[Federal Register Volume 61, Number 35 (Wednesday, February 21, 1996)]
[Rules and Regulations]
[Pages 6547-6550]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3789]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52

[MN28-02-7253; FRL-5402-2]


Approval and Promulgation of Implementation Plans (Minnesota)

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The United States Environmental Protection Agency (USEPA) is 
approving a year-round oxygenated fuels program as a revision to 
Minnesota's State Implementation Plan (SIP) for carbon monoxide (CO). 
The use of oxygenated fuels can reduce emissions of CO from vehicles, 
thereby reducing the threat to human health posed by CO, which can 
contribute to heart and lung disease and reduce the concentration of 
oxygen in the blood stream. Minnesota already has an approved SIP which 
requires the use of oxygenated fuels during the winter; the extension 
of the oxygenated fuels program beyond the winter months will serve as 
the contingency measure required for nonattainment plans under section 
172(c)(9) of the Clean Air Act (the Act). USEPA's action is based upon 
a SIP revision request which was submitted by the State to satisfy the 
requirements of the Act.

DATES: This final rule is effective on March 22, 1996.

ADDRESSES: Copies of the SIP revision request, public comments on the 
rulemaking, and other materials relating to this rulemaking are 
available for inspection at the following address: (It is recommended 
that you telephone Alexis Cain at (312) 886-7018 before visiting the 
Region 5 Office.) United States Environmental Protection Agency, Region 
5, Air and Radiation Division, 77 West Jackson Boulevard (AT-18J), 
Chicago, Illinois 60604.

FOR FURTHER INFORMATION CONTACT: Alexis Cain, Air Toxics and Radiation 
Branch, Regulation Development Section (AT-18J), United States 
Environmental Protection Agency, Region 5, Chicago, Illinois 60604, 
(312) 886-7018.

SUPPLEMENTARY INFORMATION:

I. Summary of State Submittal

    On November 12, 1993, the Commissioner of the Minnesota Pollution 
Control Agency submitted elements of a contingency measure for the 
carbon monoxide nonattainment area in the Twin-Cities area of the 
State. This area includes the following counties which comprise the CO 
control area: Anoka, Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, 
Scott, Washington, and Wright.1 The State's 

[[Page 6548]]
CO contingency plan consists of an expansion of the State's existing 
wintertime oxygenated gasoline program to a year-round program 
beginning on October 31, 1995. The program requires gasoline sold in 
the control area of the Twin Cities to contain no less than 2.0 percent 
oxygen and average 2.7 percent oxygen during the control period. On 
January 25, 1994, the USEPA issued a letter stating that the submittal 
was complete except for two items: the public hearing process and a 
report of the results of a study regarding the year-round use of 
ethanol as the oxygenate and its effect on summer-time ozone 
concentrations. The results of the public hearing process were received 
in a letter from the Commissioner of the MPCA on January 26, 1994, and 
contained the required information demonstrating that the public 
process was carried out. The letter included a report prepared by an 
environmental consultant regarding the year-round use of ethanol in the 
State. USEPA requested this report because of the potential for 
increased evaporative emissions of hydrocarbons resulting from splash 
blending ethanol in gasoline. The emission of hydrocarbons during 
summertime conditions results in the formation of tropospheric ambient 
ozone.

    \1\ St. Louis County (in the Duluth-Superior, Wisconsin MSA) was 
redesignated to attainment for carbon monoxide on April 14, 1994. 
The maintenance plan contains a ``park and ride'' measure to reduce 
vehicle miles traveled in the event maintenance cannot be assured. 
If the first choice measure (park and ride) does not succeed in 
reducing the CO concentrations the State will consider the 
implementation of an oxygenated gasoline program.
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    The State submittal was submitted to satisfy the provisions under 
section 172(c)(9) of the Clean Air Act (Act), which requires 
contingency measures in moderate CO nonattainment areas with design 
values of 12.7 parts per million or less. These contingency measures 
must be implemented in the event the area fails to attain the national 
standard by December 31, 1995. Contingency measures, once triggered, 
are to take effect automatically, without further rulemaking action by 
the State or the Administrator. States must show that their contingency 
measures can be implemented with minimal further action on their part 
and with no additional rulemaking actions.
    A proposed rulemaking was published in the June 1, 1995 Federal 
Register (60 FR 28557), which proposed approval of the CO contingency 
SIP, but raised invited public comment on three issues: potential 
increases in ozone concentrations as a result of the use of oxygenated 
fuels in the summer months; potential problems in enforcing the program 
in the event that a possible future increase in the price of ethanol 
(which is the oxygenate in use in Minnesota) gives fuel retailers and/
or blenders an incentive not to comply with the program, and the need 
to define an endpoint for reporting purposes in the oxygenate program.

II. Public Comment/USEPA Response

    USEPA received comments on the proposed rulemaking from KOCH 
Refining and the Minnesota Department of Agriculture.

KOCH Refining Comments and USEPA Response

    KOCH requested that the USEPA disapprove the proposed contingency 
measure because:
    (1) There is no need for summertime CO reductions, based on current 
and historical summertime CO ambient monitoring;
    (2) The lack of an end point for reporting purposes will lead to 
unnecessary regulatory complications;
    (3) There is great potential for increases in ambient ozone 
concentrations due to use of year-round oxygenated fuel; and
    (4) There is great potential for adverse impacts in price and 
availability of gasoline in the event of reduction or curtailment of 
federal or state subsidies for ethanol production and blending.
    Comment 1: There is no need for summer time CO reductions, based on 
current and historical summertime CO ambient monitoring.
    While there has not been a violation of the CO air quality standard 
since 1991, several of the exceedances which contributed to violations 
between 1987 and 1991 were registered outside of the current four-month 
program period. Moreover, the most recent exceedance of the standard 
occurred during the summer of 1995. Therefore, the USEPA believes that 
the extension of the program beyond the winter months, which seems to 
have been effective in reducing ambient CO concentrations, will be 
useful in providing a margin of protection against exceedances outside 
of the current program period.
    Comment 2: The lack of an end point for reporting purposes will 
lead to unnecessary regulatory complications.
    In the proposal action, USEPA noted that while the oxygenated 
gasoline program requires reports to be submitted by registered 
blenders of oxygenated fuels at the end of the control period, the end 
of the control period has not been defined for the year-round program. 
The State has been made aware of this minor technical problem, and is 
exploring means to correct it. The USEPA believes that this problem can 
be resolved without difficulty, and that it is not an adequate reason 
to delay final rulemaking.
    Comment 3: There is great potential for increases in ambient ozone 
concentrations due to use of year-round oxygenated fuel.
    The addition of ethanol to gasoline raises the vapor pressure of 
the mixture to a level higher than that of either of the two 
components. The USEPA allows a one pound per square inch (psi) waiver 
for gasolines containing up to 10 volume percent ethanol. So, for 
example, the vapor pressure of gasoline sold during summer months is 
limited to nine psi. However, a gasoline blend of 10 volume percent 
ethanol may have a vapor pressure of 10 psi. This increase in vapor 
pressure may lead to higher evaporative emissions of volatile organic 
compounds (VOCs), which are precursors of ozone, potentially increasing 
the formation of ozone.
    While the use of oxygenated fuels during the summer (the ozone 
season) may lead to increases in ambient ozone concentrations, the 
USEPA has no basis for disapproving the CO contingency SIP request 
since there is no information available that indicates that it will 
lead to violations of the ozone NAAQS. Section 110(l) of the Act 
prohibits USEPA from approving a SIP if it would interfere with any 
applicable requirement concerning attainment or reasonable further 
progress, or any other applicable requirement of the Act. Since 
Minnesota has no nonattainment areas for ozone, reasonable further 
progress is not an issue; the only concern is whether use of oxygenated 
fuels jeopardizes the attainment status of the Twin Cities.
    KOCH argues that a possible tightening of the ozone NAAQS could 
make it more difficult to avoid a violation. However, USEPA cannot base 
its current rulemaking on speculation about future changes in the 
standard. Koch also argues that the possibility of hotter summers in 
the future, which would be more conducive to ozone formation, makes it 
risky to implement the oxygenated fuels program during the summer. 
However, USEPA concludes that there is no available evidence that use 
of oxygenated fuels will lead to violation of the standard in the Twin 
Cities. Air quality data show no exceedances or violations of the ozone 
standard in the last four years, with the last exceedance recorded in 
1990. Moreover, there is some dispute over the extent to which ethanol 
will increase ozone formation. A study contracted by MPCA (discussed 
below) found that ethanol might slightly reduce ozone formation; while 
USEPA disputes this study's methodology and still believes that some 
ozone increases are possible as a result of the oxygenated 

[[Page 6549]]
fuels program, the magnitude of these increase in the Twin Cities 
cannot be determined. Furthermore, ethanol blends are already in use 
year-round in Minnesota, with 50 percent or greater market penetration 
during the past 3 ozone seasons, without causing an exceedance of the 
ozone standard. An increase from more than 50 percent use of ethanol 
blends to nearly 100 percent is not likely to lead to a significant 
increase in ozone.
    The Minnesota Pollution Control Agency submitted a contractor's 
report which suggested that the use of ethanol would not cause 
violations of the ozone standard.2 The USEPA reviewed the report 
and found that it was flawed in a number of areas including: 
uncertainty on how to take into account VOC reactivity; incorrect 
speciation profiles; inability to replicate exhaust VOC benefit of the 
ethanol blends; lack of evidence to support the contention of an 
enrichment benefit for ethanol, and the use of excessively high highway 
speeds in the modelling. Despite USEPA's criticism of this study, no 
new information was submitted by the consultant or the State. The 
USEPA's comments on this report remain unchanged. However, KOCH did not 
provide any additional studies which demonstrate that there will be 
ozone violations as a result of summertime ethanol use.

    \2\ Systems Applications International, Ozone Impact of Year-
Round Oxy-Fuel Program in Minnesota, San Rafael, CA, January 10, 
1994.
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    Comment 4: There is great potential for adverse impacts in price 
and availability of gasoline in the event of reduction or curtailment 
of federal or state subsidies for ethanol production and blending.
    Koch expressed concern that federal codification of this existing 
program will reduce the State's ability to respond flexibly to price 
increases and disruptions in availability. KOCH believes that a 
hypothetical reduction or elimination of federal and State ethanol 
subsidies, which amount to as high as 89 cents per gallon of pure 
ethanol, will not lead to ``cheating'' as suggested in the USEPA 
proposal. Instead, Koch is concerned that limited oxygenate 
availability would lead to a tight supply of blended specification 
gasoline and price increases. Koch expects the potential for shortages 
to increase in 1997 when the oxygenated gasoline program area is 
expected to be expanded to cover the entire State.
    The State does not expect or anticipate a change in the subsidy 
program associated with the use of ethanol. If there is a change in 
State and/or Federal subsidies, the USEPA believes the state does have 
the flexibility to discontinue the measure, assuming that no violation 
of the CO NAAQS occur. The USEPA would retain the contingency measure 
as a Section 172(c) requirement, however, which the State would need to 
implement if the area fails to attain the CO standard by the attainment 
date. If the area fails to attain and the State shuts the program off, 
the USEPA has the authority to require the implementation or continued 
operation of the program. If the area is in attainment (through a 
redesignation process) and the State wishes to eliminate the program as 
even a contingency measure, the State would need to identify a 
substitute contingency program.

Minnesota Department of Agriculture Comments and USEPA Response

    The Minnesota Department of Agriculture objected to statements in 
the proposed rulemaking that the year-round use of ethanol could lead 
to increased ozone pollution. The Department of Agriculture argues that 
air quality studies have shown that increased ozone will not result.
    As stated above, USEPA does not believe that this issue has been 
resolved conclusively. While it is possible to make a case that 
increased ozone concentrations may result from summertime use of 
oxygenated gasoline, it cannot be shown that violations of the NAAQS 
will result. Thus, USEPA is approving the program.

III. Rulemaking Action

    The USEPA is approving the Minnesota year-round oxygenated fuels 
program as the CO contingency measure required for nonattainment plans 
under section 172(c)(9) of the Clean Air Act.
    Nothing in this action should be construed as permitting, allowing 
or establishing a precedent for any future request for revision to any 
SIP. USEPA shall consider each request for revision to the SIP in light 
of specific technical, economic, and environmental factors and in 
relation to relevant statutory and regulatory requirements.
    This action has been classified as a Table 3 action for signature 
by the Regional Administrator under the procedures published in the 
Federal Register on January 19, 1989 (54 FR 2214-2225), as revised by a 
July 10, 1995, memorandum from Mary Nichols, Assistant Administrator 
for Air and Radiation. The Office of Management and Budget (OMB) has 
exempted this regulatory action from Executive Order 12866 review.
    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et. seq., 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, 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.
    Under Section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by April 22, 1996. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rule for the purposes of judicial 
review nor does it extend the time within which a petition for judicial 
review may be filed, and shall not postpone the effectiveness of such 
rule or action. This action may not be challenged later in proceedings 
to enforce its requirements. (See Section 307(b)(2).)

    Note--Incorporation by reference of the State Implementation 
Plan for the State of Minnesota was approved by the Director of the 
Federal Register on July 1, 1982.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Incorporation by reference, Intergovernmental relations, Ozone, 
Volatile organic compounds.

    Dated: November 6, 1995.
David A. Ullrich,
Acting Regional Administrator.

    40 CFR part 52 is amended as follows:

PART 52--[AMENDED]

    1. The authority citation for part 52 continues to read as follows:

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

Subpart Y--[Amended]

    2. Section 52.1220 is amended by adding paragraph (c)(43) to read 
as follows:


Sec. 52.1220  Identification of plan.

* * * * *
    (c) * * *
    (43) On November 12, 1993, the State of Minnesota submitted a 
contingency plan to control the emissions of carbon monoxide from 
mobile sources by use of oxygenated gasoline on a year-round basis. The 
submittal of this program satisfies the provisions under section 
172(c)(9) and 172(b) of the Clean Air Act as amended. 

[[Page 6550]]

    (i) Incorporation by reference.
    (A) Laws of Minnesota for 1992, Chapter 575, section 29(b), enacted 
by the legislature and signed into law on April 29, 1992.

[FR Doc. 96-3789 Filed 2-20-96; 8:45 am]
BILLING CODE 6560-50-P