Document ID: EPA-HQ-OAR-2003-0216-0003
Agency: epa
Document Type: 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: 2006-06-02T13:23:29Z

[Federal Register: June 2, 2006 (Volume 71, Number 106)]
[Rules and Regulations]               
[Page 31947-31964]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02jn06-12]                         

[[Page 31947]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[EPA-HQ-OAR-2003-0216; EPA-HQ-OAR-2005-0149; FRL-8178-5]
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: Direct final rule.

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SUMMARY: This direct final rule amends 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 direct final rule also largely codifies existing guidance for 
compliance by parties that handle pipeline interface with requirements 
for gasoline content standards, recordkeeping, sampling and testing. 
The rule also contains new provisions which provide additional 
flexibility for these regulated parties. It also establishes 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 clarifies the requirements for 
transmix processors under the Mobile Source Air Toxics program.

DATES: This direct final rule is effective on August 1, 2006, without 
further notice unless we receive adverse comment by July 3, 2006. If 
EPA receives adverse comment, we will publish a timely withdrawal in 
the Federal Register informing the public that the rule will not take 
effect. The incorporation by reference of certain publications in this 
rule is approved by the Director of the Office of the Federal Register 
as of August 1, 2006.

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

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 and Radiation 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 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: EPA is publishing this rule without prior 
proposal because we view this action to be non-controversial and 
anticipate no adverse comment. However, in the ``Proposed Rules'' 
section of this Federal Register publication, we are publishing a 
separate document that will serve as the proposal to adopt the 
provisions in this Direct Final Rule if adverse comments are filed. 
This rule is effective on August 1, 2006, without further notice unless 
we receive adverse comment by July 3, 2006. If EPA receives adverse 
comment, we will publish a timely withdrawal in the Federal Register 
informing the public that the amendment, paragraph or section of the 
rule on which adverse comment was received will not take effect. We 
will address all public

[[Page 31948]]

comments in a subsequent final rule based on the proposed rule. We will 
not institute a second comment period on this action. Any parties 
interested in commenting must do so at this time. Any distinct 
amendment, paragraph, or section of this rule for which we do not 
receive adverse comment will become effective on the date set out 
above, notwithstanding any adverse comment on any other distinct 
amendment, paragraph, or section of this rule.

General Information

A. Does This Action Apply to Me?

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

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                  Category                      NAICS codes a      SIC codes b                  Examples of potentially regulated entities
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Industry....................................            324110              2911  Petroleum Refiners.
Industry....................................            422710              5171  Gasoline Marketers and Distributors.
                                                        422720              5172
Industry....................................            484220              4212  Gasoline Carriers.
                                                        484230             4213
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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).
    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 Safely Risks
    H. Executive Order 13211: Acts That Significantly Affect Energy 
Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Congressional Review Act
    K. Clean Air Act Section 307(d)
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

[[Page 31949]]

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 rule 
provides an alternative QA requirement for these refiners and 
importers.
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    \1\ Energy Policy Act of 2005, Public Law 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 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 the 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 rule amends 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 will be appropriate even after the 2.0 
weight percent minimum oxygen standard is removed.

C. This Action

    This action provides 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 must 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

[[Page 31950]]

surveys must 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 must 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 must 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 is 
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 must be done in accordance with the provisions in 
Sec. Sec.  80.8 and 80.46. The surveyor obtains 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 must 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 will 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 is 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 is 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 rule requires 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 requires the refiner or importer to include such 
a requirement in contractual agreements with its branded downstream 
facilities.
    In addition, this rule requires 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 rule requires 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 must 
begin complying with the product transfer requirement upon notification 
by EPA.
    We believe that use of this QA compliance alternative will 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 will be conducted 
by an independent surveyor in accordance with a comprehensive plan 
approved by EPA, rather than by individual refiners and importers. This 
rule will not have any adverse environmental impact, and will 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, provides 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 rule.
    Compliance with this QA alternative is 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 rule adds a new paragraph (a)(11) to 40 CFR 80.69, which 
contains the provisions for the alternative QA requirement. This rule 
also amends 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,

[[Page 31951]]

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 rule codifies some of the existing practices 
into EPA regulations, and also includes 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 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 increases 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 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 rule 
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 rule 
clarifying, and in some instances expanding, the flexibilities 
available to transmix processors and transmix blenders for complying 
with the RFG/antidumping regulations. This 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 rule includes provisions for transmix processors and transmix 
blenders related to gasoline sulfur and air toxics. This 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 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 rule allows 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 rule allows 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 rule allows transmix blenders to blend transmix 
into gasoline without restriction on

[[Page 31952]]

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 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 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 part 80 and 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 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 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 rule does 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 is 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 rule 
modifies 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, 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

[[Page 31953]]

normal operational activities at pipelines and terminals, they must 
comply with all standards applicable to refiners under EPA's 
regulations for all the gasoline they produce during a compliance 
period. This rule also requires any RFG or RBOB produced by a transmix 
processor to be included in the RFG compliance calculations for the 
transmix processing facility.
    This rule also modifies 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 must 
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 must include the TGP in compliance 
calculations. This exception does 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. 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 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 rule addresses 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 must 
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 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 will 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 rule, transmix processors who add blendstocks not 
derived from transmix to their recovered gasoline will 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. Transmix 
processors that use these other feedstocks must 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 may 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

[[Page 31954]]

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 is limiting the flexibility allowed by this 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 must 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 rule does, 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 rule adds 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 
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 rule also adds 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 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 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 rule will 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

[[Page 31955]]

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 rule would change this approach.
2. These Requirements
    This rule eliminates the historical practice criterion for 
determining amounts of transmix to be blended into conventional 
gasoline and the locations where this may occur, and also eliminates 
the 0.25 volume percent limit for blending transmix in reformulated 
gasoline. This rule instead allows 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 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 is anticipated to increase under this 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

[[Page 31956]]

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 rule to list additional information on product 
transfer documents identifying gasoline or transmix properties. 
However, as described below, EPA is requiring transmix blenders to 
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 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 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 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 direct final 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 direct final 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 requirements

[[Page 31957]]

are not enforceable until OMB approves them.
    This 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 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 provides 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 are 
allowed to recover gasoline from transmix that does not need to be 
included in their compliance calculations, under certain circumstances. 
Transmix blenders are 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 will 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. These requirements 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 will 
be $71/hour, and that each petition will 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, 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 
direct final rule.

C. Regulatory Flexibility Act

    EPA has determined that it is not necessary to prepare a regulatory 
flexibility analysis in connection with this rule.
    For purposes of assessing the impacts of this rule on small 
entities, small entity is defined as: (1) A small business as defined 
by the Small Business Administration's 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 rule on small 
entities, EPA has concluded 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 proposed rule on small entities.'' 5 U.S.C. 603 
and 604. Thus, an agency may conclude 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 direct final rule will not have any adverse economic impact on 
small entities. This direct final rule codifies existing guidance for 
the RFG and antidumping regulations, and establishes provisions in the 
gasoline sulfur regulations (65 FR 6698, February 10, 2000) that allow 
transmix processors and transmix blenders more flexibility for 
compliance. The direct final rule establishes 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 clarifies the requirements for transmix processors under the Mobile 
Source Air Toxics program. These requirements codify existing practices 
designed to ensure that products transported by pipelines meet existing 
downstream standards. This direct final rule also provides 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 direct final 
rule will

[[Page 31958]]

relieve regulatory burden for all small entities subject to the RFG 
regulations.

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 direct final 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 rule provides refiners and 
importers of gasoline with additional flexibility in complying with 
regulatory requirements. As a result, this rule will have the overall 
effect of reducing the burden of the RFG regulations on these regulated 
parties. These requirements also codify existing practices designed to 
ensure that products transported by pipelines meet existing downstream 
standards. Therefore, the requirements 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 direct final rule does not have federalism implications. It 
will 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 rule provides 
refiners and importers of gasoline with additional flexibility in 
complying with regulatory requirements. These requirements also codify 
existing practices designed to ensure that products transported by 
pipelines meet existing downstream standards. The requirements of the 
rule will 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 direct final rule does not have tribal implications. It will 
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 applies to gasoline refiners and importers of gasoline. This 
action contains certain modifications to the federal requirements for 
RFG, and will 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 direct final 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 direct final rule is not 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 does not have a 
significant adverse effect on the supply, distribution, or use of 
energy. This direct final rule provides refiners and importers of 
gasoline with additional flexibility in complying with regulatory 
requirements. These requirements also codify existing practices 
designed to ensure that products transported by pipelines meet existing 
downstream standards. As a result, this rule may have a positive effect 
on gasoline supplies.

[[Page 31959]]

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law No. 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 direct final 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.

J. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A ``major rule'' 
cannot take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(a).

K. Clean Air Act Section 307(d)

    This rule is subject to section 307(d) of the CAA. Section 
307(d)(7)(B) provides that ``[o]nly an objection to a rule or procedure 
which was raised with reasonable specificity during the period for 
public comment (including any public hearing) may be raised during 
judicial review.'' This section also provides a mechanism for the EPA 
to convene a proceeding for reconsideration, ``[i]f the person raising 
an objection can demonstrate to the EPA that it was impracticable to 
raise such objection within [the period for public comment] or if the 
grounds for such objection arose after the period for public comment 
(but within the time specified for judicial review) and if such 
objection is of central relevance to the outcome of the rule.'' Any 
person seeking to make such a demonstration to the EPA should submit a 
Petition for Reconsideration to the Office of the Administrator, U.S. 
EPA, Room 3000, Ariel Rios Building, 1200 Pennsylvania Ave., NW., 
Washington, DC 20460, with a copy to both the person(s) listed in the 
preceding FOR FURTHER INFORMATION CONTACT section, and the Director of 
the Air and Radiation Law Office, Office of General Counsel (Mail Code 
2344A), U.S. EPA, 1200 Pennsylvania Ave., NW., Washington, DC 20004.

IV. Statutory Provisions and Legal Authority

    Statutory authority for the fuel controls set in this direct final 
rule comes from sections 211 and 301(a) of the CAA.

List of Subjects in 40 CFR Part 80

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

    Dated: May 25, 2006.
Stephen L. Johnson,
Administrator.

0
For the reasons set out in the preamble, part 80 of title 40 of the 
Code of Federal Regulations is amended as follows:

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

0
1. The authority citation for part 80 is revised to read as follows:

    Authority: 42 U.S.C. 7414, 7545, 7542, and 7601(a).

0
2. Section 80.69 is amended by adding paragraph (a)(11) to read as 
follows:

Sec.  80.69  Requirements for downstream oxygenate blending.

* * * * *
    (a) * * *
    (11) Any refiner or importer who produces or imports RBOB may 
comply with the following alternative quality assurance requirement 
instead of the contract and quality assurance sampling and testing 
requirements in paragraphs (a)(6) and (a)(7) of this section:
    (i) To comply with the alternative quality assurance requirement 
under this paragraph (a)(11), a refiner or importer must either arrange 
to have an independent surveyor conduct a comprehensive program of 
annual compliance surveys, or participate in the funding of an 
organization which arranges to have an independent surveyor conduct a 
comprehensive program of annual compliance surveys, to be carried out 
in accordance with a survey plan which has been approved by EPA.
    (ii) The annual compliance surveys under this paragraph (a)(11) 
shall be:
    (A) Planned and conducted by an independent surveyor that meets the 
requirements in Sec.  80.68(c)(13)(i);
    (B) Conducted at retail gasoline outlets in a specified 
reformulated gasoline covered area;
    (C) Representative of all reformulated gasoline being dispensed in 
the specified reformulated gasoline covered area; and
    (D) Designed to achieve at least the same level of quality 
assurance required under paragraph (a)(7) of this section.
    (iii) The compliance survey program shall require the independent 
surveyor conducting the surveys to:
    (A) Obtain gasoline samples in accordance with the survey plan 
approved under this paragraph (a)(11), or immediately notify EPA of any 
refusal of retail outlets to allow samples to be taken;
    (B) Test or arrange for the samples to be tested for type and 
amount of oxygenate;
    (C)(1) Obtain the product transfer documents associated with the 
gasoline sample from the retail outlet; or immediately notify EPA of 
any refusal of any party to provide product transfer documents that 
should be within their possession; and
    (2) Immediately notify EPA of any case where the product transfer 
documents obtained from the retail outlet do not contain the 
information required in paragraph (a)(11)(vii)(A) of this section, or 
any case where the gasoline does not contain the type and/or minimum 
amount of oxygenate stated on the product transfer documents;
    (D) Where the test results indicate that the gasoline does not 
contain the type and/or minimum amount of oxygenate stated on the 
product transfer documents:
    (1) Determine the oxygenate blending facility that supplied the 
gasoline; and
    (2) Obtain from the oxygenate blender documentation of the 
refiner's or importer's oxygenate blending instructions for the 
gasoline;
    (E) Immediately notify EPA of any case where the test results 
obtained by the independent surveyor indicate that the gasoline does 
not contain the type and/or minimum amount of oxygenate designated for 
the RBOB in the refiner's or importer's blending instructions;
    (F) Immediately notify EPA of any instances where a refiner, 
importer, terminal, distributor, carrier or retail

[[Page 31960]]

outlet fails to cooperate in the manner described in paragraph 
(a)(11)(vi) of this section.
    (G) Submit to EPA a report of each survey, within thirty days 
following completion of the survey, such report to include the 
following information:
    (1) The identification of the person who conducted the survey;
    (2) An attestation by an officer of the surveyor company that the 
survey was conducted in accordance with the survey plan and that the 
survey results are accurate;
    (3) Identification of the party(ies) for whom the survey was 
conducted;
    (4) The identification of the covered area surveyed;
    (5) The dates on which the survey was conducted;
    (6) The address of each facility at which a gasoline sample was 
collected and the date of collection;
    (7) The results of the analyses of the samples for type and amount 
of oxygenate;
    (8) The name and address of each laboratory where the gasoline 
samples were analyzed;
    (9) A description of the methodology utilized to select the 
locations for sample collection and the number of samples collected; 
and
    (10) For any samples excluded from the survey, a justification for 
such exclusion.
    (H) Maintain all records relating to the surveys conducted under 
this paragraph (a)(11) for a period of at least 5 years; and
    (I) At any time permit any representative of EPA to monitor the 
conduct of the surveys, including sample collection, transportation, 
storage, and analysis.
    (iv) A survey plan under this paragraph (a)(11) must include:
    (A) Identification of the party(ies) for whom the survey is to be 
conducted;
    (B) Identification of the independent surveyor;
    (C) A methodology for determining:
    (1) When the samples will be collected;
    (2) The sample collection locations; and
    (3) The number of samples to be collected during the annual 
compliance period;
    (D) A process for notifying oxygenate blenders and other downstream 
parties in the affected RFG area of the product transfer documentation 
requirements in paragraph (a)(11)(vii)(A) of this section; and
    (E) Any other elements determined by EPA to be necessary to achieve 
the level of quality assurance required under paragraph (a)(11)(ii)(D) 
of this section.
    (v) Any sampling and testing pursuant to a survey plan under this 
paragraph (a)(11) must be conducted in a manner consistent with the 
applicable provisions of Sec. Sec.  80.8 and 80.46.
    (vi)(A) Each refiner and importer who participates in the 
alternative quality assurance program under this paragraph (a)(11) must 
take all reasonable steps to ensure that each oxygenate blender, 
distributor, carrier and retail outlet cooperates in this program by 
allowing the independent surveyor to collect samples and by providing 
to the independent surveyor and/or EPA, upon request, copies of product 
transfer documents and other records or information regarding the 
source of any gasoline received, the destination of any gasoline 
distributed, the oxygenate blending instructions for the RBOB, and the 
rate (volume %) that oxygenate was blended into the gasoline.
    (B) Reasonable steps under paragraph (a)(11)(vii) of this section 
must include, but typically should not be limited to, contractual 
agreements with any branded facilities of the refiner or importer, 
including any terminals, distributors, carriers and retail outlets, 
which require the branded facility to cooperate with the independent 
surveyor and/or EPA in the manner described in paragraph 
(a)(11)(vii)(A) of this section.
    (vii)(A) Any terminal that blends oxygenate with RBOB which is 
produced or imported by any refiner or importer that complies with the 
alternative quality assurance requirement under this paragraph (a)(11), 
and any parties downstream from such oxygenate blending terminal, must 
include on product transfer documents information regarding the type 
and amount of oxygenate contained in the gasoline and identification of 
the oxygenate blending facility that blended the gasoline.
    (B) If a party downstream from a refiner or importer that complies 
with the alternative quality assurance requirement under this paragraph 
(a)(11) fails to receive notice of the requirements in paragraph 
(a)(11)(vii)(A) of this section, upon notification from EPA, the party 
must thereafter comply with the requirements in paragraph 
(a)(11)(vii)(A) of this section.
    (viii) The procedure for obtaining EPA approval of a survey plan 
under this paragraph (a)(11), and for revocation of any such approval, 
are as follows:
    (A) A detailed survey plan which complies with the requirements of 
this paragraph (a)(11) must be submitted to EPA, no later than 
September 1 of the year preceding the calendar year in which the 
surveys will be conducted;
    (B) The survey plan must be signed by a responsible corporate 
officer of the refiner or importer, or responsible officer of the 
organization which arranges to have an independent surveyor conduct a 
program of compliance surveys, as applicable; and
    (C) The survey plan must be sent to the following address: 
Director, Transportation and Regional Programs Division, U.S. 
Environmental Protection Agency, 1200 Pennsylvania Ave., NW., (6406J), 
Washington, DC 20460;
    (D) EPA will send a letter to the party submitting a survey plan 
under this section, either approving or disapproving the survey plan;
    (E) EPA may revoke any approval of a survey plan under this section 
for cause, including an EPA determination that the approved survey plan 
has proved to be inadequate in practice or that it was not diligently 
implemented;
    (F) The approving official for an alternative quality assurance 
program under this section is the Director of the Transportation and 
Regional Programs Division, Office of Transportation and Air Quality.
    (G) Any notifications required under this paragraph (a)(11) must be 
directed to the official designated in paragraph (a)(11)(viii)(F) of 
this section.
    (ix)(A) No later than December 1 of the year preceding the year in 
which the surveys will be conducted, the contract with the independent 
surveyor shall be in effect, and an amount of money necessary to carry 
out the entire survey plan shall be paid to the independent surveyor or 
placed into an escrow account with instructions to the escrow agent to 
pay the money to the independent surveyor during the course of the 
conduct of the survey plan;
    (B) No later than December 15 of the year preceding the year in 
which the surveys will be conducted, EPA must receive a copy of the 
contract with the independent surveyor, proof that the money necessary 
to carry out the survey plan has either been paid to the independent 
surveyor or placed into an escrow account, and, if placed into an 
escrow account, a copy of the escrow agreement, to be sent to the 
official designated in paragraph (a)(11)(viii)(F) of this section.
    (x) A failure of any refiner or importer to fulfill or cause to be 
fulfilled any of the requirements of this paragraph (a)(11) will cause 
the option to use the alternative quality assurance requirements under 
this paragraph (a)(11) to be void ab initio.
* * * * *

[[Page 31961]]

0
3. Section 80.74 is amended by adding paragraph (b)(10) to read as 
follows:

Sec.  80.74  Recordkeeping requirements.

* * * * *
    (b)* * *
    (10) In the case of any interface or transmix used to produce 
reformulated gasoline or RBOB under Sec.  80.84, records that reflect 
the results of any sampling and testing of RFG or RBOB required under 
Sec.  80.84.
    (i) Pipelines must keep records showing that interface was 
designated in the proper manner, according to the designations listed 
in Sec.  80.84(b)(1);
    (ii) Transmix processors and transmix blenders must keep records 
showing that their transmix meets the definition in Sec.  80.84(a)(2), 
or contains gasoline and distillate fuel only from the sources listed 
in Sec.  80.84(e);
    (iii) Transmix processors must keep records showing the volumes of 
reformulated gasoline or RBOB recovered from transmix and the type and 
amount of any blendstock added, if applicable; and
    (iv) Transmix blenders must keep records showing compliance with 
the quality assurance program and/or sampling and testing requirements 
in Sec.  80.84(d)(2) or (d)(3), and for each batch of reformulated 
gasoline or RBOB with which transmix is blended, the volume of the 
batch, and the volume of transmix blended into the batch;
* * * * *

0
4. Section 80.77 is amended by revising paragraphs (g)(2)(iv)(B) and 
(g)(3), and adding paragraph (g)(4) to read as follows:

Sec.  80.77  Product transfer documentation.

* * * * *
    (g) * * *
    (2) * * *
    (iv) * * *
    (B) Beginning on January 1, 1998, for VOC-controlled gasoline, the 
VOC emissions performance minimum.
    (3) Identification of VOC-controlled reformulated gasoline or RBOB 
as gasoline or RBOB which contains ethanol, or which does not contain 
any ethanol; and
    (4) For transfers of custody of gasoline subject to the provisions 
of Sec.  80.69(a)(11), the information required to be included on 
product transfer documents under Sec.  80.69(a)(11)(vii)(A).
* * * * *

0
5. Section 80.84 is added to subpart D to read as follows:

Sec.  80.84  Treatment of interface and transmix.

    (a) Definitions. For purposes of this section, the following 
definitions apply:
    (1) Interface means a volume of petroleum product generated in a 
pipeline between two adjacent volumes of non-identical petroleum 
product that consists of a mixture of the two adjacent products.
    (2) Transmix means an interface that does not meet the 
specifications for a fuel that can be used or sold, and that is 
composed solely of any combination of:
    (i) Previously certified gasoline (including previously certified 
gasoline blendstocks that become gasoline solely upon the addition of 
an oxygenate);
    (ii) Distillate fuel; or
    (iii) Gasoline blendstocks that are suitable for use as a 
blendstock without further processing.
    (3) Transmix gasoline product, or TGP, means the gasoline or 
gasoline blendstock that is produced when transmix is separated into 
distillate fuel and either gasoline or gasoline blendstock. Gasoline 
blendstock here includes blendstock that becomes gasoline solely upon 
the addition of an oxygenate (such as RBOB).
    (4) Transmix processing facility means any refinery that produces 
TGP from transmix by distillation or other refining processes, but does 
not produce gasoline by processing crude oil.
    (5) Transmix processor means any person who owns, leases, operates, 
controls or supervises a transmix processing facility.
    (6) Transmix blending facility means any facility which produces 
gasoline by blending transmix into gasoline.
    (7) Transmix blender means any person who owns, leases, operates, 
controls or supervises a transmix blending facility.
    (b) Designation of gasoline interface by pipeline operators. (1) 
Gasoline interface mixtures containing the products below shall be 
designated by pipeline operators in the following manner:
    (i) Interface mixtures of reformulated gasoline or RBOB, and 
conventional gasoline shall be designated as conventional gasoline;
    (ii) Interface mixtures of VOC-controlled reformulated gasoline and 
non-VOC-controlled reformulated gasoline shall be designated as non-
VOC-controlled RFG;
    (iii) Interface mixtures of RBOB and reformulated gasoline shall be 
designated as RBOB; and
    (iv) Interface mixtures of reformulated gasoline or RBOB, and 
blendstock shall be designated as blendstock.
    (2) 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 this part and the Clean Air Act.
    (c) Transmix processing--(1) TGP sold without further mixing with 
blendstocks or previously certified gasoline. (i) Where the TGP meets 
all standards and requirements that apply to conventional gasoline 
downstream from the refinery, including but not limited to any 
standards and requirements in this part and the Clean Air Act, and the 
TGP is designated and sold as conventional gasoline, the transmix 
processor may exclude the TGP from compliance calculations for the 
transmix processing facility under this part Subpart E of this part. 
Except as required in paragraph (c)(4) of this section, the transmix 
processor must either include every batch or exclude every batch of 
this TGP from their compliance calculations for each compliance period;
    (ii) Where the TGP is sold as a blendstock, the transmix processor 
must exclude the TGP from compliance calculations. Pursuant to Sec.  
80.101(d)(3), however, TGP which becomes gasoline solely upon the 
addition of an oxygenate must be included in the compliance 
calculations for the transmix processing facility under subpart E of 
this part.
    (iii) Where the TGP is designated and sold as reformulated gasoline 
or RBOB, the transmix processor must fulfill all requirements and 
standards that apply to a refiner under subpart D of this part and must 
include the reformulated gasoline or RBOB produced from the transmix in 
compliance calculations for the transmix processing facility under 
subpart D of this part.
    (2) TGP blended with blendstocks. Where the transmix processor 
mixes the TGP with blendstock(s) to produce reformulated or 
conventional gasoline or RBOB, the TGP is treated as a blendstock and 
the transmix processor must fulfill all requirements and standards that 
apply to a refiner under subpart D or E of this part, as appropriate, 
and include the gasoline produced in compliance calculations for the 
transmix processing facility under subpart D or E of this part, as 
appropriate.
    (3) TGP blended with previously certified gasoline. (i) Where the 
TGP meets all the standards and requirements that apply to conventional 
gasoline downstream from the refinery, including but not limited to any 
standards and requirements of this part and the Clean Air Act, and the 
transmix processor mixes the TGP with any previously certified gasoline 
to produce conventional gasoline, the TGP may be

[[Page 31962]]

excluded from compliance calculations for the transmix processing 
facility under subpart E of this part. Except as required in paragraph 
(c)(4) of this section, the transmix processor must either include 
every batch or exclude every batch of this TGP from compliance 
calculations for the transmix processing facility for each compliance 
period.
    (ii) Where the TGP does not meet all standards that apply to 
conventional gasoline downstream from the refinery, including but not 
limited to any standards and requirements of this part and the Clean 
Air Act, and the transmix processor mixes the TGP with any previously 
certified gasoline to produce conventional gasoline, the TGP is treated 
as a blendstock and the transmix processor must fulfill all 
requirements and standards for a refiner under subpart E of this part, 
for the TGP, and include the TGP in the compliance calculations for the 
transmix processing facility under subpart E of this part.
    (iii) The sampling and testing required under paragraph (c)(3)(ii) 
of this section may be met using one of the following methods:
    (A) Sample and test the TGP prior to blending with previously 
certified gasoline to determine the volume and properties of the TGP 
and include each volume of TGP blended with previously certified 
gasoline as a separate batch in compliance calculations for the 
transmix processing facility; or
    (B) Determine the volume and properties of the previously certified 
gasoline prior to blending with the TGP and measure the volume and 
properties of the gasoline subsequent to blending with the TGP. 
Calculate the volume and properties of the TGP by subtracting the 
volume and properties of the previously certified gasoline from the 
volume and properties of the gasoline subsequent to blending, and 
include each volume of TGP blended with previously certified gasoline 
as a separate batch in compliance calculations for the transmix 
processing facility; or
    (C) Comply with the requirements in Sec.  80.101(g)(9).
    (iv) Where the transmix processor mixes the TGP with any previously 
certified gasoline to produce reformulated gasoline or RBOB, the TGP is 
treated as a blendstock and the transmix processor must fulfill all 
requirements and standards for a refiner under subpart D of this part, 
for the TGP, and include the TGP in the compliance calculations for the 
transmix processing facility under subpart D of this part, using the 
procedures in Sec.  80.65(i).
    (4) Additional requirements for conventional gasoline produced with 
transmix containing blendstocks. Notwithstanding paragraphs (c)(1)(i) 
and (c)(3)(i) of this section, if gasoline is produced at a transmix 
processing facility from any transmix containing gasoline blendstocks, 
the transmix processor must include every batch of gasoline produced 
from transmix in compliance calculations for the transmix processing 
facility under subpart E of this part for the entire compliance period.
    (d) Transmix blending. Transmix blenders which fulfill all of the 
requirements in this paragraph (d) are exempt from the requirements and 
standards that apply to a refiner under subparts D and E of this part.
    (1) Transmix may be blended into any previously certified gasoline, 
provided that:
    (i) The endpoint of the final transmix-blended gasoline does not 
exceed 437 degrees Fahrenheit as measured by ASTM standard method D 86-
01\e1\, entitled ``Standard Test Method for Distillation of Petroleum 
Products at Atmospheric Pressure'', which is incorporated by reference. 
This incorporation by reference was approved by the Director of the 
Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. 
A copy may be obtained from the American Society for Testing and 
Materials, 100 Barr Harbor Dr., West Conshohocken, PA 19428-2959. 
Copies may be inspected at the Air Docket, EPA/DC, EPA West, Room B102, 
1301 Constitution Ave., NW., Washington, DC, or at the National 
Archives and Records Administration (NARA). For information on the 
availability of this material at NARA, call 202-741-6030 or go to: 
http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.htm.
;

    (ii) The final transmix-blended gasoline meets all applicable 
downstream standards; and
    (iii) The transmix blender complies with the requirements in 
Sec. Sec.  80.74(b)(10), 80.104(b) and 80.213.
    (2) The transmix blender must maintain and follow a written quality 
assurance program designed to assure that the type and amount of 
transmix blended into previously certified gasoline will not cause 
violations of the applicable standards in paragraph (d)(1) of this 
section. Except as set forth in paragraph (d)(3) of this section, as a 
part of the quality assurance program, transmix blenders shall collect 
samples of gasoline subsequent to blending transmix, and test the 
samples to ensure the end-point temperature of the final transmix-
blended gasoline does not exceed 437 degrees Fahrenheit, at one of the 
following rates:
    (i) In the case of transmix that is blended in a tank, following 
each occasion transmix is blended; or
    (ii) In the case of transmix that is blended by a computer 
controlled in-line blending system, the transmix blender shall collect 
composite samples of gasoline subsequent to blending transmix at a rate 
of not less than twice each calendar month during which transmix is 
blended.
    (3) Any transmix blender may petition EPA for approval of a quality 
assurance program that does not include the minimum sampling and 
testing requirements in paragraph (d)(2) of this section. In order to 
seek such an exemption, the transmix blender shall submit a petition to 
EPA that includes:
    (i) A detailed description of the quality assurance procedures to 
be carried out at each location where transmix is blended into 
previously certified gasoline, including a description of how the 
transmix blender proposes to determine the ratio of transmix that can 
be blended with previously certified gasoline without violating any of 
the applicable standards in paragraph (d)(1) of this section, and a 
description of how the transmix blender proposes to determine that the 
gasoline produced by the transmix blending operation meets the 
applicable standards.
    (ii) If the transmix is blended by a computer controlled in-line 
blending system, the transmix blender shall also include all of the 
information required by refiners under Sec.  80.65(f)(4)(i)(A).
    (iii) A letter signed by the president, chief operating or chief 
executive officer of the company, or his/her designee, stating that the 
information contained in the submission is true to the best of his/her 
belief must accompany any submission under this paragraph.
    (iv) Transmix blenders who seek an exemption under paragraph (d)(3) 
of this section must comply with any request by EPA for additional 
information or any other requirements that EPA includes as part of the 
exemption. However, they may withdraw their exemption petition or 
approved exemption at any time, upon notice to EPA.
    (v) EPA reserves the right to modify the requirements of an 
exemption under paragraph (d)(3) of this section, in whole or in part, 
at any time, if EPA determines that the transmix blender's operation 
does not effectively or adequately control, monitor or document the 
end-point temperature of the gasoline produced, or if EPA

[[Page 31963]]

determines that any other circumstance exists which merits modification 
of the requirements of an exemption. If EPA finds that a transmix 
blender provided false or inaccurate information in any submission 
required for an exemption under this section, upon notification from 
EPA, the transmix blender's exemption will be void ab initio.
    (4) In the event the test results for any sample collected pursuant 
to a quality assurance program indicate the gasoline does not comply 
with any of the applicable standards in paragraph (d)(1) of this 
section, the transmix blender shall:
    (i) Immediately take steps to stop the sale of the gasoline that 
was sampled;
    (ii) Take steps which are reasonably calculated to determine the 
cause of the noncompliance and to prevent future instances of 
noncompliance;
    (iii) Inform EPA of the noncompliance; and
    (iv) If the transmix was blended by a computer controlled in-line 
blending system, increase the rate of sampling and testing to a rate of 
not less than once per week and continue the increased frequency of 
sampling and testing until the results of ten consecutive samples and 
tests indicate the gasoline complies with applicable standards, at 
which time the sampling and testing may be conducted at the original 
frequency;
    (5) Any transmix blender who blends transmix into previously 
certified gasoline and who does not meet the requirements under this 
paragraph (d) shall meet all requirements and standards that apply to a 
refiner under subparts D and E of this part, other than this section 
and Sec. Sec.  80.74(b)(10), and 80.104(b).
    (e) The provisions of paragraphs (c) and (d) of this section also 
apply to mixtures of gasoline and distillate fuel:
    (1) Produced by unintentionally combining gasoline and distillate 
fuel in a tank.
    (2) Produced from normal business operations at terminals or 
pipelines, such as gasoline or distillate fuel drained from a tank, or 
drained from piping or hoses used to transfer gasoline or distillate 
fuel to tanks or trucks, or gasoline or distillate fuel discharged from 
a safety relief valve.
    (f) Any transmix processor or transmix blender who adds a feedstock 
to their transmix other than gasoline, distillate fuel or gasoline 
blendstocks from pipeline interface must meet all requirements and 
standards that apply to a refiner under subparts D and E of this part, 
other than this section and Sec. Sec.  80.74(b)(10), and 80.104(b), for 
all gasoline they produce during a compliance period.
0
6. Section 80.104 is amended by revising the introductory text, 
paragraph (a) introductory text and paragraph (b), and adding paragraph 
(c) to read as follows:

Sec.  80.104  Recordkeeping requirements

    Any parties in the gasoline distribution network shall maintain 
records containing the information as required by this section.
    (a) For any refiner or importer, beginning in 1995, for each 
averaging period:
* * * * *
    (b) For all parties described in this section that produce and 
distribute gasoline, in the case of any interface or transmix used to 
produce conventional gasoline under Sec.  80.84, records that reflect 
the results of any sampling and testing of conventional gasoline under 
Sec.  80.84.
    (1) Pipelines must keep records showing that the interface was 
designated in the proper manner according to the designations listed in 
Sec.  80.84(b)(1).
    (2) Transmix processors and transmix blenders must keep records 
showing that their transmix meets the definition in Sec.  80.84(a)(2), 
or contains gasoline and distillate fuel only from the sources listed 
in Sec.  80.84(e).
    (3) Transmix processors must keep records showing the volumes of 
conventional gasoline recovered from transmix and the type and amount 
of any blendstock added, if applicable.
    (4) Transmix blenders must keep records showing compliance with the 
quality assurance program and/or sampling and testing requirements in 
Sec.  80.84(d)(2) or (d)(3) for each batch of conventional gasoline 
with which transmix is blended, the volume of the batch, and the volume 
of transmix blended into the batch.
    (c) All parties in the gasoline distribution network shall retain 
the documents required in this section for a period of five years from 
the date the conventional gasoline or blendstock is produced or 
imported, and deliver such documents to the Administrator of EPA upon 
the Administrator's request.

0
7. Section 80.213 is added to read as follows:

Sec.  80.213  What alternative sulfur standards and requirements apply 
to transmix processors and transmix blenders?

    Transmix processors and transmix blenders, as defined in Sec.  
80.84(a), may comply with the following requirements instead of the 
requirements and standards otherwise applicable to a refiner under 
subpart H of this part.
    (a) Any transmix processor who recovers transmix gasoline product 
(TGP), as defined in Sec.  80.84(a), from transmix through transmix 
processing under Sec.  80.84(c) must show through sampling and testing, 
using the methods in Sec.  80.330, that the TGP meets the applicable 
sulfur standards under Sec.  80.210 or Sec.  80.220, prior to the TGP 
leaving the transmix processing facility.
    (1) The applicable sulfur standard is the standard in Sec.  
80.210(b); or
    (2) If the TGP sulfur is greater than the standard in Sec.  
80.210(b), and the transmix processor has product transfer documents 
that prove the TGP was originally produced by a small refiner, hardship 
refiner, or for use in the GPA, the applicable sulfur standard for the 
TGP is the downstream sulfur standard corresponding to the original 
gasoline.
    (b) The sampling and testing required under paragraph (a) of this 
section shall be conducted following each occasion TGP is produced.
    (c) Any transmix processor who produces gasoline by adding 
blendstock to TGP must, for such blendstock, comply with all 
requirements and standards that apply to a refiner under subpart H of 
this part, and must meet the applicable downstream sulfur standards 
under Sec.  80.210 or Sec.  80.220 for the gasoline produced by 
blending blendstock and TGP, prior to the gasoline leaving the transmix 
processing facility.
    (d) Any transmix processor who produces gasoline by blending 
blendstock into TGP may meet the sampling and testing requirements of 
subpart H of this part as follows:
    (1)(i) Sample and test the blendstock when received at the transmix 
processing facility, using the methods specified in Sec.  80.330, to 
determine the volume and sulfur content, and treat each volume of 
blendstock that is blended into a volume of TGP as a separate batch for 
purposes of calculating and reporting compliance with the applicable 
annual average and per-gallon cap sulfur standards in Sec.  80.195 or 
Sec.  80.216, as applicable; or
    (ii) Use sulfur test results of the blendstock supplier provided 
that the following requirements are met:
    (A) Sampling and testing by the blendstock supplier is performed 
using the methods specified in Sec.  80.330;
    (B) Testing for the sulfur content of the blendstock in the 
supplier's storage tank must be conducted subsequent to the last 
receipt of blendstock into the supplier's storage tank from which the 
transmix processor is supplied;

[[Page 31964]]

    (C) The transmix processor must obtain a copy of the blendstock 
supplier's test results, at the time of each transfer of blendstock to 
the transmix processor, that reflect the sulfur content of each load of 
blendstock supplied to the transmix processor;
    (D) The transmix processor must conduct a quality assurance program 
of sampling and testing for each blendstock supplier. The frequency of 
blendstock sampling and testing must be one sample for every 500,000 
gallons of blendstock received or one sample every 3 months, whichever 
results in more frequent sampling; and
    (E) If any of the requirements of this paragraph (d)(1)(ii) are not 
met, in whole or in part, for any blendstock blended into TGP, that 
blendstock is deemed in violation of the gasoline sulfur standards in 
Sec.  80.195.
    (2) Sample and test each batch of gasoline produced by blending 
blendstock into TGP, using the methods specified in Sec.  80.330, to 
determine the sulfur content of the batch.
    (3) The sulfur content of each batch of gasoline produced by 
blending blendstock into TGP must be no greater than the downstream 
sulfur standard under Sec.  80.210 or Sec.  80.220 applicable to the 
designation of the TGP; and
    (4) Gasoline produced by blending blendstock into TGP must be 
properly identified on product transfer documents in accordance with 
the provisions of Sec.  80.210 or Sec.  80.220, as applicable.
    (e) Any transmix blender who produces gasoline by blending 
transmix, or mixtures of gasoline and distillate fuel described in 
Sec.  80.84(e), into previously certified gasoline under Sec.  80.84(d) 
must meet the applicable downstream sulfur standards under Sec.  80.210 
or Sec.  80.220 for the gasoline produced by blending transmix and 
previously certified gasoline.
    (f) Any transmix processor or transmix blender who adds feedstocks 
to their transmix other than gasoline, distillate fuel, or gasoline 
blendstocks from pipeline interface must meet all requirements and 
standards that apply to a refiner under subpart H of this part, other 
than Sec.  80.213, for all gasoline they produce during a compliance 
period.

0
8. Section 80.365 is amended by adding paragraph (b)(8) to read as 
follows:

Sec.  80.365  What records must be kept?

* * * * *
    (b) * * *
    (8) In the case of parties who process transmix, records of any 
sampling and testing required under Sec.  80.213.
* * * * *

0
9. Section 80.840 is added to subpart J to read as follows:

Sec.  80.840  What requirements apply to transmix processors?

    Any transmix processor who produces gasoline or gasoline blendstock 
from transmix, or recovers gasoline or gasoline blendstock from 
transmix through transmix processing under Sec.  80.84 (c) shall 
include such gasoline or gasoline blendstock in the baseline and 
compliance calculations of this subpart to the same extent such 
gasoline or gasoline blendstock must be included in compliance 
calculations under subpart D of this part for reformulated gasoline and 
RBOB, and under subpart E of this part for conventional gasoline, 
according to the requirements specified in Sec.  80.84(c).

[FR Doc. 06-5051 Filed 6-1-06; 8:45 am]

BILLING CODE 6560-50-P