[Federal Register Volume 61, Number 161 (Monday, August 19, 1996)]
[Rules and Regulations]
[Pages 42812-42817]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21078]


-----------------------------------------------------------------------


ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80

[FRL-5555-5]


State of Alaska Petition for Exemption From Diesel Fuel Sulfur 
Requirement

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of direct final decision.

-----------------------------------------------------------------------

SUMMARY: On March 14, 1994, EPA granted the State of Alaska a waiver 
from the requirements of EPA's low sulfur diesel fuel program, 
permanently exempting Alaska's remote areas and providing a temporary 
exemption for areas of Alaska served by the Federal Aid Highway System 
(FAHS). The exemption applied to certain requirements in section 211(i) 
and (g) of the Clean Air Act, as implemented in EPA's regulations. 
These exemptions were based on EPA's determination that it would be 
unreasonable to require persons in these areas to comply with the low 
sulfur diesel fuel requirements due to unique geographical, 
meteorological and economic factors for

[[Page 42813]]

Alaska, as well as other significant local factors.
    The temporary exemption for the areas of Alaska served by the FAHS 
will expire on October 1, 1996. On December 12, 1995, the Governor of 
Alaska petitioned EPA to permanently exempt the areas covered by the 
temporary exemption. In this decision EPA is extending the temporary 
exemption for an additional 24 months, but reserving a final decision 
on whether it should be permanent.
    Based on the factors and conditions identified in Alaska's December 
12, 1995 petition, a continuation of the exemption is warranted at 
least temporarily. However, EPA believes that recent comments submitted 
to the agency merit further investigation before making a final 
decision on a permanent exemption. EPA is therefore extending the 
temporary exemption until October 1, 1998, or until such time that a 
final decision is made on the permanent exemption, whichever is 
shorter.
    This decision will continue the current status in Alaska. It is not 
expected to have a significant impact on the ability of Alaska's 
communities to attain the National Ambient Air Quality Standards for 
carbon monoxide and particulate matter, based on the limited 
contribution of emissions from diesel motor vehicles in those areas and 
the sulfur level currently found in motor vehicle diesel fuel used in 
Alaska.

DATES: This action will become effective October 3, 1996 unless adverse 
comments or a request for a public hearing are received by September 
18, 1996. If EPA receives such comments or a request for a public 
hearing, EPA will publish a timely notice in the Federal Register 
withdrawing this rule.

ADDRESSES: Copies of information relevant to this petition are 
available for inspection in public docket A-96-26 at the Air Docket of 
the EPA, first floor, Waterside Mall, room M-1500, 401 M Street S.W., 
Washington, D.C. 20460, (202) 260-7548, between the hours of 8:00 a.m. 
to 5:30 p.m. Monday through Friday. A reasonable fee may be charged for 
copying docket materials.

FOR FURTHER INFORMATION CONTACT: Mr. Paul N. Argyropoulos, 
Environmental Protection Specialist, Fuels Implementation Group, Fuels 
and Energy Division (6406J), 401 M Street S.W., Washington, D.C. 20460, 
(202) 233-9004.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Regulated Entities
II. Electronic Copies of Rulemaking Documents
III. Background
IV. Petition for Exemption
V. Decision for Extending Current Temporary Exemption
VI. Public Participation
VII. Statutory Authority
VIII. Administrative Designation and Regulatory Analysis
IX. Compliance With the Regulatory Flexibility Act
X. Paperwork Reduction Act
XI. Submission to Congress and the General Accounting Office
XII. Unfunded Mandates Act

I. Regulated Entities

    Entities potentially regulated by this action are refiners, 
marketers, distributors, retailers and wholesale purchaser-consumers of 
diesel fuel. Regulated categories and entities include:

----------------------------------------------------------------------------------------------------------------
                          Category                                      Examples of regulated entities          
----------------------------------------------------------------------------------------------------------------
Industry....................................................  Petroluem distributors, marketers, retailers      
                                                               (service station owners and operators), wholesale
                                                               purchaser consumers (fleet managers who operate a
                                                               refueling facility to refuel motor vehicles).    
Citizens....................................................  Any owner or operator of a diesel motor vehicle.  
Federal Government..........................................  Federal facilities, including military bases which
                                                               operate a refueling facility to refuel motor     
                                                               vehicles.                                        
----------------------------------------------------------------------------------------------------------------

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that EPA is now aware 
could potentially be regulated by this action. Other types of entities 
not listed in the table could also be regulated. To determine whether 
your facility is regulated by this action, you should carefully examine 
the criteria contained in Sec. 80.29 and Sec. 80.30 of title 40 of the 
Code of Federal Regulations as modified by today's action. If you have 
questions regarding the applicability of this action to a particular 
entity, consult one of the persons listed in the preceding FOR FURTHER 
INFORMATION CONTACT section.

II. Electronic Copies of Rulemaking Documents

    A copy of this document is also available electronically from the 
EPA Internet site and via dial-up modem on the Technology Transfer 
Network (TTN), which is an electronic bulletin board system (BBS) 
operated by EPA's Office of Air Quality Planning and Standards. Both 
services are free of charge, except for your existing cost of Internet 
connectivity or the cost of the phone call to TTN. Users are able to 
access and download files on their first call using a personal computer 
per the following information. Any one of the following Internet 
addresses may be used:

World Wide Web:
    http://www.epa.gov/OMSWWW/
Gopher:
    gopher://gopher.epa.gov/ Follow menus for: Offices/Air/OMS
FTP:
    ftp://ftp.epa.gov/ Change Directory to pub/gopher/OMS

    The steps required to access information on this rulemaking on the 
TTN bulletin board system are listed below.

TTN BBS: 919-541-5742 (1,200-14,400 bps, no parity, eight data bits, 
one stop bit)
Voice help: 919-541-5384
Internet address: TELNET ttnbbs.rtpnc.epa.gov
Off-line: Mondays from 8:00-12:00 Noon ET
1. Technology Transfer Network Top Menu:  GATEWAY TO TTN TECHNICAL 
AREAS (Bulletin Boards) (Command: T)
2. TTN TECHNICAL INFORMATION AREAS:  OMS--Mobile Sources Information 
(Command: M)
3. OMS BBS--MAIN MENU FILE TRANSFERS:  Other OMS Documents (Command: 
O)

    At this stage, the system will list all available files in this 
area. To download a file, select a transfer protocol that will match 
the terminal software on your computer, then set your own software to 
receive the file using that same protocol. If unfamiliar with handling 
compressed (that is, ZIP'd) files, go to the TTN top menu, System 
Utilities (Command: 1) for information and the necessary program to 
download in order to unZIP the files of interest after downloading to 
your computer. After getting the files you want onto your computer, you 
can quit TTN BBS with the oodbye command.

III. Background

    Section 211(i)(1) of the Act prohibits the manufacture, sale, 
supply, offering for sale or supply, dispensing, transport, or 
introduction into commerce of motor

[[Page 42814]]

vehicle diesel fuel which contains a concentration of sulfur in excess 
of 0.05 percent (by weight), or which fails to meet a cetane index 
minimum of 40 beginning October 1, 1993. Section 211(i)(3) establishes 
the sulfur content for fuel used in the certification of heavy-duty 
diesel vehicles and engines. Section 211(i)(4) provides that the States 
of Alaska and Hawaii may seek an exemption from the requirements of 
this subsection in the same manner as provided in section 325 1 of 
the Act, and requires the Administrator to take final action on any 
petition filed under this section, which seeks exemption from the 
requirements of section 211(i), within 12 months of the date of such 
petition.
---------------------------------------------------------------------------

    \1\ Section 211(i) (4) mistakenly refers to exemptions under 
Sec. 324 of the Act (``Vapor Recovery for Small Business Marketers 
of Petroleum Products''). While the proper reference is to Sec. 325, 
Congress clearly intended to refer to Sec. 325, as shown by the 
language used in Sec. 211(i)(4), and the United States Code citation 
used in Sec. 806 of the Clean Air Act Amendments of 1990, Public Law 
No. 101-549. Section 806 of the Amendments, which added paragraph 
(i) to Sec. 211 of the Act, used 42 U.S.C. 7625-1 as the United 
States Code designation for Sec. 324. This is the proper designation 
for Sec. 325 of the Act. Also see 136 Cong. Rec. S17236 (daily ed. 
October 26, 1990) (statement of Sen. Murkowski).
---------------------------------------------------------------------------

    Section 325 of the Act provides that upon application by the 
Governor of Guam, American Samoa, the Virgin Islands, or the 
Commonwealth of the Northern Mariana Islands, the Administrator may 
exempt any person or source in such territory from any requirement of 
the Act, with some specific exceptions. Such exemption may be granted 
if the Administrator finds that compliance with such requirements is 
not feasible or is unreasonable due to unique geographical, 
meteorological, or economic factors of such territory, or such other 
local factors as the Administrator deems significant.

IV. Petition for Exemption

    On February 12, 1993, the Honorable Walter J. Hickel, Governor of 
the State of Alaska, submitted a petition to exempt motor vehicle 
diesel fuel in Alaska from all of the requirements of section 211(i) 
except the minimum cetane index requirement of 40. The petition 
requested a short-term exemption for areas accessible by the Federal 
Aid Highway System (``on-highway'') and a permanent exemption for areas 
not accessible by the Federal Aid Highway System (``off-highway''). The 
petition for a short-term exemption requested that EPA exempt motor 
vehicle diesel fuel manufactured for sale, sold, supplied, or 
transported within the Federal Aid Highway System (FAHS) from meeting 
the sulfur content requirement specified in section 211(i) until 
October 1, 1996. The petition also requested a permanent exemption from 
such requirements for those areas of Alaska not reachable by the 
Federal Aid Highway System. The petition was based on geographical, 
meteorological, air quality, and economic factors unique to the State 
of Alaska.
    The petition was granted on March 14, 1994 and applied to all 
persons in Alaska subject to section 211(i)(1) and (g) of the Act and 
EPA's low sulfur requirement for motor vehicle diesel fuel in 40 CFR 
Part 80.29. Persons in communities served by the FAHS are exempt from 
compliance with the diesel fuel sulfur content requirement until 
October 1, 1996. Persons in communities that are not served by the 
Federal Aid Highway System are permanently exempt from compliance with 
the diesel fuel sulfur content requirement. Both the permanent and 
temporary exemption apply to all persons who manufacture, sell, supply, 
offer for sale or supply, dispense, transport, or introduce into 
commerce, in the State of Alaska, motor vehicle diesel fuel. Alaska's 
exemption does not apply to the minimum cetane requirement for motor 
vehicle diesel fuel.
    On December 12, 1995, the Honorable Governor Knowles petitioned the 
Administrator for a permanent exemption for all areas of the state 
covered by the Federal Aid Highway System. This notice addresses EPA's 
action on the petition submitted on December 12, 1995. We are making a 
decision now for the 24 month extension and reserving the decision on 
the state's request for a permanent exemption, so the agency may 
consider possible alternatives for a longer period.
    The following discussion summarizes the state's support for the 
exemption as provided for in the petition, and the rationale for the 
agency's extension of the temporary exemption.

A. Geography and Location of the State of Alaska

    Alaska is about one-fifth as large as the combined area of the 
lower 48 states. Because of its extreme northern location, rugged 
terrain and sparse population, Alaska relies on barges to deliver a 
large percentage of its petroleum products. No other state relies on 
this type of delivery system to the extent Alaska does.
    Only 35% of Alaska's communities are served by the Federal Aid 
Highway System, which is a combination of road and marine highways. The 
remaining 65% of Alaska's communities are served by barge lines and are 
referred to as off-highway or ``remote'' communities. Although barge 
lines can directly access some off-highway communities, those 
communities that are not located on a navigable waterway are served by 
a two-stage delivery system: over water by barge line and then over 
land to reach the community.
    Because of the State's high latitude, it experiences seasonal 
extremes in the amount of daily sunlight and temperature, which in turn 
affects the period of time during which construction can occur, and, 
ultimately, the cost of construction in Alaska.
    According to the petition, Alaska's extreme northern location 
places it in a unique position to fuel transcontinental cargo flights 
between Europe, Asia, and North America. Roughly 75% of all air transit 
freight between Europe and Asia lands in Anchorage, as does that 
between Asia and the United States. The result is a large market for 
Jet-A fuel produced by local refiners, which decreases the importance 
of highway diesel fuel to these refiners. Based on State tax revenue 
receipts and estimates by Alaska's refiners, diesel fuel consumption 
for highway use represents roughly 5% of total state distillate fuel 
consumption.

B. Climate, Meteorology and Air Quality

    Alaska's climate is colder than that of the other 49 states. The 
extremely low temperatures experienced in Alaska during the winter 
imposes a more severe fuel specification requirement for diesel fuel in 
Alaska than in the rest of the country. This specification, known as a 
``cloud point'' specification 2 significantly affects vehicle 
start-up and other engine operations. Alaska has the most severe cloud 
point specification for diesel fuel in the U.S. at -56 deg.F. Because 
Alaska experiences extremely low temperatures in comparison to the 
other 49 state's and the cloud point specifications are not as severe 
for fuel in the lower 48 states, most diesel fuel used in the State of 
Alaska is produced by refiners located in Alaska. Jet-A kerosene meets 
the same cloud point specification as No. 1 diesel fuel (which is 
marketed primarily during the winter in Alaska as opposed to No. 2 
diesel fuel which is marketed primarily in the summer) and is commonly 
mixed with or used as a substitute for No. 1 diesel fuel. However, 
because Jet-A kerosene can have a sulfur content as high as 0.3%, the 
diesel fuel sulfur requirement

[[Page 42815]]

of 0.05% would generally prohibit using Jet-A and No. 1 low sulfur 
diesel fuel interchangeably.
---------------------------------------------------------------------------

    \2\ The cloud point defines the temperature at which cloud or 
haze or wax crystals appears in the oil. Its purpose is to ensure a 
minimum temperature above which fuel lines and other engine parts 
are not plugged by solids that form in the fuel.
---------------------------------------------------------------------------

    Ice formation on the navigable waters during the winter months 
restricts fuel delivery to off-highway areas served by barge lines. 
Therefore, fuel is generally only delivered to these areas between the 
months of May and October. This further restricts the ability of fuel 
distributors in Alaska to supply multiple grades of petroleum products 
to these communities.
    The only violations of national ambient air quality standards in 
Alaska have been for carbon monoxide (CO) and particulate matter 
(PM10). CO violations have only been recorded in the State's two 
largest communities: Anchorage and Fairbanks. PM10 violations have 
only been recorded in two rural communities, Mendenhall Valley of 
Juneau and Eagle River, a community within the boundaries of Anchorage. 
The most recent PM10 inventories for these two communities show 
that these violations are largely the result of fugitive dust from 
paved and unpaved roads, and that motor vehicle exhaust is responsible 
for less than one percent of the overall PM10 being emitted within 
the borders of each of these areas. 3 Moreover, Eagle River has 
not had a violation of the PM10 standard since 1986 and plans to 
apply to EPA for redesignation to attainment for PM10. Mendenhall 
Valley has initiated efforts for road paving to be implemented to 
control road dust. The sulfur content of diesel fuel is not expected to 
have a significant impact on ambient PM10 or CO levels in any of 
these areas because of the minimal contribution by motor vehicles to 
PM10 in these areas and the insignificant effect of diesel fuel 
sulfur content on CO emissions.
---------------------------------------------------------------------------

    \3\ ``PM10 Emission Inventories for the Mendenhall Valley 
and Eagle River Areas,'' prepared for the U.S. Environmental 
Protection Agency, Region X, by Engineering-Science, February 1988.
---------------------------------------------------------------------------

    Finally, EPA recognizes that the primary purpose of reducing the 
sulfur content of diesel fuel is to reduce vehicle particulate 
emissions. Additional benefits cited in the final rule (55 FR 34120, 
August 21, 1990) include a reduction in sulfur dioxide (SO2) 
emissions and the ability to use exhaust after-treatment devices on 
diesel fueled vehicles, which would result in some reduction of HC and 
CO exhaust emissions. Despite the possibility that the use of high-
sulfur diesel fuel may cause plugging or increased particulate sulfate 
emissions in diesel vehicles equipped with trap systems or oxidation 
catalysts, any increase in sulfate particulate emissions would likely 
have an insignificant effect on ambient PM levels in Alaska since 
current motor vehicle contributions to PM10 emissions are minimal. 
Also, the lower sulfur requirement for motor vehicle diesel fuel will 
have no impact on the attainment prospects of Fairbanks and Anchorage 
with respect to CO, since reducing sulfur content has no direct affect 
on CO emissions. Since Alaska is in attainment with ozone and SO2 
air quality standards, there is currently no concern for reducing HC or 
SO2 emissions.
    The Agency recognizes that granting this extension to the temporary 
exemption means Alaska will forego the potential benefits to its air 
quality resulting from the use of low-sulfur diesel fuel. However, the 
Agency believes that the potential benefits to Alaska's air quality are 
minimal and far outweighed by the increased costs resulting from 
factors unique to Alaska, at this time, to communities served by the 
FAHS.

C. Economic Factors

    In complying with the section 211(i) sulfur requirement, refiners 
have the option to invest in the process modifications necessary to 
produce low-sulfur diesel fuel for use in motor vehicles, or not invest 
in the process modifications and only supply diesel fuel for off-
highway purposes (e.g., heating, generation of electricity, fuel for 
non-road vehicles). Most of Alaska's refiners indicated that local 
refineries would choose to exit the market for highway diesel fuel if 
an exemption from the low sulfur requirement is not granted, because of 
limited refining capabilities, the small size of the market for highway 
diesel fuel in Alaska, and the costs that would be incurred to produce 
low-sulfur diesel fuel.
    Demand for Jet-A kerosene, which is also sold as No. 1 diesel fuel 
because it meets Alaska's winter cloud point specification, accounts 
for almost fifty percent (50%) of Alaska's distillate consumption and 
dominates refiner planning. A survey of the refiners in Alaska, 
conducted by the State, revealed that it would cost over $100,000,000 
in construction and process modifications to refine Alaska North Slope 
(ANS) crude into 0.05% sulfur diesel fuel to meet the demand for 
highway diesel fuel. Among the reasons for the high cost include the 
construction costs in Alaska, which are 25% to 65% higher than costs in 
the lower 48 states, and the cost of modifying the fuel production 
process itself. The petition states that because there is such a small 
demand for highway diesel fuel in Alaska, the costs that would be 
incurred to comply with section 211(i)'s sulfur requirement are 
excessive in light of the expected benefits. Without an exemption from 
having to meet this requirement, most refiners would choose to exit the 
market for highway diesel fuel.
    Whether low-sulfur diesel fuel is produced in Alaska or imported 
from the lower 48 states or Canada, there remains the problem of 
segregating the two fuels for transport to communities accessible only 
by navigable waterways and storage of the fuels thereafter. Fuel is 
delivered to these communities only between the months of May and 
October due to ice formation which blocks waterways leading to these 
communities for much of the remainder of the year. The fuel supplied to 
these communities during the summer months must last through the winter 
and spring months until resupply can occur. Additionally, the existing 
fuel storage facilities limit the number of fuel types that can be 
stored for use in these communities. The cost of constructing separate 
storage facilities and providing separate tanks for transport of low-
sulfur diesel fuel is prohibitive. This is largely due to the high cost 
of construction in Alaska relative to the lower 48, and the constraints 
inherent in distributing fuel in Alaska. One alternative to 
constructing separate storage facilities is to supply only low-sulfur 
diesel fuel to these communities. However, the result would require use 
of the higher cost, low-sulfur diesel fuel for all diesel fuel needs. 
This would greatly increase the already high cost of living in these 
communities, since a large percentage of distillate consumption in 
these communities is for off-highway uses, such as operating diesel 
powered electrical generators.

D. Environmental Factors

    Information provided to EPA by the State of Alaska indicates that 
refiners supply and distribute standard diesel fuel in the summer which 
has a sulfur content of approximately 0.3% by weight, and supply and 
distribute Jet-A fuel in the winter as an Arctic-grade diesel, which 
has a sulfur content between 0.065 and 0.11. Thus, the reported level 
of sulfur in motor vehicle diesel fuel used in Alaska is below the 
current ASTM sulfur specification which allows up to 0.5% (by weight). 
Therefore, in general, the impact of not requiring the low sulfur 
diesel fuel program in Alaska are not as significant as they would be 
if the fuel were to approach the ASTM allowable sulfur content level.
    Although the State's largest communities, Fairbanks and Anchorage,

[[Page 42816]]

are CO nonattainment areas, extending this exemption is not expected to 
have any significant impact on ambient CO levels because the sulfur 
content in diesel fuel does not significantly affect CO emissions. Two 
rural communities are designated nonattainment areas with respect to 
particulate matter (PM10); however, motor vehicle exhaust is 
responsible for less than one percent of the overall PM10 being 
emitted within the borders of these two areas where fugitive dust is 
reported to be a problem. Thus, EPA believes that granting a 24-month 
extension to the current temporary exemption to communities served by 
the FAHS will not have a significant impact on the ability of any of 
these communities to meet the NAAQS.

V. Decision for Extending the Current Temporary Exemption

    In this notice, the Agency is extending the temporary exemption for 
those areas in Alaska served by FAHS from the diesel fuel sulfur 
content requirement of 0.05% (by weight), for a period of 24 months 
from October 1, 1996, or until such time as a decision is made on the 
petition for a permanent exemption, whichever is shorter. For the same 
reasons, the Agency also extends the exemption for those areas in 
Alaska covered by the FAHS from those provisions of section 211(g)(2) 
4 of the Act that prohibit the fueling of motor vehicles with 
high-sulfur diesel fuel. Sections 211(g) and 211(i) both restrict the 
use of high-sulfur motor vehicle diesel fuel. Therefore, areas in 
Alaska served by the Federal Aid Highway System are also exempt from 
the related 211(g)(2) provisions until such time as a decision has been 
made on the state's petition for a permanent exemption.
---------------------------------------------------------------------------

    \4\ This subsection makes it unlawful for any person to 
introduce or cause or allow the introduction into any motor vehicle 
of diesel fuel which they know or should know contains a 
concentration of sulfur in excess of 0.05 percent (by weight). It 
would clearly be impossible to hold persons liable for misfueling 
with diesel fuel with a sulfur content higher than 0.05%, when such 
fuel is permitted to be sold or dispensed for use in motor vehicles. 
The proposed exemptions would include exemptions from this 
prohibition, but not include the prohibitions in Sec. 211(g)(2) 
relating to the minimum cetane index or alternative aromatic levels.
---------------------------------------------------------------------------

    The basis for this decision is that compliance with this 
requirement is unreasonable during such time period because, at this 
time, it would continue to create a severe economic burden for 
refiners, distributors and consumers of diesel fuel in the State of 
Alaska. This economic burden is created by unique meteorological 
conditions in Alaska and a set of unique distillate product demands in 
the state. As a result of these conditions, during the term of this 
exemption, it is not mandated that low-sulfur diesel fuel be available 
for commercial use in Alaska. The Agency will make a final 
determination on the state's petition for a permanent exemption, as 
discussed below.
    The EPA believes that a 24-month continuation of the current 
exemption for areas served by the Federal Aid Highway System from the 
diesel fuel sulfur content requirement is reasonable and appropriate so 
that the Agency can consider recent comments on the state's petition. A 
permanent exemption is not appropriate at this time because EPA has not 
yet verified all relevant information and comments submitted by other 
interested parties.
    Alaska's most recent petition included a compilation of 
information, provided by a Task Force (in which an EPA representative 
participated) that was established after the first petition, to further 
evaluate the conditions as described in that petition. These conditions 
included: the availability of arctic-grade, low-sulfur diesel fuel from 
out-of-state refiners, the costs associated with importing the fuel, 
and the costs of storing and distributing the fuel to areas on the 
highway system. The conditions and factors that were identified in the 
initial petition were expanded upon in the task force review. At this 
time there is sufficient evidence to support granting an extension to 
the current exemption, however, the Agency believes there are several 
issues that merit further investigation prior to making a final 
decision to act on the state's request for a permanent exemption. These 
issues include: consideration of an alternative fuel standard or fuel, 
local environmental effects, manufacturer's emissions warranty and 
recall liability, and the potential for tightening future heavy-duty 
emission standards for model year 2004 engines.
    The information which is summarized in this notice and other 
pertinent information is being investigated in more detail by the 
Agency, prior to issuing a decision on the States request for a 
permanent exemption.
    The Agency will publish a separate notice in the Federal Register 
to take action on the state's petition for a permanent exemption.

VI. Public Participation

    The Agency is publishing this action as a direct final rule because 
this action is only extending Alaska's current temporary exemption from 
the diesel fuel sulfur standards as established in section 211(i) of 
the Act. The Agency views the changes contained herein as non-
controversial and based on outreach efforts with affected parties, EPA 
anticipates no adverse or critical comments.
    Following the August 27, 1993 publication of EPA's proposed 
decision to grant the first exemption from the low sulfur diesel fuel 
requirements requested by Alaska, there was a thirty day comment 
period, during which interested parties could request a hearing or 
submit comments on the proposal. The Agency received no request for a 
hearing. Comments were received both in support of the proposal to 
grant the exemption and expressing concerns over the impact of granting 
the exemption. These comments were considered in the Agency's decision 
to grant the previous exemption. The Agency received Alaska's request 
for a permanent exemption for the FAHS areas in December of 1995. Since 
that time, the Agency has received comment on the petition from the 
Alaska Center for the Environment and the Engine Manufacturers of 
America. Although the Agency believes that the petition does support an 
extension of the current exemption, EPA believes the information in 
these comments and the possible tightening of heavy duty engine 
standards in 2004 necessitate further consideration before the Agency 
proposes a decision on Alaska's request for a permanent waiver.
    This action will become effective October 3, 1996 unless the Agency 
receives adverse comments or a request for a public hearing by 
September 18, 1996. If EPA receives such comments or request for a 
public hearing, EPA will publish a timely notice in the Federal 
Register withdrawing this rule. In the event that adverse or critical 
comments are received, EPA is also publishing a Notice of Proposed 
Decision in a separate action today, which proposes the same exemption 
contained in this direct final decision. Any adverse comments received 
by the date listed above will be addressed in a subsequent final 
decision. That final decision will be based on the relevant portion of 
the revision that is noticed as a proposed decision in the Federal 
Register and that is identical to this direct final decision. The EPA 
will not institute a second comment period on this action. Any parties 
interested in commenting on this action should do so at this time. If 
no such comments are received, the public is advised that this action 
will be effective October 3, 1996.

VII. Statutory Authority

    Authority for the action in this document is in sections 211(i)(4) 
(42

[[Page 42817]]

U.S.C. 7545(i)(4)) and 325(a)(1) (42 U.S.C. 7625-1(a)(1)) of the Clean 
Air Act, as amended.

VIII. Administrative Designation and Regulatory Analysis

    Under Executive Order 12866,5 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:
---------------------------------------------------------------------------

    \5\ 58 FR 51736 (October 4, 1993)
---------------------------------------------------------------------------

    (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 of 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 
this Executive Order.6
---------------------------------------------------------------------------

    \6\ Id. at section 3(f)(1)-(4).
---------------------------------------------------------------------------

    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.

IX. Compliance With the Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601-612, requires that 
Federal Agencies examine the impacts of their regulations on small 
entities. The act requires an Agency to prepare a regulatory 
flexibility analysis in conjunction with notice and comment rulemaking, 
unless the Agency head certifies that the rule will not have a 
significant impact on a substantial number of small entities. 5 U.S.C. 
605(b).
    Today's action to extend the temporary exemption of the low sulfur 
diesel fuel requirements in the State of Alaska until October 1, 1998, 
or until such time as the Agency proposes to act on the states request 
for a permanent exemption, whichever period of time is shorter, will 
not result in any additional economic burden on any of the affected 
parties, including small entities involved in the oil industry, the 
automotive industry and the automotive service industry. EPA is not 
imposing any new requirements on regulated entities, but instead is 
continuing an exemption from a requirement which makes it less 
restrictive.
    Therefore, the Administrator has determined that this direct final 
decision will not have a significant impact on a substantial number of 
small entities, and that a regulatory flexibility analysis is not 
necessary in connection with this decision.

X. Paperwork Reduction Act

    The Paperwork Reduction Act of 1980, 544 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.

XI. Submission to Congress and the General Accounting Office

    Under section 801(a)(1)(A) of the Administrative Procedures Act 
(APA), as amended by the Small Business Regulatory Enforcement Fairness 
Act of 1996, EPA submitted a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives and the Comptroller General of the General Accounting 
Office prior to publication of the rule in today's Federal Register. 
This rule is not a ``major rule'' as defined by section 804(2) of the 
APA as amended.

XII. Unfunded Mandates Act

    Under section 202 of the Unfunded Mandates Reform Act of 1995, EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule that includes a federal mandate with estimated costs to the 
private sector of $100 million or more, or to state, local, or tribal 
governments of $100 million or more in the aggregate. 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 this direct final rule imposes no new 
federal requirements and does not include any federal mandate with 
costs to the private sector or to state, local, or tribal governments. 
Therefore, the Administrator certifies that this direct final rule does 
not require a budgetary impact statement.

List of Subjects in 40 CFR Part 80

    Environmental protection, Air pollution control, Diesel fuel, Motor 
vehicle pollution.

    Dated: August 12, 1996.
Carol M. Browner,
Administrator.
[FR Doc. 96-21078 Filed 8-16-96; 8:45 am]
BILLING CODE 6560-50-P