Document ID: EPA-HQ-OAR-2007-0478-0002
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2007-08-08T04:00Z

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

                             United States Environmental Protection
Agency (EPA)

			         Part A of the Supporting Statement

					( June 2007 )

IDENTIFICATION OF THE INFORMATION COLLECTION

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

			EPA ICR Number 1367.08, OMB Control Number 2060-0178

	

	1(b) Abstract

	Gasoline volatility, as measured by Reid Vapor Pressure (RVP) in pounds
per square inch (psi), is controlled in the spring and summer in order
to minimize evaporative hydrocarbon emissions from motor vehicles.  The
standards, 7.8 psi or 9.0 psi, for each state and the District of
Columbia, are at 40 CFR 80.27 (a).  The addition of ethanol to gasoline
increases the RVP by about one psi.  Gasoline that contains at least
nine volume percent ethanol is subject to a standard that is 1.0 psi
greater.  As an aid to compliance and enforcement, the regulation at 40
CFR 80.27 (d)(3) requires that the product transfer document (PTD) which
accompanies a shipment of gasoline containing ethanol shall contain a
legible and conspicuous statement that the gasoline contains ethanol and
the percentage concentration of ethanol.  This is intended to deter the
mixing within the distribution system, particularly in retail storage
tanks, of gasoline which contains ethanol with gasoline that does not
contain ethanol.  Such mixing would likely result in a gasoline with an
ethanol concentration of less than nine volume percent, but with an RVP
above the standard.  It is estimated that there are approximately 2,000
producers and importers (mostly blenders as opposed to refiners and
importers) of gasoline blended with ethanol.  There are approximately
10,000 shippers/distributors/transferors, mostly truckers, of gasoline
containing ethanol.  It is estimated that each transferor handles about
300 shipments annually.  Parties wishing to conduct research or
emissions certification on gasoline that does not meet the volatility
standard are required to obtain a testing exemption in accordance with
40 CFR 80.27(e).  The EPA receives approximately two requests per year
for testing exemptions.

NEED FOR AND USE OF THE COLLECTION

	2(a)	Need/Authority for the Collection

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

  

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

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

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

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

     The reporting (actually labeling) requirement is necessary because
the Act gave ethanol blends a one pound per square inch (psi) allowance
above the otherwise applicable RVP standard.  The records regarding the
shipment of ethanol blends to a retailer or to any "midstream"
distribution point will assist Agency enforcement officials, when
inspecting those shipments, in identifying those gasoline blends that
qualify for the one psi allowance and those parties who may be liable
for violations if the blend does not qualify for the allowance.  The
records are also necessary to assist regulated parties in avoiding
violations (for example, mixing loads of gasoline with ten percent
ethanol and loads without ethanol during the high ozone season can
result in violations), and can be used by parties in establishing a
legal defense.

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

     2(b) Practical Utility/Users of the Data

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

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

3.  NONDUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA

	3(a) Nonduplication

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

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

	In compliance with the Paperwork Reduction Act, there is a public
comment period of 60 days.   

	3(c) Consultations

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

	3(d) Effects of Less Frequent Collection

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

	3(e) General Guidelines 

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

	3(f) Confidentiality  

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

	3(g) Sensitive Questions

       	There are no sensitive questions.  

4.  THE RESPONDENTS AND THE INFORMATION REQUESTED

    	 4(a) Respondents/SIC/NAICS Codes

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

2869 - Denatured Alcohol Manufacturing 

2911 - Petroleum Refineries

4212 - Gasoline Distributors

5171 - Gasoline Bulk Stations and Terminals

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

5541 - Retailers/Wholesale Purchaser-consumers

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

324110 - Petroleum Refineries

325193 - Denatured Alcohol Manufacturing

424710 - Gasoline Bulk Stations and Terminals

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

 

	4(b) Information Requested

	(i)  Data Items, Including Recordkeeping Requirements

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

	(ii)  Respondent Activities

	The following are required:

Read and comprehend the regulations.

Train personnel to meet the requirements.

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

Gather and organize the information.

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

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

5.         THE INFORMATION COLLECTED--AGENCY ACTIVITIES, COLLECTION 

    	METHODOLOGY AND INFORMATION MANAGEMENT

	5(a) Agency Activities

	The following are required:

Develop a thorough understanding of the regulatory requirements.

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

Provide access to the regulations and guidance documents.

Timely process requests for testing exemptions.

Monitor compliance with the PTD requirement.

 

  

	5(b) Collection Methodology and Management

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

             

	5(c) Small Entity Flexibility

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

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

	5(d) Collection Schedule

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

6.   ESTIMATING THE BURDEN AND COST OF THE COLLECTION

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

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

     

	Based on data from the U.S. Department of Labor, Bureau of Labor
Statistics, (2005 data),  EPA estimates that the hourly cost, including
benefits and other employee costs, for this industry and for the period
of this ICR, to be about $65 per hour for a typical labor mix.    

	Almost all gasoline containing ethanol will be shipped by truck. 
Assume 60 percent of all gasoline contains ethanol.  If 60 percent of
the 140 billion gallons of gasoline that is consumed annually nationwide
contains ethanol, this comes to 84 billion gallons of gasoline.  If each
truck carries 8,500 gallons of gasoline, then about 10 million
truckloads/shipments of gasoline with ethanol are produced/imported
annually.  Thus 10 million PTDs will receive the required statement on
ethanol content annually.

	6(a) Estimating Respondent Burden 

	For 10 million PTDs (responses), at and average burden of 5 seconds per
PTD, the annual burden is 13,889 hours, or about seven hours for each of
the estimated 2,000 producers and importers.  There is an additional
hour of labor for each of the estimated 100 new producers or importers
annually to implement the requirement, for a net annual burden for
producers and importers of 13,889+100= 13,989 hours.  The two requests
for testing exemptions, at 4 hours each, add 8 hours annually, for an
annual total of 10,000,002 responses and 13,989+8= 13,997 hours.  There
is no burden for the estimated 10,000 transferors because the
transmittal of PTDs is a customary business practice.

	6(b) Estimating Respondent Costs

	For producers and importers of gasoline containing ethanol, 13,997
hours at $65 per hour gives a total of $909,805, or about $455 per
respondent (2,000 respondents) annually to generate the required
statement on PTDs.  For the estimated 100 new producers or importers
each year, there is an additional hour of labor for each, $65 per
respondent, to implement the requirement, for a total of $6,500.  Thus,
the total annual cost for producers and importers is
$909,805+$6,500=$916,305.  For parties wishing a testing exemption, 8
hours at $65 per hour gives a total of $520, or $260 per respondent. 
There are no costs for the 10,000 transferors.

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

	6(c) Estimating EPA Burden and Cost

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

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

	

	6(d) Reasons for Change of Burden

	The use of ethanol in gasoline has increased since the previous ICR. 
Thus, the annual number of respondents is estimated to have increased
from 1,500 in the previous ICR to 2,000, and the annual number of PTDs
that will contain the required language has increased from 4,600,00 in
the previous ICR to 10 milliion.      

	

	6(e) Burden Statement

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

B.  COLLECTION OF INFORMATION EMPLOYING STATISTICAL METHODS

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

                                       

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