal RFG regulations found at 
40 CFR 80.81 (CaRFG3 enforcement exemption).\3\ EPA granted this 
enforcement exemption following a determination that the CaRFG3 
regulations and associated enforcement mechanisms were sufficient to 
ensure that producers of California gasoline would in fact meet the 
CaRFG3 standards, which in turn, would ensure compliance with the 
Federal Phase II RFG standards.\4\ EPA's

[[Page 26654]]

rationale for the exemption was consistent with the analyses we used 
when we previously granted enforcement exemptions to refiners, 
importers, and blenders of California Phase 2 gasoline (CaRFG2) under 
both the Federal Phase I and Phase II RFG programs.\5\
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    \3\ 70 FR 75914 (December 21, 2005).
    \4\ EPA made three determinations to support the enforcement 
exemption: (1) That emission reductions from CaRFG3 would be equal 
to or greater than the emission reductions from Federal Phase II RFG 
standards; (2) that the content standard for benzene in CaRFG3 would 
be equivalent in practice to the Federal Phase II RFG standard and 
that the oxygen content standard of 2.0 weight percent would be met 
in Federal RFG areas; and (3) that the California Air Resources 
Board (CARB) compliance and enforcement program is sufficiently 
rigorous to ensure that Federal Phase II RFG requirements would be 
met in practice. 74 FR 33196 at 33198 (July 10, 2009); 70 FR 75914 
at 75918 (December 21, 2005). See also 69 FR 48827 at 48832 (August 
11, 2004).
    \5\ 69 FR 48827 at 48829 (August 11, 2004) (proposed rule to 
extend California enforcement exemptions to CaRFG3). EPA had 
previously exempted gasoline subject to California's Phase 2 RFG 
regulations (CaRFG2) from certain enforcement requirements under the 
Federal Phase I RFG program. See 59 FR 7813 (February 16, 1994); 63 
FR 34818 (June 26, 1998). These enforcement exemptions expired on 
December 31, 1999, but EPA continued the exemptions beyond that date 
following a determination that the CaRFG2 regulations would provide 
emission benefits equivalent to the Federal Phase II RFG program. 64 
FR 49992 (September 15, 1999). The 2005 action extended these 
California enforcement exemptions to CaRFG3.
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    Specifically, EPA determined in those prior actions that it was 
appropriate to exempt producers of California gasoline from certain 
sampling and testing, recordkeeping, and reporting provisions in the 
Federal RFG regulations that deal solely with demonstrating compliance 
with the Federal RFG standards.\6\ EPA found that these Federal 
enforcement provisions were duplicative and unnecessary, because the 
California RFG program was sufficiently stringent and enforceable to 
ensure compliance with the Federal standards.\7\ Thus, following a 
determination that the CaRFG3 regulations would provide emission 
benefits equivalent to the Federal Phase II RFG program, EPA extended 
the enforcement exemptions at 40 CFR 80.81 to refiners, importers, and 
blenders of CaRFG3.\8\
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    \6\ 58 FR 11745 at 11749 (February 26, 1993).
    \7\ 58 FR 11745 at 11746, 11749 (February 26, 1993).
    \8\ 69 FR 48827 at 48832 (August 11, 2004); 70 FR 75914 at 75918 
(December 21, 2005). Note that the CaRFG3 enforcement exemptions do 
not excuse producers of California gasoline from Federal RFG 
standards, but rather exempt them only from certain enforcement 
requirements designed to demonstrate compliance with the Federal RFG 
standards. EPA retains its authority to sample and test California 
gasoline to make sure that it meets all applicable Federal 
standards. 58 FR at 11746 (February 26, 1993); 69 FR 48827 at 48832 
(August 11, 2004).
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    As noted in our proposal for this action, CARB's compliance and 
enforcement program has not changed significantly since we made our 
2005 finding regarding its adequacy.\9\ Thus, we believe that the 
analyses underlying the CaRFG3 enforcement exemption support our 
conclusion that the CaRFG3 regulations are enforceable, consistent with 
the requirements of CAA section 110(a).
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    \9\ 74 FR at 33198 (July 10, 2009). We also reviewed CARB's most 
recent annual enforcement report, which indicates that fuels 
inspection and enforcement cases have slightly increased in recent 
years. Id. at fn. 12.
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    Moreover, many of the regulatory revisions that we are approving 
today improve the enforceability of California's RFG program. For 
example, CARB amended the Predictive Model Procedures \10\ to, among 
other things, update the motor vehicle emissions inventory vehicle mix, 
update the reactivity adjustment factors, and add new motor vehicle 
exhaust emissions test data.\11\ These revised modeling procedures, 
which become effective December 31, 2009,\12\ improve the reliability 
of emission predictions for alternative gasoline specifications subject 
to CaRFG3 standards.
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    \10\ The California ``Predictive Model Procedures'' are used to 
determine whether the emissions of a gasoline meeting alternative 
specifications will be equivalent to the emissions of a gasoline 
that meets CaRFG3 specifications. CARB most recently amended the 
Predictive Model Procedures on August 7, 2008. See ``California 
Procedures for Evaluating Alternative Specifications for Phase 3 
Reformulated Gasoline Using the California Predictive Model,'' CARB, 
Amended August 7, 2008, at pg. 4; 13 CCR section 2265.
    \11\ See ``Staff Report: Initial Statement of Reasons, Proposed 
Amendments to California Phase 3 Gasoline Regulations,'' CARB, 
Stationary Source Division, April 27, 2007 (CARB Staff Report), at 
pp. 15-20.
    \12\ 13 CCR section 2265.
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    Additionally, the CaRFG3 standards in 13 CCR section 2262 lower the 
sulfur content cap limit from 30 parts per million (ppm) to 20 ppm 
starting December 31, 2011.\13\ Cap limits \14\ provide an upper limit 
for fuel properties for all compliance options and allow for 
enforcement of the requirements throughout the gasoline distribution 
system.\15\ According to CARB's staff report for the 2007 revisions to 
the CaRFG3 program (CARB Staff Report), refiners will generally not be 
able to produce complying gasoline with sulfur limits higher than 20 
ppm--that is, any gasoline found as having a sulfur content of greater 
than 20 ppm will most likely be non-complying gasoline.\16\ The sulfur 
content cap limit of 20 ppm enables CARB to enforce against producers 
or importers of any gasoline exceeding this level of sulfur, which will 
cover most non-complying gasoline formulations.\17\
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    \13\ The declining sulfur content cap and associated compliance 
requirements are described more specifically in section 
2261(b)(1)(A).
    \14\ A ``cap limit'' is ``a limit that applies to all California 
gasoline throughout the gasoline distribution system, in accordance 
with 13 CCR sections 2262.3(a), 2262.4(a), and 2262.5(a) and (b).'' 
California Procedures for Evaluating Alternative Specifications for 
Phase 3 Reformulated Gasoline Using the California Predictive Model, 
last amended April 25, 2008, at pg. 8 (definitions).
    \15\ See CARB Staff Report, Executive Summary, at pg. ix.
    \16\ According to CARB, sulfur levels in CaRFG3 currently 
average about 10 ppmw, with 95 percent of production being below 18 
ppmw. See ``Final Statement of Reasons for Rulemaking Including 
Summary of Comments and Agency Responses,'' CARB, June 14, 2007 
(CARB FSOR) at pg. 17.
    \17\ See ``Updated Information Digest: 2007 Amendments to the 
Phase 3 California Reformulated Gasoline Regulations,'' CARB 
[undated]; see also CARB Staff Report, at pp. ix, 35.
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    Finally, several test method requirements have been updated. For 
example, the new test method for measuring olefins in fuel using 
supercritical fluid chromatography (SFC) is significantly more precise 
than the previous method, which was based on manual measurements of 
olefin content in fuel.\18\ The new test method for measuring the 
distillation temperature of RFG adopts the updated American Society of 
Testing and Materials (ASTM) standard, which corrects errors in the 
test method's precision statements and requires a temperature sensor 
centering device. These updates improve the accuracy of the temperature 
readings.\19\
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    \18\ See ``Staff Report: Initial Statement of Reasons, Public 
Hearing to Consider Amending the Test Methods Designated for 
Determining Olefin Content and Distillation Temperatures of 
Gasoline,'' CARB, September 29, 2000, at pg. 2.
    \19\ Id. at 4.
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    In sum, we believe that the analyses underlying the CaRFG3 
enforcement exemption and our review of updates to the compliance 
provisions and test methods in the CaRFG3 program demonstrate that the 
CaRFG3 regulations are practically enforceable, consistent with the 
requirements of CAA section 110(a).
    Comment 2: The commenter asserted that CaRFG3 is not enforceable 
because the Predictive Model is neither in the SIP nor part of this SIP 
revision. Specifically, the commenter asserted that ``CARB produced the 
CaRFG3 Predictive Model as a way to predict whether various RFG 
compositions, or recipes, will result in acceptable emissions when used 
in motor vehicles,'' and that ``[t]he CaRFG3 program and resulting 
emission reductions depend entirely on the Predictive Model.'' The 
commenter stated that in order for CaRFG3 to be enforceable, its 
requirements must be clearly spelled out, and that these requirements 
are contained within the Predictive Model. The commenter also asserted 
that in order for the CaRFG3 emissions reductions to be creditable to

[[Page 26655]]

attainment or Reasonable Further Progress (RFP) demonstrations, the 
Predictive Model must be included in the SIP.
    Finally, the commenter asserted that this argument is ``not merely 
a symbolic procedural argument'' and that SIP approval of the 
Predictive Model ``ensures that CARB does not change the model, perhaps 
unwittingly or even underhandedly weakening it, without first 
subjecting any such change to EPA scrutiny under Sec.  110(l).'' The 
commenter reiterated its assertion that EPA has not made the necessary 
determination that the submitted SIP revisions are enforceable.
    Response 2: We are approving the Predictive Model Procedures into 
the California SIP as part of this action. CARB initially submitted the 
Predictive Model Procedures to EPA on June 15, 2004, and submitted 
revisions on February 3, 2009. The Predictive Model Procedures are 
incorporated by reference into the CaRFG3 regulations,\20\ which 
require that producers or importers of gasoline comply with the 
Predictive Model Procedures in evaluating whether gasoline meeting 
alternative specifications in lieu of CaRFG3 specifications will 
achieve equivalent emission reductions.\21\ See also Response 1 and 
footnote 10, above (describing CARB's updates to the Predictive Model 
Procedures). We believe that our approval of the Predictive Model 
Procedures into the SIP addresses the commenter's concerns about the 
enforceability of the CaRFG3 program, in addition to the crediting of 
CaRFG3 emissions reductions to attainment or Reasonable Further 
Progress (RFP) demonstrations.
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    \20\ See 13 CCR sections 2260(a)(8.5), 2260(a)(19.7), and 
2265(a)(2).
    \21\ 13 CCR section 2265(a)(2).
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    Comment 3: The commenter stated that EPA had failed to adequately 
evaluate whether the proposed SIP revisions satisfy the requirements of 
CAA section 110(l). Specifically, the commenter asserted that EPA's 
analysis did not adequately support the Agency's conclusion that the 
proposed revisions do not interfere with applicable requirements 
concerning attainment and RFP, or other applicable requirements. The 
commenter asserted that EPA's proposal contained ``the same conclusory 
statement for both the CaRFG3 and diesel fuel rules that, `because the 
submitted SIP revisions strengthen the requirements of the approved 
SIP, EPA has determined that approval of these regulations is 
consistent with CAA section 110(l).' 74 FR 33198-33199.'' The commenter 
noted that EPA had provided more detailed analyses in its Technical 
Support Document (TSD) but stated that in several cases, EPA had not 
provided the requisite section 110(l) analysis.
    For example, the commenter stated, EPA's proposed approval of 
section 2261(b)(7) of title 13, California Code of Regulations (CCR) 
was not addressed in EPA's TSD or supported by an adequate section 
110(l) analysis. The commenter stated that ``EPA proposes to approve 
Sec.  2261(b)(4), (5), and (6) because they do not affect emission 
reductions, but does not provide the same conclusion for Sec.  
2261(b)(7).''
    As a second example, the commenter stated that EPA's TSD did not 
address the increase of the maximum denaturant content from 4.76% to 
5.00% as set forth in 13 CCR section 2262.9. The commenter stated that 
EPA had identified changes to this provision as ``non-substantive 
clarifying changes,'' but that increasing the allowable denaturant 
content is a ``substantive non-clarifying change.'' The commenter 
asserted that EPA's failure to consider the potential interference of 
these changes with applicable requirements is arbitrary and capricious.
    Response 3: Section 110(l) of the CAA states that EPA ``shall not 
approve a revision of a [SIP] if the revision would interfere with any 
applicable requirement concerning attainment and reasonable further 
progress * * * or any other applicable requirement of [the Act].'' 42 
U.S.C. 7410(l). As explained in the TSD for our proposal, most of the 
CaRFG3 program revisions are either improvements or minor 
clarifications that will not affect emissions. To the extent that some 
substantive changes may result in increased emissions, as explained 
further below, we believe these potential emissions increases are 
offset by other substantial program improvements that reduce emissions 
and therefore, considered together, will not interfere with any 
applicable requirement concerning attainment of the National Ambient 
Air Quality Standards (NAAQS), RFP, or any other applicable requirement 
of the Act.\22\
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    \22\ We note also that California Health & Safety Code Sec.  
43013.1 requires that the CaRFG3 regulations preserve the emissions 
and air quality benefits of the CaRFG2 program.
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    First, as to the commenter's assertion that EPA did not adequately 
evaluate 13 CCR section 2261(b)(7) in the CaRFG3 regulations, we have 
evaluated this provision and concluded that our approval of it 
satisfies section 110(l) requirements. Section 2261(b)(7) contains a 
temporary measure that allows gasoline producers and importers that 
comply with the revised Predictive Model Procedures prior to their 
effective date \23\ to blend higher volumes of denatured ethanol into 
California Reformulated Blendstock for Oxygenate Blending (CARBOB) than 
the amount specified by the common carrier pipeline specifications.\24\ 
CARB adopted this provision as an early compliance measure, to 
temporarily allow for some flexibility to increase denatured ethanol 
blending provided the resulting gasoline meets all emission reduction 
requirements calculated in accordance with the revised Predictive Model 
Procedures.\25\ As such, even during the early compliance period, 
section 2261(b)(7) does not allow for exceedances of existing emission 
standards and, therefore, does not interfere with any applicable 
requirement concerning attainment, RFP, or any other applicable 
requirement of the Act.\26\
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    \23\ The updates to the Predictive Model Procedures, which 
become effective December 31, 2009, were the most significant of the 
recent revisions to the CaRFG3 program. 13 CCR section 2265; CARB 
Staff Report at 1. See also fn. 10, supra.
    \24\ A producer or importer may elect to blend higher volumes of 
ethanol into CARBOB under section 2261(b)(7) only if the producer or 
importer satisfies numerous notification, recordkeeping, and 
reporting requirements to ensure that all emission reduction 
requirements are met. 13 CCR section 2261(b)(7); see also CARB FSOR 
at pg. 4.
    \25\ See 13 CCR section 2261(b)(7)(B)(1); CARB FSOR at pg. 4.
    \26\ We note also that the SIP-approved California RFG 
regulations do not regulate the composition of denatured ethanol 
that can be blended with CARBOB to produce CaRFG. See 13 CCR 
Sec. Sec.  2260-2262.1 (adopted September 18, 1992); 60 FR 43383 
(August 21, 1995). Use of denatured ethanol as an oxygenate in 
California gasoline became more widespread following California's 
prohibition of MTBE in California gasoline starting December 31, 
2003. 13 CCR section 2262.6.
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    Moreover, this temporary measure expires on December 31, 2009, 
after which the rule requires compliance with the revised Predictive 
Model Procedures and prohibits blending any higher volume of denatured 
ethanol into CARBOB than the amount specified by the common carrier 
pipeline specification.\27\ Because our approval of these revised 
regulations will not become effective until after this early compliance 
measure has expired, our approval of this provision has no effect on 
emissions and will not interfere with applicable requirements under CAA 
section 110(l).
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    \27\ 13 CCR sections 2261(b)(7)(A), 2265.
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    Second, as to the commenter's assertion that EPA did not adequately 
evaluate the increase in maximum allowed denaturant \28\ content from

[[Page 26656]]

4.76% to 5.00% under 13 CCR section 2262.9, we have evaluated this 
provision also and concluded that it satisfies section 110(l) 
requirements. California's SIP-approved RFG program does not contain 
any limit on the volume of denaturant that may be blended with 
gasoline.\29\ As such, the addition of this limit to the SIP program 
does not interfere with any applicable requirement concerning 
attainment of the NAAQS or any other applicable requirement of the Act. 
Additionally, we note that this change was designed to align the CaRFG3 
program with the current ASTM standards and does not alter any emission 
reduction requirements.\30\
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    \28\ A denaturant is added to ethanol to ensure that it cannot 
be ingested, and to allow for ethanol to be transported and handled 
as an industrial fluid rather than a controlled substance subject to 
regulation by the Bureau of Alcohol Tobacco and Firearms. See CARB 
Staff Report at pg. 40.
    \29\ See 13 CCR section 2262 (adopted September 18, 1992); 60 FR 
43383 (August 21, 1995). See also fn. 26, supra.
    \30\ The 4.76% denaturant limit in the pre-2007 CaRFG3 
regulations was based on earlier versions of the ASTM standard 
specification for denatured fuel ethanol for blending with gasoline 
(ASTM 04806-99). See CARB Staff Report at pg. 40.
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    Finally, the CaRFG3 regulations were specifically designed to 
mitigate the increases in evaporative emissions (referred to as 
``permeation'' \31\) from on-road vehicles resulting from the addition 
of ethanol to gasoline.\32\ The CARB Staff Report states that the 
revised CaRFG3 program would ``eliminate or offset all ethanol 
permeation effects from motor vehicles and a significant portion of the 
permeation effect from off-road applications.'' \33\ Although the 
proposed revisions were not expected to fully mitigate the emissions 
impact of the increase in permeation emissions from off-road sources, 
these relatively small emission increases are outweighed by the 
significant reductions in emissions from on-road sources, together with 
the updated compliance provisions that improve the enforceability of 
the program, as discussed above in Response 1. As such, the CaRFG3 rule 
revisions do not interfere with any applicable requirement concerning 
attainment or RFP, or any other applicable requirement of the Act, 
consistent with CAA section 110(l).
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    \31\ The Federal Complex Model at 40 CFR 80.45 does not take 
permeation emissions from ethanol use into account.
    \32\ See 13 CCR section 2262.6; CARB Staff Report, Executive 
Summary, pp. i, xviii. Starting December 31, 2003, the CaRFG3 
regulations prohibited California gasoline produced with MTBE and 
placed a conditional ban on the use of any oxygenate other than 
ethanol as a replacement for MTBE in California gasoline. Id. at ii.
    \33\ Id. at xvii, xviii.
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    Comment 4: The commenter asserted that EPA's approval of the 
``offsetting emissions associated with higher sulfur levels'' 
compliance option would violate CAA section 110(l). The commenter 
stated that the ``averaging option'' in section 2265.1 allows for fuel 
that does not comply with CaRFG3 to be averaged with cleaner batches of 
gasoline--i.e., that it allows for noncompliant fuel to be sold and the 
excess pollution from use of such noncompliant fuel to be offset with 
credits from cleaner batches from that facility. The commenter asserted 
that ``EPA proposes to approve this provision with one sentence of 
analysis,'' despite a relatively complex compliance scheme. 
Specifically, the commenter raised three concerns about this provision:
    First, the commenter stated that attainment and RFP demonstrations 
rely on transportation emission inventories based on CaRFG3 compliant 
fuel, and that the ``averaging option'' may interfere with these 
demonstrations by allowing producers or importers to produce 
noncompliant fuel during the ozone season (May-October) and ``offset 
the deficit'' up to three months later.
    Second, the commenter stated that attainment and RFP demonstrations 
relying on CaRFG3 emission reductions could be compromised because 
there is no geographic requirement for the ``credit'' fuel to be used 
in the same airshed as the noncompliant fuel.
    Third, the commenter stated that the rule allows for tripling the 
allowable sulfur content of certain fuels, from 10 ppm up to the 
Federal 30 ppm sulfur standard, which could result in substantial 
increases in emissions.
    Response 4: We disagree and believe that our approval of the 
``offsetting'' compliance option referenced by the commenter, and in 
particular section 2265.1, is consistent with the requirements of CAA 
section 110(l).
    Section 2265.1 contains detailed requirements for the offsets that 
must be achieved by a producer or importer who elects to comply with 
the ``[Predictive Model] emissions offsetting compliance option'' under 
section 2264.2(d) (``PM offset option''). The PM offset option is 
available only to producers and importers that meet specified criteria 
\34\ and essentially allows for the production or importation of 
higher-sulfur batches of gasoline provided the emission impacts of the 
higher-sulfur batch are fully mitigated through subsequent cleaner 
batches of gasoline at the same facility.\35\ The PM offset option 
provides gasoline producers and importers some flexibility in meeting 
the 20 parts per million by weight (ppmw) sulfur content flat limit in 
the CaRFG3 regulations,\36\ which is lower than the Federal sulfur 
content limit of 30 ppm \37\ and became effective on December 31, 
2003.\38\
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    \34\ For example, the producer or importer must not be subject 
to any outstanding requirements to provide offsets at the same 
production facility or import facility under section 2264(c). 13 CCR 
section 2264.2(d)(1)(E).
    \35\ 13 CCR section 2265.1.
    \36\ 13 CCR section 2262. A ``flat limit'' is ``a single limit 
for a fuel property that applies to all California gasoline sold or 
supplied from a California production facility or import facility.'' 
CARB, California Procedures for Evaluating Alternative 
Specifications for Phase 3 Reformulated Gasoline Using the 
California Predictive Model, last amended April 25, 2008, at pg. 8 
(definitions).
    \37\ 40 CFR 80.195(a)(1).
    \38\ CARB, Final Regulation Order, ``Amendments to the 
California Reformulated Gasoline Regulations to Postpone Imposition 
of the CaRFG3 Standards and the Prohibition of MTBE and Oxygenates 
Other Than Ethanol in California Gasoline from December 31, 2002 to 
December 31, 2003,'' Adopted November 8, 2002, at 13 CCR section 
2261(b)(1)(B).
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    Specifically, section 2265.1(a) contains detailed notification, 
reporting, and recordkeeping requirements that enable CARB to ensure 
that the increased emissions from higher-sulfur batches permitted under 
the PM offset option are in fact fully mitigated. For example, 
subsection (a)(2)(A) requires that a producer or importer electing to 
use the PM offset option provide to the Executive Officer in writing, 
before the start of physical transfer of the gasoline from the 
production or import facility, specific information about, among other 
things: the percent change in emissions values for NO<INF>X</INF>, 
total ozone forming potential, and potency-weighted toxics for the 
targeted alternative fuel specifications; the production facility or 
import facility name, batch name, blend identity, grade of California 
gasoline, and location (with sufficient specificity to allow CARB 
inspectors to locate and sample the gasoline); the designated emissions 
offsetting limit for Reid vapor pressure, sulfur content, benzene 
content, aromatics content, olefins content, and other fuel 
characteristics; and within 24 hours after the start of the physical 
transfer, the date and time of the start of physical transfer from the 
production or import facility. This information enables CARB to 
identify who is blending fuels with elevated sulfur levels, how much is 
being blended, the potential air pollution impacts of the elevated 
sulfur level, and the specific time that the physical transfer of the 
gasoline from the production or import facility is completed.\39\
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    \39\ 13 CCR section 2265.1(a)(2)(A). See also CARB FSOR at pg. 
25.
---------------------------------------------------------------------------

    Then, within 90 days after the start of physical transfer of such 
higher-sulfur gasoline, the producer or importer who has elected to 
comply with the PM

[[Page 26657]]

offset option must complete physical transfer, from the same facility, 
of California gasoline with a ``final blend credit'' \40\ in sufficient 
quantity and for the same emissions parameter (NO<INF>X</INF>, total 
ozone forming potential, or potency-weighted toxics) to fully offset 
the ``final blend deficit.'' \41\ This 90-day limit and the requirement 
to produce the ``credit fuel'' from the same facility provide a 
reasonable connection between the emissions from the non-compliant fuel 
and the offsetting emission reductions.
---------------------------------------------------------------------------

    \40\ ``Final blend credit'' is defined as ``the credit from a 
final blend of gasoline that may be used to offset a producer's or 
importer's final blend deficit'' and must be calculated in 
accordance with a specified formula provided in the definition. 13 
CCR section 2260(a)(10.5).
    \41\ ``Final blend deficit'' is defined as ``the deficit from a 
final blend of gasoline that a producer or importer must offset'' 
and must be calculated in accordance with a specific formula 
provided in the definition. 13 CCR section 2260(a)(10.7). For 
purposes of complying with the PM offset option, section 2265.1(c) 
also requires that the ``final blend deficit'' be multiplied by a 
specific factor that increases the amount of required offsets from 
the ``credit'' blend.
---------------------------------------------------------------------------

    Finally, the testing and recordkeeping requirements of 13 CCR 
section 2270 have been revised to apply to any producer or importer 
that has elected to be subject to the PM offset option pursuant to 
section 2264.2(d). As such, each producer or importer who elects to be 
subject to the PM offset option is required to, among other things: 
Sample and test for numerous characteristics of the final blend 
produced or imported, including the sulfur, aromatic hydrocarbon, 
olefin, oxygen, and benzene content; maintain, for two years from the 
date of each sampling, records showing the sample date, identity of 
blend sampled, container or other vessel sampled, final blend volume, 
and fuel characteristics; and provide to the Executive Officer any such 
records within 20 days of a written request.\42\
---------------------------------------------------------------------------

    \42\ 13 CCR section 2270(a).
---------------------------------------------------------------------------

    To the extent that the emissions from noncompliant fuel may occur 
during the ozone season and the deficit offset three months later, or 
that ``credit'' fuel may be used in an airshed that has better air 
quality than the airshed where the noncompliant fuel is used, as the 
commenter notes may occur, these possibilities do not alter our section 
110(l) analysis. The likelihood of adverse air pollution impacts \43\ 
from such events is counterbalanced by a similar likelihood of air 
quality improvements, i.e., that emission reductions from credit fuel 
may occur during the ozone season or within a more polluted airshed, to 
offset emissions from noncompliant fuel produced outside of the ozone 
season or in a less polluted airshed. In any event, we believe the 
rigorous monitoring, recordkeeping and reporting requirements in 
section 2265.1, together with the detailed requirements for calculating 
offsets, as discussed above, will ensure that any emissions increases 
resulting from noncompliant fuel permitted under the PM offset option 
will be offset by an equivalent or greater amount of emission 
reductions.
---------------------------------------------------------------------------

    \43\ We note that these emissions effects are not likely to 
occur. According to CARB, unlike most other fuel properties governed 
by the CaRFG3 rules, increases in sulfur levels in individual 
batches do not result in immediate emission increases in vehicles 
using the batch, and although sulfur degrades catalyst performance 
the effect is reversible. See CARB FSOR at pg. 24; CARB Staff Report 
at pg. 36.
---------------------------------------------------------------------------

    It is important to note that, even taking into account the PM 
offset option, the CaRFG3 sulfur content limits that we are approving 
today are substantially more stringent than the sulfur content limits 
in California's SIP-approved RFG program, which establishes a flat 
limit of 40 ppm and an option to establish a higher sulfur limit 
accompanied by offset requirements.\44\ Furthermore, we note that 
section 2265.1 provides an alternative compliance option only for 
purposes of meeting California's more stringent sulfur content flat 
limit of 20 ppmw and does not alter the applicability of the federal 
sulfur content limit of 30 ppm.\45\ As such, in no event may a higher-
sulfur batch of gasoline that qualifies for the PM offset option under 
section 2264.2(d) exceed the Federal sulfur content limit of 30 ppmw.
---------------------------------------------------------------------------

    \44\ See 13 CCR section 2262.2 (adopted September 18, 1992); 60 
FR 43383 (August 21, 1995).
    \45\ 40 CFR 80.195(a)(1). See also ``Technical Support Document 
for EPA's Proposed Approval of Rule Revisions for Reformulated 
Gasoline and Diesel Fuel Sold or Supplied as Motor Vehicle Fuels in 
California,'' June 30, 2009 (TSD), at pg. 2.
---------------------------------------------------------------------------

    In sum, given the detailed recordkeeping, reporting, and testing 
requirements associated with the PM offset option, the detailed 
criteria for calculation of the required offsetting emission 
reductions, the substantial strengthening of the sulfur content limits 
in comparison to the SIP-approved limits, and the upper bound of 30 
ppmw in the Federal regulations, we believe that our approval of the PM 
offset option does not interfere with any applicable requirement 
concerning attainment, RFP, or any other applicable requirement of the 
Act.
    Finally, as to the commenter's assertion that the rule allows for 
tripling the allowable sulfur content of certain fuels, we disagree. As 
explained above, the current CaRFG3 standards establish a 20 ppmw 
sulfur content flat limit for producers and refiners of California 
gasoline.\46\ The offsetting compliance option in section 2265.1 allows 
a producer to mitigate the excess emissions of a gasoline batch that 
exceeds the 20 ppmw sulfur content flat limit, but it does not allow 
any exceedance of the Federal 30 ppm sulfur content limit.
---------------------------------------------------------------------------

    \46\ 13 CCR section 2262. CARB has stated that sulfur levels in 
CaRFG3 currently average about 10 ppmw but has not established a 
sulfur cap limit at this level. See FSOR at pg. 17.
---------------------------------------------------------------------------

    Comment 5: The commenter asserted that the ``Alternative Emission 
Reduction Plan (AERP) creates a loophole which compromises 
enforceability of the rule,'' and that the CARB Executive Officer has 
discretion to approve an AERP without verifying the required emission 
reductions. Specifically, the commenter stated that the AERP does not 
contain adequate reporting, monitoring or verification provisions to 
ensure that the emission reductions are being carried out as proposed, 
and that the AERP ``only requires the producer, importer, or third 
party to submit to the Executive Officer `information that establishes 
* * * the offsets accrued.' 13 CCR 2265.5(i)(1). Furthermore, the 
commenter stated, ``the types of emissions offsets allowed [by the 
AERP] are particularly prone to be speculative, and may in many 
instances not actually produce the emissions reductions used to offset 
increased emissions from permeation.''
    For example, the commenter stated, the ``incentive grants'' option 
in section 2265.5(i)(3) allows for speculative and difficult-to-enforce 
offsets because it allows entities to claim offsets ``associated with 
incentive grants for cleaner-than-required engines, equipment and other 
sources of pollution * * *.'' The commenter asserted that standards for 
the Executive Officer in determining whether these emission reductions 
are real, additional, and enforceable are ``wholly absent from the AERP 
and the rule.''
    Response 5: We disagree. The Alternative Emission Reduction Plan 
(AERP) provision in 13 CCR section 2265.5 is a temporary flexibility 
option to ensure that emission increases caused by the addition of 
ethanol to gasoline are fully mitigated consistent with State law 
requirements.\47\ We believe the rule contains adequate compliance 
provisions, enforcement mechanisms, and limitations on the Executive 
Officer's discretion to meet the enforceability requirements of CAA 
section 110(a).
---------------------------------------------------------------------------

    \47\ See CARB FSOR at pg. 12 (citing California Health and 
Safety Code section 43013.1(b)(1)).
---------------------------------------------------------------------------

    Specifically, section 2265.5 provides gasoline producers an 
alternative option

[[Page 26658]]

to offset emissions from ethanol permeation while refinery 
modifications are being made to allow the production of fuel 
formulations that fully comply with CaRFG3 standards.\48\ An AERP is 
available only to a producer or importer who, among other things, would 
satisfy all of the criteria for approval in the applicable Predictive 
Model Procedures ``but for the elevated emissions associated with 
permeation.'' \49\ All AERPs sunset on December 31, 2011, with the 
possibility of an extension of up to one year.\50\
---------------------------------------------------------------------------

    \48\ See CARB FSOR at pg. 37.
    \49\ 13 CCR section 2265.5(a)(3).
    \50\ 13 CCR section 2265.5(a)(6).
---------------------------------------------------------------------------

    Contrary to the commenter's assertion, section 2265.5 contains 
rigorous monitoring, reporting, and verification provisions to ensure 
that the proposed emission reductions under an AERP will be achieved, 
in addition to specific procedures for Executive Officer action on an 
AERP application.
    First, section 2265.5 establishes detailed testing, recordkeeping 
and reporting requirements. An application for an AERP must contain, 
among other things: Calculations of the total emissions of oxides of 
nitrogen (NO<INF>X</INF>), total ozone forming potential, and potency-
weighted toxics that would be associated with the use of California 
gasoline were the producer or importer to eliminate the emissions 
associated with permeation from its gasoline; documentation of the 
amounts of these pollutants associated with the producer's or 
importer's gasoline; a demonstration that the emission reduction 
strategy(ies) in the AERP will result in equivalent or better emission 
benefits for these pollutants than would be achieved through 
elimination of permeation emissions from the gasoline for the same 
affected region and for the period the AERP will be in effect; the 
date(s) that the offsets will accrue and expire for each emission 
reduction strategy; and the proposed recordkeeping, reporting, 
monitoring, and testing procedures that the producer or importer plans 
to use to demonstrate continued compliance with the AERP.\51\
---------------------------------------------------------------------------

    \51\ 13 CCR Sec.  2265.5(b).
---------------------------------------------------------------------------

    Following approval of an AERP, section 2265.5(h)(1) requires the 
producer or importer to provide the Executive Officer with detailed 
information, before the start of physical transfer, about the estimated 
volume of the gasoline blend; the identity of the approved AERP and the 
NO<INF>X</INF>, total ozone forming potential, and potency-weighted 
toxics emission limits stated in that plan; supporting documentation, 
calculations, and emissions test data; and within 24 hours after the 
start of the physical transfer, the date and time of the start of 
physical transfer from the production or import facility. Section 
2265.5(i) also requires the producer or importer to notify the 
Executive Officer in writing of the date that the offsets actually 
accrued, together with all documentation, calculations, emissions test 
data, and other information that establishes the amounts of emission 
reductions. Together, these provisions provide clear information upon 
which the Executive Officer can base a determination whether the 
proposed emission reductions (i.e., the offsets) are real, additional, 
and enforceable, and to actually verify the emission reductions 
following physical transfer of the gasoline blend.
    Second, section 2265.5(c) establishes specific procedures for the 
Executive Officer's action on an AERP application. Among other things, 
the Executive Officer is required to make available for public review 
all documents pertaining to an AERP, provide notice of each application 
to specified parties in addition to public notice, and provide a 30-day 
public comment period, after which the Executive Officer may take final 
action to ``either approve or deny'' the AERP application. These 
procedures provide the public an opportunity to participate in the 
decisionmaking process on an AERP and limit the Executive Officer's 
discretion to either approving the application, if it satisfies the 
requirements specified in section 2265.5(b), or denying it if it does 
not.
    Finally, section 2265.5(e) establishes specific enforceable 
prohibitions on, among other things, selling or producing gasoline that 
creates emissions associated with permeation except in compliance with 
an approved AERP; failure to meet any requirement of section 2265.5 or 
any condition of an approved AERP; false reporting of any information 
contained in an AERP or supporting documentation; and any net 
exceedance of NO<INF>X</INF>, total ozone forming potential, or 
potency-weighted toxics during the period of the AERP. Violations of 
these provisions are subject to civil penalties under section 43027 of 
the California Health and Safety Code.\52\ These clear prohibitions, 
together with the specific information and compliance provisions 
required in each AERP application, provide adequate means for CARB to 
take enforcement action where the proposed emission reductions are not 
achieved, as well as for other violations of AERP conditions.
---------------------------------------------------------------------------

    \52\ Health and Safety Code section 43027 states that ``[a]ny 
person who violates any provision of this part, or any rule, 
regulation, permit, variance, or order of the state board, 
pertaining to fuel requirements and standards * * * is strictly 
liable for a civil penalty of not more than thirty-five thousand 
dollars ($35,000).'' H&SC section 43027(c). Negligent violations can 
result in civil penalties of up to $50,000 and willful and 
intentional violations can result in civil penalties of up to 
$250,000. H&SC section 43027(a), (b).
---------------------------------------------------------------------------

    Taken together, these detailed compliance mechanisms ensure that 
only those AERPs that satisfy the detailed requirements specified in 
section 2265.5(b) will be approved, and the procedural regulations 
provide an additional assurance of transparent decisionmaking 
processes.
    The commenter's assertion that the ``incentive grants'' option in 
section 2265.5(i)(3) ``allows for speculative and difficult-to-enforce 
offsets'' is not entirely clear. Section 2265.5(i) requires that the 
producer or importer subject to an AERP notify the Executive Officer in 
writing and provide all supporting documentation of the amount of 
NO<INF>X</INF>, total ozone forming potential, and potency-weighted 
toxics associated with the proposed offsets or other reduction 
strategies, as provided in the approved AERP, and the date(s) the 
offsets accrued. Section 2265.5(i)(3) lists ``incentive grants for 
cleaner-than-required engines, equipment and other sources of pollution 
providing early or extra emission reductions'' among the emission 
reduction strategies for which a producer or importer must provide the 
requisite notifications to the Executive Officer. To the extent the 
commenter intended to argue that this provision allows for 
unenforceable offsets, we disagree for the reasons stated above.\53\
---------------------------------------------------------------------------

    \53\ We note, as a practical matter, that CARB has not received 
any applications for an AERP or a third-party AERP and does not 
expect any. See e-mail from Renee Littaua, Manager, Fuels Section, 
CARB, October 20, 2009.
---------------------------------------------------------------------------

    Comment 6: The commenter asserted that several elements of the 
proposed SIP revisions contain unenforceable ``director's discretion'' 
provisions and that EPA approval of these provisions would violate CAA 
section 110(a)(2)(A). Specifically, the commenter stated that the new 
alternative compliance plan provisions in sections 2265.1 and 2265.5, 
the addition of these provisions in section 2271 as circumstances in 
which a variance may be requested, and the amended CARBOB regulations 
in section 2266.5 all provide for director's discretion without 
adequate limits on such discretion.
    The commenter referenced a ``notation 1'' in EPA's TSD for the 
proposed rule, which states that ``Director's discretion is limited by 
explicit and replicable procedures within the rule that define how 
discretion is to be exercised and that assures equivalent emission

[[Page 26659]]

reductions.'' As applied to 13 CCR sections 2265.5 and 2266.5, the 
commenter asserted that this notation ``appears * * * to be an attempt 
by EPA to preemptively address concerns regarding director's 
discretion.'' The commenter cited several EPA policy statements 
regarding director's discretion provisions and appropriate limitations 
on such discretion, and stated that the ``notation 1'' in EPA's TSD 
``appear[s] to water down the requirement'' that director's discretion 
provisions ``tightly define how the discretion will be exercised to 
assure equivalent emission reductions.''
    In sum, the commenter asserted that EPA has not shown that the 
director's discretion provisions in sections 2265.1, 2265.5, 2271, and 
the amended CARBOB regulations in section 2266.5 satisfy the 
requirements to ``include explicit and replicable procedures which 
tightly define how the discretion will be exercised, much less how the 
discretion will be exercised to assure equivalent emission 
reductions.'' Absent more specific limitations on director's discretion 
or a requirement that each exercise of such discretion be approved by 
EPA, the commenter stated, these provisions are unenforceable and 
violate CAA section 110(a)(2)(A).
    Response 6: We disagree. As to sections 2265.1 (PM offset option) 
and 2265.5 (AERPs), we believe these provisions are enforceable for the 
reasons discussed above in responses 4 and 5, respectively. 
Accordingly, the addition of sections 2265.1 and 2265.5 to the 
provisions in section 2271 for which a person may seek a variance, 
consistent with the criteria outlined in section 2271, is permissible. 
Moreover, since our approval of section 2271 into the SIP in 1995,\54\ 
CARB has revised it to add further criteria governing the Executive 
Officer's evaluation of a variance request. These rule revisions define 
even more specifically how the Executive Officer is to exercise 
discretion in acting on a variance request and strengthen the 
enforceability of the rule.
---------------------------------------------------------------------------

    \54\ 16 CCR section 2271 (adopted September 18, 1992); 60 FR 
43383 (August 21, 1995).
---------------------------------------------------------------------------

    The SIP-approved version of section 2271 requires that the 
Executive Officer's decision to grant or deny a variance be based 
``solely upon substantial evidence in the record of the variance 
proceeding,'' \55\ and states that a variance may not be granted unless 
the Executive Officer makes all of the following findings: (1) That, 
because of reasons beyond the reasonable control of the applicant, 
requiring compliance with the applicable section(s) would result in an 
extraordinary economic hardship; (2) that the public interest in 
mitigating the extraordinary hardship by issuing the variance outweighs 
the public interest in avoiding any increased emissions of air 
contaminants which would result from issuing the variance; and (3) that 
the compliance plan proposed by the applicant can reasonably be 
implemented and will achieve compliance as expeditiously as 
possible.\56\
---------------------------------------------------------------------------

    \55\ The Executive Officer is required to hold a public hearing 
on each application containing the required information, to make the 
application available to the public at least 20 days prior to the 
hearing, to provide a reasonable opportunity to submit written and 
oral testimony at the hearing and to consider such testimony. 13 CCR 
section 2271(b), (c) (adopted September 18, 1992); 60 FR 43383 
(August 21, 1995).
    \56\ 16 CCR section 2271 (adopted September 18, 1992); 60 FR 
43383 (August 21, 1995).
---------------------------------------------------------------------------

    These requirements remain unchanged. CARB has, however, revised 
section 2271 to require that each of these three findings be made in 
accordance with detailed factors listed in section 2271(e). For 
example, in determining whether the public interest in mitigating the 
extraordinary hardship by issuing the variance outweighs the public 
interest in avoiding increased air emissions, the Executive Officer 
must ``consider the potential effects of issuing or denying the 
variance on the applicant's customers, the producers of complying fuel, 
the general public, and upon air quality,'' and must also consider 
whether granting the variance will place the applicant at a cost 
advantage over other persons, including those persons who produce 
complying gasoline.\57\ Importantly, in evaluating the potential effect 
of the variance upon air quality, the Executive Officer must estimate 
both the excess exhaust emissions and the excess evaporative 
hydrocarbon emissions that will result from granting the variance in 
accordance with specific calculations, including use of the California 
Predictive Model Procedures with specified inputs.\58\ These new 
provisions tightly define how the Executive Officer's discretion will 
be exercised to assure equivalent emission reductions.
---------------------------------------------------------------------------

    \57\ 13 CCR section 2271(e)(2) (2007).
    \58\ 13 CCR section 2271(e)(2)(B) (2007).
---------------------------------------------------------------------------

    As to section 2266.5 (amended CARBOB regulations), the commenter 
has not identified any discretionary provisions that are of particular 
concern. In the absence of a more specific explanation, we have 
construed the comment to refer to several provisions in section 2266.5 
that allow the Executive Officer to enter into protocols for 
determining compliance.
    For example, section 2266.5(a)(2)(E) authorizes the Executive 
Officer to enter into a written protocol with an individual producer or 
importer for the purpose of specifying an alternative method for 
determining whether a final blend of CARBOB complies with the standards 
for California gasoline, ``as long as the executive officer reasonably 
determines that application of the protocol is not less stringent or 
enforceable than application of the express terms of [the applicable 
standards].'' Section 2266.5(b)(4) imposes identical conditions on the 
Executive Officer's authority to enter into a written protocol with an 
individual producer or importer for the purpose of specifying how the 
requirements for certain notifications to CARB should be applied to the 
producer's or importer's particular operations. We believe that section 
2266.5 adequately defines how the Executive Officer's discretion is to 
be exercised for these limited purposes.
    Comment 7: The commenter asserted that EPA must make another 
equivalency determination to maintain the RFG enforcement exemption for 
California. Specifically, the commenter stated that EPA ``relies 
heavily on an earlier equivalency determination made in December 2005 
in the context of an RFG enforcement exemption request approval,'' that 
the relevance of the 2005 enforcement exemption is unclear, and that 
``because significant changes are being proposed to the California RFG 
regulations, EPA must make another equivalency determination to 
continue exempting California gasoline from RFG regulation.''
    Response 7: We disagree. The CAA does not require that EPA revisit 
an equivalency determination for the RFG enforcement exemption each 
time we revise a SIP, and the commenter does not identify any such 
requirement. As explained in our response to comment 1, above, we have 
concluded that the rationale supporting the CaRFG3 enforcement 
exemption in 2005 continues to support our action today.
    To the extent the commenter intended to argue that the facts 
underlying EPA's 2005 determination have significantly changed, such 
that that prior determination is no longer valid, we also disagree. 
Neither the CaRFG3 nor federal RFG compliance and enforcement programs 
have been significantly revised since our 2005 equivalency 
determination.\59\ In the

[[Page 26660]]

proposed rule we also stated that the revisions to the CaRFG3 
regulations strengthen the requirements in the existing SIP. The 
commenter has not identified any factual changes that call into 
question our previous findings.
---------------------------------------------------------------------------

    \59\ 74 FR at 33198.
---------------------------------------------------------------------------

    Finally, we note that the commenter incorrectly suggests that the 
CaRFG3 enforcement exemption allows EPA to ``exempt[ ] California 
gasoline from RFG regulation.'' The CaRFG3 enforcement exemption 
applies only to certain federal RFG enforcement requirements and does 
not exempt California gasoline from any federal RFG standards.\60\
---------------------------------------------------------------------------

    \60\ See fn. 8, supra.
---------------------------------------------------------------------------

III. Final Action

    Under section 110(k)(3) of the Clean Air Act, EPA is approving 
revisions to the California regulations for reformulated gasoline (RFG) 
sold or supplied in California, as submitted on June 15, 2004 and 
February 3, 2009, and revisions to the regulations for diesel fuel sold 
or supplied in California, as submitted on February 3, 2009, as 
revisions to the California SIP.

IV. Statutory and Executive Order Reviews

    Under the Clean Air Act, the Administrator is required to approve a 
SIP submission that complies with the provisions of the Act and 
applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). 
Thus, in reviewing SIP submissions, EPA's role is to approve state 
choices, provided that they meet the criteria of the Clean Air Act. 
Accordingly, this action merely approves state law as meeting Federal 
requirements and does not impose additional requirements beyond those 
imposed by state law. For that reason, this action:
    <bullet> Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
    <bullet> Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
    <bullet> Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
    <bullet> Does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
    <bullet> Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
    <bullet> Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
    <bullet> Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
    <bullet> Is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the Clean Air Act; and
    <bullet> Does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified 
by Executive Order 13175 (65 FR 67249, November 9, 2000), because the 
SIP is not approved to apply in Indian country located in the state, 
and EPA notes that it will not impose substantial direct costs on 
tribal governments or preempt tribal law.
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this action and 
other required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2).
    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by July 12, 2010. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this action for the purposes of 
judicial review nor does it extend the time within which a petition for 
judicial review may be filed, and shall not postpone the effectiveness 
of such rule or action. This action may not be challenged later in 
proceedings to enforce its requirements (see section 307(b)(2)).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Carbon monoxide, Hydrocarbons, Intergovernmental relations, 
Oxides of Nitrogen, Ozone, Reporting and recordkeeping requirements, 
Volatile organic compounds.

    Dated: December 11, 2009.
Laura Yoshii,
Acting Regional Administrator, Region IX.

0
Part 52, chapter I, title 40 of the Code of Federal Regulations is 
amended as follows:

PART 52--[AMENDED]

0
1. The authority citation for part 52 continues to read as follows:

    Authority:  42 U.S.C. 7401 et seq.

0
2. Section 52.220 is amended by adding paragraphs (c)(204)(i)(A)(7), 
(c)(374), (c)(375) and (c)(376) to read as follows:


Sec.  52.220  Identification of plan.

* * * * *
    (c) * * *
    (204) * * *
    (i) * * *
    (A) * * *
    (7) Previously approved on August 21, 1995, in paragraph 
(c)(204)(i)(A)(3) of this section, and now deleted without replacement: 
Title 13, California Code of Regulations, Reformulated Gasoline 
Regulations, sections 2262.1, 2262.2, and 2262.7.
* * * * *
    (374) The following revisions to the California Reformulated 
Gasoline Regulations were submitted on June 15, 2004 (2004 RFG 
Revision), by the Governor's Designee.
    (i) Incorporation by reference.
    (A) California Air Resources Board.
    (1) Title 13, California Code of Regulations, Division 3 (Air 
Resources Board), Chapter 5 (Standards for Motor Vehicle Fuels), 
Article 1 (Standards for Gasoline), Subarticle 1 (Gasoline Standards 
That Became Applicable Before 1996), sections 2253.4, ``Lead in 
Gasoline'' (operative August 12, 1991); 2254, ``Manganese Additive 
Content'' (operative August 12, 1991); 2257, ``Required Additives in 
Gasoline'' (operative July 16, 1999); 2259, ``Exemptions for Motor 
Vehicle Fuels Used in Test Programs'' (operative February 15, 1995); 
Subarticle 2 (Standards for Gasoline Sold Beginning March 1, 1996), 
sections 2260, ``Definitions'' (operative May 1, 2003); 2261, 
``Applicability of Standards; Additional Standards'' (operative May 1,

[[Page 26661]]

2003); 2262, ``The California Reformulated Gasoline Phase 2 and Phase 3 
Standards'' (operative December 24, 2002); 2262.3, ``Compliance With 
the CaRFG Phase 2 and CaRFG Phase 3 Standards for Sulfur, Benzene, 
Aromatic Hydrocarbons, Olefins, T50 and T90'' (operative August 20, 
2001); 2262.4, ``Compliance With the CaRFG Phase 2 and CaRFG Phase 3 
Standards for Reid Vapor Pressure'' (operative December 24, 2002); 
2262.5, ``Compliance With the Standards for Oxygen Content'' (operative 
December 24, 2002); 2262.6, ``Prohibition of MTBE and Oxygenates Other 
Than Ethanol in California Gasoline Starting December 31, 2003'' 
(operative May 1, 2003); 2262.9, ``Requirements Regarding Denatured 
Ethanol Intended For Use as a Blend Component in California Gasoline'' 
(operative December 24, 2002); 2263, ``Sampling Procedures and Test 
Methods'' (operative May 1, 2003); 2263.7, ``Multiple Notification 
Requirements'' (operative September 2, 2000); 2264, ``Designated 
Alternative Limits'' (operative August 20, 2001); 2264.2, ``Election of 
Applicable Limit for Gasoline Supplied From a Production or Import 
Facility'' (operative September 2, 2000); 2265, ``Gasoline Subject to 
PM Alternative Specifications Based on the California Predictive 
Model'' (operative December 24, 2002); 2266, ``Certified Gasoline 
Formulations Resulting in Equivalent Emission Reductions Based on Motor 
Vehicle Emissions Testing'' (operative August 20, 2001); 2266.5, 
``Requirements Pertaining to California Reformulated Gasoline 
Blendstock for Oxygen Blending (CARBOB) and Downstream Blending'' 
(operative May 1, 2003); 2267, ``Exemptions for Gasoline Used in Test 
Programs'' (operative September 2, 2000); 2268, ``Liability of Persons 
Who Commit Violations Involving Gasoline That Has Not Yet Been Sold or 
Supplied to a Motor Vehicle'' (operative September 2, 2000); 2269, 
``Submittal of Compliance Plans'' (operative December 24, 2002); 2270, 
``Testing and Recordkeeping'' (operative December 24, 2002); 2271, 
``Variances'' (operative December 24, 2002); 2272, ``CaRFG Phase 3 
Standards for Qualifying Small Refiners'' (operative May 1, 2003); 
2273, ``Labeling of Equipment Dispensing Gasoline Containing MTBE'' 
(operative May 1, 2003); 2273.5, ``Documentation Provided with Delivery 
of Gasoline to Retail Outlets'' (operative May 1, 2003).
    (2) ``California Procedures for Evaluating Alternative 
Specifications for Phase 2 Reformulated Gasoline Using the California 
Predictive Model,'' as last amended December 11, 1998.
    (3) ``California Procedures for Evaluating Alternative 
Specifications for Phase 3 Reformulated Gasoline Using the California 
Predictive Model,'' as last amended April 25, 2001.
    (4) ``California Procedures for Evaluating Alternative 
Specifications for Gasoline Using Vehicle Emissions Testing,'' as last 
amended April 25, 2001.
    (5) ``Procedures for Using the California Model for California 
Reformulated Gasoline Blendstocks for Oxygenate Blending (CARBOB),'' as 
adopted April 25, 2001.
    (ii) Additional material.
    (A) California Air Resources Board.
    (1) Executive Order G-125-320, dated June 15, 2004, adopting the 
2004 RFG Revision.
    (2) The following additional material is available for inspection 
at EPA Region 9. To inspect this material, please contact EPA Region 9, 
75 Hawthorne Street, San Francisco, California, 94105, Chief of Air 
Planning, (415) 947-8021.
    (i) Standard Test Method for Determination of Ethanol Content of 
Denatured Fuel Ethanol by Gas Chromatography, Designation: D 5501-94 
(1998); Standard Test Method for Gum Content in Fuels by Jet 
Evaporation, Designation: D 381-00; Standard Test Method for Water 
Using Volumetric Karl Fischer Titration, Designation: E 203-96; 
Standard Test Method for Water in Organic Liquids by Coulometric Karl 
Fischer Titration, Designation: E 1064-00; Standard Test Methods for 
Chloride Ion In Water, Designation: D 512-89 (1999); Standard Test 
Methods for Copper in Water, Designation: D 1688-95; Standard Test 
Method for Acidity in Volatile Solvents and Chemical Intermediates Used 
in Paint, Varnish, Lacquer, and Related Products, Designation: D 1613-
96 (1999); Standard Test Method for Determination of pHe of Ethanol, 
Denatured Fuel Ethanol, and Fuel Ethanol (Ed75-Ed85), Designation: D 
6423-99.
    (ii) Standard Test Method for Determination of Total Sulfur in 
Light Hydrocarbons, Motor Fuels and Oils by Ultraviolet Fluorescence, 
Designation: D 5453-93.
    (iii) Standard Test Method for Determination of MTBE, ETBE, TAME, 
DIPE, tertiary-Amyl Alcohol and C1 to C4 Alcohols in Gasoline by Gas 
Chromatography, Designation: D 4815-99; Standard Test Method for 
Distillation of Petroleum Products at Atmospheric Pressure, 
Designation: D 86-99a; Standard Test Method for Determination of Olefin 
Content of Gasolines by Supercritical-Fluid Chromatography, 
Designation: D 6550-00.
    (375) The following revisions to the California Reformulated 
Gasoline Regulations were submitted on February 3, 2009 (2009 RFG 
Revision), by the Governor's Designee.
    (i) Incorporation by reference.
    (A) California Air Resources Board.
    (1) Title 13, California Code of Regulations, Division 3 (Air 
Resources Board), Chapter 5 (Standards for Motor Vehicle Fuels), 
Article 1 (Standards for Gasoline), Subarticle 2 (Standards for 
Gasoline Sold Beginning March 1, 1996), sections 2260, ``Definitions'' 
(operative August 29, 2008); 2261, ``Applicability of Standards; 
Additional Standards'' (operative August 29, 2008); 2262, ``The 
California Reformulated Gasoline Phase 2 and Phase 3 Standards'' 
(operative August 29, 2008); 2262.3, ``Compliance With the CaRFG Phase 
2 and CaRFG Phase 3 Standards for Sulfur, Benzene, Aromatic 
Hydrocarbons, Olefins, T50 and T90'' (operative August 29, 2008); 
2262.4, ``Compliance With the CaRFG Phase 2 and CaRFG Phase 3 Standards 
for Reid Vapor Pressure'' (operative August 29, 2008); 2262.5, 
``Compliance With the Standards for Oxygen Content'' (operative August 
29, 2008); 2262.6, ``Prohibition of MTBE and Oxygenates Other Than 
Ethanol in California Gasoline Starting December 31, 2003'' (operative 
April 9, 2005); 2262.9, ``Requirements Regarding Denatured Ethanol 
Intended For Use as a Blend Component in California Gasoline'' 
(operative August 29, 2008); 2263, ``Sampling Procedures and Test 
Methods'' (operative August 29, 2008); 2263.7, ``Multiple Notification 
Requirements'' (operative August 29, 2008); 2264, ``Designated 
Alternative Limits'' (operative August 20, 2001); 2264.2, ``Election of 
Applicable Limit for Gasoline Supplied From a Production or Import 
Facility'' (operative August 29, 2008); 2265, ``Gasoline Subject to PM 
Alternative Specifications Based on the California Predictive Model'' 
(operative August 29, 2008); 2265.1, ``Offsetting Emissions Associated 
with Higher Sulfur Levels'' (operative August 29, 2008); 2265.5, 
``Alternative Emission Reduction Plan (AERP)'' (operative August 29, 
2008); 2266, ``Certified Gasoline Formulations Resulting in Equivalent 
Emission Reductions Based on Motor Vehicle Emissions Testing'' 
(operative August 29, 2008); 2266.5, ``Requirements Pertaining to 
California Reformulated Gasoline Blendstock for Oxygen Blending 
(CARBOB) and Downstream Blending'' (operative August 29, 2008); 2270, 
``Testing and Recordkeeping'' (operative August 29,

[[Page 26662]]

2008); 2271, ``Variances'' (operative August 29, 2008); 2273, 
``Labeling of Equipment Dispensing Gasoline Containing MTBE'' 
(operative August 29, 2008).
    (2) ``California Procedures for Evaluating Alternative 
Specifications for Phase 3 Reformulated Gasoline Using the California 
Predictive Model,'' as last amended August 7, 2008.
    (3) ``Procedures for Using the California Model for California 
Reformulated Gasoline Blendstocks for Oxygenate Blending (CARBOB),'' as 
last amended August 7, 2008.
    (ii) Additional material.
    (A) California Air Resources Board.
    (1) Executive Order S-09-001, dated February 3, 2009, adopting the 
2009 RFG Revision.
    (376) The following revisions to the California Diesel Fuel 
Regulations were submitted on February 3, 2009 (2009 Diesel Fuels 
Revision), by the Governor's Designee.
    (i) Incorporation by reference.
    (A) California Air Resources Board.
    (1) Title 13, California Code of Regulations, Division 3 (Air 
Resources Board), Chapter 1 (Motor Vehicle Pollution Control Devices), 
Article 1 (General Provisions), sections 1956.8, ``Exhaust Emissions 
Standards and Test Procedures--1985 and Subsequent Model Heavy-Duty 
Engines and Vehicles'' (operative December 31, 2008); 1960.1, ``Exhaust 
Emissions Standards and Test Procedures--1981 through 2006 Model 
Passenger Cars, Light-Duty and Medium-Duty Vehicles'' (operative March 
26, 2004); 1961, ``Exhaust Emissions Standards and Test Procedures--
2004 and Subsequent Model Passenger Cars, Light-Duty and Medium-Duty 
Vehicles'' (operative June 16, 2008); Chapter 5 (Standards for Motor 
Vehicle Fuels), Article 2 (Standards for Diesel Fuel), sections 2281, 
``Sulfur Content of Diesel Fuel'' (operative August 4, 2005); 2282, 
``Aromatic Hydrocarbon Content of Diesel Fuel'' (operative August 4, 
2005); 2284, ``Lubricity of Diesel Fuel'' (operative August 4, 2005); 
2285, ``Exemption from Diesel Fuel Requirements for Military-
Specification Fuels Used in Qualifying Military Vehicles'' (operative 
August 14, 2004); Chapter 14 (Verification Procedure, Warranty and In-
Use Compliance Requirements for In-Use Strategies to Control Emissions 
from Diesel Engines), section 2701, ``Definitions'' (operative January 
1, 2005).
    (2) Title 17, California Code of Regulations, Division 3 (Air 
Resources), Chapter 1 (Air Resources Board), Subchapter 7.5 (Airborne 
Toxic Control Measures), section 93114, ``Airborne Toxic Control 
Measure To Reduce Particulate Emissions from Diesel-Fueled Engines--
Standards for Nonvehicular Diesel Fuel'' (operative August 14, 2004).
    (ii) Additional material.
    (A) California Air Resources Board.
    (1) Executive Order S-09-001, dated February 3, 2009, adopting the 
2009 Diesel Fuels Revision.
* * * * *
[FR Doc. 2010-11005 Filed 5-11-10; 8:45 am]
BILLING CODE 6560-50-P


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