Document ID: EPA-HQ-OAR-2007-0478-0006
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2010-12-01T05:00Z

SEQ CHAPTER \h \r 1                                INFORMATION
COLLECTION REQUEST (ICR)

                             United States Environmental Protection
Agency (EPA)

			         Part A of the Supporting Statement

				   (Draft -November 2010)

IDENTIFICATION OF THE INFORMATION COLLECTION

1(a) 	Title: 	Regulation of Fuels and Fuel Additives: Gasoline
Volatility; Reporting Requirements for Parties Which Produce or Import
Gasoline Containing Ethanol, and Reporting Requirements for Parties
Seeking a Testing Exemption (40 CFR 80.27)

			EPA ICR Number 1367.09, OMB Control Number 2060-0178

	

	1(b) Abstract

	Gasoline volatility, as measured by Reid Vapor Pressure (RVP) in pounds
per square inch (psi), is controlled in the spring and summer in order
to minimize evaporative hydrocarbon emissions from motor vehicles.  The
standards, 7.8 psi or 9.0 psi, for each state (excluding Alaska and
Hawaii) and the District of Columbia, are at 40 CFR 80.27(a).  The
addition of ethanol to gasoline increases the RVP by about one psi. 
Gasoline that contains at least nine volume percent ethanol, and no more
than 10 volume percent ethanol, is subject to a standard that is 1.0 psi
greater.  As an aid to compliance and enforcement, the regulation at 40
CFR 80.27 (d)(3) requires that the product transfer document (PTD) which
accompanies a shipment of gasoline containing ethanol shall contain a
legible and conspicuous statement that the gasoline contains ethanol and
the percentage concentration of ethanol.  This is intended to deter the
mixing within the distribution system, particularly in retail storage
tanks, of gasoline which contains ethanol in the 9-10 percent range with
gasoline that does not contain ethanol in the 9-10 percent range.  Such
mixing would likely result in a gasoline with an ethanol concentration
outside the 9-10 percent range, but with an RVP above the applicable
standard of 7.8 or 9.0 psi.  It is estimated that there are
approximately 2,000 producers and importers (mostly blenders as opposed
to refiners and importers) of gasoline blended with ethanol.  These are
the parties responsible for generating the PTDs.  Parties wishing to
conduct research or emissions certification on gasoline that does not
meet the volatility standard are required to obtain a testing exemption
in accordance with 40 CFR 80.27(e).  The EPA receives approximately two
requests per year for testing exemptions.

	EPA has proposed additional PTD requirements for gasoline containing
ethanol at 75 FR 68044 (November 4, 2010).  Those requirements will be
addressed in a separate ICR.

NEED FOR AND USE OF THE COLLECTION

	2(a)	Need/Authority for the Collection

	Section 211(h) of the Clean Air Act (Act) requires EPA to promulgate
regulations prohibiting the sale or distribution of gasoline whose
volatility, as measured by RVP, exceeds certain standards during the
high ozone season.  The Act and regulations at 40 C.F.R. 80.27 and 80.28
permit gasoline containing 9-10 percent ethanol to have an RVP that is
one psi greater than the standard that would otherwise apply.  Normally,
the gasoline distribution system treats gasoline as a fungible product. 
That is, gasolines from numerous sources are mixed together (also known
as commingling) in tanks at terminals and retail outlets.  Therefore,
without the required statement on the PTD, gasoline containing ethanol
in the 9-10 percent range could easily be commingled with gasoline
containing ethanol outside that range.  This could result in gasoline
that exceeds the applicable 7.8 psi or 9.0 psi standard, and not have
ethanol in the 9-10 percent range to qualify for the one psi exemption
allowed by the Act and regulations.  Thus, it is imperative that
gasoline marketers, shippers, and distributors know if a shipment of
gasoline contains ethanol, and in what concentration.  The required
statement on the PTD of gasoline blended with ethanol will significantly
aid industry compliance and EPA’s ability to enforce the volatility
standards.  

  

	Thus, the rule requires that the customary business practice (CBP) PTD
for a shipment of gasoline containing ethanol state that the gasoline
contains ethanol and the percentage concentration of ethanol.  The rule
does not have a recordkeeping requirement.  However, PTDs are usually
retained in the normal course of business for five years.  The PTD is
generated by any party that produces or imports gasoline that contains
ethanol.

	As required by section 211(h) of the Act, the Agency promulgated a
final rule in 1991.  The reporting requirement in 40 C.F.R. 80.27(d)(3)
was promulgated under authority of section 211(h) of the Act, 42 U.S.C.
§ 7545(h) and sections 114 and 208 of the Act, 42 U.S.C. §§ 7414 and
7542, and provides:

"Each invoice, loading ticket, bill of lading, delivery ticket and other
document which accompanies the shipment of gasoline containing ethanol
shall contain a legible and conspicuous statement that the gasoline
being shipped contains ethanol and the percentage concentration of
ethanol."  

	These regulations provide for the enforcement of the standards for the
maximum RVP that will be allowed during the high ozone portion of the
year, extending from May 1 (suppliers) or June 1 (all other persons)
through September 15.  Regulatory control of volatility stems from a
recognition of the major impact that increases in the RVP of gasoline
have on the emissions of volatile organic compounds (VOCs).  Consequent
to the excessive emission of VOCs is the formation of ozone in the
ambient air, a major summertime health problem in many urban areas.

     The reporting (actually labeling) requirement is necessary because
the Act gave certain ethanol blends a one pound per square inch (psi)
allowance above the otherwise applicable RVP standard.  The records
regarding the shipment of ethanol blends to a retailer or to any
"midstream" distribution point will assist Agency enforcement officials,
when inspecting those shipments, in identifying those gasoline blends
that qualify for the one psi allowance, and those parties who may be
liable for violations if the blend is not in compliance.  The records
are also necessary to assist regulated parties in avoiding violations
when handling multiple shipments of gasoline during the high ozone
season, and can be used by parties in establishing a legal defense.

	Parties wishing to conduct research or emissions certification on
gasoline that does not meet the volatility standard may obtain a testing
exemption by providing the information specified at 40 CFR 80.27(e) to
EPA.  Thus, if a test facility was inspected by EPA, and gasoline was
found that did not meet the standard, and the facility had an exemption,
there would not be a violation.  

     2(b) Practical Utility/Users of the Data

	The collection of information is necessary for the proper performance
of the functions of the Agency and has practical utility.  The
information contained in the PTDs for gasoline blended with ethanol is
used to identify those gasoline blends that may qualify for the one psi
allowance, as provided by the Act and by the rule.  The required record
also helps prevent the commingling of gasoline containing the required
amount of ethanol necessary to be eligible for the one psi waiver with
gasoline that does not qualify.  Such commingling would usually result
in a violation.  The testing exemption provides flexibility for research
or emissions certification.

	Agency enforcement officers need this information to assist in
identifying violations and violating parties.  There is no recordkeeping
requirement under this rule.  Industry entities, including blenders of
ethanol and gasoline, and distributors of gasoline containing ethanol,
as well as retailers (who ultimately receive the gasoline but have no
recordkeeping requirements under the rule) need the information in order
to prevent violations that can occur from commingling multiple gasoline
shipments during the high ozone season.

3.  NONDUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA

	3(a) Nonduplication

	The information collection is not duplicative.  The PTDs are the only
records available to recipients of gasoline that document that ethanol
has been blended into the gasoline.  The reporting requirement for a
testing exemption is the only practical approach.  

	3(b) Public Notice Required Prior to ICR Submission to OMB

	In compliance with the Paperwork Reduction Act, a notice was published
in the Federal Register. 

	3(c) Consultations

	The general consensus is that the burden is very small.  The
information is generally computer-generated, pre-printed, or hand
stamped on the PTDs.  The rule does not require that the PTDs be
retained.  Only about two requests for testing exemptions are received
annually.

	3(d) Effects of Less Frequent Collection

	This labeling activity is the minimum necessary to alert downstream
distributors/marketers that a shipment of gasoline contains ethanol. 
The labeling requirement applies only to those producing or importing
gasoline blended with ethanol.  The Agency allows maximum flexibility in
the form of the labeling.  Neither record maintenance nor reporting to
the Agency is required.  No new documents are required since PTDs are
routinely used in the gasoline distribution network.  Testing exemptions
are requested only as necessary.

	3(e) General Guidelines 

	The collection is in compliance with OMB guidelines.  To the extent
that some affected companies may be relatively small businesses, their
informational requirements do not change since the requirement is
already the minimal possible in order to give other businesses and EPA
information that is necessary for compliance.  

	3(f) Confidentiality  

	Information claimed as confidential is handled in accordance with EPA
Freedom of Information Act regulations at 40 CFR 2.

	3(g) Sensitive Questions

       	There are no sensitive questions.  

4.  THE RESPONDENTS AND THE INFORMATION REQUESTED

    	 4(a) Respondents/SIC/NAICS Codes

	The respondents are related to the following major group Standard
Industrialization Classification (SIC) codes:

2869 - Denatured Alcohol Manufacturing 

2911 - Petroleum Refineries

4212 - Gasoline Distributors

5171 - Gasoline Bulk Stations and Terminals

5172 - Gasoline Merchant Wholesalers (except bulk stations, terminals)

5541 - Retailers/Wholesale Purchaser-consumers

	The respondents are related to the following major group NAICS codes:

324110 - Petroleum Refineries

325193 - Denatured Alcohol Manufacturing

424710 - Gasoline Bulk Stations and Terminals

424720 - Gasoline Merchant Wholesalers (except bulk stations, terminals)

 

	4(b) Information Requested

	(i)  Data Items, Including Recordkeeping Requirements

	This ICR covers the reporting/labeling requirement at 40 CFR
80.27(d)(3) for the PTDs for shipments of gasoline containing ethanol. 
Ethanol is generally splash-blended into a gasoline tanker truck at a
terminal truck rack at ten volume percent.  The blender creates a
statement on the PTD that the product contains ten percent ethanol.  The
same is required for a refiner who produces gasoline blended with
ethanol at a refinery and an importer of gasoline blended with ethanol. 
Each distributor/transferor transfers this PTD on to the next transferor
and ultimately to the retail level.  Many refiners/blenders/importers
already included this information on the PTDs prior to the EPA
regulatory requirement (also, some states already required this
information), and for them this requirement represented no new burden. 
Even where it did represent a new burden, in just about all cases the
information is now encoded automatically by computer or otherwise
routinely stamped or entered on the PTD, resulting in an extremely small
reporting burden.  There is no burden for transferors, as they already
had to transfer a PTD with each shipment of gasoline as a customary
business practice (CBP).  This rule has no recordkeeping requirement. 
Parties needing a testing exemption must submit the information
specified at 40 CFR 80.27(e).

	(ii)  Respondent Activities

	The following are required:

Read and comprehend the regulations.

Train personnel to meet the requirements.

Develop the information for the PTD and/or testing exemption.

Gather and organize the information.

Review the information, perform quality assurance, and take corrective
action, if necessary, to meet the regulatory requirements.

Enter the information onto the PTD or submit the request for a testing
exemption to EPA.

5.         THE INFORMATION COLLECTED--AGENCY ACTIVITIES, COLLECTION 

    	METHODOLOGY AND INFORMATION MANAGEMENT

	5(a) Agency Activities

	The following are required:

Develop a thorough understanding of the regulatory requirements.

Convey the requirements and respond to inquiries in a clear manner.

Provide access to the regulations and guidance documents.

Timely process requests for testing exemptions.

Monitor compliance with the PTD requirement.

 

  

	5(b) Collection Methodology and Management

	The information collection, to the maximum extent practicable, uses
appropriate information technology to reduce burden and improve data
quality, agency efficiency and responsiveness to the public.  Ethanol
blender/distributors generally use computer-printed language stating
that the product contains ethanol and the amount (usually10 percent). 
This information is printed on PTDs, and in many cases the information
itself was already printed prior to the rule.  EPA also allows the use
of coded statements to reduce the space the statement requires on the
PTD.  EPA may examine these records during investigations regarding
gasoline exceeding the applicable RVP standard.  Requests for a testing
exemption are routinely reviewed and granted by EPA.

             

	5(c) Small Entity Flexibility

	The information collection reduces to the extent practicable and
appropriate the burden on persons who shall provide information to or
for the Agency, including with respect to small entities, as defined by
the Regulatory Flexibility Act (5 U.S.C. § 601(6)), the use of such
techniques as: (1) establishing differing compliance or reporting
requirements or timetables that take into account the resources
available to those who are to respond; (2) the clarification,
consolidation, or simplification of compliance and reporting
requirements; or (3) an exemption from coverage of the collection of
information, or any part thereof.  

	The approach of this information collection holds burdens to the
irreducible minimum consistent with obtaining the required compliance
levels.  The labeling requirement applies only to those entities that
produce or import gasoline blended with ethanol.  It enables those
parties, as well as retail level entities, to comply with the law. 
However, retail entities have no requirement to make or maintain
records.  Therefore, the smallest entities have no burden under this
collection and for those small blenders and importers who do have a
burden, the burden is minimal.  The information required is not in any
prescribed format, allowing for maximum flexibility in how to print the
information, including the use of short codes, and does not necessitate
any new records.  Therefore, no further flexibility is needed.  

	5(d) Collection Schedule

     There is no reporting requirement to EPA and there is no required
maintenance period.  There is no collection schedule; the statement is
added to the CBP transfer document when the blend is produced or
imported. 

6.   ESTIMATING THE BURDEN AND COST OF THE COLLECTION

	It is estimated that there are 2,000 producers and importers of
gasoline blended with ethanol.  The vast majority is blended at
terminals.  Some ethanol is blended at a refinery or contained in
imported gasoline 

            Based on information received from respondents and from EPA
experience, for most respondents the required information is
automatically computer-generated or preprinted on the PTDs.  This means
the reporting requirement is almost immeasurable for these parties. 
Other parties may spend about ten seconds per transaction to stamp or
otherwise enter the information on the PTDs.  The average for all
respondents is estimated to be about one second per transaction.  There
is no recordkeeping requirement.  It is estimated to take four hours to
prepare a request for a testing exemption.   

     

	Based on data from the U.S. Department of Labor, Bureau of Labor
Statistics, (2008 data),  EPA estimates that the hourly cost, including
benefits and other employee costs, for this industry and for the period
of this ICR, to be about $110 per hour for a typical labor mix.    

	Almost all gasoline containing ethanol will be shipped by truck. 
Assume 95 percent of all gasoline contains ethanol.  If 95 percent of
the 140 billion gallons of gasoline that is consumed annually nationwide
contains ethanol, this comes to 133 billion gallons of gasoline.  If the
average truck shipment is 3,000 gallons of gasoline, then about 44
million truckloads/shipments of gasoline with ethanol are
produced/imported annually.  Thus 44 million PTDs will receive the
required statement on ethanol content annually.

	6(a) Estimating Respondent Burden 

	For 44 million PTDs (responses), at and average burden of 1 second per
PTD, the annual burden is 12,222 hours, or about six hours for each of
the estimated 2,000 producers and importers.  There is an additional
hour of labor for each of the estimated 100 new producers or importers
annually to implement the requirement, for a net annual burden for
producers and importers of 12,222+100= 12,322 hours.  The two requests
for testing exemptions, at 4 hours each, add 8 hours annually, for an
annual total of 44,000,002 responses and 12,322+8= 12,330 hours.  There
is no burden for transferors and recipients because the transmittal of
PTDs is a customary business practice.

	6(b) Estimating Respondent Costs

	For producers and importers of gasoline containing ethanol, 12,222
hours at $110 per hour gives a total of $1,344,420, or about $672 per
respondent (2,000 respondents) annually to generate the required
statement on PTDs.  For the estimated 100 new producers or importers
each year, there is an additional hour of labor for each, $110 per
respondent, to implement the requirement, for a total of $11,000.  Thus,
the total annual cost for producers and importers is
$1,344,420+$11,000=$1,355,420.  For parties wishing a testing exemption,
8 hours at $110 per hour gives a total of $880, or $440 per respondent
(2 respondents).  There are no costs for transferors and recipients.

	There are no Purchased Services Costs.  There are no Annualized Startup
Costs.  There are no Annualized Capital Costs.  Thus, the only non-labor
costs are Operating and Maintenance (O&M) costs are for copying and
postage for the two exemption requests annually, and are estimated at
$10 each for a total of $20.  

	6(c) Estimating EPA Burden and Cost

     	The labeling activity that is the subject of this ICR imposes no
burden or costs on the

Agency.  The Agency would conduct inspections even without the
requirement but the required information facilitates the investigation
of possible violations.   

	

	6(d) Reasons for Change of Burden

	The use of ethanol in gasoline has increased since the previous ICR
from 60 percent of the market to 95 percent of the market.  Also, the
average shipment size has been reevaluated from 8,500 gallons to 3,000
gallons.  Thus, the estimated annual number of PTDs that will contain
the required language has increased from 10 million in the previous ICR
to 44 million.      

	

	6(e) Burden Statement

	There are no EPA forms on which to place a statement.

B.  COLLECTION OF INFORMATION EMPLOYING STATISTICAL METHODS

	This section is not applicable because statistical methods are not used
in this data collection associated with the Gasoline Volatility Rule.

                                       

 PAGE   

 PAGE   1 

  PAGE   8