[Senate Report 107-131]
[From the U.S. Government Publishing Office]
Calendar No. 302
107th Congress Report
SENATE
1st Session 107-131
_______________________________________________________________________
FEDERAL REFORMULATED FUELS ACT
OF 2001
__________
R E P O R T
of the
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
to accompany
S. 950
together with
MINORITY VIEWS
December 20 (legislative day, December 18), 2001.--Ordered to be
printed.
__________
U.S. GOVERNMENT PRINTING OFFICE
99-010 WASHINGTON : 2002
______________________________________________________________________
For sale by the Superintendent of Documents,
U.S. Government Printing Office
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Mail: Stop SSOP, Washington, DC 20402-0001
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
one hundred seventh congress
JAMES M. JEFFORDS, Vermont Chairman BOB SMITH, New Hampshire
MAX BAUCUS, Montana JOHN W. WARNER, Virginia
HARRY REID, Nevada JAMES M. INHOFE, Oklahoma
BOB GRAHAM, Florida CHRISTOPHER S. BOND, Missouri
JOSEPH I. LIEBERMAN, Connecticut GEORGE V. VOINOVICH, Ohio
BARBARA BOXER, California MICHAEL D. CRAPO, Idaho
RON WYDEN, Oregon LINCOLN CHAFEE, Rhode Island
THOMAS R. CARPER, Delaware ARLEN SPECTER, Pennsylvania
HILLARY RODHAM CLINTON, New York BEN NIGHTHORSE CAMPBELL, Colorado
JON S. CORZINE, New Jersey
Ken Connolly, Staff Director
Dave Conover, Minority Staff Director
C O N T E N T S
__________
Page
General statement................................................ 1
Background....................................................... 2
Federal Reformulated Gasoline Program........................ 2
Oxygenates................................................... 4
Methyl Tertiary Butyl Ether and Water Quality................ 5
Ethanol...................................................... 6
Chronology....................................................... 8
Objectives of the Legislation.................................... 8
Section-by-Section Analysis:
Section. 1. Short title...................................... 9
Sec. 2. Leaking Underground Storage Tanks.................... 9
Sec. 3. Authority for Water Quality Protection from Fuels.... 12
Sec. 4. Waiver of Oxygen Content Requirement for Reformulated
Gasoline................................................... 12
Sec. 5. Public Health and Environmental Impacts of Fuels and
Fuel Additives............................................. 14
Sec. 6. Analysis of Motor Vehicle Fuel Changes............... 14
Sec. 7. Elimination of Ethanol Waiver........................ 16
Sec. 8. Additional Opt-In Areas Under Reformulated Gasoline
Program.................................................... 16
Sec. 9. MTBE Merchant Producer Conversion Assistance......... 17
Appendix I: MTBE-Related Legislation in Congress and the States.. 17
Appendix II: List of Reformulated Gasoline Program Areas......... 21
Appendix III: Letter from California Governor Gray Davis......... 26
Appendix IV: Letter from EPA Administrator Christine Todd Whitman 28
Appendix V: Letter from New Hampshire Governor Jeanne Shaheen.... 38
Appendix VI: Summary of State Drinking Water and Groundwater
Standards for MTBE............................................. 43
Appendix VII: Tests on Oxygenated Fuels Containing Oxygenates
Other Than MTBE................................................ 44
Hearings......................................................... 51
Legislative history.............................................. 52
Rollcall votes................................................... 52
Regulatory impact statement...................................... 52
Mandates assessment.............................................. 53
Cost of legislation.............................................. 54
Minority Views of Senator Inhofe................................. 57
Minority Views of Senator Voinovich.............................. 67
Changes in existing law.......................................... 71
Calendar No. 302
107th Congress Report
SENATE
1st Session 107-131
======================================================================
FEDERAL REFORMULATED FUELS ACT OF 2001
_______
December 20 (legislative day, December 18), 2001.--Ordered to be
printed
Mr. Jeffords, from the Committee on Environment and Public Works,
submitted the following
R E P O R T
[To accompany S. 950]
together with
minority views
The Committee on Environment and Public Works, to which was
referred the bill (S. 950) to amend the Clean Air Act to
address problems concerning methyl tertiary butyl ether, and
for other purposes, having considered the same, reports
favorably thereon with amendments and recommends that the bill,
as amended, do pass.
General Statement
The Reformulated Gasoline (RFG) program of the Clean Air
Act (CAA), added to the law in 1990, required the use of
oxygen-laden additives, called oxygenates, in RFG in
nonattainment areas. To comply with this requirement, refiners
have relied heavily on methyl tertiary butyl ether (MTBE). MTBE
has also been used as an additive in conventional gasoline at
lower concentrations since 1979.
MTBE was detected in groundwater in a number of locations
as early as the mid-1980's. This contamination was believed to
be a minor, manageable problem until 1995. That year, MTBE
contamination in Santa Monica, California led to the closure of
wells producing more than half of that city's daily water
supply. Since that time, MTBE has been the focus of numerous
State and Federal efforts to ban its use. Appendix I provides a
list of Federal and State legislative activities regarding
MTBE. Due to the fact that MTBE is used to satisfy a particular
requirement in the CAA, eliminating its use in gasoline will
lead to related consequences for the environment, human health,
the supply and cost of fuel, and the future of the industries
involved in the manufacture and supply of oxygenates. Elements
of this legislation relate to each of these consequences.
Background
The Federal Reformulated Gasoline Program
The Clean Air Act Amendments of 1990 (CAAA) established the
RFG program as a measure to reduce the growing impact of mobile
source emissions on air quality in urban areas. The program
requires gasoline in the nine nonattainment areas\1\ with the
highest ozone concentrations and populations over 250,000, to
meet criteria that are stricter than standards for conventional
gasoline. In June 1996, one additional area\2\ was required to
use RFG after being redesignated from serious to severe.
Authority was given for other nonattainment areas to opt-in to
the RFG program at the discretion of the Governor of a
State.\3\
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\1\ 1Los Angeles, California; San Diego, California; Hartford,
Connecticut; New York, New York; Philadelphia, Pennsylvania; Chicago,
Illinois; Baltimore, Maryland; Houston, Texas; and Milwaukee,
Wisconsin. (See Appendix II).
\2\ Sacramento, California.
\3\ States that opted-in areas to the RFG program include Arizona,
Connecticut (entire State), Delaware (entire State), District of
Columbia, Kentucky, Maine, Maryland, Massachusetts (entire State),
Missouri, New Hampshire, New Jersey (entire State), New York,
Pennsylvania, Rhode Island (entire State), Texas, Virginia. The
Governors of Arizona, Maine, New York and Pennsylvania subsequently
opted-out certain opt-in areas. See Appendix II for a complete list of
RFG areas.
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Areas that opted in to the RFG program prior to January 1,
2000, are required to use RFG until January 1, 2003. The extent
of the opt-in authority recently has been challenged and
explicitly limited by the DC Circuit Court of Appeals.\4\ This
legislation expands State authority to opt-in to the RFG
program beyond the limits the Court found in existing law.
Areas now using RFG represent approximately 30 percent of U.S.
gasoline consumption.
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\4\ American Petroleum Institute v. Environmental Protection
Agency, 198 F. 3d 275 (DC Cir. 2000). The Court agreed with API, saying
that Congress did not grant EPA the authority to interpret the opt-in
provisions in Section 211(k)(6) of the Clean Air Act so as to allow
areas that are not classified or are in attainment to adopt the Federal
RFG program via application by a Governor. Only areas that are
designated nonattainment for one of the specified classes of
nonattainment (marginal, moderate, serious, extreme, and severe) are
presently allowed to implement an RFG program.
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The program set a variety of content and performance
requirements, including a minimum content requirement for
oxygen and maximum allowable benzene and heavy metal quantities
in RFG. Through regulatory authority provided by the Act, EPA
chose, in 1993, to adopt performance standards for toxic air
pollutants and volatile organic compounds (VOCs) rather than
the prescriptive fuels formula allowed under Section
211(k)(3)(A). These performance standards required a 15 percent
reduction in toxic air pollutants from baseline vehicles\5\
starting in 1995 and maintained through 1999, and required a 22
percent reduction from baseline vehicles beginning in 2000, as
part of Phase II. Phase II also requires reductions in NOx and
VOCs.
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\5\ Baseline vehicles and fuel technology assumptions in EPA's
complex model date from 1990, despite significant advances in vehicle
and fuel systems technology.
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Motor vehicle emissions of carbon monoxide, volatile
organic compounds, and, most notably, toxics have been reduced
drastically in RFG areas. RFG use has allowed areas to exceed
the statutory requirements to reduce toxic emissions, including
emissions of benzene. This over-compliance is largely due to
the dilution of the blendstock gasoline when the relatively
toxic-free oxygenates, ethanol and MTBE, are added. (Although
substantially toxic-free, MTBE is listed in Section 112 of the
Clean Air Act Amendments of 1990 (CAAA) as a hazardous air
pollutant due to its adverse effects on human health when
inhaled.) Recent data suggest that refiners have achieved a 27
percent or higher reduction in toxic air pollutants in RFG
areas (where MTBE was used) from the 1990 baseline. A 1998
study by the Northeast States for Coordinated Air Use
Management (NESCAUM) concluded that Phase II RFG would reduce
the public cancer risk by 20 percent.
On March 29, 2001, EPA released a final strategy\6\ to
further reduce air toxics emissions from motor fuels as an
effort to comply with its responsibility under Section 202(l)
of the Act to establish additional standards for fuels or
vehicles to control hazardous air pollutant emissions. The
strategy identified 21 mobile source air toxics (MSATs). It is
intended to ensure that refiners continue over-compliance with
RFG and anti-dumping requirements by maintaining their average
1998-2000 toxic emissions performance levels for RFG and
conventional gasoline. The MSAT rule commits EPA to revisiting
additional fuel and vehicle MSATs controls in a 2004
rulemaking. The MSAT rule is intended to ensure that toxics
overcompliance is maintained regardless of whether any
oxygenates are used. The deadline in the CAAA for issuance of
these regulations was June 1995.
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\6\ Federal Register Vol. 66, No. 61 pages 17229-17273, March 29,
2001
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The final MSATs rule has been challenged by a number of
parties. On May 24, 2001, the States of New York and
Connecticut and the Sierra Club, Earth Justice, the Natural
Resources Defense Council and the U.S. Public Interest Research
Group filed suit against EPA, charging that the MSATs rule
fails to achieve the pollution reductions mandated by the Clean
Air Act. Other parties, including Amerada Hess, Hovensa LLC,
and International Truck and Engine Corporation have filed
petitions in the United States Court of Appeals challenging
EPA's final rule on the grounds that it is inconsistent with
section 202(l) of the Act, that EPA acted arbitrarily and
capriciously in promulgating the rule and did not adequately
follow required notice and comment rulemaking procedures.
There is no specific deadline in the Act for EPA to further
reduce toxic air pollutants from mobile sources. The Agency
retains general authority to control emissions from motor
vehicles of any air pollutant that causes or contributes to air
pollution which may reasonably be anticipated to endanger
public health or welfare. In a discussion focused on
maintaining air toxics reductions from the RFG program, EPA's
Blue Ribbon Panel on Oxygenates in Gasoline specifically
recommended that EPA should explore and implement mechanisms to
achieve equivalent or improved public results that focus on
reducing those compounds that pose the greatest risk.\7\
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\7\ U.S. EPA. ``Achieving Clean Air and Clean Water: The Report of
the Blue Ribbon Panel on Oxygenates in Gasoline'' (EPA420-R 99 021)
Washington, DC: GPO, 1999.
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The Panel recognized that the current mass-based
performance requirements in the RFG program may not adequately
account for and consider that the different exhaust components
pose differential levels of risk to public health due in large
part to their variable potency.
While the RFG program is considered a general success,
experts acknowledge that there is some uncertainty in
estimating the actual quantity of mobile source emissions. It
is difficult to verify the emission reductions associated with
the RFG program as distinct from other mobile source emission
reduction programs. In May 2000, the National Research Council
recommended that EPA make a number of improvements to the
Mobile Source Emissions Factor model (MOBILE), including
estimation of off-road vehicle emissions and incorporation of
both mobile source toxic emissions and high-emitting
vehicles.\8\ More regular revisions and updating of this model
is important for air quality planners. S. 950 requires the EPA
to expedite resolution of the current complex model which
generates important fuels-related emissions information and
provides input for the MOBILE model so that vehicle
manufacturers, fuel makers, air quality planners, and Congress
have accurate information.
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\8\ National Research Council. ``Modeling Mobile-Source
Emissions.'' Washington, DC: National Academy Press, May 2000.
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Oxygenates
The CAAA required that 2 percent by weight of RFG be
oxygen. This requirement was not included in the Senate
Environment and Public Works Committee's reported version of S.
1630, the Clean Air Act Amendments of 1989. It was added on the
Senate floor after vigorous debate and was the only successful
floor amendment. Proponents of that requirement had expected
ethanol to be the oxygenate of choice for fuel providers. It
was not regarded as a mandate to use ethanol, however, even by
its sponsors. During floor debate on the measure, Senator
Daschle, a co-sponsor of the amendment, stated that the oxygen
standard was fuel neutral. (Congressional Record, March 29,
1989, page S3513) Most refiners, blenders, and importers opted
to use a cheaper and more easily used oxygenate, MTBE, in many
nonattainment areas. MTBE currently is used in approximately 80
percent of RFG, while ethanol is used in slightly less than 20
percent of that fuel.
In late 1993, EPA issued final regulations implementing the
RFG program. In 1994, EPA issued another set of final rules
that revised the RFG program. The revisions included a
requirement that renewable oxygenates be used to meet 30
percent of the 2 percent oxygen content requirement in RFG. The
1994 rules were challenged by the American Petroleum Institute
and the National Petroleum Refiners Association. The DC Circuit
Court of Appeals decided that EPA lacked the authority to
impose the renewable requirement and vacated the 1994
rulemaking.\9\
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\9\ American Petroleum Institute v. Environmental Protection
Agency, 52 F. 3d 1113 (DC Cir. 1995).
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The principle benefits of oxygenates are the reduction of
carbon monoxide emissions through more complete fuel combustion
and the reduction of toxic air pollution. The oxygen content
requirement formally took effect in 1995 and is currently
satisfied by refiner use of either MTBE or ethanol. Today,
approximately four billion gallons of MTBE and 380 million
gallons of ethanol (EtOH) are consumed to meet this
requirement. Most of the ethanol is produced and consumed in
the Midwest region of the country, while MTBE use is
concentrated in the Northeastern States, Texas, and California.
Approximately 3.5 percent of ethanol and 30 percent of MTBE is
imported. In addition to use in the RFG program, ethanol and
MTBE are used to help reduce emissions in carbon monoxide (CO)
nonattainment areas as part of the wintertime oxygenated fuels
program, which began in 1992. Originally, 40 CO nonattainment
areas were required to participate in this winter fuel program.
Today 15 areas in ten States participate. Approximately 46
million gallons of MTBE and 240 million gallons of ethanol are
used each year to satisfy the oxygenate requirement of this
program.
Section 211(k)(2)(B) of the CAA provides EPA the authority
to waive the oxygen content requirement for RFG, in whole or in
part, for an ozone nonattainment area upon the determination by
the Administrator that compliance with the requirement would
prevent or interfere with the attainment of a National Ambient
Air Quality Standard (NAAQS). On April 12, 1999, California
submitted to EPA a petition requesting such a waiver. The
waiver request letter from Governor Gray Davis is attached in
Appendix III. In June 2001, EPA denied California's request. A
copy of the denial letter is attached in Appendix IV. In
providing the States with access to this waiver authority on
the condition of meeting a relatively stringent test, and under
EPA's authority under Section 211(c)(4), Congress sought to
balance the desire for uniformity in our nation's fuel supply
with the obligation to empower States to adopt measures
necessary to meet national air quality standards.
The State of New Hampshire is seeking to opt out of the
entire RFG program. The State opted in to the program its four
ozone nonattainment areas\10\ under Section 211(k)(2)(B) in
1991. In May 2001, the State filed with EPA a petition to opt
out of the Federal RFG program. The letter and the petition are
attached in Appendix V.
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\10\ Rockingham, Hillsborough, Merrimack, and Strafford counties.
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Methyl Tertiary Butyl Ether and Water Quality
MTBE has been used nationwide at low levels in gasoline
since 1979 to replace lead as an octane booster, or as an anti-
knocking agent. It is a fuel additive containing oxygen
manufactured from natural gas or petroleum sources. The use of
MTBE greatly expanded due to the oxygen content requirement of
the RFG program described above. Demand driven by the RFG
program caused MTBE's share of the total national gasoline
supply to grow from 1 percent in 1990 to the current 3 percent
level. Most of that increase has been concentrated in the
nonattainment areas of the Northeastern States, Texas, and
California.
The success of the RFG program has been overshadowed in
recent years by the discovery of MTBE in drinking water
supplies. When leaked or spilled into the environment, MTBE can
cause serious drinking water quality problems. MTBE moves
quickly through ground and water without significant
biodegredation or natural attenuation. Once in underground
water supplies, MTBE can be detected by smell and taste at
extremely low concentrations. Small amounts of MTBE can render
water supplies undrinkable, but the precise human health
effects of MTBE consumption at very low levels are unknown. In
1997, the EPA issued a drinking water advisory that recommends
an aesthetic limit of 20 to 40 parts per billion (ppb) and a
health limit of 70 ppb. Many States have also established
drinking water standards for MTBE, some of which are more
stringent than EPA's advisory. A list of State standards is
attached in Appendix VI.
Currently, there are no comprehensive nationwide data on
the extent of MTBE contamination. A few targeted studies have
been conducted. In 2000, the U.S. Geological Survey completed a
study that estimates up to 20 percent of the nation's drinking
water supplies are at risk due to their proximity to
underground fuel storage tanks. In 1998, Maine conducted a
State-wide sampling that found 16 percent of tested wells
contained some level of MTBE.
The major sources of MTBE contamination are leaking
underground storage tanks. Many underground storage tanks have
been or are currently being upgraded or replaced per a recent
deadline under a long-standing EPA regulation. Questions
remain, however, regarding the ability of refiners,
distributors, and manufacturers of MTBE to ensure that fuel
storage systems are completely sealed from the environment.
Other sources of MTBE contamination are automobile and tanker
truck accidents, leaks from above ground tanks, leaks from
pipelines, two-stroke water craft engine releases, storm water
runoff, fueling over-fills, and residential releases.
The EPA Blue Ribbon Panel recommended a suite of Federal,
State, and local actions that could expedite remediation of
MTBE contamination and protect water supplies from additional
and future contamination. Cleanup is possible, but difficult
and expensive. Contaminated water may be filtered, aerated, or
bioremediated. MTBE may be pumped and treated or remediated in
situ. All options require installation and use of special
equipment as well as on-going operation and maintenance. States
and communities are seeking financial assistance for the
cleanup of MTBE. Existing Federal and State programs are not
fully funded.
Many States have enacted or are considering legislation to
address MTBE contamination. Appendix I provides a complete list
of all such State legislative activities. Legislation has been
enacted to ban MTBE in several States including Arizona,
California, Colorado, Connecticut, Illinois, Kansas, Michigan,
Minnesota, Nebraska, New Jersey, New York, South Dakota, and
Washington. EPA has started action to phase down or eliminate
MTBE under the Toxic Substances Control Act, but this action
could take years to complete. Both State and Federal efforts to
ban MTBE continue to face questions regarding the limits of
existing authority to ban a substance that is not yet proven to
be hazardous to human health at anticipated levels of exposure.
The CAA allows neither EPA nor the States to prohibit a
fuel or fuel additive unless ``. . . any emission product of
such fuel or fuel additive causes, or contributes, to air
pollution which may reasonably be anticipated to endanger the
public health or welfare.'' (Section 211(c)(1)) MTBE, as part
of the RFG program, has provided air quality benefits, but its
role in contaminating water is the main problem that argues in
favor of a ban of MTBE use in gasoline.
Ethanol
Ethanol is used as an oxygenate in the RFG program and as
an octane enhancer in conventional gasoline. Some of the
physical and chemical properties of ethanol affect how it is
used as a gasoline additive. The volatility of gasoline
increases when blended with ethanol. Consequently, gasoline
blendstocks that are prepared for blending with ethanol must
undergo additional refinement to reduce volatility and comply
with evaporative performance standards. Manufacturing such sub-
RVP blendstock adds to the refiners' costs of production.
Ethanol also is soluble in water. Since water is suspended
in gasoline and is present in pipelines and storage tanks along
the gasoline distribution system, ethanol blended with gasoline
can lead to pools of ethanol and water separating from the
gasoline. As a result, ethanol is blended at terminals and
refinery racks as close as possible to the point of retail sale
where it is delivered by truck. Often this involves filling a
truck with gasoline and ethanol from separate tanks. The two
fuels are then splash-blended by the motion of the truck as the
truck drives to its destination. These factors create a need
for additional infrastructure to distribute and blend ethanol
into gasoline.
Ethanol consumption, as part of the nation's total motor
vehicle fuel use, is expected to increase as MTBE is banned by
States and as a result of enactment of this legislation. This
increase will, in turn, affect the nation's fuel supply and
distribution system, air quality, and water quality. The
Administrator and the States will have to monitor carefully
and, as appropriate, deal with these consequences using both
existing authorities and those established in this legislation
to prevent economic and environmental harm.
Ethanol can contribute to both increases and decreases of
emissions of air pollutants. The increased volatility of
ethanol blends of gasoline can lead to greater emissions of
volatile organic compounds that contribute to smog formation.
It can also play a role in ozone formation in warm-weather
conditions. On the other hand, ethanol is effective at reducing
carbon monoxide emissions. Carbon monoxide is a pollutant more
common in cold-weather conditions and regulated because of its
adverse health effects.
Adding ethanol to gasoline displaces benzene and other
aromatics and can result in a reduction in emissions of those
toxic compounds. Exhaust emissions of acetaldehyde, however,
can increase by as much as 100 percent when ethanol is blended
at 5 percent volume of gasoline. Ethanol blends typically
contain 10 percent ethanol as a result of tax incentives.
Acetaldehyde is classified as a probable human carcinogen. It
can undergo photochemical reactions in the atmosphere to form
peroxyacetyl nitrate (PAN). PAN is a respiratory irritant and
has been shown to be mutagenic in cellular research. Further
study is needed to confirm or refute that emissions of these
substances pose significant health risks.
Ethanol biodegrades more easily than other components of
gasoline. Some laboratory data and modeling have indicated that
this property can result in extending the plume of benzene,
toluene, and xylene (BTEX) in leaks or spills of gasoline
containing ethanol. The BTEX plume will likely not begin to
biodegrade until the ethanol is depleted, if the ethanol
continues to consume all the oxygen available for
biodegradation until it is completely broken down. This allows
more time for the BTEX plume to migrate in either soil or
groundwater.
CHRONOLOGY
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November 1990............................... President George Bush signs S. 1630, the Clean Air Act Amendments
of 1990. Public Law 101 549 added the RFG program to the CAA and
includes the 2 percent oxygen requirement.
December 1993............................... EPA promulgates final regulations to implement the RFG program.
June 1994................................... EPA promulgates regulations to require 30 percent of the oxygen
requirement in the RFG program be renewable oxygenates. The rule
is challenged in the DC Circuit Court of Appeals and vacated by
the Court in April 1995.
December 1994............................... RFG is first sold.
May 1995.................................... United States Geological Survey reports detections of MTBE in
groundwater in Denver, Colorado.
February 1996............................... MTBE is detected in water supplies in Santa Monica, California.
Seven of 11 municipal drinking water wells are closed,
eliminating more than half of the city's daily water production.
Contamination levels range from 610 ppb to 230,000 ppb.
January 1997................................ Monitoring program of water reservoirs begins in Southern
California and leads to detections of MTBE concentrations as high
as 29 ppb during the summer boating months.
December 1997............................... U.S. EPA publishes a Drinking Water Advisory for MTBE that
recommends an aesthetic limit of 20 to 40 ppb and a health limit
of 70 ppb.
Spring 1998................................. Maine experiences three incidents of small gasoline spills that
contaminate water supplies. In Standish, an automobile accident
is linked to contamination of 24 private wells (10 contained MTBE
levels in excess of 100 ppb). In Whitefield, a gasoline spill is
the likely source of contamination of a well supplying water to a
public elementary school with MTBE levels of 800 ppb. In Windham,
surface spills and fuel over-fills at a convenience store, with
up-dated double-walled tanks, contaminate nearby wells.
October 1998................................ Maine's request to opt-out of the RFG program is granted in
Federal Register notice.
March 1999.................................. California Governor Gray Davis issues Executive Order D-5-99
calling for a phase-out of MTBE use in California by December
2002.
April 1999.................................. California Governor Gray Davis sends letter to EPA requesting a
waiver from the oxygen mandate by making the claim that
compliance with the oxygenated fuel mandate contributes to air
pollution and hampers the State's efforts to attain the NAAQS for
ozone.
September 1999.............................. EPA's Blue Ribbon Panel on Oxygenates in Gasoline issues its final
report. Among its recommendations are the elimination of the 2
percent oxygen mandate, maintenance of toxic emission reductions
achieved by the oxygen mandate, expansion available resources for
treatment of water contaminated by MTBE, and a substantial
reduction in the use of MTBE.
March 2000.................................. Clinton Administration issues principles for elimination or phase
down of MTBE use in fuels nationwide and increased use of
renewable fuels. EPA initiates efforts to phase down or eliminate
MTBE use under the Toxic Substances Control Act.
May 2000.................................... Article is published in Environmental Science and Technology--the
U.S. Geological Survey determined that 9000 wells in 31 surveyed
States are at risk of gasoline contamination due to proximity to
leaking underground storage tanks. Sampling was not done to
determine actual MTBE contamination.
May 2000.................................... New York Governor George Pataki signs legislation banning the use
of MTBE in gasoline in New York within 3 years.
September 2000.............................. The Senate Environment and Public Works Committee reports S. 2962,
the Federal Reformulated Fuels Act of 2000. Report 106-426.
March 2001.................................. U.S. EPA promulgates final regulation on Control of Emissions of
Hazardous Air Pollutants from Mobile Sources, referred to as the
MSAT rule.
May 2001.................................... New Hampshire submits to U.S. EPA a request to opt-out of the RFG
program.
June 2001................................... EPA issues denial of the request by California Governor Davis for
a waiver of the oxygen mandate made in April 1999.
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Objectives of the Legislation
The Federal Reformulated Fuels Act, S. 950, is intended to
address existing and potential MTBE contamination in the most
cost-effective manner.
In order to accomplish this objective, S.950 achieves the
following items:
Authorizes $200 million from the Leaking
Underground Storage Tank (LUST) Trust Fund for State grants to
clean up MTBE and other ether gasoline additives. Also
authorizes an additional $200 million from the LUST Trust Fund
for State and Federal activities to prevent releases and
increase compliance under the UST program.
Requires EPA to ban the use of MTBE within 4
years of enactment.
Expands existing EPA authority to allow for
regulation of fuel additives for protection of water quality
(current law only allows for regulation to protect air
quality).
Allows governors to waive oxygen mandate within
90 days of enactment.
Establishes anti-backsliding provisions by
setting toxics emissions performance standards on a regional
basis.
Instructs EPA to require fuel producers to
conduct tests on a regular basis to determine the health and
environmental effects of new fuels and fuel additives.
Requires EPA to study the health and
environmental impacts of using other ethers as a substitute for
MTBE.
Requires EPA to release a draft fuel study within
4 years of enactment. The study must contain an analysis of the
changes in emissions of air pollutants and changes in overall
air quality due to the use of fuels and fuel additives
resulting from this bill. The final study must be published not
later than 5 years from enactment.
Eliminates the existing waiver of the Reid Vapor
Pressure limitation for ethanol fuel blends.
Allows Governors to opt-in both classified and
non-classified areas to the RFG program.
Authorizes a total of $750 million over three
fiscal years for grants to merchant MTBE producers for
assisting in the conversion to production of other fuel
additives.
Section-By-Section Analysis
Section 1. Short Title
The bill is entitled ``The Federal Reformulated Fuels
Act.''
Section 2. Leaking Underground Storage Tanks
Summary
The bill authorizes appropriations not to exceed $200
million from the Leaking Underground Storage Tank (LUST) Trust
Fund to be used for cleanup and treatment of MTBE. The bill
authorizes an additional $200 million over 6 years from the
LUST Trust Fund for EPA and States to conduct inspections,
issue orders, and bring actions under Subtitle I of the Solid
Waste Disposal Act.
Discussion
In 1984, Congress enacted, as Subtitle I of the Solid Waste
Disposal Act, a comprehensive program to address the problem of
leaking underground storage tanks. Among other things, the
program required EPA to develop leak detection and prevention
standards for underground storage tanks (USTs). It authorized
the Agency to compel tank owners and operators either to take
corrective action to clean up leaking tanks and comply with
standards for USTs or to close the tanks. States have largely
taken the lead in implementing and enforcing the program
requirements, including corrective action requirements.
States receive Federal funds from the LUST Trust Fund.
Revenue for this Fund comes from a one-tenth of one cent tax on
all petroleum products. This tax generates approximately $170
million per year. The interest on the principal in the fund
generates approximately $70 million annually (roughly the
amount of annual appropriations from the LUST Trust Fund).
Amounts are appropriated each year from the Trust Fund for
the States and EPA to implement and enforce the UST corrective
action requirements; to conduct cleanups in certain limited
situations where there is no financially viable responsible
party or where a responsible party fails to undertake the
appropriate corrective action; to take corrective action in
cases of emergency; and to bring cost recovery actions against
parties to seek reimbursement of costs expended from the Fund
to clean up sites. The balance of the Trust Fund is
approximately $1.3 billion. The annual appropriation from the
Trust Fund for fiscal year 2001 was approximately $72 million.
Congress has appropriated approximately $10 million per year
from general revenues for State implementation of leak
prevention and detection programs.
In addition to the Federal LUST Trust Fund, many States
have also established funds, capitalized through State gas
taxes, fees, and other mechanisms, to pay for cleanups and to
provide assistance to tank owners in complying with other
requirements. States spend approximately $1 billion per year
from their trust funds. In recent years, however, the claims
against those funds have risen dramatically.
More than a million leaking USTs have been closed under
this program, EPA estimates that over 740,000 active USTs
contain petroleum products. Some of these tanks have leaks,
causing potential harm to human health and the environment. A
number of recent, high profile contamination cases have
highlighted this problem. MTBE has been detected at thousands
of leaking UST sites. In some cases, drinking water wells have
been closed due to these releases of MTBE. According to EPA,
States have reported more than 400,000 confirmed releases from
USTs. Cleanups have been initiated for approximately 357,000
releases and almost 242,000 cleanups have been completed. In
spite of this progress, many thousands of cleanups remain to be
completed. EPA, States, and the private sector have suggested
that lack of resources, both for cleanup and for inspections
and enforcement, have limited efforts to fully address MTBE
contamination and leaking USTs. Section 2 of this bill
addresses these concerns.
Section 2(a) reconfirms the authority of the Administrator
and the States to use funds from the LUST Trust Fund for the
cleanup of sites contaminated by MTBE from leaking USTs. In
addition, Section 2(a) authorizes the Administrator and the
States to conduct such cleanup activities using specifically
designated funds made available under new Section 9011(a) from
the LUST Trust Fund. In order to undertake a corrective action
under this subsection, the Administrator or a State must still
comply with the requirements of Section 9003(h)(2) of the Solid
Waste Disposal Act. States are to exercise this authority in
accordance with their cooperative agreements.
Relatively low levels of MTBE can be detected in
groundwater. The detection of MTBE, by taste and smell, can
make the water unpalatable, but not necessarily harmful. This
section amends Section 9003 of the Solid Waste Disposal Act to
clarify that the Administrator and the States may undertake
corrective actions whenever the presence of MTBE in groundwater
presents a threat to public welfare, even in situations where
the level of MTBE is not so high as to present a threat to
human health.
Section 2(b) amends Subtitle I of the Solid Waste Disposal
Act by creating a new Section 9010 giving States greater
flexibility in their use of LUST funds. New Section 9010
authorizes EPA and the States to use funds appropriated from
the LUST Trust Fund to conduct inspections, issue orders, or
bring actions under Subtitle I. Funding authorized under this
section is for both formal enforcement actions, such as
judicial actions and administrative orders, and related
measures to secure compliance, such as notices of violation or
warnings. This increased funding for inspections and
enforcement related activities will enable States and EPA to
secure greater compliance with UST standards. Increased
compliance will avoid future releases and resulting cleanup
costs. Funds authorized under this provision may be used for
cost recovery.
This section does not change current law on State authority
under authorized programs or Federal authority to enforce the
requirements of Subtitle I. Nor does this provision affect
EPA's authority to use other funds to enforce the UST program.
EPA receives funding from sources other than the LUST Trust
Fund to undertake inspection and enforcement related activities
for leak detection and other preventive requirements. Any LUST
Trust Fund appropriations used for such enforcement activities
by EPA are expected to supplement funds that the Agency has
been receiving, and will continue to receive, from sources
other than the LUST Trust Fund.
In addition to authorizing funding for States and EPA for
federally authorized programs, this section authorizes States
to use funds to undertake inspection and enforcement related
actions for State tank leak detection, prevention, and other
requirements through State programs with requirements that are
similar or identical to Subtitle I. State agencies currently
receive funding from EPA from sources other than the LUST Trust
Fund to undertake such activities for leak detection and other
preventive requirements. It is expected that States will
continue to receive funding from EPA from these other sources,
as well as from the LUST Trust Fund, for these activities. Any
LUST Trust Fund appropriations used for enforcement related
activities by States should supplement funds that the States
have been receiving, and will continue to receive, through
grants authorized under Section 2007(f).
Section 2(b) also creates a new Section 9011 to increase
the levels of authorized funding for measures related to
corrective actions and enforcement. This section authorizes
appropriations for two major and equally important activities--
funding an immediate need to address MTBE, which is currently
coming from leaking underground tanks and is creating problems
in numerous drinking water wells, and facilitating inspection
and enforcement activities to avoid similar problems being
created in the future. Section 9011(1) authorizes a one-time
appropriation of $200 million for corrective actions with
respect to MTBE. The bill authorizes substantial funding to
clean up MTBE contamination in recognition of the fact that
this problem has arisen, in part, as a result of increased use
of MTBE by refiners in an effort to meet Federal oxygenate
requirements. Section 9011(2) authorizes an additional $200
million over the period between fiscal years 2002 through 2007
to conduct inspections or issue orders or bring actions under
Subtitle I. There is broad consensus that more resources are
needed to conduct inspections to ensure that underground tanks
comply with applicable regulations and to ensure early
detection of leaks and other problems. EPA has estimated that
it would cost approximately $93 million over what is currently
appropriated for the first year, and $70 million each year
thereafter, to inspect facilities on an annual basis. A
biannual inspection schedule would cost approximately $63
million over what is currently appropriated for the first 2
years combined, and $20 million additional annually thereafter.
Section 3. Authority for Water Quality Protection From Fuels
Summary
This section provides the Administrator with new authority
to address water pollution caused by the use of motor fuel or
fuel additives. It also eliminates the use of MTBE in gasoline
within 4 years.
Discussion
Section 211(c) of the CAA allows EPA to regulate fuel and
fuel additives that cause or contribute to air pollution.
Section 3 of this bill expands current law to allow the
Administrator to control fuel and fuel additives that are shown
to cause or contribute to water pollution which may reasonably
be anticipated to endanger the public health or welfare.
Section 3 creates a ban on the use of MTBE that shall be
effective not later than 4 years after enactment of S. 950.
While no regulatory action is required to effect the
elimination of MTBE, EPA is required to issue regulations to
implement and enforce this ban. A savings clause in Section 3
makes clear that nothing in S. 950 can be read to limit
existing authority of States to prohibit or control the use of
MTBE. Additionally, the bill does not grant new State authority
outside of that available to States acting in accordance with
Section 209 of the CAA.
Section 4. Waiver of Oxygen Content Requirement for Reformulated
Gasoline
Summary
Section 211(k)(2) of current law requires RFG to contain 2
percent oxygen by weight. That section also places other
formula and performance requirements on gasoline to be sold as
RFG. Section 4 of S. 950 allows Governors to waive the oxygen
content requirement and establishes additional performance
standards for RFG sold in States that exercise the waiver.
Discussion
The bill allows Governors 90 days from enactment to waive
the oxygen requirements in Section 211(k)(2) for RFG sold or
dispensed within the State. The Governor must notify the
Administrator of the waiver. States that opt-in to the program,
including opt-in areas, are allowed to waive the oxygen
requirement as part of the opt-in application. States with
areas that are required to use RFG as a result of a
reclassification are permitted 90 days from reclassification to
waive the oxygen requirement. This relatively brief period of
90 days for a decision by a Governor is included to provide
refiners with ample opportunity to comply with changes in the
RFG requirements described below before the sale of a revised
formula of RFG is scheduled to start.
Gasoline sold in areas that have waived the oxygen mandate
will be required to meet all other RFG requirements. Under
section 4, the EPA must publish in the Federal Register the
actual toxic reductions achieved by the RFG program (based on
EPA RFG survey data for 1999 and 2000) in each Petroleum
Administration Defense District (PADD) within 30 days of
enactment. Within 270 days, EPA must promulgate regulations
that set new regional toxics performance standards for States
that waive the oxygen mandate. If EPA does not act within 270
days of enactment, the reductions published in the Federal
Register become the new standards for States that waive the
mandate. The oxygenate waiver takes effect when the new toxics
standard is in place.
The new performance standards will be applied on an annual
average importer or refinery-by-refinery basis to all RFG sold
in a State for which the Governor waives the oxygen mandate.
Credits for exceeding the performance standard will be provided
by the Administrator in the same manner as credits provided
under Section 211(k)(3). The Administrator must ensure that the
granting or transfer of credits for use in meeting toxics
performance standards will not result in higher average
aggregate emissions of toxic air pollutants for the
nonattainment area in which such credits are used than would
occur in the absence of using such credits. The performance
standards will not apply in a State, such as California, which
has authority to regulate motor vehicles under Section 209(b).
The provisions regarding performance standards for toxic
emissions will prevent backsliding that could result from
changes in refinery product use or processes spurred by waivers
of the oxygen mandate. The 2 percent oxygen content mandate
requires refiners to use more oxygenates than would be
necessary to meet the other performance or content standards in
Section 211(k) of current law. Refiners could respond to
waivers of the oxygen mandate by shifting to other high-octane
components such as aromatics or alkylates. These substitutes
can lead to increased emissions of toxic air pollutants,
including benzene.
Section 5. Public Health and Environmental Impacts of Fuels and Fuel
Additives
Summary
The bill directs the Administrator to require tests to
determine potential public health effects of fuels or fuel
additives prior to registering fuels or fuel additives and
during their use. Studies under this provision will be
conducted on a regular basis. In addition, EPA is instructed to
study the health and environmental impacts of using ETBE and
other ethers as a substitute for MTBE.
Discussion
The existing law allows the Administrator to require fuel
producers to conduct tests to determine the health and
environmental effects of fuels and fuel additives. This
provision makes such testing mandatory.
The Administrator should use this authority to identify and
assess any adverse public health, welfare, or environmental
effects from the use of motor vehicle fuels or fuel additives
or the combustion products of such fuels or fuel additives. The
Administrator should use the authority to assess threats to
both air pollution and water pollution in order to effectively
exercise the authority in Section 211(c) as amended by this
legislation. This provision is intended to prevent situations
such as the one presented by MTBE contamination of water
supplies.
To avoid such recurrences, the Blue Ribbon Panel on
Oxygenates in Gasoline recommended that EPA and others
accelerate ongoing research efforts into the inhalation and
ingestion health effects, air emission transformation
byproducts, and environmental behavior of all oxygenates and
other components likely to increase in the absence of MTBE.
This should include research on ethanol, alkylates, and
aromatics, as well as on gasoline compositions containing those
components.
EPA has provided a list of fuel and fuel additive testing
which is now underway, pursuant to Section 211 requirements.
See Appendix VII for the list of on-going studies. This testing
is designed to provide specific information on MTBE and five
other oxygenates, as well as conventional gasoline containing
typical gasoline components that would substitute for
oxygenates.
Section 6. Analysis of Motor Vehicle Fuel Changes
Summary
Section 6 requires the Administrator to publish an analysis
of the changes in emissions of air pollutants and air quality
due to the implementation of the provisions in S. 950. The
analysis is to examine changes in all motor vehicle fuels and
fuel additives and must attempt to identify and quantify any
increase in emissions or air pollution caused by implementing
this bill. A draft analysis is to be published within 4 years
of enactment, and a final analysis is to be published within 5
years of enactment. The Administrator should include in the
analysis consideration of direct and evaporative emissions, as
well as combustion by-products, from the use of these fuels and
fuel additives in on-road and off-road vehicles.
Section 6 requires the Administrator to develop and
finalize an emissions model that reasonably reflects the
effects of characteristics or components of motor vehicle fuel
or emissions from vehicles in the motor vehicle fleet during
calendar year 2005.
Discussion
Section 211(c) of the CAA, as amended by this legislation,
provides the Administrator with the authority to regulate,
control, or prohibit the manufacture, introduction into
commerce, offering for sale, or sale of any fuel or fuel
additive, if, in the judgment of the Administrator, the fuel or
fuel additive or emission product causes or contributes to air
pollution or water pollution that may reasonably be anticipated
to endanger the public health or welfare. The bill requires the
Administrator to exercise this authority with respect to MTBE.
The bill also adds water quality as an environmental protection
criterion in Title II of the Act.
Section 202(l) of the Act requires the Administrator to
exercise the authorities in Sections 211(c) and 202(a) and to
promulgate, and from time to time revise, regulations
containing reasonable requirements to control hazardous air
pollutants from motor vehicles and fuels. The regulations must
reflect the greatest degree of reductions achievable,
considering cost and projected available technology, and must
focus on those categories of emissions that pose the greatest
risk to human health or about which significant uncertainties
remain.
The emissions model currently used by EPA to determine
compliance in both the RFG and conventional anti-dumping
gasoline programs is called the complex model. It uses 1990
average gasoline quality and 1990 model year motor vehicle
technology as its baseline, and models how changes in gasoline
qualities change emissions of these vehicles compared to 1990
gasoline. For purposes of this provision, EPA is authorized to
update its complex model to address changes in motor vehicle
technology since 1990. The motor vehicle fleet in calendar year
2005 will be different from model year 1990 vehicles. The
updated model is expected to contain a mix of technologies
with, for example, the newer Tier 2 technology entering the
fleet.
Developing an emissions model that reflects the actual mix
of motor vehicle technologies in the fleet during calendar year
2006 allows EPA to reasonably determine the change in emissions
between 1999-2000 and 2005-2006 due to changes in gasoline, as
the 2006 calendar year fleet should still contain the kinds of
technologies found in the prior years, although with a
different mix of technologies. EPA should work with a
consortium of the automobile and oil industries and other
interested and qualified parties to design and conduct the
extensive vehicle and fuel combination testing that will be
necessary to update the complex model, as was done in
developing the current complex model.
An updated complex model may be useful for other related
applications, such as emissions modeling for State planning.
EPA could use the updated model in the RFG and conventional
gasoline programs, including future RFG rulemakings, where
doing so would not be inconsistent with the provisions of
Section 211(k).
Section 7. Elimination of Ethanol Waiver
Summary
Section 4 eliminates the RVP waiver for ethanol blends of
conventional gasoline provided by Section 211(h)(4).
Discussion
Blending ethanol with gasoline increases the RVP, a measure
of volatility, of gasoline. Under certain conditions, gasoline
with a higher RVP will have increased evaporative emissions of
VOCs that can exacerbate air quality problems, unless the base
gasoline has been refined sufficiently to accommodate the
addition of ethanol. Manufacturing such a sub-RVP blendstock
adds to the refiners' costs of production. Many factors
interact to increase or reduce the probability of a higher RVP
fuel leading to a reduction in air quality. Under current law,
RVP limits are either required or recommended for most of the
fuel sold in the nation.
Since S. 950 may result in increases in ethanol consumption
over time in attainment and nonattainment areas, the
elimination of the RVP waiver for ethanol will prevent any
related increase in VOC emissions.
Section 8. Additional Opt-In Areas Under Reformulated Gasoline Program
Summary
This section of the bill provides explicit State authority
to allow nonclassified areas to opt-in to the RFG program.
Discussion
Currently, 17 States and the District of Columbia rely on
the RFG program as an emissions control strategy. Appendix II
provides a complete list of all RFG areas. The CAAA mandated
use of RFG in nine areas.\11\ One additional area\12\ was
required to sell RFG beginning in June 1996 after being
redesignated from serious to severe. Several States\13\ have
exercised the opt-in authority of Section 211(k)(6) to require
the use of RFG. Areas that opted in to the RFG program prior to
January 1, 2000, are required to use RFG until December 31,
2003. The Act limits opt-in actions to areas that previously
violated the 1-hour ozone NAAQS and are classified according to
their current status in relation to attainment of the NAAQS.
States expend considerable resources in an effort to avoid
violating the NAAQS because of the stringent requirements
imposed on nonattainment areas by the CAA. This section allows
use of the RFG program for those areas that seek to use it as
an emissions control technique in the State's strategy for
avoiding new violations of the NAAQS. Under this provision,
once the SIP revision is approved the area will be a covered
area under the Federal program. The SIP revision may include a
waiver of the oxygen content requirement under Section 4 of
this bill.
---------------------------------------------------------------------------
\11\ Los Angeles, California; San Diego, California; Hartford,
Connecticut; New York, New York; Philadelphia, Pennsylvania; Chicago,
Illinois; Baltimore, Maryland; Houston, Texas; and Milwaukee,
Wisconsin.
\12\ Sacramento, California.
\13\ States that opted-in to the RFG program include Connecticut
(entire State), Delaware (entire State), District of Columbia,
Kentucky, Maryland, Massachusetts (entire State), Missouri, New
Hampshire, New Jersey (entire State), New York, Rhode Island (entire
State), Texas, Virginia. The Governors of Arizona, Maine, New York and
Pennsylvania opted-out certain opt-in areas.
---------------------------------------------------------------------------
Section 9. MTBE Merchant Producer Conversion Assistance
Authorizes a total of $750 million over three fiscal years
for grants to merchant MTBE producers for assisting in the
conversion to production of other fuel additives.
------
APPENDIX I
----------------------------------------------------------------------------------------------------------------
MTBE-RELATED LEGISLATION IN THE SENATE OF THE
107th CONGRESS
----------------------------------------------------------------------------------------------------------------
S. 265............................... Fitzgerald............. MTBE is banned after 3 years. Gasoline
containing MTBE must be labeled. EPA should
assist local communities in testing and
remediating contaminated drinking water
supplies. Establishes an MTBE research grants
program within EPA. Research and development
efforts should be directed to allow ethanol use
to expand sufficiently as the use of MTBE is
phased out.
S. 670............................... Daschle/Lugar.......... MTBE is banned within 4 years. Allows use of
LUST Trust Fund. Phases in the use of
alternative and renewable fuels, including
ethanol.
S. 892............................... Harkin................. MTBE is to be phased out in 3 years. Gasoline
containing MTBE must be labeled. Permits State
restrictions on MTBE sale or use. EPA is
required to revise reformulated gasoline
performance standards. Requires the use of
renewable fuels.
S. 947............................... Feinstein/Inhofe....... States are authorized to waive oxygen content
requirements for reformulated gasoline.
S. 1006.............................. Hagel/Johnson.......... Phases in use of renewable fuels, including
ethanol, under a motor vehicle renewable fuel
program.
----------------------------------------------------------------------------------------------------------------
ISSUE BRIEF--Methyl Tertiary Butyl Ether (MTBE)
Prepared for the NCSL Clean Air Working Group and AFI Environment
Committee
(Summarizes State legislative activity from 1999-2001, may not include
all proposed legislation)
------------------------------------------------------------------------
STATE LEGISLATION ON MTBE ADDITIVES IN
REFORMULATED GASOLINE
------------------------------------------------------------------------
Alabama...................... Little or no activity
Alaska....................... Little or no activity
Arizona...................... FINAL ACTION. Arizona will ban MTBE no
later than 180 days after California
completes its phaseout of MTBE on
December 31, 2002, according to Senate
Bill 1504 (HB 2386)
Arkansas..................... Little or no activity
California................... FINAL ACTIONS. In March 1999, California
became the first State to officially ban
MTBE when Governor Gray Davis issued an
executive order for a three-year phase
out of the gasoline additive
California SB 989 codified the governor's
executive order for the phase-out of
MTBE. The legislature also required that
refiners submit quarterly reports to
detail the amount of MTBE used in
gasoline and how the amount compares to
last year's use
MTBE has shown up in hundreds more
underground fuel links in and water
quality experts have raised their
estimate of the number of MTBE spills
from 4,500 to nearly 6,600, a nearly 32
percent increase over the past year
Colorado..................... FINAL ACTION. Colorado's Governor signed
SB 190 into law, which mandates a
phasing out of MTBE by April 30, 2002.
In areas where MTBE is not currently
sold or stored--which includes Denver
and the rest of the Front Range of the
Rocky Mountains--the additive will be
banned immediately
Connecticut.................. FINAL ACTION. SB 571 (signed by Governor
6/1/2000) will phase out the use of MTBE
as a gasoline additive over a five-year
period, and increase penalties for the
unlawful discharge of gasoline
Delaware..................... The legislature is studying the
groundwater problem, but as of now, no
resolutions have passed or been proposed
to phase out MTBE. (Source at the
Department of Environmental Control)
District of Columbia......... Little or no activity
Florida...................... Florida has been monitoring its public
water system for MTBE since the early
1990's; MTBE has not yet been found in
amounts exceeding the EPA guidelines. No
MTBE legislation has passed as of the
present
Georgia...................... Little or no activity
Hawaii....................... FINAL ACTION. The Governor vetoed Hawaii
HB 3021 (passed House and Senate) which
would have banned MTBE by July 1, 2001
Idaho........................ Little or no activity
Illinois..................... FINAL ACTION. HB 171 was signed into law.
Prohibits the use, sale, distribution,
blending or manufacturing of MTBE as a
fuel additive in the State beginning
three years after the effective date of
the legislation
Indiana...................... Little or no activity
Iowa......................... FINAL ACTION. Iowa HB 2294 died in
committee. It would have prohibited the
sale of MTBE, but would have permitted
the sale or storage of an ``incidental
amount'' of MTBE if the Department of
Natural Resources found no threat to
public health/ environment. FINAL ACTION
A resolution has been considered to urge
Congress or the State's congressional
delegation to change the Clean Air Act
to phase out MTBE
Kansas....................... FINAL ACTION SB 37 was signed into law.
Prohibits the sale of gasoline
containing MTBE in quantities greater
than 0.5 percent by volume after July 1,
2004, provided the U.S. Environmental
Protection Agency has granted the State
a waiver allowing the State to ban or
control MTBE
Kentucky..................... FINAL ACTION. House Resolution 151,
passed 3/23/2000, recognized the
benefits of ethanol as an effective
alternative to MTBE
FINAL ACTION. HB 849, which would have
banned the use of MTBE, died in
committee with the end of the
legislative session
FINAL ACTION. Senate Joint Resolution 68,
which urged KY's congressional
delegation to support changes to the
Clean Air Act that would allow the State
to opt out of the Federal RFG program,
passed in the Senate, but died in
committee in the House
Louisiana.................... Little or no activity
Maine........................ FINAL ACTION. Maine has not participated
in the RFG program since 1999 because of
concerns about a State study that
detected MTBE in 15 percent of drinking
water supplies. Although legislation to
ban MTBE was proposed, it was tabled
because the MTBE contamination of water
improved rapidly
Maryland..................... FINAL ACTION. Legislation has been
enacted creating a State Task Force to
investigate the contamination of water
supplies MTBE and to examine potential
health effects. (HB 823)
Environmental officials have found the
gasoline additive MTBE in 66 of the
1,060 public water systems in Maryland
they investigated (03/08/2000)
Massachusetts................ FINAL ACTION. Resolution against MTBE
failed in the legislature. Although no
ban is likely to be proposed, the Dept.
of Environmental Affairs is working with
regional groups to monitor water
contamination and to eventually phase
out MTBE additives. NESCAUM, a coalition
of New England regions, is the principle
organization working to monitor the
situation
Michigan..................... FINAL ACTION. On June 15, 2000,
Michigan's Governor signed into law HB
5570, which bans MTBE beginning 1/1/
2003, and directs the department of
environmental quality to study the
environmental and health effects of MTBE
Minnesota.................... FINAL ACTION. Minnesota HB 3131, a
complete ban on MTBE, died in committee.
However, SB 2946, which instead limits
MTBE content in gasoline to 1/3 of one
percent by weight, and requires that
MTBE be phased out by July 2005, was
signed into law. (Codified in Chapter
434)
Mississippi.................. Little or no activity
Missouri..................... FINAL ACTION. Concurrent resolutions in
the legislature urged the governor to
exercise the State's right to opt out of
the RFG program until a safe substitute
for MTBE is identified (e.g. HCR 32, HCR
14)
Thus pressed by the Republicans, the
Governor issued an executive order which
will ban MTBE after the EPA and Congress
meet certain conditions. These
conditions include: a requirement that
the EPA provide a waiver for Missouri
from provisions in the Clean Air Act and
the reformulated gasoline program (RFG);
a requirement that Congress prevent
price increases or a decline in air
quality that could result from an MTBE
ban; and assurance from Congress that
Missouri will not lose Federal highway
funds because of its ban of MTBE
FINAL ACTION. SB 966 (HB 1801), which was
to codify the Governor's ban on MTBE,
died in committee at the end of the
legislative session
PENDING ACTION. Missouri lawmakers are
also urging quick action at the Federal
levels to ban MTBE and to promote
ethanol as a replacement. (03/29/2000)
Montana...................... Little or no activity
Nebraska..................... FINAL ACTION. The much-talked-about
ethanol mandate in Nebraska appears to
be finished for this year, and thus Gas
station owners will not be required to
sell an ethanol blend. The ethanol
mandate instead evolved into a ban of
MTBE (LB 1234), which was approved by
the Governor on 4/12/2000
Nevada....................... Little or no activity
New Hampshire................ FINAL ACTION. HB 758 was signed into law.
Authorizes the State to opt out of the
Federal reformulated gasoline program no
later than January 1, 2004, and empowers
the Department of Environmental Services
(DES) commissioner to work with the U.S.
Environmental Protection Agency to
achieve that objective. Authorizes the
DES commissioner to establish limits on
the manufacture, use or sale of MTBE.
Authorizes the DES commissioner to
implement an alternative or regional
gasoline approach. Establishes a
gasoline remediation and elimination of
ethers fund, and a fee to capitalize the
fund. The fund is to be used to mitigate
the presence of MTBE in groundwater
New Jersey................... FINAL ACTION. SB 2137 Passed Senate;
Reported out of Assembly Committee
Prohibits the sale of gasoline
containing methyl tertiary butyl ether
(MTBE) on January 1, 2004. Directs the
Department of Environmental Protection
to seek from the U.S. Environmental
Protection Agency a waiver from the
Federal oxygenate in gasoline
requirement
New Mexico................... Little or no activity
New York..................... FINAL ACTION. Governor Pataki (R-NY)
signed a bill banning MTBE by Jan. 1,
2004. The New York ban, drafted partly
in response to contamination reported on
Long Island and upstate, will prohibit
the use, sale, and importation of MTBE
beginning January 1, 2004 under penalty
of up to $10,000, according to Pataki's
office. (5/24/2000)
PENDING ACTION. Legislation has also been
proposed to direct State agencies to
study MTBE contamination of water
supplies and to examine its health
effects
North Carolina............... Little or no activity
North Dakota................. Little or no activity
Ohio......................... Little or no activity
Oklahoma..................... Little or no activity
Oregon....................... Little or no activity
Pennsylvania................. FINAL ACTION. In June 1999, Pennsylvania
chose to no longer participate in the
Federal RFG program, citing MTBE health
effects as its primary reason. Studies
found 73 percent of Pennsylvania's
drinking water supplies were
contaminated with MTBE
Rhode Island................. FINAL ACTION. House Resolution 7999
(passed 06/07/2000) requests that the
Federal government lift the requirement
for 2% oxygenate levels in reformulated
gasoline
PENDING ACTION. Legislation has been
proposed to direct State agencies to
study MTBE contamination of water
supplies and to examine its health
effects
South Carolina............... Little or no activity
South Dakota................. FINAL ACTION. SB 161 was signed into law.
Prohibits the sale, offering for sale,
or storing of petroleum products
containing or treated with methyl
tertiary butyl ether (MTBE)
Tennessee.................... Little or no activity
Texas........................ Little or no activity
Utah......................... Little or no activity
Vermont...................... Little or no activity
Virginia..................... FINAL ACTION. HB 909 was enacted (4/09/
2000), which directs State agencies to
study MTBE contamination of water
supplies and to examine its health
effects
Washington................... FINAL ACTION. HB 1015 was signed into
law. Prohibits MTBE as a gasoline
additive after December 31, 2003
West Virginia................ FINAL ACTION. West Virginia SB 441, which
would have prohibited MTBE use, died in
committee at the end of the legislative
session
Wisconsin.................... FINAL ACTION. AB 838, a proposed ban on
MTBE, failed to pass the Wisconsin
Assembly in 1999
Wyoming...................... Little or no activity
------------------------------------------------------------------------
----------
APPENDIX II
List of Reformulated Gasoline Program Areas
U.S. Environmental Protection Agency, Office of Transportation and Air Quality, January 5, 2001
----------------------------------------------------------------------------------------------------------------
Clean Air Act: Required Areas
----------------------------------------------------------------------------------------------------------------
LOS ANGELES................................... South Coast Air Basin, South East Desert, Ventura, CA
Los Angeles County, CA
Ventura County, CA
Orange County, CA
San Bernardino County (partial), CA
Riverside County (partial), CA
SAN DIEGO County, CA.......................... San Diego County, CA
HARTFORD...................................... New Haven--Waterbury, CT
Hartford County (partial), CT
Litchfield County (partial), CT
Middlesex County (partial), CT
New London County (partial), CT
New Haven County (partial), CT
Tolland County (partial), CT
NEW YORK...................................... Northern New Jersey--Long Island--Connecticut area, NY-NJ-CT
Fairfield County, CT
Litchfield County, (partial), CT
New Haven County (partial), CT
Bergen County, NJ
Essex County, NJ
Hudson County, NJ
Hunterdon County, NJ
Middlesex County, NJ
Monmouth County, NJ
Morris County, NJ
Ocean County, NJ
Passaic County, NJ
Somerset County, NJ
Sussex County, NJ
Union County, NJ
Bronx County, NY
Kings County, NY
Nassau County, NY
New York County, NY
Orange County, NY
Putnam, NY
Queens County, NY
Richmond County, NY
Rockland County, NY
Suffolk County, NY
Westchester County, NY
PHILADELPHIA.................................. Wilmington--Trenton--Cecil County, MD area PA-NJ-DE-MD
New Castle County, DE
Kent County, DE
Cecil County, MD
Burlington County, NJ
Camden County, NJ
Cumberland County, NJ
Gloucester County, NJ
Mercer County, NJ
Salem County, NJ
Bucks County, PA
Chester County, PA
Delaware County, PA
Montgomery County, PA
Philadelphia County, PA
CHICAGO....................................... Gary--Lake County, IL--Indiana--Wisconsin area
Cook County, IL
Du Page County, IL
Kane County, IL
Lake County, IL
McHenry County, IL
Will County, IL
Grundy County, IL, (partial)
Kendall County, IL,( partial)
Lake County, IN
Porter County, IN
BALTIMORE, MD................................. Anne Arundel County, MD
Baltimore County, MD
Carroll County, MD
Harford County, MD
Howard County, MD
The City of Baltimore, MD
HOUSTON....................................... Galveston--Brazoria, TX
Brazoria County, TX
Chambers County, TX
Fort Bend County, TX
Galveston County, TX
Harris County, TX
Liberty County, TX
Montgomery County, TX
Waller County, TX
MILWAUKEE..................................... Racine, WI
Kenosha County, WI
Milwaukee County, WI
Ozaukee County, WI
Racine County, WI
Washington County, WI
Waukesha County, WI
SACRAMENTO, CA * (newly required area)........ El Dorado County (partial), CA
Placer County (partial), CA
Sacramento County, CA
Solano County (partial), CA
Sutter County (partial), CA
Yolo County, CA
``Opt-In'' Areas--Voluntary
CONNECTICUT, The Entire State 1............... Litchfield County (partial), CT
Hartford County (partial), CT
Middlesex County (partial), CT
New London County (partial), CT
Tolland County (partial), CT
Windham County, CT
DELAWARE, The Entire State 1.................. Sussex nonattainment area
Sussex County, DE
DISTRICT OF COLUMBIA.......................... Washington, DC-MD-VA area (DC portion)
Entire District of Columbia
KENTUCKY...................................... Cincinnati-Hamilton KY-OH area (KY portion)
Boone County, KY
Campbell County, KY
Kenton County, KY Louisville, KY-IN area (KY portion)
Jefferson County, KY
Bullitt County (partial), KY
Oldham County (partial), KY
MARYLAND...................................... Washington, DC-MD-VA area (MD portion)
Calvert County, MD
Charles County, MD
Frederick County, MD
Montgomery County, MD
Prince Georges County, MD Kent & Queen Anne's nonattainment area
Queen Anne's County, MD
Kent County, MD
MASSACHUSETTS, The Entire State 1............. Boston-Lawrence-Worcester (E. MA)
Barnstable County, MA
Bristol County, MA
Dukes County, MA
Essex County, MA
Middlesex County, MA
Nantucket County, MA
Norfolk County, MA
Plymouth County, MA
Suffolk County, MA
Worcester County, MA Springfield (Western MA) nonattainment
areas
Berkshire County, MA
Franklin County, MA
Hampden County, MA
Hampshire County, MA
MISSOURI (Effective Opt-In Date is June 1, St. Louis nonattainment area
1999). St. Louis County
St Louis (city)
Franklin County
Jefferson County
St. Charles County
NEW HAMPSHIRE................................. Boston-Lawrence-Worcester, MA-NH nonattainment area (NH portion)
Hillsborough County, NH
Rockingham County, NH
Merrimack County, NH
Strafford County, NH
NEW JERSEY, The Entire State 1................ Allentown-Bethlehem-Easton area (NJ portion)
Warren County, NJ Atlantic City nonattainment area
Atlantic County, NJ
Cape May County, NJ
NEW YORK...................................... Essex nonattainment area
Dutchess County, NY
Essex County (partial), NY
RHODE ISLAND, The Entire State................ Providence nonattainment area
Bristol County, RI
Kent County, RI
Newport County, RI
Providence County, RI
Washington County, RI
TEXAS......................................... Dallas-Fort Worth nonattainment area
Collin County, TX
Dallas County, TX
Denton County, TX
Tarrant County, TX
VIRGINIA...................................... Washington DC-MD-VA area (VA portion)
Alexandria, VA
Arlington County, VA
Fairfax, VA
Fairfax County, VA
Falls Church, VA
Loudoun County, VA
Manassas, VA
Manassas Park, VA
Prince William County, VA
Stafford County, VA Richmond, VA nonattainment area
Charles City County, VA
Chesterfield County, VA
Colonial Heights, VA
Hanover County, VA
Henrico County, VA
Hopewell, VA
Richmond, VA Norfolk-Virginia Beach-Newport News area
Chesapeake, VA
Hampton, VA
James City County, VA
Newport News, VA
Norfolk, VA
Poquoson, VA
Portsmouth, VA
Suffolk, VA
Virginia Beach, VA
Williamsburg, VA
York County, VA.
``Opt-Out'' Areas**
MAINE......................................... Hancock and Waldo Counties, ME--Hancock County--Waldo County
PENNSYLVANIA.................................. Allentown--Bethlehem--Easton, PA
Carbon County
Lehigh County
Northampton County Altoona, PA
Blair County Erie, PA
Erie County Harrisburg--Lebanon--Carlisle, PA
Cumberland County
Dauphin County
Lebanon County
Perry County Johnstown, PA
Cambria County
Somerset County Lancaster, PA
Lancaster County Pittsburgh--Beaver Valley, PA
Allegheny County
Beaver County
Fayette County
Washington County
Westmoreland County
Armstrong County
Butler County Reading, PA
Berks County Scranton--Wilkes-Barre, PA
Columbia County
Lackawanna County
Luzerne County
Monroe County
Wyoming County York, PA
Adams County
York County Youngstown, OH--Warren, OH--Sharon, PA*
Mercer, PA * Ohio counties have not opted-in.
NEW YORK...................................... Albany--Schenectady--Troy, NY
Albany County
Greene County
Montgomery County
Rensselear County
Saratoga County
Schenectady County
Jefferson County, NY
Buffalo--Niagara Falls, NY
Erie County
Niagara County
A proposed rule to remove the above ``opt-
out'' areas from the requirements of the
reformulated gasoline program was published
June 14, 1995. [On January 1, 1995, a
temporary exemption of the RFG requirements
in these areas went into effect.
On July 1, 1995 this stay was extended until
the Agency took final action]. The final
rule, published July 8, 1996 [61 FR 35673],
formally removed these areas from the list of
RFG covered areas and provided States with
general opt-out procedures.
The July 8 final rule was superseded by a
final rule published October 20, 1997 [62 FR
54552], revising the opt-out procedures.
ARIZONA....................................... Phoenix nonattainment area
Maricopa County (partial), AZ
Phoenix opted in the RFG program in 1997;
retail stations were required to supply RFG
by August 4, 1997.
In September 1997, the Governor of Arizona
submitted an RFG opt-out petition for
purposes of adopting a more stringent State
RFG program in Phoenix.
EPA approved the opt-out petition which became
effective on June 10, 1998.
MAINE......................................... The following counties in Maine ``opted-out'' of the RFG
program--the effective opt-out date was March 10, 1999: Knox &
Lincoln nonattainment area
Knox County, ME
Lincoln County, ME Lewiston-Auburn nonattainment area
Androscoggin County, ME
Kennebec County, ME Portland nonattainment area
Cumberland County, ME
Sagadahoc County, ME
York County, ME
----------------------------------------------------------------------------------------------------------------
* Reclassification of Sacramento from Serious to Severe was effective June 1, 1995. RFG was required as of June
1, 1996.
**Note: These ``Opt-Out'' areas withdrew from the Federal RFG program before it went into effect on January 1,
1995.
----------
APPENDIX III
Office of the Governor,
Sacramento, CA, April 12, 1999.
The Honorable Carol M. Browner, Administrator,
Environmental Protection Agency,
401 M Street SW,
Washington, DC 20460.
Dear Ms. Browner: I am writing to request that the U.S. Environmental
Protection Agency (EPA) take prompt action to waive Federal
requirements that all gasoline sold in the Sacramento region and most
of Southern California contain a minimum oxygen content pursuant to the
provisions of the 1990 amendments to the Clean Air Act.
As I am sure you are aware, on March 26, 1999, I concluded that the
use of the oxygenate methyl tertiary-butyl ether (MTBE) in California
gasoline poses a significant risk to California's environment, and,
accordingly, directed that MTBE be phased out of California gasoline as
soon as possible. A copy of my Executive Order D-5-99, which identifies
the actions we will take to remove MTBE from gasoline, is enclosed.
One of the essential elements for a rapid phase down, and eventual
phase-out of MTBE in California, is action by the U.S. EPA to eliminate
the current mandate that California gasoline subject to the Federal
reformulated gasoline (RFG) program--about 70 percent of all gasoline
in the State--must contain at least 2.0 percent by weight oxygen year-
round. Your action to provide this relief is needed for several
compelling reasons.
Many California refineries have the capability to produce
significant amounts of gasoline that provides all of the required
emission reductions without using MTBE or any other oxygenate. The only
reason such MTBE-free gasoline is not being made available today is
U.S. EPA's enforcement of the 2.0 percent oxygen requirement. Your
approval of our requested action would enable several refiners to
greatly reduce their use of MTBE in the very near future.
In terms of the eventual phase-out of MTBE, your action is equally
important. Under the current U.S. EPA requirements, once MTBE is phased
out, the 70 percent of California gasoline that is sold in areas
subject to the Federal RFG program would need to be oxygenated with
ethanol. Relying on ethanol exclusively for this volume of gasoline,
approximately 10 billion gallons per year, would increase the time
needed to complete our phase-out of MTBE, and result in higher fuel
costs to California consumers. Your action to allow the required
emissions reductions to be achieved without using a minimum oxygen
content in every gallon of fuel would allow us to reduce risks of
future water contamination sooner, meet California's growing demand for
fuel and allow flexibility to make more economical blends of gasoline.
Finally, time is of the essence. California refineries must begin a
time consuming and expensive retooling process to eliminate their
current reliance on MTBE. In order to complete the phase-out of MTBE by
December 31, 2002 or earlier, the refiners must start immediately with
the planning and design phases of the necessary refinery and
distribution system modifications. It is clear that the approach taken
by industry will differ substantially depending on whether, upon
completion of the modifications, refiners will be subject to a
mandatory Federal RFG minimum oxygen requirement. Without the mandatory
oxygen requirement, the industry can design in greater flexibility and
less costly processes. But in order to make informed planning and
design decisions, the refiner must know in 1999--not just in 2001 or
2002 or 2003--that they will have flexibility with respect to oxygen
requirements.
Because California has historically experienced the worst air
quality in the nation and has long been engaged in pioneering efforts
to reduce the contribution of motor vehicles to air pollution, the
State has been granted unique authority by the Clean Air Act and the
EPA to administer a State fuels program to reduce motor vehicle
emissions. California is the only area in the country where the Federal
RFG requirements apply in conjunction with comprehensive and
demonstrably more effective State standards for cleaner burning
gasoline. The California regulations provide complete assurances that a
waiver of the Federal RFG year-round minimum oxygen content requirement
will not result in a loss of any air quality.
Our regulations accomplish the needed emissions reductions without
requiring a minimum level of oxygen. Numerous assessments by the auto
and fuels industry, government agencies, and most recently scientists
at the University of California confirm that a minimum oxygen content
is not essential to making RFG that meets all emission reduction
requirements. Therefore, application of the current minimum oxygen
content requirement serves absolutely no purpose in California relative
to its intended air quality rationale--to reduce ozone precursors and
toxic emissions from vehicles.
In contrast, the minimum oxygen content requirement is having one
clear effect on another area of the environment. It is increasing the
risk that leaking tanks and boat engine discharges pose to water
quality. As the University of California study of MTBE indicated,
California's ground and surface water resources are seriously at risk
because of discharges of gasoline that has been oxygenated with MTBE.
Over 60 percent of the reservoirs tested have detectable levels of
MTBE, and many public drinking water sources in areas like Santa
Monica, Santa Clara, Sacramento and South Lake Tahoe have been
contaminated and shut down because of MTBE contamination. This is what
led me to direct the appropriate State regulatory agencies to devise
and carry out a plan to complete the expeditious phase-out of MTBE from
California gasoline.
However, in order for California to achieve this essential
protection of water quality quickly and at an affordable cost, we must
have flexibility relative to the minimum oxygen content currently
enforced by U.S. EPA. We need this action quickly, and I am calling on
you to use your broad authority to protect both the air and water
environment by allowing California's reformulated gasoline rules, which
provide all of the emission benefits of the Federal RFG, to be applied
in lieu of the counterproductive Federal minimum oxygen content
requirement.
Your prompt approval of this request will help us limit any further
contamination of drinking water while we transition away from MTBE. It
will not risk any adverse impact on air quality due to California's
more effective State gasoline regulations. It will enable us to devise
the most expeditious and cost-effective solution to the MTBE problem in
California. One that will protect our water and keep us on the road to
clean air.
Thank you for your consideration of this request. Enclosed is a
more detailed discussion of this issue and materials that support our
request. As always we are ready to work with you to ensure that
California and the EPA are working together to ensure environmental
protection.
Sincerely,
Gray Davis.
----------
APPENDIX IV
Letter from Environmental Protection Agency
U.S. Environmental Protection Agency,
Office of the Administrator, June 12, 2001.
The Honorable Governor Gray Davis,
State Capitol,
Sacramento, California 95814.
Dear Governor Davis: On April 12, 1999, the State of California
requested a waiver from the oxygen content requirement of the Federal
reformulated gasoline (RFG) program. As you know, the RFG program and
the oxygen content requirement were created by the 1990 Amendments to
the Federal Clean Air Act. Because of the legal constraints imposed by
the Clean Air Act, I cannot grant California's waiver request.
Under the Clean Air Act, the Environmental Protection Agency is
authorized to waive the oxygen content requirement only if there is
clear evidence that the requirement will ``prevent or interfere with
the attainment by the area of a national primary ambient air quality
standard.'' Your request for a waiver is based on the assertion that a
waiver of the oxygen content requirement would aid in reducing ozone
and particulate matter (PM) in California and, therefore, that the
oxygen requirement interferes with California's attainment of the
national ambient air quality standards (NAAQS) for ozone and PM.
Given the complexity of the issues involved, we have carefully
reviewed all the information and analysis submitted by California. We
have also performed our own comprehensive analysis to evaluate the
possible emissions effects of a waiver. Based on our review of
California's submission and our own analysis, we believe that a waiver
of the oxygen requirement would likely result in a decrease in
emissions of oxides of nitrogen (NOx), but an increase in emissions of
carbon monoxide (CO). Our analysis also shows that there is significant
uncertainty about whether emissions of volatile organic compounds
(VOCs) would increase or decrease if a waiver is granted. Both VOC
emissions and, to a lesser extent, CO emissions contribute to ozone
formation in California. A more detailed description of this analysis
is provided in the enclosure.
California's own analysis shows that, even without the oxygen
requirement, fuels used in California will contain a significant amount
of ethanol. When ethanol blends are added to non-ethanol containing
gasoline in vehicle fuel tanks, the overall volatility of the fuel in
the tank can increase significantly. The increase in volatility from
this ``commingling effect'' raises substantial uncertainty about
whether a waiver of the oxygen requirement would increase or decrease
VOC emissions. Because of this uncertainty and the expected increase in
CO, it is not clear whether the waiver sought by California will
actually help to reduce ozone levels. Thus, the State has not met its
burden of showing that the oxygen requirement interferes with its
attainment of the NAAQS.
I understand that your waiver request is based in part on concerns
about contamination of drinking water supplies with MTBE, which is
widely used to meet the oxygenate requirement. The Bush Administration
is very concerned about MTBE contamination in drinking water and
groundwater. Clean air and clean water are equally important to us, and
we do not want to pursue one at the expense of the other. As noted
above, however, the legal requirements of the Clean Air Act limit EPA's
ability to address these concerns. As I have indicated in the past, we
are committed to working with Congress to develop legislation that
addresses concerns about MTBE, while maintaining the air quality and
other benefits of the RFG program.
We would be glad to work with you and your staff if you have any
questions about this decision or seek further guidance from the Agency
on these issues.
Sincerely,
Christine Todd Whitman.
Analysis of and Action on California's Request for a Waiver of the
Oxygen Content in Gasoline
1. introduction
a. The Clean Air Act requirements
Section 211(k)(2)(B) of the Act, 42 U.S.C. Sec. 7545(k)(2)(B),
establishes an oxygen content requirement for Federal reformulated
gasoline (RFG), and allows EPA to waive compliance with the requirement
under certain circumstances. Section 211(k)(2)(B) reads:
The oxygen content of the gasoline shall equal or exceed 2.0
percent by weight (subject to a testing tolerance established by the
Administrator) except as otherwise required by this Act. The
Administrator may waive, in whole or in part, the application of this
subparagraph for any ozone nonattainment area upon a determination by
the Administrator that compliance with such requirement would prevent
or interfere with attainment by the area of a national primary ambient
air quality standard.
EPA has the discretion under this section to waive the oxygen
content requirement, to the extent reasonably necessary, where EPA
determines that compliance with the oxygen content requirement would
interfere with attainment of the primary National Ambient Air Quality
Standard (NAAQS) in an ozone nonattainment area. In evaluating
California's request for waiver of the oxygen requirement, EPA has
analyzed the likely composition of gasoline in the relevant
nonattainment area(s) with and without a waiver of the oxygen content
requirement and the resulting impact of oxygen content on emissions.
This analysis is needed so EPA can assess the potential effect that a
waiver would have on California's efforts to attain the ozone and
particulate matter NAAQS.
b. California's waiver request
In a letter dated April 12, 1999 from California Governor Gray
Davis to Administrator Browner, California officially requested a
waiver from the Federal oxygen requirement for reformulated gasoline,
under Section 211(k)(2)(B).\1\ The April 12, 1999 submittal stated that
``the ARB will be revising its CaRFG program this year, and continuing
the oxygen mandate will make it more difficult to maintain the emission
reductions benefits needed for California's SIP.'' The submittal did
not, however, contain the technical analysis to support the statement
that the oxygen requirement might actually prevent or interfere with
the attainment of the NAAQS in California. As such, the Agency believed
that the request submitted by California on April 12, 1999 did not
provide enough detail about the underlying analyses upon which the
request was premised to allow EPA to make a careful and fully informed
decision on the request.
---------------------------------------------------------------------------
\1\ (Filed in docket A-2000-10, document number II.D.-1; also
available at http://www.arb.ca.gov/cbg/Oxy/wav/041299.pdf)
---------------------------------------------------------------------------
Subsequent submittals from the California Air Resources Board
(CARB) provided additional information necessary to evaluate
California's request for a waiver from the oxygen requirement. In order
to evaluate whether compliance with the oxygen content requirement
prevents or interferes with a NAAQS, the Agency then began an
independent evaluation of the data, modeling, and other information
submitted by California in support of its request for a waiver from the
Federal RFG oxygen requirement.
c. California's argument for a waiver
California's waiver request rests first on CARB's assertion that
additional NOx reductions are needed in California. CARB claims that
the South Coast Air Quality Management District (SCAQMD) and Sacramento
Metropolitan Air Quality Management District (SMAQMD) need additional
NOx reductions beyond the commitments made in their recently approved
State Implementation Plans (SIPs) for these areas to attain the
National Ambient Air Quality Standards (NAAQS) for ozone and
particulate matter.
CARB then claims that without the oxygen requirement, California
RFG Phase 3 (CaRFG) would achieve greater NOx reductions. CARB's
assertion regarding the benefits achievable under CaRFG3 without the
oxygen requirement is based primarily on the relationship between fuel
oxygen and NOx formation. CARB claims that increases in gasoline oxygen
content increase NOx emissions and therefore the requirement for oxygen
in RFG prevents the State from achieving the maximum amount of NOx
reduction from CaRFG3.\2\ In light of the additional NOx reductions
needed in the SCAMQD and Sacramento RFG regions, CARB argues that NOx
emissions resulting from compliance with the oxygen content requirement
would interfere with the attainment of the ozone and PM NAAQS.
---------------------------------------------------------------------------
\2\ Specifically, CARB varied the values of the aromatics, olefins,
sulfur, T50, T90, and benzene fuel parameters of each of the two sets
of complying fuels (i.e., 2 weight percent oxygen fuels and zero
percent oxygen fuels) between the lower and upper bound limits that it
defined for each parameter. CARB then generated over 10 million
combinations of fuel properties within the bounds it defined, and using
its Predictive Model for CaRFG3 (PM3) identified the subset of these
hypothetical fuels which would comply with CARB's standards for its
CaRFG3. CARB's simulation analysis showed that on average among the
large number of complying formulations, the additional reduction in NOx
associated with going from a 2 weight percent oxygen fuel to a zero
oxygen fuel is about 1.5 percent. On the basis of this simulation
analysis CARB claimed that the reduction of NOx is greater without
oxygen independent of which fuel properties are varied.
---------------------------------------------------------------------------
CARB acknowledges that reducing oxygen content would increase
carbon monoxide (CO) emissions. CARB claims, however, that with a
waiver there would be a reduction in oxygenated fuels (i.e., reduction
of ethanol) which would lead to a decrease in the emissions associated
with permeation of VOC through vehicle fuel system components such as
hoses and seals that occurs with the use of ethanol as an oxygenate.
Based on the use of reactivity factors, CARB argues that the VOC
emission decrease from reduction in permeation losses offsets the
increase in CO, resulting in an ozone neutral effect. (This is
discussed in further detail in Section 4 below).
CARB also acknowledges that with a waiver, both oxygenated and non-
oxygenated gasolines would be used, resulting in commingling of ethanol
and non-ethanol gasolines in automobile gas tanks. Since ethanol acts
to boost the Reid Vapor Pressure (RVP) of gasoline, such commingling
would result in a VOC increase. CARB estimates that commingling would
increase VOC emissions by an amount equivalent to an overall increase
in RVP of 0.1 psi. CARB has set the flat limit of RVP in CaRFG3 0.1 psi
lower than it otherwise would have been (i.e., 6.9 rather than 7.0) and
asserts that the lower RVP offsets the VOC increase due to commingling.
d. Criteria for acting on California's request
As previously stated, the Clean Air Act requires that, in order to
waive the Federal RFG oxygen requirement, EPA must determine that the
requirement will prevent or interfere with the State's ability to
attain a NAAQS. The key question before the agency therefore involves
the air quality impacts of a waiver for the relevant NAAQS.
To address the air quality impact, it is critical to consider both
the potential changes in gasoline quality which could occur if a waiver
were granted and the potential emissions impacts of these changes. All
relevant categories of emissions should reasonably be considered. This
information is needed to evaluate the impacts of a waiver on each
applicable NAAQS.
EPA believes it should not make a determination of interference or
prevention and should not grant a waiver unless the impacts of a waiver
are clearly demonstrated for each applicable NAAQS. Absent such a clear
demonstration, EPA is not able to determine whether a waiver would aid,
hinder, or have no effect on attainment of a NAAQS. It is important
that the impacts of a waiver be clearly demonstrated for each
applicable NAAQS, because EPA believes it should not grant a waiver
unless, at a minimum, it has been clearly demonstrated that granting a
waiver would aid in attaining at least one NAAQS, and would not hinder
attainment for any other NAAQS.
2. epa's analysis of the emissions impacts of a waiver
a. Background
EPA performed a complex analysis to evaluate the effect of a waiver
on NOx, VOC, and CO inventories. In order to perform this analysis it
was necessary to estimate both how emissions were likely to change as a
result of fuel property changes, and how California Phase 3 RFG
(CaRFG3) fuel properties were likely to differ with and without a
waiver. EPA considered various pre-existing models and estimates
relating fuel properties to emissions and, where warranted and
feasible, produced new models to relate fuel properties and emissions
for evaluation of the waiver. EPA also reviewed existing refinery
modeling results which predicted the composition of CaRFG3 with and
without a waiver. EPA ultimately concluded that additional refinery
modeling was needed and, through its contractor MathPro, performed such
modeling. EPA used these emission models in conjunction with refinery
modeling results in order to estimate factors, generally as percent
changes, which could then be applied to emissions inventory estimates
to predict the tons/day emission changes in year 2005 resulting from a
waiver. The analysis included both on-road and non-road emissions, and
addressed emissions of NOx, CO, and VOC.
The following brief description of the process highlights some of
EPA's major decisions and assumptions. EPA's analysis is described in
detail in our Technical Support Document (TSD), Docket Number A-2000-
10, Document II-B-2.
b. Refinery modeling
EPA's initial waiver analysis included use of certain fuel property
estimates from a December 9, 1999 MathPro refinery modeling analysis
for the California Energy Commission. EPA concluded that this modeling,
for reasons discussed in the technical support document, did not
provide a sufficient basis for evaluation of California's waiver
request. Consequently, EPA commissioned MathPro to do additional
modeling.
The EPA MathPro modeling provided property estimates for oxygenated
CaRFG3 if no waiver were granted, and property and market share
estimates for non-oxygenated and oxygenated CaRFG3 if a waiver were
granted. The refinery modeling investigated a number of cases in which
refiners blended CaRFG3 with and without a waiver using the phase 3
predictive model, the flat limit reference specifications, and the
exhaust plus evaporative VOC compliance option. In these cases the
impact of various factors was considered. Specifically, this modeling
evaluated the properties of CaRFG3 where oxygen was used at 2.0 percent
or 2.7 percent by weight, the constraints of the Unocal patent were
imposed (requiring refiners to avoid the parameter ranges established
by the patent) or eliminated (assuming, for whatever reasons, refiners
did not need to avoid the patent), and where MTBE use outside of
California was assumed to be reduced (e.g., because of MTBE bans or
refiner liability concerns) or assumed to continue at current levels.
The modeling predicted non-oxygenated CaRFG3 shares ranging from 35
percent to 74 percent if a waiver were granted, with six of the eight
cases being greater than the 40 percent non-oxygenated share EPA had
assumed based on earlier modeling. With an increase in oxygen content
from 2.0 percent to 2.7 percent by weight, all else being constant, the
analysis predicts a decrease in non-oxygenated market share. Also, it
predicts that a reduction of MTBE use outside of California would
result in an increase in the non-oxygenated market share of the CaRFG3
pool. The Unocal Patent may also affect the non-oxygenated/oxygenated
market split. Specifically, avoidance of T50 less than 2101 F could
limit the use of alkylate for premium CaRFG3, possibly increasing the
use of oxygen. Based on the refinery modeling, we concluded that under
a number of sets of foreseeable ``waiver'' circumstances, there would
be substantial quantities of both oxygenated and non-oxygenated CaRFG3
produced. EPA's refinery modeling provides a number of alternative
cases, incorporating the finalized version of the Phase 3 predictive
model and CaRFG3 flat limit reference specifications. This allowed EPA
to examine potential waiver emissions impacts under various alternative
scenarios which incorporate a variety of potential conditions. EPA
evaluated emission impacts for the eight basic cases from the modeling
and for four cases where the ``no waiver'' oxygen level was 2.7 weight
percent, and the ``waiver'' oxygen level for the oxygenated portion of
the pool was 2.0 percent.
c. Emissions modeling
At the time that EPA began its analysis of the California waiver
request, there were several available emission models which related
fuel properties to emissions of on-road light duty vehicles. These were
the complex model (the compliance model for Federal RFG), the Phase 2
predictive model (the compliance model for phase 2 California RFG), and
the PM3 (the compliance model for phase 3 California RFG which had not
yet been officially adopted). Each of these models was based on
statistical regression analysis of thousands of emission test results.
The Phase 3 predictive model was developed using statistical procedures
and software not available for use in developing the complex model or
the Phase 2 predictive model. Although additional data were used to
develop the Phase 3 model, much of the same data were used in the
development of all three models.
EPA was concerned that considerable disparity existed among the
models in the estimated direction and magnitude of the NOx response to
changes in oxygen content, all else being constant. The Phase 2 and
Phase 3 models both indicate a NOx increase with increasing oxygen,
however the Phase 3 model shows a much steeper response. The Complex
Model, by contrast, predicts that NOx will decrease slightly as oxygen
increases. It should be noted that the magnitude of the NOx response to
oxygen, even as predicted by the Phase 3 model, is not large when
compared to NOx emission differences between vehicles, or test-to-test
variability in emissions. The small size of the oxygen effect on NOx
emissions indicated in all of these models makes it difficult to detect
statistically and to quantify precisely. In an attempt to resolve the
uncertainty about the NOx/oxygen relationship, EPA staff and a
consultant audited the process that CARB staff used to develop the
Phase 3 predictive model.\3\ Additionally, EPA independently developed
alternative models for NOx as a function of fuel properties for the
Tech 4 vehicles.\4\
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\3\ EPA utilized the consulting expertise of Southwest Research
Institute (SwRI) which had previously been involved in emissions
modeling efforts such as development of EPA's complex model.
\4\ For modeling purposes, CARB separated vehicles into technology
classes 3, 4, and 5. Tech 3 vehicles represent the oldest technology
vehicles, Tech 4 represents ``middle-aged'' vehicles which make up the
majority of the fleet and its emissions, and Tech 5 represents the
newest technology vehicles. For a more complete description, see the
TSD.
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EPA's audit of CARB's model included a review of the decisions for
inclusion and exclusion of data from the data set, the statistical
approach, treatment of ``high emitters'' and selection of a final
model. EPA also reviewed the sufficiency of data and the approach taken
in CARB's representation of Tech 5 emissions in the predictive model.
EPA's review raised a number of concerns about CARB's model development
process. These concerns included CARBs decision not to consider high
emitter terms for potential inclusion in the model, its decision to
discard the primary results of the Phase 3 model-building process and
return to the terms from the earlier Phase 2 effort, and modeling of
emissions from Tech 5 vehicles. These concerns contributed to EPA's
decision to pursue its development of alternative Tech 4 models for
both NOx and exhaust VOCs (modeling non-methane hydrocarbons), for
evaluation of the waiver request. EPA additionally concluded that there
was considerable uncertainty about the accuracy of CARB's Tech 5
models, given the small amount of Tech 5 data and CARB's modeling
approach which relied heavily on Tech 4 data to develop the Tech 5
models. Consequently, based on engineering judgment, EPA concluded that
the best approach for waiver evaluation was to assume that Tech 5 NOx,
VOC and CO exhaust emissions would not be affected by fuel property
differences. EPA elected to use the Tech 3 portion of the phase 3
predictive model, and the allocations of exhaust VOCs and NOx emissions
that would occur with a waiver (based on the use of CARB's emission
inventory model EMFAC7g) among the three technology groups assumed in
the predictive model.
While the Phase 3 predictive model contains an equation to
calculate a CO credit as a function of oxygen content it does not
explicitly calculate CO mass emissions as a function of fuel
properties. EPA used CARB's assumptions regarding oxygen effect on CO
(contained in Appendix G--``Estimation of a CO Credit'' of its staff
report for the CaRFG3 rule) in calculating CO changes. However, EPA did
not assume that the CO would change due to changes in sulfur or T50.
EPA split the CO change among the Tech 3, Tech 4 and Tech 5 categories
as CARB did, assuming that there would be no change in CO as a result
of oxygen reduction in Tech 5 vehicles (which CARB assumed as well).
When EPA developed its alternative Tech 4 models, a number of
possible candidate models resulted. Certain of these models did not
show substantially different predictive utility based on statistical
criteria. Therefore, EPA had to use engineering judgment of the likely
effect on emissions as well as statistical measures to select the
models it would use for evaluating California's waiver petition.
Ultimately, EPA selected six different NOx models and decided to
average results in order to determine applicable percent change factors
for the waiver analysis. Similarly, EPA selected three models from
among the candidate NMHC exhaust models. Two of these NMHC models
contained terms which indicated that ``high emitters'' and ``normal
emitters'' would respond differently to certain fuel property changes.
EPA requested information, based on EMFAC7G, from CARB in order to
properly weight normal and high emitter contributions.
EPA also included non-exhaust VOC emission effects in its analysis.
Such effects could arise from differences in RVP in as-blended gasoline
under a waiver compared to no waiver, and from in-vehicle commingling
of ethanol-oxygenated and non-oxygenated gasoline. Additionally,
permeation VOC emissions through non-metallic fuel system components
are expected to be higher with ethanol-oxygenated gasolines than with
non-oxygenated gasolines.
To quantify RVP-related changes in evaporative emissions, EPA used
an equation, based on EMFAC7G, published in a report prepared by Sierra
Research for the American Methanol Institute.\5\ This equation
expresses evaporative emissions, in tons per day, as a function of RVP.
Rather than use the tons per day estimates directly, EPA calculated
percent change factors, and applied them to evaporative VOC emission
inventory estimates. CARB estimated, in its February 7, 2000 submittal,
that the difference in VOC emissions due to permeation losses when
comparing non-oxygenated gasoline to gasoline/ethanol blends with 2.0
weight percent oxygen is about 13 tons/day for all Federal RFG areas,
assuming 100 percent penetration of non-oxygenated fuels. EPA
quantified permeation effects by adjusting proportionally for various
non-oxygenated penetrations and oxygen contents different than 2.0
weight percent, assuming that 60 percent of these permeation losses
would represent SCAQMD.
---------------------------------------------------------------------------
\5\ Report No. SR00-0101 ``Potential Evaporative Emission Impacts
Associated with the Introduction of Ethanol-Gasoline Blends in
California'' January 11, 2000.
---------------------------------------------------------------------------
The MathPro modeling indicated that the as-blended RVP of the
CaRFG3 pool with a waiver would be lower than the RVP without a waiver
for all scenarios. This results in a net reduction in VOC emissions for
all scenarios with a waiver when exhaust, as-blended evaporative and
permeation emission changes are considered. If EPA were to grant a
waiver, however, in-vehicle commingling of ethanol blended oxygenated
gasoline and non-oxygenated CaRFG3 would cause additional RVP increases
to occur. California has estimated the likely magnitude of this
increase to be about 0.1 psi (basically the lower of several RVP
increases produced by CARB's analysis). EPA reviewed CARB's evaluation
of the commingling effect. EPA also evaluated the possible commingling
effect under various potential conditions. This analysis used a pre-
existing EPA commingling model to help assess the average in-vehicle
RVP increases that could occur if ethanol-oxygenated gasoline were
commingled with non-oxygenated gasoline during vehicle refueling. Since
EPA's model assumes that ethanol would be blended at 10 volume percent,
EPA multiplied the model's RVP increase estimates by 0.8 (as CARB did)
to evaluate potential RVP increases when ethanol is blended at 5.7
volume percent (2.0 weight percent oxygen). EPA also considered the
analysis contained in the Sierra Research report cited earlier. EPA
found that an RVP increase close to 0.2 psi is as likely to occur under
a fairly broad set of conditions as a 0.1 psi increase. Since EPA
recognized that there is considerable uncertainty about the magnitude
of the commingling RVP increase, EPA evaluated net VOC (exhaust + as-
blended evaporative + commingling evaporative + permeation) changes at
various levels of RVP boost from 0 psi to 0.3 psi. For this analysis,
EPA assumed that commingling RVP increases apply to non-road as well as
on-road vehicles. EPA concluded that, depending on the scenario and the
magnitude of the RVP increase, the net VOC benefit with the waiver
would change and significantly could be reversed by the commingling
component of VOC emissions. These results are discussed below.
EPA expected that non-road exhaust emission changes would be a
function of oxygen content. We used information in an EPA document,
Report No. NR-003, in conjunction with statewide California non-road
inventory data to determine percent change factors for the waiver
analysis.\6\ Non-road RVP-related evaporative emissions were modeled
using the on-road percent change factors. EPA recognized that the
extremely limited amount of data available to estimate non-road effects
added considerable uncertainty to the analysis. Furthermore, EPA had to
make a number of assumptions to derive baseline non-road gasoline
emission inventory estimates for the SCAQMD, and to separate the VOC
estimate into exhaust and evaporative components.\7\
---------------------------------------------------------------------------
\6\ ``Exhaust Emission Effects of Fuel Sulfur and Oxygen on
Gasoline Nonroad Engines'', Report No. NR-003, November 24, 1997,
Christian E. Lindhjem, U.S. EPA
\7\ Inventory assumptions are described in a memo in the Document
II-B-1 in Docket A-2000-10.
---------------------------------------------------------------------------
3. emissions changes expected to result from a waiver
EPA's evaluation of the emissions impacts of a waiver, as discussed
below, shows a likely decrease of NOx under all scenarios examined, an
increase in CO under these scenarios, and significant uncertainty about
the change in VOC emissions. The VOC emissions impact ranges from a
decrease in VOC to an increase, largely depending on the level of
commingling emissions and whether they are or are not accounted for.
NOx Emissions Effects. The changes that refiners would make to the
composition of California gasoline in response to a waiver, when
evaluated with EPA's NOx emissions model, would likely reduce NOx
emissions under every scenario that we evaluated (see Table 1). This
finding, which is unique to California's regulatory structure and
specific to California refineries' technical configurations, is
directionally in agreement with CARB predictions, though the two
analyses have important differences.
CO Emissions Effects. With a waiver, CO emissions would increase in
all scenarios, as indicated in Table 1. This is because oxygenated
gasoline generally produces lower CO emissions and a mixed pool of
gasoline with significant quantities of non-oxygenated gasoline would
result in poorer CO emissions performance. The refinery modeling, under
various scenarios, estimates the proportion of the gasoline that would
be oxygenated with a waiver and thus drives the inventory effects.
CARB's model was used to determine the CO effects brought about by
changes in oxygen content.
VOC Emissions Effects. Our analysis shows that the impact of a
waiver on VOC emissions would be mixed. Exhaust VOC emissions would be
higher with a waiver, as indicated when EPA's VOC emissions model is
used to predict exhaust VOC emissions from the fuels that our refinery
analysis indicates are likely to be produced with and without a waiver.
But the refinery modeling also indicates that the RVP of both
oxygenated and non-oxygenated fuels produced under a waiver would be
lower than without a waiver, with a consequent reduction in ``as-
blended'' evaporative emissions. Additionally, the smaller proportion
of gasoline containing ethanol in the waiver case would also tend to
reduce permeation emissions. (Permeation is the escape of gasoline
components through the material used in soft fuel system components.
Such losses are increased by the presence of ethanol in gasoline.) In
the absence of any commingling considerations (discussed below), the
net result of these opposite exhaust and non-exhaust effects would be a
reduction in VOC emissions with a waiver, though the magnitude of the
reduction varies across scenarios. As with NOx, the conclusion that the
RVP of fuels produced with a waiver would be lower than without a
waiver is based on the specific circumstances of California regulations
and the fuel formulation decisions likely to be made by refineries
supplying the California market.
Commingling effects on VOC emissions occur when ethanol-oxygenated
gasolines and gasolines without ethanol are mixed in vehicle fuel
tanks. This is due to the volatility boost caused when ethanol is added
to all-hydrocarbon gasoline. This boost in volatility occurs even when
a small amount of ethanol is added to gasoline. Therefore, in order to
produce an ethanol-containing RFG meeting evaporative emissions
requirements, the hydrocarbon blendstock to which the ethanol is added
must have very low volatility to accommodate increased volatility
produced by the ethanol. If the non-oxygenated RFGs are ``commingled''
in vehicle fuel tanks with ethanol RFG, the ethanol will similarly
increase the volatility of these non-oxygenated RFGs resulting in an
overall volatility of the ``commingled'' blends greater than that of
either the ethanol RFG or the non-oxygenated RFG prior to commingling.
In other words, when a vehicle with a partially full tank is refueled
with a different type of gasoline (i.e., ethanol-oxygenated in the tank
and non-oxygenated added or vice versa), the presence of ethanol will
cause the resulting mixture to have an overall RVP greater than the
original RVP of either of the gasolines prior to refueling.
Without a waiver it is reasonable to believe that there would be no
appreciable commingling effects, since all of the gasoline in the RFG
areas would contain ethanol.\8\ With a waiver, commingling would
certainly occur and would exert an upward pressure on VOC emissions.
While the directional impact on emissions from commingling is clear,
its magnitude is very difficult to forecast as it depends upon
estimates of the oxygenated/non-oxygenated market share, the oxygen
content used in ethanol-oxygenated RFG, and vehicle owners' refueling
behavior (including brand loyalty and full versus partial fill-ups),
among other variables.
---------------------------------------------------------------------------
\8\ There is actually always some commingling where one of two
adjacent areas has ethanol in its gasoline owing to travel across area
boundaries and the resulting fuel mixing. Some of this will occur in
California with or without a waiver. We considered the difference in
the magnitude of this cross-border commingling between waiver and non-
waiver situations to be small enough to ignore for the purposes of this
analysis.
---------------------------------------------------------------------------
CARB estimated that commingling would have the effect of raising
the RVP of gasoline by about 0.1 psi. CARB's analysis assumed ethanol
use in 100 percent of premium gasoline and 46 percent of regular
gasoline, no grade switching (thus restricting the occurrence of
commingling only vehicles using regular (i.e., non-premium) gasoline),
a gasoline pool comprising 75 percent regular gasoline and 25 percent
premium, and 63 percent of regular grade customers switching brands,
potentially resulting in commingling. Using a ``simplified'' analysis
CARB calculated the RVP boost for each possible outcome under two
scenarios (three refills with initial tank volume at the quarter tank
level and 4 refills at the half tank level) and averaged the results
for each scenario. CARB estimated the RVP increase of the gasoline pool
by multiplying the average result by the commingling probability (63
percent) and the regular grade market share (75 percent). Average
increases (above 7 psi) were 0.12 psi for the quarter tank scenario and
0.16 psi for the half tank scenario. These calculations were based on
ethanol content of 10 volume percent (about 3.5 weight percent oxygen)
in ethanol oxygenated gasoline. CARB determined, based on the
University of California, Davis commingling model, that the boost with
5.7 volume percent ethanol content RFG (about 2.0 weight percent
oxygen) would be about 80 percent of the boost with 10 volume
percent.\9\ Consequently, CARB applied an 80 percent adjustment factor
to its 10 volume percent RVP boost estimates to estimate the boost if
5.7 volume percent ethanol content oxygenated RFG were used. Resultant
estimates were 0.10 psi for the quarter tank scenario and 0.13 psi for
the half tank scenario.
---------------------------------------------------------------------------
\9\ A commingling model developed by Dr. D.M. Rocke, University of
California at Davis.
---------------------------------------------------------------------------
We believe that a 0.2 psi estimate of the commingling effect (as
seen in Table 1 and further explained in the Technical Support
Document) is at least as likely to be the case as CARB's 0.1 psi
estimate. CARB estimated the commingling effect by calculating a small
number of refueling iterations under a set of assumptions that would
tend to produce an RVP boost estimate at the lower end of the range of
likely RVP increases (i.e., 100 percent ethanol use in premium
gasoline, no grade switching, and ethanol content at 5.7 volume
percent). Furthermore, EPA's analysis indicates that even with these
assumptions concerning ethanol use, content and grade switching, the
commingling effect is still likely to be about 0.17 psi which is closer
to 0.2 psi than 0.1 psi.
In finalizing version 3 of the California RFG regulations, CARB
adopted a 0.1 psi reduction in allowable RVP to compensate for the
expected increase in VOC associated with commingling if a waiver were
granted. If we credit CARB's 0.1 psi reduction in allowable RVP against
the additional 0.2 psi equivalent increase in VOC emissions from
commingling, the net increase in VOC emissions expected from a
commingling effect would be 0.1 psi. If this figure is used in
estimating the effect of a waiver on the VOC inventory, all but two of
our modeled scenarios show overall VOC reductions with a waiver, but
considerably smaller reductions than are predicted using CARB's
approach (assumption of a commingling effect of 0.1 psi, with the
entire effect offset by the 0.1 psi RVP reduction). See the Table 1
column labeled ``VOC 0.1 psi boost''\10\
---------------------------------------------------------------------------
\10\ For purposes of this decision EPA does not need to decide
whether it is appropriate to offset the expected increase in emissions
from commingling with the 0.1 psi RVP reduction adopted by CARB, as
even if the 0.1 psi offset is applied, as discussed below, VOC
reductions are too uncertain to resolve what the effect of a waiver on
ozone would be.
---------------------------------------------------------------------------
The columns for VOC emissions reflect the estimated impact of a
waiver on actual VOC emissions (in tons/day), considering exhaust and
evaporative emissions, including commingling and permeation, from on-
road and non-road vehicles. The columns differ based on the estimates
of average increase in RVP associated with commingling. For example,
``VOC 0.1 psi boost'' would reflect the impact of a waiver on the VOC
inventory if commingling increases the average RVP by 0.2 psi, but this
increase is treated as partially offset by CARB's adoption of a 0.1 psi
reduction in RVP.\11\ The column ``VOC no boost'' would reflect the
impact on the VOC inventory if commingling increases RVP by 0.1 psi,
and this increase is treated as fully offset by CARB'S adoption of a
0.1 psi reduction.
---------------------------------------------------------------------------
\11\ This column would also reflect the impact of a waiver on the
VOC inventory if commingling increases the average RVP of the gasoline
by 0.1 psi and the impact is not offset.
---------------------------------------------------------------------------
The impact of a waiver on the VOC inventory differs considerably
depending on the estimates of commingling (comparing the VOC columns of
Table 1). This highlights the importance of commingling emissions in
assessing the overall VOC impact of a waiver. Using the 0.2 psi
commingling effect (based on the discussion above), and crediting
CARB's 0.1 psi RVP adjustment, results in substantially less overall
VOC reduction than otherwise, and we still have reasonably likely
scenarios where there is a net VOC increase. Not only is commingling a
quantitatively important factor in VOC emissions, it is also a
component that is very sensitive to variables such as brand loyalty
whose values have been only crudely estimated. As a result of this
sensitivity, a plausible case can be made for commingling effects
ranging all the way from 0.1 psi to 0.3 psi (see the Technical Support
Document).
Our analysis indicates a waiver would likely result in a decrease
in emissions of NOx, an increase in exhaust VOC, a decrease in
evaporative VOC (as-blended), and an increase in CO. However, we are
less confident about on-road permeation effects and off-road emissions
of CO, NOx and VOC. The consistent decreases in NOx emissions shown by
our analysis also indicate that there would likely also be an overall
decrease in nitrogen-containing PM emissions. There is much uncertainty
about the estimation of permeation and other emissions on off-road
vehicles/engines as discussed in detail in the Technical Support
Document. Finally, there is significant uncertainty regarding
commingling effects. In summary, the impact of a waiver on VOC
emissions is considerably more complex to model than the impact of a
waiver on either NOx or CO emissions, and there is significant
uncertainty as to the overall VOC effect of a waiverBin both the amount
and the direction of the effect.
Table 1: Waiver Impacts at Various Commingling-Related RVP Boosts
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Waiver Case Oxygen Market Shares and Oxy Emission Inventory Changes (tons/day) (On-road, off-
Levels road and all exhaust and evaporative VOC such as
------------------------------------------ permeation and commingling)
No Waiver Oxy Level Waiver Oxy Level Nationwide MTBE Use Unocal Patent Year- ------------------------------------------------------
% Non- round VOC 0.1 VOC 0.2
% Oxyfuel Oxyfuel Oxygen NOx VOC no psi psi CO
Avg boost\12\ boost\13\ boost\14\
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2.0............................. 2.0................ Reduced............ Patent not avoided. 35................ 65 1.0 -6.60 -4.02 2.54 9.23 173.13
2.7............................. 2.7................ Reduced............ Patent not avoided. 40................ 60 1.5 -7.53 -15.24 -9.15 -2.94 225.19
2.7............................. 2.0................ Reduced............ Patent not avoided. 35................ 65 1.0 -9.61 -16.23 -10.14 -3.93 274.24
2.0............................. 2.0................ Continues.......... Patent not avoided. 50................ 50 1.3 -5.08 -4.10 2.46 9.15 133.18
2.7............................. 2.7................ Continues.......... Patent not avoided. 60................ 40 1.9 -4.68 -9.72 -3.51 2.81 150.12
2.7............................. 2.0................ Continues.......... Patent not avoided. 50................ 50 1.3 -8.21 -16.35 -10.26 -4.05 230.93
2.0............................. 2.0................ Reduced............ Patent avoided..... 26................ 74 0.9 -7.20 -9.05 -2.69 3.79 197.11
2.7............................. 2.7................ Reduced............ Patent avoided..... 46................ 54 1.6 -7.08 -12.12 -5.96 0.33 202.67
2.7............................. 2.0................ Reduced............ Patent avoided..... 26................ 74 0.9 -10.89 -15.55 -9.44 -3.20 300.23
2.0............................. 2.0................ Continues.......... Patent avoided..... 50................ 50 1.3 -4.84 -8.17 -1.80 4.69 133.18
2.7............................. 2.7................ Continues.......... Patent avoided..... 65................ 35 2.0 -4.78 -9.35 -3.13 3.20 131.36
2.7............................. 2.0................ Continues.......... Patent avoided..... 50................ 50 1.3 -8.73 -14.73 -8.61 -2.36 230.93
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\12\ This scenario is equivalent to a 0.1 psi RVP boost from commingling completely offset by California's 0.1 psi adjustment to its standards.
\13\ Equivalent to a 0.2 psi RVP boost from commingling offset by California's 0.1 psi adjustment to its standards resulting in a net commingling effect of 0.1 psi.
\14\ Equivalent to a 0.3 psi RVP boost from commingling offset by California's 0.1 psi adjustment to its standards resulting in a net commingling effect of 0.2 psi.
4. effects on ozone of emission changes from a waiver
Given an expected reduction in NOx, an increase in CO, and
significant uncertainty about the overall change in VOCs, the evidence
is not clear what impact the emissions changes from a waiver would have
on ozone.
All three of the pollutants discussed above influence ozone
formation. The atmospheric chemistry is complex, but directionally we
would expect NOx reductions to reduce ozone formation, CO increases to
contribute to ozone formation, and VOC emissions to either increase or
reduce ozone, depending on whether VOC emissions increase or decrease.
In order to determine the direction of the overall impact on ozone from
the changes in these three pollutants, we must consider the expected
change in each of them and the overall balance that results from the
directionally different impacts on ozone.
EPA does not believe that the evidence provided by California and
developed through its own analyses clearly demonstrates what effect a
waiver would have an on ozone. This is because: 1) there are three
pollutants whose emission rates would be altered by a waiver, and all
three affect ozone formation, 2) these pollutants are not equivalent,
on a ton-for-ton basis, in their effects on ozone formation, and 3)
while NOx will go down with a waiver, CO is expected to go up and VOC
may go up or down resulting in an uncertain impact on ozone. (The
uncertainties regarding the combined effect on ozone are more
thoroughly discussed in the TSD.)
5. conclusion
EPA has carefully evaluated all of the information in front of it,
including information submitted by CARB, other interested parties, and
developed by EPA. After considering what effect a waiver might have on
the properties of California reformulated gasoline, and the effect this
change in fuel properties would have on emissions from highway and off-
road vehicles and equipment, EPA concludes that there has been no clear
demonstration as to what effect a waiver would have on ozone. There is
significant uncertainty associated with determining the expected
emissions impact of a waiver, largely based on uncertainty regarding
the expected impact on VOCs produced when gasoline containing ethanol
is mixed with other gasolines in the marketplace. As a result, there is
significant uncertainty in balancing the emissions impacts of the three
different pollutants involved, each of which affect ozone, and
determining their overall effect on ozone. This uncertainty has not
been resolved, even using the approach suggested by CARB. Since there
has been no clear demonstration of what effect a waiver would have on
ozone, it is appropriate to deny California's request for a waiver.\15\
---------------------------------------------------------------------------
\15\ Since we are denying California's request based upon
uncertainty associated with the effect of a waiver on ozone, we need
not decide whether the expected reduction in NOx from a waiver and the
associated reduction in PM would support a determination of
interference with the PM NAAQS.
---------------------------------------------------------------------------
----------
APPENDIX V
State of New Hampshire,
Office of the Governor,
Concord, NH, May 30, 2001.
Hon. Christine Todd Whitman, Administrator
U.S. Environmental Protection Agency
Ariel Rios Federal Building
1200 Pennsylvania Avenue, NW
Washington, DC 20460
Re: Petition to Opt Out of the Federal Reformulated Gasoline Program
Dear Administrator Whitman: I am writing to follow-up on my letter of
April 16, 2001 notifying you of my decision to withdraw the State of
New Hampshire from the Federal Reformulated Gasoline (RFG) program
immediately.
I understand that EPA regulations require that any opt-out petition
must describe the role that RFG plays in our State Implementation Plan
(SIP), and identify those alternative air quality control measures that
the State will adopt to replace RFG in our SIP. Enclosed is the
documentation necessary to meet this requirement. I also understand
that these measures must be implemented by the State and approved by
EPA into our SIP before New Hampshire's opt-out can become effective.
Therefore, at my direction, the New Hampshire Department of
Environmental Services has commenced the rulemaking process that will
enable these measures to be incorporated into the State's SIP at the
earliest possible date.
New Hampshire's citizens and elected officials are deeply concerned
about the impacts of MtBE on our drinking water supplies. In the last
six years, MtBE contamination of water supplies has increased steadily,
to the point where over 16 percent of public water supplies statewide
have some level of MtBE contamination, with one county having more than
24 percent--nearly one in four--of its public water supplies
contaminated to some degree by MtBE. Recently, the New Hampshire House
of Representatives passed legislation (HB 758) directing the State to
opt-out of the RFG program as soon as possible. This bill is now
pending in the New Hampshire State Senate, where passage is also
likely. The fact that New Hampshire's legislative and executive
branches are speaking with one voice on this issue is indicative of the
importance New Hampshire citizens place on clean water and the urgency
with which they want the MtBE problem resolved. I hope EPA will
recognize this importance and urgency, and respond by acting quickly
and affirmatively on New Hampshire's petition to opt-out of the Federal
RFG program and to enable the State to do so without delay.
Thank you for your attention to this critical matter. Please feel
free to contact me or Robert Varney, Commissioner of the Department of
Environmental Services, as needed.
Very truly yours,
Jeanne Shaheen.
______
Petition to Opt New Hampshire Out of the Federal Reformulated Gasoline
Program
New Hampshire Governor Jeanne Shaheen wrote to U.S. Environmental
Protection Agency (EPA) Administrator Christine Todd Whitman on April
16, 2001 conveying the intent of the State of New Hampshire to opt out
of the Federal Reformulated Gasoline (RFG) program. Significant
quantities of oxygenating compounds are required to be present in
gasoline under the Federal RFG program. Since the Federal RFG program
commenced in 1995, the oxygenate methyl tertiary-butyl ether (MtBE),
has become a significant contamination threat to New Hampshire's
groundwater and surface water resources. Existing Federal statutory and
regulatory barriers to reducing and/or phasing-out the use of MtBE
leave States with few constructive options to rectify this
environmental and public health problem. New Hampshire has enjoyed the
notable air quality benefits of the Federal RFG program, and would like
to maintain its contribution to air quality. At this point, however,
there appears to be no effective, legal route by which New Hampshire
can address the MtBE problem except to opt out of the Federal RFG
program.
MtBE is the additive most often used by petroleum refiners serving
the Northeast to meet the Federal Clean Air Act (CAA) Sec. 211k(2)(B)
requirement that RFG contain 2.0 percent oxygen by weight (i.e., the
``oxygen mandate''). Since the MtBE problem originated with this
statutory provision, the best resolution is Congressional action to
repeal the oxygenate mandate. Having invested considerable effort and
resources pursuing such action over the last two years, however, New
Hampshire is concerned that Congressional action to address the
underlying origin of the MtBE problem may not happen in the near
future. Faced with no other viable, effective, or legal alternative
under the Federal Clean Air Act to reduce or eliminate MtBE
concentrations in New Hampshire's gasoline, the State is compelled to
submit this formal petition to opt out of the Federal RFG program.
Under authority provided in Sec. 211(k)(6) of the Federal Clean Air
Act, New Hampshire petitioned EPA to participate in the Federal RFG
program on October 22, 1991. Notice of EPA's approval of this request
was posted in the Federal Register on December 23, 1991 (56 FR 66444).
The State of New Hampshire, in accordance with the procedures outlined
40 CFR 80.72, now hereby petitions EPA to opt out of the Federal RFG
program and to remove all New Hampshire counties from the list of
``covered areas'' delineated in 40 CFR 80.70. Upon approval--of this
petition by EPAt the four-county area in New Hampshire where Federal
RFG is currently required (specifically Hillsborough, Merrimack,
Rockingham, and Strafford counties) will no longer be subject to the
requirements of the Federal Clean Air Act Section 211(k) and the
Federal RFG rule (40 CFR Part 80) for gasoline supplied and sold in
those areas, including the specification that such gasoline contain 2
percent oxygen by weight.
Based on a review of the applicable statutory provisions and EPA's
RFG rule, as well as discussions. With EPA's regional staff, New
Hampshire understands that the submissions required for EPA approval of
the State's request to opt out of the RFG program include:
A formal opt out request pursuant to 40 CFR 80.72,
including a list of all prior State Implementation Plan (SIP)
submittals which utilize Federal RFG emission reduction benefits--
benefits that must be replaced upon eliminating Federal RFG in New
Hampshire;
SIP revisions containing the State rules promulgated to
replace the emission reductions benefits provided by Federal RFG; and
A request for a waiver of CAA Sec. 211(c)(4)(A), pursuant
to Sec. 211(c)(4)(C), in order to adopt a State control measure that
affects federally regulated fuels or fuel component.
This document is the formal request to opt out of the Federal RFG
program, and it outlines all New Hampshire SIP submittals that use RFG
emission benefits to satisfy Federal emission reduction requirements.
It also describes New Hampshire's plans for satisfying those'
requirements via other means. The New Hampshire Department of
Environmental Services (DES) has initiated expedited rulemaking
procedure?to enact replacement emissions reductions and is preparing
the necessary SIP amendments.
RFG has been included in certain New Hampshire SIP revisions as a
mobile source emissions control measure for volatile organic compounds
(VOCs), nitrogen oxides (NOx), and carbon monoxide (CO). Attachment 2
lists these SIP revisions and their approval status at EPA. As detailed
further below, New Hampshire will replace Federal RFG as a VOC and/or
NOx control measure by adopting rules implementing ``Oxy-Free
Reformulated Gasoline'' (OFRFG) that will be substantively identical to
Federal RFG, except that no minimum oxygen content will be required.
New Hampshire's Sec. 211(c)(4)(A) waiver request will be submitted
concurrent with the State's SIP modifications in order to enact State
rules on OFRFG. At the present time, New Hampshire's ozone
nonattainment areas have achieved ``clean data'' status, where three-
year average monitored ozone concentrations are consistent with the
National Ambient Air Quality Standard (NAAQS). The State of New
Hampshire believes that the mobile source VOC and NOx benefits of
Federal RFG have contributed to this achievement, and that these fuel-
related air quality benefits must be retained in order to meet the
ozone NAAQS on a going-forward basis. New Hampshire's approach of
substituting OFRFG for Federal RFG retains these benefits, simplifies
the demonstration of equivalency with RFG, can be more readily
implemented than other control measures, and should accommodate timely
approval of this petition.
The CAA and the Federal RFG rule in 40 CFR 80.41 impose
requirements on refiners that RFG meet a complex combination of
specifications and emissions reduction performance standards for VOCs
and NOx. OFRFG will be adopted as a State rule that will incorporate by
reference applicable Federal RFG requirements, except for the oxygen
requirement. New Hampshire recognizes that to the extent that OFRFG is
equivalent to Federal RFG, OFRFG may also result in lower toxic
emissions. However, the State believes that maximizing the similarity
between OFRFG and Federal RFG will provide greater consistency with
respect to recently adopted Federal regulations relative to gasoline
toxics and in refiners' production processes, resulting in lower costs.
New Hampshire's plans for OFRFG are consistent with the findings
and recommendations of EPA's independent Blue Ribbon Panel on the use
of oxygenates in gasoline, which recommended elimination of the minimum
oxygen requirement for Federal RFG. This position was supported by EPA
and the American Petroleum Institute, both of which were represented on
the panel. DES anticipates that refiners serving New Hampshire will
seek to reduce MtBE levels for both environmental and economic reasons.
MtBE is one of the most expensive components of gasoline, so refiners
may reduce MtBE levels simply to reduce costs. In addition, since MtBE
poses such a threat to water resources, it increases the potential
environmental liability claims that refiners, distributors, and
retailers face.
Appropriate testing, certification, and enforcement procedures for
OFRFG will be adopted as necessary after consultation with EPA's
regional staff. In combination, these steps will ensure that OFRFG
provides the air quality benefits necessary to meet Federal emission
reduction requirements and the commitments reflected in the cited New
Hampshire SIP revisions.
OFRFG will be required in the same areas of New Hampshire where
Federal RFG is currently required (i.e., Hillsborough, Merrimack,
Rockingham, and Strafford counties), and will--by definition--provide
reductions in VOC and NOx emissions equivalent to Federal RFG. Relative
to the State's use of Federal RFG for CO reductions, New Hampshire will
demonstrate that new vehicle and fuel standards (including the Federal
Tier 2 Vehicle/Gasoline Sulfur Rule), coupled with New Hampshire's
fleet turnover, will provide the necessary CO emissions reductions to
maintain the integrity of the State's CO SIP commitments.
Attachment 2 shows that New Hampshire has seven SIP revisions that
use RFG as a control measure to achieve federally required emission
reductions. Of these, five include RFG as a VOC and/or NOx control
measure, and three of these have received final approval from EPA. Two
SIP revisions include RFG as a CO control measure to maintain
attainment of the Federal CO standard, and both of these have received
final approval from EPA. The following sections address each of these
SIP submittals, describing RFG's contribution to the required emission
reductions and how OFRFG will provide the same degree of emission
reductions as the Federal RFG program.
Approved SIP Revisions Which Include Federal RFG as a VOC Control
Measure
Federal RFG is used as a VOC control measure in the following EPA-
approved New Hampshire SIP revisions:
1996 15 percent VOC Rate of Progress Plan (approved
December 7, 1998, 63 FR 67405);
Stage II Comparability Analysis SIP Revision (approved
September 29, 1999,64 FR 52434); and
Clean Fuel Vehicles SIP Revision (approved September 29,
199964 FR 52434).
To replace Federal RFG as a VOC control measure in these SIP
revisions, DES will adopt rules implementing OFRFG. By definition,
OFRFG will provide reductions in VOC emissions equivalent to Federal
RFG, so no change from the VOC emission reduction values in the
existing SIP revisions is expected. OFRFG will be required in the same
areas of New Hampshire that Federal RFG is currently required (i.e.,
Hillsborough, Merrimack, Rockingham, and Strafford counties). Upon
final adoption of its OFRFG rules, DES will submit corresponding
modifications to these currently approved SIP revisions. Using an
expedited process, DES intends to complete this rulemaking within 60
days.
Approved SIP Revisions Which Include Federal RFG as a CO Control
Measure
Federal RFG is referenced as part of New Hampshire's demonstration
that the Manchester and Nashua areas will continue to maintain
attainment of the National Ambient Air Quality Standard (NAAQS) for CO,
as outlined in the following maintenance plan SIP revisions:
Redesignation to Attainment for CO in Manchester, NH
(approved November 29, 2000, 65 FR 71060); and
Redesignation to Attainment for CO in Nashua, NH(approved
November 29, 2000, 65 FR 71060).
While some CO benefits are associated with the use of Federal RFG
in older vehicles, the Manchester and Nashua areas have monitored
attainment with the CO NAAQS since 1990 (i.e., five years before the
Federal RFG program was implemented in New Hampshire). Federal RFG was
clearly not necessary to attain the CO standard in these areas, and is
not necessary to continue to maintain compliance with the CO NAAQS in
the future. New Hampshire will submit revisions to these approved SIP
provisions demonstrating that fleet turnover and new Federal vehicle
and fuel standards will provide adequate CO emissions reduction
benefits to maintain the integrity of the State's CO SIP commitments.
DES will work with EPA regional staff and CO modeling staff at the New
Hampshire Department of Transportation to determine how best to make
this demonstration, and to expeditiously follow through with all
necessary submittals to correspondingly modify New Hampshire's
currently approved CO SIP revisions. The time frame for this process
depends on the availability of EPA regional staff, but is anticipated
to proceed expeditiously.
New Hampshire Post-1996 Reasonable Further Progress Plan SIP Revision
Federal RFG is used as a VOC control measure in New Hampshire's
Post-1996 Reasonable Further Progress Plan SIP Revision. EPA approval
of this SIP revision is currently pending. New Hampshire does not
intend to withdraw this SIP revision. However, because opting out of
the Federal RFG program could affect both the administrative
completeness and the ultimate approval of this SIP revision, the State
will replace Federal RFG as a VOC control measure by adopting rules to
implement a OFRFG that will provide VOC emissions reductions equivalent
to those achieved by Federal RFG. As a result, no change from the VOC
emission reduction values in the pending SIP revision is expected. As
noted above, OFRFG will be required in the same areas of New Hampshire
that Federal RFG is currently required (i.e., Hillsborough, Merrimack,
Rockingham, and Strafford counties). Also as noted above, upon final
adoption of its OFRFG rules, DES will submit a corresponding
modification to this currently pending SIP revision. Using an expedited
process, DES intends to complete this rulemaking within 60 days.
New Hampshire 2003 Ozone Attainment Demonstration SIP Revision
Federal RFG is used as a VOC and NOx control measure in New
Hampshire's 2003 Ozone Attainment Demonstration SIP Revision.
Specifically, the photochemical modeling conducted to demonstrate
attainment in this SIP revision assumed that Federal RFG would be
required in New Hampshire's four-county nonattainment area. EPA
approval of this SIP revision is currently pending. New Hampshire does
not intend to withdraw this SIP revision. However, because opting out
of the Federal RFG program could affect both the administrative
completeness and the ultimate approval of this SIP revision, New
Hampshire will replace Federal RFG as a VOC and NOx control measure by
adopting rules to implement a OFRFG that will provide VOC and NOx
emissions reductions equivalent to those achieved by Federal RFG. As a
result, no change from the VOC and NOx emission reduction values in the
pending SIP revision is expected. Again, OFRFG will be required in the
same areas of New Hampshire that Federal RFG is currently required
(i.e., Hillsborough, Merrimack, Rockingham, and Strafford counties).
Upon final adoption of its OFRFG rules, DES will submit a corresponding
modification to this currently pending SIP revision. Using the
expedited process noted above, DES intends to complete this rulemaking
within 60 days.
Currently, 40 CPR 80.72(c) prohibits States from opting out of the
Federal RFG program until January 1, 2004. But for this constraint, EPA
and New Hampshire could together move rapidly to alleviate the
increasing threat of MtBE contamination by enabling the State to opt
out of the Federal RFG program prior to January 1, 2004. Given the
extent of the MtBE contamination that has resulted from the use of
Federal RFG, the State of New Hampshire re-emphasizes and reiterates
the request made in Governor Shaheen's April 16, 2001 letter that EPA
address this section of the Federal RFG rule, either in a formal
rulemaking process or through the use of enforcement discretion, to
allow New Hampshire to pursue all earlier opt out date than January 1,
2004, and to provide such other relief as may be possible.
Submitted this 30th day of May in the year 2001,
Robert W. Varney, Commissioner.
New Hampshire Department of Environmental Services.
Attachment 2
----------------------------------------------------------------------------------------------------------------
State Implementation Plan (SIP)
Revision Submission Date EPA Approval Status Federal Register Notice
----------------------------------------------------------------------------------------------------------------
New Hampshire 1996 15% VOC Rate of Submitted to EPA August Approved by EPA 63 FR 67405
Progress Plan. 29, 1996. December 7, 1998.
New Hampshire State II Comparability Submitted to EPA April Approved by EPA 64 FR 52434
Analysis. 30, 1998. September 29, 1999.
New Hampshire Clean Vehicles SIP..... Submitted to EPA June Approved by EPA 64 FR 52434
7, 1994. September 29, 1999.
Carbon Monoxide (CO) SIP Revision Submitted to EPA Approved by EPA 65 FR 71060
Redesignation to Attainment for CO December 11, 1998. November 29, 2000.
in Manchester, NH.
Carbon Monoxide (CO) SIP Revision Submitted to EPA Approved by EPA 65 FR 71060
Redesignation to Attainment for CO November 30, 1998. November 29, 2000.
in Nashua, NH.
New Hampshire Post-1996 Reasonable Submitted to EPA EPA approval is n/a
Further Progress Plan. September 27, 1996. pending. EPA found
that the submittal was
complete on October 9,
1996. New Hampshire
fulfilled its
obligations under the
Clean Air Act Section
182(c)(2)(B) with the
State's submittal on
September 27, 1996..
New Hampshire 2003 Ozone Attainment Phase I submitted to EPA approval is n/a
Demonstration. EPA June 2, 1995; pending. New Hampshire
found complete by EPA fulfilled its
December 2, 1995;. obligations under the
Phase II submitted to Clean Air Act Section
EPA June 30, 1998. 182(c)(2)(B) with the
State's submittal on
June 2, 1995 and June
30, 1998..
----------------------------------------------------------------------------------------------------------------
__________
APPENDIX VI
Summary of State Drinking Water and Groundwater Standards For MTBE
----------------------------------------------------------------------------------------------------------------
State Groundwater (ppb) Type of Standard or Guideline
----------------------------------------------------------------------------------------------------------------
Alabama............................... 20....................... Guideline or Action Level
Arizona............................... 35....................... Guideline or Action Level
California............................ 13/5..................... Public Health Goal/ Enforceable Aesthetic
Std.
Connecticut........................... 70....................... Guideline or Action Level
Florida............................... 50/500................... Primary Drinking Waster Std./Non-Potable
Water Std.
Hawaii................................ 20....................... Groundwater Cleanup Level for Drinking Water
Idaho................................. 52/261/511............... Pathway Dependent Action Level
Illinois.............................. 70....................... Guideline or Action Level
Kansas................................ 20 to 40................. Health Advisory
Louisiana............................. 18....................... Guideline or Action Level (10% of MCL)
Maine................................. 35/25.................... Drinking Water Std./Action Level
Maryland.............................. 10/50.................... Guideline or Action Level/Drinking Water Std.
Massachusetts......................... 70/50,000................ Primary Drinking Water Std./Vapors in
Buildings
Michigan.............................. 240/20 to 40............. Enforceable Guideline/Aesthetic Guideline
Missouri.............................. 400/40................... Guideline for Non-potable and Potable Water
Montana............................... 30....................... Guideline or Action Level
New Hampshire......................... 70/15/13................. Current Primary Drinking Water Std./Action
Level Prop. Primary Drinking Water Std. &
Groundwater Cleanup Level
New Jersey............................ 70....................... Primary Drinking Water Std.
New Mexico............................ 100...................... Interim Action Level
Nevada................................ 20/200................... Interim Action Level for Nearby Receptors/
Incomplete Exposure Pathway
New York.............................. 50/10.................... Primary Drinking Water Std./Groundwater
Cleanup Std.
North Carolina........................ 200...................... Guideline or Action Level
Ohio.................................. 40....................... Action Level
Oklahoma.............................. 20....................... Action Level
Oregon................................ 20 to 40................. Revised Guideline
Pennsylvania.......................... 20 to 40................. Health Advisory
Rhode Island.......................... 40/500................... Primary Drinking Water Std./Non-potable Water
South Carolina........................ 20 to 40................. Interim MCLG
Texas................................. 15....................... Guideline or Action Level
Utah.................................. 200/70................... Groundwater Cleanup Level/Drinking Water
Cleanup Level
Vermont............................... 40/1..................... Primary Drinking Water Std./Action Level
Washington............................ 20....................... Guideline or Action Level
West Virginia......................... 20 to 40................. Health Advisory
Wisconsin............................. 60/12.................... Groundwater Enforcement Std./Action Level
Wyoming............................... 200...................... Primary Drinking Water Std.
----------------------------------------------------------------------------------------------------------------
Source: New Hampshire Department of Environmental Services, January 20, 2000
----------
APPENDIX VII
Tests on Oxygenated Fuels Containing Oxygenates Other than MTBE
Source: U.S. Environmental Protection Agency
Blue Ribbon Panel Recommendation: EPA and others should
accelerate ongoing research efforts into the inhalation and
ingestion health effects, air emission transformation
byproducts, and environmental behavior of all oxygenates and
other components likely to increase in the absence of MTBE.
This should include research on ethanol, alkylates, and
aromatics, as well as of gasoline compositions containing those
components.
Listing of ongoing research on health effects responsive to this BRP
recommendation.
Fuel and fuel additive testing required under Clean Air Act
Section 211 is underway and will provide specific health
information on MTBE and five other oxygenates as well as
conventional gasoline containing typical gasoline components
that would substitute for oxygenates. The more expanded testing
on MTBE gasoline and conventional non-oxygenated gasoline will
provide information that will likely be applicable to the other
oxygenates as well. Pharmacokinetic testing on the oxygenates
should provide information that may link health effects that
may be common to more than one oxygenate. The pharmacokinetic
testing may also allow extrapolations to be made regarding
route of exposure. For example, inhalation toxicology testing
could be extrapolated to ingestion routes of exposure. Using
pharmacokinetic modeling and health effects data, EPA's Office
of Research and Development is in the process of updating and
expanding the MTBE file in the Agency's Integrated Risk
Information System (IRIS) database. In addition to updating the
inhalation reference concentration (RfC) currently on IRIS, the
file will contain an oral reference dose (RfD) and cancer
assessment when completed (an external review draft is expected
in spring of 2002). These assessments are expected to be of
relevance to establishing drinking water standards and other
guidance on MTBE in water. Similar efforts will begin in 2002
to develop an IRIS file for ethanol, using ingestion health
effects data to estimate inhalation health risk. Finally, the
exposure testing will produce valuable information regarding
the transformation byproducts and environmental behavior of all
oxygenates and other hydrocarbon gasoline components.
Tests on Oxygenated Fuels Containing Oxygenates Other than MTBE
Ethanol (EtOH)
Subchronic Inhalation Toxicity Study, with
Specific Health Effect Assessments
Fertility/Teratology Assessment which includes
animal studies designed to provide information on potential
health hazards to the fetus arising from the mother's repeated
inhalation exposure to vehicle/engine emissions before and
during her pregnancy.
In vivo Micronucleus Assay which is an in vivo
cytogenetic test which uses erythrocytes in the bone marrow of
animals to detect chemical damage to the chromosomes or mitotic
apparatus of mammalian cells.
In vivo Sister Chromatid Exchange Assay to detect
the ability of a chemical to enhance the exchange of DNA
between two sister chromatids of a duplicating chromosome.
Neuropathology Assessment including
histopathological and biochemical techniques designed to
develop data in animals on morphologic changes in the nervous
system associated with repeated inhalation exposures.
Glial Fibrillary Acidic Protein Assay to
determine chemically induced injury to the brain and central
nervous system.
Histopathology Assessment including preparation
of the animals targeted for pathologic examination of the lungs
shall include inflation of the lungs with fixative which will
permit later examination of the lung tissues by electron
microscopy, if follow-up to light microscopy is indicated. In
addition, respiratory tract histopathology shall be conducted.
Immunotoxicity Screening describing the
performance and analysis of the required primary antibody
response (IgM) to sheep red blood cell antigen by either the
Jerne and Nordin splenic antibody plaque forming cell assay or
by an enzyme-linked immunosorbent assay (ELISA)
Inhalation Pharmacokinetic Studies which develop
and validate a physiologically-based pharmacokinetic (PBPK)
model to quantitatively describe test substance disposition
(uptake, distribution, metabolism and elimination).
Ethyl tertiary butyl ether (ETBE)
Subchronic Inhalation Toxicity Study, with
Specific Health Effect Assessments
Fertility/Teratology Assessment
In vivo Micronucleus Assay
In vivo Sister Chromatid Exchange Assay
Neuropathology Assessment
Glial Fibrillary Acidic Protein Assay
Histopathology Assessment
Immunotoxicity Screening
Inhalation Pharmacokinetic Studies
Tertiary amyl methyl ether (TAME)
Subchronic Inhalation Toxicity Study, with
Specific Health Effect Assessments
Fertility/Teratology Assessment
In vivo Micronucleus Assay
In vivo Sister Chromatid Exchange Assay
Neuropathology Assessment
Glial Fibrillary Acidic Protein Assay
Histopathology Assessment
Immunotoxicity Screening
Inhalation Pharmacokinetic Studies
Di-isopropyl ether (DIPE)
Subchronic Inhalation Toxicity Study, with
Specific Health Effect Assessments
Fertility/Teratology Assessment
In vivo Micronucleus Assay
In vivo Sister Chromatid Exchange Assay
Neuropathology Assessment
Glial Fibrillary Acidic Protein Assay
Histopathology Assessment
Immunotoxicity Screening
Inhalation Pharmacokinetic Studies
Tertiary butyl alcohol (TBA)
Subchronic Inhalation Toxicity Study, with
Specific Health Effect Assessments
Fertility/Teratology Assessment
In vivo Micronucleus Assay
In vivo Sister Chromatid Exchange Assay
Neuropathology Assessment
Glial Fibrillary Acidic Protein Assay
Histopathology Assessment
Immunotoxicity Screening
Inhalation Pharmacokinetic Studies
Tests on Non-Oxygenated Gasoline and MTBE-Gasoline
Subchronic Inhalation Toxicity Study, with
Specific Health Effect Assessments
Two-Generation Reproductive Study which includes
animal studies designed to provide information on potential
health hazards to the fetus arising from the mother's repeated
inhalation exposure to vehicle/engine emissions before and
during her pregnancy. This study will include neuropathology
and Glial Fibrillary Acidic Protein Assay assessments conducted
on the first generation of pups no sooner than 21 days after
birth and no later than 28 days.
In vivo Micronucleus Assay which is an in vivo
cytogenetic test which uses erythrocytes in the bone marrow of
animals to detect chemical damage to the chromosomes or mitotic
apparatus of mammalian cells.
In vivo Sister Chromatid Exchange Assay to detect
the ability of a chemical to enhance the exchange of DNA
between two sister chromatids of a duplicating chromosome.
Neuropathology Assessment including
histopathological and biochemical techniques designed to
develop data in animals on morphologic changes in the nervous
system associated with repeated inhalation exposures.
Glial Fibrillary Acidic Protein Assay to
determine chemically induced injury to the brain and central
nervous system.
Histopathology Assessment including preparation
of the animals targeted for pathologic examination of the lungs
shall include inflation of the lungs with fixative which will
permit later examination of the lung tissues by electron
microscopy, if follow-up to light microscopy is indicated. In
addition, respiratory tract histopathology shall be conducted.
Immunotoxicity Screening describing the
performance and analysis of the required primary antibody
response (IgM) to sheep red blood cell antigen by either the
Jerne and Nordin splenic antibody plaque forming cell assay or
by an enzyme-linked immunosorbent assay (ELISA)
Inhalation Pharmacokinetic Studies which develop
and validate a physiologically-based pharmacokinetic (PBPK)
model to quantitatively describe test substance disposition
(uptake, distribution, metabolism and elimination).
Two-species Developmental Study which is a
developmental study to determine chemically induced changes in
development.
Two-year cancer bioassay to determine the
chemically induced development of tumors.
Exposure Testing
Quantify personal exposures to motor vehicle gasoline and
MTBE-oxyfuel emissions (both evaporative and combustion-
related) in microenvironments which represent the upper end of
the frequency distribution of such exposures. This would
include determination of the quantitative relationship between
the personal exposures measured in the selected
microenvironments, fixed site measurements in these
microenvironments, and available ambient emission measurements;
determination of how the high-end personal exposures (i.e,
exposures approaching the 99th percentile), differ in cities
and seasons of the year in which oxyfuel is used (MTBE-
containing reformulated gasoline (RFG) or wintertime oxygenated
gasoline) as compared with cities and seasons in which oxyfuels
are typically not used; determination of the relative
contributions of fuel combustion vs. evaporation as the source
of personal exposures to gasoline and oxyfuel emissions. The
study would provide sufficient information to serve as a
baseline for extrapolation to other sites and, if possible,
other oxygenated fuels.
Animal Testing Approximate Schedules
--------------------------------------------------------------------------------------------------------------------------------------------------------
Draft Report Due to Final Report Due to
Test Group Fuel Mixture Toxicology Studies EPA Comments Due to RG EPA
--------------------------------------------------------------------------------------------------------------------------------------------------------
Group A............................ Baseline Gasoline-- Study Set 1........... App. 1/2002.......... App. 3/2002..........
Gasoline MTBE. Subchronic w/ App. 2/2002.......... App. 4/2002 App. 5/
Neurotoxicity, 2002.
Immunotoxicity, and App. 6/2002..........
In Vivo/In Vitro
Genotoxicity\1\.
Developmenta
l Toxicity (Two
Species).
--------------------------------------------------------------------------------------------
Study Set 2........... App. 9/2002.......... App. 11/2002......... App. 1/2003
Two
Generation
Reproductive Toxicity.
--------------------------------------------------------------------------------------------
Study Set 3........... App. 3/2004.......... App. 5/2004.......... App. 7/2004
Oncogenicity
(One Species).
--------------------------------------------------------------------------------------------
Group B............................ Gasoline Ethanol...... Study Set 4........... App. 8/2002.......... App. 10/2002......... App. 12/2002
Gasoline TAME......... Subchronic w/ App. 8/2002.......... App. 10/2002......... App. 12/2002
Gasoline ETBE......... Neurotoxicity,
Immunotoxicity, and
In Vivo/In Vitro
Genotoxicity \1\.
Developmenta
l Toxicity (One
Species).
--------------------------------------------------------------------------------------------
Study Set 5........... App. 12/2002......... App. 2/2003.......... App. 4/2003
One
Generation
Reproductive Toxicity.
--------------------------------------------------------------------------------------------
Group C............................ Gasoline DIPE......... Study Set 6........... App. 11/2002......... App. 1/2003.......... App. 3/2003
Gasoline TBA.......... Subchronic w/ App. 12/2002......... App. 2/2003.......... App. 4/2003
Neurotoxicity,
Immunotoxicity, and
In Vivo/In Vitro
Genotoxicity\1\.
Developmenta
l Toxicity (One
Species).
--------------------------------------------------------------------------------------------
Study Set 7........... App. 5/2003.......... App. 7/2003.......... App 9/2003
One
Generation
Reproductive Toxicity.
--------------------------------------------------------------------------------------------
Group D............................ EtOH, TAME, ETBE, Study Set 8........... App. 6/2002.......... App. 8/2002.......... App. 10/2002
DIPE, TBA. Neat
Oxygenate PK(EtOH,
ETBE completed).
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\To include the in vivo micronucleus assay and the in vivo sister chromatid exchange assay, as well as the in vitro salmonella test specified in 40
CFR para. 79.68.
EXPOSURE STUDIES
Exposure Assessment Task Schedule
------------------------------------------------------------------------
Incorporate results of pilot studies................ App. 2/2002
API submits revised draft protocol to EPA........... App. 3/2002
EPA approves/disapproves revised draft protocol..... App. 5/2002
API completes microenvironmental studies............ App. 4/2003
API submits draft final report for review by EPA App.10/2003
including individual peer review comments and
disposition of comments.
EPA provides comments on draft final report......... App. 12/2003
API submits final report to EPA on results of App. 4/2004
testing.
------------------------------------------------------------------------
Hearings
On December 9, 1997, the Committee on Environment and
Public Works held a field hearing in Sacramento, CA on the
presence of MTBE in the nation's water supply. Testimony was
given by Nancy J. Balter, Principal, Center for Environmental
Health and Human Toxicology, and former Associate Professor of
pharmacology, Georgetown University Medical Center; Nachman
Brautbar, Professor of clinical medicine, University of
Southern California School of Medicine; Cynthia Dougherty,
Director, Office of Groundwater and Drinking Water,
Environmental Protection Agency; Stephen K. Hall, Executive
Director, Association of California Water Agencies; The
Honorable Tom Hayden, California State Senator; The Honorable
Richard Mountjoy, California State Senator; Gary Patton,
Counsel, The Planning and Conservation League; Craig Perkins,
Director of Environment and Public Works Management, City of
Santa Monica, California; Peter M. Rooney, Secretary,
California State Environmental Protection Agency; David Spath,
Chief, Drinking Water and Environmental Management Division,
California State Environmental Protection Agency; and John
Zogorski, Chief of National Synthesis on Volatile Organic
Compounds and MTBE, U.S. Geological Survey.
On September 16, 1998, the Committee on Environment and
Public Works held a hearing on S.1576, a bill to amend the
Clean Air Act to permit the exclusive application of California
State regulations regarding reformulated gasoline in certain
areas within the State. Testimony was given by The Honorable
Brian Bilbray, U.S. Representative from the State of
California; John D. Dunlap, III, Chairman, California Air
Resources Board; Douglas A. Durante, Executive Director, Clean
Fuels Development Coalition; The Honorable Dianne Feinstein,
U.S. Senator from the State of California; Daniel S. Greenbaum,
President, Health Effects Institute; Al Jessel, Senior Fuels
Specialist, Chevron Products Company; and Ned Sullivan,
Commissioner, Maine Department of Environmental Conservation.
On October 5, 1999, the Subcommittee on Clean Air,
Wetlands, Private Property and Nuclear Safety of the Committee
on Environment and Public Works held a hearing on the Blue
Ribbon Panel findings on MTBE. Testimony was given by Robert H.
Campbell, Chairman and Chief Executive Officer, Sunoco, Inc.;
The Honorable Jake Garn, Vice Chairman, Huntsman Corporation;
Daniel S. Greenbaum, President, Health Effects Institute; and
Michael P. Kenny, Executive Officer, California Air Resources
Board.
On June 14, 2000, the Subcommittee on Clean Air, Wetlands,
Private Property and Nuclear Safety of the Committee on
Environment and Public Works held a hearing on the
environmental benefits and impacts of ethanol under the Clean
Air Act. Testimony was given by Dan Greenbaum, President,
Health Effects Institute; Blake Early, Environmental
Consultant, American Lung Association; Michael Graboski,
Director, Colorado Institute for Fuels and High Altitude Engine
Research, Colorado Department of Chemical Engineering, Colorado
School of Mines; Bob Slaughter, Director, National
Petrochemical & Refiners Association; Jack Huggins, Vice
President, Williams Energy Services; Jason Grumet, Executive
Director, Northeast States for Coordinated Air Use Management;
Stephen Gatto, President and Chief Executive Officer, BC
International; Gordon Proctor, Director, Ohio Department of
Transportation; The Honorable Charles Grassley, United States
Senator from the State of Iowa; The Honorable Tom Harkin,
United States Senator from the State of Iowa; The Honorable
Richard Durbin, United States Senator from the State of
Illinois.
On April 27, 2001, the Committee on Environment and Public
Works held a field hearing in Salem, NH on the use of the
gasoline additive methyl tertiary butyl ether (MTBE). Testimony
was given by Christina Miller, homeowner in Derry, New
Hampshire; the Honorable Arthur Klemm, Senate President, New
Hampshire State Senate; Robert Varney, Director, New Hampshire
Department of Environmental Services; Dr. Nancy Kinner,
Professor civil engineering, University of New Hampshire; Bill
Holmberg, resident of Bow; Patty Aho, Maine Petroleum
Association.
Legislative History
On May 24, 2001, S. 950 was received in the Senate, read
twice, and referred to the Committee on Environment and Public
Works. On September 25, 2001, the committee held a business
meeting to consider the bill. The bill, as amended, was ordered
reported.
Rollcall Votes
On September 25, 2001, at 9:30 a.m., the committee held a
business meeting to consider S. 950 and other bills. The
committee recessed at 10:35 a.m. to reconvene at the call of
the chair.
The committee reconvened in the President's Room (S 216,
U.S. Capitol). The committee began consideration of S. 950.
Upon no further discussion of the bill, a motion to report the
bill was taken by voice vote. A motion to report the bill as
introduced was agreed to by voice vote. Recorded as voting
against were Senators Bond, Crapo, Inhofe, Voinovich, and
Warner.
Regulatory Impact Statement
The regulatory authority granted by this bill is structured
to streamline and make flexible the imposition of any new
requirements.
No regulatory action is required to effect the elimination
of MTBE in Section 3, though the Administrator will need to
issue regulations to implement and enforce this ban. The
Administrator's existing authority to limit the use of fuels or
fuel additives is expanded by the bill to allow consideration
of water pollution effects.
The authority to waive the oxygen mandate granted to
Governors under Section 4 of this bill requires no regulatory
action to become effective. Section 4 authorizes regulations to
establish new performance standards for toxic emissions. If
regulations are not promulgated within 270 days, statutory
performance standards become effective, rendering regulations
unnecessary. The statutory performance standards could be
revised by regulation based on data described in Section 4.
Compliance with the performance standards is managed through
existing regulatory structures under Section 211(k) of the CAA.
The statutory elimination of the ethanol waiver by Section
7 does not require regulatory action, but may require the
Administrator to provide guidance and technical assistance to
refiners and air quality planners on the change in fuel
characteristics.
The provisions in Section 8 regarding additional opt-in
areas rely entirely on existing authority and regulatory
structures for revisions and approvals of SIPs.
Mandates Assessment
In compliance with the Unfunded Mandates Reform Act of 1995
(Pub. L. 104-4), the committee finds that this bill imposes no
Federal intergovernmental unfunded mandates on State, local or
tribal governments. All of the bill's governmental directives
are imposed on Federal agencies. Furthermore, Section 4 of the
bill provides relief from the mandate in current law that RFG
contain 2 percent oxygen by weight. This bill provides
authority to the Governor of a State to waive that CAA mandate.
In addition, the committee finds that this bill does not
preempt any State, local or tribal law.
The committee finds that this bill imposes two mandates on
the private sector. Section 3 of the bill prohibits the use of
MTBE as a fuel additive. This ban requires the private sector
to identify and use alternative fuel additives, which may
increase fuel production costs. Section 7 of the bill
eliminates the one-pound-per-square-inch waiver of Reid Vapor
Pressure requirements that is available for fuel blends
containing gasoline and 10 percent ethanol under Section
211(h)(4) of the Clean Air Act. The elimination of the waiver
may increase fuel costs, particularly in non-attainment areas
using ethanol blends, as refiners will be required to provide
for a lower RVP blendstock to achieve air quality goals.
Section 423(c) of the Unfunded Mandates Reform Act requires
each report to contain an estimate of the direct costs to the
private sector required to comply with the Federal mandates.
The committee is unable to include such estimates at this time
because the Congressional Budget Office has not completed an
analysis of the bill as reported by the committee.
Cost of Legislation
Section 403 of the Congressional Budget and Impoundment
Control Act requires that a statement of the cost of the
reported bill, prepared by the Congressional Budget Office, be
included in the report. That statement follows:
U.S. Congress,
Congressional Budget Office,
Washington, DC, November 9, 2001.
Hon. James Jeffords, Chairman,
Committee on Environment and Public Works,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has prepared
the enclosed cost estimate for S. 950, the Federal Reformulated
Fuels Act of 2001.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Susanne S.
Mehlman (for Federal costs), who can be reached at 226-2860,
and Elyse Goldman (for the State and local impact), who can be
reached at 225-3220.
Sincerely,
Dan L. Crippen
----------
S. 950, Federal Reformulated Fuels Act of 2001, as ordered reported by
the Senate Committee on Environment and Public Works on
September 25, 2001
SUMMARY
The Clean Air Act (CAA) Amendments of 1990 set up the
reformulated gasoline program (RFG), which requires regions in
certain States with severe air pollution to use reformulated
gasoline. Other States are given the option of participating in
the RFG program. Participating States are required to add
chemicals called Aoxygenates
to gasoline to reduce pollution from fuel emissions. One of
the most commonly used oxygenates is methyl tertiary butyl
ether (MTBE), but in recent years concerns have been raised
about the effects of MTBE on drinking water.
Under S. 950, the use of MTBE would be banned four years
after enactment. This bill also would allow States who chose to
opt-in to the RFG program to waive the oxygenate requirement in
gasoline sold in their respective States. S. 950 would
authorize the appropriation of $370 million over the 2002-2006
period from the Environmental Protection Agency's (EPA's)
Leaking Underground Storage Tank (LUST) Trust Fund. This
funding would be used for grants to States for the cleanup and
treatment of MTBE contamination and for enforcement and
inspection activities related to any LUST sites.
S. 950 also would authorize the appropriation of $750
million to EPA over the 2002-2004 period for grants to assist
manufacturers of MTBE to convert facilities to produce
substitute fuel additives instead of MTBE. This bill also would
require EPA to draft and publish various notices and rules
concerning discontinuing the use of MTBE, and to conduct
several studies on motor vehicle fuels and emissions standards.
Assuming appropriation of the authorized necessary amounts,
CBO estimates that implementing S. 950 would cost about $1
billion over the 2002-2006 period. The bill would not affect
direct spending or receipts; therefore, pay-as-you-go
procedures would not apply.
S. 950 contains no intergovernmental mandates as defined in
the Unfunded Mandates Reform Act (UMRA) and would impose no
costs on State, local, and tribal governments. The act would
benefit States by authorizing $370 million in grants from the
LUST Trust Fund for a variety of activities. S. 950 also would
benefit States by giving them flexibility in determining
whether to use oxygenates in their gasoline.
ESTIMATED COST TO THE FEDERAL GOVERNMENT
The estimated budgetary impact of S. 950 is shown in the
following table. The costs of this legislation fall within
budget function 300 (natural resources and environment).
By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
2001 2002 2003 2004 2005 2006
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
LUST Spending Under Current Law.................................
Budget Authority\1\72....................................... 0 0 0 0 0
Estimated Outlays........................................... 70 53 29 11 4 0
Proposed Changes................................................
LUST Program................................................
Authorization Level..................................... 0 250 30 30 30 30
Estimated Outlays....................................... 0 63 95 81 51 41
Grants to MTBE manufacturers................................
Authorization Level..................................... 0 250 250 250 0 0
Estimated Outlays....................................... 0 100 213 250 150 38
EPA Administrative Support..................................
Estimated Authorization Level........................... 0 3 4 2 2 2
Estimated Outlays....................................... 0 3 4 2 2 2
Total Spending Under S. 950.....................................
Estimated Authorization Level............................... 72 503 284 282 32 32
Estimated Outlays........................................... 70 219 341 344 207 81
----------------------------------------------------------------------------------------------------------------
\1\ The 2001 level was appropriated to the Environmental Protection Agency to administer the LUST program in
that year. This program has not yet received a full-year appropriation for 2002.
BASIS OF ESTIMATE
For this estimate, CBO assumes that the bill will be
enacted near the beginning of fiscal year 2002, that the full
amounts authorized will be appropriated for each fiscal year,
and that outlays will occur at rates similar to EPA's LUST
program and other similar grant programs.
S. 950 would authorize the appropriation of $1.1 billion
over the 2002-2006 period and also would increase EPA's costs
for administrative activities that are not specifically
authorized under the bill. This legislation would make EPA
responsible for various activities related to discontinuing the
use of MTBE, such as drafting and issuing notices and
conducting various studies related to motor vehicle fuels and
emissions standards. Based on information from EPA, CBO
estimates that conducting this work would cost about $13
million, subject to the availability of appropriated funds.
Pay-As-You-Go Considerations: None.
Estimated Impact on State, Local, and Tribal Governments
S. 950 contains no intergovernmental mandates as defined in
UMRA and would impose no costs on State, local, or tribal
governments. The bill would benefit States by authorizing the
appropriation of $370 million in grants from the LUST Trust
Fund for a variety of activities. S. 950 also would benefit
States by giving them flexibility in determining whether to use
oxygenates in their gasoline.
Estimated Impact on the Private Sector
CBO's estimate of the bill's impact on the private sector
will be provided at a later date.
Estimate Prepared By: Federal Costs: Susanne S. Mehlman Impact
on State, Local, and Tribal Governments: Elyse Goldman.
Estimate Approved By: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
MINORITY VIEWS OF SENATOR JAMES INHOFE
These views are submitted to explain certain shortcomings
in to S. 950, the Federal Reformulated Fuels Act of 2001, as
approved by the Senate Committee on Environment and Public
Works. In summary, I believe that S. 950 falls short of
balancing our need for environmental protection with our need
for sound national energy policy.
GENERAL CONCERNS: S. 950 IS A DIRECT IMPEDIMENT TO THE ENERGY SECURITY
OF THE UNITED STATES
In addition to serving on the Senate Committee on
Environment and Public Works, it is my honor and privilege to
serve as the ranking Republican member of the Readiness and
Management Support Subcommittee of the Senate Committee on
Armed Services. In that capacity, I have undertaken a careful
review of the defense readiness of the United States,
particularly as it relates to energy security. This is one of
the many reasons that comprehensive energy legislation has been
and remains one of the most important agenda items of the
Congress. I fear that S. 950 is a hasty and ill-conceived piece
of legislation. In its great desire to address the political
circumstances surrounding the fuel additive MTBE, this bill
makes our energy security considerably worse by shortening
supply and limiting the diversity of its sources.
Never has the Congress needed to be more cognizant of the
relationship between energy and national security than needs to
be now. As I observed on the floor of Senate on November 1,
2001, the United States is currently 56.6 percent dependent
upon foreign countries for our oil supply. There is a
bipartisan and historic consensus that such dependence is
dangerous. Five different Presidents--Eisenhower, Kennedy,
Nixon, Ford and Carter--imposed restrictions on imports of
refined petroleum products because they recognized that
maintaining domestic refining capacity was essential to
national security. While declining to act upon it, President
Clinton also made a similar finding.
We know that the current risk factors are just as acute. I
recently asked Deputy Defense Secretary Paul Wolfowitz a
question regarding the strategic risk imposed by enhanced
dependence of foreign sources--particularly from the Middle
East. He responded, ``[It] is a serious strategic issue. . . .
My sense is that [our] dependency is projected to grow, not to
decline. . . . I think you're right to point out that it's not
only that we would, in a sense, be dependent upon Iraqi oil,
but the oil as a weapon. The possibility of taking that oil off
the market and doing enormous economic damage with it is a very
serious problem.''
The inability of this nation to produce sufficient volumes
of motor fuels constitutes a real threat to national security
for several reasons.\1\ First, the amount of refined products
required to supply a modern military far exceeds the amount
required in the past. For example, during the peak of Operation
Desert Storm, the half million U.S. military personnel consumed
more than 450,000 barrels of light refined products per day,
nearly four times the amount used in WWII by the 2 million
strong Allied Expeditionary Force that liberated Europe.
Second, the nature of modern warfare necessitates the use
of high volumes of gasoline and other refined products. The
shorter warning time requires massive air lifts of supplies
overseas, and the increased emphasis on heavy bombing and
maneuver warfare such as that used in the Gulf War create a
significant demand for refined products. Further, because these
modern conflicts are likely to take place in underdeveloped
regions and because of the short warning period, much of the
refined products necessary for mobilization must originate from
domestic sources.
At mark-up for S. 950, I raised the objection that the bill
would eliminate large volumes of the current gasoline pool in
the United States. I was assured that the bill would be
perfected before any final adoption, and that many Senators
shared my concerns regarding security implications. I look
forward to working with the chairman and ranking member on
those changes.
SECTION 2B LEAKING UNDERGROUND STORAGE TANKS
In general, I have no objection to programs that make
greater resources available to carry out corrective actions and
engage in other remediation activities related to instances of
leaking underground storage tanks. Of course, precisely because
it has not been shown that MTBE constitutes any threat to human
health and the environment, we must be careful to allow those
empowered to use these resources the flexibility to address
MTBE concerns even in the absence of the finding of any threat
to human health and the environment. I am not certain the
current language in S. 950 does so. It should be so clarified.
I would also observe that Section 2 contains the solution
to gasoline contamination that makes the draconian provisions
of Section 3 superfluous. Simply stated, if we fix the tanks
and thereby improve the handling of gasoline, it makes no sense
to then ban a single fuel additive among the many gasoline
components that may leak. Indeed, EPA's own Blue Ribbon Panel B
the study that arguably launched the interest in this
legislation B bluntly stated, ``The major source of groundwater
contamination appears to be releases from underground gasoline
storage systems.''
It is my understanding that the comprehensive energy
legislation adopted by the House of Representatives already
contains similar LUST language regarding fuel additives. I
further understanding that the Senate Environment and Public
Works Committee may take up specific fixes to the LUST program.
In either event, it would appear that the need for this
legislation may well have been overtaken by events.
SECTION 3--BANNING THE SALE OF GASOLINE CONTAINING MTBE
MTBE represents an important contribution to refining
volume and fuel diversity. By harnessing natural gas resources
to augment the gasoline supply with non-petroleum alternatives,
MTBE represents the crucial price and supply moderators in the
modern fuel pool. The Undersecretary of Energy Bob Card
testified before the Senate Energy and Natural Resources
Committee in June 2001 that eliminating MTBE from the fuel pool
amounts to a tremendous constriction in fuel supply, thus
straining refining capacity. He stated:
MTBE's contribution to gasoline supplies nationally is
equivalent to about 400,000 barrels a day of gasoline
production capacity or the gasoline output of four to five
large refineries. Additionally, a loss of ability to use MTBE
may also affect the ability of the US gasoline market to draw
gasoline supplies from Europe, the major source of our price-
sensitive gasoline imports, since those refiners widely use
MTBE, albeit typically at lower concentrations than in the
U.S.\2\
DOE has further reported that banning MTBE in the United
States further undermines the ability of the country to rely
upon secure sources of gasoline supply from around the world.
MTBE will continue to be used by our closest trading partners
and strategic allies, thus reducing the fungibility of supply
for the United States, and again straining capacity. The same
DOE statement continued, ``In addition to the ongoing supply
problems one could expect from trying to produce both
reformulated and conventional gasolines without MTBE, regional
refinery or distribution supply problems could lead to
additional short-term difficulties under State-by-State bans.
One would expect these situations to contribute to regional
gasoline shortfalls and longer periods of price volatility as
markets struggle to re-balance on a State-by-State basis. In
addition, for Northeast States, which depend heavily on
imported reformulated gasoline, MTBE bans and the subsequent
need for special gasoline blendstocks for ethanol blending
could be even more problematic.''\3\
Some have argued that should MTBE exit the market, ethanol
will simply fill the gap. However, there is much uncertainty in
such an approach. First, and most generally, I am concerned
about the conclusions of some studies, which state that ethanol
still has a net negative energy yield. This means that energy
input into ethanol production exceeds the energy output on a
BTU basis. Professor David Pimental of Cornell University
released the most recent study conducted on the subject this
year. His conclusions are clear:
Numerous studies have concluded that ethanol production
does not enhance energy security, is not a renewable energy
source, is not an economical fuel, and does not insure clean
air. Further its production uses land suitable for crop
production and causes environmental degradation (Pimentel,
1991; Pimentel and Pimentel, 1996).\4\
Ethanol advocates cite contrary studies on the subject of
net energy yield (including a recent one from the USDA), but
these studies consistently fail to consider all the energy
inputs necessary to produce ethanol.\5\ Pimental's bottom line
conclusion on energy input is staggering:
The total energy input to produce 1,000 liters of ethanol
is 8.7 million kcal. However, 1,000 liters of ethanol has an
energy value of only 5.1 million kcal. Thus, there is a net
energy loss of 3.6 million kcal per 1,000 liters of ethanol
produced. Put another way, about 70 percent more energy is
required to produce 1,000 liters of ethanol than the energy
that actually is in the ethanol.\6\
The history with the ethanol tax subsidy underscores the
inability of ethanol to add to energy security. The General
Accounting Office reviewed the history of the subsidy in 1997,
and concluded that, ``ethanol tax incentives have not
significantly enhanced U.S. energy security.''\7\ The
Department of Energy has also rejected the notion that a
renewable fuels mandate could significantly reduce imports or
enhance security.\8\
As ranking member of the Subcommittee on Transportation,
Infrastructure, and Nuclear Safety, I also have very serious
concerns about the impact of the increased use of ethanol on
the Highway Trust Fund. Increasing the use of ethanol by 500
percent would translate into a 500 percent increase in the
impact of the ethanol subsidy to the Highway Trust Fund. The
Highway Trust Fund must not suffer as a result of an explicit
or implicit ethanol mandate.
However, with the above statements having been made on
ethanol, as a matter of national energy policy, I would like to
see a day when domestically-produced ethanol is widely used
because of technological development rather than government
mandates and subsidies.
While I believe the legislation should not be adopted until
such time as these troubling supply and security questions can
be answered with certainty, there are some changes that must be
made before any serious consideration can be given to final
passage of this bill. At the very least, DOE must be empowered
to review any changes to the legal status of a fuel additive in
the nation as a whole or in any part of the United States. DOE
must evaluate the likely consequence of any change in the legal
status of fuel additives in light of such national interest
considerations such as security, price, and supply of energy,
and DOE's favorable recommendation should be a precondition of
any change in status becoming operative. Such a suggestion is
clearly consistent with the current scheme of the Clean Air
Act, in the sense that the Act is a comprehensive national
program that occupies the field of fuel additives based on
national environmental priorities and concerns regarding
interstate commerce. Having DOE explicitly review any
authorized change is fuel-additive status fits well within this
existing scheme.
Section 3 of S. 950 would make three amendments to the
Clean Air Act: (1) it would amend the Clean Air Act to include
new authority for EPA to regulate, control or prohibit a fuel
or fuel additive based on water pollution; (2) it would give
California special authority beyond that already given to any
other State to regulate motor vehicle emissions for the purpose
of protecting water quality (although it would not provide it
without any authority in this regard to limit MTBE); and (3) it
would require the EPA Administrator to ban the use of MTBE in
gasoline not later than four years after the date of enactment.
I have concerns with each of these provisions.
The Clean Air Act Should Not be Used to Regulate Water Quality
Section 3(a) of S. 950 amends Section 211(c)(1) of the
Clean Air Act to give EPA the authority to regulate fuels and
fuel additives not only to protect air quality, but also to
prevent water pollution. This amendment would create a clumsy
and inefficient overlap of regulatory authorities. The Clean
Air Act is intended to regulate air quality. The committee has
failed to show that other existing authorities, such as the
Clean Water Act and Subtitle I of the Resource Conservation and
Recovery Act pertaining to leaking underground storage tanks
containing petroleum, are inadequate to address the problem of
groundwater contamination. Even if such a showing were made,
the appropriate response would be to modify those authorities,
not add new authorities in an unrelated statute. Unless and
until Congress develops one comprehensive environmental
statute, the Clean Air Act should not be used to regulate water
quality.
The State of California Should Not be Given Special Authority to
Regulate Water Quality
Section 3(a) of S. 950 amends Section 211(c)(4)(B) to give
the State of California additional authority to regulate water
quality. For the reasons cited above, we believe it is
inappropriate to use the Clean Air Act to give any jurisdiction
additional authority to regulate water quality.
The Ban on MTBE is Arbitrary and Unprecedented
Section 3 of S. 950 requires the EPA Administrator to ban
the use of MTBE in gasoline not later than four years after the
date of enactment. This statutory prohibition is arbitrary and
unprecedented in several respects.
First, the bill makes no finding that MTBE presents a
serious risk to public health. Indeed, the proponents of the
bill acknowledge that the health effects of exposure to low
levels of MTBE are unknown. In fact, after extensive scientific
review, MTBE has not been designated as a significant risk to
human health.
The committee fails to take any notice of information
indicating that recent efforts to prevent gasoline (including
MTBE) from being released into the environment are succeeding
and, as a result, human exposure to MTBE is diminished. The
committee's action obviously is rooted in the consequences of
underground storage tanks that were allowed to leak gasoline
into groundwater supplies in the early and mid-1990s. Since
then, however, new regulations on underground storage tanks
have gone into effect, minimizing the potential for releases of
gasoline into the environment. In addition, a prohibition on
the use of two-cycle engines on lakes and reservoirs has
further minimized the risk of gasoline (including gasoline
containing MTBE) in drinking water supplies.\9\ Unfortunately,
the committee's action fails to take into account these
developments. As a result, the bill bears little logical
relation to the actual factual circumstances. Indeed, a study
in the March 2001 edition of Soil, Sediment & Groundwater
indicates that the average MTBE concentrations in California
have steadily declined over the 1995 to 1999 time period, as
California came into compliance with new LUST standards.
While Congress has acted to ban certain toxic chemicals, it
has never done so without an extensive scientific record and,
in some cases, with an opportunity for the appropriate
administrative agency to revisit the prohibition based on
additional factual information. Congress has enacted only one
statutory prohibition on a toxic chemical, a ban on PCBs in the
Toxic Substances Control Act, enacted in 1976. But even this
prohibition allowed EPA to permit the use of PCBs where it
could be shown that there was no unreasonable risk.
Furthermore, while EPA has taken regulatory action before to
take chemicals out of commerce, such as asbestos, lead, and
a few major pesticides, EPA only exercised its authority after
substantial scientific analysis and an opportunity for public
review and comment. Contrary to this precedent, S. 950 neither
allows EPA to make additional findings concerning the actual
risk to human health nor allows EPA to exercise its regulatory
expertise to provide for exceptions or changes based on changed
circumstances. In this respect, the ban of MTBE is both
arbitrary and unprecedented.
In no event have these extraordinary burdens of proof been
met. Regarding health impacts, a consensus has emerged. Reviews
by scientific panels from the U.S. Government (the National
Toxicology Program), State governments (such as California's
own Carcinogenic Identification Committee), and even
international health organizations (such as the World Health
Organization's International Agency for Research on Cancer and,
more recently, the European Community) all have declined to
list MTBE as a human carcinogen. Further, the Health Effects
Institute, which chaired the EPA Blue Ribbon Panel, released a
report on June 15, 2001 based on three new, independent
studies. HEI stated that ``effects of MTBE exposure are likely
to be no more, and may be less, that the effects seen in
previous studies.'' Therefore, they concluded ``MTBE would be
considered less likely to have adverse effects than previously
thought.''
Recent work in Europe again has demonstrated how outdated
the committee's assumptions are as they relate to MTBE. In a
report released in December 2001, the European Commission
reported findings of two Finnish reports, both of which have
now been published in the Official Journal of the European
Communities. The main conclusion is that there is no risk to
human health from MTBE. Just as this committee recognized in
Section 2 of this bill, the European Commission has instead
opted for commonsense measures to address the handling of
gasoline and the protection of groundwater. Bans on MTBE are
not part of the recommendations.
The ban of MTBE is also objectionable because it is to be
implemented in four years or less. In other parts of the Clean
Air Act, Congress has taken action to prohibit the sale of
certain chemicals or change the design of certain products, but
never according to such an abrupt schedule. In Title VI of the
1990 Clean Air Act Amendments, for example, Congress mandated a
phase out of Class I chlorofluorocarbons (CFCs) over a ten-year
period, and a phase out of Class II CFCs over a 30-year period.
Likewise, in Title IV of the 1990 Clean Air Act Amendments,
Congress ordered a reduction in emissions of sulfur dioxide
over a ten-year period. Title II of the 1990 Clean Air Act
Amendments provides for a tightening of standards for
automobile emissions that extends in a two-step process over
eleven years. Indeed, the investments required to make the
Clean Air Act RFG work were substantial enough to warrant a
five year planning and implementation period. It is hard to
understand the rationale for banning the use of MTBE in four
years or less.
The ban on MTBE in four years or less raises issues of both
workability and fairness. As described initially in these
views, there are serious concerns that gasoline and home
heating oil markets will be seriously disrupted by the abrupt
ban on MTBE. MTBE constitutes approximately three percent of
the total national gasoline pool, and approximately ten percent
of the gasoline pool in areas of the United States using RFG.
It is unlikely that gasoline markets can adjust to this lost
volume without significant price increases and supply
disruptions. And even as more crude oil is used to meet the
demand for motor vehicle fuels, the supplies of crude oil
necessary to produce home heating oil are reduced.
Finally, the ban on MTBE in four years or less is unfair to
those who took risks and committed significant resources to
make the RFG program successful. As Chairman Smith has stated
on several occasions, Congress created the market for fuel
additive oxygenates for an important purpose--to address
serious air quality problems in many areas of the United
States. MTBE producers, especially petrochemical companies,
made significant investments to provide the necessary volumes
of oxygenates. The ban on MTBE in four years or less deprives
these producers of a reasonable return on their investment and
may threaten their economic well being and the economic well
being of their shareholders.
The ban on MTBE not only harms MTBE manufacturers, it also
sets a dangerous precedent that could inhibit the success of
federally mandated environmental programs in the future. While
Congress can establish conditions for participating in
interstate commerce, it cannot compel a business to produce a
particular product. Thus, to encourage the development of such
products, Congress must ensure that the rules for participating
in markets are clear and fair, and that the participant has a
reasonable expectation to earn a return on an investment. The
proposed ban on MTBE in four years or less sends a disquieting
message that Congress can arbitrarily change the rules at any
time, with potentially ruinous consequences for those who have
taken risks and made good faith investments.
SECTION 4--WAIVER OF THE OXYGEN CONTENT REQUIREMENT FOR REFORMLATED
GASOLINE
In addition to allowing States to waive the reformulated
gasoline oxygen content requirement, this section of the bill
would impose new air toxics requirements that would apply in
areas where the oxygen mandate has been waived.
The air toxics provision in Section 4 are extraordinarily
complicated and would require EPA to develop new regional air
toxics standards that would apply to RFG in areas of the
country that waive the RFG oxygen mandate unless EPA's existing
air toxics standards are more stringent. In areas that do not
waive the oxygen mandate, and in areas of the country that do
not use RFG, EPA's existing air toxics standards would apply.
While the intent is to maintain the air toxics benefits of the
RFG program, the scheme outlined in section 4 is too complex,
and will likely result in the imposition of numerous different
air toxics standards, which will likely further fragment
gasoline markets. The fragmentation of gasoline markets makes
it more difficult for the industry to supply consumers with the
fuels they need, particularly if there is an unexpected
disruption in the gasoline supply and distribution system,
because it hinders the ability of the industry to shift
supplies from one market to another.
Moreover, the air toxics provisions in section 4 are
unnecessary. On March 29, 2001, EPA published a new rule in the
Federal Register that ensures that the air toxics emissions
reductions achieved in the past will be maintained into the
future, regardless of any other changes to the RFG
requirements. This new rule requires that refineries continue
to attain the same level of air toxics emissions performance
that they attained in 1998-2000. EPA's rule ensures that
refineries will continue to make RFG with the same high
performance that they did in the past even if the RFG oxygen
mandate is repealed, or the use of MTBE is limited. Moreover,
in the new rule, EPA commits to continue to evaluate air toxics
emissions and to propose additional mobile source air toxics
standards, as appropriate, by July 1, 2004 and to take final
action on such proposal by July 1, 2005. And all of this is
moving forward notwithstanding the fact that EPA expressly
declined to promulgate more stringent RFG air toxics controls
in 1994 on the basis that the benefits could be achieved at a
much lower cost by controlling air toxics emissions through
other EPA programs. 59 Fed. Reg. 7755-56.
Rather than create a new and more complex program to
maintain the air toxic emission reduction benefits of the RFG
program, which could add to the boutique fuels problem and
exacerbate the gasoline supply situation, Congress should give
the new EPA regulations time to work.
SECTION 6--ANALYSIS OF MOTOR VEHICLE FUEL CHANGES
Section 6 is greatly reduced from the Section 9 in the past
committee bill on this subject, S. 2962. While I am glad that
the committee has addressed the concern raised previously that
no predicate had been laid for additional EPA automotive
authority, it is plain that Section 6 is not particularly well-
designed. For example, under Section 3 of the bill, adverse air
quality consequences flowing from the ban on MTBE would begin
virtually immediately (and in no event later than four years
from the date of enactment). However, not until four years
after the date of enactment does Section 6 require even a draft
analysis of impact, to be finalized a year after that. Only
then would modeling changes be contemplated. In effect, the cow
Section 6 seeks will be well out of the barn before Section 6
could possibly be effective.
SECTION 7--ELIMINATION OF THE 1-PSI RVP WAIVER FOR ETHANOL BLENDS OF
CONVENTIONAL GASOLINE
The provision, which would eliminate the 1-psi RVP waiver
for ethanol blends of conventional gasoline, is likely to have
an adverse impact on conventional gasoline supply and cost.
Without the 1-psi waiver, the cost to manufacture the
appropriate blendstock for ethanol blending would increase.
Many ethanol blenders blend ethanol directly with regular
gasoline. This process would no longer be allowed and a special
low RVP blendstock for ethanol blending would have to be
produced and moved through the distribution system, which is
likely to increase supply problems. The net result is likely to
be a reduction in ethanol blending in gasoline and therefore a
reduction in Midwest total gasoline supply. This is not
appropriate given the recent tightness in gasoline supply.
SECTION 8--ADDITIONAL OPT-IN AREAS UNDER THE RFG PROGRAM
This provision would allow for expansion of the RFG program
to any area of the country. This section provides no
consideration of the impact of such an expansion on the
gasoline distribution system, or the overall costs of the RFG
program. Congress debated at great length the geographic scope
of the RFG program in the 1990 Clean Air Act Amendments and
rejected a national RFG program based on need, supply, and
cost. These same factors apply to an even greater extent today
as refining capability has been and will continue to be further
constrained in light of numerous fuels regulations industry
must comply with in a short time frame, such as the recently
promulgated gasoline and diesel sulfur rules, and the mobile
source air toxics rule. There is no justification to expand the
scope of the RFG program.
SECTION 9B--MTBE MERCHANT PRODUCER CONVERSION ASSISTANCE
I commend the committee for recognizing in this provision
that MTBE producers answered the explicit call of Federal
requirement for oxygenates when they manufactured and marketed
their product. As I have suggested at the mark up held on
similar legislation in the last Congress (S. 2962), users and
producers of MTBE are deserving of liability protection for the
same reason that conversion assistance is also justified: the
government required the use of products like MTBE; the
government must hold harmless those that answered the call of
its mandate. Essentially, we should bear in mind that: (1) MTBE
is widely used because of a Federal mandate, the oxygenate
standard; (2) MTBE has been effective in addressing the energy
and environmental concerns that lay at the heart of a larger
Federal program requiring the use of RFG; (3) the government,
as a result of the first two points, bears great responsibility
for any attendant MTBE liability; and (4) failure to address
MTBE liability may undermine any incentive for additive
manufacturers to produce new generations of additives that will
be needed to replace MTBE and to meet future energy and
environmental goals.
In Congress, we have considered liability protections in a
variety of settings, including medical care, firefighter
assistance, educational institutions, firearms, nuclear energy,
and many other areas. The point is that liability protection
makes sense when we are seeking to protect a greater principle,
such as sound public policy or fairness. Both justifications
are present in the current case, and lay at the heart of the
judgment the committee made with respect to conversion
assistance.
The conversion assistance program itself is an important
element to the bill. It reflects the solemn commitment that the
bill's primary author made to Senators on the committee. Not
only is the provision fair; it is vital if we are to expect
companies to respond to future demands for clean fuel
additives. I commend the committee for adopting Section 9, but
advise vigilance to make sure that adequate funds are
appropriated to satisfy Section 9's authorization.
ENDNOTES
\1\ National Defense Council Foundation, The Growing
Refining Gap, A Threat to National Security. vi (Apr. 29,
1994).
\2\ Bob Card, Undersecretary of Energy, Hearings before the
Senate Committee on Energy and Natural Resources, June 21,
2001.
\3\ Id.
\4\ David Pimental, The Limits of Biomass Utilization,
August 16, 2001 at 9.
\5\ Pimental at 10 (``When investigators ignore some of the
energy inputs in biomass production and processing they reach
an incomplete and deficient analysis for ethanol production. In
a recent USDA report (Shapouri et al., 1995), no energy inputs
were listed for machinery, irrigation, or for transportation.
All of these are major energy input costs in U.S. corn
production (Table 3). Another way of reducing the energy inputs
for ethanol production is to arbitrarily select lower
production costs for the inputs. For instance, Shapouri et al.
(1995) list the cost of a kilogram of nitrogen production at
12,000 kcal/kg, considerably lower than FAO which list the cost
of nitrogen production at 18,590 kcal per kg. Using the lower
figure reduces the energy inputs in corn production by about 50
percent. Other workers have used a similar approach to that of
Shapouri et al. (1995).'').
\6\ Id.
\7\ U.S. General Accounting Office, Tax Policy: Effects of
the Alcohol Fuels Tax Incentive, March 6, 1997.
\8\ Blake Early, Sierra Club Testimony Before the Senate
Committee on Environment and Public Works, at Congressional
Record, Aug. 3, 1994, at S10472 (``As my testimony points out,
even the EPA's initial analysis of the program failed to
establish that mandated renewable oxygenate use would result in
a net reduction of global warming gases. In proposing the
renewable oxygen program, EPA claimed DOE support for its
assertion that the renewable oxygen program `would reduce
foreign oil imports, * * * reduce fossil energy use, and lower
emissions of harmful greenhouse gases. The DOE has now
challenged these EPA claims and recently released a report from
Argonne National Laboratories showing that the renewable
oxygenate requirement is more likely to increase--not reduce--
foreign oil imports, fossil energy use, and global greenhouse
gas emissions.'').
\9\ See Chris Bowman, ``Through Tahoe's Murk, Officials
Look at `Crisis:' Leaders Briefed on Cleanup Strategies,''
Sacramento Bee, August 5, 2000.
MINORITY VIEWS OF SENATOR GEORGE V. VOINOVICH
Introduction
The Clean Air Act Amendments of 1990 require the mixing of
an oxygenate with gasoline in an effort to reduce vehicle and
toxic emissions. However, the most common oxygenate, methyl
tetiary butyl ether (MTBE), has been found to contaminate
groundwater. MTBE, primarily made from natural gas or petroleum
products, is listed as a hazardous substance under the
Comprehensive Environmental Response Compensation and Liability
Act of 1990 (CERCLA), but has not been listed as a carcinogen
by either the National Institute of Environmental Health
Sciences or the International Agency on Research on Cancer.
Last year, this Committee responded to the issues and
serious health concerns raised by using MTBE by marking up a
bill that banned MTBE. That legislation created an ethanol
requirement aimed at ensuring that the MTBE could be replaced
and our domestic fuel supply would grow by encouraging the use
of ethanol. This legislation however, does not encourage
ethanol. In fact, it removes the incentive to use ethanol by
removing the oxygenate mandate. Further, it discourages its use
by removing the ethanol vapor pressure waiver thus making it
harder to blend ethanol.
While I support banning MTBE, I am concerned about certain
clean air regulations that would result in the reduced use of
ethanol. Oxygenated fuels that use additives such as ethanol
have been found to reduce carbon monoxide emissions from
automobile exhaust by fourteen percent. Additionally, because
ethanol and other additives typically make up about ten percent
of one gallon of gasoline, eliminating them would require the
country to use an additional five hundred thousand to one
million barrels of gasoline per day. This amounts to
approximately six to twelve percent of our total daily domestic
supply.
Although it is generally more expensive, there are several
advantages to using ethanol over MTBE. Primarily, since it is
an agricultural product, ethanol is a renewable energy source
that helps to address our nation=s energy concerns. In
addition, ethanol is readily biodegradable, thereby eliminating
some of the potential concerns about groundwater contamination
that have been associated with MTBE.
According to the U.S. Department of Energy, there are four
provisions in S. 950 that create problems directly related to
gas supply in this country. The effects of which will be felt
greatest and primarily in the Northeast regions of the U.S.
National MTBE Ban in 4 Years
The DOE analysis states that the MTBE ban would create
economic problems in the Northeast by eliminating nearly three
hundred thousand barrels per day (depending on how California
is viewed) of what is arguably the highest quality gasoline
blend stock. Also, the ban would limit refiners= ability to
bring additional blend stock material, such as light straight
run and raffinate, into the general gasoline pool.
Presumably, this ban would reduce the supply of
reformulated gasoline (RFG) because blending clean gas will
become more difficult. In addition to this, the ban will
decrease the amount of gasoline available for import from
Europe because most of this gasoline contains MTBE and is sent
to northeastern markets.
Additionally, in light of the 2002 toxic anti-backsliding
rule that EPA put into effect this year, any loss of or
limitation on additional use of MTBE (or other ethers) will
severely limit refiners= ability to make incremental barrels of
RFG or other Aclean gasolines.@ Refiners have had meetings with
DOE and EPA in which this combined effect of the toxics rule
and MTBE limitations have been clarified. Therefore, S. 950
will impose additional limitations on RFG supply capability.
Overall, DOE estimates the total impact of this provision
is over four hundred thousand barrels per day of lost gasoline
volume, most of which is concentrated in the east and more so
in the northeast.
Removal of Ethanol Vapor Pressure (RVP) Waiver
This bill eliminates the Vapor Pressure waiver for ethanol.
In order to meet the new vapor pressure, some gasoline
components will need to be removed. This will inevitably result
in an immediate loss of nearly 20 thousand barrels per day with
this number increasing if there is a renewable mandate. If an
ethanol mandate is added later on the floor, and this provision
remains, the loss would catapult to nearly 80 thousand barrels
a day. Therefore, instead of getting 100% of ethanol produced
gasoline, some of the gasoline components will need to be
removed thereby reducing the overall amount of gasoline
produced.
In the 2003/2004 time frame, ethanol will be blended into
at least 1 million barrels per day of conventional gasoline
(where this waiver applies). With a renewable mandate this
volume will increase in later years. The loss of the waiver
will result in at least a 2% volume loss (lighter gasoline
components will have to be removed to accommodate the high RVP
ethanol) on each gallon of gasoline with ethanol.
If a renewable mandate (RFS) is imposed as is almost
certain, in order to obtain passage of the RFG oxygenate waiver
in S. 950, the volume of ethanol used could increase by at
least 4 billion gallons and the volume of gasoline (presumably
conventional) affected would expand to nearly four million
barrels per day. However, the volume loss associated with this
would be on the order of nearly .8 million barrels per day. As
noted, much of this loss will be concentrated in the mid-west
gasoline market where ethanol is currently blended into
conventional gasoline. This is a gasoline market that is
already short in capacity.
The Additional Gasoline Toxics Controls
This bill calls for a complicated program of additional
gasoline toxics control based on PADD level average baseline
performance, applicable only to those states that request a
waiver of the RFG oxygenate requirement. Presumably, this would
be most or all of the RFG states, leaving marginal gasoline
suppliers (those with poorer gasoline toxics performance) with
less competitive markets and less total supply access. In times
like these where there is severe market imbalance, the ultimate
result will be higher and more volatile prices.
The toxics language is based on regional averages. The
result will be an undetermined number of Amarginal@ or mostly
smaller refiners going out of business. Additionally, the EPA=s
new toxics rule for gasoline proposed this year decreases the
methods available to reduce the toxics and produce RFG at the
same time. This legislation makes it even more difficult since
MTBE would have been the toxic reduction mechanism of choice.
The banning of MTBE will therefore cause production losses of
1-4% for refineries making reformulated gasoline.
The State Oxygenate Waiver Option
This provision has no effect on gasoline volume, in and of
itself, beyond those already noted. However, it does introduce
other grades of (boutique) fuels into the system. Over the last
few years boutique fuels have caused most if not all of our
supply problems and price spikes. Under this bill, this problem
will worsen the gasoline supply situation, just as individual
state RFG toxic requirements do whenever there is a supply
upset. This will further limit supply options when there are
refinery or pipeline problems.
Summary
This legislation and the state actions that it encourages
will no doubt reduce U.S. gasoline supply capability, during
the critical summer high gasoline demand months. This decrease
will amount to a loss of at least .5 million barrels per day of
gasoline blendstock availability. There will be an additional
loss of imported gasoline supply due to the tighter toxic
standards, bans on MTBE and requirements for sub-RVP
blendstocks for ethanol blending.
To place things in proper perspective, currently, the U.S.
uses approximately 8.5 million barrels of gasoline per day.
Imported gasoline accounts for 3 to 4 million barrels per day
of U.S. supply. Essentially all of the imported gasoline is
shipped to the East Coast markets. A reduction of .5 million
barrels per day is equal to a 6% reduction of total U.S. daily
gasoline supply. By banning MTBE and not encouraging the growth
of ethanol, S. 950 ignores the fuel needs of the Northeast,
which would be most directly affected by this legislation. The
result would be crippling gasoline shortages and price hikes.
Ethanol ensures a replacement for MTBE, while increasing
our domestic fuel supply. Ethanol is good for the environment.
It is an oxygenate which promotes cleaner air, and reduces the
amount of carbon monoxide, a poison. Earlier this year, the
Auto Alliance reported to the California Air Resources Board
that a recent study found that ethanol has a measurable impact
on air quality in even the newest, cleanest and most efficient
cars and fuels.
S. 950, however, does not encourage the use of ethanol and
eliminates the incentive to use it by removing the oxygenate
mandate. Additionally, the bill discourages ethanol use by
removing the ethanol vapor pressure waiver, which would make it
harder to blend ethanol. Although some environmentalists may
complain about a potential increase in volatile organic
compounds (VOCs) caused by ethanol, the EPA has studied this
issue and asserts that any increase in VOC emissions caused by
ethanol will be offset by the reductions in carbon monoxide.
The analysis conducted by the Department of Energy found
that S. 950 would reduce our gasoline supply anywhere between
.5 and one million barrels per day, or six to twelve percent.
As a nation, we have reached a point where we should be
encouraging the growth of our domestic ethanol production, if
for no other reason than to displace the amount of oil we
import from the Middle East and other countries.
As we seek to resolve our current national energy crisis
and preserve the environment for the many generations to
follow, we must do so without compromising our domestic fuel
supply. It is obvious that the effects of this legislation will
potentially leave the U.S. at the mercy of foreign oil
producing countries, while ignoring our own ability to produce
clean, domestic gasoline for ourselves.
Changes in Existing Law
In compliance with section 12 of rule XXVI of the Standing
Rules of the Senate, changes in existing law made by the bill
as reported are shown as follows: Existing law proposed to be
omitted is enclosed in [black brackets], new matter is printed
in italic, existing law in which no change is proposed is shown
in roman:
----------
CLEAN AIR ACT\1\
[As Amended Through P.L. 106-55, August 17, 1999]
Part A--Air Quality and Emission Limitations
findings and purposes
Sec. 101. (a) The Congress finds--
---------------------------------------------------------------------------
\1\ The Clean Air Act (42 U.S.C. 7401-7626) consists of Public Law
159 (July 14, 1955; 69 Stat. 322) and the amendments made by subsequent
enactments.
* * * * * * *
---------------------------------------------------------------------------
regulation of fuels
Sec. 211. (a) * * *
* * * * * * *
(b)(1) For the purpose of registration of fuels and fuel
additives, the Administrator shall require--
(A) the manufacturer of any fuel to notify him as
to the commercial identifying name and manufacturer of
any additive contained in such fuel; the range of
concentration of any additive in the fuel; and the
purpose-in-use of any such additive; and
(B) the manufacturer of any additive to notify him
as to the chemical composition of such additive.
(2) For the purpose of registration of fuels and fuel
additives, the Administrator [may also] shall, on a regular
basis require the manufacturer of any fuel or fuel additive--
[(A) to conduct tests to determine potential public
health effects of such fuel or additive (including, but
not limited to, carcinogenic, teratogenic, or mutagenic
effects), and]
(A) to conduct tests to determine potential public
health and environmental effects of the fuel or
additive (including carcinogenic, teratogenic, or
mutagenic effects); and
(B) to furnish the description of any analytical
technique that can be used to detect and measure any
additive in such fuel, the recommended range of
concentration of such additive, and the recommended
purpose-in-use of such additive, and such other
information as is reasonable and necessary to determine
the emissions resulting from the use of the fuel or
additive contained in such fuel, the effect of such
fuel or additive on the emission control performance of
any vehicle, vehicle engine, nonroad engine or nonroad
vehicle, or the extent to which such emissions affect
the public health or welfare.
Tests under subparagraph (A) shall be conducted in conformity
with test procedures and protocols established by the
Administrator. The results of such tests shall not be
considered confidential.
(3) Upon compliance with the provisions of this
subsection, including assurances that the Administrator will
receive changes in the information required, the Administrator
shall register such fuel or fuel additive.
(4) Ethyl tertiary butyl ether.--
(A) In general.--Not later than 2 years after the
date of enactment of this paragraph, the Administrator
shall--
(i) conduct a study on the effects on
public health, air quality, and water resources
of increased use of, and the feasibility of
using as substitutes for methyl tertiary butyl
ether in gasoline--
(I) ethyl tertiary butyl ether; and
(II) other ethers, as determined by
the Administrator; and
(ii) submit to the Committee on Energy and
Commerce of the House of Representatives and
the Committee on Environment and Public Works
of the Senate a report describing the results
of the study.
(B) Contracts for study.--In carrying out this
paragraph, the Administrator may enter into 1 or more
contracts with nongovernmental entities.
(c)(1) The Administrator may, from time to time on the
basis of information obtained under subsection (b) of this
section or other information available to him, by regulation,
control or prohibit the manufacture, introduction into
commerce, offering for sale, or sale of any fuel or fuel
additive for use in a motor vehicle, motor vehicle engine, or
nonroad engine or nonroad vehicle (A) if in the judgment of the
Administrator any fuel or fuel additive or emission product of
such fuel or fuel additive causes, or contributes, to [air
pollution which] air pollution, or water pollution, that may
reasonably be anticipated to endanger the public health or
welfare, or (B) if emission products of such fuel or fuel
additive will impair to a significant degree the performance of
any emission control device or system which is in general use,
or which the Administrator finds has been developed to a point
where in a reasonable time it would be in general use were such
regulation to be promulgated.
(2)(A) No fuel, class of fuels, or fuel additive may be
controlled or prohibited by the Administrator pursuant to
clause (A) of paragraph (1) except after consideration of all
relevant medical and scientific evidence available to him,
including consideration of other technologically or
economically feasible means of achieving emission standards
under section 202.
(B) No fuel or fuel additive may be controlled or
prohibited by the Administrator pursuant to clause (B) of
paragraph (1) except after consideration of available
scientific and economic data, including a cost benefit analysis
comparing emission control devices or systems which are or will
be in general use and require the proposed control or
prohibition with emission control devices or systems which are
or will be in general use and do not require the proposed
control or prohibition. On request of a manufacturer of motor
vehicles, motor vehicle engines, fuels, or fuel additives
submitted within 10 days of notice of proposed rulemaking, the
Administrator shall hold a public hearing and publish findings
with respect to any matter he is required to consider under
this subparagraph. Such findings shall be published at the time
of promulgation of final regulations.
(C) No fuel or fuel additive may be prohibited by the
Administrator under paragraph (1) unless he finds, and
publishes such finding, that in his judgment such prohibition
will not cause the use of any other fuel or fuel additive which
will produce emissions which will endanger the public health or
welfare to the same or greater degree than the use of the fuel
or fuel additive proposed to be prohibited.
(3)(A) For the purpose of obtaining evidence and data to
carry out paragraph (2), the Administrator may require the
manufacturer of any motor vehicle or motor vehicle engine to
furnish any information which has been developed concerning the
emissions from motor vehicles resulting from the use of any
fuel or fuel additive, or the effect of such use on the
performance of any emission control device or system.
(B) In obtaining information under subparagraph (A),
section 307 (a) (relating to subpenas) shall be applicable.
(4)(A) Except as otherwise provided in subparagraph (B)
or (C), no State (or political subdivision thereof) may
prescribe or attempt to enforce, for the purposes of motor
vehicle emission control, any control or prohibition respecting
any characteristic or component of a fuel or fuel additive in a
motor vehicle or motor vehicle engine--
(i) if the Administrator has found that no control
or prohibition of the characteristic or component of a
fuel or fuel additive under paragraph (1) is necessary
and has published his finding in the Federal Register,
or
(ii) if the Administrator has prescribed under
paragraph (1) a control or prohibition applicable to
such characteristic or component of a fuel or fuel
additive, unless State prohibition or control is
identical to the prohibition or control prescribed by
the Administrator.
(B) Any State for which application of section 209(a) has
at any time been waived under section 209(b) may at any time
prescribe and enforce, for the purpose of motor vehicle
emission control or water quality protection, a control or
prohibition respecting any fuel or fuel additive.
(C) A State may prescribe and enforce, for purposes of
motor vehicle emission control, a control or prohibition
respecting the use of a fuel or fuel additive in a motor
vehicle or motor vehicle engine if an applicable implementation
plan for such State under section 110 so provides. The
Administrator may approve such provision in an implementation
plan, or promulgate an implementation plan containing such a
provision, only if he finds that the State control or
prohibition is necessary to achieve the national primary or
secondary ambient air quality standard which the plan
implements. The Administrator may find that a State control or
prohibition is necessary to achieve that standard if no other
measures that would bring about timely attainment exist, or if
other measures exist and are technically possible to implement,
but are unreasonable or impracticable. The Administrator may
make a finding of necessity under this subparagraph even if the
plan for the area does not contain an approved demonstration of
timely attainment.
(5) Ban on the use of mtbe.--Not later than 4 years after
the date of enactment of this paragraph, the Administrator
shall ban use of methyl tertiary butyl ether in motor vehicle
fuel.
(6) MTBE merchant producer conversion assistance.--
(A) In general.--The Administrator may make grants
to merchant producers of methyl tertiary butyl ether in
the United States to assist the producers in the
conversion of eligible production facilities described
in subparagraph (B) to the production of other fuel
additives that--
(i) will be consumed in nonattainment
areas;
(ii) will assist the nonattainment areas in
achieving attainment with a national primary
ambient air quality standard;
(iii) will not degrade air quality or
surface or ground water quality or resources;
and
(iv) have been registered and tested in
accordance with the requirements of this
section.
(B) Eligible production facilities.--A production
facility shall be eligible to receive a grant under
this paragraph if the production facility--
(i) is located in the United States; and
(ii) produced methyl tertiary butyl
ether for consumption in nonattainment
areas during the period--
(I) beginning on the date of
enactment of this paragraph; and
(II) ending on the effective date
of the ban on the use of methyl
tertiary butyl ether under paragraph
(5).
(C) Authorization of appropriations.--There is
authorized to be appropriated to carry out this
paragraph $250,000,000 for each of fiscal years 2002
through 2004.
(d) Penalties and Injunctions.--
(1) Civil penalties.--Any person who violates
subsection (a), (f), (g), (k), (l), (m), or (n) of this
section or the regulations prescribed under subsection
(c), (h), (i), (k), (l), (m), [or (n)] (n), or (o) of
this section or who fails to furnish any information or
conduct any tests required by the Administrator under
subsection (b) of this section shall be liable to the
United States for a civil penalty of not more than the
sum of $25,000 for every day of such violation and the
amount of economic benefit or savings resulting from
the violation. Any violation with respect to a
regulation prescribed under subsection (c), (k), (l),
[or (m)] (m), or (o) of this section which establishes
a regulatory standard based upon a multiday averaging
period shall constitute a separate day of violation for
each and every day in the averaging period. Civil
penalties shall be assessed in accordance with
subsections (b) and (c) of section 205.
(2) Injunctive authority.--The district courts of
the United States shall have jurisdiction to restrain
violations of subsections (a), (f), (g), (k), (l), (m),
and (n) of this section and of the regulations
prescribed under subsections (c), (h), (i), (k), (l),
(m), [and (n)] (n), and (o) of this section, to award
other appropriate relief, and to compel the furnishing
of information and the conduct of tests required by the
Administrator under subsection (b) of this section.
Actions to restrain such violations and compel such
actions shall be brought by and in the name of the
United States. In any such action, subpoenas for
witnesses who are required to attend a district court
in any district may run into any other district.
* * * * * * *
(h) Reid Vapor Pressure Requirements.--
(1) Prohibition.--Not later than 6 months after the
date of the enactment of the Clean Air Act Amendments
of 1990, the Administrator shall promulgate regulations
making it unlawful for any person during the high ozone
season (as defined by the Administrator) to sell, offer
for sale, dispense, supply, offer for supply,
transport, or introduce into commerce gasoline with a
Reid Vapor Pressure in excess of 9.0 pounds per square
inch (psi). Such regulations shall also establish more
stringent Reid Vapor Pressure standards in a
nonattainment area as the Administrator finds necessary
to generally achieve comparable evaporative emissions
(on a per-vehicle basis) in nonattainment areas, taking
into consideration the enforceability of such
standards, the need of an area for emission control,
and economic factors.
(2) Attainment areas.--The regulations under this
subsection shall not make it unlawful for any person to
sell, offer for supply, transport, or introduce into
commerce gasoline with a Reid Vapor Pressure of 9.0
pounds per square inch (psi) or lower in any area
designated under section 107 as an attainment area.
Notwithstanding the preceding sentence, the
Administrator may impose a Reid vapor pressure
requirement lower than 9.0 pounds per square inch (psi)
in any area, formerly an ozone nonattainment area,
which has been redesignated as an attainment area.
(3) Effective date; enforcement.--The regulations
under this subsection shall provide that the
requirements of this subsection shall take effect not
later than the high ozone season for 1992, and shall
include such provisions as the Administrator determines
are necessary to implement and enforce the requirements
of this subsection.
[(4) Ethanol waiver.--For fuel blends containing
gasoline and 10 percent denatured anhydrous ethanol,
the Reid vapor pressure limitation under this
subsection shall be one pound per square inch (psi)
greater than the applicable Reid vapor pressure
limitations established under paragraph (1); Provided,
however, That a distributor, blender, marketer,
reseller, carrier, retailer, or wholesale purchaser-
consumer shall be deemed to be in full compliance with
the provisions of this subsection and the regulations
promulgated thereunder if it can demonstrate (by
showing receipt of a certification or other evidence
acceptable to the Administrator) that--
[(A) the gasoline portion of the blend
complies with the Reid vapor pressure
limitations promulgated pursuant to this
subsection;
[(B) the ethanol portion of the blend does
not exceed its waiver condition under
subsection (f)(4); and
[(C) no additional alcohol or other
additive has been added to increase the Reid
Vapor Pressure of the ethanol portion of the
blend.
[(5)] (4) Areas covered.--The provisions of this
subsection shall apply only to the 48 contiguous States
and the District of Columbia.
* * * * * * *
(k) Reformulated Gasoline for Conventional Vehicles.--
(1) EPA regulations.--[Within 1 year after the
enactment of the Clean Air Act Amendments of 1990]
(A) In general.--Not later than November
15, 1991, the Administrator shall promulgate
regulations under this section establishing
requirements for reformulated gasoline to be
used in gasoline-fueled vehicles in specified
nonattainment areas. Such regulations shall
require the greatest reduction in emissions of
ozone forming volatile organic compounds
(during the high ozone season) and emissions of
toxic air pollutants (during the entire year)
achievable through the reformulation of
conventional gasoline, taking into
consideration the cost of achieving such
emission reductions, any nonair-quality and
other air-quality related health and
environmental impacts and energy requirements.
(B) Waiver of oxygen content requirement.--
(i) Authority of the governor.--
(I) In general.--
Notwithstanding any other
provision of this subsection, a
Governor of a State, upon
notification by the Governor to
the Administrator during the
90-day period beginning on the
date of enactment of this
subparagraph, or during the 90-
day period beginning on the
date on which an area in the
State becomes a covered area by
operation of the second
sentence of paragraph (10)(D),
may waive the application of
paragraphs (2)(B) and (3)(A)(v)
to gasoline sold or dispensed
in the State.
(II) Opt-in areas.--A
Governor of a State that
submits an application under
paragraph (6) may, as part of
that application, waive the
application of paragraphs
(2)(B) and (3)(A)(v) to
gasoline sold or dispensed in
the State.
(ii) Treatment as reformulated
gasoline.--In the case of a State for
which the Governor invokes the waiver
described in clause (i), gasoline that
complies with all provisions of this
subsection other than paragraphs (2)(B)
and (3)(A)(v) shall be considered to be
reformulated gasoline for the purposes
of this subsection.
(iii) Effective date of waiver.--A
waiver under clause (i) shall take
effect on the earlier of--
(I) the date on which the
performance standard under
subparagraph (C) takes effect;
or
(II) the date that is 270
days after the date of
enactment of this subparagraph.
(C) Maintenance of toxic air pollutant
emission and aromatic hydrocarbon content
reductions.--
(i) In general.--As soon as
practicable after the date of enactment
of this subparagraph, the Administrator
shall--
(I) promulgate regulations
consistent with subparagraph
(A) and paragraph (3)(B)(ii) to
ensure that reductions of toxic
air pollutant emissions
achieved under the reformulated
gasoline program under this
section before the date of
enactment of this subparagraph
are maintained in States for
which the Governor waives the
oxygenate requirement under
subparagraph (B)(i); or
(II) determine that the
requirement described in clause
(iv)--
(aa) is consistent
with the bases for a
performance standard
described in clause
(ii); and
(bb) shall be
deemed to be the
performance standard
under clause (ii) and
shall be applied in
accordance with clause
(iii).
(ii) PADD performance standards.--
The Administrator, in regulations
promulgated under clause (i)(I), shall
establish annual average performance
standards for each Petroleum
Administration for Defense District
(referred to in this subparagraph as a
``PADD') based on--
(I) the average of the
annual aggregate reductions in
emissions of toxic air
pollutants achieved under the
reformulated gasoline program
in each PADD during calendar
years 1999 and 2000, determined
on the basis of the 1999 and
2000 Reformulated Gasoline
Survey Data, as collected by
the Administrator; and
(II) such other information
as the Administrator determines
to be appropriate.
(iii) Applicability.--
(I) In general.--The
performance standards under
this subparagraph shall be
applied on an annual average
importer or refinery-by-
refinery basis to reformulated
gasoline that is sold or
introduced into commerce in a
State for which the Governor
waives the oxygenate
requirement under subparagraph
(B)(i).
(II) More stringent
requirements.--The performance
standards under this
subparagraph shall not apply to
the extent that any requirement
under section 202(l) is more
stringent than the performance
standards.
(III) State standards.--The
performance standards under
this subparagraph shall not
apply in any State that has
received a waiver under section
209(b).
(IV) Credit program.--The
Administrator shall provide for
the granting of credits for
exceeding the performance
standards under this
subparagraph in the same manner
as provided in paragraph (7).
(iv) Statutory performance
standards.--
(I) In general.--Subject to
subclause (IV), if the
regulations under clause (i)(I)
have not been promulgated by
the date that is 270 days after
the date of enactment of this
subparagraph, the requirement
described in subclause (III)
shall be deemed to be the
performance standards under
clause (ii) and shall be
applied in accordance with
clause (iii).
(II) Publication in federal
register.--Not later than 30
days after the date of
enactment of this subparagraph,
the Administrator shall publish
in the Federal Register, for
each PADD, the percentage equal
to the average of the annual
aggregate reductions in the
PADD described in clause
(ii)(I).
(III) Toxic air pollutant
emissions.--The annual
aggregate emissions of toxic
air pollutants from baseline
vehicles when using
reformulated gasoline in each
PADD shall be not greater
than--
(aa) the aggregate
emissions of toxic air
pollutants from
baseline vehicles when
using baseline gasoline
in the PADD; reduced by
(bb) the quantity
obtained by multiplying
the aggregate emissions
described in item (aa)
for the PADD by the
percentage published
under subclause (II)
for the PADD.
(IV) Subsequent
regulations.--Through
promulgation of regulations
under clause (i)(I), the
Administrator may modify the
performance standards
established under subclause (I)
to require each PADD to achieve
a greater percentage reduction
than the percentage published
under subclause (II) for the
PADD.
* * * * * * *
[(6) Opt-in areas.--(A) Upon]
(6) Opt-in areas.--
(A) Classified areas.--
(i) In general.--Upon the
application of the Governor of a State,
the Administrator shall apply the
prohibition set forth in paragraph (5)
in any area in the State classified
under subpart 2 of part D of title I as
a Marginal, Moderate, Serious, or
Severe Area (without regard to whether
or not the 1980 population of the area
exceeds 250,000). In any such case, the
Administrator shall establish an
effective date for such prohibition as
he deems appropriate, not later than
January 1, 1995, or 1 year after such
application is received, whichever is
later. The Administrator shall publish
such application in the Federal
Register upon receipt.
[(B) If]
(ii) Effect of insufficient
domestic capacity to produce
reformulated gasoline.--If the
Administrator determines, on the
Administrator's own motion or on
petition of any person, after
consultation with the Secretary of
Energy, that there is insufficient
domestic capacity to produce gasoline
certified under this subsection, the
Administrator shall, by rule, extend
the effective date of such prohibition
in Marginal, Moderate, Serious, or
Severe Areas referred to in
[subparagraph (A)] clause (i) for one
additional year, and may, by rule,
renew such extension for 2 additional
one-year periods. The Administrator
shall act on any petition submitted
under [this paragraph] this
subparagraph within 6 months after
receipt of the petition. The
Administrator shall issue such
extensions for areas with a lower ozone
classification before issuing any such
extension for areas with a higher
classification.
(B) Nonclassified areas.--
(i) In general.--In accordance with
section 110, a State may submit to the
Administrator, and the Administrator
may approve, a State implementation
plan revision that provides for
application of the prohibition
specified in paragraph (5) in any
portion of the State that is not a
covered area or an area referred to in
subparagraph (A)(i).
(ii) Period of effectiveness.--
Under clause (i), the State
implementation plan shall establish a
period of effectiveness for applying
the prohibition specified in paragraph
(5) to a portion of a State that--
(I) commences not later
than 1 year after the date of
approval by the Administrator
of the State implementation
plan; and
(II) ends not earlier than
4 years after the date of
commencement under subclause
(I).
* * * * * * *
(10) Exclusion from reid vapor pressure
requirement.--Notwithstanding subsection (c)(4)(C), the
Administrator may approve a revision of a State
implementation plan that excludes an area from a waiver
provided under subsection (h)(4) if--
(A) the State demonstrates that the
increases in volatile organic compound
emissions resulting from the waiver
significantly interfere with attainment or
maintenance of the national ambient air quality
standard for ozone; and
(B) the Administrator determines that the
exclusion is reasonable and practicable.
[(10)] (11) Definitions.-- * * *
* * * * * * *
(o) Analyses of Motor Vehicle Fuel Changes and Emissions
Model.--
(1) Anti-backsliding analysis.--
(A) Draft analysis.--Not later than 4 years
after the date of enactment of this subsection,
the Administrator shall publish for public
comment a draft analysis of the changes in
emissions of air pollutants and air quality due
to the use of motor vehicle fuel and fuel
additives resulting from implementation of the
amendments made by the Federal Reformulated
Fuels Act of 2001.
(B) Final analysis.--After providing a
reasonable opportunity for comment but not
later than 5 years after the date of enactment
of this subsection, the Administrator shall
publish the analysis in final form.
(2) Emissions model.--For the purposes of this
subsection, as soon as the necessary data are
available, the Administrator shall develop and finalize
an emissions model that reasonably reflects the effects
of fuel characteristics or components on emissions from
vehicles in the motor vehicle fleet during calendar
year 2005.
[(o)] (p) Fuel and Fuel Additive Importers and
Importation.--For the purposes of this section, the term
``manufacturer'' includes an importer and the term
``manufacture'' includes importation.
* * * * * * *
SOLID WASTE DISPOSAL ACT 1
[As Amended Through P.L. 106-55, August 17, 1999]
---------------------------------------------------------------------------
1 The Solid Waste Disposal Act (42 U.S.C. 6901-6992k)
consists of title II of Public Law 89-272 and the amendments made by
subsequent enactments. This Act is popularly referred to as the
Resource Conservation and Recovery Act, after the short title of the
law that amended the Solid Waste Disposal Act in its entirety in 1976
(P.L. 94-580).
---------------------------------------------------------------------------
Sec. 1001. This title (hereinafter in this title referred
to as ``this Act''), together with the following table of
contents, may be cited as the ``Solid Waste Disposal Act'':
Subtitle A--General Provisions
Sec. 1001. * * *
* * * * * * *
[Sec. 9010. Authorization of appropriations.]
Sec. 9010. Release prevention and compliance.
Sec. 9011. Authorization of appropriations.
* * * * * * *
definitions and exemptions
Sec. 9001. For the purposes of this subtitle--
(1) * * *
* * * * * * *
(3) The term ``owner'' means--
(A) in the case of an underground storage
tank in use on the date of enactment of the
Hazardous and Solid Waste Amendments of 1984,
or brought into use after that date, any person
who owns an underground storage tank used for
the storage, use, or dispensing of regulated
[sustances] substances,
* * * * * * *
release detection, prevention, and correction regulations
Sec. 9003. (a) * * *
* * * * * * *
(f) Effective Dates.--(1) Regulations issued pursuant to
[subsection (c) and (d) of this section] subsections (c) and
(d), and standards issued pursuant to subsection (e) of this
section, for underground storage tanks containing regulated
substances defined in section 9001(2)(B) (petroleum, including
crude oil or any fraction thereof which is liquid at standard
conditions of temperature and pressure) shall be effective not
later than thirty months after the date of enactment of the
Hazardous and Solid Waste Amendments of 1984.
* * * * * * *
(h) EPA Response Program for Petroleum.--
(1) * * *
* * * * * * *
(7) State authorities.--
(A) General.--A State may exercise the
authorities in [paragraphs (1) and (2) of this
subsection] paragraphs (1), (2), and (12),
subject to the terms and conditions of
paragraphs (3), (5), (9), (10), and (11), and
including the authorities of paragraphs (4),
(6), and (8) of this subsection and subsection
9010(a) if--
* * * * * * *
(12) Remediation of mtbe contamination.--
(A) In general.--The Administrator and the
States may use funds made available under
section 9011(1) to carry out corrective actions
with respect to a release of methyl tertiary
butyl ether that presents a threat to human
health, welfare, or the environment.
(B) Applicable authority.--Subparagraph (A)
shall be carried out--
(i) in accordance with paragraph
(2); and
(ii) in the case of a State, in
accordance with a cooperative agreement
entered into by the Administrator and
the State under paragraph (7).
* * * * * * *
approval of state programs
Sec. 9004. (a) Elements of State Program.--Beginning 30
months after the date of enactment of the Hazardous and Solid
Waste Amendments of 1984, any State may, submit an underground
storage tank release detection, prevention, and correction
program for review and approval by the Administrator. The
program may cover tanks used to store regulated substances
[referred to in 9001(2) (A) or (B) or both. A State program may
be approved by the Administrator under this section only if the
State demonstrates that the State program includes the
following requirements and standards and provides for adequate
enforcement of compliance with such requirements and standards]
referred to in subparagraph (A) or (B), or both, of section
9001(2)--
* * * * * * *
inspections, monitoring, testing, and corrective action
Sec. 9005. (a) Furnishing Information.--For the purposes
of developing or assisting in the development of any
regulation, conducting any [study taking] study, taking any
corrective action, or enforcing the provisions of this
subtitle, any owner or operator of an underground storage tank
(or any tank subject to study under section 9009 that is used
for storing regulated substances) shall, upon request of any
officer, employee or representative of the Environmental
Protection Agency, duly designated by the Administrator, or
upon request of any duly designated officer, employee, or
representative of a State acting parsuant to subsection (h)(7)
of section 9003 or with an approved program, furnish
information relating to such tanks, their associated equipment,
their contents, conduct monitoring or testing, permit such
officer at all reasonable times to have access to, and to copy
all records relating to such tanks and permit such officer to
have access for corrective action. For the purposes of
developing or assisting in the development of any regulation,
conducting any study, taking corrective action, or enforcing
the provisions of this subtitle, such officers, employees, or
representatives are authorized--
(1) to enter at reasonable times any establishment
or other place where an underground storage tank is
located;
(2) to inspect and obtain samples from any person
of any regulated substances contained in such tank;
(3) to conduct monitoring or testing of the tanks,
associated equipment, contents, or surrounding soils,
air, surface water or ground water, and
(4) to take corrective action.
Each such inspection shall be commenced and completed with
reasonable promptness.
(b) Confidentiality.--(1) Any records, reports, or
information obtained from any persons under this section shall
be available to the public, except that upon a showing
satisfactory to the Administrator (or the State, as the case
may be) by any person that records, reports, or information, or
a particular part thereof, to which the Administrator (or the
State, as the case may be) or any officer, employee, or
representative thereof has access under this section if made
public, would divulge information entitled to protection under
section 1905 of title 18 of the United States Code, such
information or particular portion thereof shall be considered
confidential in accordance with the purposes of that section,
except that such record, report, document, or information may
be disclosed to other officers, employees, or authorized
representatives of the United States concerned with carrying
out this Act, or when [relevent] relevant in any proceeding
under this Act.
(2) Any person not subject to the provisions of section
1905 of title 18 of the United States Code who knowingly and
willfully divulges or discloses any information entitled to
protection under this subsection shall, upon conviction, be
subject to a fine of not more than $5,000 or to imprisonment
not to exceed one year, or both.
(3) In submitting data under this subtitle, a person
required to provide such data may--
(A) designate the data which such person believes
is entitled to protection under this subsection, and
(B) submit such designated data separately from
other data submitted under this subtitle.
A designation under this paragraph shall be made in writing and
in such manner as the Administrator may prescribe.
(4) Notwithstanding any limitation contained in this
section or any other provision of law, all information reported
to, or otherwise obtained, by the Administrator (or any
representative of the Administrator) under this Act shall be
made available, upon written request of any duly authorized
committee of the Congress, to such committee (including
records, reports, or information obtained by representatives of
the [Evironmental] Environmental Protection Agency).
* * * * * * *
[authorization of appropriations
[Sec. 9010. For authorization of appropriations to carry
out this subtitle, see section 2007(g).]
SEC. 9010. RELEASE PREVENTION AND COMPLIANCE.
Funds made available under section 9011(2) from the Leaking
Underground Storage Tank Trust Fund may be used for conducting
inspections, or for issuing orders or bringing actions under
this subtitle--
(1) by a State (pursuant to section 9003(h)(7))
acting under--
(A) a program approved under section 9004;
or
(B) State requirements regulating
underground storage tanks that are similar or
identical to this subtitle; and
(2) by the Administrator, acting under this
subtitle or a State program approved under section
9004.
SEC. 9011. AUTHORIZATION OF APPROPRIATIONS.
In addition to amounts made available under section
2007(f), there are authorized to be appropriated from the
Leaking Underground Storage Tank Trust Fund--
(1) to carry out section 9003(h)(12), $200,000,000
for fiscal year 2001, to remain available until
expended; and
(2) to carry out section 9010--
(A) $50,000,000 for fiscal year 2002; and
(B) $30,000,000 for each of fiscal years
2003 through 2007.
* * * * * * *