[Federal Register Volume 59, Number 13 (Thursday, January 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-1400]


[[Page Unknown]]

[Federal Register: January 20, 1994]


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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52

[MN17-2-5959; A-1-FRL-4828-4]

 

Approval and Promulgation of Implementation Plan; Carbon 
Monoxide; Oxygenated Gasoline Program; Minnesota

AGENCY: United States Environmental Protection Agency (USEPA).

ACTION: Proposed rule.

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SUMMARY: The USEPA is proposing to approve a State Implementation Plan 
(SIP) revision submitted by the State of Minnesota. This revision 
implements an oxygenated gasoline program in the Minneapolis-St. Paul 
Metropolitan Statistical Area (MSA), and the Duluth-Superior MSA. Both 
MSA's are required to implement an oxygenated gasoline program because 
of past violations of the carbon monoxide standard. This SIP revision 
was submitted to satisfy the requirement of section 211(m) of the Clean 
Air Act as amended by the Clean Air Act Amendments of 19909 (the Act), 
which requires all carbon monoxide nonattainment areas with a design 
value of 9.5 parts per million (ppm) or above based on 1988 and 1989 
air quality monitoring data to implement an oxygenated gasoline 
program. The effect of this action is to propose approval of the 
oxygenated gasoline program. This action is being taken under section 
110 of the Act.

DATES: Comments must be received on or before February 22, 1994.

ADDRESSES: Comments may be mailed to John Paskevicz, AE-17J Air 
Enforcement Branch, USEPA, 77 West Jackson Blvd., Chicago, Illinois 
60604. Copies of the documents relevant to this action are available 
for public inspection during normal business hours at the USEPA 
Regional office on the 17th floor, at 77 West Jackson Blvd., Chicago.

FOR FURTHER INFORMATION CONTACT:
John Paskevicz, (312) 886-6084.

SUPPLEMENTARY INFORMATION:

I. Introduction: Statutory Requirements and Guidance

    Motor vehicles are significant contributors of carbon monoxide 
emissions. An important measure toward reducing these emissions is the 
use of cleaner-burning oxygenated gasoline. Extra oxygen enhances fuel 
combustion and helps to offset fuel-rich operating conditions, 
particularly during vehicle starting, which are more prevalent in the 
winter.
    Section 211(m) of the Act requires that certain states submit 
revisions to the SIPs and implement oxygenated gasoline programs by no 
later than November 1, 1992. This requirement applies to all states 
with carbon monoxide nonattainment areas with design values of 9.5 
parts per million or more based on 1988 and 1989 data. Each state's 
oxygenated gasoline program must require gasoline for the specified 
control area(s) to contain not less than 2.7 percent oxygen by weight 
during that portion of the year in which the area(s) is/are prone to 
high ambient concentrations of carbon monoxide. Under section 
211(m)(2), the oxygenated gasoline requirements apply to all gasoline 
sold or dispensed in the larger of the Consolidated Metropolitan 
Statistical Area (CMSA) or the Metropolitan Statistical Area (MSA) in 
which the nonattainment area is located. Under section 211(m)(2), the 
duration of the control period, to be established by the USEPA 
Administrator, shall not be less than four months unless a state can 
demonstrate that, because of meteorological conditions, a reduced 
control period will assure that there will be no carbon monoxide 
exceedances outside of such reduced period. USEPA announced guidance on 
the establishment of control periods by area in the Federal Register on 
October 20, 1992.\1\
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    \1\See ``Guidelines for Oxygenated Gasoline Credit Programs and 
Guidelines on Establishment of Control Periods under section 211(m) 
of the Clean Air Act as Amended--Notice of Availability,'' 57 FR 
47849 (October 20, 1992).
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    In addition to the guidance on establishment of control periods by 
area, the USEPA has issued additional guidance related to the 
oxygenated gasoline program. Pursuant to the requirements of section 
211(m)(5) of the Act on October 20, 1992, the USEPA announced the 
availability of oxygenated gasoline credit program guidelines in the 
Federal Register.\2\ Under the credit program, marketable oxygen 
credits may be generated from the sale of gasoline with a higher oxygen 
content than is required (i.e. an oxygen content greater than 2.7 
percent by weight). These oxygen credits may be used to offset the sale 
of gasoline with a lower required oxygen content. Where a credit 
program has been adopted, USEPA's guidelines provide that no gallon of 
gasoline should contain less than 2.0 percent oxygen by weight.
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    \2\See footnote 1. USEPA issued guidelines for credit programs 
under section 211(m)(5) of the Act.
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    Section 211(m)(4) of the Act requires that any person selling the 
oxygenated gasoline label the fuel dispensing system. The USEPA 
promulgated the labeling regulations in the Federal Register on October 
20, 1992.\3\
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    \3\See ``Notice of Final Oxygenated Fuels Labeling Regulations 
under section 211(m) of the Clean Air Act as Amended--Notice of 
Final Rulemaking,'' 57 FR 47769. The labeling regulations may be 
found in 40 CFR 80.35.
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II. Background for this Action: State SIP Revision

    The Minneapolis-St. Paul and Duluth-Superior areas in the State of 
Minnesota (the control areas) are designated nonattainment for carbon 
monoxide and classified as moderate with a design value of 11.4 and 9.9 
parts per million respectively, based on 1988 and 1989 data.\4\ Under 
section 211(m) of the Act, Minnesota was required to submit a revision 
SIP under section 110 and part D of title I of the Act which includes 
an oxygenated gasoline program for Minneapolis-St. Paul, and Duluth-
Superior by November 15, 1992.\5\ On November 9, 1992, the 
Commissioner, Minnesota Pollution Control Agency, submitted to USEPA a 
revised SIP including the oxygenated gasoline program containing rules 
that were signed by the Governor on April 29, 1992, and became 
effective on August 1, 1992. The USEPA issued a completeness letter to 
the State on January 20, 1993. The USEPA summarizes its analysis of the 
state submittal below. A more detailed analysis of the state submittal 
is contained in a Technical Support Document (TSD) dated June 11, 1993, 
which is available from the Region 5 office, listed in the ADDRESSES 
section of this proposed rulemaking.
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    \4\See ``Designation of Areas for Air Quality Planning 
Purposes,'' 56 FR 56694 (November 6, 1991.)
    \5\See credit program guidelines in footnote 3, wherein the 
November 15, 1992 SIP revision due date was specified.
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Type of Program and Oxygen Content Requirement

    Section 211(m)(2) of the Act requires that gasoline sold or 
dispensed for use in the specified control areas contain not less than 
2.7 percent oxygen by weight. Under section 211(m)(5), the USEPA 
Administrator issued guidelines for credit programs allowing the use of 
marketable oxygen credits from gasoline with a higher oxygen content 
than required. However, Minnesota has adopted a system of oxygen 
content averaging that does not include oxygen credit trading. Each 
registered blender must maintain an individual average of 2.7 percent 
oxygen for all gasoline shipped into a control area during a control 
period. Gasoline sold in the control area during the control period 
must contain a minimum of 2.0 percent oxygen. A registrant cannot 
accumulate oxygen credits to be traded to other registrants. The 
Minnesota requirements to not distinguish between a control area 
responsible (CAR) party and blender CAR.\6\ All registrants are 
classified as blenders. The following sections of this notice address 
some specific elements of the state's submittal. Parties desiring more 
specific information should consult the TSD.
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    \6\The Implementation Guideline for Oxygenated Gasoline 
Programs, published on November 20, 1991, provides a definition of 
Control Area Responsible (CAR) party. A CAR party is a person who 
owns oxygenated gasoline which is sold or dispensed from a control 
area terminal. A blender CAR is a person who owns oxygenated 
gasoline which is sold or dispensed from a control area oxygenate 
blending facility.
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Applicability and Program and Scope

    Section 211(m)(2) requires oxygenated gasoline to be sold during a 
control period based on air quality monitoring data and established by 
the USEPA Administrator. Minnesota has established control periods 
consistent with the USEPA guidance. The 1992 carbon monoxide control 
period began on November 1, 1992, and extended through January 31, 
1993. In subsequent years, the control periods will begin on October 1, 
and end after January 31.
    All gasoline sold or dispensed for use within the control area and 
during the control period must comply with the average 2.7 percent 
oxygen content requirement and must contain not less than 2.0 percent 
oxygen by weight. The Minnesota program does not include oxygen credit 
trading.

Registration Requirements.

    The registration requirements for the Minnesota program are similar 
to the guidelines established by the USEPA. The State treats all 
registrants as averaging blenders. Oxygenated gasoline purchased by a 
non-registered party will be counted into the average of the registered 
company that sold the product to the retailer or the non-registered 
distributor. Each registrant has the option to choose a per gallon 
blending method, or an averaging method. The registrant is required to 
maintain an average oxygen content of 2.7 percent or greater, for all 
gasoline distributed in the control area.
    The Minnesota oxygen plan specifies that records of all gasoline-
oxygenate blends, received, sold, or transferred, must be retained for 
at least one year after the control period ends. The records must 
include the original transfer documents showing the volume of blended 
product and the weight percent of oxygen in each blend. The registrant 
is required to commission an attestation engagement within 120 days 
after the close of the control period. Records are also required to be 
kept by non-registered distributors.
    All parties in the gasoline distribution network who are located in 
or do business within a control area, and whose product is eventually 
sold into the control area for the ultimate consumer, are required to 
keep records concerning quantity of blend sold and amount of oxygen in 
the product. Registered parties are not specifically required by State 
law or by rules or procedures to take samples and test the product. 
However, the State plan calls for an extensive sampling and testing 
program throughout the product lifecycle.
    All refineries and terminals that ship gasoline into the control 
area will be inspected at least once each month during the control 
period by inspectors from the State Weights and Measures Division. 
Samples will be taken and tested for minimum oxygen content, and 
transfer documents will be inspected to ensure each contains required 
information on every batch shipped. At least 20 percent of all 
registered distributors and 20 percent of all retailers in the control 
area will be inspected/tested by the State.
    Under these inspection requirements, refiners and importers are 
required to keep a copy of all the tests that are performed on batches 
of gasoline prior to shipment, as well as copies of the bills of lading 
or transfer documents for each batch. Terminal owners and operators and 
CARs are required to keep records of both the gasoline they receive 
from upstream parties, as well as copies of all the tests (if any) 
performed as part of the shipping documentation and records created 
before the gasoline was transferred to a downstream party.
    The USEPA guidelines also require that CARs commission an annual 
attest engagement,\7\ performed by either an internal auditor or 
independent Certified Public Account (CPA). The guidelines also specify 
that the standardized forms, specifying agreed-upon procedures for the 
conduct of the attest engagement, for use by the internal auditor or 
CPA be provided by the state.
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    \7\The USEPA does not require an attest engagement in a per 
gallon program.
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    The State requirement for maintaining records is found in Minnesota 
Statute, section 239.791. In addition to the record-keeping 
requirement, the registrant must commission an attestation engagement 
by a certified public accountant to demonstrate that the blending 
records are accurate. The registrant has 120 days after the end of the 
control period to report the results of the audit to the State. These 
requirements for the State program go beyond the requirements in USEPA 
guidelines for a per gallon program but, are acceptable. Comments are 
invited on this issue.

Prohibited Activities

    The USEPA's credit program guidelines contain provisions designed 
to ensure that gasoline that fails to meet the 2.0 percent by weight 
minimum oxygen content requirement is not available for use within a 
control area. Generally, CARs or blender CARs may not transfer gasoline 
for use in a control area that contains less than the minimum percent 
of oxygen by weight to parties who are not themselves registered as 
CARs or blender CARs. Under USEPA's credit program guidelines, 
regulated parties, including refiners, importers, oxygenate blenders, 
carriers, distributors, or resellers may not fail to comply with 
recordkeeping requirements.\8\
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    \8\USEPA's recommended provisions for prohibited activities are 
found at pages 59-61 of the credit program guidelines.
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    The State enforces a variety of provisions in areas where oxygas is 
required. The primary focus is violations of the sale of gasoline 
containing less than 2.0 percent oxygen, pumps which are not labeled, 
and registrants who cannot produce records of blending or transfer 
records or shipping manifests.

Transfer Documents

    The USEPA's credit program guidelines specify that transfer 
documents should include the following information: date of the 
transfer, name and address of the transferor, and name and address of 
the transferee, the volume of gasoline which is being transferred, the 
proper identification of the gasoline as oxygenated or nonoxygenated, 
the location of the gasoline at the time of the transfer, the type of 
oxygenate, and the oxygen content of the gasoline (for transfer 
upstream of the control area terminal and for transfers between CARs, 
include the oxygenate volume of the gasoline). Records are to be kept 
in a location where they are available for state review.
    Minnesota's enforcement plan instructs investigators to inspect 
transfer documents to ensure they contain information regarding the 
quality and destination of the gasoline. Registration forms and oxygen 
units worksheets contain an adequate amount of information regarding 
the fuel and the registrants. The State's operation manual for 
distributors, refinery operators and terminal operators requires 
detailed record keeping and auditing to meet the requirements of the 
State legislation. These requirements go beyond what is required for 
the Minnesota program but, are acceptable to the USEPA.

Enforcement and Penalty Schedules

    State oxygenated gasoline regulation must be enforceable by the 
state oversight agency. The USEPA recommends that states will visit at 
least 20 percent of regulated parties during a given control period. 
Inspections should consist of product sampling and record review. In 
addition, each state should devise a comprehensive penalty schedule. 
Penalties should reflect the severity of a party's violation, the 
compliance history of the party, as well as the potential environmental 
harm associated with the violation.
    Minnesota Statutes contain a graduated penalty schedule for 
violations of any of the winter oxygas requirements. Violation of any 
of the requirements is a criminal offense, punishable as a misdemeanor. 
The State retains discretionary authority to apply the graduated 
penalty schedule including the authority to: issuing written warnings, 
issue stop sale orders, lock or seal any gasoline dispenser, and 
request a misdemeanor complaint against a violator.
    At least 20 percent of the registered distributors will be 
inspected during the control period, and samples will be taken of each 
product at the facility, according to the State procedure. Samples will 
be analyzed by the State at the State laboratory using gas 
chromatography and a thermal conductivity detector following an 
unspecified ASTM test method. Similarly, retail gasoline stations will 
be inspected and samples taken during the control period. Approximately 
20 percent of the retail outlets in the control area will be visited 
during the control period.
    Inspections, which will be unannounced and at random, will include, 
in addition to sample collection, a visual check to ensure pumps are 
properly labeled, that transfer documentation is on hand, and that only 
oxygenated gasoline has been received during the control period.

Test Methods and Laboratory Review

    The USEPA's sampling procedures are detailed in appendix D of 40 
CFR part 80. The USEPA has recommended, in its credit program 
guidelines, that states adopt these sampling procedures. Minnesota has 
not adopted USEPA sampling procedures. However, the State does intend 
to attempt a statistical validation which it will send to USEPA for 
approval.
    Each state regulation must include a test method. The USEPA 
guidelines recommend the use of the OFID test, although parties may 
elect to use ASTM-D4815-89 or another method, if approved by the USEPA. 
Minnesota has elected to use an unspecified ASTM test method using gas 
chromatography with a thermal conductivity detector and the appropriate 
ASTM test method to determine oxygen content. The State will also use a 
contractor where needed if the sample is expected to contain a non-
ethanol oxygenate. The State is also expected to use a field screening 
method based on a near infra-red spectrophotometer. Information from 
these tests will be sent to the USEPA for statistical validation as a 
primary oxygenate test method.
    The USEPA has established an interim testing tolerance, which 
states appropriate ranges for credit and per-gallon programs.\9\ As 
USEPA states in that memorandum, the purpose of the testing in a credit 
program is to determine if a sample meets the 2.0 percent minimum 
oxygen content requirement and to determine whether the documentation 
that accompanies that gasoline is correct. For a per-gallon program, 
the purpose of the testing is to determine whether the gasoline 
contains less than 2.7 percent oxygen by weight. Minnesota has not 
provided a description of its testing tolerance.
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    \9\See Memorandum dated October 5, 1992 from Mary T. Smith, 
Director, Field Operations and Support Division to State/Local 
Oxygenated Fuels Contacts.
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Labeling

    The USEPA was required to promulgate Federal labeling regulations 
under section 211(m)(4) of the Act. These regulations were published in 
the Federal Register on October 20, 1992\10\. The Minnesota requirement 
for labeling is consistent with that of the USEPA. The USEPA's review 
of the material indicates that the State of Minnesota has adopted an 
oxygenated gasoline regulation substantially in accordance with the 
requirements of the Act. The USEPA is proposing to approve the 
Minnesota SIP revision for an oxygenated gasoline program, which was 
submitted on November 9, 1992. The USEPA is soliciting public comments 
on the issues discussed in this notice or on other relevant matters. 
Comments regarding program operation during the first and subsequent 
years of operation of the oxygenated gasoline program are invited.
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    \10\See footnote 3.
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    These comments will be considered before taking final action. 
Interested parties may participate in the Federal rulemaking procedure 
by submitting written comments to the USEPA Regional office listed in 
the ADDRESSES section of this notice.

III. Proposed Action

    The USEPA proposes to approve the oxygenated gasoline program 
revision to the Minnesota SIP. Public comment is solicited on the 
USEPA's proposed rulemaking action. Comments received on or before 
February 22, 1994 will be considered in the development of the final 
rulemaking.
    This action is classified as a Table 2 action by the Regional 
Administrator under the procedures published in the Federal Register on 
January 19, 1989 (54 FR 2214-2225). On January 6, 1989, the Office of 
Management and Budget (OMB) waived Table 2 and Table 3 SIP revisions 
(54 FR 2222) from the requirements of section 3 of Executive Order 
12291 for a period of two years. The USEPA has submitted a request for 
a permanent waiver for Table 2 and Table 3 SIP revisions. The OMB has 
agreed to continue the waiver until such time as it rules on USEPA's 
request. This request continues in effect under Executive Order 12866 
which superseded Executive Order 12291 on September 30, 1993.
    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., the 
USEPA must prepare a regulatory flexibility analysis assessing the 
impact of any proposed or final rule on small entities. (5 U.S.C. 603 
and 604.) Alternatively, the USEPA may certify that the rule will not 
have a significant impact on a substantial number of small entities. 
Small entities include small businesses, small not-for-profit 
enterprises, and government entities with jurisdiction over populations 
of less than 50,000. The USEPA certifies that this rule, which merely 
approves state requirements that are already in place, will not have a 
significant impact on a substantial number of small entities.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Reporting and recordkeeping requirements.

    Authority: 42 U.S.C. 7401-7671q.

    Dated: January 7, 1994.
Valdas V. Adamkus,
Regional Administrator.
[FR Doc. 94-1400 Filed 1-19-94; 8:45 am]
BILLING CODE 6560-50-F-M