Document ID: EPA-HQ-OAR-2003-0216-0004
Agency: epa
Document Type: Proposed Rule
Title: Regulation of Fuel and Fuel Additives: Refiner and Importer Quality Assurance Requirements for Downstream Oxygenate Blending and Requirements for Pipeline Interface
Posted Date: 2006-06-02T13:36:11Z

[Federal Register: June 2, 2006 (Volume 71, Number 106)]
[Proposed Rules]               
[Page 32015-32027]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02jn06-25]                         

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[EPA-HQ-OAR-2003-0216; EPA-HQ-OAR-2005-0149; FRL-8178-4]
RIN 2060-AM27 and RIN 2060-AM88

 
Regulation of Fuel and Fuel Additives: Refiner and Importer 
Quality Assurance Requirements for Downstream Oxygenate Blending and 
Requirements for Pipeline Interface

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: This proposed rule would amend the reformulated gasoline (RFG) 
regulations to allow refiners and importers of reformulated gasoline 
blendstock for oxygenate blending, or RBOB, the option to use an 
alternative method of fulfilling a regulatory requirement to conduct 
quality assurance sampling and testing at downstream oxygenate blending 
facilities. This alternative method consists of a comprehensive program 
of quality assurance sampling and testing that would cover all 
terminals that blend oxygenate with RBOB in a specified reformulated 
gasoline covered area. The program would be carried out by an 
independent surveyor funded by industry. The program would be conducted 
pursuant to a survey plan, approved by EPA, that is calculated to 
achieve the same objectives as the current regulatory quality assurance 
requirement.
    This proposed rule also would largely codify existing guidance for 
compliance by parties that handle pipeline interface with requirements 
for gasoline content standards, recordkeeping, sampling and testing. 
The proposed rule also contains new provisions which would provide 
additional flexibility to these regulated parties. The proposed rule 
would also establish gasoline sulfur standards for transmix processors 
and blenders that are consistent with the sulfur standards for other 
entities, such as pipelines and terminals, that are downstream of 
refineries in the gasoline distribution system, and would clarify the 
requirements for transmix processors under the Mobile Source Air Toxics 
program.

DATES: Comments: Comments must be received on or before July 3, 2006. 
Under the Paperwork Reduction Act, comments on the information 
collection provisions must be received by OMB on or before July 3, 
2006.
    Hearings: If EPA receives a request from a person wishing to speak 
at a public hearing by June 19, 2006, a public hearing will be held on 
July 3, 2006. If a public hearing is requested, it will be held at a 
time and location to be announced in a subsequent Federal Register 
notice. To request to speak at a public hearing, send a request to the 
contact in FOR FURTHER INFORMATION CONTACT.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2003-0216 for comments on the transmix provisions, and EPA-HQ-OAR-
2005-0149 for comments on the RBOB provisions, by one of the following 
methods:
     http://www.regulations.gov: Follow the online instructions 

for submitting comments.
     E-mail: a-and-r-docket@epa.gov.
     Fax: (202) 566-1741, Attention Docket ID No. EPA-HQ-OAR-
2003-0216 or EPA-HQ-OAR-2005-0149, as appropriate.
     Mail: Air Docket, Docket ID No. EPA-HQ-OAR-2003-0216, or 
EPA-HQ-OAR-2005-0149, as appropriate, Environmental Protection Agency, 
Mailcode: 6102T, 1200 Pennsylvania Ave., NW., Washington, DC 20460.
     Hand Delivery: EPA Docket Center, Room B102, EPA West 
Building, 1301 Constitution Avenue, NW., Washington, DC, Attention Air 
Docket ID No. EPA-HQ-OAR-2003-0216, or EPA-HQ-OAR-2005-0149, as 
appropriate. Such

[[Page 32016]]

deliveries are accepted during the Docket's normal hours of operation, 
and special arrangements should be made for deliveries of boxed 
information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2003-0216, or EPA-HQ-OAR-2005-0149, as appropriate. EPA's policy is 
that all comments received will be included in the public docket 
without change and may be made available online at http://www.regulations.gov
, including any personal information provided, 

unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through http://www.regulations.gov. The 

http://www.regulations.gov Web site is an ``anonymous access'' system, which 

means EPA will not know your identity or contact information unless you 
provide it in the body of your comment. If you send an e-mail comment 
directly to EPA without going through http://www.regulations.gov your e-mail 

address will be automatically captured and included as part of the 
comment that is placed in the public docket and made available on the 
Internet. If you submit an electronic comment, EPA recommends that you 
include your name and other contact information in the body of your 
comment and with any disk or CD-ROM you submit. If EPA cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment. Electronic 
files should avoid the use of special characters, any form of 
encryption, and be free of any defects or viruses. For additional 
information about EPA's public docket visit the EPA Docket Center 
homepage at http://www.epa.gov/epahome/dockets.htm. For additional 

instructions on submitting comments, go to Section I.B. of the 
SUPPLEMENTARY INFORMATION section of this document.
    Docket: All documents in the docket are listed in the 
http://www.regulations.gov index. Although listed in the index, some 

information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in http://www.regulations.gov or in hard copy at the Air Docket, EPA/

DC, EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. 
The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday 
through Friday, excluding legal holidays. The telephone number for the 
Public Reading Room is (202) 566-1744, and the telephone number for the 
Air Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Chris McKenna, mailcode 6406J, 
Environmental Protection Agency, 1200 Pennsylvania Ave., NW., 
Washington, DC 20460; telephone number: 202-343-9037; fax number: 202-
343-2802; e-mail address: mckenna.chris@epa.gov.

SUPPLEMENTARY INFORMATION: For further information, please see the 
information provided in the direct final action that is located in the 
``Rules and Regulations'' section of this Federal Register publication.
    In the ``Rules and Regulations'' section of the Federal Register, 
we are issuing these amendments to the RFG regulations as a direct 
final rule without prior proposal because we view them as non-
controversial amendments and anticipate no adverse comment. If we 
receive no adverse comment, we will not take further action on this 
proposed rule. If we receive adverse comment, we will publish a timely 
withdrawal in the Federal Register informing the public that the 
portion of the direct final rule on which adverse comment was received 
will not take effect. Those portions of the rule on which adverse 
comment was not received will go into effect on the effective date 
noted in the DATES section. We will address all public comments in a 
subsequent final rule based on this proposed rule. We will not 
institute a second comment period on this action. Any parties 
interested in commenting must do so at this time.

General Information

A. Does This Action Apply to Me?

    Entities potentially affected by this action include those involved 
with the production or importation of gasoline motor fuel. Regulated 
categories and entities affected by this action include:

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                                               NAICS codes                    Examples of potentially regulated
                  Category                         \a\        SIC codes \b\                entities
----------------------------------------------------------------------------------------------------------------
Industry...................................          324110            2911  Petroleum Refiners.
Industry...................................  422710; 422720      5171; 5172  Gasoline Marketers and
                                                                              Distributors.
Industry...................................  484220; 484230      4212; 4213  Gasoline Carriers.
----------------------------------------------------------------------------------------------------------------
\a\ North American Industry Classification System (NAICS).
\b\ Standard Industrial Classification (SIC) system code.

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that EPA is now aware 
could be potentially regulated by this action. Other types of entities 
not listed in the table could also be regulated. To determine whether 
your entity is regulated by this action, you should carefully examine 
the applicability criteria of Part 80, subparts D, E and F of title 40 
of the Code of Federal Regulations. If you have any question regarding 
applicability of this action to a particular entity, consult the person 
in the preceding FOR FURTHER INFORMATION CONTACT section.

B. What Should I Consider as I Prepare My Comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through 
http://www.regulations.gov or e-mail. Clearly mark the part or all of the 

information that you claim to be CBI. For CBI information in a disk or 
CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as 
CBI and then identify electronically within the disk or CD ROM the 
specific information that is claimed as CBI. In addition to one 
complete version of the comment that includes information claimed as 
CBI, a copy of the comment that does not contain the information 
claimed as CBI must be submitted for inclusion in the public docket. 
Information so marked will not be disclosed except in accordance with 
procedures set forth in 40 CFR part 2.
    2. Tips for Preparing Your Comments. When submitting comments, 
remember to:
    A. Identify the rulemaking by docket number and other identifying 
information (subject heading, Federal Register date and page number).

[[Page 32017]]

    B. Follow directions--The agency may ask you to respond to specific 
questions or organize comments by referencing a Code of Federal 
Regulations (CFR) part or section number.
    C. Explain why you agree or disagree; suggest alternatives and 
substitute language for your requested changes.
    D. Describe any assumptions and provide any technical information 
and/or data that you used.
    E. If you estimate potential costs or burdens, explain how you 
arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
    F. Provide specific examples to illustrate your concerns, and 
suggest alternatives.
    G. Explain your views as clearly as possible, avoiding the use of 
profanity or personal threats.
    H. Make sure to submit your comments by the comment period deadline 
identified.
    3. Docket Copying Costs. You may be charged a reasonable fee for 
photocopying docket materials, as provided by 40 CFR Part 2.

Outline of This Preamble

I. Refiner and Importer Quality Assurance Requirements for 
Downstream Oxygenate Blending
    A. Background
    B. Need for Action
    C. This Action
II. Requirements for Pipeline Interface
    A. Background
    B. 1997 Notice of Proposed Rulemaking
    C. Pipelines
    D. Transmix Processors
    E. Transmix Blenders
III. Administrative Requirements
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination with 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children from 
Environmental Health and Safety Risks
    H. Executive Order 13211: Acts that Significantly Affect Energy 
Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
IV. Statutory Provisions and Legal Authority

I. Refiner and Importer Quality Assurance Requirements for Downstream 
Oxygenate Blending

A. Background

    The RFG regulations currently require RFG to contain a minimum of 
2.0 weight percent oxygen. 40 CFR 80.41. To fulfill this requirement, 
oxygenate is added either at the refinery before the gasoline is 
certified by the refiner as meeting RFG requirements, or it is added 
downstream from the refinery at an oxygenate blending facility. As 
discussed in more detail below, refiners often wish to require that 
more than the minimum amount of oxygenate be added downstream in order 
to include the additional oxygenate in their emissions performance 
compliance calculations. Although Congress recently removed the oxygen 
requirement for RFG in the Clean Air Act,\1\ we believe many refiners 
and importers may wish to continue to include oxygenate added 
downstream in their emissions compliance calculations. Under the 
current regulations, refiners must conduct a program of quality 
assurance testing at the downstream oxygenate blending facility in 
order to include the oxygenate in their compliance calculations. This 
proposed rule would provide an alternative QA requirement for these 
refiners and importers.
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    \1\ 1 Energy Policy Act of 2005, Pub. L. 109-58 (HR6), section 
1504(a), 119 STAT 594, 1076-1077(2005). In accordance with the 
Energy Policy Act, EPA has issued a rule amending the RFG 
regulations for California to remove the 2.0 weight percent oxygen 
standard (71 FR 8965 (February 22, 2006)), and has proposed a 
similar rule that would be applicable in the rest of the country (71 
FR 9070 (February 22, 2006)).
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    Under the current regulations, when oxygenate is to be added to 
produce RFG at a downstream oxygenate blending facility, refiners 
produce a product called reformulated gasoline blendstock for oxygenate 
blending, or RBOB. RBOB is certified by the refiner, or by an importer 
who imports RBOB, as complying with all of the RFG requirements except 
the minimum 2.0 weight percent oxygen requirement. The oxygenate 
blender is responsible for complying with the oxygen requirement when 
the oxygenate is added to the RBOB to produce RFG at the oxygenate 
blending facility.
    Various oxygenates may be used to fulfill the oxygen requirement. 
Some oxygenates, such as methyl tertiary butyl ether, or MTBE, 
typically are added at the refinery. However, some oxygenates, such as 
ethanol, have a propensity to attract water, and, as a result, cannot 
be added at the refinery, particularly where the finished gasoline will 
be traveling through a pipeline on its way to terminals and retail 
gasoline stations. As a result, RFG containing ethanol is typically 
produced by blending the ethanol with RBOB at a blending facility 
downstream from the refinery that produced the RBOB.
    Refiners and importers of RBOB are required to calculate compliance 
with the RFG emissions performance standards for VOC, NOX 
and toxics by sampling and testing a hand blended mixture of the RBOB 
and the type and amount of oxygenate that the refiner or importer of 
the RBOB designates must be added downstream. The type and amount of 
oxygenate to be added downstream must be indicated on the product 
transfer documents that accompany the gasoline when it is transferred 
to the downstream oxygenate blender. The oxygenate blender is required 
to add the type and amount of oxygenate designated on the product 
transfer documents.
    Under the current regulations, RBOB refiners and importers can 
designate either a specific type and specific amount of oxygenate to be 
added downstream, or they can designate one of two generic categories 
of RBOB: ``any-oxygenate'' RBOB or ``ether-only'' RBOB. 40 CFR 
80.69(a)(8). Where the RBOB is designated as any-oxygenate RBOB, the 
refiner or importer must assume for purposes of its handblend that 2.0 
weight percent ethanol will be added downstream. The downstream 
oxygenate blender may add any type of legal \2\ oxygenate, to any-
oxygenate RBOB in an amount sufficient to meet the minimum 2.0 weight 
percent requirement. Where the RBOB is designated as ether-only RBOB, 
the refiner or importer must assume for purposes of its handblend that 
2.0 weight percent MTBE will be added downstream. The oxygenate blender 
may add any legal ether oxygenate to ether-only RBOB in an amount 
sufficient to meet the minimum 2.0 weight percent requirement.
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    \2\ Oxygenates that are allowed under EPA's ``substantially 
similar'' rule and any section 211(f) waiver that may apply.
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    Where a specific type and amount of oxygenate is designated for the 
RBOB rather than one of the two generic designations, the regulations 
require the refiner or importer to conduct downstream oversight quality 
assurance (QA) sampling and testing of the downstream oxygenate 
blending facility. 40 CFR 80.69(a)(7). This is to ensure that the 
specific type and amount of oxygenate that is designated, which 
typically is greater than the 2.0 weight percent requirement, in fact 
is added to the RBOB by the oxygenate blender. In addition, the refiner 
or importer must have a contract with the oxygenate blender which 
requires the blender to comply with the blending procedures specified 
by the RBOB refiner or importer and allows the refiner or

[[Page 32018]]

importer to conduct the required QA sampling and testing. 40 CFR 
80.69(a)(6). If the refiner or importer does not meet the contractual 
and quality assurance requirements and does not designate its RBOB as 
ether-only or any-oxygenate, the refiner or importer must assume for 
purposes of its handblend that 4.0 volume percent ethanol will be added 
to the RBOB downstream.

B. Need for Action

    Recently, the states of New York and Connecticut promulgated state 
laws banning the use of MTBE in gasoline sold in these states. As a 
result, many refiners and importers that historically produced or 
imported RFG containing MTBE for the NY/CT RFG area currently produce 
or import RBOB for ethanol blending. Refiners in this area have 
indicated that, due to the complex gasoline marketplace in New York and 
Connecticut, it is extremely difficult, if not impossible, to track 
RBOB from the refinery where it is produced to the terminal where it is 
blended with ethanol in order to fulfill the downstream QA sampling and 
testing requirement. As a result, under the current regulations, 
refiners in the NY/CT RFG area are effectively precluded from producing 
an RBOB which requires a specific type and amount of oxygenate, such as 
10 volume percent ethanol, and instead must produce a generic any-
oxygenate RBOB, which does not require the refiner to conduct 
downstream QA testing at the ethanol blender facility.
    As discussed above, for purposes of calculating compliance with RFG 
emissions performance standards, these refiners may then only include 
in their handblends ethanol in an amount which would result in gasoline 
having 2.0 weight percent ethanol (approximately 5.7 volume percent 
ethanol.) Some refiners have indicated that they will need to produce 
RBOB requiring 10 volume percent ethanol, which would allow them to 
include 10 volume percent ethanol for purposes of compliance 
calculations, in order to meet emissions performance standards. As a 
result, these refiners have asked EPA to allow use of an alternative 
method of meeting the downstream QA sampling and testing requirement.
    For the reasons discussed below, we believe it is appropriate to 
provide refiners and importers who produce or import RBOB for the NY/CT 
RFG area with an alternative means of meeting the QA sampling and 
testing requirement. We also believe it is appropriate to provide this 
alternative to refiners and importers who produce or import gasoline 
RBOB for other RFG areas. As a result, this proposed rule would amend 
the RFG regulations to provide an alternative QA sampling and testing 
option which will be available to any RBOB refiner or importer in any 
RFG covered area. As indicated above, we believe that providing this 
alternative QA requirement would be appropriate even after the 2.0 
weight percent minimum oxygen standard is removed.

C. This Action

    This proposal would provide RBOB refiners and importers the option 
to comply with an alternative QA requirement which consists of a 
program of sampling and testing designed to provide oversight of all 
terminals that blend ethanol with RBOB for use in a specified RFG 
covered area. Under this option, a refiner or importer would need to 
either arrange to have an independent surveyor conduct a program of 
compliance surveys, or participate in the funding of an organization 
which arranges to have independent surveyor conduct a program of 
compliance surveys. In either event, compliance surveys would need to 
be carried out by an independent surveyor pursuant to a survey plan 
calculated to achieve the same QA objectives as the current regulatory 
requirement. A detailed survey plan would be submitted to EPA for 
approval by September 1st of the year preceding the annual averaging 
period in which the alternative QA sampling and testing program would 
be implemented. The survey plan would include a methodology for 
determining when the survey samples will be collected, the location of 
the retail outlets where the samples will be collected, the number of 
samples to be included in the survey, and any other elements that EPA 
determines are necessary to achieve the same level of quality assurance 
as the current QA requirement.
    Under this alternative QA option, the independent surveyor would be 
required to obtain samples at retail stations in the RFG covered area 
in accordance with the survey plan and have the samples tested for type 
and amount of oxygenate. The sampling and testing conducted under this 
alternative QA option would be required to be done in accordance with 
the provisions in Sec. Sec.  80.8 and 80.46. The surveyor would obtain 
from the retail outlet the product transfer documents associated with 
the gasoline, which will provide the surveyor with information 
regarding the type and amount of oxygenate that the gasoline is 
supposed to contain, and the terminal that conducted the oxygenate 
blending. The surveyor would be required to notify EPA of any instance 
where the product transfer documents do not contain such information. 
If the test results show that the gasoline does not contain the type 
and/or the minimum amount of oxygenate indicated on the product 
transfer documents, the surveyor would be required to ask the terminal 
determined to have supplied the gasoline to produce documentation of 
the blending instructions from the refiner or importer of the RBOB. The 
surveyor would be required to notify EPA of any instances where the 
refiner's or importer's blending instructions indicate that the 
oxygenate blender did not add the type or minimum amount of oxygenate 
designated for the RBOB by the refinery or importer. The surveyor would 
be required to submit to EPA a report which includes the information 
and data collected during the survey, and to maintain records 
associated with the surveys for five years.
    This proposed rule would require each refiner and importer who 
chooses to comply with the alternative QA requirement to take all 
reasonable steps to ensure that parties downstream from the refiner or 
importer cooperate with the program by allowing the independent 
surveyor to collect samples, and by providing to the independent 
surveyor copies of product transfer documents and other information 
regarding the source of any gasoline received, the destination of any 
gasoline distributed, the oxygenate blending instructions for RBOB, and 
the rate the oxygenate was blended. In partial satisfaction of the 
``reasonable steps'' requirement, the rule would require the refiner or 
importer to include such a requirement in contractual agreements with 
its branded downstream facilities.
    In addition, this proposed rule would require parties downstream 
from a refiner or importer that complies with the alternative QA 
requirement to include on product transfer documents the type and 
amount of oxygenate contained in the gasoline and identification of the 
oxygenate blending terminal that blended the gasoline. This proposed 
rule would require that the survey plan include a process for notifying 
all oxygenate blending terminals and other downstream parties in the 
affected area of the product transfer documentation requirement. Where 
a downstream party fails to receive notice of the product transfer 
requirement, the party would be required to begin complying with the

[[Page 32019]]

product transfer requirement upon notification by EPA.
    We believe that use of this QA compliance alternative would result 
in oversight sampling and testing that is equivalent to the current 
regulatory QA requirement, and, in fact, may result in significantly 
superior QA oversight since the sampling and testing would be conducted 
by an independent surveyor in accordance with a comprehensive plan 
approved by EPA, rather than by individual refiners and importers. This 
rule would not have any adverse environmental impact, and would provide 
refiners and importers with additional flexibility in complying with 
the regulations. As a result, while this rulemaking was initiated in 
response to the compliance issues raised by refiners in the NY/CT area, 
we believe it is appropriate to provide this compliance alternative to 
refiners and importers supplying any RFG covered area. The rule, 
therefore, would provide this QA compliance alternative to any RBOB 
refiner or importer in any RFG area who either arranges to have an 
independent surveyor conduct a program of compliance surveys, or who 
participates in the funding of an organization that arranges to have an 
independent surveyor conduct a program of compliance surveys, in 
accordance with the provisions in this proposed rule.
    Compliance with this QA alternative would be optional. Refiners and 
importers may choose to comply with the existing QA requirement and not 
participate in a survey program. Refiners and importers who supply more 
than one RFG area may choose to participate in the survey program for 
one RFG area and comply with the existing QA requirement for another 
RFG area.
    This proposed rule would add a new paragraph (a)(11) to 40 CFR 
80.69, which contains the current QA requirement. This proposed rule 
also would amend Sec.  80.77 to require parties to include on product 
transfer documents the information required under Sec.  80.69(a)(11) as 
described above.

II. Requirements for Pipeline Interface

A. Background

    Refined petroleum products that are transported by pipeline 
normally are pumped sequentially, as a continuous flow through the 
pipeline. As a result, some amount of mixing of adjacent product types 
normally occurs. The product in a pipeline between two adjacent volumes 
of petroleum product consists of a mixture of the two adjacent volumes 
and is called ``interface.'' Generally, interface is blended into the 
two adjoining products that created the interface. For example, half of 
the interface between premium and regular gasoline is blended into the 
premium gasoline and half into the regular gasoline (called a ``fifty 
percent cut'' or a ``mid-point cut.'') However, certain product types, 
such as jet fuel, are not mixed with any other product type, and all of 
the interface that contains jet fuel is blended into the other product 
(called a ``clean cut.'')
    Where interface consists of a mixture of finished fuels that cannot 
be cut with adjoining product so as to produce a product that meets the 
specifications for a fuel that can be used or sold without further 
processing, the interface is called ``transmix''. Transmix is not 
blended into either of the two adjacent products transported by the 
pipeline, but is diverted by the pipeline as a distinct product into a 
separate storage tank. Transmix is generally transported via tank 
truck, pipeline or barge to a facility designed to separate the 
transmix into its fuel components. For example, where the transmix 
consists of gasoline and distillate fuel, the transmix may be 
transported to a ``transmix processing'' facility where the gasoline 
portion is separated from the distillate fuel. At locations where it is 
either relatively expensive or inconvenient to transport transmix to a 
transmix processing facility for separation, the transmix is sometimes 
blended into gasoline in very small amounts, typically around 0.25 
volume percent of the gasoline.
    The reformulated gasoline (RFG) and anti-dumping requirements apply 
at any facility where gasoline is produced. See 40 CFR 80.2(h) and (i), 
80.65(a), and 80.101. Gasoline most commonly is produced by processing 
crude oil at refineries, but it is also produced by other processes, 
such as combining blendstocks or adding blendstocks to finished 
gasoline. Gasoline is also produced when transmix is blended into 
gasoline, or when transmix is separated into gasoline and distillate 
fuel. Transmix blending is similar to adding blendstock to gasoline 
where the addition of the transmix, like blendstock, may change the 
properties of the gasoline. Similarly, the process of separating 
gasoline and distillate fuel may result in gasoline with different 
properties than the gasoline as originally certified by the refinery. 
Transmix processors and transmix blenders are refiners under the RFG/
anti-dumping regulations, but EPA has historically provided transmix 
processors and transmix blenders flexibility in complying with the 
refiner requirements. This proposed rule would codify some of the 
existing practices into EPA regulations, and would also include 
modifications reflecting EPA experience.

B. 1997 Notice of Proposed Rulemaking

    On July 11, 1997, EPA proposed to add a new Sec.  80.84 to the RFG/
anti-dumping regulations at 40 CFR Part 80 to clarify the manner in 
which interface, including transmix, would be treated under the RFG/
anti-dumping regulations. The NPRM proposed requirements for 
designating different combinations of gasoline in interface. The NPRM 
also proposed requirements for transmix processors and transmix 
blenders that produce either RFG or conventional gasoline.
    The NPRM proposed to allow parties to blend transmix into 
conventional gasoline provided that the transmix resulted from normal 
pipeline operations, and either there was no means of transporting the 
transmix to a transmix processor via pipeline or water, or there was an 
historical practice of blending transmix at the facility before 1995. 
The rate of transmix blending was limited to the greater of 0.25 volume 
percent or the demonstrated blending rate in 1994. The NPRM proposed to 
allow transmix to be blended into RFG provided that the transmix 
resulted from normal pipeline operations, there was no means of 
transporting the transmix to a transmix processing facility via 
pipeline or water, and the party was unable to blend the transmix into 
conventional gasoline. The rate of transmix blending into RFG was 
limited to a maximum of 0.25 volume percent. The NPRM also proposed 
requiring transmix blenders to carry out a program of periodically 
sampling and testing of the RFG subsequent to transmix blending to 
ensure that the downstream standards were met.
    The NPRM proposed to require transmix processors who designate the 
gasoline produced from the transmix (such gasoline is one type of 
transmix gasoline product, or TGP) as conventional gasoline to exclude 
the TGP from anti-dumping compliance calculations for the transmix 
processing facility, but to include any blendstocks added to the TGP 
since such blendstocks would not previously have been included in any 
refinery's compliance calculations. The NPRM proposed to require 
transmix processors who designate the gasoline produced from transmix 
as RFG to include the TGP, as well as any blendstocks used, in the RFG 
compliance calculations for the transmix processing facility to

[[Page 32020]]

ensure that the gasoline produced using the transmix meets all RFG 
standards.
    Parties have been processing and blending transmix in accordance 
with EPA guidance which describes similar treatment of interface and 
transmix as that outlined in the July 11, 1997 NPRM. (See Reformulated 
Gasoline and Anti-dumping Questions and Answers (November 12, 1996)). 
Our experience since the guidance was issued indicates that the 
approach taken in the guidance is mostly appropriate, but that some 
revisions are warranted. EPA is also aware, from recent discussions 
with several pipeline operators, that volumes of transmix may increase 
as pipelines begin transporting ultra-low sulfur diesel fuel. EPA had 
anticipated that transporting ultra-low sulfur diesel would require 
greater volumes of diesel to be cut as interface into other higher-
sulfur distillate fuels such as heating oil and jet fuel. However, some 
pipelines have indicated they intend to change their product sequencing 
by transporting volumes of ultra-low sulfur diesel between volumes of 
gasoline, in order to minimize sulfur contamination of the ultra-low 
sulfur diesel. This change would increase the number of gasoline/diesel 
interfaces cut to transmix, and increase the overall volume of 
transmix. Pipeline operators have also indicated that transporting 
ultra-low sulfur diesel fuel will cause them to generate transmix at 
locations where they have not historically generated transmix.
    In this proposed rule, we are including the provisions in Sec.  
80.84, which were previously proposed in the July 11, 1997 NPRM, with 
certain changes made in response to the comments we received on the 
NPRM, as discussed below. We believe it is appropriate to include in 
this proposal the provisions in Sec.  80.84 given the length of time 
since they were originally proposed, and to include changes made in 
response to prior comments. We have also added several new provisions 
in this proposal clarifying, and in some instances expanding, the 
flexibilities available to transmix processors and transmix blenders 
for complying with the RFG/antidumping regulations. This proposed rule 
also includes modest recordkeeping requirements in Sec. Sec.  80.74 and 
80.104 which would require parties that handle interface and transmix 
to keep records verifying that the requirements of Sec.  80.84 were 
met. In addition, this proposed rule includes provisions for transmix 
processors and transmix blenders related to gasoline sulfur and air 
toxics. This proposed rule only addresses gasoline produced by transmix 
processors and transmix blenders. Distillate fuel produced by transmix 
processors and transmix blenders is addressed in the diesel sulfur 
regulations under 40 CFR part 80, subpart I.
    EPA believes the flexibilities available in this proposed rule are 
appropriate given the unique roles that transmix processors and 
transmix blenders fill in the petroleum products distribution system. 
Although transmix processors and transmix blenders are refiners under 
EPA's regulations, almost all of the gasoline and distillate fuel they 
produce is derived from fuel which has already been produced and 
certified by an upstream refinery. Thus, this proposed rule would allow 
transmix processors the flexibility to exclude from their antidumping 
compliance calculations conventional gasoline that they recover 
directly from transmix, since the conventional gasoline has already 
been accounted for in the compliance calculations of an upstream 
refinery. Similarly, this proposed rule would allow transmix processors 
to only have to meet the downstream sulfur standards for gasoline they 
recover directly from transmix, since the gasoline has already been 
accounted for in the compliance calculations of an upstream refinery. 
However, transmix processors must comply with all refiner standards at 
each of their transmix processing facilities for any blendstocks they 
add to gasoline. Lastly, this proposed rule would allow transmix 
blenders to blend transmix into gasoline without restriction on 
location or rate, provided the endpoint of the transmix-blended 
gasoline does not exceed 437 degrees Fahrenheit, and that the gasoline 
meets all applicable downstream standards.

C. Pipelines

    This proposed rule includes designations for pipeline interface 
that are consistent with the designations in EPA's current guidance and 
the 1997 NPRM. The designations for pipeline interface are primarily 
intended to ensure that pipelines cut their interfaces in a manner that 
maintains the quality of any RFG or VOC-controlled gasoline transported 
by a pipeline. For example, interfaces between volumes of RFG and 
conventional gasoline should be cut into the conventional gasoline to 
maintain the quality of the RFG. Regardless of gasoline product 
designation, all gasoline containing interface must meet all downstream 
standards, including but not limited to any standards and requirements 
that apply downstream of the refinery in 40 CFR Part 80 and the Clean 
Air Act.

D. Transmix Processors

1. Comments on the 1997 Notice of Proposed Rulemaking
    EPA received a number of comments on the 1997 NPRM regarding 
transmix processors. One commenter said that the definition of transmix 
should be changed since transmix processors and transmix blenders 
sometimes process or blend mixtures of fuels that were unintentionally 
combined in tanks. Although such mixtures are similar in composition to 
transmix, they do not fit the definition of transmix proposed in the 
1997 NPRM, which specified that transmix must be generated in a 
pipeline. EPA agrees that a product that in composition is similar to 
transmix, and that is produced by unintentionally mixing gasoline and 
distillate fuel in tanks, should be afforded the same treatment as 
transmix product generated in a pipeline. EPA also understands that 
transmix may include mixtures of gasoline and distillate fuel produced 
through normal operational activities at pipelines and terminals, such 
as draining tanks, or draining piping and hoses used to transfer 
gasoline or distillate fuel to tanks or trucks, or from a safety relief 
valve discharging to protect equipment from overpressuring. As a 
result, Sec.  80.84(e) in this proposed rule specifically allows such 
products to be covered under the transmix provisions.
    EPA is aware that some transmix processors and transmix blenders 
may also be adding feedstocks to their transmix that were not produced 
from normal pipeline interface, or from inadvertently mixing gasoline 
and distillate fuel in tanks, or through normal operational activities 
at pipelines and terminals. Mixing other feedstocks in transmix prior 
to processing may cause these other feedstocks to be inappropriately 
accounted for under the antidumping regulations and gasoline sulfur 
regulations, as discussed later. The flexibility provided in this rule 
extends only to transmix composed of pipeline interface, mixtures of 
gasoline and distillate fuel that were unintentionally combined in a 
tank, and mixtures of gasoline and distillate fuel produced through 
normal operational activities at pipelines and terminals. A transmix 
processor or transmix blender who adds feedstocks derived from any 
other sources to their transmix must comply with all the standards 
applicable to a refiner under EPA's regulations for all the gasoline 
they produce during a compliance period, including but not limited to 
any standards and requirements in 40 CFR parts 79, 80 and

[[Page 32021]]

the Clean Air Act. Transmix processors that add feedstocks from any 
other sources should also take extra care to be sure that they are 
complying with Subtitle C of the Resource Conservation and Recovery Act 
(RCRA), 42 U.S.C. 6921-6939(e), and any state provision authorized 
pursuant to Section 3006 of RCRA, 42 U.S.C. 6926.
    One commenter said that the 1997 NPRM should clarify that the 
transmix processing requirements do not apply to transmix processed by 
a crude oil refinery where the transmix is received into a crude or 
other feedstock stream and is not separated before it is added to other 
feedstocks. EPA believes that the regulations in this proposed rule are 
clear in this regard, since they specifically apply to persons who 
separate transmix at a transmix processing facility. The term 
``transmix processing facility'' is defined as excluding refineries 
that ``produce gasoline by processing crude oil''. Such refineries must 
comply with all existing refiner requirements, and would not be 
eligible to take advantage of the flexibilities available in this 
proposed rule.
    Some commenters said that they do not know the source of the 
transmix and, therefore, would not know the original designation of the 
gasoline portion of the transmix (e.g., RFG, conventional gasoline, 
blendstocks). The commenters said that the transmix processor should 
not be required to track and segregate transmix generated from 
different types of gasoline or blendstocks. This proposed rule would 
not require a transmix processor to track and segregate transmix. 
However, Sec.  80.65 requires the transmix processor to designate the 
gasoline portion (i.e., conventional gasoline, RFG, or RBOB) that is 
separated from the distillate fuel.
    One commenter said that, under previous guidance, EPA provided for 
the exclusion of the transmix-based portion of conventional gasoline 
from anti-dumping compliance calculations as an option, whereas in the 
1997 NPRM, the exclusion would be mandatory. The commenter believes the 
exclusion should be optional. Another commenter believes that transmix 
processing improves the quality of the gasoline separated from transmix 
by removing more heavy aromatics and sulfur compounds and improving 
E300 distillation point, and therefore, TGP should be included in 
compliance calculations for conventional gasoline to give credit for 
the improvements. EPA agrees with the commenters, and this proposed 
rule would modify the 1997 NPRM to allow the exclusion of the TGP from 
anti-dumping compliance calculations to be optional, provided the TGP 
meets all of the downstream standards for conventional gasoline. 
However, in order to prevent transmix processors from selectively 
including only high quality TPG batches in their compliance 
calculations, while excluding those of low quality, transmix processors 
must consistently include or exclude TGP in their compliance 
calculations during each annual compliance period, with one exception.
    The exception occurs if transmix contains gasoline blendstocks that 
are derived from pipeline interface. EPA understands that some 
pipelines transport gasoline blendstocks, and that these pipelines may 
cut interfaces containing gasoline blendstock to a transmix tank. If a 
transmix processor produces conventional gasoline from transmix 
containing gasoline blendstocks and was allowed to exclude the TGP from 
their anti-dumping compliance calculations, the finished conventional 
gasoline would not be included in any refiner's anti-dumping compliance 
calculations. Thus, under this proposal, if a transmix processor 
produces conventional gasoline at a transmix processing facility from 
transmix containing gasoline blendstocks derived from pipeline 
interface, the transmix processor must consistently include all TGP 
produced during a compliance period in their antidumping compliance 
calculations for that transmix processing facility. As discussed 
previously, if transmix processors add any feedstocks to their transmix 
that were not produced from normal pipeline interface, or from 
inadvertently mixing gasoline and distillate fuel in tanks, or through 
normal operational activities at pipelines and terminals, they would 
need to comply with all standards applicable to refiners under EPA's 
regulations for all the gasoline they produce during a compliance 
period. This proposed rule would also require any RFG or RBOB produced 
by a transmix processor to be included in the RFG compliance 
calculations for the transmix processing facility.
    This proposed rule would also modify the 1997 NPRM by treating TGP 
as a blendstock when the transmix processor mixes the TGP with other 
blendstock(s) to produce conventional gasoline. In this situation, the 
TGP would be included in compliance calculations for the resulting 
conventional gasoline. We believe it is appropriate to treat TGP as a 
blendstock rather than as a previously certified gasoline in this 
situation, since the TGP is likely to have undergone changes as a 
result of having been interfaced with another product and separated 
through transmix processing. For example, one transmix processor 
indicated that their TGP could not be directly sold as gasoline because 
it does not meet standards for octane or Reid vapor pressure. This 
approach is consistent with the approach taken in both the 1997 NPRM 
and the Question and Answer guidance with regard to RFG, where TGP is 
required to be included in compliance calculations when it is mixed 
with blendstock to produce RFG.
    Where TGP is sold as a blendstock, the transmix processor would be 
required to exclude the TGP from compliance calculations, with one 
exception. The exception is when the transmix processor sells the TGP 
to an oxygenate blender as a blendstock which becomes conventional 
gasoline solely upon the addition of an oxygenate, such as ethanol or 
MTBE. In this circumstance, the transmix processor would need to 
include the TGP in compliance calculations. This exception would not 
apply if the TGP is combined with any other non-oxygenated blendstocks 
to produce conventional gasoline. Thus, in order for a transmix 
processor to properly account for any TGP sold as a blendstock in 
compliance calculations for a transmix processing facility, the 
transmix processor must clearly state on the TGP product transfer 
documents whether or not the TGP may only be combined with an oxygenate 
to produce conventional gasoline. This approach is consistent with the 
anti-dumping regulations at Sec.  80.101(d)(3), which require 
blendstocks that become conventional gasoline solely upon the addition 
of an oxygenate to be included in anti-dumping compliance calculations 
for the refiner that produced the blendstock.
    Transmix processors also sometimes blend sub-octane TGP with 
previously certified premium gasoline (PCG) to produce regular 
gasoline. EPA is proposing that transmix processors which blend sub-
octane TGP with premium PCG to produce conventional gasoline must 
include the TGP in compliance calculations for the transmix processing 
facility, but may meet the sampling and testing requirements in one of 
three ways. First, the transmix processor may directly measure the 
properties of the TGP and treat each volume of TGP blended with PCG as 
a separate batch for purposes of compliance calculations. As a second 
alternative, the transmix processor may measure the volume and 
properties of the PCG prior to blending with the TGP, then measure the 
volume and properties of the gasoline subsequent to blending

[[Page 32022]]

with the TGP, and calculate the volume and properties of the TGP by 
subtracting the volume and properties of the PCG from the volume and 
properties of the gasoline subsequent to blending. As a third 
alternative, the transmix processor may demonstrate compliance using 
the procedures in Sec.  80.101(g)(9). Where TGP is mixed with 
previously certified gasoline to produce RFG or RBOB, the transmix 
processor must demonstrate compliance using the procedures in Sec.  
80.65(i).
    One commenter said that EPA should allow transmix processors to 
blend oxygenates and other blendstocks into transmix-based conventional 
gasoline to produce RFG. This proposed rule would address this comment 
by allowing transmix processors to treat their TGP as a blendstock, and 
combine the TGP with other blendstocks to produce either conventional 
or reformulated gasoline. In this situation, the transmix processor 
would be required to fulfill all the requirements and standards for RFG 
that apply to a refiner.
2. Issues Not Addressed in the 1997 NPRM
    a. Gasoline Sulfur. In the preamble to the gasoline sulfur 
regulations, EPA indicated that the Agency would establish requirements 
for transmix processors in a future rulemaking (65 FR 6800, February 
10, 2000). Therefore, as part of this rulemaking, EPA is also including 
proposed requirements for transmix processors and transmix blenders 
under the gasoline sulfur regulations at 40 CFR part 80, subpart H.
    As under the RFG/anti-dumping rule, transmix processors and 
transmix blenders are refiners under the gasoline sulfur regulations. 
As a result, transmix processors and transmix blenders are subject to 
the refinery sulfur standards under Sec.  80.195 of the gasoline sulfur 
regulations. However, for reasons discussed below, we believe it is 
appropriate that such parties be held to the gasoline sulfur standards 
applicable to downstream parties under Sec. Sec.  80.210 and 80.220 of 
the gasoline sulfur regulations, and not be held to the more stringent 
refinery standards in Sec.  80.195.
    As indicated above, transmix processors generally do not control 
their feedstock, but receive mixtures of products from upstream 
refineries. The gasoline portion of transmix may be relatively high in 
sulfur if it was originally produced by a small refiner, a refiner 
producing gasoline for use in the Geographic Phase-in Area (GPA), or a 
refiner who has been given a temporary hardship extension to produce 
relatively high sulfur gasoline. As a result, holding transmix 
processors to the downstream sulfur standards rather than the more 
stringent refinery standards would provide transmix processors the 
flexibility to recover gasoline originally produced by small refiners, 
refiners of GPA gasoline, or temporary hardship refiners. To ensure 
compliance with the applicable downstream sulfur standards, transmix 
processors will be required to test any gasoline produced from transmix 
for sulfur content.
    Under this proposed rule, transmix processors who add blendstocks 
not derived from transmix to their recovered gasoline would be required 
to meet all of the requirements and standards that apply to refiners 
under 40 CFR Part 80, subpart H, for such blendstocks. Where certain 
requirements are met, the transmix processor may use sulfur test 
results from the blendstock supplier for purposes of meeting the 
sampling and testing requirements under the sulfur rule.
    As mentioned previously, EPA has learned that some transmix 
processors have added feedstocks to their transmix, before the transmix 
is processed, that are not produced from pipeline interface, or from 
mixtures of gasoline and distillate fuel unintentionally combined in a 
tank, or from normal operations at pipelines and terminals. Under this 
proposal, transmix processors that use these other feedstocks would 
need to meet all EPA standards applicable to a refiner for all the 
gasoline they produce during a compliance period, including the 
refinery level sulfur standards in 40 CFR 80.195. These transmix 
processors could not utilize the flexibilities in this rule because 
they have chosen to use feedstocks that have not been previously 
accounted for by a refinery in the production of gasoline. When the 
transmix is processed, the previously compliant gasoline present in the 
transmix and the other feedstocks both distill out of the transmix 
together as a fungible product, and the transmix processor cannot 
distinguish exactly which portion of the TGP was derived from 
previously compliant gasoline and which was derived from other 
feedstocks. Thus, EPA proposes limiting the flexibility allowed by this 
proposed rule to gasoline produced from transmix, only if the transmix 
was produced from pipeline interface, or from mixtures of gasoline and 
distillate fuel that were unintentionally combined in a tank, or from 
mixtures of gasoline and distillate fuel produced from normal 
operational activities at pipelines and terminals. Transmix processors 
who add any other material to their transmix would need to comply with 
all EPA standards applicable to a refiner for all the gasoline they 
produce during a compliance period, including the refinery level sulfur 
standards in 40 CFR 80.195.
    This proposed rule would, however, allow transmix processors that 
produce gasoline from pipeline interface to meet the less stringent 
downstream gasoline sulfur standards, even if the interface contains 
small amounts of gasoline blendstocks that are transported via pipeline 
as a normal part of pipeline operations. EPA believes it is appropriate 
to allow transmix processors that produce gasoline from these interface 
mixtures to meet the downstream sulfur standards because they do not 
have the same level of control over their transmix as the transmix 
processors that intentionally introduce other feedstocks into the 
production process. Furthermore, because the volume of gasoline 
blendstocks in the transmix will be relatively small and since the 
gasoline will still have to meet downstream standards, EPA believes the 
environmental consequences of allowing these transmix processors to 
meet the less stringent downstream sulfur standard should be 
negligible.
    This proposed rule would add a new Sec.  80.213 to the gasoline 
sulfur regulations. This section contains the additional requirements 
for demonstrating compliance with the gasoline sulfur rule discussed 
above for refiners who process or blend transmix in accordance with the 
provisions in Sec.  80.84. EPA believes that the additional proposed 
requirements for transmix processors and transmix blenders in Sec.  
80.213 are necessary to maintain the flexibility of the current 
practices regarding transmix, and will not result in any adverse 
environmental consequences. This proposed rule would also add modest 
recordkeeping requirements to Sec.  80.365 which require parties to 
retain records of any sampling and testing required under Sec.  80.213.
    b. Air Toxics. The mobile source air toxics (MSAT) rule (66 FR 
17230, March 29, 2001) requires the annual average toxics performance 
of a refinery's or importer's gasoline to be at least as clean as the 
average of its gasoline during the three-year baseline period 1998-
2000. The MSAT requirements apply separately to RFG and to conventional 
gasoline. MSAT compliance is determined from the same gasoline data 
used by a refiner to determine its compliance with the RFG or anti-
dumping requirements. As a result, only gasoline which would be 
included in the RFG or anti-dumping compliance determination of a 
refiner is

[[Page 32023]]

included in the refiner's MSAT baseline and compliance determinations.
    Most, if not all, transmix processors have unique individual MSAT 
baselines. Under MSAT, those with unique individual MSAT baselines 
(Sec.  80.915) are subject to their MSAT baseline up to their 
associated MSAT baseline volume (Sec.  80.850). Gasoline production 
above the MSAT baseline volume is subject to either the RFG toxics 
performance standard (Sec.  80.41) or to the refiner's anti-dumping 
standard (Sec.  80.91). Because these standards are equal to or less 
stringent than the refiner's MSAT baseline, they offer some flexibility 
to the refiner's overall compliance with its MSAT standard. Because 
gasoline demand is increasing, EPA expects that this provision will 
provide most refiners with some degree of MSAT compliance flexibility. 
The MSAT rules also provide for limited credit and deficit carryover, 
allowing refiners to weather slightly off years with better toxics 
performance in an adjacent year (Sec.  80.815). Finally, because all 
refiners are subject to MSAT standards which are typically more 
stringent than the RFG toxics performance standard or their individual 
anti-dumping standard, it is likely that the gasoline portion of the 
transmix is also cleaner with respect to toxics performance than it was 
during the baseline period 1998-2000, thus providing some immediate 
flexibility to transmix processors and transmix blenders.
    This action clarifies that any gasoline or blendstock a transmix 
processor includes in their RFG or anti-dumping compliance 
determination is also included in their MSAT compliance calculations. 
Also, EPA has recently proposed to replace the existing MSAT 
regulations with a standard that would limit the benzene content of 
gasoline to an annual average of 0.62 percent by volume for most 
refiners, beginning in 2011. See 71 FR 15803 (March 29, 2006). The 
proposed toxics regulations would exempt transmix processors from the 
new benzene standard for any gasoline they recover from transmix, but 
require transmix processors to meet the standard for any blendstocks 
they add to transmix.

E. Transmix Blenders

1. Comments on the 1997 Notice of Proposed Rulemaking

    One commenter was concerned that the sampling and testing 
procedures in the 1997 NPRM for blends of transmix and RFG, which would 
be performed after blending the transmix, may not prevent the release 
of noncompliant RFG in the distribution system. For reasons discussed 
below, however, EPA believes that commercial standards limit transmix 
blending to such small percentages, that blending transmix in RFG will 
cause essentially no change in the emissions performance of the RFG. 
This proposed rule would specifically require that all gasoline 
produced by transmix blenders have an endpoint less than 437 degrees 
Fahrenheit. As described below, as a practical matter, EPA believes 
that this endpoint standard will effectively prevent the blending of 
transmix into gasoline from causing any appreciable changes in gasoline 
emissions performance.
    One commenter said that the 1996 Question and Answer guidance 
regarding transmix blended into conventional gasoline requires that the 
transmix be blended at a rate no greater than the historical rate that 
was used by the pipeline, whereas the NPRM provided that the transmix 
be blended at a rate no greater than the historical rate at the 
terminal or 0.25 volume percent, whichever is greater. The commenter 
said the NPRM did not cover a situation where, historically, transmix 
was moved through a pipeline to a terminal that is no longer used for 
blending transmix, and the transmix is currently moved through the same 
pipeline but blended at an intermediate terminal which historically had 
not been used for blending transmix. The commenter recommended that the 
language in the Q&A guidance, which covers this situation by allowing 
blending at the historical rate used by the pipeline rather than by the 
terminal, be adopted in the regulations.
    We believe the Q&A guidance is consistent with the 1997 NPRM in 
stating that if a pipeline stops blending transmix at a terminal, that 
the pipeline may not begin blending transmix at a second terminal at a 
rate equal to the first terminal's blending rate. The Q&A guidance 
states: ``* * * the transmix must be present in a terminal from which 
there is no out-bound pipeline or water transportation by which the 
transmix could be transported to a transmix processor, or the 
pipeline's historical practice at the terminal [emphasis added] (the 
practice beginning at least before January, 1994) has been to blend all 
transmix into conventional gasoline without further processing.'' This 
language indicates that the criteria regarding historical practice 
applies to the terminal in which the transmix was blended by the 
pipeline. Where a pipeline blends transmix at more than one terminal, 
the historical practice criterion would apply separately to each of the 
pipeline's terminals at which transmix is blended. However, as 
described below, this proposed rule would change this approach.
2. This Proposal
    This proposed rule would eliminate the historical practice 
criterion for determining amounts of transmix to be blended into 
conventional gasoline and the locations where this may occur, and also 
would eliminate the 0.25 volume percent limit for blending transmix in 
reformulated gasoline. This proposed rule would instead allow transmix 
to be blended into conventional or reformulated gasoline in any 
location and in any amount, provided the endpoint of the transmix-
blended gasoline does not exceed 437 degrees Fahrenheit,\3\ and meets 
all other applicable downstream standards. As EPA's diesel sulfur 
regulations begin phasing in, transmix will be generated at new 
locations. EPA believes it is appropriate to allow the flexibility to 
blend transmix into gasoline at locations which have not historically 
blended transmix, provided the endpoint of the transmix-blended 
gasoline does not exceed 437 degrees Fahrenheit, and the gasoline meets 
all other applicable downstream standards. In addition, EPA believes it 
is appropriate to use gasoline endpoint to regulate transmix blending 
because it takes into account the quality of the transmix-blended 
gasoline. The historical practice criterion for conventional gasoline 
and the 0.25 volume percent limit for RFG were crude approaches that 
did not account for the variability of transmix and its effect on the 
gasoline into which it was blended.
---------------------------------------------------------------------------

    \3\ 437 degrees Fahrenheit is the maximum allowable endpoint for 
gasoline specified in ASTM's standard for automotive spark-ignition 
engine fuel, D 4814-88. Gasoline endpoint is measured using ASTM 
D86-01. ASTM D86-01 measures the percentage of a gasoline sample 
that evaporates, as a function of temperature, as the sample is 
heated up under controlled conditions. Endpoint is the temperature 
at which all the volatile portion of a gasoline sample is 
evaporated. ASTM D4814-88 specifies a maximum allowable endpoint of 
437 degrees Fahrenheit in order to limit the amount of higher-
boiling point compounds that can be present in the gasoline.
---------------------------------------------------------------------------

    EPA believes that blending small percentages of transmix in 
gasoline should be allowed at any facility, provided the facility takes 
appropriate steps to ensure that the endpoint of the transmix-blended 
gasoline does not exceed 437 degrees Fahrenheit. Transmix typically 
contains significant percentages of distillate fuels such as diesel 
fuel or heating oil, and distillate fuels have higher boiling points 
and much lower octane ratings than

[[Page 32024]]

gasoline. EPA's existing guidance regarding transmix blending reflected 
a concern that blending excessive amounts of transmix in gasoline could 
have an appreciable effect on emissions. However, EPA believes that 
where transmix is blended at sufficiently low percentages, such that 
the endpoint of the transmix-blended gasoline does not exceed 437 
degrees Fahrenheit, the emissions effect of blending transmix in 
gasoline will be negligible.
    In addition to affecting gasoline endpoint and octane, blending 
transmix in gasoline also affects parameters in EPA's complex model, 
the model used to ensure that imported or produced gasoline complies 
with EPA standards. Although the complex model does not use gasoline 
endpoint or octane to predict gasoline emissions, the complex model 
does use several other gasoline parameters to predict gasoline 
emissions. These parameters include sulfur content, benzene content, 
aromatics content, olefin content, oxygen content, Reid vapor pressure 
(RVP), and two distillation points (E200 and E300). Compared to 
gasoline, the distillate fuel portion of transmix contains much less 
benzene, olefins, and oxygen (typically zero for all three parameters), 
has a much lower RVP, may contain a moderately greater percentage of 
aromatics, has significantly lower (typically zero) E200 and E300 
distillation points, and may contain more sulfur.
    EPA is primarily concerned with the effect of transmix blending on 
average gasoline sulfur content. Beginning in 2006, EPA's gasoline 
sulfur regulations specify that all gasoline produced by most 
refineries or imported by each importer must contain an annual average 
sulfur content of 30 ppm or less, in order to help significantly reduce 
emissions from gasoline-powered vehicles.\4\ Transmix may contain 
significant percentages of high sulfur distillate fuel such as heating 
oil, nonroad diesel or jet fuel, and blending transmix containing high 
sulfur distillate fuels into gasoline could cause an increase in the 
sulfur content of the gasoline.
---------------------------------------------------------------------------

    \4\ Gasoline produced by most refineries or imported by each 
importer must also contain no more than 80 ppm sulfur per gallon 
beginning in 2006. However, EPA has allowed flexibility for some 
refiners to be able to produce gasoline that is higher on both an 
average basis and a per gallon basis through December 31, 2010.
---------------------------------------------------------------------------

    EPA believes, for two reasons, that the potential increase in 
gasoline sulfur due to blending transmix into gasoline would be so 
small, that the effect on emissions from gasoline engines would be 
negligible. The first reason is that the percentage of transmix that 
can be blended into gasoline is significantly limited by the amount of 
distillate fuel in the transmix. Distillate fuels have much higher 
boiling points than gasoline, so transmix blenders must limit the 
addition of transmix so that the endpoint of the transmix-blended 
gasoline does not exceed 437 degrees Fahrenheit. Refiners already have 
to meet the ASTM endpoint standard under the ``substantially similar'' 
requirements for gasoline (56 FR 5352, February 11, 1991). 
Consequently, transmix which contains relatively high percentages of 
distillate fuel must be blended into gasoline at relatively low 
percentages so that the endpoint of the transmix-blended gasoline does 
not exceed 437 degrees Fahrenheit.
    The second reason is that EPA anticipates that the distillate fuel 
portion of transmix will contain significantly less sulfur beginning 
June, 2006, when the sulfur standard for highway diesel fuel drops 
sharply from 500 to 15 parts per million (ppm). Beginning in June, 
2006, EPA estimates that the national average sulfur content of 
transmix will drop from approximately 800 ppm to 141 ppm, using product 
sulfur levels and pipeline product sequencing arrangements from Chapter 
7 of the Regulatory Support Document (RSD) for the nonroad diesel 
sulfur regulations. Blending 0.25 volume percent transmix containing 
141 ppm sulfur into gasoline raises the sulfur level of the gasoline by 
only approximately 0.3 ppm. Although the percentage of gasoline that is 
blended with transmix would be anticipated to increase under this 
proposed rule, EPA anticipates that transmix will be blended at no more 
than 0.25 volume percent on average nationwide, and that the overall 
average increase in gasoline sulfur from transmix blending will have a 
negligible impact on emissions from gasoline engines. Using EPA's model 
for calculating emissions from vehicle fleets for a given year (MOBILE 
6.2.03), EPA estimates that blending 0.25 volume percent transmix in 
gasoline would change emissions of various pollutants by only -0.2 to 
0.3 percent.
    EPA believes that the effect of blending transmix in gasoline at 
relatively low percentages will have a similarly small effect on other 
complex model parameters, such that the consequent effect on gasoline 
emissions will also be negligible. Since gasoline toxics emissions are 
primarily affected by benzene, and the distillate fuel portion of 
transmix typically contains no benzene, transmix-blended gasoline is 
not expected to produce any more toxics than gasoline which does not 
contain transmix. Similarly, since evaporative emissions are primarily 
affected by RVP, and the distillate fuel portion of transmix has a much 
lower RVP than gasoline, volatile emissions from transmix-blended 
gasoline are not expected to be any greater than volatile emissions 
from gasoline which does not contain transmix.
    EPA is aware that the physical properties of gasoline and transmix 
can vary due to a variety of factors, which affect the percentage of 
transmix that can be blended into gasoline, without causing the 
endpoint of the transmix-blended gasoline to exceed 437 degrees 
Fahrenheit. For example, gasoline that is produced for use during 
colder winter months often has an endpoint which is lower than the 
endpoint of gasoline produced during warmer summer months. Similarly, 
reformulated gasoline often has an endpoint which is lower than the 
endpoint of conventional gasoline produced during the same time of the 
year. Gasoline which has a relatively low endpoint compared to the ASTM 
standard can be blended with a greater percentage of distillate fuel 
without causing the endpoint of the transmix-blended gasoline to exceed 
437 degrees Fahrenheit. Additionally, the properties of the transmix 
itself can vary widely due to the practices of the pipeline or terminal 
that produced the transmix. If transmix contains a relatively high 
percentage of gasoline, a relatively greater percentage of transmix can 
be blended into gasoline without causing the endpoint of the transmix-
blended gasoline to exceed 437 degrees Fahrenheit, since the transmix 
itself is already mostly composed of gasoline. Alternatively, if 
transmix contains a relatively high percentage of distillate fuel, the 
percentage of transmix that can be blended into gasoline without 
causing the endpoint of the transmix-blended gasoline to exceed 437 
degrees Fahrenheit is relatively low. EPA is not including any 
requirements in this proposed rule to list additional information on 
product transfer documents identifying gasoline or transmix properties. 
However, as described below, EPA is proposing that transmix blenders 
maintain a quality assurance program.
    EPA also understands that distillate fuel can potentially be 
blended more than once into the same volume of gasoline through 
transmix blending and other normal pipeline operations. Blending 
transmix multiple times into the same volume of gasoline can cause an 
excessive cumulative percentage of transmix to be blended into the 
gasoline, and cause the endpoint of the transmix-blended gasoline to 
exceed

[[Page 32025]]

437 degrees Fahrenheit. For example, a pipeline or terminal may blend 
transmix into gasoline, then send the gasoline to another pipeline or 
terminal which may blend transmix into the gasoline a second time. 
Similarly, as part of normal pipeline operation, pipeline operators may 
cut an interface between adjacent volumes of gasoline and distillate 
fuel directly into the gasoline volume. Cutting distillate fuel 
directly into gasoline has an effect on gasoline properties similar to 
the effect of blending transmix directly into the gasoline (gasoline 
endpoint increases and octane decreases). A downstream pipeline or 
terminal could then subsequently blend transmix into the same volume of 
gasoline which already contains distillate fuel from the interface cut. 
EPA is not including any requirements in this proposed rule to list any 
additional information on product transfer documents identifying 
whether gasoline has been blended with transmix or any distillate fuel. 
EPA believes that the requirement that gasoline produced by transmix 
blenders meet the 437 degree Fahrenheit endpoint standard will prevent 
any potentially deleterious effects from successive transmix blending. 
However, as described below, EPA is proposing that transmix blenders 
maintain a quality assurance program designed to ensure compliance with 
the endpoint standard.
    This proposed rule requires transmix blenders to maintain a quality 
assurance program that will ensure that the endpoint of transmix-
blended gasoline does not exceed 437 degrees Fahrenheit, and that the 
transmix-blended gasoline will comply with the downstream standards for 
conventional or reformulated gasoline. As a part of this quality 
assurance program, transmix blenders must either sample and test 
transmix-blended gasoline at certain frequencies to determine the end-
point of the gasoline, or submit a petition to EPA documenting how 
their quality assurance program ensures that the endpoint of their 
transmix-blended gasoline will not exceed 437 degrees Fahrenheit, and 
that the transmix-blended gasoline meets all EPA downstream standards 
for conventional or reformulated gasoline.

III. Administrative Requirements

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866, (58 FR 51735 (October 4, 1993)) the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant regulatory action'' as 
one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.''
    It has been determined that this proposed rule does not satisfy the 
criteria stated above. As a result, this rule is not a ``significant 
regulatory action'' under the terms of Executive Order 12866 and is 
therefore not subject to OMB review. It would not have an annual effect 
on the economy of $100 million or more and is not expected to have any 
adverse economic effects as described in the Order. This proposed rule 
does not raise issues of consistency with the actions taken or planned 
by other agencies, would not materially alter the cited budgetary 
impacts, and does not raise any novel legal or policy issues as defined 
in the Order.

B. Paperwork Reduction Act

    The modifications to the RFG information collection requirements in 
this rule have been submitted for approval to the Office of Management 
and Budget (OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et 
seq. The Information Collection Request (ICR) document prepared by EPA 
has been assigned EPA ICR number 1591.21, OMB control number 2060-0277.
    This proposed rule addresses certain adverse impacts on refiners 
and importers of RBOB under the current rule and provides these 
refiners and importers with additional flexibility to comply with the 
regulations. The flexibility afforded under this rule is optional. 
Modest information collection requirements in the form gasoline surveys 
of oxygenate blending facilities are required for those parties who 
avail themselves of the flexibility provided in this rule. It is 
estimated that refiners and importers who choose this option will save, 
at a minimum, half of the cost they would incur if they complied with 
the existing QA requirements.
    The estimated total hourly burden per respondent for the gasoline 
surveys is 20 hours. The estimated total hourly burden for all 
respondents is 700 hours (35 respondents maximum). The estimated hourly 
cost is estimated to be $71 per hour. The total estimated cost per 
respondent for the gasoline surveys is $1,420. The total estimated cost 
for all respondents is $49,700. In addition, the gasoline survey 
requirement is estimated to require purchase of services costs to 
industry of approximately $220,000, assuming that refiners and 
importers in all potentially affected RFG areas choose the compliance 
option under this rule.
    This rule would provide flexibility for transmix processors and 
transmix blenders to produce gasoline under certain circumstances 
without having to meet all of EPA's standards for refiners. Transmix 
processors would be allowed to recover gasoline from transmix that does 
not need to be included in their compliance calculations, under certain 
circumstances. Transmix blenders would be provided with the additional 
flexibility to blend transmix at any rate and at any location, provided 
the endpoint of their transmix-blended gasoline does not exceed 437 
degrees Fahrenheit. However, in order to ensure the endpoint of the 
transmix-blended gasoline does not exceed 437 degrees, transmix 
blenders would be required to either test every batch of transmix-
blended gasoline or submit a petition to EPA documenting that they 
maintain an oversight program that will prevent the endpoint of 
transmix-blended gasoline from exceeding 437 degrees. This proposed 
rule would codify existing practices designed to ensure that products 
transported by pipelines meet existing downstream standards.
    EPA estimates that approximately 25 transmix blenders will submit 
one-time petitions for approval of their quality testing programs. One 
transmix blender estimated that they would need 1-2 person-weeks to 
prepare a petition for EPA approval. For calculating the burden and 
cost of this rule, EPA has estimated that the average labor cost would 
be $71/hour, and that each petition would take 2 person-weeks (80 
hours) to prepare. Multiplying the average labor cost by the total time 
required to prepare each petition (80 hours) by the total number of 
petitions (25) results in a total respondent cost of $142,000.
    The information under this rule will be collected by EPA's 
Transportation and Regional Programs Division, Office of Transportation 
and Air Quality, Office of Air and Radiation (OAR), and by EPA's Air 
Enforcement Division,

[[Page 32026]]

Office of Regulatory Enforcement, Office of Enforcement and Compliance 
Assurance (OECA). The information collected will be used by EPA to 
evaluate compliance with the requirements under the RFG and antidumping 
programs, and gasoline sulfur program. This oversight by EPA is 
necessary to ensure attainment of the air quality goals of the RFG and 
antidumping programs, and gasoline sulfur program.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9. When this ICR is 
approved by OMB, the Agency will publish a technical amendment to 40 
CFR part 9 in the Federal Register to display the OMB control number 
for the approved information collection requirements contained in this 
proposed rule.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of this proposed rule on 
small entities, small entity is defined as: (1) A small business as 
defined by the Small Business Administration (SBA) regulations at 13 
CFR 121.201; (2) a small governmental jurisdiction that is a government 
of a city, county, town, school district or special district with a 
population of less than 50,000; and (3) a small organization that is 
any not-for-profit enterprise which is independently owned and operated 
and is not dominant in its field.
    After considering the economic impacts of this proposed rule on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. In 
determining whether a rule has a significant economic impact on a 
substantial number of small entities, the impact of concern is any 
significant adverse economic impact on small entities, since the 
primary purpose of the regulatory flexibility analyses is to identify 
and address regulatory alternatives ``which minimize any significant 
economic impact of the rule on small entities.'' 5 U.S.C. 603 and 604. 
Thus, an agency may certify that a rule will not have a significant 
economic impact on a substantial number of small entities if the rule 
relieves regulatory burden, or otherwise has a positive economic effect 
on all of the small entities subject to the rule.
    This proposed rule will not have any adverse economic impact on 
small entities. This proposed rule would codify existing guidance for 
the RFG and antidumping regulations, and establish provisions in the 
gasoline sulfur regulations (65 FR 6698, February 10, 2000) that allow 
transmix processors and transmix blenders more flexibility for 
compliance. The proposed rule would establish gasoline sulfur standards 
for transmix processors and blenders that are consistent with the 
sulfur standards for other entities, such as pipelines and terminals, 
that are downstream of refineries in the gasoline distribution system, 
and would clarify the requirements for transmix processors under the 
Mobile Source Air Toxics program. This proposed rule would codify 
existing practices designed to ensure that products transported by 
pipelines meet existing downstream standards. This proposed rule would 
also provide refiners and importers with an alternative compliance 
option for fulfilling a requirement to conduct downstream sampling and 
testing at oxygenate blender facilities. We have, therefore, concluded 
that this proposed rule would relieve regulatory burden for all small 
entities subject to the RFG regulations. We continue to be interested 
in the potential impacts of the proposed rule on small entities and 
welcome comments on issues related to such impacts.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective or least burdensome alternative 
that achieves the objectives of the rule. The provisions of section 205 
do not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why that 
alternative was not adopted. Before EPA establishes any regulatory 
requirements that may significantly or uniquely affect small 
governments, including tribal governments, it must have developed under 
section 203 of the UMRA a small government agency plan. The plan must 
provide for notifying potentially affected small governments, enabling 
officials of affected small governments to have meaningful and timely 
input in the development of EPA regulatory proposals with significant 
Federal intergovernmental mandates, and informing, educating, and 
advising small governments on compliance with the regulatory 
requirements.
    This proposed rule contains no Federal mandates (under the 
regulatory provisions of Title II of the UMRA) for State, local or 
tribal governments or the private sector that would result in 
expenditures of $100 million or more. This proposed rule provides 
refiners and importers of gasoline with additional flexibility in 
complying with regulatory requirements. As a result, this proposed rule 
would have the overall effect of reducing the burden of the RFG 
regulations on these regulated parties. This proposed rule would also 
codify existing practices designed to ensure that products transported 
by pipelines meet existing downstream standards. Therefore, the 
requirements

[[Page 32027]]

of the Unfunded Mandates Act do not apply to this action.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''
    This proposed rule does not have federalism implications. It would 
not have substantial direct effects on the States, on the relationship 
between the National Government and the States, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in Executive Order 13132. This proposed rule would provide 
refiners and importers of gasoline with additional flexibility in 
complying with regulatory requirements. This proposed rule would also 
codify existing practices designed to ensure that products transported 
by pipelines meet existing downstream standards. The requirements of 
this proposed rule would be enforced by the Federal Government at the 
national level. Thus, Executive Order 13132 does not apply to this 
rule.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 6, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' ``Policies that have tribal 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on one or more Indian tribes, on 
the relationship between the Federal Government and the Indian tribes, 
or on the distribution of power and responsibilities between the 
Federal Government and Indian tribes.''
    This proposed rule does not have tribal implications. It would not 
have substantial direct effects on tribal governments, on the 
relationship between the Federal Government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian tribes, as specified in Executive Order 13175. 
This rule would apply to gasoline refiners and importers of gasoline. 
This action contains certain modifications to the federal requirements 
for RFG, and would not impose any enforceable duties on communities of 
Indian tribal governments. Thus, Executive Order 13175 does not apply 
to this rule.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    Executive Order 13045: ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that: (1) Is determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health or safety risk that EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, the Agency must evaluate the environmental health 
or safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency.
    EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that are based on health or safety risks, such that 
the analysis required under the Order has the potential to influence 
the regulation. This proposed rule is not subject to Executive Order 
13045 because it is not economically significant and does not establish 
an environmental standard intended to mitigate health or safety risks.

H. Executive Order 13211: Acts That Significantly Affect Energy Supply, 
Distribution, or Use

    This proposed rule would not be an economically ``significant 
energy action'' as defined in Executive Order 13211, ``Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use'' (66 FR 28355 (May 22, 2001)) because it would 
not have a significant adverse effect on the supply, distribution, or 
use of energy. This proposed rule will provide refiners and importers 
of gasoline with additional flexibility in complying with regulatory 
requirements. This proposed rule would also codify existing practices 
designed to ensure that products transported by pipelines meet existing 
downstream standards. As a result, this proposed rule may have a 
positive effect on gasoline supplies.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C. 
272 note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. The NTTAA directs EPA 
to provide Congress, through OMB, explanations when the Agency decides 
not to use available and applicable voluntary consensus standards.
    This proposed rule does not establish new technical standards 
within the meaning of the NTTAA. Therefore, EPA did not consider the 
use of any voluntary consensus standards.

IV. Statutory Provisions and Legal Authority

    The statutory authority for the actions in this proposed rule comes 
from sections 211 and 301(a) of the CAA.
    For the reasons set out in the preamble, the regulatory text 
proposed today is set forth in the concurrent direct final rule 
published in today's Federal Register.

List of Subjects in 40 CFR Part 80

    Environmental protection, Air pollution control, Fuel additives, 
Gasoline, Imports, Incorporation by reference, Motor vehicle pollution, 
Reporting and recordkeeping requirements.

    Dated: May 25, 2006.
Stephen L. Johnson,
Administrator.
[FR Doc. 06-5050 Filed 6-1-06; 8:45 am]

BILLING CODE 6560-50-P