Document ID: EPA-R09-OAR-2010-0717-0043
Agency: epa
Document Type: Rule
Title: Approval and Promulgation of Implementation Plans: Arizona; Update to Stage II Gasoline Vapor Recovery Program; Change in the Definition of Gasoline to Exclude E85
Posted Date: 2012-06-13T04:00Z

[Federal Register Volume 77, Number 114 (Wednesday, June 13, 2012)]
[Rules and Regulations]
[Pages 35279-35285]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-14148]

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 ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2010-0717; FRL 9661-3]

Approval and Promulgation of Implementation Plans; Arizona; 
Update to Stage II Gasoline Vapor Recovery Program; Change in the 
Definition of ``Gasoline'' To Exclude ``E85''

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: Under the Clean Air Act, EPA is taking final action to approve 
certain revisions to the Arizona State Implementation Plan submitted by 
the Arizona Department of Environmental Quality. These revisions 
concern amendments to the statutory and regulatory provisions adopted 
by the State of Arizona to regulate volatile organic compound emissions 
from the transfer of gasoline from storage tanks to motor vehicle fuel 
tanks at gasoline dispensing sites, i.e., stage II vapor recovery. The 
revisions also amend the definition of ``gasoline'' to explicitly 
exclude E85 and thereby amend the requirements for fuels available for 
use in the Phoenix metropolitan area as well as the requirements for 
vapor recovery. In approving the revisions, EPA is taking final action 
to waive the statutory stage II vapor recovery requirements at E85 
dispensing pumps within the Phoenix metropolitan area. Lastly, EPA is 
taking final action to correct an EPA rulemaking that approved a 
previous version of the Arizona rules regulating these sources and to 
thereby identify the appropriate regulatory agency and specific rules 
that were previously approved and incorporated by reference into the 
Arizona State Implementation Plan.

DATES: Effective Date: This rule is effective on July 13, 2012.

ADDRESSES: EPA has established docket number EPA-R09-OAR-2010-0717 for 
this action. The index to the docket is available electronically at 
www.regulations.gov and in hard copy at EPA Region IX, 75 Hawthorne 
Street, San Francisco, California. While all documents in the docket 
are listed in the index, some information may be publicly available 
only at the hard copy location (e.g., copyrighted material), and some 
may not be publicly available in either location (e.g., Confidential 
Business Information). To inspect the hard copy materials, please 
schedule an appointment during normal business hours with the contact 
listed in the FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT: For further information on the 
revisions to the Arizona State Implementation Plan submitted by the 
Arizona Department of Environmental Quality, contact Mr. Andrew 
Steckel, EPA Region IX, 75 Hawthorne Street (AIR-4), San Francisco, CA 
94105, phone number (415) 947-4115, fax number (415) 947-3579, or by 
email at steckel.andrew@epa.gov.

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

Table of Contents

I. EPA's Proposed Action
    A. The State's Submittal
    B. Regulatory Context
    C. EPA's Evaluation of SIP Submittal and Proposed Action
    D. Proposed Correction of Previous Rulemaking
II. Public Comments and EPA Responses
III. Final Action
IV. Statutory and Executive Order Reviews

I. EPA's Proposed Action

A. The State's Submittal

    On October 3, 2011 (76 FR 61062), we proposed to approve a revision 
to the Arizona State Implementation Plan (SIP) submitted to EPA on 
September 21, 2009 by the Arizona Department of Environmental Quality 
(ADEQ). The purpose of the SIP revision is to update the gasoline vapor 
recovery program that was originally submitted and approved by EPA in 
1994 to meet certain applicable requirements of the Clean Air Act, as 
amended in 1990 (CAA or ``Act'').\1\ The specific revisions include 
statutory provisions and administrative rules regulating the emissions 
of volatile organic compounds (VOC) due to the transfer of gasoline 
from storage tanks (typically underground) to motor vehicle fuel tanks 
at gasoline stations in the Phoenix metropolitan area. The statutory 
provisions and administrative rules are contained in enclosures 3 and 4 
of ADEQ's September 21, 2009 SIP revision submittal package.\2\
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    \1\ Gasoline dispensing pump vapor control devices, commonly 
referred to as ``stage II'' vapor recovery, are systems that control 
VOC vapor releases during the refueling of motor vehicles. This 
process takes the vapors normally emitted directly into the 
atmosphere when pumping gas and recycles them back into the fuel 
storage tank, preventing them from polluting the air. For more 
information on stage II vapor recovery systems, please see EPA's 
proposed rule, ``Air Quality: Widespread Use for Onboard Refueling 
Vapor Recovery and Stage II Waiver,'' 76 FR 41731, at 41734 (July 
15, 2011).
    \2\ By letter dated April 12, 2011, ADEQ substituted the 
statutes and rules in enclosures 3 and 4 as submitted on September 
21, 2009 with official, published versions of the same statutes and 
rules in keeping with the requirements. ADEQ did so in response to 
an EPA request for the official, published versions of the statutes 
and rules to comply with the requirements established by the Office 
of the Federal Register for incorporating such materials by 
reference into the Code of Federal Regulations.
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    ADEQ's submittal represents an update to the stage II requirements 
but is comprehensive in that the submitted

[[Page 35280]]

statutory and regulatory provisions also address general requirements 
related to stage I vapor recovery.\3\ While ADEQ's submittal relates 
almost entirely to the State's vapor recovery program, it also amends 
the State's fuels program by amending the definition of the term 
``gasoline'' to exclude ``E85,'' \4\ a change that affects both the 
gasoline fuels program established for the Phoenix metropolitan area 
and the stage II vapor recovery program because both programs now rely 
on that particular definition. In our October 3, 2011 proposed rule, we 
concluded that ADEQ's September 21, 2009 SIP revision submittal 
contains adequate documentation of public notice, opportunity for 
comment, and a public hearing on the proposed SIP revision (see 
enclosure 5 of the submittal) and that the public participation 
materials submitted by ADEQ demonstrate compliance with the procedural 
requirements set forth in section 110(l) of the CAA.
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    \3\ ``Stage I'' vapor recovery refers to the collection of VOC 
emissions expelled from underground storage tanks at gasoline 
stations when being refilled by tank trucks. The Maricopa County Air 
Quality Department (MCAQD) implements its own stage I vapor recovery 
regulation within the Phoenix metropolitan area, Regulation III, 
Rule 353 (``Transfer of Gasoline into Stationary Storage Dispensing 
Tanks''). EPA approved MCAQD rule 353 and incorporated it into the 
Arizona SIP. See 61 FR 3578 (February 1, 1996). MCAQDM's stage I 
vapor recovery program and related rule are not affected by today's 
proposed action.
    \4\ E85 is a motor vehicle fuel that is a blend of as little as 
15 percent gasoline and up to 85 percent ethanol. (In wintertime 
applications, the ratio may be 30 percent gasoline and 70 percent 
ethanol.) E85 can only be used in specially designed FFVs, which 
have mostly been manufactured since 1998. Since these are newer 
vehicles, most of them are equipped with ORVR, and every FFV built 
today has ORVR. Thus, most vehicles refueling at E85 dispensing 
pumps are already having their evaporative emissions captured, as in 
the cases of late model rental cars refueling at rental car 
facilities and newly manufactured cars being fueled for the first 
time at automobile assembly plants.
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    Table 1 lists the statutory provisions, and Table 2 lists the 
administrative rules, that were submitted by ADEQ on September 21, 2009 
and that we are approving in today's action.

                 Table 1--Submitted Statutory Provisions
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    Arizona revised statutes            Title             Submitted
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Title 41, chapter 15, article    Definitions:        09/21/09
 1, section 41-2051.              subsection 6
                                  (``Certification'
                                  '), subsection 10
                                  (``Department''),
                                  subsection 11
                                  (``Diesel
                                  fuel''),
                                  subsection 12
                                  (``Director''),
                                  and subsection 13
                                  (``E85'').
Title 41, chapter 15, article    Definitions:        09/21/09
 6, section 41-2121.              subsection 5
                                  (``Gasoline'').
Title 41, chapter 15, article    Definitions:        09/21/09
 7, section 41-2131.              subsection 1
                                  (``Annual
                                  throughput''),
                                  subsection 2
                                  (``Clean air
                                  act''),
                                  subsection 3
                                  (``Gasoline
                                  dispensing
                                  site''),
                                  subsection 4
                                  (``Stage I vapor
                                  collection
                                  system''),
                                  subsection 5
                                  (``Stage II vapor
                                  collection
                                  system''), and
                                  subsection 6
                                  (``Vapor control
                                  system'').
Title 41, chapter 15, article    Stage I and stage   09/21/09
 7, section 41-2132.              II vapor recovery
                                  systems.
Title 41, chapter 15, article    Compliance          09/21/09
 7, section 41-2133.              schedules.
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                                            Table 2--Submitted Rules
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                                                                 Effective date  (for
     Arizona administrative code             Rule title             state purposes)             Submitted
----------------------------------------------------------------------------------------------------------------
Title 20, chapter 2, article 1,       Definitions............  06/05/04................  09/21/09
 section R20-2-101.
Title 20, chapter 2, article 9,       Material Incorporated    06/05/04................  09/21/09
 section R20-2-901.                    by Reference.
Title 20, chapter 2, article 9,       Exemptions.............  06/05/04................  09/21/09
 section R20-2-902.
Title 20, chapter 2, article 9,       Equipment and            06/05/04................  09/21/09
 section R20-2-903.                    Installation.
Title 20, chapter 2, article 9,       Application              06/05/04................  09/21/09
 section R20-2-904.                    Requirements and
                                       Process for Authority
                                       to Construct Plan
                                       Approval.
Title 20, chapter 2, article 9,       Initial Inspection and   06/05/04................  09/21/09
 section R20-2-905.                    Testing.
Title 20, chapter 2, article 9,       Operation..............  10/08/98................  09/21/09
 section R20-2-907.
Title 20, chapter 2, article 9,       Training and Public      10/08/98................  09/21/09
 section R20-2-908.                    Education.
Title 20, chapter 2, article 9,       Recordkeeping and        10/08/98................  09/21/09
 section R20-2-909.                    Reporting.
Title 20, chapter 2, article 9,       Annual Inspection and    06/05/04................  09/21/09
 section R20-2-910.                    Testing.
Title 20, chapter 2, article 9,       Compliance Inspections.  06/05/04................  09/21/09
 section R20-2-911.
Title 20, chapter 2, article 9,       Enforcement............  06/05/04................  09/21/09
 section R20-2-912.
----------------------------------------------------------------------------------------------------------------

    Under Arizona law, the principal stage II vapor recovery 
requirements are found in Arizona Revised Statutes (ARS) section 41-
2132 (``Stage I and stage II vapor recovery systems''), which requires 
gasoline dispensing sites to be equipped with a stage II vapor 
collection system within ``an ozone nonattainment area designated as 
moderate, serious, severe or extreme by the United States environmental 
protection agency under Sec.  107(d) of the clean air act, area A or 
other geographical area * * *.'' ARS section 41-2132(C). ``Area A'' is 
defined in ARS section 49-541 and it includes all of the metropolitan 
Phoenix former 1-hour ozone nonattainment area plus additional areas in 
Maricopa County to the north, east, and west, as well as small portions 
of Yavapai County and Pinal County.
    ARS 41-2132 also provides an exemption for gasoline dispensing 
sites with a throughput of less than 10,000 gallons per month or less 
than 50,000 gallons per month in the case of an independent small 
business marketer as defined in section 324 of the CAA, and for 
gasoline dispensing sites that are located on a manufacturer's proving 
ground. ARS 41-2133 sets forth certain compliance schedules related to 
the stage II vapor recovery requirements in ARS 41-2132.

[[Page 35281]]

    The stage II vapor recovery requirements in ARS 41-2132 rely upon 
the definitions of certain terms, such as ``gasoline,'' ``stage II 
vapor collection system,'' and ``E85,'' among others, which are 
codified in ARS sections 41-2015, 41-2121, and 41-2131, and ADEQ 
included the relevant definitions, along with ARS sections 41-2132 and 
41-2133, in the SIP revision submittal dated September 21, 2009. See 
table 1 of this document. The definition of ``gasoline,'' which is 
codified in paragraph (5) of ARS 41-2121, specifically excludes 
``diesel fuel'' and ``E85.''
    ARS section 41-2132(G) directs the Arizona Department of Weights 
and Measures (ADWM) to adopt rules that establish standards for the 
installation and operation of stage I and stage II vapor recovery 
systems. In 1994, EPA approved an earlier version of ADWM's rules for 
stage II vapor recovery. See 59 FR 54521 (November 1, 1994). Since 
then, in addition to renumbering and recodifying the rules, ADWM has 
amended the vapor recovery rules to delete, modify, and add certain 
definitions; to approve use of certain new test procedures developed by 
the California Air Resources Board (CARB); to include general 
requirements for stage I vapor recovery systems; to add exemptions for 
motor raceways, motor vehicle proving grounds, and marine and aircraft 
refueling facilities; to clarify and expand application requirements; 
and to enhance compliance-related provisions.
    ADWM's rules for such systems are now codified at title 20, chapter 
2, article 9 (``Gasoline Vapor Recovery''), of the Arizona 
Administrative Code (AAC). These rules rely upon certain definitions in 
AAC, title 20, chapter 2, article 1 (``Administration and 
Procedures''), section R20-2-101 (``Definitions''). ADEQ submitted 
these rules and definitions to EPA as part of the stage II SIP revision 
dated September 21, 2009--see table 2 of this document.
    In our October 3, 2011 proposed rule, we also explained that in our 
1994 final rule approving an earlier version of ADWM's vapor recovery 
rules, we made an error in how we codified the stage II vapor recovery 
rules into the Arizona SIP, and were thus proposing to correct that 
error. Please see our October 3, 2011 proposed rule at pages 61063 and 
61064 for additional information on these topics.

B. Regulatory Context

    Under CAA section 182(b)(3), stage II vapor recovery systems are 
required to be used at larger gasoline dispensing facilities located in 
Serious, Severe, and Extreme nonattainment areas for ozone.\5\ More 
specifically, the Act specifies that such systems be installed at any 
facility that dispenses more than 10,000 gallons of gasoline per month, 
or, in the case of an independent small business marketer (as defined 
in CAA section 324), any facility that dispenses more than 50,000 
gallons of gasoline per month. Based on deadlines established in the 
Act, within 24 months from the effective date of the initial area 
designation and classification, states must adopt a stage II program 
into their SIPs, and the controls must be installed according to 
specified deadlines following state rule adoption. For existing 
facilities the installation deadlines depend on the date the facilities 
were built and the monthly volume of gasoline dispensed. See CAA 
sections 182(b)(3)(A)-(B), and 324(a)-(c).\6\
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    \5\ See CAA section 182(b)(3), 42 U.S.C. 7511a(b)(3). 
Originally, the section 182(b)(3) stage II requirement also applied 
in all Moderate ozone nonattainment areas. However, under section 
202(a)(6) of the CAA, 42 U.S.C. 7521(a)(6), the requirements of 
section 182(b)(3) no longer apply in Moderate ozone nonattainment 
areas after EPA promulgated ORVR standards on April 6, 1994, 59 FR 
16262, codified at 40 CFR parts 86 (including 86.098-8), 88 and 600. 
Under implementation rules issued in 2004 for the 1997 8-hour ozone 
standard, EPA retained the stage II-related requirements under 
section 182(b)(3) as they applied for the 1-hour ozone standard. 40 
CFR 51.900(f)(5).
    \6\ Section 182(b)(3)(B) has the following effective date 
requirements for implementation of stage II after the adoption date 
by a state of a stage II rule: 6 months after adoption of the state 
rule, for gas stations built after the enactment date (which for 
newly designated areas would be the designation date); 1 year after 
adoption date, for gas stations pumping at least 100,000 gal/month 
based on average monthly sales over 2-year period before adoption 
date; 2 years after adoption, for all others.
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    However, the CAA provides discretionary authority to the EPA 
Administrator to, by rule, revise or waive the section 182(b)(3) stage 
II requirement after the Administrator determines that On-Board 
Refueling Vapor Recovery (ORVR) is in widespread use throughout the 
motor vehicle fleet. See CAA section 202(a)(6). ORVR consists of an 
activated carbon canister installed in the vehicle into which vapors 
being expelled from the vehicle fuel tanks are forced to flow. There 
the vapors are captured by the activated carbon in the canister. When 
the engine is started, the vapors are drawn off of the activated carbon 
and into the engine where they are burned as fuel. EPA promulgated ORVR 
standards on April 6, 1994, 59 FR 16262.
    EPA first began the phase-in of ORVR by requiring that 40 percent 
of passenger cars manufactured in model year 1998 be equipped with 
ORVR. The ORVR requirement for passenger cars was increased to 100 
percent by model year 2000. Phase-in continued for other vehicle types 
and ORVR has been a requirement on virtually all new gasoline-powered 
motor vehicles (passenger cars, light trucks, and complete \7\ heavy-
duty gasoline powered vehicles under 10,000 lbs gross vehicle weight 
rating (GVWR)) sold since model year 2006. See 40 CFR part 86. 
Currently, ORVR-equipped vehicles comprise approximately 67 percent of 
the in-service vehicle fleet nationwide, and account for around 76 
percent of the vehicle miles traveled (VMT) in the nationwide fleet. 
The percentage of non-ORVR vehicles and the percentage of VMT driven by 
those vehicles declines each year as these older vehicles wear out and 
are removed from service. Since certain vehicles are not required to 
have ORVR, including motorcycles and incomplete heavy-duty gasoline 
powered trucks chassis, under current requirements the nationwide motor 
vehicle fleet would never be entirely equipped with ORVR but these 
vehicles account for less than 2 percent of national annual highway 
gasoline consumption.
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    \7\ For purposes of ORVR applicability, a ``complete'' vehicle 
means a vehicle that leaves the primary manufacturer's control with 
its primary load carrying device or container attached.
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    The CAA anticipates that, over the long-term, ORVR will reduce the 
benefit from, and the need for, stage II vapor recovery systems at 
gasoline dispensing sites in ozone nonattainment areas, and as noted 
above, section 202(a)(6) of the CAA allows EPA to revise or waive the 
application of stage II vapor recovery requirements for areas 
classified as Serious, Severe, or Extreme for ozone, as appropriate, 
after such time as EPA determines that ORVR systems are in widespread 
use throughout the motor vehicle fleet. CAA section 202(a)(6) does not 
specify which motor vehicle fleet must be the subject of a widespread 
use determination before EPA may revise or waive the section 182(b)(3) 
stage II requirement. Nor does the CAA identify what level of ORVR use 
in the motor vehicle fleet must be reached before it is ``widespread.'' 
To date, EPA has issued two memoranda addressing when ORVR widespread 
use might be found for particular fleets.\8\
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    \8\ ``Removal of Stage II Vapor Recovery in Situations Where 
Widespread Use of Onboard Vapor Recovery is Demonstrated,'' 
memorandum from Stephen D. Page, Director, EPA Office of Air Quality 
Planning and Standards, and Margo Tsirigotis Oge, Director, EPA 
Office of Transportation and Air Quality, to Regional Air Division 
Directors, dated December 12, 2006 (``2006 Page/Oge Memorandum''); 
and ``Removal of Stage II Vapor Recovery from Refueling of Corporate 
Fleets,'' memorandum from Stephen D. Page, Director, EPA Office of 
Air Quality Planning and Standards, and Margo Tsirigotis Oge, 
Director, EPA Office of Transportation and Air Quality, to Regional 
Air Division Directors, dated November 28, 2007 (``2007 Page/Oge 
Memorandum'').

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[[Page 35282]]

    EPA expects the possibility of different rates of implementation of 
ORVR across different geographic regions and among different types of 
motor vehicle fleets within any region. Given this, EPA does not 
believe that CAA section 202(a)(6) must be read narrowly to allow a 
widespread use determination and waiver of the stage II requirement for 
a given area or area's fleet only if ORVR use has become widespread 
through the entire United States, or only if ORVR use has reached a 
definite level in each area. Rather, EPA believes that section 
202(a)(6) allows the Agency to apply the widespread use criterion to 
either the entire motor vehicle fleet in a State or nonattainment area, 
or to special segments of the overall fleet for which ORVR use is shown 
to be sufficiently high, and to base widespread use determinations on 
differing levels of ORVR use, as appropriate. EPA also believes that 
the Act allows the Agency to use an area-specific rulemaking approving 
a SIP revision to issue the section 202(a)(6) waiver for a relevant 
fleet in a nonattainment area.
    One metric that EPA has considered in determining whether ORVR use 
is widespread within a given motor vehicle fleet considers when VOC 
emissions resulting from the application of ORVR controls alone equal 
the VOC emissions when both stage II vapor recovery systems and ORVR 
controls are used, after accounting for incompatibility excess 
emissions. The incompatibility excess emissions factor relates to 
losses in control efficiency when certain types of stage II and ORVR 
are used together. One metric previously discussed by EPA for 
widespread use in distinct and unique situations was that widespread 
use will likely have been reached when the percentage of motor vehicles 
in service with ORVR, the vehicle miles traveled (VMT) by ORVR-equipped 
vehicles, or the gasoline dispensed to ORVR-equipped vehicles reaches 
95 percent. See the 2006 Page/Oge Memorandum, page 2. Application of 
the 95 percent criterion could lead to, for example, waiver of stage II 
vapor recovery requirements at gasoline dispensing sites that 
exclusively fuel new automobiles at assembly plants and rental cars at 
rental car facilities given the high percentage (essentially 100%) of 
ORVR-equipped vehicles associated with such facilities.
    Recently, EPA proposed criteria for determining whether ORVR is in 
``widespread use'' for purposes of controlling motor vehicle refueling 
emissions throughout the motor vehicle fleet. See 76 FR 41731 (July 15, 
2011). In EPA's July 15, 2011 action, EPA also proposed criteria that 
would establish June 30, 2013 as the date on with ``widespread use'' 
will occur nationally, and the date on which a nationwide waiver of 
stage II gasoline vapor recovery systems will be effective.
    EPA, after considering public comments, intends to take final 
action regarding the July 15, 2011 proposal to establish a nationwide 
date for determining when ORVR is in ``widespread use'' and for waiving 
the stage II requirement. In the proposed rule, EPA stated that it 
intends to provide that individual states may submit SIP revisions that 
demonstrate that ORVR widespread use has occurred (or will occur) on a 
date earlier than the date identified in the final rule for areas in 
their states, and to request that the EPA revise or waive the section 
182(b) (3) requirement as it applies to only those areas. See 76 FR at 
41733. Consistent with EPA's July 15, 2011 proposal to allow states to 
submit such SIP revisions, EPA is taking final action today to approve 
an area-specific revision to the Arizona SIP and to approve a waiver 
for a specific portion of the motor vehicle fleet, namely flexible fuel 
vehicles refueled with E85 gasoline blend, in the Phoenix metropolitan 
area.
    As explained in our October 3, 2011 proposed rule, the ``Phoenix 
area,'' defined by the Maricopa Association of Governments' (MAGs') 
urban planning area boundary (but later revised to exclude the Gila 
River Indian Community at 70 FR 68339 (November 10, 2005)), was 
classified as a ``Moderate'' nonattainment area for the 1-hour ozone 
national ambient air quality standard (NAAQS) and later reclassified as 
``Serious'' for the 1-hour ozone standard. See 56 FR 56694, at 56717 
(November 6, 1991) and 62 FR 60001 (November 6, 1997). As noted above, 
section 182(b)(3) of the Act required States with ozone nonattainment 
areas such as the Phoenix area to adopt and submit a SIP revision 
requiring gasoline dispensing facilities to install and operate stage 
II vapor recovery equipment, and in response, ADEQ submitted the 
statutory provisions and rules establishing stage II vapor recovery 
requirements in the Phoenix area. EPA approved the stage II vapor 
recovery rules as a revision to the Arizona SIP. See 59 FR 54521 
(November 1, 1994). We are taking final action today to approve a SIP 
revision that updates the stage II vapor recovery requirements for the 
Phoenix metropolitan area and that waives stage II vapor recovery 
requirements at E85 dispensing pumps.

C. EPA's Evaluation of SIP Submittal and Proposed Action

Relevant Statutes, Rules, Policies, and Guidance
    In our October 3, 2011 proposed rule, we explained how we evaluated 
the statutory provisions and administrative rules that ADEQ submitted 
to update the Arizona SIP with respect to the stage II vapor recovery 
program in the Phoenix metropolitan area. To summarize that 
information, we evaluated ADEQ's stage II vapor recovery SIP update 
revision based on the Phoenix metropolitan area's designations and 
classifications for the now-revoked one-hour ozone standard and the 
current eight-hour ozone standard to ensure Arizona's stage II program 
complies with section 182(b)(3) of the Act (which is described in 
section I.B. of this document), to ensure that the requirements of the 
program are enforceable (see CAA section 110(a)(2)), and that the 
changes would not interfere with reasonable further progress or 
attainment of the NAAQS (see CAA section 110(l)).
    In doing so, we relied on a number of guidance and policy documents 
including, but not limited to the 2006 Page/Oge Memorandum \9\ and the 
2007 Page/Oge Memorandum (see footnote 7 of this document for the full 
references to these memoranda). Please see our October 3, 2011 proposed 
rule at page 61065 for a complete list of the guidance and policy 
documents upon which we relied.
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    \9\ In EPA's recent national rulemaking regarding waiver of 
stage II requirements, we indicate that the Agency continues to 
believe the 2006 Page/Oge Memorandum is sound guidance in areas 
where stage II is currently being implemented, and is unaffected by 
the proposed national widespread use determination. See 76 FR 41731, 
at 41737 (July 15, 2011). In today's action, we rely primarily on 
the principles and rationale set forth in the 2006 Page/Oge 
Memorandum rather than those set forth in EPA's July 15, 2011 
proposed rule.
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Compliance With CAA Section 182(b)(3) Stage II Requirements
    In our October 3, 2011 proposed rule, we concluded that the 
statutory provisions meet the CAA section 182(b)(3) stage II 
requirements for the following reasons:
     The State is requiring stage II vapor recovery controls in 
an area that encompasses all of the 1-hour ozone ``serious'' 
nonattainment area consistent

[[Page 35283]]

with compliance schedules set forth in the Act and the State provides 
low-volume throughput exemptions that are consistent with those allowed 
for in CAA section 182(b)(3); and
     The State law exemption for a ``gasoline dispensing site 
that is located on a manufacturer's proving ground'' in ARS 41-2132(C) 
does not apply to any facility within the nonattainment area, and, 
assuming that the fuel throughput at the facility to which it had 
applied is representative of the throughput of any such facility that 
might locate within the nonattainment area, the exemption would be 
consistent with the low-volume throughput exemptions allowed for in CAA 
section 182(b)(3).
    Further, in our October 3, 2011 proposed rule, we evaluated whether 
the exclusion of ``E85'' from the State law definition of gasoline 
comports with section 182(b)(3) vapor recovery requirements. Based on 
this evaluation, we concluded that, given how close the ORVR-equipped 
percentage for flexible fuel vehicles (FFVs) in the Phoenix 
metropolitan area (87 percent in 2008 and climbing) is to the ORVR 
widespread use threshold based on comparable VOC emissions (95 percent) 
and because the change in emissions due to use of E85 would not 
interfere with attainment and RFP of any of the NAAQS, ORVR is in 
widespread use in the FFV vehicle fleet in the Phoenix metropolitan 
area for the purposes of CAA section 202(a)(6). Based on the finding of 
``widespread use,'' in our October 3, 2011 proposed rule, we proposed 
to waive the stage II vapor recovery requirements for E85 dispensing 
pumps in the Phoenix metropolitan area under section 202(a)(6).
    Third, in our October 3, 2011 proposed rule, we noted that changes 
in ADWM's vapor recovery rules would generally serve to clarify and 
improve the existing stage II vapor recovery rules that we approved 
into the SIP in 1994, and that the only significant changes potentially 
affecting approvability with respect to CAA section 182(b) (3) would be 
the new exemptions for motor raceways, and for marine and aircraft 
refueling facilities. We evaluated the new exemptions and concluded 
that they would be acceptable under section 182(b)(3) because the fuel 
throughput at the one motor raceway facility to which the exemption 
applies is far below the 10,000-gallon per month low-throughput 
threshold exemption allowed under CAA section 182(b)(3) and because the 
exemptions as applied to the race cars themselves and to marine and 
aircraft refueling facilities do not apply to apply to ``motor 
vehicles'' as defined in CAA section 216(2) and thus are not required 
to be subject to stage II vapor recovery requirements under section 
182(b)(3). Please see our October 3, 2011 proposed rule at pages 61066 
and 61067 for more information about our evaluation of the submitted 
statutory provisions and rules for compliance with section 182(b)(3) 
and for more information about our proposed waiver under section 
202(a)(6).
Compliance With CAA Section 110(l)
    In our October 3, 2011 proposed rule, we also evaluated the 
statutory provisions and administrative rules submitted by ADEQ as part 
of the September 21, 2009 SIP revision under CAA section 110(l) for 
possible interference with any applicable requirement concerning 
reasonable further progress (RFP) and attainment of any of the NAAQS or 
any other applicable requirement under the Act. With respect to this 
SIP revision, we found that the only potentially significant adverse 
effect on emissions and, thus, potential for interference would stem 
from the exclusion of E85 from the definition of ``gasoline'' in ARS 
41-2121. The exclusion of E85 from ``gasoline'' would allow for 
increased use of E85 (by FFVs) as a motor fuel in the Phoenix 
metropolitan area and would result in corresponding change in emissions 
from FFVs using E85 relative to the same vehicles using the specially 
formulated gasoline (referred to as ``Arizona Cleaner Burning 
Gasoline,'' or ``Arizona CBG'') otherwise required.\10\ (Arizona CBG is 
a boutique fuel established to reduce vehicle emissions in the Phoenix 
metropolitan area and to help meet CAA air quality planning 
requirements.) The gasoline portion of E85 must continue to meet the 
specifications for Arizona CBG pursuant to AAC R20-2-718(B).
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    \10\ EPA's guidance for States in developing their stage II SIPs 
in the early 1990s suggested that States use the same definition of 
``gasoline'' as the one found in EPA's Standard of Performance for 
Bulk Gasoline Terminals at 40 CFR 60.501, which includes ``any 
petroleum distillate or petroleum distillate/alcohol blend having a 
Reid vapor pressure of 27.6 kilopascals or greater which is used as 
a fuel for internal combustion engines.'' EPA recommended using this 
definition to most broadly reach situations in which refueling of 
motor vehicles results in evaporative VOC emissions that contribute 
to ozone nonattainment concentrations, and to avoid a narrow 
interpretation of what is ``gasoline'' that would allow significant 
VOC emissions from motor vehicle refueling activities in 
nonattainment areas to go uncontrolled.
    In the existing SIP, Arizona includes a definition of 
``gasoline,'' AAC R4-31-901(5), that is consistent with the NSPS 
definition. The SIP revision that we are approving today would 
replace the existing SIP definition of ``gasoline'' from Arizona's 
rules for gasoline vapor recovery (AAC title 20, chapter 2, article 
9) with the definition of ``gasoline'' from Arizona's statutes 
governing motor fuel (ARS section 41-2121(5)). The definition of 
``gasoline'' in ARS section 41-2121(5) is as inclusive as the 
existing SIP definition in AAC R4-31-901(5), except for the explicit 
exclusion of E85. Given that E85 can only be used by FFVs, and based 
on our proposed ``widespread use'' determination with respect to the 
FFV fleet in the Phoenix area that would be fueled at E85 dispensing 
pumps, we find the exception for E85 from the definition of 
``gasoline'' acceptable under CAA section 182(b)(3). Moreover, to 
allow for the distribution and sale of E85 in the Phoenix area, a 
change in the term of ``gasoline'' (to exclude E85) for stage II 
vapor recovery purposes alone would not have sufficed. Because of 
the boutique fuel requirements of Arizona CBG that have been 
approved into the Arizona SIP, a change in the definition of 
``gasoline'' as a motor fuel (to exclude E85) was also necessary.
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    To evaluate the change in emissions, we reviewed a recently 
published study from the Journal of the Air & Waste Management 
Association titled ``Effect of E85 on Tailpipe Emissions from Light-
Duty Vehicles \11\'' (herein, the ``E85 Vehicle Emissions Study''), 
which compiled the results from previous published studies but also 
analyzed a significantly larger database compiled by EPA for vehicle 
certification purposes. As described in our October 3, 2011 proposed 
rule, though the results vary by pollutant and between ``tier 1'' 
(i.e., model year (MY) 1994-2003) and ``tier 2'' (MY 2004-2008) 
vehicles, in general, the study suggests that FFVs using E85 emit fewer 
oxides of nitrogen (NOX), carbon monoxide, and particulate 
matter (PM) relative to the same FFVs using gasoline. However, with 
respect to VOCs, FFVs may well emit greater VOCs than the same FFVs 
using gasoline [based on the measurement results for non-methane 
organic gases (NMOGs)].\12\
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    \11\ Janet Yanowitz and Robert L. McCormick, ``Effect of E85 on 
Tailpipe Emissions from Light-Duty Vehicles,'' Journal of the Air & 
Waste Management Association, Volume 59, February 2009, pages 172-
182.
    \12\ Ethanol itself contains no lead (Pb) or sulfur, but the 
ethanol portion of E85 does contain some Pb and sulfur due to the 
addition of a denaturant, which can comprise up to 5% of the ethanol 
portion of E85. The denaturant used by ethanol producers is 
typically gasoline (either RFG or conventional gasoline, depending 
on where the ethanol plant is located), which has sulfur and Pb 
specifications similar to those for CBG. Therefore, a gallon of E85 
would have less sulfur and Pb than a gallon of CBG (due to the 
dilution provided by the ethanol), and thus the emissions of sulfur 
dioxide and Pb from use of E85 in FFVs would be less than the 
corresponding emissions from use of CBG in those vehicles. 
Therefore, there would be no interference with RFP or attainment of 
the Pb and sulfur dioxide NAAQS.
---------------------------------------------------------------------------

    Thus, with respect to nitrogen dioxide, carbon monoxide and 
particulate matter, because emissions using E85 would be lower than 
those using CBG, we concluded that the incremental substitution of CBG 
with E85 would not interfere with RFP or

[[Page 35284]]

attainment of the ambient standards for those pollutants.
    We also concluded that the net effect on ozone conditions in the 
Phoenix 8-hour ozone nonattainment area would be beneficial despite the 
potential higher VOC emission rate by E85-fueled FFVs (relative to CBG-
fueled FFVs) because of the offsetting effect of NOX 
emissions reductions (from use of E85 relative to Arizona CBG) and 
because of the extension of stage II vapor recovery requirements to 
``Area A,'' an area that is larger than the area formerly designated as 
nonattainment for the 1-hour ozone standard and that includes the fast-
growing region west of the City of Phoenix.\13\
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    \13\ As submitted in 1993, ARS section 41-2132(C) established 
the stage II vapor recovery requirement within the ozone 
nonattainment area, but the current version of this statute, which 
is included in today's final approval action, extends the 
requirement to ``Area A.''
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    On the basis of the above rationale, we determined in our October 
3, 2011 proposed rule that this SIP revision, including the change in 
the definition of ``gasoline'' to exclude ``E85,'' would not interfere 
with RFP and attainment for any of the NAAQS. Please see our October 3, 
2011 proposed rule at pages 61067 and 61068 for more information about 
our evaluation of the submitted statutory provisions and rules for 
compliance with section 110(l) of the CAA.

D. Proposed Correction of Previous Rulemaking

    Lastly, in our October 3, 2011 proposed rule, we described our 
direct final action (59 FR 54521, November 1, 1994) to approve the 
administrative rules adopted by ADWM to provide for the installation 
and operation of stage II vapor recovery systems, and in which we 
included erroneous references and failed to identify the specific rules 
being incorporated by reference into the SIP. To address this issue, we 
proposed, under section 110(k)(6) and 301(a) of the CAA,\14\ to correct 
our previous codification of our approval of the stage II vapor 
recovery rules to identify the appropriate regulatory agency and to 
identify the specific rules that were being approved and incorporated 
by reference into the Arizona SIP. Please see our October 3, 2011 
proposed rule at page 61068 for more information about our proposed 
error correction under CAA section 110(k)(6).
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    \14\ Section 110(k)(6) of the CAA provides that, whenever EPA 
determines that the Agency's action approving, disapproving, or 
promulgating any plan or plan revision, area designation, 
redesignation, classification, or reclassification was in error, EPA 
may in the same manner as the approval, disapproval, or promulgation 
revise such action as appropriate without requiring any further 
submission from the State. Section 301(a) of the CAA authorizes EPA 
to prescribe such regulations as are necessary to carry out the 
Agency's functions under the CAA.
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II. Public Comments and EPA Responses

    Our October 3, 2011 proposed rule provided a 60-day comment period. 
During this period, we received no comments on our proposed action.

III. Final Action

    As authorized in section 110(k)(3) of the Act and for the reasons 
provided in our October 3, 2011 proposed rule and summarized herein, 
EPA is taking final action to approve the statutory provisions and 
updated administrative rules establishing certain vapor recovery 
requirements in the Phoenix metropolitan area as a revision to the 
Arizona SIP. Specifically, we are taking final action to approve 
Arizona Revised Statutes (ARS) sections listed in table 1 of this 
document and the Arizona Administrative Code (AAC) sections listed in 
table 2 of this document.\15\ Second, as authorized under CAA section 
202(a)(6), we are taking final action to waive the stage II vapor 
recovery requirements at E85 dispensing pumps in the Phoenix area under 
CAA section 202(a)(6) based on our conclusion that ORVR is in 
widespread use among the FFVs that use such facilities.
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    \15\ Our approval of the statutory provisions and administrative 
rules in tables 1 and 2 of this document supersedes the previously 
approved versions of the administrative rules in the Arizona SIP 
(i.e., AAC Article 9 (``Gasoline Vapor Control''), Rules R4-31-901 
through R4-31-910, adopted by the Arizona Department of Weights and 
Measures on August 27, 1993, submitted on May 27, 1994, and approved 
on November 1, 1994 (59 FR 54521)).
---------------------------------------------------------------------------

    In so doing, we conclude that the submitted statutory provisions 
and updated administrative rules meet the related requirements for 
stage II vapor recovery under CAA section 182(b)(3) and will not 
interfere with attainment and RFP of any of the NAAQS or any other CAA 
applicable requirement, consistent with the requirements of CAA section 
110(l). Final EPA approval of the updated statutory provisions and 
rules and incorporation of them into the Arizona SIP makes them 
federally enforceable.
    Lastly, under section 110(k)(6) and 301(a) of the CAA, we are 
taking final action to correct and clarify the incorporation of the 
previous version of ADWM's vapor recovery related administrative rules 
into the Arizona SIP.

IV. Statutory and Executive Order Reviews

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

In addition, this rule does not have tribal implications as specified 
by Executive Order 13175 (65 FR 67249, November 9, 2000), because the 
SIP is not approved to apply in Indian country located in the State, 
and EPA notes that

[[Page 35285]]

it will not impose substantial direct costs on tribal governments or 
preempt tribal law.

    The Congressional Review Act, 5 U.S.C. section 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. 
section 804(2).
    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate circuit by August 13, 2012. Filing a petition for 
reconsideration by the Administrator of this final rule does not affect 
the finality of this rule for the purposes of judicial review nor does 
it extend the time within which a petition for judicial review may be 
filed, and shall not postpone the effectiveness of such rule or action. 
This action may not be challenged later in proceedings to enforce its 
requirements (See section 307(b)(2)).

List of Subjects in 40 CFR Parts 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Ozone, Reporting and 
recordkeeping requirements, Volatile organic compounds.

    Dated: April 11, 2012.
Lisa P. Jackson,
Administrator.

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

PART 52--[AMENDED]

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

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

Subpart D--Arizona

0
2. Section 52.120 is amended by revising paragraph (c)(69)(i)(A) and 
adding paragraph (c)(148) to read as follows:

Sec.  52.120  Identification of plan.

* * * * *
    (c) * * *
    (69) * * *
    (i) * * *
    (A) Arizona Department of Weights and Measures. (1) Letter from 
Grant Woods, Attorney General, State of Arizona, to John U. Hays, 
Director, Department of Weights and Measures, dated August 31, 1993, 
and enclosed Form R102 (``Certification of Rules and Order of Rule 
Adoption'').
    (2) Arizona Administrative Code, Article 9 (``Gasoline Vapor 
Control''), Rules R4-31-901 through R4-31-910, adopted August 27, 1993, 
effective (for state purposes) on August 31, 1993.
* * * * *
    (148) The following plan revision was submitted on September 21, 
2009 by the Governor's designee.
    (i) Incorporation by reference. (A) Arizona Department of Weights 
and Measures. (1) Arizona Revised Statutes, title 41 (State 
Government), chapter 15 (Department of Weights and Measures), as 
amended and supplemented by the general and permanent laws enacted 
through the First Special Session, and legislation effective January 
11, 2011 of the First Regular Session of the Fiftieth Legislature 
(2011):
    (i) Article 1 (General Provisions), section 41-2051 
(``Definitions''), subsections (6) (``Certification''), (10) 
(``Department''), (11) (``Diesel fuel''), (12) (``Director''), and (13) 
(``E85''), amended by Laws 2008, Ch. 254, Sec.  2;
    (ii) Article 6 (Motor Fuel), section 41-2121 (``Definitions''), 
subsection (5) (``Gasoline'') amended by Laws 2007, Ch. 292, Sec.  11; 
and
    (iii) Article 7 (Gasoline Vapor Control), section 41-2131 
(``Definitions''), added by Laws 1992, Ch. 299, Sec.  6; section 41-
2132 (``Stage I and stage II vapor recovery systems''), amended by Laws 
2010, Ch. 181, Sec.  2; and section 41-2133 (``Compliance schedules''), 
amended by Laws 1999, Ch. 295, Sec.  17.
    (2) Arizona Administrative Code, title 20, chapter 2, article 1 
(Administration and Procedures), section R20-2-101 (``Definitions''), 
effective (for state purposes) on June 5, 2004.
    (3) Arizona Administrative Code, title 20, chapter 2, article 9 
(Gasoline Vapor Control):
    (i) Sections R20-2-901 (``Material Incorporated by Reference''), 
R20-2-902 (``Exemptions''), R20-2-903 (``Equipment and Installation''), 
R20-2-904 (``Application Requirements and Process for Authority to 
Construct Plan Approval''), R20-2-905 (``Initial Inspection and 
Testing''), R20-2-910 (``Annual Inspection and Testing''), R20-2-911 
(``Compliance Inspections''), and R20-2-912 (``Enforcement''), 
effective (for state purposes) on June 5, 2004.
    (ii) Sections R20-2-907 (``Operation''), R20-2-908 (``Training and 
Public Education''), and R20-2-909 (``Recordkeeping and Reporting''), 
effective (for state purposes) on October 8, 1998.

[FR Doc. 2012-14148 Filed 6-12-12; 8:45 am]
BILLING CODE 6560-50-P