This change to the previous regulation is to provide refiners the certainty of a stable demand for Phase II RFG for at least four years. This will help industry to make decisions on capital investments needed to comply with Phase II RFG requirements. There is one exception to the states' deadline to submit an opt- out petition. Refiners need to begin investing in Phase II RFG by late 1997. By a state committing to Phase II RFG for several years, the industry will be more inclined to make investments to produce the cleaner burning gasoline.
Industry desires market certainty and the maximum opportunity to recover investment costs.
The Agency believes that refiners on average require 6 years to recover their investment costs. DOE has commented that an 8-year period is adequate to fully recover costs. Thus, four years will provide market certainty and allow most refiners to recover a substantial portion of investments while providing states as much flexibility that is reasonable and practicable. Consumers benefit from this final rule since a stable market helps reduce possible price fluctuations and it ensures adequate supply of the cleaner burning gasoline. States will continue to be encouraged to assess the air quality ramifications of withdrawing from the program.