[Federal Register Volume 60, Number 150 (Friday, August 4, 1995)]
[Proposed Rules]
[Pages 40009-40017]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14429]




  Federal Register / Vol. 60, No. 150 / Friday, August 4, 1995 / 
Proposed Rules  

[[Page 40009]]


ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[AMS-FRL-5214-7]


Regulation of Fuels and Fuel Additives: Standards for 
Reformulated and Conventional Gasoline

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: Under the Clean Air Act, as amended in 1990 (CAA or the Act), 
the Environmental Protection Agency (EPA or the Agency) promulgated 
anti-dumping regulations for conventional gasoline (gasoline not 
certified as reformulated gasoline (RFG)). These regulations require 
that conventional gasoline not be more polluting than it was in 1990. 
The regulations for conventional gasoline include provisions for the 
development of individual refinery baselines and other compliance 
provisions. This proposal would modify the requirements for obtaining a 
baseline adjustment due to the production of JP-4 jet fuel in 1990. 
Additionally, EPA is proposing to allow a baseline adjustment due to 
the inability to acquire extremely sweet crude that had been available 
in 1990 and from which the gasoline used to develop the 1990 individual 
baseline was obtained. With regard to both of these baseline adjustment 
proposals, EPA is issuing a three-month administrative stay (which is 
published elsewhere in this issue of the Federal Register) of the 
applicable portions of the December 1993 final rule and proposes to 
extend such stay by rule pending the outcome of this rulemaking. EPA is 
also proposing a baseline adjustment for refiners which have both 
extremely low baseline sulfur and olefin levels. A refiner is severely 
limited in its ability to comply with its individual baseline when the 
baseline values of both of these parameters are very low. For refiners 
which qualify for one or more of the baseline adjustments proposed 
today, EPA proposes to apply the adjustments to gasoline produced in 
1995. Finally, EPA is also proposing to revise its regulations 
concerning the publication and confidentiality of individual baselines 
and information submitted to obtain an individual baseline.

DATES: EPA will conduct a hearing (date and location to be announced) 
if a request for such is received by September 5, 1995. The comment 
period on this document will close September 5, 1995 unless a hearing 
is requested, in which case the comment period will close 30 days after 
the close of the public hearing.

ADDRESSES: Interested parties may submit written comments (in 
duplicate, if possible) to Public Docket No. A-95-03 at Air Docket 
Section, U.S. Environmental Protection Agency, Waterside Mall, Room M-
1500, 401 M Street S.W., Washington, D.C. 20460. The Agency requests 
that commenters also send a copy of any comments to Christine M. 
Brunner at the address listed below in the ``Further Information'' 
section.
    The support document containing detailed discussion of today's 
proposal is contained in Public Docket A-95-03. Materials relevant to 
the reformulated gasoline final rule are contained in Public Dockets A-
91-02 and A-92-12. These dockets are located at Room M-1500, Waterside 
Mall (ground floor), U.S. Environmental Protection Agency, 401 M Street 
S.W., Washington, D.C. 20460. The docket may be inspected from 8:00 
a.m. until 5:00 p.m. Monday through Friday. A reasonable fee may be 
charged by EPA for copying docket materials.

FOR FURTHER INFORMATION CONTACT: Christine M. Brunner, U.S. EPA (RDSD-
12), Regulation Development and Support Division, 2565 Plymouth Road, 
Ann Arbor, MI 48105, Telephone: (313) 668-4287.

SUPPLEMENTARY INFORMATION: To Request Copies of This Document Contact: 
Delores Frank, U.S. EPA (RDSD-12), Regulation Development and Support 
Division, 2565 Plymouth Road, Ann Arbor, MI 48105, Telephone: (313) 
668-4295.
    A copy of this document is also available electronically on the 
EPA's Office of Air Quality Planning and Standards (OAQPS) Technology 
Transfer Network Bulletin Board System (TTNBBS). The service is free of 
charge, except for the cost of the phone call. The TTNBBS can be 
accessed with a dial-in phone line and a high-speed modem per the 
following information:

TTN BBS: 919-541-5742
(1200-14400 bps, no parity, 8 data bits, 1 stop bit)
Voice Help-line: 919-541-5384

    Accessible via Internet: TELNET ttnbbs.rtpnc.epa.gov Off-line: 
Mondays from 8:00 AM to 12:00 Noon ET.
    A user who has not called TTN previously will first be required to 
answer some basic informational questions for registration purposes. 
After completing the registration process, proceed through the 
following menu choices from the Top Menu to access information on this 
rulemaking.

 GATEWAY TO TTN TECHNICAL AREAS (Bulletin Boards)
 OMS--Mobile Sources Information
 Rulemaking and Reporting
<3> Fuels
<9> File Area #9 * * * Reformulated gasoline

    At this point, the system will list all available files in the 
chosen category in reverse chronological order with brief descriptions. 
These files are compressed (i.e., ZIPed). Today's notice can be 
identified by the following title: JP4NPRM.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. After getting the files 
you want onto your computer, you can quit the TTNBBS with the oodbye 
command. 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. Introduction

    Compliance with certain aspects of the reformulated and 
conventional gasoline regulations depends on the individual baseline of 
the refinery or refiner.1 The individual baseline is the set of 
fuel parameter values, emissions and volumes which represent the 
quality and quantity of the refiner's 1990 gasoline. See 40 CFR 80.91. 
EPA's regulations establish requirements for developing an individual 
baseline. For specific situations, the Agency allowed the baseline fuel 
parameters, volumes and emissions values to be adjusted to reflect 
certain limited unique instances. Allowable circumstances under the 
regulations include unforeseen downtime of a gasoline blendstock 
producing unit, nonannual maintenance, work-in-progress and 

[[Page 40010]]
production of JP-4 jet fuel. In such cases, EPA has ``case-by-case 
discretion'' to grant variances or even dispensation from a rule where 
imposition of the requirement would result in minimal environmental 
benefit but would extremely burden a regulated party.2

    \1\ In general, the anti-dumping provisions apply to refiners or 
importers of conventional gasoline. The baseline adjustment 
provisions proposed in today's notice, however, are applicable only 
to refiners and their refineries.
    \2\ Alabama Power Company v. Costle, 636 F.2d 323.357 (D.C. Cir 
1979).
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    This notice of proposed rulemaking (NPRM) proposes to allow 
baseline adjustments for three situations where parties would be 
extremely burdened by the current regulations were relief not granted. 
Specifically, today's notice proposes to revise the requirements for a 
baseline adjustment due to JP-4 jet fuel production in 1990, to add a 
provision addressing the use of extremely sweet crude in 1990 which is 
no longer available, and to add a provision addressing compliance 
difficulties arising from a baseline which is very low in both sulfur 
and olefins. EPA is also issuing a three-month administrative stay, 
which is published elsewhere in this issue of the Federal Register, 
with regard to the first two baseline adjustment issues above pending 
reconsideration of the applicable provisions by the Agency. In 
addition, EPA proposes to extend the stay until final action is taken 
on the regulatory changes proposed herein. For refiners which qualify 
for one or more of the baseline adjustments proposed today, EPA 
proposes to apply the adjustments to gasoline produced in 1995. This 
notice also proposes to revise the regulations concerning the 
publication and confidentiality of individual baselines and the 
information submitted to receive such a baseline. Comments and 
supporting data are requested on any aspect of today's document.

II. JP-4 Baseline Adjustment

A. Introduction

    JP-4 jet fuel, the use of which is being phased out by the Defense 
Department, was produced by many refiners under contract with the 
Defense Department in 1990. Because the JP-4 blendstock is now likely 
to be used in gasoline, most of that blendstock cannot be used in 
gasoline without first going through a reformer to increase its octane 
to suitable gasoline levels. Due to the high aromatic content of 
streams after reforming, the toxic emissions of the current gasoline of 
a refiner which produced JP-4 in 1990 will likely increase relative to 
its 1990 values. In addition, it is possible that gasoline production 
would increase (relative to 1990 production) due to movement of 
blendstocks directly and indirectly from JP-4 to gasoline. The impact 
of the increase in aromatic content and/or additional volume due to JP-
4 phaseout will, of course, affect certain refiners more extremely than 
others.
    The current regulations provide for an adjustment to a refiner's 
individual baseline due to production of JP-4 in 1990 if three criteria 
are met. The criteria were fashioned to ensure that the requirements of 
Alabama Power were met. First, JP-4 baseline adjustments will be 
allowed only for a refiner which will not produce reformulated 
gasoline. If a refiner granted such an adjustment subsequently produces 
reformulated gasoline, its conventional gasoline compliance would be 
subject to its original unadjusted baseline during the current 
averaging period and all subsequent years. For multi-refinery refiners, 
this provision applies on a refiner-wide basis. Second, a JP-4 baseline 
adjustment is available primarily to qualifying single-refinery 
refiners. A multi-refinery refiner could also receive an adjustment if 
each of its refineries produced JP-4 in 1990 and each refinery also met 
the other requirements for obtaining the adjustment. Third, the refiner 
is required to show that a significant burden would exist if no 
baseline adjustment was allowed. The current regulations require that 
the ratio of a refinery's 1990 JP-4 production to its 1990 gasoline 
production equal or exceed 0.5 in order to qualify as a significant 
burden.
    EPA expected minimal negative environmental affects from allowing 
baseline adjustments under the criteria specified in the current 
regulations because (1) the number of refineries meeting the criteria 
for a baseline adjustment is expected to be quite small, and (2) the 
total production of all such refineries is also small.

B. Proposal

    In today's notice, EPA proposes provisions related to JP-4 baseline 
adjustments which are essentially as contained in the direct final rule 
(DFRM), published July 20, 1994 (59 FR 36944).3 The provisions are 
discussed below. For detailed discussion of the provisions proposed 
today, refer to the support document for this rule, ``Regulation of 
Fuels and Fuel Additives: Standards for Reformulated and Conventional 
Gasoline--Detailed Discussion and Analysis'', Air Docket A-95-03.

    \3\ Since EPA received adverse comments on the changes specified 
in the DFRM with regard to JP-4 baseline adjustments, EPA withdrew 
this DFRM based on EPA's determination, announced in the DFRM, that 
such provisions would take effect only if no persons submitted 
adverse comments or requested an opportunity to comment. For more 
discussion, see the support document, ``Regulation of Fuels and Fuel 
Additives: Standards for Reformulated and Conventional Gasoline--
Detailed Discussion and Analysis'', Air Docket A-95-03.
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1. Multiple-Refinery Requirement
    EPA proposes that the following conditions would have to be met by 
a multi-refinery refiner in order for that refiner to qualify for a 
baseline adjustment for 1990 JP-4 production at one or more of its 
refineries:
    (1) Produced JP-4 at one or more of its refineries in 1990.
    The current JP-4 baseline adjustment provisions for multi-refinery 
refiners require each refinery to have produced JP-4 in 1990. EPA 
believes it may use its discretion to provide relief because the 
requirements of Alabama Power are satisfied. If a multi-refinery 
refiner qualifies for a baseline adjustment under this criterion, it 
would (1) determine the adjusted baseline of the refinery(ies) which 
actually produced JP-4 in 1990 and (2) determine its anti-dumping 
compliance on an aggregate basis.
    (2) Has a 1990 JP-4 to gasoline ratio of at least 0.15 (see 
discussion below regarding JP-4 baseline adjustment ratio).
    (a) For each individual refinery, if all of its refineries produced 
JP-4 in 1990, in which case the refiner may comply with the anti-
dumping requirements on an individual or aggregate basis; or
    (b) On a refiner-wide basis, in which case the refiner must 
determine an individual baseline for each of its refineries but must 
comply with the anti-dumping requirements on an aggregate basis; and
    (3) Will not produce RFG at any of its refineries.
    EPA requests comments on this change to the current JP-4 baseline 
adjustment provisions concerning multi-refinery refiners.
2. JP-4 Baseline Adjustment Ratio
    The current regulations for a baseline adjustment require that the 
ratio of the refinery's 1990 JP-4 production to its 1990 gasoline 
production must equal or exceed 0.5. Based on responses from affected 
refiners, very few refiners under contract to produce JP-4 would have 
the relief intended by the provision. Further, EPA has evaluated data 
it received subsequent to December 1993 concerning 1990 JP-4 and 
gasoline production for refiners (both multi- and 

[[Page 40011]]
single refinery refiners) 4 and is hereby proposing that the ratio 
be reduced to 0.15. EPA believes this ratio will allow three to four 
refiners which dedicated a substantial amount of 1990 production to JP-
4 production and for which converting the associated feedstock for use 
in gasoline would be a severe economic burden. This value is in line 
with the ratio options that were suggested by commenters during the 
original rulemaking. At a ratio of less than 0.15, EPA believes the 
impact on benzene and aromatics may make it more costly for refiners to 
comply with the regulations, though it is unlikely that such refiners 
will be forced out of business or experience extreme burden.

    \4\ Petition for Adjustment to Anti-Dumping Baseline, Atlas 
Processing Company, Penzoil Products Company, Attachments B and C, 
March 29, 1994.
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    EPA expects minimal negative environmental affects due to the 
reduction of the ratio requirement to 0.15 because the expanded 
provision will still apply to a very limited number of refiners 
producing a limited amount of conventional gasoline. EPA requests 
comments on the proposal discussed above.
3. Comments Received on the DFRM
    For a discussion of comments received on the DFRM, please see the 
support document for this rule (``Regulation of Fuels and Fuel 
Additives: Standards for Reformulated and Conventional Gasoline--
Detailed Discussion and Analysis'', Air Docket A-95-03).

III. Crude Quality Baseline Adjustment

A. Introduction

    Crude sulfur content is increasing nationwide 5 and, while for 
most refiners increases in crude sulfur content should be considered 
manageable, such increases might be devastating for certain refiners. 
EPA has also been informed that the quality of the crude oil (with 
regard to sulfur content) available to refiners in PADD IV has been 
deteriorating faster than the rest of the U.S. since 1990.6 
Additionally, refiners in this region do not have access to imports of 
foreign crudes other than those from Canada. Thus, the quality of crude 
oil reasonably and economically available to these refiners, from 
traditional or alternative sources, is quite limited. Prior to 
promulgation of the December 1993 rules, EPA did not know that the 
deterioration of crude oil available to certain refiners (with regard 
to increasing sulfur content) might in some cases force them to cease 
operation in order to avoid noncompliance as compliance options for 
such a refiner might be prohibitively expensive.

    \5\ E.J. Swain, ``U.S. crude slate continues to get heavier, 
higher in sulfur,'' Oil & Gas Journal, p. 37, January 9, 1995.
    \6\ Oil & Gas Journal, January 9, 1995.
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    The current regulations generally do not allow baseline adjustments 
for changing crude quality or availability. However, as discussed in 
the preamble to the December 1993 final rule, EPA recognized that a 
refiner's ability to comply with its individual baseline can be 
extremely burdensome due to certain factors, such as changes in crudes, 
markets, and fuel specifications. As with the work-in-progress baseline 
adjustment and the JP-4 baseline adjustment which is discussed above, 
EPA believes it has the authority to provide limited relief in the form 
of a baseline adjustment in those situations where the anti-dumping 
regulatory burden is extremely onerous and where requiring compliance 
would yield little or no environmental gain. Thus, EPA is proposing 
such a baseline adjustment where a dramatic increase in crude sulfur 
content has occurred which could severely affect the anti-dumping 
compliance of refiners with extremely low baseline sulfur values. EPA 
requests comments on the discussion and proposed criteria presented 
today. EPA also requests data which supports or refutes the information 
presented in this notice.

B. Proposal

    EPA proposes to allow a baseline adjustment only for the 
deterioration of crude sulfur levels as it is unaware of other inherent 
crude properties which strongly and directly affect baseline fuel 
parameters. Comments are requested on other inherent crude properties 
which have significantly deteriorated since 1990 and which directly and 
significantly affect the values of any of the fuel parameters for which 
an individual baseline value must be determined. Comments concerning 
crude quality changes since 1990, as well as future trends (including 
identifying whether crude sulfur content increases will flatten off or 
continue to increase), especially on a regional or PADD basis, are also 
requested.
    As with other baseline adjustments such as work-in-progress, the 
proposed criteria for obtaining an adjustment are necessarily stringent 
so as to provide relief only in cases of extreme burden and to maintain 
the environmental benefits of the (anti-dumping) program. EPA does not 
intend to allow adjustments for all refiners who have experienced 
increasing crude sulfur levels in the time period since 1990 or will 
experience such increases in the future. Thus, the existing provisions 
in section 80.91 of the regulations still apply, i.e., no adjustments 
for crude quality or availability changes are allowed unless the 
proposed criteria are met.
    If a refiner meets the following proposed criteria, it would be 
able to petition for a baseline adjustment to account for crude sulfur 
changes:
    (1) The refinery produces no reformulated gasoline. While the anti-
dumping requirements, in general, apply to all conventional gasoline 
whether or not reformulated gasoline is also produced, in these 
specific cases no dumping will occur due to reformulated gasoline 
production. If a refinery granted such an adjustment subsequently 
produces reformulated gasoline, its conventional gasoline compliance 
would be subject to its original unadjusted baseline during the current 
averaging period and in all subsequent years.
    (2) A refiner has an unadjusted baseline value of not more than 50 
ppm. EPA believes that requiring a threshold value of 50 ppm is 
appropriate because higher baseline values would indicate that the 
refiner's 1990 crude slate was not extremely low in sulfur. 
Additionally, a refiner with a higher baseline sulfur value should have 
sufficient leeway, e.g., types of crudes utilized and processing 
flexibility, to comply with its individual baseline. EPA requests 
comments on the appropriateness of requiring a threshold value, and on 
the suitability of 50 ppm or another value as a threshold value.
    (3) The affected refinery of a multi-refinery refiner may not be 
aggregated with the refiner's other refineries for compliance purposes. 
Since both the unadjusted and adjusted baselines must be determined, if 
a refinery granted such an adjustment subsequently is included in an 
aggregate baseline, its conventional gasoline compliance would be 
subject to its original unadjusted baseline during the current 
averaging period and in all subsequent years.
    (4) The installation of the refinery units necessary to process 
higher sulfur crudes to comply with the refinery's actual (i.e., 
unadjusted) baseline would cost $10 million or be at least 10 percent 
of the depreciated book value of the refinery as of January 1, 1995. 
The purpose of this provision would be to ensure that an adjustment be 
limited to cases of extreme burden or economic hardship and de minimis 
environmental impact, and is the same economic burden requirement which 
must be met 

[[Page 40012]]
by a refiner seeking a work-in-progress baseline adjustment.7 EPA 
requests comments on this criterion and whether the specified values 
are adequate given the type of unit (e.g., hydrotreater) that a refiner 
would have to install in order to comply. EPA also requests comments on 
(1) the economic burden, if any, of producing and selling gasoline 
blendstocks in lieu of finished gasoline, and (2) the economic burden 
of complying with an unadjusted baseline under the circumstances 
described above by modifying refinery operations in ways other than 
installing major refinery units. For instance, the principal source of 
sulfur in gasoline is the catalytic gasoline blendstock. An option for 
lowering sulfur would be to lower the catalytic gasoline end point and 
shift the back (heavy, high boiling) portion of the gasoline into the 
distillate stream. While this would move barrels of crude oil into 
distillates and out of gasoline and shift the refinery product mix 
8, it would lower the sulfur content of the catalytic gasoline. 
EPA also requests information on the effect of crude sulfur levels on 
gasoline sulfur.

    \7\ 40 CFR 80.91(e)(5)(v).
    \8\ Because sulfur content of petroleum products increases with 
the boiling range of the material.
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    (5) The refiner has access to a geographically-limited crude 
supply. The refiner must show that it could not reasonably or 
economically obtain crude oil from an alternative source that would 
permit it to produce conventional gasoline which would comply with its 
unadjusted baseline. EPA requests comment on this proposed provision 
and on which criteria that should be used to evaluate ``reasonably and 
economically available''.
    (6) The refiner has experienced an average crude sulfur increase of 
at least 25 percent since 1990. EPA proposes that the highest annual 
average crude sulfur slate utilized during the period 1991-1994, 
inclusive, be used for comparison to 1990 to determine if the ``25 
percent'' criterion is met. Comments are requested concerning the level 
of difference between 1990 and post-1990 crude sulfur contents that 
should exist in order to obtain an adjustment, and whether 1991-1994 is 
an appropriate comparison period or whether some other comparison 
should be established. Comments are also requested as to whether it is 
appropriate, and feasible, to distinguish crudes used solely for 
gasoline production from crudes used to produce other refinery 
products. If such distinction is possible, EPA believes it would be 
appropriate to base all calculations pertaining to this proposed 
baseline adjustment only on those volumes of each crude used to produce 
gasoline.
    (7) Gasoline sulfur changes are directly and solely attributable to 
the crude sulfur change, and not due to alterations in refinery 
operation nor choice of products.
    (8) A baseline adjustment is available to both single-refinery and 
multi-refinery refiners.
    (9) The eligibility of a refinery of a multi-refinery refiner for 
this proposed baseline adjustment is not dependent on the RFG 
production of the other refineries of the refiner.
    EPA is proposing several options for determining the adjusted 
baseline sulfur value if a refiner meets the above criteria and is 
approved for a baseline adjustment. EPA will finalize only one option; 
certain portions of the other proposed options could also be 
incorporated. For this reason, EPA requests comments on all aspects of 
the options proposed. For brevity, only OPTION 1 is included in the 
proposed regulatory language. EPA proposes that, regardless of which 
option is finalized, the adjusted baseline sulfur value may not exceed 
338 ppm, the annual average value specified in 40 CFR 80.91(c)(5)(iii). 
See the support document for this rule for more discussion related to 
the various options presented (``Regulation of Fuels and Fuel 
Additives: Standards for Reformulated and Conventional Gasoline--
Detailed Discussion and Analysis'', Air Docket A-95-03.)
    Option 1: EPA proposes that the adjusted baseline sulfur value be 
related to the ratio of the sulfur value of the highest sulfur crude 
utilized in 1994 to the average sulfur content of the crude slate 
utilized in 1990. Under this option, if a refiner utilized two crudes 
in its gasoline production in 1994 with sulfur levels of 1000 ppm and 
2100 ppm, the higher sulfur crude would be utilized in the 
determination of the adjusted baseline sulfur value. If, for example, 
the 1990 average crude sulfur content was 500 ppm (resulting, say, in a 
20 ppm baseline), the adjusted baseline sulfur value would be 84 ppm  
20 ppm  x  (2100/500) . EPA requests comments on this proposed option, 
including whether the highest sulfur crude from 1991-1994 should be 
used rather than just considering 1994.
    Option 2: EPA proposes that the adjusted baseline sulfur value be 
related to the ratio of the highest average sulfur content of the crude 
slate utilized in 1991, 1992, 1993 or 1994 to the average sulfur 
content of the crude slate utilized in 1990. Using the 1990 baseline 
and crude sulfur values from Option 1, and average crude sulfur 
contents of 1000, 1100, 1400, and 1300 ppm for years 1991, 1992, 1993 
and 1994, respectively, the adjusted baseline sulfur value would be 56 
ppm, i.e., 20 ppm  x  [1400/500]. EPA requests comments on this 
proposed methodology and solicits alternative methods of determining 
the adjusted baseline sulfur value.
    Option 3: EPA proposes that an adjusted baseline sulfur value be 
determined for each year through 1999. Beginning January 1, 2000, the 
adjusted baseline sulfur value would be the same as it was in 1999. EPA 
proposes that the annual adjusted value be determined over the four 
years prior to the year before the new value takes effect, except for 
1995 and 1996 which would be determined as specified in OPTION 1 above 
(and for which the adjusted baseline sulfur value would be the same). 
EPA also proposes that if less than a 25 percent difference occurs 
between the 1990 average crude sulfur level and the average crude 
sulfur level over a four-year time period, the refiner would receive no 
additional adjustments, and its most recent adjusted baseline sulfur 
value would become its permanent baseline sulfur value at that point. 
For example, the standard for 1997 would be based on the ratio of the 
average sulfur content of the crude slate utilized in 1992, 1993, 1994 
or 1995 to the average sulfur content of the crude slate utilized in 
1990. EPA proposes that the resulting adjusted baseline sulfur value be 
submitted to the Agency for evaluation and approval by June 1 of the 
year preceding the year for which it would be the standard. In the 
example given, the adjusted baseline value (and all supporting 
information) would have to be submitted by June 1, 1996.
    EPA requests comments on a refiner's ability, given the other 
requirements of this proposed option and the proposed requirements used 
to qualify for an adjusted baseline sulfur value, to choose to process 
higher sulfur crudes.
    Option 4: EPA proposes requirements similar to those presented for 
option 3 except that adjustments will only be allowed through 1997, 
i.e., the duration of the simple model years. Beginning in 1998, the 
adjusted baseline sulfur value would be the value in 1997.
    Option 5: EPA proposes that the adjusted baseline sulfur value be 
the unadjusted baseline sulfur value plus 50 ppm. EPA requests comments 
on this proposed option, including whether 50 ppm is an appropriate 
value. EPA specifically seeks comment on the appropriateness of using 
100 ppm or 150 ppm instead of 50 ppm.
    These five proposed options all result in an adjusted baseline 
sulfur value 

[[Page 40013]]
which is known prior to the period of production, thus treating the 
affected refiner like all other refiners. If one of OPTIONS 1-5 becomes 
final, a refiner might have to modify refinery operations in the future 
to accommodate increasing crude sulfur levels. However, future refinery 
operation modifications will likely be required of most refiners, 
without benefit of a baseline adjustment, in order to deal with the 
increasing crude sulfur levels. The purpose of this proposed baseline 
adjustment is to provide relief in certain cases where increasing crude 
sulfur levels could make compliance with the anti-dumping requirements 
extremely difficult. However, baseline adjustments are intended to 
reduce, not eliminate, the burden associated with complying with the 
anti-dumping regulations in situations where the burden is onerous and 
the environmental impact is minimal. If the burden were totally 
eliminated, then this criteria would no longer be met.
    EPA received a suggested option proposing that a refiner would be 
able to produce conventional gasoline which does not meet, on average, 
the requirements of its individual baseline if it could show that 
deviation from its baseline was directly and solely attributable to 
crude sulfur change, and not due to alterations in refinery operation 
or choice of products. The suggested option also contained other 
requirements a refiner would have to meet which are essentially those 
proposed today by EPA in order to qualify for this proposed baseline 
adjustment.
    EPA has many concerns about the concept and detail of this 
suggested option. This option basically exempts a qualifying refiner 
from complying with its anti-dumping compliance baseline if the refiner 
can show, at the end of the compliance period, that deviation from its 
baseline was directly and solely attributable to crude sulfur change. 
Thus, unlike all other refiners, a qualifying refiner would have no 
clearly defined standard prior to year of production. Additionally, if 
EPA was not satisfied that deviation from its baseline was directly and 
solely attributable to crude sulfur change, the refiner would have to 
determine compliance relative to its unadjusted baseline and would 
likely be out of compliance.
    EPA requests comments as to whether, in order to show that 
increased gasoline sulfur is due solely to the increased crude sulfur, 
no changes in refinery configuration or refinery operation would be 
allowed. Or is it possible to ``back out'' the effects of such changes? 
If it is not possible to ``back out'' the effects of refinery changes 
to determine just the effect of crude sulfur on gasoline sulfur, then a 
refiner which would use this option could potentially not make any 
refinery changes in order to qualify for a baseline adjustment. 
Alternatively, if refinery changes were made under this suggested 
option, it would seem that the refiner's compliance baseline would 
revert back to its unadjusted baseline. EPA requests comments on this 
suggested option, particularly addressing its enforceability and 
competitive concerns.
    Since today's proposed baseline adjustment focuses on sulfur 
(unless commenters suggest other baseline fuel parameters which are 
directly affected by crude oil quality), if the suggested approach 
(which is not part of OPTIONS 1 through 5) were adopted, EPA believes 
it would be more appropriate, under the suggested option, that a 
refiner be exempt only from complying with its anti-dumping compliance 
baseline for sulfur under the simple model and NOX emissions under 
the complex model, to the extent that increased sulfur affects NOX 
emissions. The refiner would have to comply with NOX emissions 
once the effect of increased sulfur is factored out. Basically, the 
refiner would (1) determine its baseline NOX emissions after 
substituting its annual average sulfur for the compliance period for 
its unadjusted baseline sulfur value, (2) determine its annual average 
NOX emissions for the compliance period, and (3) compare the 
values in (1) and (2) for the purposes of determining compliance. EPA 
does not believe that a refiner should be exempt from its other anti-
dumping compliance baselines, i.e., all other simple model requirements 
as well as exhaust benzene and exhaust toxics emissions under the 
complex model since those emissions are only minimally affected by 
sulfur. Comments are requested on these details of this suggested 
option.
    EPA expects minimal negative environmental affects from allowing 
baseline adjustments under the criteria proposed today due to the small 
number of refineries expected to qualify for a baseline adjustment and 
the relatively small total production volume of all such refineries.

IV. Baseline Adjustment for Very Low Baseline Sulfur and Olefins

A. Introduction
    In addition to compliance difficulties resulting from crude quality 
changes, the Agency also recognizes that very clean individual 
baselines can make compliance extremely difficult or impossible due to 
limited maneuverability about the clean baseline and limited 
flexibility with regard to annual averaging when certain baseline fuel 
parameter values are very low. During the review and approval of 
individual baselines, EPA was informed that extremely low baseline 
sulfur and olefin values (e.g., below 30 ppm sulfur and 1.0 volume 
percent olefins) could force a refiner to cease gasoline production. 
This was not EPA's intention when it developed the reformulated 
gasoline and anti-dumping requirements. Refiners with very clean 
baselines will presumably produce the least polluting gasoline of all 
refiners. (For more discussion on these proposed baseline adjustment 
provisions, see the support document, ``Regulation of Fuels and Fuel 
Additives: Standards for Reformulated and Conventional Gasoline--
Detailed Discussion and Analysis'', Air Docket A-95-03.)
    EPA believes it has the authority to provide limited relief in the 
form of a baseline adjustment in those few cases where the regulatory 
burden is extremely onerous and where requiring compliance would yield 
little or no environmental gain. EPA is proposing such a baseline 
adjustment in cases where both the baseline sulfur and baseline olefins 
values are very low and certain other conditions are met. EPA requests 
comments on the discussion and proposed criteria presented today.

B. Proposal

    EPA proposes several criteria a refiner must meet in order to 
petition for a baseline adjustment to account for restricted 
maneuverability due to very low baseline sulfur and olefin values. EPA 
does not necessarily intend to allow adjustments for all refiners who 
foresee restricted maneuverability due to a clean individual baseline. 
EPA requests comments on the appropriate level of stringency to apply 
to the minimum criteria that must be met in order to receive an 
adjustment.
    (1) EPA proposes to allow an adjustment for individual baselines 
when the sulfur and olefin contents are extremely low, defined as 
values below 30 ppm sulfur and 1.0 vol% olefins. These values are 
identical to the minimum levels given in the negligible quantity 
provision (see 40 CFR 80.91(d)(3)). Comments are requested on other 
fuel components which, when they are found to be extremely low in an 
individual baseline, can restrict the refiner's compliance 
maneuverability to the point of severe economic burden.
    (2) EPA proposes that a refiner seeking a baseline adjustment for 
low 

[[Page 40014]]
baseline levels of sulfur and olefins must show that the installation 
of the refinery units necessary to comply with its actual (i.e., 
unadjusted) baseline would cost $10 million or be at least 10 percent 
of the depreciated book value of the refinery as of January 1, 1995. 
EPA requests comments on this criterion and specifically whether such 
amounts are adequate given the type of unit (e.g., hydrotreater) that a 
refiner would have to install in order to comply. EPA also requests 
comments on (1) the economic burden, if any, of producing and selling 
gasoline blendstocks in lieu of finished gasoline, and (2) the economic 
burden of complying with an unadjusted baseline under the circumstances 
described above by modifying refinery operations in ways other than 
installing major refinery units.
    (3) EPA proposes that such an adjustment be available to both 
single-refinery and multi-refinery refiners and that the affected 
refinery of a multi-refinery refiner may not be aggregated with the 
refiner's other refineries for compliance purposes.
    (4) If a refiner meets the above criteria and is approved for a 
baseline adjustment, EPA proposes that the baseline adjustment simply 
amount to setting the annual average sulfur and olefin values to 30 ppm 
and 1.0 volume percent, respectively. If at any time the refinery's 
baseline is aggregated with another refiner's baseline for compliance 
purposes, the applicable individual baseline would revert to the 
unadjusted baseline. The summer and winter values would each also be 
set to 30 ppm for sulfur and 1.0 volume percent for olefins. Comments 
are requested on the methodology of setting the adjusted baseline 
sulfur and olefin values. An alternative approach to setting seasonal 
values for sulfur and olefins would be to maintain the actual (i.e., 
unadjusted) proportion of summer to winter sulfur and olefin values.
    As with the baseline adjustment proposals described earlier, EPA 
expects minimal negative environmental effects from allowing baseline 
adjustments under the criteria proposed in this section due to the 
small number of refiners which might qualify for such an adjustment and 
the small amount of additional gasoline that would be affected by the 
proposed baseline adjustments.

V. Stay and Reconsideration of the Regulations

A. Authority for Stay and Reconsideration

    The administrative stay (which is published elsewhere in this issue 
of the Federal Register) of the provisions concerning JP-4 and certain 
changes in sweet crude oil are being undertaken pursuant to section 
307(d)(7)(B) of the Clean Air Act, 42 U.S.C. 7607(d)(7)(B). That 
provision authorizes the Administrator to stay the effectiveness of a 
rule for three months if the grounds for an objection arose after the 
period for public comment and if the objection is of central relevance 
to the outcome of the rule.
    The grounds for an objection to the criteria for an individual 
baseline adjustment based on production of JP-4 jet fuel arose after 
the end of the public comment period, and before the time allowed for 
seeking judicial review. Basically, new information has been submitted 
to EPA concerning the number of parties potentially affected by the 
criteria adopted, and the ability of parties with more than one 
refinery to aggregate baselines and thereby avoid the adverse impacts 
of a failure to obtain an individual baseline adjustment. This 
information became available to EPA after the final criteria were 
adopted by EPA, and are directly relevant to the basic rationale for 
those criteria. This information was not available before that time, 
because it relates to the impact of the final criteria adopted by EPA 
as compared to the proposed criteria.
    Similarly, the grounds for an objection to a lack of a baseline 
adjustment based on changes in the sulfur level of available crude oil 
arose after expiration of the period for public comment. It appears 
that the sulfur levels of crude have changed significantly since 1990 
for certain areas of the country. Until EPA issued its final rules in 
December 1993, and more information was obtained on the sulfur levels 
of crude that would be available for use in 1995 and later, refiners 
that have historically relied on the availability of low sulfur crude 
could not identify for EPA the full impact of the final conventional 
gasoline requirements on their ability to continue marketing 
conventional gasoline.
    Based on the above, and the Agency's interest in reconsidering 
these provisions through rulemaking, EPA is issuing a three-month 
administrative stay (which is published elsewhere in this issue of the 
Federal Register) of the effectiveness of the following rules, with 
certain conditions keyed to the requirements proposed today. The stay 
is structured such that it will only affect those persons who meet the 
requirements proposed today.
    First, 40 CFR 80.91(e)(7)(i)(A) through (C) is being stayed for 
three months for all persons that meet the requirements proposed today 
regarding Sec. 80.91(e)(7). In effect, persons who meet the proposed 
requirements would be able to receive a baseline adjustment under 
Sec. 80.91(e)(7) if they also met the requirements of 
Sec. 80.91(e)(7)(ii) and (iii). If a person does meet these conditions, 
then the Agency may approve a baseline adjustment under the terms of 
this stay, or under the terms of any stay issued through rulemaking.
    Second, 40 CFR 80.101(b)(1)(ii) is being stayed for three months 
for all persons that meet the requirements proposed today as a new 
Sec. 80.91(e)(8), and that comply with an annual average sulfur level 
of 125% of the compliance baseline that would apply under the new 
Sec. 80.91(e)(8) proposed today. (See the Option 1 discussion in 
Section III.B. above.) In effect, the stay would only affect those 
persons who meet the proposed requirements for a baseline adjustment 
and who also meet the annual average sulfur level for conventional 
gasoline that would apply if they received a baseline adjustment under 
this proposal.
    EPA is also proposing to stay these provisions by rule, pending 
completion of this rulemaking. If EPA does not finalize the changes 
proposed today, then EPA would revise any such baseline established 
during the stay to conform with the final action taken by the Agency. 
An appropriate time period would be allowed before a revised baseline 
would become effective. The terms of the 3 month administrative stay 
and any stay issued through rulemaking would apply to all gasoline 
produced from January 1, 1995 through to the end of any such stay.

B. Proposal for a Stay Pending Rulemaking

    As described earlier, EPA is issuing a three month administrative 
stay of certain provisions pending reconsideration by the Agency. The 
authority for this three month administrative stay is section 
307(d)(7)(B) of the Act. Since EPA may not be able to complete its 
reconsideration and this rulemaking during this time period, EPA 
proposes to extend the stay until final action is taken on the 
regulatory changes proposed herein. EPA requests public comment on this 
extension of the stay during reconsideration and rulemaking.

VI. Confidentiality of Information Submitted for Individual Baselines

A. Introduction

    The final regulations issued by EPA in December 1993 determined 
that certain information submitted by refiners or 

[[Page 40015]]
importers would not be considered confidential. In addition, EPA stated 
that it would publish a portion of this information. This information 
concerns the individual baseline assigned to refiners and importers for 
use in the conventional and reformulated gasoline program, as well as 
information submitted by these parties in their petition for a 
baseline. See 40 CFR 80.93(b)(6).
    Persons affected by this provision sought judicial review, 
objecting to the release of this information on grounds of business 
confidentiality. American Petroleum Institute v. U.S. Environmental 
Protection Agency, No. 94-1138 (D.C. Cir.), and consolidated case 
Texaco, Inc. and Star Enterprises v. U.S. Environmental Protection 
Agency, No. 94-1143 (D.C. Cir.). Based on discussions with these 
parties, EPA has decided to reconsider this provision and is proposing 
to revise it. Under the proposal, only a portion of this information 
would be published, the exhaust emissions values assigned as an 
individual baseline. Issues concerning claims of business 
confidentiality for the remaining information would be resolved under 
EPA's regulations on ``Confidentiality of Business Information,'' 40 
CFR Part 2 subpart B.

B. Background

    The conventional gasoline regulations are based in large part on 
the use of individual baselines for refiners and importers, while their 
use in the reformulated gasoline program is limited to the first three 
years of the program. The individual baseline reflects the average 
quality of a refiner's or importer's gasoline for the year 1990. The 
standards for conventional gasoline are generally expressed in terms of 
a refiner's or importer's individual baseline, so that compliance with 
the standards is measured by comparing current production of 
conventional gasoline against the individual baseline, on an annual 
basis. For example, under the simple model for conventional gasoline, a 
refiner's annual average for exhaust benzene emissions may not exceed 
their compliance baseline, and the annual averages for sulfur, olefins 
and T-90 may not exceed 125 percent of their compliance baseline value 
for these parameters. 40 CFR 80.101(b)(1). In most cases, the 
compliance baseline is the same as the individual baseline. 40 CFR 
80.101(f). For reformulated gasoline, certain standards applicable 
during 1995 through 1997 are also expressed in terms of a refiner's or 
importer's individual baseline. 40 CFR 80.41(H)(2).
    EPA assigns an individual baseline after reviewing the individual 
baseline values for various fuel parameters, the motor vehicle exhaust 
emissions levels calculated from such parameters, individual 1990 
baseline gasoline volumes, and the blendstock to gasoline ratios for 
1990 through 1993, all submitted by the refiner or importer. This 
information would be deemed not confidential under EPA's current 
regulations. In addition, under the current regulations, EPA would 
publish the individual emissions standard for each refiner or importer, 
as well as the sulfur, olefins and T-90 standard noted above. 40 CFR 
80.93(b)(6).

C. Proposal

    EPA remains concerned that the emissions standards for refiners and 
importers should continue to be public. Therefore, EPA is proposing to 
publish the individual baseline values for exhaust emissions that 
comprise a refiner or importer's standards. EPA is proposing that the 
standards for sulfur, olefins and T-90 applicable during 1995 through 
1997 not be published, and that the reporting requirements be revised 
so a refiner or importer would have to note whether and how much their 
annual average for these values exceeded their individual baseline 
value. This latter information would be considered non-confidential. 
This would effectively provide the same benefits as publishing the 
baseline values for these three parameters as it would clearly show 
whether a refiner or importer violated the standards applicable for 
these fuel parameters. In addition, requests for release of other 
baseline information would be governed by the regulations on the 
confidentiality of business information at 40 CFR Part 2 subpart B. EPA 
is proposing this change so that the factual and legal issues 
concerning disclosure of this information may be resolved on a case-by-
case basis under EPA's CBI rules.
    For a discussion of industry concerns regarding this issue and 
EPA's rationale behind its proposal, see the support document for this 
rule, ``Regulation of Fuels and Fuel Additives: Standards for 
Reformulated and Conventional Gasoline--Detailed Discussion and 
Analysis'', Air Docket A-95-03.

VII. Environmental and Economic Impacts

    The environmental impacts of today's proposal are minimal, as 
discussed above. Additionally, economic impacts are generally 
beneficial to affected refiners due to the additional flexibility 
proposed in today's notice. Minimal anti-competitive effects are 
expected. The environmental and economic impacts of the reformulated 
gasoline program are described in the Regulatory Impact Analysis 
supporting the December 1993 rule, which is available in Public Docket 
A-92-12 located at Room M-1500, Waterside Mall (ground floor), U.S. 
Environmental Protection Agency, 401 M Street SW., Washington, DC 
20460.

VIII. Public Participation

    EPA desires full public participation in arriving at its final 
decisions and solicits comments on all aspects of this proposal. 
Wherever applicable, full supporting data and detailed analysis should 
also be submitted to allow EPA to make maximum use of the comments. All 
comments should be directed, by [30 days after publication] to the EPA 
Air Docket, Docket A-95-03 (See ADDRESSES).
    Any proprietary information being submitted for the Agency's 
consideration should be markedly distinguished from other submittal 
information and clearly labelled ``Confidential Business Information.'' 
Proprietary information should be sent directly to the contact person 
listed above, and not to the public docket, to ensure that it is not 
inadvertently placed in the docket. Information thus labeled and 
directed shall be covered by a claim of confidentiality and will be 
disclosed by EPA only to the extent allowed and by the procedures set 
forth in 40 CFR Part 2. If no claim of confidentiality accompanies a 
submission when it is received by EPA, it may be made available to the 
public without further notice to the commenter.

IX. Compliance With the Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) of 1980 requires federal 
agencies to examine the effects of their regulations and to identify 
any significant adverse impacts of those regulations on a substantial 
number of small entities. Pursuant to section 605(b) of the Regulatory 
Flexibility Act, 5 U.S.C. 605(b), the Administrator certifies that this 
rule will not have a significant economic impact on a substantial 
number of small entities. In fact, today's proposals are designed to 
promote successful implementation of the anti-dumping requirements of 
the reformulated gasoline program for all affected parties and to 
minimize any adverse competitive impacts by virtue of the proposal to 
report individual baseline emissions and not fuel parameters. 

[[Page 40016]]


X. Administrative Designation

    Pursuant to Executive Order 12866, (58 FR 51735 (October 4, 1993)) 
the Agency must determine whether the regulatory action 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 entitlement, 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.
    Pursuant to the terms of Executive Order 12866, it has been 
determined that this notice of proposed rulemaking is not a 
``significant regulatory action''.

XI. Paperwork Reduction Act

    The Paperwork Reduction Act of 1980, 44 U.S.C. 3501 et seq., and 
implementing regulations, 5 CFR Part 1320, do not apply to this action 
as it does not involve the collection of information as defined 
therein.

XII. Unfunded Mandates Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 (``Unfunded 
Mandates Act''), signed into law on March 22, 1995, EPA must prepare a 
budgetary impact statement to accompany any proposed or final rule that 
includes a Federal mandate that may result in expenditure by State, 
local, and tribal governments, in the aggregate; or by the private 
sector, of $100 million or more. Under Section 205, EPA must select the 
most cost-effective and least burdensome alternative that achieves the 
objectives of the rule and is consistent with statutory requirements. 
Section 203 requires EPA to establish a plan for informing and advising 
any small governments that may be significantly or uniquely impacted by 
the rule.
    EPA has determined that the action promulgated today does not 
include a Federal mandate that may result in estimated costs of $100 
million or more to either State, local or tribal governments in the 
aggregate, or to the private sector. This action has the net effect of 
reducing burden of the reformulated gasoline program on regulated 
entities. Therefore, the requirements of the Unfunded Mandates Act do 
not apply to this action.
XIII. Statutory Authority

    The statutory authority for the actions proposed today is granted 
to EPA by Sections 114, 211 (c) and (k) and 301 of the Clean Air Act, 
as amended; 42 U.S.C. 7414, 7545 (c) and (k), and 7601.

List of Subjects in 40 CFR Part 80

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

    Dated: May 25, 1995.
Carol M. Browner,
Administrator.

    For the reasons set out in the preamble, part 80 of title 40 of the 
Code of Federal Regulations 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 80.75 is amended by removing ``and'' at the end of 
paragraph (b)(2)(ii)(F), by adding a semi-colon in place of the period 
at the end of paragraph (b)(2)(ii)(G), and adding paragraphs (b)(2)(ii) 
(H), (I), and (J) to read as follows:


Sec. 80.75  Reporting requirements.

* * * * *
    (b) * * *
    (2) * * *
    (ii) * * *
    (H) The difference between the applicable sulfur content standard 
under Sec. 80.41(h)(2)(i) in parts per million and the average sulfur 
content in parts per million, indicating whether the average is greater 
or lesser than the applicable standard;
    (I) The difference between the applicable olefin content standard 
under Sec. 80.41(h)(2)(i) in volume percent and the average olefin 
content in volume percent, indicating whether the average is greater or 
lesser than the applicable standard; and
    (J) The difference between the applicable T90 distillation point 
standard under Sec. 80.41(h)(2)(i) in degrees Fahrenheit and the 
average T90 distillation point in degrees Fahrenheit, indicating 
whether the average is greater or lesser than the applicable standard.
* * * * *
    3. Section 80.91 is amended by revising paragraph (e)(7)(i) and 
adding paragraphs (e)(8) and (e)(9) to read as follows:


Sec. 80.91  Individual baseline determination.

* * * * *
    (e) * * *
    (7) * * *
    (i) Baseline adjustments may be allowed, upon petition and approval 
(per Sec. 80.93), if a refinery produced JP-4 jet fuel in 1990 and all 
of the following requirements are also met:
    (A) Refinery type.
    (1) The refinery is the only refinery of a refiner such that it 
cannot form an aggregate baseline with another refinery (per paragraph 
(f) of this section); or
    (2) The refinery is one refinery of a multi-refinery refiner for 
which all of its refineries produced JP-4 in 1990 and each of the 
refineries also meets the requirements specified in paragraphs 
(e)(7)(i) (B) and (C) of this section; or
    (3) The refinery is one refinery of a multi-refinery refiner for 
which not all of the refiner's refineries produced JP-4 in 1990.
    (B) No refinery of the refiner produces reformulated gasoline. If 
any refinery of the refiner produces reformulated gasoline at any time 
in a calendar year, the compliance baseline of all its refineries 
receiving a baseline adjustment per this paragraph (e)(7) shall revert 
to each refinery's unadjusted baseline for that year and all subsequent 
years.
    (C) 1990 JP-4 to gasoline ratio.
    (1) For a refiner per paragraph (e)(7)(i)(A)(1) of this section, 
the ratio of its refinery's 1990 JP-4 production to its 1990 gasoline 
production must equal or exceed 0.15.
    (2) For a refiner per paragraph (e)(7)(i)(A)(2) of this section, 
the ratio of each of its refinery's 1990 JP-4 production to its 1990 
gasoline production must equal or exceed 0.15.
    (3) For a refiner per paragraph (e)(7)(i)(A)(3) of this section, 
the ratio of the refiner's 1990 JP-4 production to its 1990 gasoline 
production must equal or exceed 0.15, when determined across all of its 
refineries.
* * * * *
    (8) Baseline adjustments due to increasing crude sulfur content.
    (i) Baseline adjustments may be allowed, upon petition and approval 
(per Sec. 80.93), if a refinery meets all of the following 
requirements:
    (A) The refinery does not produce reformulated gasoline. If the 
refinery 

[[Page 40017]]
produces reformulated gasoline at any time in a calendar year, its 
compliance baseline shall revert to its unadjusted baseline values for 
that year and all subsequent years;
    (B) Has an unadjusted baseline sulfur value of not more than 50 
ppm;
    (C) Is not aggregated with one or more other refineries per 
paragraph (f) of this section. If a refinery which received an 
adjustment per this paragraph (e)(8) subsequently is included in an 
aggregate baseline, its compliance baseline shall revert to its 
unadjusted baseline values for that year and all subsequent years;
    (D) Would require refinery improvements of at least $10 million or 
10 percent of the depreciated value of the refinery to comply with its 
unadjusted baseline;
    (E) Can show that it could not reasonably or economically obtain 
crude oil from an alternative source that would permit it to produce 
conventional gasoline which would comply with its unadjusted baseline;
    (F) Has experienced at least a 25% increase in the average sulfur 
content of the crude oil used in the production of gasoline in the 
refinery since 1990, calculated as follows:
[GRAPHIC][TIFF OMITTED]TP04AU95.007

Where:

CSHI=highest annual average crude slate per paragraph (e)(8)(ii)(B) of 
this section
CS90=1990 annual average crude slate sulfur per paragraph (e)(8)(ii)(A) 
of this section.
CS%CHG=percent change in average sulfur content of crude slate;

    (G) Can show that gasoline sulfur changes are directly and solely 
attributable to the crude sulfur change, and not due to alterations in 
refinery operation nor choice of products.
    (ii) The adjusted baseline sulfur value shall be calculated as 
follows:
    (A) Determine the average sulfur content (ppm) of the crude slate 
utilized in the production of gasoline in the refinery in 1990;
    (B) Determine the highest crude sulfur level (ppm) of the crude 
slate utilized in the production of gasoline in the refinery in 1994;
    (C) Determine the adjusted baseline sulfur value as follows:
    [GRAPHIC][TIFF OMITTED]TP04AU95.008
    
Where

ASULF=adjusted baseline sulfur value, ppm
BSULF=actual baseline sulfur value, ppm
CSHI=highest crude sulfur (ppm) per paragraph (e)(8)(ii)(B) of this 
section
CS90=1990 annual average crude slate sulfur per paragraph (e)(8)(ii)(A) 
of this section

    (iii) In no case can the adjusted baseline sulfur value determined 
per paragraph (e)(8)(ii) of this section exceed the sulfur value 
specified in paragraph (c)(5)(iii) of this section.
    (iv) All adjustments made pursuant to this paragraph (e)(8) must be 
accompanied by:
    (A) Unadjusted and adjusted fuel parameters and emissions; and
    (B) A narrative describing the situation, the types of 
calculations, and the reasoning supporting the types of calculations 
done to determine the adjusted values.
    (9) Baseline adjustment for low sulfur and olefins.
    (i) Baseline adjustments may be allowed, upon petition and approval 
(per Sec. 80.93), if a refinery meets all of the following 
requirements:
    (A) The unadjusted annual average baseline sulfur value is less 
than 30 ppm;
    (B) The unadjusted annual average baseline olefin value is less 
than 1.0 vol%;
    (C) Would require refinery improvements of at least $10 million or 
10 percent of the depreciated value of the refinery to comply with its 
unadjusted baseline.
    (ii) If a refinery is aggregated with one or more other refineries 
per paragraph (f) of this section, then no adjustment per this 
paragraph (e)(9) shall be allowed, and the unadjusted baseline shall be 
used in the aggregated baseline.
    (iii) (A) The adjusted baseline shall have an annual average sulfur 
value of 30 ppm, and an annual average olefin value of 1.0 vol%.
    (B) The adjusted baseline shall have a summer sulfur value of 30 
ppm, and a summer olefin value of 1.0 vol%.
    (C) The adjusted baseline shall have a winter sulfur value of 30 
ppm, and a winter olefin value of 1.0 vol%.
* * * * *
    4. Section 80.93 is amended by revising paragraph (b)(6) to read as 
follows:


Sec. 80.93  Individual baseline submission and approval.

* * * * *
    (b) * * *
    (6) Confidential business information.
    (i) Upon approval of an individual baseline, EPA will publish the 
individual annualized baseline exhaust emissions, on an annual average 
basis, specified in paragraph (b)(5)(ii) of this section. Such 
individual baseline exhaust emissions shall not be considered 
confidential. In addition, the reporting information required under 
Sec. 80.75(b)(2)(ii) (H), (I) and (J), and Sec. 80.105(a)(4) (ii), 
(iii) and (iv) shall not be considered confidential.
    (ii) Information in the baseline submission which the submitter 
desires to be considered confidential business information (per 40 CFR 
part 2, subpart B) must be clearly identified. If no claim of 
confidentiality accompanies a submission when it is received by EPA, 
the information may be made available to the public without further 
notice to the submitter pursuant to the provisions of 40 CFR part 2, 
subpart B.
* * * * *
    5. Section 80.105 is amended by redesignating paragraph (a)(4) as 
paragraph (a)(4)(i) and adding paragraphs (a)(4) (ii), (iii), and (iv) 
to read as follows:


Sec. 80.105  Reporting requirements.

    (a) * * *
    (4)(i) * * *
    (ii) If using the simple model, the difference between the 
applicable sulfur content standard under Sec. 80.101(b)(1)(ii) in parts 
per million and the average sulfur content in parts per million, 
indicating whether the average is greater or lesser than the applicable 
standard;
    (iii) If using the simple model, the difference between the 
applicable olefin content standard under Sec. 80.101(b)(1)(iii) in 
volume percent and the average olefin content in volume percent, 
indicating whether the average is greater or lesser than the applicable 
standard; and
    (iv) If using the simple model, the difference between the 
applicable T90 distillation point standard under Sec. 80.101(b)(1)(iv) 
in degrees Fahrenheit and the average T90 distillation point in degrees 
Fahrenheit, indicating whether the average is greater or lesser than 
the applicable standard.
* * * * *
[FR Doc. 95-14429 Filed 8-3-95; 8:45 am]
BILLING CODE 6560-50-P