[Federal Register Volume 62, Number 32 (Tuesday, February 18, 1997)]
[Rules and Regulations]
[Pages 7164-7167]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3926]


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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80

[FRL-5689-2]


Regulations of Fuels and Fuel Additives: Extension of the 
Reformulated Gasoline Program to the Phoenix, Arizona Moderate Ozone 
Nonattainment Area

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: Under section 211(k)(6) of the Clean Air Act, as amended 
(Act), the Administrator of EPA shall require the sale of reformulated 
gasoline in an ozone nonattainment area classified as Marginal, 
Moderate, Serious, or Severe upon the application of the governor of 
the state in which the nonattainment area is located. This action 
extends the prohibition set forth in section 211(k)(5) against the sale 
of conventional (i.e., non-reformulated) gasoline to the Phoenix, 
Arizona moderate ozone nonattainment area. The Agency is revising the 
regulations such that the implementation date of the prohibition 
described herein shall take effect on the effective date of this rule 
or June 1, 1997, whichever is later, for all persons other than 
retailers and wholesale purchaser-consumers (i.e., refiners, importers, 
and distributors). For retailers and wholesale purchaser-consumers, the 
implementation date of the prohibition described herein shall take 
effect 30 days after the effective date of this rule or July 1, 1997, 
whichever is later. As of the implementation date for retailers and 
wholesale purchaser-consumers, the Phoenix ozone nonattainment area 
will be a covered area for all purposes in the federal RFG program.

DATES: This action will be effective on April 4, 1997 unless notice is 
received by March 20, 1997 from someone who wishes to submit adverse or 
critical comments or requests an opportunity for a public hearing. If 
such comments or a request for a public hearing are received by the 
Agency, EPA will withdraw this direct final rule and a timely notice 
will be published in the Federal Register to indicate the withdrawal.

ADDRESSES: Comments should be submitted (in duplicate, if possible) to 
Air Docket Section, Mail Code 6102, U.S. Environmental Protection 
Agency, 401 M Street, SW, Washington, DC 20460. A copy should also be 
sent to Janice Raburn at U.S. Environmental Protection Agency, Office 
of Air and Radiation, 401 M Street, SW (6406J), Washington, DC 20460. A 
copy should also be sent to EPA Region IX, 75 Hawthorne Street, AIR-2, 
17th Floor, San Francisco, CA 94105.
    Materials relevant to this document have been placed in Docket A-
97-02. The docket is located at the Air Docket Section, Mail Code 6102, 
U.S. Environmental Protection Agency, 401 M Street, SW, Washington, DC 
20460, in room M-1500 Waterside Mall. Documents may be inspected from 
8:00 a.m. to 5:30 p.m. A reasonable fee may be charged for copying 
docket material. An identical docket is also located in EPA's Region IX 
office in Docket A-AZ-97. The docket is located at 75 Hawthorne Street, 
AIR-2, 17th Floor, San Francisco, California 94105. Documents may be 
inspected from 9:00 a.m. to noon and from 1:00--4:00 p.m. A reasonable 
fee may be charged for copying docket material.

FOR FURTHER INFORMATION CONTACT: Janice Raburn or Paul Argyropoulos at 
U.S. Environmental Protection Agency Office of Air and Radiation, 401 M 
Street, SW (6406J), Washington, DC 20460, (202) 233-9000.

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

    (M) OMS.
    (K) Rulemaking and Reporting.
    (3) Fuels.
    (9) Reformulated gasoline.
    A list of ZIP files will be shown, all of which are related to the 
reformulated gasoline rulemaking process. Today's action will be in the 
form of a ZIP file and can be identified by the following title: 
OPTOUT.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

[[Page 7165]]

software should then be opened and directed to receive the file using 
the same protocol. Programs and instructions for de-archiving 
compressed files can be found via ystems Utilities from the top 
menu, under rchivers/de-archivers. Please note that due to 
differences between the software used to develop the document and the 
software into which the document may be downloaded, changes in format, 
page length, etc. may occur.
    Regulated entities. Entities potentially regulated by this action 
are those which produce, supply or distribute motor gasoline. Regulated 
categories and entities include:

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                                                Examples of regulated   
                 Category                             entities          
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Industry..................................  Petroleum refiners, motor   
                                             gasoline distributors and  
                                             retailers.                 
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    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 business is regulated by this action, you should carefully examine 
the list of areas covered by the reformulated gasoline program in 
Sec. 80.70 of title 40 of the Code of Federal Regulations. If you have 
questions regarding the applicability of this action to a particular 
entity, consult the person listed in the preceding FOR FURTHER 
INFORMATION CONTACT section.

I. Background

    As part of the Clean Air Act Amendments of 1990, Congress added a 
new subsection (k) to section 211 of the Act. Subsection (k) prohibits 
the sale of gasoline that EPA has not certified as reformulated 
(``conventional gasoline'') in the nine worst ozone nonattainment areas 
beginning January 1, 1995. Section 211(k)(10)(D) defines the areas 
covered by the reformulated gasoline (RFG) program as the nine ozone 
nonattainment areas having a 1980 population in excess of 250,000 and 
having the highest ozone design values during the period 1987 though 
1989.1 Under section 211(k)(10)(D), any area reclassified as a 
severe ozone nonattainment area under section 181(b) is also to be 
included in the RFG program. EPA published final regulations for the 
RFG program on February 16, 1994. See 59 FR 7716.
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    \1\ Applying these criteria, EPA has determined the nine covered 
areas to be the metropolitan areas including Los Angeles, Houston, 
New York City, Baltimore, Chicago, San Diego, Philadelphia, Hartford 
and Milwaukee.
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    Any other ozone nonattainment area classified as Marginal, 
Moderate, Serious, or Severe may be included in the program at the 
request of the Governor of the state in which the area is located. 
Section 211(k)(6)(A) provides that upon the application of a Governor, 
EPA shall apply the prohibition against selling conventional gasoline 
in any area requested by the Governor which has been classified under 
subpart 2 of Part D of Title I of the act as a Marginal, Moderate, 
Serious or Severe ozone nonattainment area. Subparagraph 211(k)(6)(A) 
further provides that EPA is to apply the prohibition as of the date 
the Administrator ``deems appropriate, not later than January 1, 1995, 
or 1 year after such application is received, whichever is later.'' In 
some cases the effective date may be extended for such an area as 
provided in section 211(k)(6)(B) based on a determination by EPA that 
there is ``insufficient domestic capacity to produce'' RFG. Finally, 
EPA is to publish a governor's application in the Federal Register.

II. The Governor's Request

    EPA received an application from the Honorable Fife Symington, 
Governor of the State of Arizona, for the Phoenix moderate ozone 
nonattainment area to be included in the reformulated gasoline program. 
The Governor's letter is set out in full below.
January 17, 1997.
Ms. Carol Browner, Administrator, U.S. Environmental Protection 
Agency, 401 M. Street, S.W. (1101), Washington, D.C. 20460.

    Dear Ms. Browner: The purpose of this letter is to request, 
under Sec. 211(k)(6) of the Clean Air Act and 40 CFR 81.303, that 
the U.S. E.P.A. extend the requirement for reformulated gasoline 
(RFG) to the Phoenix Ozone Nonattainment Area beginning June 1, 
1997. This ``opt-in'' request is made in accordance with the 
guidance provided by your agency in letters to me of December 31, 
1996 and January 13, 1997.
    Furthermore, I am requesting waivers related to summertime Reid 
Vapor Pressure (RVP) and wintertime oxygenated fuels:

--From June 1 through September 30 of each year, that the current 
State standard of 7.0 pounds per square inch (psi) RVP be enforced 
in the Phoenix Ozone Nonattainment Area; and
--That the U.S.E.P.A. preserve existing State standards for 
oxygenated gasoline blends.

    These unique gasoline standards were submitted by Arizona in the 
1993 ozone and carbon monoxide State Implementation Plan revisions 
required under the Clean Air Act, but no action was taken on our 
waiver request. I urge EPA to expeditiously approve these waivers in 
accordance with section 211(c)(4)(C) of the Act.
    As you know, Arizona has made a good faith effort to implement 
its ozone nonattainment plan in compliance with all of the 
requirements of the Clean Air Act. Regardless, a significant 
proportion of the emissions reductions included in this plan were 
not realized due to the difficulties the State has experienced in 
attempting to fully implement the federal enhanced vehicular 
inspection and maintenance program. This problem, and continued 
violations of the ozone standard in Maricopa County have motivated 
the State to voluntarily develop and submit an ozone plan, which 
will include a variety of enforceable control programs designed to 
reduce pollution and bring about attainment of the ozone standard by 
1999. Reformulated gasoline is critical to the success of this plan, 
and will probably provide the largest pollution reduction of any 
single control program contemplated in this plan.
    The State will continue to evaluate gasoline formulations and 
other strategies for reducing ozone, carbon monoxide and particulate 
pollution, and may determine that another gasoline formulation 
provides equivalent or better emissions reductions, and is more 
cost-effective or represents a better overall solution to our 
pollution problems in the long term. In such case, the State will 
submit a complete opt-out request by December 31, 1997, or take 
other appropriate action, as described in the December 31, 1996 and 
January 13, 1997 letters previously mentioned.
    I appreciate the prompt assistance that your Region IX staff 
provided on this issue. Thank you for your attention to this matter.
      Sincerely,
Fife Symington,
Governor.
FS:sae
cc: Felicia Marcus, EPA, Region IX, Russell F. Rhoades, Arizona 
Department of Environmental Quality, John Hays, Arizona Department 
of Weights and Measures

III. Action

    Pursuant to the governor's letter and the provisions of section 
211(k)(6), EPA will apply the prohibitions of subsection (211)(k)(5) to 
the Phoenix, Arizona moderate ozone nonattainment area as of the 
effective date of this rule, or June 1, 1997 whichever is later, for 
all persons other than retailers and wholesale purchaser-consumers. 
This date applies to the refinery level and all other points in the 
distribution system other than the retail level. For retailers and 
wholesale purchaser-consumers, the prohibitions of subsection 
(211)(k)(5) will apply 30 days after the effective date of this rule, 
or July 1, 1997, whichever is later. As of the implementation date for 
retailers and wholesale purchaser-consumers, this area will be treated 
as a covered area for all purposes of the federal RFG program.
    The application of the prohibition of section 211(k)(5) to the 
Phoenix

[[Page 7166]]

moderate ozone nonattainment area could take effect no later than 
January 17, 1998 under section 211(k)(6)(A), which stipulates that the 
effective program date must be no ``later than January 1, 1995 or 1 
year after [the Governor's] application is received, whichever is 
later.'' For the Phoenix nonattainment area, EPA could establish an 
effective date for the start of the RFG program anytime up to this 
date. EPA considers that January 17, 1998, would be the latest possible 
effective date, since EPA expects there to be sufficient domestic 
capacity to produce RFG and therefore has no current reason to extend 
the effective date beyond one year after January 17, 1998. EPA believes 
that there is adequate domestic capability to support the current 
demand for RFG nationwide as well as the addition of the Phoenix area.
    Like the federal volatility program, the RFG program includes 
seasonal requirements. Summertime RFG must meet certain VOC control 
requirements to reduce emissions of VOCs, an ozone precursor. Under the 
RFG program, there are two compliance dates for VOC-controlled RFG. At 
the refinery level, and all other points in the distribution system 
other than the retail level, compliance with RFG VOC-control 
requirements is required from May 1 to September 15. At the retail 
level (service stations and wholesale purchaser-consumers), compliance 
is required from June 1 to September 15. See 40 CFR 80.78(a)(1)(v). 
Pipeline requirements and demands for RFG from the supply industry 
drive refineries to establish their own internal compliance date 
earlier than May so that they can assure that terminals are capable of 
meeting the requirements by the May 1 date. Based on past success with 
this implementation strategy, EPA is staggering the implementation 
dates for the Phoenix opt-in to the RFG program.
    The Governor's request seeks an implementation date of June 1, 1997 
for the RFG program in the Phoenix area. However, pursuant to its 
discretion to set an effective date under Sec. 211(k)(6), EPA is 
establishing two implementation dates. For all persons other than 
retailers and wholesale purchaser-consumers (i.e., refiners, importers, 
and distributors), implementation shall take effect on the effective 
date of this rule, or June 1, 1997, whichever is later. For retailers 
and wholesale purchaser-consumers, implementation shall take effect 30 
days after the effective date of this rule or July 1, 1997, whichever 
is later. EPA believes these implementation dates achieve a reasonable 
balance between requiring the earliest possible start date and 
providing adequate lead time for industry to prepare for program 
implementation. These dates are consistent with the state's request 
that EPA require that the RFG program begin in the Phoenix area as 
early as possible in the high ozone season, which begins June 1. These 
dates provide environmental benefits by allowing Phoenix to achieve VOC 
reduction benefits for some of the 1997 VOC-controlled season. EPA 
believes these dates provide adequate lead time for the distribution 
industry to set up storage and sales agreements to ensure supply.

IV. Public Participation and Effective Date

    The Agency is publishing this action both as a proposed rulemaking 
and as a direct final rule because it views setting the effective date 
for the addition of the Phoenix ozone nonattainment area to the federal 
RFG program as non-controversial and anticipates no adverse or critical 
comments. This action will be effective April 4, 1997 unless the Agency 
receives notice by March 20, 1997 that adverse or critical comments 
will be submitted, or that a party requests the opportunity to submit 
such oral comments pursuant to section 307(d)(5) of the Act, as 
amended. If such notice is received by the Agency, EPA will withdraw 
this direct final rule and a timely notice will be published in the 
Federal Register to indicate the withdrawal.
    The Governor of Arizona established in May 1996 an Air Quality 
Strategies Task Force to develop a report describing long- and short-
term strategies that would contribute to attainment of the federal 
national ambient air quality standards for ozone, carbon monoxide and 
particulates. In July 1996, this task force recommended establishment 
of a Fuels Subcommittee to evaluate potential short-term and long-term 
fuels options for the Phoenix ozone nonattainment area. The Fuels 
Subcommittee was composed of representatives of a diverse mixture of 
interests including gasoline-related industries, public health 
organizations, and both in-county and out-of-county interests. Several 
members of the refining industry supported the opt into the federal RFG 
program for Phoenix for the onset of the 1997 VOC control season. The 
subcommittee submitted its final report to the Air Quality Strategies 
Task Force on November 26, 1996.
    Section 211(k)(6) states that, ``[u]pon the application of the 
Governor of a State, the Administrator shall apply the prohibition'' 
against the sale of conventional gasoline in any area of the State 
classified as Marginal, Moderate, Serious, or Severe for ozone. 
Although section 211(k)(6) provides EPA discretion to establish the 
effective date for this prohibition to apply to such areas, and allows 
EPA to consider whether there is sufficient domestic capacity to 
produce RFG in establishing the effective date, EPA does not have 
discretion to deny a Governor's request. Therefore, the scope of this 
action is limited to setting an effective date for Phoenix's opt-in to 
the RFG program, and not to decide whether Phoenix should in fact opt 
in. For this reason, EPA is only soliciting comments addressing the 
implementation date and is not soliciting comments that either support 
or oppose Phoenix participating in the program.

V. Environmental Impact

    The federal RFG program provides reductions in ozone-forming VOC 
emissions, oxides of nitrogen (NOX), and air toxics. Reductions in 
VOCs are environmentally significant because of the associated 
reductions in ozone formation and in secondary formation of particulate 
matter, with the associated improvements in human health and welfare. 
Exposure to ground-level ozone (or smog) can cause respiratory 
problems, chest pain, and coughing and may worsen bronchitis, 
emphysema, and asthma. Animal studies suggest that long-term exposure 
(months to years) to ozone can damage lung tissue and may lead to 
chronic respiratory illness. Reductions in emissions of toxic air 
pollutants are environmentally important because they carry significant 
benefits for human health and welfare primarily by reducing the number 
of cancer cases each year.
    The Arizona Governor's Task Force estimates that if federal RFG is 
required to be sold in Phoenix, VOC emissions will be be cut by more 
than nine tons/day. In addition, all vehicles would have improved 
emissions and the area would also get reductions in toxic emissions.

VI. Statutory Authority

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

VII. Regulatory Flexibility

    For the following reasons, EPA has determined that it is not 
necessary to prepare a regulatory flexibility analysis in connection 
with this final rule. EPA has also determined that this rule will not 
have a significant economic impact on a substantial number of small

[[Page 7167]]

entities. In promulgating the RFG and anti-dumping regulations, the 
Agency analyzed the impact of the regulations on small businesses. The 
Agency concluded that the regulations may possibly have some economic 
effect on a substantial number of small refiners, but that the 
regulations may not significantly affect other small entities, such as 
gasoline blenders, terminal operators, service stations and ethanol 
blenders. See 59 FR 7810-7811 (February 16, 1994). As stated in the 
preamble to the final RFG/anti-dumping rule, exempting small refiners 
from the RFG regulations would result in the failure of meeting CAA 
standards. 59 FR 7810. However, since most small refiners are located 
in the mountain states or in California, which has its own RFG program, 
the vast majority of small refiners are unaffected by the federal RFG 
requirements (although all refiners of conventional gasoline are 
subject to the anti-dumping requirements). Moreover, all businesses, 
large and small, maintain the option to produce conventional gasoline 
to be sold in areas not obligated by the Act to receive RFG or those 
areas which have not chosen to opt into the RFG program. A complete 
analysis of the effect of the RFG/anti-dumping regulations on small 
businesses is contained in the Regulatory Flexibility Analysis which 
was prepared for the RFG and anti-dumping rulemaking, and can be found 
in the docket for that rulemaking. The docket number is: EPA Air Docket 
A-92-12.
    Today's rule will affect only those refiners, importers or blenders 
of gasoline that choose to produce or import RFG for sale in the 
Phoenix ozone nonattainment area, and gasoline distributors and retail 
stations in those areas. As discussed above, EPA determined that, 
because of their location, the vast majority of small refiners would be 
unaffected by the RFG requirements. For the same reason, most small 
refiners will be unaffected by today's action. Other small entities, 
such as gasoline distributors and retail stations located in Phoenix, 
which will become a covered area as a result of today's action, will be 
subject to the same requirements as those small entities which are 
located in current RFG covered areas. The Agency did not find the RFG 
regulations to significantly affect these entities.

VIII. Executive Order 12866

    Under Executive Order 12866,2 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:
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    \2\ See 58 FR 51735 (October 4, 1993).
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    (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.3
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    \3\ Id. at section 3(f)(1)-(4).
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    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. Unfunded Mandates

    Under Section 202 of the Unfunded Mandates Reform Act of 1995 
(``UMRA''), Public Law 104-4, EPA must prepare a budgetary impact 
statement to accompany any general notice of proposed rulemaking or 
final rule that includes a Federal mandate which may result in 
estimated costs to State, local, or tribal governments in the 
aggregate, or to the private sector, of $100 million or more in any one 
year. Under Section 205, for any rule subject to Section 202 EPA 
generally must select the least costly, most cost-effective, or least 
burdensome alternative that achieves the objectives of the rule and is 
consistent with statutory requirements. Under Section 203, before 
establishing any regulatory requirements that may significantly or 
uniquely affect small governments, EPA must take steps to inform and 
advise small governments of the requirements and enable them to provide 
input.
    EPA has determined that today's rule does not trigger the 
requirements of UMRA. The rule does not include a Federal mandate that 
may result in estimated annual costs to State, local or tribal 
governments in the aggregate, or to the private sector, of $100 million 
or more, and it does not establish regulatory requirements that may 
significantly or uniquely affect small governments.

X. Submission to Congress

    Under 5 U.S.C. 801(a)(1)(A) as added 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 5 
U.S.C. 804(2).

List of Subjects in 40 CFR Part 80

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

    Dated: February 7, 1997.
Carol M. Browner,
Administrator.

    40 CFR part 80 is amended as follows:

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

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

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

    2. Section 80.70 is amended by adding paragraph (m) to read as 
follows:


Sec. 80.70  Covered areas.

* * * * *
    (m) The prohibitions of section 211(k)(5) will apply to all persons 
other than retailers and wholesale purchaser-consumers June 1, 1997. 
The prohibitions of section 211(k)(5) will apply to retailers and 
wholesale purchaser-consumers July 1, 1997. As of the effective date 
for retailers and wholesale purchaser-consumers, the Phoenix, Arizona 
ozone nonattainment area is a covered area. The geographical extent of 
the covered area listed in this paragraph shall be the nonattainment 
boundaries for the Phoenix ozone nonattainment area as specified in 40 
CFR 81.303.

[FR Doc. 97-3926 Filed 2-14-97; 8:45 am]
BILLING CODE 6560-50-P