Source: https://www.federalregister.gov/documents/2005/12/21/05-24298/regulation-of-fuel-and-fuel-additives-extension-of-california-enforcement-exemptions-for
Timestamp: 2016-12-05 21:15:49
Document Index: 416400194

Matched Legal Cases: ['art 80', '§\u200980', 'art 80', '§\u20092250', '§\u200980', 'art 80', 'art1', 'art 80', 'art2', '§\u200980', 'art 80']

:: Regulation of Fuel and Fuel Additives: Extension of California Enforcement Exemptions for Reformulated Gasoline to California Phase 3 Gasoline
75913-75921
https://www.federalregister.gov/d/05-24298
Start Printed Page 75914
EPA has established a docket for this action under OAR-2003-0217. All documents in the docket are listed in the EDOCKET index at http://www.epa.gov/​edocket. Although listed in the index, some information is not publicly available, i.e., CBI or other information the disclosure of which is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in EDOCKET or in hard copy at the Air Docket in the EPA Docket Center, EPA/DC, EPA West, Room B102, 1301 Constitution Avenue, 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.
CategoryNAICSs codes aSIC codes bExamples of potentially regulated partiesIndustry3241102911Petroleum refiners.Industry422710 4227205171 5172Gasoline Marketers and Distributors.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 an entity is regulated by this action, one should carefully examine the RFG provisions at 40 CFR part 80, particularly § 80.81 dealing specifically with California gasoline. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section.
Section 211(k) of the Federal Clean Air Act (the Act) directs the EPA to establish requirements for reformulated gasoline (RFG) to be used in specified ozone nonattainment areas, as well as “anti-dumping” requirements for conventional gasoline used in the rest of the country. The areas covered by the Federal RFG program in California are San Joaquin Valley, Los Angeles, San Diego, and Sacramento.[1] The RFG provisions of the Act require EPA to promulgate regulations to reduce the emissions in RFG covered areas of ozone forming volatile organic compounds (VOCs) and toxic air pollutants through the use of RFG in gasoline-fueled motor vehicles. The Act also specifies that RFG use result in no increase in the emission of oxides of nitrogen (NOX) over baseline levels (under Phase I of the program). Finally, gasoline subject to the RFG requirements must meet certain content standards for oxygen, benzene and heavy metals.
The RFG program was designed to be implemented in two phases. The Phase I program was in effect from January 1, 1995 through December 31, 1999. The Phase II program, which began on January 1, 2000 and is currently in effect, is similar to the Phase I program, but requires even greater reductions in emissions of VOC, toxics and NOX. The regulations for RFG and conventional gasoline may be found at 40 CFR part 80, subparts D, E, and F.
On September 18, 1992, the California Air Resources Board (CARB) adopted regulations establishing California's Phase 2 reformulated gasoline program (“California Phase 2 RFG”), which became effective March 1, 1996. These regulations established a comprehensive set of gasoline specifications designed to achieve reductions in emissions of VOCs, NOX, carbon monoxide (CO), sulfur dioxide, and toxic air pollutants Start Printed Page 75915from gasoline-fueled motor vehicles.[2] The California Phase 2 RFG regulations set standards for eight gasoline parameters—sulfur, benzene, olefins, aromatic hydrocarbons, oxygen, Reid vapor pressure (RVP), and distillation temperatures for the 50 percent and 90 percent evaporation points (T-50 and T-90, respectively). These regulations also provide for the production and sale of alternative gasoline formulations, with certification under the CARB program based on a predictive model or on vehicle emission testing.
EPA previously adopted enforcement exemptions for California Phase 2 gasoline under the Federal Phase I RFG program.[3] In doing so, we concluded that:
(1) The emission reductions resulting from the California Phase 2 standards would be equal to or greater than the Federal Phase I RFG standards (i.e., the standards that were applicable from January 1, 1995 through December 31, 1999), (2) The content standard for benzene under California Phase 2 would be equivalent in practice to the Federal Phase I content standard and that the oxygen content standard of 2.0 weight percent would be achieved in Federal RFG areas, and
Requirement exemptedCitation at 40 CFR 80.xxCompliance Surveys.480.68Independent Sampling & Testing80.65(f)Designation of Gasoline80.65(d)Marking of Conventional Gasoline80.65(g) and 80.82Downstream Oxygenate Blending80.69Recordkeeping80.74 and 80.104Reporting80.75 and 80.105Product Transfer Documents80.77Parameter Value Reconciliation Requirements80.65(e)(2)Reformulated Gasoline and Reformulated Gasoline Blendstock for Oxygenate Blending (RBOB) Compliance Requirements80.65(c)Annual Compliance Audit Requirements80.65(h)Compliance Attest Engagement Requirementssubpart F
California refiners, importers, and blenders were not granted exemptions from these Federal enforcement requirements with regard to gasoline delivered for use outside California, because the California Phase 2 standards and the CARB enforcement program do not apply to gasoline delivered for use outside of California.
The original California enforcement exemptions expired on December 31, 1999 when the Federal Phase II RFG started. The exemptions expired because they were based on a comparison of California Phase 2 gasoline and Federal Phase I RFG. An appropriate equivalency determination comparing California Phase 2 and Federal Phase II gasolines would have been premature in 1994, when the final RFG regulations were issued. However, on September 15, 1999, we published a direct final rule continuing the California enforcement exemptions beyond December 31, 1999.[5] We took this action after comparing California Phase 2 gasoline and Federal Phase II RFG. In brief, we concluded that:
(3) CARB's compliance and enforcement program was designed to be sufficiently rigorous to ensure that Federal Phase II requirements would be met in practice.[6] III. Today's Action and Response to Comments on the Notice of Proposed Rulemaking
On August 11, 2004, EPA published a notice of proposed rulemaking for this rule in the Federal Register.[7] This section summarizes the analyses and conclusions that we used in developing the proposed and final rule. It also discusses comments we received in response to the notice of proposed rulemaking.
Since March 21, 2001, CARB has completed a series of rulemakings that amended its CaRFG3 regulations. Many of these amendments were made necessary by a postponement of the MTBE phase-out and to accommodate the use of ethanol. The MTBE phase-out was delayed until December 31, 2003 by Governor Gray Davis's issuance of a second Executive Order D-52-02.[8] The CaRFG3 regulations and all standards discussed in this notice represent the May 1, 2003 version of the California Reformulated Gasoline Regulations, Title 13, California Code of Regulations, § 2250 et seq.
In developing the proposed rule and determining whether to apply the Federal enforcement exemptions of 40 CFR 80.81 to CaRFG3, we considered:Start Printed Page 75916
(2) Whether the content standard for benzene under CaRFG3 would be equivalent in practice to the Federal Phase II content standard and whether the oxygen content standard of 2.0 weight percent would be met in Federal RFG areas; [9] and
Considering these factors is appropriate and consistent with the analyses we used when we previously granted enforcement exemptions to refiners, importers, and blenders of California Phase 2 gasoline under both the Federal Phase I and Phase II RFG programs.[10] To determine whether CaRFG3 emissions reductions are equivalent to or greater than Federal Phase II RFG, we have evaluated the CaRFG3 standards and the Federal Phase II complex model standards. We have also considered whether possible “real world” CaRFG3 formulations would comply with Federal Phase II RFG emissions reduction standards. Compliance with performance standards under the Federal RFG program is determined by using the Phase II Complex Model. The Complex Model predicts VOC, toxics and NOX emissions relative to the emissions of 1990 baseline gasoline.[11] These reduction percentages are compared to RFG performance standards. The Federal performance standards applicable to VOC-controlled RFG designated for VOC control region 1 apply to California areas covered by the Federal RFG program.[12] California's Phase 2 RFG regulations established specifications for eight gasoline parameters: sulfur, benzene, olefins, aromatic hydrocarbons, oxygen, RVP, T50 and T90. Some parameters are expressed as flat limits and some parameters are expressed as averaging limits with caps. California's flat limit option requires refiners to meet parameter standards on an every-gallon, rather than an averaged basis. The California flat limits are somewhat analogous to the Federal RFG per-gallon standards. The CaRFG3 regulations revised certain of these specifications and incorporated an updated version of the California predictive model.[13] Refiners may produce complying California gasoline using a “recipe” that meets these parameter specifications. Alternative specifications for complying gasoline can be established by using the California predictive model to demonstrate that emissions are equivalent to those of a gasoline meeting the established specifications. Six of the parameters are also input parameters for the EPA Complex Model. The remaining two, T50 and T90, are closely related to E200 and E300, the remaining two Complex Model inputs.[14] If CaRFG3 provides emission benefits equivalent to Federal Phase II RFG, then a gasoline formulation meeting the CaRFG3 flat limit specifications should provide emission reductions, as calculated by the complex model, which meet Federal Phase II performance standards. The following table, which was prepared for the proposed rule, compares the emissions performance of the CaRFG3 “recipe,” evaluated using the Federal Complex Model, to the Federal Phase II RFG performance standards: [15] Table 1.— Comparison of CaRFG3 Flat Limit Recipe Complex Model Performance With Federal Phase II RFG Standards VOC (% reduction)Toxics (% reduction)NOX (% reduction)CaRFG3 Flat Limits with ethanol27.730.014.5CaRFG3 Flat Limits with MTBE27.732.214.5Federal per gallon standards27.520.05.5Federal averaged standards29.021.56.8
Table 1 shows two sets of results; one where the oxygenate was assumed to be MTBE and the other where the oxygenate was assumed to be ethanol. The specific oxygenate affects the toxics performance estimate. Two sets of Federal standards are shown, the per-gallon standards and the averaged standards. (These numerically more stringent averaged standards are applicable if a refiner chooses to comply on average, rather than on a per gallon basis.) The emissions performance of the flat limit recipe gasoline is better than the Federal RFG per gallon standards for VOC, toxics and NOX reductions, and better than the Federal RFG averaged standards for toxics and NOX reduction. Thus, gasoline produced in compliance with the CaRFG3 flat limits (which are somewhat analogous to Federal per-gallon standards) would achieve performance limits at least as stringent as the Federal Phase II RFG per-gallon standards for VOCs and at least as stringent as the averaged standards for toxics and NOX. Thus, CaRFG3 would meet Federal standards if every gallon were produced according to this recipe.Start Printed Page 75917
However, as explained in the proposed rule, we anticipate that most refiners will use the CaRFG3 predictive model to certify alternative specifications with emissions equivalent to or better than the flat limit recipe. While there are similarities between the California Phase 3 predictive model and the Federal Phase II Complex Model, there are also substantial differences. Consequently, two recipes found to have equal emissions with the California predictive model may not have equal emissions when evaluated by the Federal Complex Model. In other words, a finding that the Complex Model emissions performance of the flat limit recipe is equal to or better than the Federal standards does not guarantee that the Complex Model emissions performance of all gasoline blends that may be produced in compliance with CaRFG3 will meet or surpass the Federal standards.
For purposes of determining whether or not CaRFG3 produced and certified under the predictive model would be equivalent to Federal Phase II RFG, we considered several reasonably likely “real world” CaRFG3 formulations. These formulations were developed in connection with California's 1999 request for a waiver from the Federal oxygen content requirement for reformulated gasoline.[16] The CaRFG3 formulations depicted in Tables 2 and 3 do not represent each and every possible gasoline formulation under the California's regulations, but we believe that they provide a representative sample of that universe of gasoline formulations that are likely to be produced under the CaRFG3 program. This analysis is discussed in more detail in the following paragraphs.
In April 1999, California applied for a waiver of the Federal oxygen content requirement for reformulated gasoline. In order to complete an evaluation of the technical basis for this waiver request, we determined that additional refinery modeling was needed to forecast the likely composition of CaRFG3, after California's phase-out of methyl-tertiary-butyl-ether (MTBE), with and without an oxygen waiver.[17] Consequently, EPA commissioned MathPro to conduct this modeling, which estimated the composition of ethanol-oxygenated and non-oxygenated CaRFG3 under various scenarios.[18] These scenarios varied in terms of the continued or reduced use of MTBE outside of California, whether or not refiners avoid the patent held by Unocal on certain reformulated blends, and whether ethanol is used at 2.0 or 2.7 weight percent oxygen. Although these modeling results were intended for use in the waiver evaluation, they are also helpful when considering the appropriateness of extending the existing enforcement exemptions to CaRFG3. EPA believes that these modeling results are likely to be the most accurate and comprehensive forecasts of the likely properties of the CaRFG3 that will be sold in Federal RFG areas in California. For the purpose of this rule, we have considered both oxygenated and non-oxygenated CaRFG3 blends. (See footnote 9 for a discussion of the oxygen content requirement in light of the Energy Policy Act of 2005.)
Table 2.—Complex Model Performance of Oxygenated CaRFG3 Using MathPro Gasoline Property EstimatesEthanol (wt% oxygen)Sulfur (ppm)RVP (psi)E200 (%)E300 (%)Aromatics (vol%)Olefins (vol%)Benzene (vol%)VOC (%)Toxics (%)NOX (%)2.0156.6647.2087.6024.104.400.6430.232.914.82.0106.7446.4088.7023.303.900.5729.634.115.42.7106.8546.9088.1023.203.800.7029.032.815.42.796.8446.6088.0023.303.800.6829.032.915.42.0176.6046.8088.3026.503.400.6230.132.014.32.0176.6045.2090.6019.104.600.7730.833.816.42.0136.6246.2087.7024.303.700.6030.133.215.02.0126.6046.1088.2028.602.900.5129.632.114.22.7106.7646.2088.6025.702.800.6629.132.114.92.7126.6044.9087.7022.402.800.7130.232.915.7Start Printed Page 759182.786.7345.4089.0026.301.900.6328.932.115.02.7106.6945.4088.3025.302.800.6529.432.315.1
Table 3.—Complex Model Performance of Non-Oxygenated CaRFG3 Using MathPro Gasoline Property EstimatesEthanol (wt% oxygen)Sulfur (ppm)RVP (psi)E200 (%)E300 (%)Aromatics (vol%)Olefins (vol%)Benzene (vol%)VOC (% )Toxics (%)NOX (%)0.086.6047.787.423.05.90.5730.732.515.10.076.6048.787.628.64.70.5130.030.414.00.086.6048.187.226.92.40.4629.732.014.30.0106.6047.788.024.33.90.4930.332.914.80.0126.6049.085.824.86.00.5230.532.214.30.0106.6049.287.428.64.10.5330.030.213.80.0126.6047.686.821.26.30.5231.033.815.30.096.6047.987.625.73.90.4930.132.214.5
In developing the proposed rule, we considered the design and implementation of CARB's enforcement program, which includes enforcement at refineries, import facilities, terminals, and service stations. CARB's enforcement program is generally outlined in its regulations and includes requirements that refiners submit annual compliance plans,[19] which outline how they will meet CaRFG3 requirements, and that refiners and importers conduct testing and maintain records of testing performed on batches of gasoline.[20] CARB staff summarized information on its actual enforcement activities in fiscal years 1999-2000 and 2000-2001, indicating that 6.6% and 6.5% of gasoline sold in California was inspected, during each respective period. In 1999-2000, the violation rate was 1.9% (based on volumes sampled) and 0.5% (based on the number of samples). In 2000-2001, the violation rate was 0.16% (based on volumes sampled) and 1.06% (based on the number of samples). We believe that, considering the presence of adequate enforcement provisions in its regulations and CARB's actual enforcement activities, that the CARB enforcement program is sufficiently stringent to ensure that the California standards will be met. For all these reasons, we have determined that it is appropriate to apply the enforcement exemptions at 40 CFR 80.81 to refiners, importers, and blenders of CaRFG3.
This rule restores the definition of “California gasoline,” which was previously included in § 80.81, but which was accidentally and erroneously removed from the Code of Federal Regulations. The definition is necessary because it describes the gasoline to which the enforcement exemptions may apply.
(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;Start Printed Page 75919
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” are defined in the Executive Order to include Start Printed Page 75920regulations 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.”
Start Amendment PartFor the reasons set forth in the preamble, part 80 of title 40 of the Code of Federal Regulations is amended as follows:End Amendment Part
Start Amendment Part1. The authority citation for part 80 continues to read as follows:End Amendment Part
Start Amendment Part2. Section 80.81 is amended by:End Amendment Part
Start Amendment Parta. Revising paragraph (a). End Amendment Part
Start Amendment Partb. Revising paragraph (c) introductory text. End Amendment Part
Start Amendment Partc. Revising paragraph (e)(2) introductory text and (e)(3)(i). End Amendment Part
Start Amendment Partd. Revising paragraph (g)(1) introductory text. End Amendment Part
Start Amendment Parte. Revising paragraphs (h)(1) introductory text, (h)(1)(ii)(A), (h)(1)(ii)(C) and (h)(2)(i).End Amendment Part
The revisions read as follows: Start Printed Page 75921
§ 80.81 Enforcement exemptions for California gasoline.
See http://www.epa.gov/​otaq/​rfgmap.jpg for a map and list of RFG covered areas by state. A copy of the map and list has been placed in the docket for this rulemaking. The map and list are revised frequently—please contact the person identified in the FOR FURTHER INFORMATION CONTACT section for updated information. Please be aware that the statutory requirement for RFG use in Atlanta and Baton Rouge that arose from their classification as severe non-attainment areas for the 1-hour ozone standard is currently stayed pursuant to court orders in pending litigation and, therefore, these areas do not currently appear on the map.
California's reformulated gasoline regulations, includng Phase 2 and Phase 3, are at Title 13, California Code of Regulations (CCR), section 2250 et seq. (May 1, 2003). A copy of the regulations have been placed in the docket.
See 59 FR 7758 (February 16, 1994) and 63 FR 34818 (June 26, 1998).
Partial exemption from oxygen survey requirement. See 63 FR 34818, 34820-34822 (June 26, 1998). Also see fn. 9.
See “Regulation of Fuels and Fuel Additives, Extension of California Enforcement Exemptions for Reformulated Gasoline Beyond December 31, 1999” Direct Final rule, 64 FR 49992 (September 15, 1999).
See the Notice of Proposed Rulemaking (which accompanied the Direct Rule cited in footnote 5) at 64 FR 50036, 50038-50040 (September 15, 1999).
See 69 FR 48827.
A copy of the Executive Order has been placed in the docket.
Both oxygenated and nonoxygenated blends were considered in developing the notice of proposed rulemaking. At the time we issued the notice of proposed rulemaking, we did not know if California's request for a waiver of the oxygen content requirements for reformulated gasoline would be granted. We also did not know what the outcome would be with regard to the Energy Bill, H.R. 6, which addressed the elimination of the oxygen content requirement for reformulated gasoline. Since then, H.R. 6 was passed by both the House and Senate and was signed into law by President Bush. The Energy Policy Act of 2005, Pub.L. 109-58, Sec. 1504, amends section 211(k) of the Clean Air Act to eliminate the oxygen content requirement under that section. We plan to initiate rulemaking activity soon to amend 40 CFR part 80 to reflect changes to the Clean Air Act that were enacted in the Energy Policy Act.
See 59 FR 7813 (February 16, 1994) as amended at 59 FR 36965 (July 20, 1994), 59 FR 39289 (August 2, 1994), 59 FR 60715 (November 28, 1994), 63 FR 34825 (June 26, 1998), 64 FR 49997 (September 15, 1999), and 66 FR 17263 (March 29, 2001).
“Baseline gasoline” refers to a general set of properties representative of a refiner's fuel in 1990. The purpose of establishing a baseline is to prevent the quality of gasoline to degrade in areas in which reformulated gasoline is not required. For a discussion of baselines, please refer to the RFG and anti-dumping final rule, 59 FR 7798 (February 16, 1994).
See 40 CFR 80.41 and 90.71.
The California predictive model, like the Complex Model, is used to predict emissions performance of gasoline.
There is a strong correlation between T50 (the 50% distillation temperature) and E200 (the percent distilled at 200F). Likewise, there is a strong correlation between T90 (the 90% distillation temperature) and E300 (the percent distilled at 300F). For the analysis in table 1, E200 and E300 were estimated from the flat limit T50 and T90 specifications using conversions found in EPA's complex model spreadsheet.
Oxygen was assumed to be 2.0 wt%, the midpoint of the 1.8-2.2 wt% specification and RVP was 6.90, the RVP used with the evaporative compliance option in the predictive model.
The California waiver analysis considered the effect of changes in gasoline composition on the entire on-road and off-road gasoline-power fleet. The analysis for this rule considers only Complex Model performance, which considers a portion of the on-road gasoline-powered fleet, since the Model considers 1990s technology vehicles.
One of the reasons for this determination was that earlier modeling was done before the CaRFG3 predictive model was finalized. This may have affected the estimates of CaRFG3 properties developed from these earlier studies. EPA's Technical Support Document for the waiver decision “Analysis of California's Reformulated Gasoline Oxygen Content Requirement for California Covered Areas” discusses this in greater depth. A copy of this document has been placed in the docket.
See “Analysis of the Production of California Phase 3 Reformulated Gasoline With and Without an Oxygen Waiver”, MathPro, Inc. (January 19, 2001). A copy of this document has been placed in the docket.
Title 13, CCR section 2269.
Title 13, CCR section 2270.