[Federal Register Volume 62, Number 147 (Thursday, July 31, 1997)] [Notices] [Pages 41047-41049] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 97-20220] ----------------------------------------------------------------------- ENVIRONMENTAL PROTECTION AGENCY [FRL-5867-1] Change in Minimum Oxygen Content Requirement for Reformulated Gasoline AGENCY: Environmental Protection Agency. ACTION: Notice. ----------------------------------------------------------------------- SUMMARY: EPA's reformulated gasoline (RFG) program contains various standards for RFG, including an oxygen content standard. The current per-gallon minimum standard for oxygen content in RFG is 1.5% by weight. Pursuant to the RFG regulations, EPA is increasing this standard to 1.6% by weight for several of the RFG covered areas, because those areas failed a series of compliance surveys for oxygen content in 1996. This notice announces the increased standard, and describes the covered areas and parties that are subject to the increased standard. The increased standard will help ensure that all covered areas receive the full benefit of the oxygen content requirement in the RFG program. FOR FURTHER INFORMATION CONTACT: Stuart Romanow, Fuels and Energy Division, Office of Mobile Sources, Environmental Protection Agency, Washington DC (6406J) 202-233-9296. SUPPLEMENTARY INFORMATION: I. Regulatory Entities Regulatory categories and entities potentially affected by this action include: ------------------------------------------------------------------------ Examples of affected Category entities ------------------------------------------------------------------------ Industry.................................. Refiners, importers, oxygenate blenders of reformulated gasoline. ------------------------------------------------------------------------ This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. This table lists the types of entities that EPA is now aware could be potentially affected by this action. Other types of entities not listed in the table could also be affected. To determine whether your entity is affected by this action, you should carefully examine the existing provisions at 40 CFR 80.41. 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. II. Background Section 211(k) of the Clean Air Act requires that EPA establish standards for reformulated gasoline ( RFG) to be used in specified ozone nonattainment areas (covered areas). The RFG requirements contain performance standards for reductions of emissions from motor vehicles of ozone forming volatile organic compounds and toxic pollutants. Standards for RFG are contained in 40 CFR 80.41. Refiners and other parties subject to the standards can choose to comply on either a per- gallon basis or to comply on average. The standards for compliance on average (``averaged standards'') are numerically more stringent than the per-gallon standards. The averaged standards for RFG that apply in 1996 are contained in Sec. 80.41(b). These averaged standards include a per-gallon minimum requirement of 1.5 weight percent oxygen. This per- gallon minimum requirement is in addition to the requirement for 2.1 weight percent oxygen, on average. The average standard for oxygen must be met by a refiner or oxygenate blender for all of the RFG it produced at a refinery or blending facility, or for RFG imported by an importer, but these parties are not required to meet this standard for the RFG supplied to each covered area separately. Any refiner, importer or oxygenate blender has the option of meeting the RFG standards on average or per gallon. If a party is subject to the averaged standards, then the requirement to conduct surveys, as specified in Sec. 80.68, must be satisfied. In these surveys, RFG samples are collected at retail gasoline stations within covered areas and analyzed to determine if the RFG supplied to each covered area meets certain survey pass/fail criteria specified in Sec. 80.68. An oxygen survey series failure occurs in a covered area if the annual average oxygen content for all of the samples is less than 2.00 weight percent. The purpose of the surveys and the tightened standards which result if a survey is failed is to ensure that averaging over a refiner's entire production as compared to separate averaging for each covered area does not lead to the reduced quality of RFG in any covered area. Since the implementation of the RFG program in 1995, these surveys have been conducted by the RFG Survey Association, a not-for-profit association of refiners, importers and blenders, using an EPA-approved survey design plan as required in the regulations. By letter dated January 16, 1997, the RFG Survey Association reported to EPA the results of its surveys for 1996, indicating that several survey areas failed to meet the annual average requirements of 2.00% oxygen by weight.\1\ After reviewing the data EPA determined that 8 areas did fail the survey series for oxygen content.\2\ --------------------------------------------------------------------------- \1\ Letter dated January 16, 1997 from Frank C. Lenski, President, RFG Survey Association, to Charles Freed, Director, Fuels and Energy Division, EPA. \2\ Letter dated January 31, 1997 from Charles Freed, EPA, to Frank Lenski, RFG Survey Association. Also see Memorandum dated April 29, 1997 from Stuart Romanow, Mechanical Engineer, Fuels and Energy Division to Charles Freed. --------------------------------------------------------------------------- The following covered areas failed the oxygen survey series: 1. Philadelphia-Wilmington-Trenton area [Sec. 80.70(e)] 2. Baltimore, MD area [Sec. 80.70(g)] [[Page 41048]] 3. Houston-Galveston-Brazoria, TX area [Sec. 80.70(h)] 4. The Atlantic City, NJ area comprised of [Sec. 80.70(j)(9):] Atlantic County Cape May County 5. The Dallas-Fort Worth, TX area comprised of [Sec. 80.70(j)(13):] Collin County Dallas County Denton County Tarrant County 6. Norfolk-Virginia Beach-Newport News (Hampton Roads), VA area comprised of [Sec. 80.70(j)(14):] Chesapeake Hampton James City County Newport News Norfolk Poquoson Portsmouth Suffolk Virginia Beach Williamsburg York County 7. Richmond, VA area comprised of [Sec. 80.70(j)(14):] Charles City County Chesterfield County Colonial Heights Hanover County Henrico County Hopewell Richmond 8. Washington D.C. area comprised of [Sec. 80.70(j)(2),(j)(6),(j)(14):] The District of Columbia Calvert County, MD Charles County, MD Frederick County, MD Montgomery County, MD Prince Georges County, MD Alexandria, VA Arlington County, VA Fairfax, VA Fairfax County, VA Falls Church, VA Loudon County, VA Manassas, VA Manassas Park, VA Prince William County, VA Stafford County, VA The boundaries of the covered areas are described in detail in Sec. 80.70. Under Sec. 80.41(o), when a covered area fails an oxygen content survey series, the minimum oxygen content requirement for that covered area is made more stringent by increasing the per gallon minimum oxygen content standard for affected RFG subject to the averaging standard by 0.1% . This more stringent requirement applies beginning the year following the year of the failure. Therefore, in this case, the minimum per gallon oxygen content requirement for the above covered areas is increased from 1.5% to 1.6% by weight. The criteria identifying the refineries, importers and oxygenate blenders subject to adjusted standards are stated in Sec. 80.41(q). In general, adjusted standards apply to RFG that is subject to an averaging standard (``averaged RFG'') that is produced at a refinery or oxygenate blending facility if any averaged RFG from that refinery or facility supplied a failed covered area during 1996, or supplies the covered area during any year that the more stringent standards are in effect. The regulation provides for an exception based on certain volume limits [see 40 CFR Sec. 80.41(q)(1)(iii).] Thus, if a refiner has elected for a refinery to be subject to the average oxygen standard, and if even a small portion of the RFG produced at the refinery is used in an area subject to an oxygen ratchet, the entire volume of RFG produced at the refinery is subject to the more stringent oxygen standard regardless of which area receives the RFG. This result is true regardless of whether the refinery's gasoline was supplied to the city in question during 1996 or during a year when the more stringent oxygen standard applies. Under Sec. 80.41(q)(2), the applicability of adjusted standards to imported averaged RFG is specified by the Petroleum Administration for Defense District (PADD) in which the covered area is located and the PADD where the gasoline is imported. The covered areas that had oxygen survey series failures are located in PADDs I and III. Therefore, all RFG imported at facilities located in PADDs I, II, III or IV is subject to the adjusted oxygen standard. The states included in each PADD are identified in Sec. 80.41(r). In addition, if any RFG imported into any other PADD supplies any of the covered areas with oxygen survey failures, the adjusted standard applies to that RFG, as well. Under Sec. 80.41(q)(3), any gasoline that is transported in a fungible manner by a pipeline, barge or vessel is considered to have supplied each covered area that is supplied with any gasoline by that pipeline, barge or vessel shipment unless the refiner or importer is able to establish that the gasoline it produced or imported was supplied only to a smaller number of covered areas. Consider, for example, gasoline transported on the Colonial Pipeline, which supplies RFG to several cities that failed the oxygen survey in 1996. If a refinery's RFG was transported by the Colonial Pipeline any time during 1996, or any time during any year when the more stringent oxygen standard applies, the more stringent oxygen standard applies to all RFG produced at the refinery regardless of the market. In addition, there is a presumption that, due to fungible mixing, each refinery's RFG that is transported by the Colonial Pipeline is in part supplied to each city supplied by the Colonial Pipeline. This presumption is rebuttable, but the rebuttal normally would require a refiner to have transported its RFG in a non-fungible manner. Thus, the more stringent standard applies to a refinery whose gasoline is transported on the Colonial Pipeline regardless of whether the refiner takes delivery of RFG in the specific cities that failed the oxygen survey. The adjusted oxygen standard applies to all averaged RFG produced by a refinery or imported by an importer identified in Sec. 80.41(q). In accordance with Sec. 80.41(p), the effective date of this change is October 29, 1997. Thus, under Sec. 80.41(p) the more stringent oxygen standard applies at all points of the distribution system beginning on October 29, 1997, including terminals supplying the affected covered areas and retail outlets in the covered areas. If a downstream facility fails to meet the new standard by October 29, 1997, the party who operates the facility would be in violation, as well as each upstream party who supplied that facility. An upstream party who failed to supply RFG meeting the new oxygen standard sufficiently in advance of October 29, 1997 will have caused the violation. As a result, EPA believes that refiners, importers and oxygenate blenders must begin producing or importing RFG meeting the new oxygen standard sufficiently in advance of October 29, 1997 to ensure all downstream parties have time to transition storage tanks to meet the new standard. However, EPA believes it may be difficult for all regulated parties to transition to the new oxygen standard by October 29, 1997. As a result, EPA intends to enforce the new oxygen standard in a manner that gives parties additional time. Refiners, importers, and oxygenate blenders will be required to meet the new oxygen standard beginning September 29, 1997. EPA believes this revised date for refinery-level compliance reflects a later date than would be necessary if all parties had to comply by October 29, 1997. In the case of parties other than refiners, importers, oxygenate blenders, retailers and wholesale purchaser-consumers, (e.g., pipelines and terminals supplying gasoline to affected covered areas) EPA will enforce the new oxygen standard [[Page 41049]] beginning November 28, 19973. In the case of retail outlets and wholesale purchaser-consumer facilities located in the affected covered areas EPA will enforce the new oxygen standard beginning December 29, 1997. EPA intends to initiate a rulemaking to revise Sec. 80.41(p) to reflect the need for additional downstream transition time when a standard is changed. --------------------------------------------------------------------------- \3\ This supersedes the downstream enforcement timing discussed in ``RFG/Anti-Dumping Questions and Answers, November 12, 1996''. --------------------------------------------------------------------------- Mary D. Nichols, Assistant Administrator for Air and Radiation. Sylvia K. Lowrance, Assistant Administrator for Enforcement and Compliance Assurance. [FR Doc. 97-20220 Filed 7-30-97; 8:45 am] BILLING CODE 6560-50-P