[Federal Register Volume 60, Number 7 (Wednesday, January 11, 1995)]
[Rules and Regulations]
[Pages 2696-2699]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-421]


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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80

[FRL-5134-7]


Temporary Administrative Stay of the Reformulated Gasoline 
Program: Nine Counties in New York, Twenty-Eight Counties in 
Pennsylvania, and Two Counties in Maine

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: In today's action, EPA is temporarily staying the reformulated 
gasoline program requirements in nine opt-in counties in New York, in 
twenty-eight opt-in counties in Pennsylvania and in two opt-in counties 
in Maine. Today's action stays the applicability of the RFG 
requirements for these areas effective from January 1, 1995, until July 
1, 1995. Although EPA believes that the RFG program provides a highly 
cost-effective means of reducing ground-level ozone and toxic vehicle 
emissions, the Agency believes that States should be given the 
flexibility to choose which programs best meet each State's needs for 
emissions reductions. In a separate notice of proposed rulemaking to be 
published soon, EPA will propose to approve the requests for opt-out 
for these specified counties from the States of New York, Pennsylvania, 
and Maine. EPA will be unable to take final action on this proposed 
rulemaking by January 1, 1995, the date when RFG requirements must be 
met at the retail level. EPA believes a stay in the implementation of 
the reformulated gasoline requirements in these areas effective January 
1, 1995 and continuing until July 1, 1995, will avoid significant 
disruption in the marketplace while notice and comment rulemaking 
proceeds. This temporary stay is issued without prior notice and 
comment, based on good cause described herein.

EFFECTIVE DATE: This rule is effective on December 29, 1994.

ADDRESSES: Materials relevant to this action have been placed in Docket 
A-94-68. The docket is located at the Air Docket Section (6102), U.S. 
Environmental Protection Agency, 401 M Street, SW., Washington, DC 
20460, in room M-1500 Waterside Mall. Documents may be inspected from 
8:00 a.m. to 4:00 p.m. A reasonable fee may be charged for copying 
docket material.

FOR FURTHER INFORMATION CONTACT:
Mr. Mark Coryell, U.S. Environmental Protection Agency, Office of Air 
and Radiation, 401 M Street, SW. (6406J), Washington, DC 20460, (202) 
233-9014.

SUPPLEMENTARY INFORMATION: A copy of this action is available on the 
OAQPS Technology Transfer Network Bulletin Board System (TTNBBS). The 
TTNBBS can be accessed with a dial-in phone line and a high-speed modem 
(PH# 919-541-5742). The parity of your modem should be set to none, the 
data bits to 8, and the stop bits to 1. Either a 1200, 2400, or 9600 
baud modem should be used. When first signing on, the user will be 
required to answer some basic informational questions for registration 
purposes. After completing the registration process, proceed through 
the following series of menus:

(M)  OMS
(K)  Rulemaking and Reporting
(3)  Fuels
(9)  Reformulated gasoline

A list of ZIP files will be shown, all of which are related to the 
reformulated gasoline rulemaking process. Today's action will be in the 
form of a ZIP file and can be identified by the following titles: 
STAY.ZIP. To download this file, type the instructions below and 
transfer according to the appropriate software on your computer:

ownload, rotocol, xamine, ew, ist, or elp Selection 
or  to exit: D filename.zip

    You will be given a list of transfer protocols from which you must 
choose one that matches with the terminal software on your own 
computer. The software should then be opened and directed to receive 
the file using the same protocol. Programs and instructions for de-
archiving compressed files can be found via ystems Utilities from 
the top menu, under rchivers/de-archivers. Please note that due to 
differences between the software used to develop the document and the 
software into which the document may be downloaded, changes in format, 
page length, etc. may occur.

I. Background

A. General Background on Reformulated Gasoline Program and Opt-In 
Process

    The reformulated gasoline program is designed to reduce ozone 
levels in the largest metropolitan areas of the U.S. with the worst 
ground-level ozone problems by reducing vehicle emissions of the ozone 
precursors, specifically volatile organic compounds (VOC), through fuel 
reformulation. Reformulated gasoline also achieves a significant 
reduction in air toxics. In Phase II of the program, nitrogen oxides 
(NOX), another precursor of ozone, are reduced. The 1990 
amendments of the Clean Air Act require reformulated gasoline in the 
nine cities with the highest levels of ozone. Congress also provided 
the opportunity for states to choose to opt into the RFG program for 
their other nonattainment areas.
    EPA issued final rules establishing requirements for RFG on 
December 15, 1993 (59 FR 7716, February 16, 1994). During development 
of the RFG rule, a number of states inquired as to whether they would 
be permitted to opt out of the RFG program at a future date or to opt 
out of certain of the requirements. This was based on their concern 
that the air quality benefits of RFG, given their specific needs, might 
not warrant the cost of the program, specifically focusing on the more 
stringent standards in Phase II of the program (starting in 2000). Such 
states wished to retain their ability to opt out of the program. Other 
states indicated they viewed RFG as an interim strategy to help bring 
their nonattainment areas into attainment sooner than would otherwise 
be the case.
    The regulation issued on December of 1993 did not include 
procedures for opting out of the RFG program, because EPA had not 
proposed and was not ready to adopt such procedures at that time. 
However, the Agency did indicate that it intended to propose such 
procedures in a separate rule.

B. Jefferson County, New York

    Jefferson County was included as a covered area in EPA's 
reformulated gasoline regulations based on Governor Mario Cuomo's 
request of October 28, 1991, that this county be included under the 
Act's opt-in provision for ozone nonattainment areas (57 FR 7926, March 
5, 1992). See 40 CFR 80.70(j)(10)(vi). On November 29, 1994, EPA 
received a petition from the Commissioner of New York's

[[Page 2697]]

Department of Environmental Conservation, Mr. Langdon Marsh, to remove 
Jefferson County, New York, from the list of areas covered by the 
requirements of the reformulated gasoline program. EPA understands that 
Commissioner Marsh is acting for Governor Cuomo on this matter. The 
Administrator responded to the State's request in a letter to 
Commissioner Marsh dated December 12, 1994, stating EPA's intention to 
grant New York's request as of January 1, 1995, and to conduct 
rulemaking to implement the opt-out. The Administrator also announced 
that effective January 1, 1995, and until the rulemaking to remove 
Jefferson County from the list of covered areas is completed, EPA would 
not enforce the reformulated gasoline requirements in Jefferson County. 
This decision was based on the particular circumstances that apply in 
Jefferson County.

C. The Buffalo and Albany Areas of New York

    On December 23, 1994, Commissioner Marsh of New York's Department 
of Environmental Conservation wrote to request opt-out of the Albany 
and Buffalo areas which include the counties of Albany, Greene, 
Montgomery, Rensselaer, Saratoga, Schenectady, Erie and Niagara. The 
Assistant Administrator for Air and Radiation, Mary Nichols, responded 
to the state's request in a letter to Commissioner Marsh dated December 
28, 1994, stating EPA's intention to grant New York's request as of 
January 1, 1995, and to conduct rulemaking to implement the opt-out. 
The December 28, letter also indicated EPA's intent to stay the RFG 
requirements effective from January 1, 1995 until July 1, 1995, while 
the Agency completes rulemaking to appropriately change the 
regulations.

D. Pennsylvania Counties

    Twenty-eight counties in Pennsylvania were included as covered 
areas in EPA's reformulated gasoline regulations based on Governor 
Robert P. Casey's request dated September 25, 1991 (56 FR 57986, 
November 15, 1991). See 40 C.F.R. 80.70(j)(11) (i) through (xxviii). 
The counties referred to are listed as follows: Adams, Allegheny, 
Armstrong, Beaver, Berks, Blair, Butler, Cambria, Carbon, Columbia, 
Cumberland, Dauphin, Erie, Fayette, Lackawanna, Lancaster, Lebanon, 
Lehigh, Luzerne, Mercer, Monroe, Somerset, Northhampton, Perry, 
Washington, Westmoreland, Wyoming and York. On December 1, 1994, EPA 
received a petition from Governor Casey to remove these twenty-eight 
counties from the list of areas covered by the requirements of the 
reformulated gasoline program. Based on the state of Pennsylvania's 
opt-out request of December 1, 1994, the EPA Administrator formally 
responded to the State's request in a letter to Governor Casey dated 
December 12, 1994. In this letter, the Administrator indicated that 
effective January 1, 1995, and until the formal rulemaking to remove 
the twenty-eight counties from the list of covered areas is completed, 
EPA would not enforce the reformulated gasoline requirements in these 
twenty-eight counties. This decision was based on the particular 
circumstances that apply in these twenty-eight counties.

E. Hancock and Waldo Counties in Maine

    Hancock and Waldo counties were included as a covered areas in 
EPA's reformulated gasoline regulation based on Governor John R. 
McKernan's request of June 26, 1991, that these counties be included 
under the Act's opt-in provision for ozone nonattainment areas (56 FR 
46119, September 10, 1991). See 40 CFR 80.70(j)(5) (viii) and (ix). On 
December 27, 1994, EPA received a petition from the Acting Commissioner 
of Maine's Department of Environmental Protection, Ms. Deborah Garrett, 
to remove Hancock and Waldo Counties in Maine from the list of areas 
covered by the requirements of the reformulated gasoline program. EPA 
understands that Commissioner Garrett is acting for Governor McKernan 
in this matter. The Assistant Administrator for Air and Radiation, Mary 
Nichols, responded to the state's request in a letter to Commissioner 
Garrett, dated December 27, 1994, stating EPA's intention to grant 
Maine's request, and conduct rulemaking to implement the opt-out. The 
December 28 letter also indicated EPA's intent to stay the reformulated 
gasoline requirements effective from January 1, 1995, until July 1, 
1995, while the Agency completes rulemaking to appropriately change the 
regulations.

II. EPA's Proposal To Grant New York's, Pennsylvania's, and Maine's 
Request To Remove Selected Opt-In Areas From the Requirements of the 
Reformulated Gasoline Program

    EPA believes that it is reasonable to construe section 211(k) as 
authorizing the Agency to establish procedures and requirements for 
states to opt out of the reformulated gasoline program. This would only 
apply to areas that have previously opted in under section 211(k)(6); 
the mandatory covered areas would not be allowed to opt out of the 
program.
    In section 211(k)(6), Congress expressed its clear intention 
regarding state opting in to this program. That paragraph establishes 
that ``upon the application of the Governor of a State, the 
Administrator shall apply the prohibition set forth in paragraph (5) in 
any (ozone nonattainment) area in the State * * *. The Administrator 
shall establish an effective date for such prohibition * * *.'' \1\ 
However, with respect to opting out, ``the statute is silent or 
ambiguous with respect to the specific issue'' and the question is 
whether EPA's interpretation ``is based on a permissible construction 
of the statute.'' Chevron U.S.A. Inc. v. Natural Resources Defense 
Council, Inc., 467 U.S. 837, 843 (1984). In addition, ``[i]f Congress 
has explicitly left a gap for the Agency to fill, there is an express 
delegation of authority to the Agency to elucidate a specific provision 
of the statute by regulation.'' Id. at 843-44. If the delegation is 
implicit, the Agency may adopt a reasonable interpretation of the 
statute. Id. at 844.
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    \1\ Paragraph 5 of section 211(k) prohibits the sale of 
conventional, or non-reformulated gasoline, in covered areas.
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    Section 211(k)(1) provides that EPA is to promulgate ``regulations 
establishing requirements for reformulated gasoline.'' This provision 
therefore delegates to EPA the authority to define the requirements for 
reformulated gasoline. Clean Air Act section 301(a)(1) also delegates 
to EPA the general authority to promulgate ``such regulations as are 
necessary'' for EPA to carry out its function under the Act. Given 
these delegations of legislative rulemaking authority, EPA's 
interpretation of section 211(k) with respect to opting out should be 
upheld unless manifestly contrary to the Act. Chevron, 467 U.S. at 843-
44.
    EPA believes that it is appropriate to interpret section 211(k) as 
authorizing states to opt-out of this program, with the requirements 
focusing on a reasonable transition out of the program.\2\ There are 
really two aspects

[[Page 2698]]

to this, the first being whether states should be allowed to opt out at 
all, the second being what conditions, if any, should be placed on 
opting out. With respect to the former, a right to opt out is 
consistent with the Act's recognition that states have the primary 
responsibility to develop a mix of appropriate control strategies 
needed to reach attainment with the NAAQS. While various mandatory 
control strategies were established under the Clean Air Act, the Act 
still evidences a clear commitment to allowing states the flexibility 
to determine the appropriate mix of other measures needed to meet their 
air pollution goals. Section 211(k)'s opt-in provision reflects this 
deference to state choice, providing that opt-in will occur upon 
application by the governor. The only discretion EPA retains regarding 
opt-in is in setting or extending the effective date. Allowing states 
the right to opt-out is a logical extension of these considerations of 
deference to state decision making.
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    \2\ The preamble to the December 15, 1993, final regulations 
failed to provide a clear discussion of EPA's views on this issue. 
While EPA noted that it ``may pursue a separate action in the future 
that would allow states to opt out of the RFG program, provided 
sufficient notice is given,'' the preamble also indicated there were 
concerns over whether EPA had authority to allow states to opt-out. 
59 FR 7808 (February 16, 1994). The context for these statements, 
however, makes it clear that EPA's concerns were based on issues 
surrounding questions of opting-in for only Phase I of the 
reformulated gasoline program. See 59 FR 7809. As noted above, EPA 
believes that it does have authority to establish requirements that 
allow states to opt-out of this program.
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    Given such deference, it follows that opting out should be 
accomplished through application of the governor. It also follows that 
the conditions on opting out should be geared towards achieving a 
reasonable transition out of the reformulated gasoline program, as 
compared to requiring a state to justify its decision. EPA has 
identified two principal areas of concern in this regard. The first 
involves coordination of air quality planning. For example, 
reformulated gasoline in opt-in areas has been relied upon by several 
states in their State Implementation Plan submissions or in their 
redesignation requests. The second involves appropriate lead time for 
industry to transition out of the program.
    In a separate notice, to be published soon, EPA will be proposing 
to revise its RFG regulations to remove the affected counties from the 
program.

III. Temporary Stay Removing the Nine New York Counties, the Twenty-
Eight Counties in Pennsylvania, and Two Counties in Maine From the List 
of Areas Covered by the Reformulated Gasoline Requirements as of 
January 1, 1995

    Clean Air Act section 307(d)(1) requires EPA to follow specified 
rulemaking procedures in promulgating regulations under section 211(h). 
Section 307(d) provides, however, that notice and comment rulemaking 
requirements ``shall not apply in the case of any rule or circumstance 
referred to in subparagraph (A) or (B) of subsection 553(b) of title 5 
of the United States Code [i.e. sections 553(b) (A) and (B) of the 
APA].'' Under APA section 553(b)(B), notice and comment are not 
required ``when the agency for good cause finds (and incorporate the 
finding and a brief statement of reasons thereof in the rules issued) 
that notice and public procedure thereon are impracticable, 
unnecessary, or contrary to the public interest.''
    EPA is issuing this temporary stay as a final rule without prior 
notice and comment. This expedited rulemaking procedure is based on the 
need to act quickly to avoid unnecessary disruption at the inception of 
the reformulated gasoline program, stemming from recent decisions by 
various states to opt out of this program. The different circumstances 
for the various covered areas involved are discussed below.
    The final regulations establishing the reformulated gasoline 
program were issued on December 15, 1993, requiring upstream parties to 
have reformulated gasoline in the covered areas as of December 1, 1994, 
and to have reformulated gasoline at all retail outlets in those areas 
as of January 1, 1995. In late November and December, EPA received 
requests from Pennsylvania, New York and Maine to opt out various areas 
in these states. EPA responded to the initial requests from New York 
and Pennsylvania by letter dated December 12, 1994, indicating EPA's 
belief that the Act authorizes states to opt out of the reformulated 
gasoline program, and EPA's intention to grant the request considering 
the lack of adverse air quality impacts,\3\ the lack of reliance on 
reformulated gasoline in the states' SIPs, and the logistical problems 
associated with providing reformulated gasoline, at least with respect 
to Jefferson County. EPA announced that it would commence rulemaking to 
revise its regulations to effectuate the opt out, and effective January 
1, 1995 would not enforce the reformulated gasoline requirements in the 
respective counties. EPA, of course, retains its authority to take 
appropriate action to address any non-compliance that may have occurred 
prior to January 1, 1995.
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    \3\ The affected areas have not had ozone exceedances for three 
years. Several of the areas have requests pending before the agency 
for redesignation to attainment status. The other areas are expected 
to submit such requests.
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    EPA has since learned that its December 12 announcement has led to 
confusion and disruption in the market place regarding the transition 
back to conventional gasoline. There is also uncertainty regarding 
potential liability under EPA's citizen suit provisions. The existence 
of confusion within the regulated community has led to unfortunate 
disruptions in the market place. EPA neither intended nor expected this 
result. Instead, EPA's December 12 announcement was an attempt to 
provide certainty and stability, while at the same time recognizing the 
value in allowing states to expeditiously opt out of the reformulated 
gasoline program under appropriate circumstances.
    With respect to the Albany-Buffalo area in New York and the 
affected towns in Maine, EPA did not make a prior announcement of its 
intention regarding the opt-out of these areas. However, expedited 
issuance of a temporary stay is also needed for those areas to avoid a 
patchwork of staggered times for opt out, occurring at the inception of 
this major program. Such variability would only increase the logistical 
and other problems facing the regulated community, and disrupt their 
planning to produce and market reformulated gasoline over the next 
several months.
    This important and complicated program is just starting, and it is 
necessary that all parties involved have the certainty and stability 
needed for successful implementation. EPA believes that these 
circumstances warrant a temporary stay of the reformulated gasoline 
requirements in these areas effective from January 1, 1995 until July 
1, 1995. That will provide adequate time to conduct notice and comment 
rulemaking and take final action on these opt-out requests.
    Given all of the above circumstances, EPA's belief that it is fully 
authorized to allow the affected areas to opt out, the temporary nature 
of this stay, and the ability of all parties to comment on the notice 
of proposed rulemaking to allow the opt out of these areas, EPA 
believes there is good cause under 5 U.S.C. 553(b) and CAA 
Sec. 307(d)(1) to issue this final rule without prior notice and 
comment. For the same reasons, EPA finds there is good cause under 5 
U.S.C. 553(d) for the expedited effective date of this final rule.

V. Effective Date

    This temporary stay is effective as of January 1, 1995.

VI. Environmental Impact

    The temporary stay is not expected to have any adverse 
environmental effects. The areas covered by this rule have data showing 
compliance with the National Ambient Air Quality Standard (NAAQS) for 
ozone for three or more consecutive years.

VII. Economic Impact

    Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 
U.S.C. 605(b), the Administrator certifies that this temporary stay 
will not have a

[[Page 2699]]

significant economic impact on a substantial number of small entities. 
This temporary stay is not expected to result in any additional 
compliance cost to regulated parties and, in fact, is expected to 
decrease compliance costs to the industry and decrease costs to 
consumer in the affected areas.

VIII. Administrative Requirements

    Under Executive Order 12866 (58 FR 51735, October 4, 1993) the 
Agency must determine whether a regulation is ``significant'' and 
therefore subject to OMB review and the requirements of the Executive 
Order. The Order defines ``significant regulatory action'' as one that 
is likely to result in a rule that may:

    (1) Have an annual effect on the economy of $100 million or 
more, or adversely affect in a material way the economy, a sector of 
the economy, productivity, competition, jobs, the environment, 
public health or safety, or State, local or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with 
an action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.

    It has been determined that this rule is not a ``significant 
regulatory action'' under the terms of Executive Order 12866 and is 
therefore not subject to OMB review.
    Under the Paper Reduction Act, 44 U.S.C. 3501 et seq., EPA must 
obtain Office of Management and Budget (OMB) clearance for any activity 
that will involve collecting substantially the same information from 10 
or more non-Federal respondents. This rule does not create any new 
information requirements or contain any new information collection 
activities.

IX. Statutory Authority

    The statutory authority for the action in this rule is granted to 
EPA by section 211 (c) and (k), and section 301(a) of the Clean Air Act 
as amended, 42 U.S.C. 7545 (c) and (k) and 7601(a).

List of Subjects in 40 CFR Part 80

    Environmental protection, Air pollution control, Fuel additives, 
Gasoline, and Motor vehicle pollution.

    Dated: December 29, 1994.
Carol M. Browner,
Administrator.

    40 CFR Part 80 is amended as follows:

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

    1. The authority citation for part 80 continues to read as follows:

    Authority: Sections 114, 211 and 301(a) of the Clean Air Act as 
amended (42 U.S.C. 7414, 7545, and 7601(a))

    2. Section 80.70 is amended by revising the introductory text of 
paragraph (j) to read as follows.


Sec. 80.70  Covered areas.

* * * * *
    (j) The ozone nonattainment areas listed in this paragraph (j) of 
this section are covered areas beginning on January 1, 1995, except 
that those areas listed in paragraphs (j)(5) (viii) and (ix), (j)(10) 
(i), (iii) and (v) through (xi) and j(11) of this section are covered 
areas beginning on July 1, 1995. The geographic extent of each covered 
area listed in this paragraph (j) of this section shall be the 
nonattainment area boundaries as specified in 40 CFR part 81, subpart 
C:
* * * * *
[FR Doc. 95-421 Filed 1-10-95; 8:45 am]
BILLING CODE 6560-50-M