[Federal Register Volume 62, Number 133 (Friday, July 11, 1997)]
[Proposed Rules]
[Pages 37338-37406]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-17029]



[[Page 37337]]

_______________________________________________________________________

Part II





Environmental Protection Agency





_______________________________________________________________________



40 CFR Part 80



Regulation of Fuels and Fuel Additives: Modifications to Standards and 
Requirements for Reformulated and Conventional Gasoline; Proposed Rule

  Federal Register / Vol. 62, No. 133 / Friday, July 11, 1997 / 
Proposed Rules  

[[Page 37338]]



ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[FRL 5850-6]
RIN 2060-AG76


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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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

SUMMARY: Through the amended Clean Air Act of 1990, Congress mandated 
that EPA promulgate regulations requiring that gasoline sold in certain 
areas be reformulated to reduce vehicle emissions of toxic and ozone-
forming compounds. The EPA published rules for the certification and 
enforcement of reformulated gasoline (RFG) and provisions for non-
reformulated or conventional gasoline on February 16, 1994.
    Based on experience gained since the promulgation of these 
regulations, EPA is proposing a variety of changes to the regulations 
relating to emissions standards, emissions models, compliance related 
requirements and enforcement provisions. The proposed changes involve 
both the reformulated and conventional gasoline programs. Many of the 
changes codify guidance issued by the Agency since the initial adoption 
of these gasoline programs. These changes are in the nature of minor 
adjustments to the structure of these programs. The emissions benefits 
achieved from reformulated gasoline will not be reduced.

DATES: The comment period on this proposed action will close August 11, 
1997, unless a hearing is requested, in which case the comment period 
will close 30 days after the close of the public hearing. EPA will 
conduct a hearing (date and location to be announced) if a request for 
such is received by July 18, 1997.

ADDRESSES: Written comments on this proposed action should be addressed 
to Public Docket No. A-97-03, Waterside Mall (Room M-1500), 
Environmental Protection Agency, Air Docket Section, 401 M Street, SW, 
Washington, DC 20460. The Agency requests that commenters also send a 
copy of any comments to Marilyn Bennett, U.S. Environmental Protection 
Agency, Office of Air and Radiation, at the address listed in the For 
Further Information Contact section. Those wishing to notify EPA of 
their intent to submit adverse comment or request an opportunity for a 
public hearing on this action should contact Marilyn Bennett at (202) 
233-9006. Materials relevant to the final rule establishing standards 
for reformulated gasoline and anti-dumping standards for conventional 
gasoline are contained in Public Dockets--A-92-01 and A-92-12, and are 
incorporated by reference.
    The preamble, regulatory language and regulatory support document 
are also available electronically from the EPA Internet Web 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. The official Federal Register version is made available on 
the day of publication on the primary Internet sites listed below. The 
EPA Office of Mobile Sources also publishes these notices on the 
secondary Web site listed below and on the TTN BBS.
Internet (Web)
    http://www.epa.gov/docs/fedrgstr/EPA-AIR/
    (either select desired date or use Search feature)
    http://www.epa.gov/OMSWWW/
    (look in What's New or under the specific rulemaking topic)
TTN BBS: 919-541-5742
    (1200-14400 bps, no parity, 8 data bits, 1 stop bit)
    Voice Helpline: 919-541-5384
    Off-line: Mondays from 8 am to 12 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
    (Alerts display a chronological list of recent documents)  
Rulemaking & Reporting

    At this point, choose the topic (e.g., Fuels) and subtopic (e.g., 
Reformulated Gasoline) of the rulemaking, and the system will list all 
available files in the chosen category in date order with brief 
descriptions. To download a file, type the letter ``D'' and hit your 
Enter key. Then select a transfer protocol that is supported by the 
terminal software on your own computer, and pick the appropriate 
command in your own software to receive the file using that same 
protocol. After getting the files you want onto your computer, you can 
quit the TTN BBS 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.

FOR FURTHER INFORMATION CONTACT: Marilyn Bennett, Fuels and Energy 
Division, U.S. EPA, 401 M Street, SW (6406J), Washington, DC 20460. 
Telephone: (202) 233-9006.

SUPPLEMENTARY INFORMATION:

Regulated Entities

    Regulated categories and entities potentially affected by this 
action include:

------------------------------------------------------------------------
               Category                  Examples of regulated  entities
------------------------------------------------------------------------
Industry..............................  Refiners, importers, and        
                                         distributors of motor vehicle  
                                         fuel; motor vehicle fuel retail
                                         outlets and wholesale purchaser-
                                         consumer facilities; facilities
                                         that act as independent        
                                         laboratories.                  
------------------------------------------------------------------------

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 be potentially regulated by this action. Other types of entities 
not listed in the table could also be regulated. To determine whether 
your entity is regulated by this action, you should carefully examine 
the applicability criteria of part 80, subparts D, E and F, of title 40 
of the Code of Federal Regulations. If you have questions regarding 
applicability of this action to a particular entity, consult the person 
listed in the preceding FOR FURTHER INFORMATION CONTACT section.
    Today's preamble explains the basis for the regulatory changes and 
the purpose of the proposed rule. The remainder of this preamble is 
organized into the following sections:

I. Corrections of Typographical Errors and Minor Revisions
II. General Fuels Provisions
III. RFG and Anti-dumping Standards/Models
IV. RFG Compliance Requirements
V. Enforcement
VI. Anti-dumping Requirements
VII. Attest Engagements

[[Page 37339]]

VIII. Environmental and Economic Impacts
IX. Public Participation
X. Regulatory Flexibility
XI. Executive Order 12866
XII. Paperwork Reduction Act
XIII. Unfunded Mandates Act
XIV. Statutory Authority

I. Corrections of Typographical Errors and Minor Revisions

Sec.  80.2(w)................  The reference to the cetane index test   
                                method is removed and added as Sec.     
                                80.3(e). As a replacement, a definition 
                                is proposed for ``previously certified  
                                gasoline'' to mean RFG and conventional 
                                gasoline that has been produced or      
                                imported in conformance with applicable 
                                requirements and included in the        
                                refinery, oxygenate blender or importer 
                                compliance calculations.                
Sec.  80.2(y)................  The reference to the sulfur content test 
                                method is removed and added as Sec.     
                                80.3(f). This section is revised to     
                                conform to the sulfur test method in    
                                Sec.  80.46(a).                         
Sec.  80.2(z)................  The reference to the aromatics content   
                                test method is removed and added as Sec.
                                 80.3(g). This section is revised to    
                                limit the test method to use for diesel 
                                fuel only to avoid conflict with the    
                                test method for aromatics content of RFG
                                in Sec.  80.46(f).                      
Sec.  80.2(ee)...............  Revises the definition of reformulated   
                                gasoline to delete the requirement for a
                                gasoline marker under Sec.  80.82.      
Sec.  80.2(gg)...............  Revises definition of gasoline ``batch'' 
                                to make this definition apply to        
                                conventional gasoline as well as to RFG.
Sec.  80.41(d)...............  Revises chart to replace ``32.6'' for VOC per-gallon minimum    
                                reduction with ``32.6'' and  
                                replace ``-2.5'' with ``-2.5'' for per-gallon minimum NOX
                                performance reduction (percent).        
Sec.  80.45(c)(1)(iv)(B).....  Corrects several small typographical     
                                errors in both the Phase I and Phase II 
                                equations.                              
Sec.  80.45(c)(1)(iv)(D)(12).  Corrects typographical error by changing 
                                ``(E300 X 72 percent)'' to ``(E300--72  
                                percent).''                             
Sec.  80.45 (c)(1)(iv)(D)      Corrects typographical error by changing 
 (13).                          Phase I coefficients to Phase II        
                                coefficients, i.e. change ``80.32 +     
                                (0.390 X ARO)'' to ``79.75 + (0.385 X   
                                ARO).''                                 
Sec.  80.45(d)(1)(iv)(B).....  Corrects typographical errors to the     
                                equation.                               
Sec.  80.45(f)(1)(i).........  Corrects the entry for aromatics         
                                ``acceptable range'' to read ``0.0--55.0
                                volume percent.''                       
Sec.  80.49(a)...............  Corrects typographical error. There is a 
                                reference to section 80.43(c), which is 
                                incorrect. The proper reference is to   
                                section 80.49(a)(5)(i).                 
Sec.  80.49(a)(1)............  Corrects typographical error in formula  
                                at the bottom of the new parameter under
                                Fuel 2. Changes from ``C+B/2'' to       
                                ``(C+B)/2.''                            
Sec.  80.49(a)(3)............  Corrects typographical error. There is a 
                                reference to Sec.  80.43(c), which is   
                                incorrect. The proper reference is to   
                                Sec.  80.49(a)(5)(i).                   
Sec.  80.49(b)...............  Corrects typographical error. There is a 
                                reference to Sec.  80.43(c), which is   
                                incorrect. The proper reference is to   
                                Sec.  80.49(a)(5)(i).                   
Sec.  80.50(a)(2)............  Corrects reference to ``extension fuels  
                                per the requirements of Sec.  80.49(a)''
                                to read ``extension fuels per the       
                                requirements of Sec.  80.49(b).''       
Sec.  80.65(e)(2)(ii)(B).....  Revises to apply to importers as well as 
                                refiners.                               
Sec.  80.65(g)...............  Revises to delete heading: ``Marking of  
                                conventional gasoline.''                
Sec.  80.68(b)(2)(ii)........  Revises the word ``area'' to read        
                                ``area(s)'' to clarify the application  
                                of the equation to a situation in which 
                                more than one area fails a survey or    
                                survey series in a single year.         
Sec.  80.69(a)(6)(iv)........  Revises to add reference to Sec.         
                                80.69(e)(2).                            
Sec.  80.69(e)...............  Revises to clarify reference by removing 
                                ``who obtains any RBOB in any gasoline  
                                delivery truck'' and adding ``other than
                                a terminal storage tank blender         
                                specified in Sec.  80.69(c)'.           
Sec.  80.69(e)(2)(i)(A)......  Revises to add the word ``to.''          
Sec.  80.69(e)(2)(v).........  Corrects reference to Sec.               
                                80.70(b)(2)(i). The correct reference is
                                to Sec.  80.65(e)(2)(i).                
Sec.  80.75(a)...............  Revises to require refiners, importers,  
                                and oxygenate blenders to include       
                                notification to EPA of per-gallon versus
                                average election with the first         
                                quarterly reports submitted each year.  
Sec.  80.75(a)(3)............  Revises to add a new Sec.  80.75(a)(3)   
                                which provides a mathematical equation  
                                for converting weight percent oxygen    
                                from an oxygenate to volume percent     
                                oxygenate.                              
Sec.  80.77(c)...............  Revises to add reference to RBOB.        
Sec.  80.77(f)...............  Revises to add reference to RBOB.        
Sec.  80.128(e)(2)...........  Revises by changing reference from Sec.  
                                80.69(a)(9) to Sec.  80.69(a)(2).       
                                                                        

II. General Fuels Provisions

A. Test Methods (Sec. 80.3; RFG Test Methods Sec. 80.46)

1. Replacement of Lead and Phosphorus Test Methods with Industry 
Standard Test Methods (Secs. 80.3 (a) and (b))
    40 CFR part 80, appendices A and B, specify the test methods that 
are used for determining, respectively, the phosphorus content and the 
lead content of gasoline. Today's proposal would remove appendices A 
and B and add Secs. 80.3 (a) and (b) which would require the use of 
ASTM method D 3231-94 for phosphorus and methods D 3237-90 or D 5059-92 
for lead. The phosphorus and lead test methods are used primarily to 
determine compliance with the standards under Secs. 80.22 and 80.23, 
dealing with the unleaded gasoline program. Also, under 
Sec. 80.41(h)(1), RFG may contain no heavy metals. As a result, the 
proposed lead test method would be used for determining the presence of 
this heavy metal in RFG.
    The test methods in appendices A and B of 40 CFR part 80 originally 
were adopted from ASTM standard test methods. Over time, however, ASTM 
has updated their test methods, while EPA has not. EPA believes the 
current ASTM test methods are equivalent to the methods currently in 
the regulations, and are more consistent with the test methods 
regulated parties normally use for commercial purposes. As a result, 
the proposed test methods would be appropriate for determining 
compliance with the provisions of 40 CFR part 80.
    EPA believes there would be little additional burden on the 
regulated industry if the proposed phosphorus and lead test methods 
were adopted. Initially, EPA understands that the proposed test methods 
are the current industry standard test methods, so most gasoline 
testing laboratories already are equipped to conduct the proposed test

[[Page 37340]]

methods. In addition, there is no requirement for regulated parties to 
test their gasoline for phosphorus or lead under either the unleaded 
gasoline or the RFG regulations, so parties would not be obligated to 
use the proposed test methods at all. Rather, the phosphorus and lead 
test methods in the regulations are used by EPA to determine if 
gasoline meets standards for these metals. EPA or a regulated party 
also could use non-regulatory phosphorus or lead test methods. However, 
in an enforcement proceeding, the results from non-regulatory test 
methods would only constitute evidence of the results that would have 
been obtained if the regulatory test method had been conducted on the 
gasoline at issue.
2. Reformulated Gasoline Test Methods (Secs. 80.46 (a) Through (g))
    In Sec. 80.46, test methods were specified for the measurement of 
the regulated properties of reformulated gasoline. Many of the test 
methods designated in the original rule were consensus standards, 
prepared and maintained by ASTM. Since the original issuance of the 
rule, some of these methods have been updated. EPA is now proposing to 
replace the current regulatory methods with the updated versions of 
these methods for the measurement of sulfur, olefins, and distillation 
parameters. In addition, EPA is proposing an alternative test method 
(ASTM D 5453-93) for determining the sulfur content in conventional 
gasoline until September 1, 1998. This proposed alternative test method 
is discussed in Section VI.B.6. The proposed updated methods all are 
finally approved ASTM test methods. In addition, ASTM has developed a 
method (ASTM D 5599-95) that is the same as the procedure for the 
measurement of oxygenates at Secs. 80.46(g) (1) through (8), and EPA 
proposes to replace Secs. 80.46(g) (1) through (8) with a reference to 
the ASTM method. For the measurement of RVP, EPA proposes to eliminate 
the appendix containing EPA Method 3 (appendix E), and designate ASTM D 
5191-96 as the required method, with the exception that the correlation 
equation as described in EPA Method 3 must be used in place of the 
correlation equation described in ASTM D 5191-96. ASTM D 5191-96 is 
identical to the RVP test method in appendix E when the correlation 
equation from EPA Method 3 is used with the ASTM method. In all cases, 
these changes do not amount to a deviation in method, or significant 
change in procedure. Most of the ASTM changes revolve around 
improvements in quality statements. The inclusion of ASTM D 5599-95 for 
oxygenates is the result of ASTM preparing a test method that is 
consistent with that previously defined in the Federal Register.
    The test method previously designated for benzene, ASTM D 3606, has 
been updated since the original publication of the rule. However, the 
parameters must be adjusted to allow for the resolution of ethanol and 
methanol from the benzene. In addition, the EPA GC/MS method has been 
demonstrated through ASTM round-robin testing to be an equivalent 
method for the measurement of benzene. Since the use of the EPA GC/MS 
method would allow two parameters (benzene and aromatics) to be 
performed with a single test, EPA believes the use of the EPA GC/MA 
method for the measurement of benzene would result in a reduced burden 
to the regulated industry, and, therefore, is proposing to allow its 
use as an alternate test procedure for the measurement of benzene in 
gasoline.
3. Butane Test Methods (Sec. 80.46(h))
    Blendstocks require the same full set of parameter measurements as 
reformulated gasoline, since final properties must be extrapolated for 
all final blends. When butane designated for blending must be tested, 
the designated methods are generally not applicable, since the 
properties for butane typically fall outside the scope of the methods. 
Therefore, EPA is proposing to designate several test methods 
specifically for butane blendstock testing. ASTM D 2163-91 and D 5623-
94 have been identified as suitable methods for the measurement of 
light hydrocarbons and sulfur respectively. The Gas Producers 
Association (GPA) has developed a method for the measurement of benzene 
and aromatics in butane. This method is GPA 2186-95. EPA is not 
proposing to designate a method for measuring olefins in butane. No 
consensus method currently exists for measuring total olefins in butane 
blendstocks. ASTM D 2163-91 will measure the lighter olefins, but not 
any heavier ones in the mix. EPA has identified a proprietary method, 
known as the Wasson ECE 383-01 method, which measures all of the 
olefinic compounds in the blendstock. This method is not a consensus 
standard, but is of the type that would be acceptable, due to its 
ability to measure total olefins.
4. Volatility Test Methods (Secs. 80.3 (c) and (d))
    As discussed above, for the measurement of RVP, EPA proposes to 
eliminate the appendix containing EPA Method 3 (appendix E) and 
designate ASTM D 5191-96 as the regulatory method, with the exception 
that the correlation equation as described in EPA Method 3 must be used 
in place of the correlation equation described in ASTM D 5191-96.
    The measurement of alcohols, especially ethanol, for the volatility 
rule has been described in detail in appendix F of 40 CFR part 80. In 
this appendix, Method 1 describes a water extraction method, and Method 
2 details a chromatographic procedure (an older version of ASTM D 
4815.) In an effort to harmonize methods, EPA believes it would reduce 
the testing burden to allow test methods that are consistent with the 
reformulated gasoline rule. As a result, EPA proposes to eliminate 
Appendix F and designate ASTM D 5599-95 as the method for the 
measurement of alcohols in gasoline for the purpose of complying with 
the volatility regulations. Consistent with the reformulated gasoline 
rule, the use of ASTM D 4815-94a will be allowed as an alternate as 
long as this use is allowed under the reformulated gasoline rule.
5. Diesel Fuel Test Methods (Secs. 80.3 (e), (f), and (g))
    When the diesel sulfur rule was originally published by EPA, 
several methods were included for the measurement of the regulated 
properties. Included in these properties are sulfur concentration, 
cetane index, and aromatic content. The current designated test for 
sulfur is ASTM D 2622-87, with D 4294-83 being an allowable alternate. 
As discussed above, EPA proposes to substitute the current regulatory 
test method for sulfur, D 2622-87, with the latest version of this 
method, D 2622-94. EPA also proposes to substitute the alternate method 
for determining sulfur content in diesel fuel, D 4294-83, with the 
latest version, D 4294-90(1995), and substitute the current test method 
for cetane index, ASTM D 976-80, with the latest version, D 976-91.
    The test for aromatics in diesel had been designated to be ASTM D 
1319-88. EPA recognizes that ASTM describes this test as inadequate for 
the measurement of the aromatic content in diesel fuel. For some time, 
EPA has been performing ASTM D 5186 in parallel with D 1319, and found 
D 5186 to be superior in both precision and accuracy. The primary 
difficulty in changing from the use of D 1319 to D 5186 to measure 
compliance lies in the units reported by the two methods. The 
regulation specifies a limit on the aromatic content in volume per-
cent, coincidentally the same units reported

[[Page 37341]]

by D 1319. Unfortunately, D 5186 reports results in mass per-cent. In 
order to comply with the regulation, these results must be converted to 
volume per-cent. EPA proposes to apply a conversion factor to the 
results. The equation to be used for the conversion of mass per-cent 
diesel aromatics to volume per-cent diesel aromatics is:

Vol% = (Mass% * 0.916) + 1.33

    Where Mass% refers to the output from D 5186-96, the SFC test.
    This equation is identical to that used by CARB in their conversion 
of mass per-cent results to volume per-cent results for the affirmation 
of regulatory limits.
    This change should not impose any additional financial burden on 
industry, since it is not a required test. The option of measuring 
aromatics was originally placed in the rule to allow an alternate to 
the requirement that low sulfur fuels meet a minimum requirement of a 
40 cetane index. The intent was to regulate aromatic content, and it 
was found that some fuels with high napthenic content could actually be 
very low in aromatics, yet still not meet the 40 cetane index level. 
The option to test for aromatic content would only be exercised if a 
fuel fails to meet the required cetane index level, a relatively 
infrequent occurrence.
6. Table of Test Methods
    The following table sets out the test methods currently required 
under the fuels regulations at 40 CFR part 80, and the corresponding 
proposed test methods:

----------------------------------------------------------------------------------------------------------------
               Parameter                           Old test                             New test                
----------------------------------------------------------------------------------------------------------------
Reformulated Gasoline:                                                                                          
    RVP...............................  EPA Method 3..................  ASTM 5191-96, except that equation is as
                                                                         in Method 3.                           
    Benzene...........................  ASTM D3606-92, with exceptions  ASTM D3606-96, also with exceptions. In 
                                         for Methanol and Ethanol.       addition, the use of the EPA GC/MS     
                                                                         Method for the measurement of Benzene  
                                                                         will now be allowed as an alternate.   
    Distillation......................  ASTM D86-90...................  ASTM D86-96.                            
    Aromatics.........................  EPA GC/MS Method (80.46)......  EPA GC/MS Method (80.46) (No Change)    
                                                                         alternate is D1319-95a.                
    Olefins...........................  ASTM D1319-93.................  ASTM D1319-95a.                         
    Sulfur............................  ASTM D2622-92.................  ASTM D2622-94 (ASTM D5453-93 is         
                                                                         alternate for Conventional Gasoline to 
                                                                         9/1/98).                               
    Oxygenates........................  EPA OFID Method (80.46).......  ASTM D5599-95, alternate is D4815*-94a. 
Lead Phase Down:                                                                                                
    Phosphorus........................  Appendix A....................  ASTM D3231-94.                          
    Lead..............................  Appendix B....................  ASTM D3237-90 (Atomic Absorbance) or    
                                                                         D5059-92 (X-ray).                      
Volatility:                                                                                                     
      Alcohol.........................  ..............................  Consistent with Reformulated Gasoline.  
Diesel Sulfur:                                                                                                  
    Sulfur............................  ASTM D2622-87, or D4294-83....  ASTM D2622-94, or D4294-90 (1995).      
    Aromatics.........................  ASTM D1319-88.................  ASTM D5186-96.                          
    Cetane Index......................  ASTM D976-80..................  ASTM D976-91.                           
Blendstock Tests:                                                                                               
    Light Hydrocarbons in Butane......  ..............................  ASTM D2163-91.                          
    Sulfur in Butane..................  ..............................  ASTM D5623-94.                          
    Benzene and Aromatics in Butane...  ..............................  GPA 2186-95.                            
    Olefins in Butane.................  ..............................  Test procedure not specified. Wasson-ECE
                                                                         383-01 is an example of an acceptable  
                                                                         test procedure.                        
----------------------------------------------------------------------------------------------------------------

B. Gasoline and Diesel Fuel Sampling Procedures (Proposed 
Sec. 80.8)

    40 CFR part 80, Appendices D and G, specify sampling procedures for 
gasoline and diesel fuel for all motor vehicle fuel programs under 40 
CFR part 80, including the programs for unleaded gasoline, gasoline 
volatility, diesel sulfur, RFG, and anti-dumping. Today's proposal 
would replace the sampling procedures in appendices D and G with the 
following ASTM standard practices:
     D 4057-95, ``Standard Practice for Manual Sampling of 
Petroleum and Petroleum Products;''
     D 4177-95, ``Standard Practice for Automatic Sampling of 
Petroleum and Petroleum Products;''
     D 5842-95, ``Standard Practice for Sampling and Handling 
of Fuels for Volatility Measurements;'' and
     D 5854-95, ``Standard Practice for Mixing and Handling of 
Liquid Samples of Petroleum and Petroleum Products.''
    Appendices D and G were adopted from the 1981 version of D 4057. 
Over time, however, ASTM has updated D 4057, and these changes are not 
reflected in Appendices D and G. For example, appendix D addresses the 
collection of samples from a ``tap'' in the shell of a petroleum 
storage tank. The current requirement under appendix D, reflective of D 
4057-81, requires that taps extend at least three feet into the storage 
tank. See, para. 11.3.1.1 of appendix D. However, tap extensions are 
necessary only for heavy petroleum products (and not for gasoline and 
diesel fuel), and, furthermore, tap extensions are not possible with 
floating roof storage tanks that are commonly used today. As a result, 
EPA and regulated parties currently agree to waive the tap extension 
requirement on a case-by-case basis. Under D 4057-95 sampling tap 
extensions are not required for light petroleum products such as 
gasoline and diesel fuel, so that if this ASTM procedure were adopted 
the tap extension issue would be resolved for all cases.
    EPA is proposing to adopt three ASTM methods in addition to D 4057-
95 in order to include procedures that address a broad scope of 
sampling situations that are relevant to EPA's motor vehicle fuels 
programs. D 4177-95 deals with automatic sampling of petroleum 
products, which is relevant under the anti-dumping regulations for 
refiners who produce conventional gasoline using an in-line blending 
operation where automatic sampling is necessary. Similarly, D 5842-95 
deals with sampling and sample handling for volatility measurement, 
which is relevant to determining compliance with the volatility 
standards in Sec. 80.27 and the RFG standards in Sec. 80.41. Last, D 
5854-96 deals with the creation of composite samples, which is relevant

[[Page 37342]]

under the RFG and anti-dumping programs in certain situations involving 
imported gasoline where the gasoline from multiple ship compartments is 
treated as a single batch.
    EPA believes it is appropriate to replace Appendices D and G with 
ASTM standard practices. The current ASTM practices reflect up to date 
procedures, which if followed would result in improved sample quality 
for regulatory purposes. In addition, the adoption of industry standard 
procedures would reduce regulatory burden because parties would be able 
to follow their customary practices when meeting regulatory 
requirements.

III. RFG and Anti-Dumping Standards/Models

A. Standards and Requirements for Compliance (Secs. 80.41 and 80.101)

1. Averaging Per-Gallon Minimum Standards for NOX 
(Secs. 80.41 (d) and (f); Sec. 80.68(b)(1)(iv))
    Reduction of NOX emissions is a prominent feature of 
Phase II of the Reformulated Gasoline Program which goes into effect on 
January 1 of 2000 (Phase I provides control at a ``no NOX 
increase'' level). The Phase II standard for refiners choosing to 
comply on average (requiring a 6.8% reduction from baseline during the 
high ozone season) sets the level of NOX emission reduction 
required on average by these refiners. Thus, for refiners who choose to 
average, the averaging standard effectively controls the overall 
environmental benefit contributed to the program by these refiners.
    In addition to the average NOX standards, though, there 
are also per-gallon minimum reduction standards for refiners that 
choose to average (not to be confused with standards for overall 
compliance on a per-gallon basis). The averaging minimum standard in 
Phase II requires that each gallon (batch) of RFG in the high ozone 
season has at least a 3% reduction from the statutory baseline; the 
corresponding Phase I standard holds any increase over statutory 
baseline for a batch to 2.5%. Less stringent minimum standards apply 
outside of the high ozone season in Phase II. The per-gallon minimum 
standards are in addition to the year-long average standard of a 
refinery's output of a given type of RFG and these minimum standards 
set the NOX reduction which must be achieved by each batch 
(and therefore each gallon) of RFG.
    These NOX per-gallon minimum standards were not put in 
place to provide any incremental environmental benefit beyond that 
provided by the average standard, but rather to ensure an even 
distribution of program benefits from area to area and through time. 
This primary reason for the averaging per-gallon minimum standards (for 
NOX and other parameters as well) was discussed in the 
enforcement section of the preamble to the RFG final rule (Section 
VII). An additional but secondary objective of the minimum standard was 
to augment the ability of enforcement authorities to detect non-RFG 
gasoline being illegally sold in RFG areas. For reasons that will be 
discussed more fully below, EPA is proposing to eliminate the per-
gallon minimum standards for NOX and to accomplish the same 
objectives that these standards would have accomplished by 
substantially expanding the number of area-by-area surveys of RFG 
emission performance required to be conducted by refiners choosing to 
average. EPA is not proposing any change to the averaging standard for 
NOX.

The Problem With the Per-Gallon NOX Minimums

    When EPA imposed the per gallon minimum standards, data did not 
exist to adequately assess the variability, within refineries' output, 
of NOX quality or the factors that affect it across all of 
the batches of gasoline produced in a year.
    Representatives of the gasoline refining industry (the American 
Petroleum Institute (API), the National Petroleum Refiners Association 
(NPRA) and representatives of various of their member companies) have 
presented data to EPA 1 showing that NOX 
performance of actual RFG retail samples varies substantially by octane 
grade and from batch to batch 2 within a grade. The 
processes involved in gasoline production result in a broad bimodal 
3 distribution of NOX quality, with premium 
batches showing characteristically lower NOX emissions and 
regular batches, with their higher levels of sulfur and olefins, 
showing higher NOX emissions. 4 These data on 
gasoline produced under the simple model requirements showed a very 
substantial proportion of regular grade RFG samples that would have 
failed to meet the Phase I minimum reduction standard that applies 
beginning in 1998.
---------------------------------------------------------------------------

    \1\ Industry representatives met with EPA personnel on January 
14, 1997 and presented a graphical analysis which can be found in 
the docket for this rulemaking. Docket Number A-97-03, Item Number 
II-E-1.
    \2\ Since these were retail samples, they could not truly 
reflect batch-to-batch variability due to the intermingling of 
gasolines from different batches, and even from different sources, 
in the distribution system.
    \3\ A bimodal distribution here refers to one that has two 
distinct frequency peaks or two values around which a large number 
of batches will gather.
    \4\ Engineering judgment would lead to a conclusion that a broad 
distribution of NOX quality differing markedly between 
premium and regular gasoline grades would exist in the gasoline 
pool. First, NOX quality under EPA's complex model is 
primarily a function of sulfur and olefin content in the gasoline. 
Thus, differences in either of these properties would result in 
differences in NOX quality. Second, in the refinery, 
processes which typically contribute large volumes to the regular 
gasoline grade are often high in sulfur and olefins, whereas 
processes contributing heavily to the premium gasoline pool are 
often very low in olefins and sulfur. For example, the fluid 
catalytic cracker (FCC) unit in a refinery breaks large molecules 
into smaller ones and is the ``workhorse'' of most refineries and 
the largest contributor of any refinery unit to the gasoline pool. 
The gasoline produced by the FCC unit is highly olefinic, and, 
depending upon the crude oil source for the refinery, usually very 
high in sulfur. FCC gasoline also possesses octane quality 
consistent with regular gasoline. For this reason and since regular 
gasoline is typically the highest volume product of U.S. refineries, 
most of the product produced by the FCC is used in the production of 
regular gasoline. On the other hand, premium gasolines, which differ 
from regular grades primarily in the higher octane quality they 
possess, contain lower amounts of FCC streams and higher levels of 
high-octane aromatic streams produced by catalytic reformers. Such 
streams, called reformate, are extremely low in olefins and also 
very low in sulfur. Thus, a much lower level of sulfur and olefin 
content and therefore, better NOX quality, is found in 
the premium pool as compared to the regular pool. (A 1989 study of 
blendstocks used to produce U.S. gasoline found FCC blendstocks 
possessing an average octane quality of 86.4, an average olefin 
content of 29.1 percent, and an average sulfur content of 756 parts 
per million (ppm). The same study found that reformate streams, 
produced by the reformer, possessed octane quality of 92.6, an 
olefin content of less than 1 percent and an average sulfur level of 
55 ppm. See ``NPRA Survey of U.S. Gasoline Quality and U.S. Refining 
Industry Capacity to Produce Reformulated Gasolines--Part A'', 
National Petroleum Refiners Association, 1991 Gasoline Study, 
January, 1991, Docket Number A-97-03, Item Number II-B-1.)
---------------------------------------------------------------------------

    In order to bring these higher NOX batches of regular 
RFG into compliance, the refiners suggested that the industry would 
have to incur substantial additional costs in excess of those 
calculated in EPA's Regulatory Impact Assessment which EPA relied upon 
in adopting the standards for RFG in 1993. That assessment of the costs 
of compliance for NOX was based upon the cost of meeting the 
average standard, not the per-gallon minimum that applies to refineries 
that average, which is the subject of this proposal. They further 
argued that in the absence of a substantial enforcement tolerance to 
account for the uncertainty of measurement (especially of olefin 
levels) in downstream enforcement sampling, the bimodal frequency 
distribution would have to be shifted further than would otherwise be 
required. While the problem created by the NOX minimum would 
already be substantial in Phase I with the 1998 introduction of the 
complex model, the

[[Page 37343]]

refiners suggested that Phase II's tighter minimum standard for 
NOX in the year 2000 would exacerbate an already very 
difficult situation, even given the changes made to refinery processes 
in order to be able to comply with the Phase II average standard.
    The distribution of retail sample data initially presented by the 
refiners in their general meeting with the Agency described the net 
result of the product intermingling that occurs in the gasoline 
distribution system. By describing all of the nation's gasoline taken 
together, these data could suggest the existence of a problem (high 
variability with many samples below the minimum reduction standard), 
but could not indicate much about how widespread the problem is or show 
what types of refineries are likely to be affected. By examining 
historical RFG reporting data,5 EPA was able to confirm the 
general factual basis of the industry analysis. Specifically, the data 
showed a broad distribution of NOX quality with the premium 
batches clustered near the high end (high NOX reductions), 
while regular batches are more spread out with central tendency nearer 
the low end and many batches falling below the Phase I NOX 
minimum. Left unanswered by either the industry-supplied information or 
EPA's own analysis, was the question of whether refiners could exercise 
any control over the variability and shape of the frequency 
distribution that was evident in both data sources. In other words, it 
was not clear what options were available to refineries to remedy the 
problem.
---------------------------------------------------------------------------

    \5\ Data on the characteristics of gasoline batches as they are 
shipped from the refinery are submitted to EPA as part of the 
reporting requirements of the RFG regulations. An aggregated 
analysis that protects the confidentiality of individual refiners' 
data can be found in the docket for this rulemaking. Docket Number 
A-97-03, Item Number II-A-5.
---------------------------------------------------------------------------

    To provide additional insights, EPA and a refinery expert from the 
Department of Energy met separately with individual refiners in order 
to look at batch data from single refineries using differing gasoline 
production approaches. The refineries represented by the companies EPA 
met with comprised a very diverse group. They varied with regard to 
size, general level of technology, control over inputs, historical 
product slate, and other characteristics. EPA focused the agenda for 
these meetings on three basic questions: (1) For each separate 
refinery, what is the batch-to-batch distribution of NOX 
quality by grade and season, (2) what are the causes of the variability 
that is observed in the historical data--which parameters account for 
the variability in NOX, and what caused them to vary the way 
they did, and (3) how do refinery managers plan to meet the 
NOX minimum standards in the absence of a substantial 
enforcement tolerance or regulatory relief.
    The general picture of the broad bimodal distribution of gasoline 
NOX quality by grade that was developed from overall 
industry analyses and examination of our own data was generally 
confirmed in these more detailed meetings.
    As might be expected, individual facilities varied considerably in 
the size of the challenge posed by the NOX minimum standards 
and they expected to address that problem with varying strategies. The 
pattern that emerged from all of these discussions was that refiners 
intend to pursue the least capital-intensive solutions wherever 
possible, even to the extent of incurring substantial additional 
production costs in the short run. Although the strategies articulated 
in these meetings 6 did not precisely conform to the pattern 
expected by the industry associations (shifting the entire distribution 
of NOX quality), they seemed to lead to the same result 
economically--excess costs in producing RFG beyond the costs of making 
the refinery's average conform to the average standard. Any major 
expansion of the RFG program as a result of areas opting into the 
program could further increase the costs of meeting the minimum 
standard.
---------------------------------------------------------------------------

    \6\ Some general examples of the approaches which are likely to 
be used to bring sub-minimum batches above the standard include: 
Finding another use for the poor NOX quality gasoline or 
its components (shifting it to conventional gasoline, if that can be 
done without violating anti-dumping standards, or shifting it to 
other products) and buying conforming RFG on the spot market to take 
its place; reblending the poor NOX quality batches with 
clean blendstocks purchased from the outside to make them conform to 
the minimum; or simply reducing RFG production.
---------------------------------------------------------------------------

Objectives of the NOX Minimum Standards

    The primary purpose of the NOX minimum is to assure an 
even temporal and geographic distribution of the program's 
environmental benefits. To put this more simply, the minimum is 
intended to ensure that no area covered by the RFG program will suffer 
from impaired air quality (possibly resulting in an exceedance of the 
NAAQS for ozone) as a result of a single refinery's shipping a batch of 
high NOX gasoline to an area for which it was a primary 
supplier. An additional, though secondary, purpose of the 
NOX minimum standards is to provide a tool for detecting the 
illegal sale of non-RFG gasoline in areas covered by the program. This 
would work by keeping legitimate RFG above the minimum, while illegally 
sold non-RFG might fall below the standard.
    Avoiding distribution problems. The RFG regulations incorporated 
two mechanisms to avoid the unlikely event of an area being 
shortchanged on NOX quality due to refinery gate averaging--
the minimum standard and the RFG gasoline quality surveys.7 
These surveys were specifically intended to guard against uneven 
distribution of benefits. In the event that the surveys find a covered 
area to have received less than the intended NOX emission 
reduction benefits, the regulations provide for a substantial 
tightening of the average standard--an outcome that would be expensive 
to the industry and one that it will work hard to avoid. This proposal 
includes an increase in the number of surveys to be conducted (an 
additional 20 surveys per year) that should improve the surveillance of 
gasoline quality on an area-by-area basis.
---------------------------------------------------------------------------

    \7\ A program of gasoline quality surveys is required to be 
conducted by refiners that wish to comply on average rather than on 
a per-gallon basis. The surveys must be done by an independent 
contractor in accordance with a statistically sound sampling plan 
approved by EPA. The location and timing of surveys is determined by 
EPA with minimal advance notice to the industry's contractor. If 
survey averages fall short of the criteria set out in the 
regulations, the average standards and/or the minimum standards are 
made more stringent for subsequent years for all of the refineries 
that supplied gasoline to the area(s) where the failure occurred.
---------------------------------------------------------------------------

    Detecting non-conforming gasoline. A detailed examination of 1995 
and 1996 actual batch-by-batch gasoline quality (NOX 
performance) shows that the NOX minimum standard is not a 
very useful tool for detecting contamination of RFG by illegally sold 
conventional gasoline, since many batches of conventional gasoline, 
especially premium grade, are in compliance with the minimum standard. 
Minimum standards for other gasoline characteristics (especially oxygen 
content and benzene levels) provide far superior capability for 
determining if contamination by non-complying gasoline has taken 
place.8 The proposed expansion of the survey program would 
further enhance these enforcement efforts, since analysis results for 
survey samples found to be out of compliance with RFG requirements are 
immediately supplied to EPA's enforcement office.
---------------------------------------------------------------------------

    \8\ Analysis in support of this conclusion has been placed in 
the docket for this rulemaking. Docket Number A-97-03, Item Number 
II-A-6.
---------------------------------------------------------------------------

Conclusions and Proposed Regulatory Actions

    EPA believes, as a result of the investigations discussed above, 
that the averaging minimum standards for NOX

[[Page 37344]]

are likely to be costly to the industry as a whole in both phases of 
the program, and will make the 1998 complex model implementation 
extremely difficult for a portion of existing refineries. With the 
additional costs in question, the overall cost of compliance is likely 
to exceed the cost upon which the standards were based (the cost of 
meeting the average standard) without providing additional 
environmental benefits. By increasing the costs of producing RFG, these 
standards may contribute to a higher cost differential between RFG and 
conventional gasoline and so pose a significant obstacle to smooth 
implementation of Phase II of the program. Since the per-gallon minimum 
standards for NOX do not increase the environmental benefit 
and their purposes can be as easily served by the RFG surveys, EPA 
proposes the elimination of these per-gallon minimum standards.
    Since the RFG surveys provide an alternative tool for accomplishing 
both of the purposes of the NOX per-gallon minimums, it is 
important that the survey program remain adequate to perform these 
tasks. The regulations at Sec. 80.68(b)(1) currently prescribe 50 
surveys beginning in 1998, with adjustments provided for opt-in of 
additional programs and/or potential survey failures. EPA believes that 
20 additional surveys would provide significant additional protection 
of the NOX quality of gasoline in those RFG covered areas 
with limited sources of supply. Accordingly, EPA proposes that the 
number of surveys in the initial schedule (Sec. 80.68(b)(1)) for each 
year beginning in 1998 be expanded by 20. EPA invites comments on this 
proposed change.
2. Clarification That Model Limits Constitute Standards (Proposed 
Sec. 80.41(h)(3) and Sec. 80.78(a)(1)(vi); Revised Sec. 80.101(b)(3))
    Both the simple and the complex models include restrictions on the 
range of parameter values that may be used with these models. See 
Secs. 80.42(c) and 80.45(f) for the simple model limits and the complex 
model limits, respectively. These parameter range limits are included 
because the simple and complex models have not been shown to accurately 
predict emissions when parameter values outside the range limits are 
used. For this reason, Secs. 80.42(c) and 80.45(f) state that the 
models may not be used for fuels with parameter values that are outside 
the valid range limits. The complex model specifies different valid 
range limits for reformulated versus conventional gasoline. Compare 
Sec. 80.45(f)(1)(i) (complex model range limits for reformulated 
gasoline) with Sec. 80.45(f)(1)(ii) (complex model range limits for 
conventional gasoline).
    EPA always has considered the valid range limits to constitute 
standards that apply to reformulated and conventional gasoline. 
Gasoline subject to simple or complex model standards must be evaluated 
for compliance with these standards. Where gasoline has property values 
outside the valid range limits, it cannot be evaluated and, therefore, 
it is unlawful to produce and sell such gasoline.
    Today's proposal would clarify that the valid range limits are 
standards, by citing the valid range limits along with the other 
standards that apply to reformulated and conventional gasoline. In 
addition, EPA is proposing to add a provision to the reformulated 
gasoline prohibitions under Sec. 80.78(a) that addresses the valid 
range limit standards. This prohibition would clarify that the complex 
model valid range limits apply not only to reformulated gasoline when 
produced or imported, but throughout the distribution system as well. 
The complex model valid range limit standards must be applied 
downstream of the refinery or importer because complex model standards 
apply throughout the distribution system, i.e., the VOC and 
NOX minimum per-gallon emissions performance standards. In 
order to evaluate reformulated gasoline for compliance with these 
downstream standards, the gasoline must have parameter values that are 
within the valid range limits.
    EPA is proposing to promulgate the revisions contained in this 
rulemaking under the authority of both sections 211 (c) and (k) of the 
Act, except for the revisions which would include the valid range 
limits as standards under Sec. 80.41 and Sec. 80.101. EPA proposes to 
promulgate the revisions concerning the valid range limits under the 
authority of section 211(k), but not section 211(c). EPA is proposing 
to promulgate the valid range limits as standards solely for the 
purpose of ensuring that the models will accurately predict emissions, 
and not for the independent purpose of achieving emissions reductions 
from the range limits themselves. As a result, EPA believes that it is 
not necessary to promulgate the valid range limits as standards under 
the authority of section 211(c).
3. Effective Dates for Standard Changes Due to Survey Failures 
(Sec. 80.41(p))
    Section 80.41(p) states that when a minimum or maximum per-gallon 
reformulated gasoline standard is changed to be more stringent as a 
result of a survey failure, the effective date for the new standard is 
ninety days after EPA announces the new standard. EPA now believes that 
additional time is necessary in order to ensure an appropriate 
transition to a new standard as a result of the lag time between the 
date refiners and importers begin producing gasoline to a new standard, 
and the date this gasoline displaces the earlier gasoline through the 
distribution system.
    For this reason, EPA is proposing a staged introduction to a new 
per-gallon standard, that results from a survey failure. The dates the 
new standard would be required would be expressed in the number of days 
after the date EPA announces the new standard: 60 days for gasoline 
produced at a refinery or imported by an importer; 120 days for 
facilities downstream of the refinery or importer other than retail 
outlets and wholesale purchaser-consumers; and 150 days for retail 
outlets and wholesale purchaser-consumers. Under the proposed approach 
refiners and importers would have about two months to begin meeting the 
new standard, downstream parties such as terminal operators then would 
have about two months to transition to the new standard after shipments 
of gasoline meeting the new standard begin, and retailers and wholesale 
users would have about one month to transition after terminals must 
begin shipping gasoline meeting the new standard.
    EPA believes the times proposed for these stages are consistent 
with current industry practice for transitioning to new standards, such 
as the transition to meet the summertime high ozone season standards 
each spring. For example, terminals supplying RFG must have gasoline 
that meets the VOC-control standard beginning on May 1 each year, and 
retailers and wholesale purchaser-consumers in RFG areas must meet the 
VOC-control standard beginning about one month later, on June 1.
    Refiners must begin producing VOC-controlled RFG early enough 
before May 1 that the gasoline distribution system through the terminal 
level can transition from non-VOC-controlled gasoline to VOC-controlled 
gasoline by May 1. The date when particular refiners begin producing 
VOC-controlled RFG each year varies depending on factors such as the 
time necessary to transport gasoline from the refinery to the 
terminals, and the rate of turnover at the terminal. However, EPA 
believes that most long-distance distribution systems are able to 
transition within 60 days of the date refiners begin shipping gasoline 
meeting the new standard.

[[Page 37345]]

    EPA is able to enforce the VOC-control standard at refineries based 
on the refiners' batch reports to EPA that identify gasoline batches as 
either VOC-controlled or non-VOC-controlled; the VOC-control standards 
apply only to batches that are identified as VOC-controlled. However, 
there is nothing in the refiners' batch reports to EPA that identifies 
the per-gallon minimum and maximum standards to which the gasoline is 
subject. As a result, EPA must rely on a date certain on which the new 
standard applies at the refinery. Moreover, EPA believes this date must 
be sufficiently earlier than the date the new standard applies at the 
terminals in order to ensure the availability to terminals of gasoline 
meeting the new standard for the terminals' transition. EPA also 
believes that 60 days is an appropriate length of time for terminal 
transitions, based on experience with VOC-control transitions.

B. Complex Model (Sec. 80.45)

1. Proper E300 Value for the Edge Target Fuel for Use in Complex Model 
Extrapolation (Sec. 80.45(c)(1)(iv)(C)(6))
    The Complex Model as described in Sec. 80.45 includes provisions 
for extrapolations beyond the limits of the data upon which the model 
was based. The limits of the data define the ``allowable range'' which 
represents the range of fuel parameters within which the Complex Model 
equations are directly applicable, and outside of which extrapolation 
must be used up to the limits of the model.9 These 
extrapolations take the form of intricate equations and a series of 
conditions for use of those equations. Among other things, the 
conditions associated with extrapolation direct Complex Model users to 
determine properties for an ``edge target fuel.'' The edge target fuel 
is equivalent in all respects to the target fuel, except that no fuel 
parameters are allowed to exceed the limits of the allowable range. In 
effect, the edge target fuel represents the point in the multi-
dimensional fuel parameter space where extrapolation begins.
---------------------------------------------------------------------------

    \9\ The allowable range of the model is, in fact, a combination 
of the limits of the data and additional limitations that may be 
imposed by the existence of extreme, or curve turnover points.
---------------------------------------------------------------------------

    The Complex Model equation for exhaust volatile organic compounds 
(VOC) contained in Sec. 80.45(c)(1) includes a single interactive term. 
This term, the product of E300 and aromatics, necessitates that 
extrapolations involving E300 include a simultaneous evaluation of the 
aromatics level of the target fuel. Thus in paragraph (c)(1)(iv)(C)(6), 
Complex Model users are directed to determine whether the mathematical 
phrase (80.32 + (-.390xARO)) is greater or less than 94, and to set the 
E300 edge target fuel value accordingly. In so doing, users are 
determining whether the aromatics-dependent E300 extrema (i.e. curve 
turnover) point falls beyond the limits of the available data in the 
Complex Model database.
    However, the language in paragraph (c)(1)(iv)(C)(6) is misleading. 
As currently written, the user is directed to set the E300 value of the 
edge target fuel at 94 vol% whenever the value of the phrase (80.32 + 
(0.390xARO)) is greater than 94. The Agency's intention, however, was 
that this step be taken only if the E300 term is being extrapolated. In 
other words, if the target fuel value for E300 falls below the higher 
limit for E300 in the allowable range as defined in Table 6, 
Sec. 80.45(c)(1)(iv), then E300 is not being extrapolated, and the E300 
value of the edge target fuel should be equal to the E300 value of the 
target fuel.
    To correct this problem, the language in Sec. 80.45(c)(1)(iv)(C)(6) 
and its counterpart applicable to Phase II calculations at Sec. 80.45 
(c)(1)(iv)(D)(6) would be changed such that Complex Model users will 
only set the E300 value of the edge target fuel equal to 94 if the 
target fuel value for E300 exceeds the higher limit specified in Table 
6, Sec. 80.45(c)(1)(iv).

IV. RFG Compliance Requirements

A. Sampling of Reformulated and Conventional Gasoline (Proposed 
Sec. 80.47)

    Under Sec. 80.65(e)(1) refiners and importers are required to 
collect a representative sample from each RFG batch produced or 
imported, and to determine the batch properties based upon analysis of 
this sample.10 ``Batch of reformulated gasoline'' is 
currently defined in Sec. 80.2(gg) as ``a quantity of reformulated 
gasoline which is homogeneous with regard to those properties which are 
specified for reformulated gasoline certification.'' Similarly 
Sec. 80.101(i)(1)(i)(A) requires refiners and importers of conventional 
gasoline to collect a representative sample from each batch produced or 
imported, and to determine compliance with the anti-dumping standards 
based upon the batch samples.11
---------------------------------------------------------------------------

    \10\ Under Sec. 80.69(b) oxygenate blenders who meet the oxygen 
standard on average also are required to sample and test each batch 
of RFG produced using RBOB, and the discussion in this preamble 
section applies to such oxygenate blenders in the same manner as for 
refiners of RFG.
    \11\ EPA is proposing several changes relative to the sampling 
of conventional gasoline that are discussed below in section VI.B. 
of this preamble. EPA is also proposing to revise the ``batch'' 
definition in Sec. 80.2(gg) to apply to conventional gasoline and 
not just to RFG. EPA also is proposing to require refiners and 
importers of conventional gasoline to separately test each batch, 
which would eliminate the current option of testing a number of 
batches together using a composite sample.
    In addition, EPA is proposing a definition for ``previously 
certified gasoline'' to mean RFG and conventional gasoline for which 
the refiner, oxygenate blender or importer has met applicable 
requirements and standards and that the refiner, oxygenate blender 
or importer has included or intends to include in the refinery or 
importer compliance calculations.
---------------------------------------------------------------------------

    As a result, refiners and importers are required to collect a 
representative sample of each gasoline batch. However, EPA has not 
previously promulgated requirements for determining when a quantity of 
gasoline is homogeneous so that it qualifies as a batch. Today EPA is 
proposing such requirements for determining batch homogeneity. In 
addition, EPA is proposing procedures whereby an importer of 
reformulated or conventional gasoline would be able to treat as a 
single batch the gasoline contained in multiple compartments of a ship.
    It is important that refiners and importers determine compliance 
with the reformulated and conventional gasoline standards using samples 
collected from quantities of gasoline that are homogeneous in terms of 
the properties relative to these standards. If a quantity of gasoline 
is not homogeneous, a sample of that gasoline often will not reflect 
the overall average qualities of the gasoline. For example, when a 
refiner produces gasoline by combining blendstocks having different 
volatilities, unless the tank is thoroughly mixed the gasoline often 
will be horizontally stratified, with the higher volatile blendstocks 
at the top of the tank and the lower volatile blendstocks at the bottom 
of the tank. If a sample is collected of the gasoline at any one spot 
in such a stratified tank the sample only will reflect the properties 
of the gasoline at that strata. Storage tank sampling techniques such 
as ``all level samples'' or ``running samples'' tend to compensate for 
stratified product, but these techniques do not assure a truly 
representative sample.12
---------------------------------------------------------------------------

    \12\ A ``running sample'' of the product contained in a storage 
tank is collected by lowering a sample container from the top of the 
product to the bottom and then raising the container to the top, at 
such a speed that the container is less than full when removed from 
the tank. See, 40 CFR part 80, appendix D, para. 11.2.2.2. An ``all 
levels sample'' is collected by lowering a stoppered container to 
the bottom of the product in a storage tank, removing the stopper 
with a cord or chain, and raising the container to the top at such a 
speed that the container is less than full when removed from the 
tank. See, 40 CFR part 80, Appendix D, para. 11.2.2.1. In theory, 
both of these sampling methods obtain product from all strata in the 
storage tank somewhat in proportion to the size of the strata.

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

[[Page 37346]]

    In the case of RFG, moreover, certain standards must be met on a 
per-gallon basis. If any portion of the RFG in a storage tank violates 
an applicable per-gallon standard, this gasoline portion is out of 
compliance even if the gasoline in the tank would be in compliance if 
fully mixed. For example, consider a refinery storage tank containing 
RFG designated as simple model, VOC controlled for Region 2. If the 
gasoline is stratified by RVP, and the RVP of the upper strata is 
greater than the applicable per-gallon maximum standard of 8.3 pounds 
per square inch (psi),the gasoline in this upper strata would violate 
the applicable per-gallon standard even if the average RVP of the 
gasoline in the tank is less than 8.3 psi.13 A single sample 
from such a stratified tank may not reflect the violation. Even an 
``all levels'' or ``running'' sample of the gasoline in a stratified 
storage tank could yield a test result within the standard because to a 
certain extent such a sample ``averages'' across the strata, which 
would have the effect of masking the violation.
---------------------------------------------------------------------------

    \13\ Per-gallon standards must be met by all portions of the 
gasoline contained in a storage tank in part because the different 
gasoline portions may be distributed without further mixing.
---------------------------------------------------------------------------

    As a result, EPA is proposing that refiners and importers would be 
required to establish that each quantity of reformulated or 
conventional gasoline that will be treated as a batch is homogeneous 
before the batch sample is prepared or analyzed.
    EPA is proposing two options by which the homogeneity of the 
gasoline in a storage tank could be established. Under the first 
option, a refiner would collect three separate samples from the storage 
tank--upper, middle, and lower spot or tap samples. These samples would 
be analyzed for each parameter relevant to applicable standards, and 
the gasoline in the storage tank would be considered homogeneous if the 
test results agree within the ranges specified in Sec. 80.65(e)(2)(i).
    Under the second option for establishing storage tank homogeneity, 
the party would demonstrate that it followed tank mixing procedures 
that can be shown to result in homogeneity. For example, a refiner 
could meet the homogeneity requirement through records that show the 
tank mixing procedures used for a batch (tank size and type, volume of 
gasoline, the type of tank mixers, the mode of mixer operation if 
appropriate, and the duration of mixer operation), together with 
historic sampling and testing records demonstrate these procedures 
result in complete mixing.
    Under this second storage tank option, success of the mixing 
procedure must still be confirmed for each batch. However, instead of 
requiring analysis for each parameter relevant to applicable standards, 
only API gravity analysis of upper, middle, and lower spot or tap 
samples would be required. The gasoline would be considered homogeneous 
under this option if the demonstrated mixing procedure was performed, 
and the API gravity values for the upper, middle, and lower samples do 
not differ by more than 0.3 deg. API. Where the configuration of a 
storage tank does not permit the collection of upper, middle, and lower 
spot or tap samples, the API gravity analysis to confirm the success of 
the mixing procedure would be waived.
    EPA also is proposing procedures whereby an importer would be able 
to demonstrate the gasoline in multiple compartments of a marine vessel 
is homogeneous. The importer would collect a ``running'' sample from 
each compartment and analyze the samples for each parameter relevant to 
applicable standards. The vessel's gasoline would be homogeneous and 
could be treated as a batch if the results agree within the ranges 
specified in Sec. 80.65(e)(2)(i).
    EPA is proposing that for purposes of establishing homogeneity a 
party could use test methods other than the methods specified in 
Sec. 80.46. The methods in Sec. 80.46 would still be used to establish 
the batch properties for ``certifying'' a batch.
    EPA also is proposing that in the case of RFG, the gasoline 
contained in a storage tank or marine vessel would not be considered 
homogeneous if any sample collected to establish homogeneity has a test 
result that exceeds an applicable per-gallon standard. Thus, in the 
case of standards a refiner or importer is meeting on a per-gallon 
basis no test result could violate the per-gallon standard, and in the 
case of standards being met on average no test result could violate an 
applicable per-gallon minimum or maximum standard.
    EPA is proposing additional options by which an importer could 
treat the gasoline imported by marine vessel as a single batch without 
determining the homogeneity of the gasoline. RFG contained in multiple 
compartments of a marine vessel could be certified as a single batch 
using a volume weighted composite of samples collected from the 
compartments if the entire contents of these compartments is 
transferred into a single shore tank. EPA is proposing this option 
because it is likely the gasoline from multiple vessel compartments is 
completely mixed, i.e., becomes homogeneous, through the process of 
being transferred into a shore tank.
    Under today's proposal importers also would be allowed to use 
composite samples to certify as a single batch the RFG imported by 
marine vessel where the gasoline is off-loaded into multiple shore 
storage tanks. Under this option, however, the importer would be 
required to demonstrate that the RFG off-loaded into each shore tank 
separately meets all applicable per-gallon standards, without regard to 
any gasoline contained in the storage tank prior off-loading the 
imported gasoline (or, ``heel''). Thus, the importer would be required 
to sample and test the tank heel prior to off-loading the imported 
gasoline and the tank contents after the imported gasoline has been 
added, and to mathematically calculate the properties of the imported 
gasoline added to the tank.
    EPA is proposing that imported conventional gasoline contained in 
multiple compartments of a marine vessel could be tested using a volume 
weighted composite of samples collected from the compartments with one 
limitation. There are no per-gallon standards associated with 
conventional gasoline (other than the complex model limit standards, as 
is discussed in section III.A.1. of this Preamble), and, as a result, 
there are no proposed requirements to separately test vessel 
compartment or shore tanks. However, EPA is proposing that each 
separate grade of conventional gasoline on a marine vessel (e.g., 
regular, premium) must be treated as a separate batch. EPA believes 
that, in general, there is greater variability in the properties of 
gasolines of different grades, than of gasolines of the same grade. The 
proposed grade limitation on marine vessel compositing for conventional 
gasoline would constitute some limit on the range of gasoline 
properties that could be included in a single composite sample, which 
EPA believes would improve the quality of composite samples. EPA 
requests comment on this proposed limitation on the use of composite 
samples of imported conventional gasoline.

C. General Requirements (Sec. 80.65)

1. Assignment of Batch Numbers (Sec. 80.65(d)(3))
    Section 80.65(d)(3) requires refiners and importers to assign batch 
numbers to batches of RFG, RBOB, conventional gasoline, and certain 
blendstock that is included in the refiner's compliance

[[Page 37347]]

calculations. The batch numbers are used to identify batches in batch 
reports submitted to EPA under Secs. 80.75(a) and 80.105(a).
    EPA is proposing to revise Sec. 80.65(d)(3) to require oxygenate 
blenders who meet the oxygen standard on average to assign batch 
numbers to RFG batches. This would conform Sec. 80.65(d)(3) with the 
current reporting requirement at Sec. 80.74(a), that oxygenate blenders 
who meet the oxygen standard on average must submit batch reports to 
EPA.
2. Clarifications of Requirement to Test RFG and RBOB 
(Sec. 80.65(e)(1))
    Section 80.65(e)(1) requires refiners and importers to determine 
the properties of each batch of RFG that is produced or imported. 
Gasoline that complies with the standards in Sec. 80.41 is deemed 
certified (Sec. 80.40(a)), hence this process is commonly considered as 
``certifying'' each batch. This determination is required for each 
parameter relevant to the RFG standards. EPA is proposing two 
clarifications of Sec. 80.65(e).
    EPA is proposing to add language to Sec. 80.65(e) to clarify that 
this section applies to RBOB as well as to RFG, and to add a cross 
reference to the requirement in Sec. 80.69(a)(2) that the certified 
properties of RBOB are the properties of the RBOB subsequent to 
downstream blending with oxygenate, based on test results of a sample 
of the RBOB hand blended in the laboratory with the appropriate 
oxygenate type and amount. EPA believes the certification of RBOB 
already is implicit in Sec. 80.65(e), and that refiners and importers 
have been certifying and reporting the properties of RBOB based on the 
analysis results of a hand blend, so that the proposed changes would 
not change current practices.
    EPA also is proposing to clarify that certification testing for RVP 
is necessary only for RFG and RBOB that is designated as VOC 
controlled, because RVP test results are relevant only to VOC 
controlled gasoline. Under the simple model the RVP standard applies 
only to VOC controlled product. RVP test results are an input to the 
complex model only for VOC controlled gasoline; in the case of non-VOC 
controlled gasoline the complex model uses an RVP value of 8.7 psi 
regardless of the actual RVP value of the gasoline. This change to 
Sec. 80.65(e) also would change the reporting requirement for RVP, to 
apply only to VOC controlled RFG and RBOB, because the parameter 
reporting requirement in Sec. 80.75(a)(2)(v)(B) cross references the 
requirements in Sec. 80.65.
3. Weight Percent Range for Total Oxygen Content (Sec. 80.65(e)(2)(i))
    Section 80.65(e)(2)(i) provides a table with ranges for fuel 
properties to be used in comparing the refiner's or importer's test 
results to the test results obtained from the independent laboratory. 
The table at Sec. 80.65(e), however, currently does not include a range 
for total oxygen content. The RFG regulations prescribe a standard for 
weight percent oxygen, and refiners and importers of RFG are required 
to determine and report the total weight percent of oxygen in each 
batch of RFG for compliance purposes. It is appropriate, therefore, to 
include a range for total oxygen content in the table at Sec. 80.65(e) 
for purposes of comparing the refiner's or importer's test results with 
the test results obtained from the independent laboratory. A range for 
total weight percent oxygen content was unintentionally omitted in the 
final rule. As a result, today's rule proposes to add to the table at 
Sec. 80.65(e)(2)(i) a 0.10 wt% range for total oxygen content. This 
range would be in addition to, and not instead of, the volume ranges 
for oxygenates listed in Sec. 80.65(e)(2)(i).
    The 0.10 wt % range for total oxygen was derived by multiplying the 
values of the oxygenates in the table in Sec. 80.65(e)(2)(i) by the 
weight % of the oxygen in the oxygenates and averaging them. EPA 
acknowledges that this approach assumes that the density of these 
oxygenates is similar to gasoline, but believes that any difference in 
density would result in an insignificant increase in the 0.10 wt % 
value. EPA continues to believe that this is an appropriate method of 
determining an appropriate range for total oxygen content between the 
refiner's laboratory and the independent laboratory.
    4. Independent Laboratory Requirements (Sec. 80.65(f); Proposed 
Secs. 80.72, 80.74(h), and 80.75(n))
    Sections 80.65(e) and (f) contain the independent laboratory 
requirements for RFG. Under Sec. 80.65(e)(1) each batch of RFG must be 
analyzed, either by the refiner or importer, or by an independent lab. 
Section 80.65(f) requires each refiner and importer of RFG to designate 
an independent lab that must collect a sample from each batch of RFG. 
The refiner/importer then has the option of having the independent lab 
meet the analysis requirement for all RFG batches (the 100% analysis 
option), or of having the independent lab analyze up to 10% of the 
samples collected to be identified by EPA (the 10% analysis option). 
The 100% analysis option is most often chosen by importers who do not 
operate their own company laboratory.
    EPA is proposing two categories of changes to the independent 
laboratory requirements. The first category of changes would include in 
the regulations the guidance EPA previously has issued regarding the 
identification of samples for analysis by independent labs, and the 
identification of samples the independent lab would send to EPA. The 
second category would slightly narrow the criteria by which a 
laboratory is considered independent. In addition, EPA is seeking 
comment on whether companies that serve as independent laboratories 
under the RFG program should be made directly responsible for properly 
completing the functions of sample collection, analysis, record keeping 
and reporting.
    The first category of changes being proposed relate to the 
identification of samples to be analyzed under the 10% analysis option, 
and the identification of samples to be supplied to EPA under both the 
10% and the 100% analysis options.
    Sections 80.65(f)(1)(ii) (B) and (C) state that under the 10% 
independent analysis option, EPA will identify which samples the 
independent lab must analyze. However, the regulations do not specify 
the mechanism by which EPA identifies these specific samples. EPA 
subsequently provided this sample-identification guidance in 
Reformulated Gasoline and Anti-Dumping Questions and Answers (October 
3, 1994), titled ``Reformulated gasoline program protocol for use by 
independent labs in selecting samples for analysis under the 10% 
independent analysis option, and for identifying samples to ship to 
EPA.'' This protocol has been in use since it was issued, and EPA has 
received no adverse comments from regulated parties regarding this 
protocol. Therefore, EPA proposes to incorporate this protocol in the 
RFG regulations. See proposed Sec. 80.72.
    EPA believes the protocol is an appropriate mechanism for 
identifying samples for analysis by independent labs. The protocol 
provides an automated system to randomly identify for analysis 10% of 
the samples collected by an independent lab in a way that gives 
regulated parties no influence over the sample choice.
    In addition to identifying the independent laboratory samples to be 
analyzed, the proposed protocol also identifies which samples must be 
supplied to EPA, including the minimum sample quantity to supply. The 
requirement to forward samples to EPA applies to both the 10% and the

[[Page 37348]]

100% analysis options, and, therefore, the proposed sample-shipment 
protocol applies to both options. Further, the regulations would 
instruct independent labs to send to EPA any sample that, when tested 
by the independent lab, is found to violate a per-gallon standard that 
applies to the refiner or importer.
    The proposal also would specify the quantity of gasoline that 
independent labs would be required to supply to EPA. The batch sampling 
methodologies of appendix D, in section 12.2, call for sample 
containers of one quart as a minimum. Assuming that a single sample is 
collected in a one quart container and that the container is filled 
only to the minimum 70% level (appendix D requires samples to be 70-85% 
full), this would provide a total of approximately 660mL of gasoline. 
EPA believes one-half of this quantity, or 330mL, is sufficient for a 
laboratory to complete all the testing requirements of the RFG 
regulations. Therefore, where an independent lab analyzes an RFG sample 
that also must be supplied to EPA, at least half the original sample 
volume, or 330mL, would be available for shipment to EPA. Under the 
proposed regulation regarding sample quantity, where the independent 
lab has not analyzed a sample the lab would be required to supply EPA 
with a one quart sample 70-85% full. In the case of a sample that has 
been analyzed by the independent laboratory the lab would be required 
to supply EPA with a minimum sample volume of 330mL.
    The proposed regulations state that samples supplied to EPA should 
be sent to an address to be specified by EPA. This address would be the 
following: United States Environmental Protection Agency, National 
Vehicle and Fuel Emissions Laboratory (NVFEL), Fuels and Chemical 
Analysis Branch 2565 Plymouth Road, Ann Arbor, MI 48105, (313) 668-
4200.
    EPA is not proposing to include this address in the regulations in 
order to facilitate an address change if it becomes necessary. If there 
is an address change for samples shipped to EPA, regulated parties 
would be notified through individual letters, a Federal Register 
notice, or some other appropriate means.
    The second change being proposed would revise one criteria used to 
determine if a laboratory is ``independent.'' Section 
80.65(f)(2)(iii)(A), and proposed Sec. 80.72(b)(2)(I), specify that in 
order to be considered independent a laboratory may ``not be operated 
by any refiner or importer * * *.'' EPA now believes this independence 
requirement is too stringent, and should apply only in the case of 
refiners and importers of RFG.
    Laboratories used to satisfy the independent sampling and testing 
requirements are required to be independent in order to increase the 
credibility of the laboratories' test results, as discussed at 59 FR 
7765 (February 16, 1994). The independent sampling and testing 
requirement applies only to refiners and importers of RFG, however, and 
as a result EPA believes refiners and importers who operate a 
commercial laboratory, but who produce or import no RFG, should be 
allowed to serve as independent laboratories under the RFG program. EPA 
is proposing that this definition of ``independence'' would not apply 
if any RFG is produced or imported within a common corporate structure. 
Thus, if a parent corporation has a subsidiary corporation that is a 
refiner or importer of RFG, no other subsidiary of that parent 
corporation could be considered independent.
    Finally, EPA is seeking comment on whether companies that serve as 
independent laboratories should be made regulated parties under the RFG 
program.
    Section 80.65(f)(3) describes the sample collection and reporting 
procedures, and requires that each refiner or importer shall ``cause 
its designated independent laboratory'' to carry out these procedures. 
Under these procedures the independent lab collects a representative 
sample from the RFG batch, determines the batch volume and other 
information about the batch, reports test results to EPA, and supplies 
samples to EPA upon request. A refiner or importer whose independent 
lab fails to properly carry out these procedures would have failed to 
meet the independent lab requirements, which would constitute a 
violation of the RFG requirements by the refiner or importer.
    EPA requests comments on whether the regulations should be revised 
to provide that a laboratory that undertakes to act as an independent 
lab under the RFG program becomes responsible to properly carry out the 
independent lab requirements, in order to allow better monitoring and 
enforcement of the independent lab requirements. For example, currently 
there is no requirement for independent labs to retain records, which 
creates potential difficulties when EPA attempts to audit and inspect 
independent labs.
    Under this approach, where an independent lab failed to properly 
carry out an independent lab procedure, the independent lab would be 
liable for a violation of the RFG regulations. In addition, the refiner 
or importer for whom the lab is performing the independent lab function 
would have failed to meet the independent lab requirement which would 
constitute a violation of the RFG regulations. Under this approach, the 
independent lab would also be required to retain records and submit 
reports to EPA.
    The authority to regulate laboratories that serve as an independent 
labs under the RFG program is based on Clean Air Act sections 114(a), 
208(a), 211(c), and 211(k). Analysis of RFG by independent laboratories 
is critical to enforcement of the RFG standards, for reasons that are 
discussed at 59 FR 7765 (February 16, 1994). In order for independent 
laboratory sampling and testing to serve a useful purpose, however, the 
independent lab must properly perform the procedures. EPA believes 
independent labs would be more likely to take the steps necessary to 
ensure the required procedures are properly performed if there were 
regulatory consequences that applied directly to the independent 
laboratory, and not just indirectly through sanctions against the 
refiner or importer.
    The current regulations state that a lab that is debarred, 
suspended, or proposed for debarment pursuant to the Governmentwide 
Debarment and Suspension regulations cannot serve as an independent lab 
under the RFG program. An independent lab that fails to properly carry 
out the required procedures could be the subject of a suspension or 
debarment action by EPA. EPA requests comment on whether the suspension 
or debarment sanction is adequate to ensure that independent labs 
properly perform required procedures, in the absence of regulatory 
liability.
    In addition, EPA requests comment on whether regulations should be 
proposed that would require labs to be accredited in order to carry out 
the RFG independent lab requirements. EPA has not previously proposed a 
lab accreditation requirement because of the likelihood that refiners 
and importers would use only labs the refiners and importers are 
convinced are fully capable of properly performing the independent lab 
requirements. However, EPA has received comments that an accreditation 
requirement could result in greater certainty that labs have the 
equipment, training, and internal procedures necessary to properly 
carry out the independent lab requirements, that could assist refiners 
and importers in selecting independent labs.
    Therefore, EPA requests comments on whether lab accreditation would 
be appropriate for the RFG program;

[[Page 37349]]

whether accreditation should be performed by EPA or by an independent 
body, and which independent body or bodies should be considered; the 
accreditation criteria that would be appropriate; the estimated costs 
of an accreditation program; and any other considerations EPA should 
include as part of a lab accreditation proposal.
5. Compliance Audits (Sec. 80.65(h) and Sec. 80.105(c))
    EPA proposes to modify Secs. 80.65(h) and 80.105(c) to make clear 
that the attest requirement applies separately to each refinery 
operated by a refiner, or the gasoline imported by an importer. The 
amended rules clarify EPA's intent that refiners and importers of RFG, 
RBOB, and conventional gasoline, and oxygenate blenders who blend RBOB 
and meet the oxygen standard on average, must perform a separate attest 
engagement for each facility at which such gasoline or product is 
produced. In the process of issuing the Final Rule, EPA considered and 
rejected the suggestion that parties be able to aggregate multiple 
facilities within one attest engagement. Such an aggregation would 
adversely skew the effect of the random sampling protocol described in 
Sec. 80.127 by increasing the population of batches subject to random 
sampling, and by potentially spreading the samples drawn over several 
facilities. The effect, therefore, would be to produce less than the 
95% confidence level for each facility that the attest engagement is 
designed to accomplish.
6. Calculations Involving Previously Certified Gasoline (Sec. 80.65(i); 
Sec. 80.78(a); Sec. 80.101(e))
    Under Secs. 80.65(i) and 80.101(e)(1) refiners are required to 
exclude from a refinery's compliance calculations gasoline that was not 
produced at that refinery and gasoline that was produced at that 
refinery but was included as part of another batch, sometimes called 
``previously certified gasoline,'' or ``PCG.'' These requirements are 
included in order to prevent double counting of PCG. Section 
80.101(g)(3) provides the procedure by which refiners are required to 
calculate the properties of blendstock that are combined with PCG to 
produce conventional gasoline. However, the procedure in 
Sec. 80.101(g)(3) is appropriate only for the simple model anti-dumping 
standards, and there is no procedure specified for excluding PCG from 
RFG compliance calculations. As a result, EPA is proposing procedures 
for excluding PCG from the complex model compliance calculations for 
both RFG and conventional gasoline. In addition, the procedures EPA is 
proposing would allow refiners to use conventional gasoline to produce 
RFG or RBOB, and to reclassify RFG with regard to VOC control and OPRG.
    The procedures EPA is proposing would require refiners to determine 
the volume and properties of each batch of PCG used in the refinery 
operation, along with the designations of the gasoline: RFG, RBOB or 
conventional gasoline; and for RFG, the designations relative to VOC 
control and OPRG. The volume and properties of each PCG batch would be 
reported to EPA as a negative batch using the same designations as when 
received by the refiner. The PCG then would be used by the refiner as 
another blendstock in the refinery operation, and any gasoline produced 
using the PCG would be sampled and tested and included in compliance 
calculations without regard to the PCG content. Gasoline produced using 
the PCG could have the same designations as the original PCG batch, or 
different designations. Thus, the proposed procedures would allow a 
refiner to reclassify conventional gasoline as RFG, or to reclassify 
RFG with regard to VOC control and OPRG.
    Under the current regulations refiners are prohibited from 
reclassifying gasoline in certain ways. For example, Sec. 80.78(a)(10) 
prohibits any person from reclassifying conventional gasoline as RFG. 
However, EPA understands that prohibitions against reclassifying 
gasoline, such as Sec. 80.78(a)(1), constrain the operational 
flexibility for regulated parties, and that such prohibitions should be 
imposed only where necessary. EPA believes the PCG proposal allows 
greater flexibility without compromising the environmental goals or 
effective enforcement of the RFG program, and the PCG proposal is 
appropriate for this reason.
    In the case of standards that are met on average a refiner who uses 
PCG would meet each average standard based upon the net average 
properties of gasoline in the relevant averaging pool, 14 
consisting of the positive volume and properties of all gasoline 
produced in that averaging pool and the negative volume and properties 
of all PCG in that averaging pool. In addition, each averaging pool 
would be required to have a net ``positive'' gasoline volume--each 
averaging pool's volume of gasoline produced would have to be greater 
than the volume of PCG.
---------------------------------------------------------------------------

    \14\  Compliance with each average standard is based on the 
average property or emissions performance of the subset of the 
gasoline produced at a refinery that is relevant to that standard, 
sometimes called an ``averaging pool.'' For example, the averaging 
pool for anti-dumping standards is all conventional gasoline 
produced during an averaging period. In addition, certain RFG 
standards must be separately met by more than one averaging pool. 
For example, under Sec. 80.67(g) the RFG NOx emissions performance 
standard must be met by the averaging pool of all RFG and RBOB that 
is VOC controlled, and separately by the averaging pool of all RFG 
and RBOB that is not VOC controlled.
---------------------------------------------------------------------------

    Consider, for example, Refiner A who has elected to meet the VOC 
emissions performance standard on average at Refinery X. In this 
example a batch of PCG, designated as RFG, VOC controlled for Region 1, 
is used to produce RFG at Refinery X. This PCG would be included as a 
negative batch in Refinery X's VOC emissions performance compliance 
calculations for the ``VOC controlled for Region 1'' averaging pool, 
regardless of whether the PCG was used to produce RFG with this or with 
another designation. 15 Refiner A nevertheless would be 
required to meet the VOC standard for the ``VOC controlled for Region 
1'' averaging pool, and the net volume of gasoline in this averaging 
pool would have to be greater than zero.
---------------------------------------------------------------------------

    \15\  EPA is proposing that a ``negative'' batch would be 
included in the ``Actual Total'' calculation in Sec. 80.67(g)(1)(ii) 
by multiplying the ``Vi'' term (the batch volume) times 
minus 1.
---------------------------------------------------------------------------

    In a case where a refiner has elected to meet a parameter or 
emissions performance standard on a per-gallon basis, and a batch of 
RFG or RBOB is produced using previously certified RFG, the value of 
the per-gallon standard the refiner would be required to meet for this 
batch would be the more stringent of: (1) The per-gallon standard that 
applies to the refinery under Sec. 80.41; or (2) the value for that 
parameter or emissions performance for the previously certified RFG 
used to produce the batch. If previously certified conventional 
gasoline is used, however, use of this PCG would not affect the per-
gallon RFG standards.
    Consider again the example of Refiner A, and in this example 
Refiner A has elected to meet the benzene standard on a per-gallon 
basis at Refinery X. Under Sec. 80.41(c), and in the absence of 
applicable survey ratchets, the benzene per-gallon standard is 1.00 
volume percent (vol%). Also, in this example the batch of previously 
certified RFG has a benzene content of 0.85 vol%. In consequence, any 
RFG produced at Refinery X using any amount of this PCG would be 
subject to a benzene per gallon standard of the more stringent 0.85 
vol%.
    Any previously certified conventional gasoline used to produce RFG 
or conventional gasoline would be included in the compliance 
calculations

[[Page 37350]]

for the gasoline produced. In addition, the previously certified 
conventional gasoline would be included, as a negative batch, in the 
refinery's anti-dumping compliance calculations.
    Finally, any previously certified RFG or conventional gasoline 
would be included as a negative volume for purposes of calculating a 
refinery's compliance baseline under Sec. 80.101(f).
    The proposed approach is summarized in the following table.

----------------------------------------------------------------------------------------------------------------
                                                                           Gasoline produced standards          
 Previously certified gasoline (PCG)    Gasoline produced type -------------------------------------------------
                 type                                                  Per-gallon                Average        
----------------------------------------------------------------------------------------------------------------
RFG or RBOB..........................  RFG....................  More stringent of:        Include PCG in
                                                                   Sec.  80.41    compliance            
                                                                per gallon standards;     calculations as       
                                                                or                        negative batch.       
                                                                   PCG            All RFG pool  
                                                                properties                volumes for average   
                                                                                          standards must be     
                                                                                          positive.             
Conventional Gasoline (CG)...........  RFG or RBOB............  Sec.  80.42 per gallon    Include PCG in
                                                                 standards.               CG compliance         
                                                                                          calculations as       
                                                                                          negative batch.       
                                                                                          CG pool volume
                                                                                          must be positive.     
CG \1\...............................  CG.....................  None...................  (Same as above).       
----------------------------------------------------------------------------------------------------------------
\1\ Includes RFG used to produce CG, because previously certified RFG may be ``downgraded'' to previously       
  certified CG.                                                                                                 

    EPA believes the approach proposed for addressing PCG is 
appropriate because it would provide regulated parties with 
significantly additional flexibility, with no apparent risk of adverse 
environmental consequences. The additional flexibility would result 
from the ability for regulated parties to more easily use previously 
certified gasoline in refinery operations.
    At the time the RFG regulations were promulgated EPA was concerned 
that the overall quality of the various gasoline pools could be 
degraded if refiners were able to reclassify conventional gasoline into 
RFG, or to reclassify certain categories of RFG into other categories. 
For example, if a refiner could reclassify conventional into RFG, it 
would be possible for a refiner to produce very ``clean'' conventional 
gasoline and include this gasoline in its anti-dumping compliance 
calculations, and then reclassify this same gasoline into RFG with very 
little or no additional blending. This would enable the refiner to meet 
the anti-dumping standards using gasoline that, in reality, will be 
used as RFG. One effect of this type of ``gaming'' would be to degrade 
the quality of the conventional gasoline pool, with consequent adverse 
environmental effects.
    As a result of these concerns, EPA included provisions in 
Sec. 80.78 that prohibit parties from combining certain categories of 
gasoline. For example, Sec. 80.78(a)(10) prohibits parties from 
combining RFG with conventional gasoline to produce RFG, in part in 
order to address the ``gaming'' concern described above.
    However, the proposed PCG accounting procedure would allow refiners 
to reclassify conventional gasoline into RFG in a manner that avoids 
the potential for adverse environmental effects from ``gaming.'' This 
is true because reclassifications using PCG may occur only at a 
refinery, and the PCG must be included, as a negative batch, in the 
refinery's compliance calculations for the gasoline pool that 
corresponds to the PCG's designations when first produced. Consider 
again the example of ``gaming'' involving very ``clean'' conventional 
gasoline, described above. Under the PCG proposal any of the very 
``clean'' conventional gasoline used as PCG would have to be included 
in the refinery's anti-dumping compliance calculations as a negative 
batch, this pool would have to meet the anti-dumping standards, and the 
pool volume would have to be positive. This would require the refiner, 
in effect, to produce other conventional gasoline that is equal in 
quantity and quality to very ``clean'' conventional gasoline used as 
PCG, that would offset the loss of this gasoline to the conventional 
gasoline pool. Thus, under the proposal there would be no net change in 
the quality of the conventional gasoline pool.
    This same logic would allow refiners to reclassify RFG with regard 
to VOC control and OPRG.
    In the case of RFG standards that are met on a per-gallon basis, a 
different approach would be used to ensure no degradation in the 
quality of the overall RFG pool as a result of the PCG proposal, since 
averaging calculations are performed only where standards are met on 
average. The approach proposed, as discussed above, would prohibit the 
receiving refiner from degrading the quality of any previously 
certified RFG batch with regard to any standard the receiving refiner 
meets on a per-gallon basis, by setting the per-gallon standard at the 
parameter value of the PCG if it is more stringent than the normal per-
gallon standard.
    As a result, EPA is proposing to specifically allow refiners to 
change the classifications of RFG and conventional gasoline under the 
PCG procedures. In addition, EPA is proposing to revise the 
prohibitions in Sec. 80.78 to reflect the PCG proposal. In proposed 
revisions to Secs. 80.78(a) (5) and (7) parties would be allowed to 
combine RFG or RBOB with blendstock under the terms of the PCG 
proposal.
    Under the proposed PCG procedures it would be important that any 
gasoline claimed as PCG actually is used in a refinery's operation--
otherwise, these procedures could cause a degradation in gasoline 
quality. For example, consider a refinery that received a batch of 
relatively ``dirty'' conventional gasoline. If this gasoline is 
classified as PCG, is used in the production and compliance 
calculations of conventional gasoline, and is added to the anti-dumping 
compliance calculations as a negative batch, there would be no net 
effect of the ``dirty'' PCG on the refinery's overall anti-dumping 
compliance calculations. If, however, the refiner never used the PCG as 
a component for gasoline production, yet included the ``dirty'' PCG as 
a negative batch in compliance calculations, the refinery's 
conventional gasoline pool would appear ``cleaner'' than it was in 
reality.
    As a result, EPA is proposing record keeping and attest 
requirements that would apply in the case of any refiner who uses the 
PCG option, that would include records demonstrating the storage and 
movement of the PCG from the time it is received at the refinery until 
it is used in the production of gasoline. The proposed attest 
procedures would require the auditor to verify that PCG was used to 
produce gasoline at the refinery, and that the PCG batch report to EPA 
is consistent with the refiner's sampling and testing of the PCG, and 
the PCG product transfer documents, when received at the refinery.

[[Page 37351]]

7. Requirements for Imported Gasoline (Sec. 80.65(j))
    Section 80.65(j) ``Requirements for imported gasoline,'' is 
proposed as an addition to the general requirements of Sec. 80.65(e) to 
qualify import certifications. This is in response to importer and 
independent laboratory questions regarding certification of import 
cargoes. The Agency has received questions regarding where and when 
imported gasoline must be certified, and how to treat gasoline destined 
for multiple ports. The Agency has issued policy guidance in response 
to these questions in Reformulated Gasoline and Anti-Dumping Questions 
and Answers. Today's regulatory revision is somewhat more restrictive 
than the Reformulated Gasoline and Anti-Dumping Questions and Answers 
policy guidance, in that batch certification would have to comply with 
the U.S. Customs Service requirements for imported gasoline. The 
original intent of the RFG regulation was to follow the normal import 
industry practices as regulated by the U.S. Customs Service. Some 
allowances were provided in the Reformulated Gasoline and Anti-Dumping 
Questions and Answers guidance that may not conform with the U.S. 
Customs Service regulations and today's proposal reverses any changes 
that may have occurred.
    The first requirement proposed in Sec. 80.65(j) is that batch 
certification sampling be conducted at the time and place permitted 
under U.S. Customs Service regulations, 19 CFR 151.42, and as specified 
in the new Sec. 80.47 Sampling of reformulated and conventional 
gasoline, which is discussed above. Section 80.47 provides specific 
sampling procedures for reformulated and conventional gasoline, and 
refers to Sec. 80.8 Sampling Methods for the general sampling 
procedures that apply.
    This requirement reflects the majority of guidance provided in 
Reformulated Gasoline and Anti-Dumping Questions and Answers. For 
instance, the guidance provides that when an import vessel off-loads 
its cargo at more than one U.S. Customs Service port, then it must 
certify the cargoes off-loaded in the separate ports as different 
batches. The reason for this is that there is no mechanism for EPA to 
enforce or even to find out about possible additions to a certified 
batch when a vessel leaves the port where it was sampled. Today's 
proposal also requires separate batch certifications for separate entry 
ports as governed by the U.S. Customs Service regulations. However, in 
Reformulated Gasoline and Anti-Dumping Questions and Answers, an 
exception to this guidance is provided for multiple ports within a 
given harbor area, such as the New York City harbor area, wherein a 
single batch may be off-loaded at multiple Customs ports within the 
harbor. Today's proposal will not include this exception because it 
does not conform with U.S. Customs Service regulations. EPA relies on 
U.S. Customs Service records for enforcement of the EPA fuels 
regulations. By following the Customs Service regulations EPA maximizes 
the usefulness of this enforcement tool. It also minimizes regulatory 
confusion by conforming the EPA requirements with an existing 
regulatory requirement of the U.S. Customs Service.
    U.S. Customs Service regulations for imported petroleum products 
allow for sampling once an import vessel is docked and ready to off-
load its cargo, although under 19 CFR 151.42, Controls on unlading and 
gauging, each port director independently establishes the methods of 
control. As such, the protocols for sampling an import vessel could 
vary from port to port and could also depend on the type of import 
vessel (for instance, ship, barge, rail car). EPA requests comments on 
the requirement to follow the U.S. Customs Service procedures during 
batch certification. EPA will retract any conflicting guidance that 
remains in Reformulated Gasoline and Anti-Dumping Questions and Answers 
after final revisions to this regulation are promulgated.
    The second and final requirement of proposed Sec. 80.65(j) is that 
batch size could be no larger than a ``line item,'' or a single item of 
merchandise, of an entry summary under U.S. Customs Service 
requirements specified at 19 CFR part 141, subparts D, E, and F, and 
part 142, subparts A and B. These subparts of the Customs Service 
regulations specify the documentation required for import cargoes. This 
documentation must differentiate merchandise by listing or invoicing 
items subject to different duty rates (19 CFR 141.61(e)), and it must 
list or invoice items of varying commercial value separately (19 CFR 
141.86). Therefore, it is EPA's understanding that the Customs Service 
regulations require quantities of gasoline imported on a single vessel 
to be distinguished on the basis of their differences in commercial 
values or potential for differences in commercial value. For instance, 
different grades (segregated in different tanks) would be entered as 
separate line items. Also, gasoline from different sources but of the 
same grade, would normally be entered as separate line items due to 
their potential for the separate sources not meeting the agreed upon 
commercial specifications. Limiting batch size to U.S. Customs Service 
entry ``items'' serves two functions: (1) It adjusts the EPA 
requirements to fit better with the existing regulatory standards of 
the U.S. Customs Service, and (2) it puts a limit on the variations of 
RFG property values within a batch (that could lead to inaccurate 
sample representation as discussed above in the preamble to Sec. 80.47, 
regarding homogeneity determination).

D. Compliance on Average (Sec. 80.67)

1. Transfer of Oxygen and Benzene Credits (Sec. 80.67(h)(1)(iv))
    Section 80.67(h)(1)(iv) permits the transfer of credits directly 
from the refiner, importer, or blender who generates them to the 
refiner, importer, or blender who uses the credits for compliance 
purposes. EPA has received several inquiries with regard to whether 
transfers within the same company are included in the language of this 
section. It is the Agency's intention that the refiner, importer, or 
blender may properly transfer legitimate credits within the company or 
outside of the company. As a result, EPA is proposing to modify 
Sec. 80.67(h)(1)(iv) to clarify that credit transfers may be either 
intercompany or intracompany.

E. Compliance Survey Requirements (Sec. 80.68)

1. Method of Computation for Averages in Survey Series (Secs. 80.68 
(c)(9)(I)(B) and (ii)(B), (c)(10), (c)(11), (c)(12) and (c)(13))
    The RFG surveys were designed to deter and detect situations where 
the flexibility afforded refiners through averaging gasoline 
characteristics at the refinery gate (as opposed to averaging each 
refinery's contribution to the gasoline in a particular covered area) 
results in a covered area obtaining gasoline that on average differs in 
relevant qualities from the average gasoline quality that would occur 
if averaging was required separately for each covered area. The surveys 
are conducted by an industry association according to a statistical 
sampling plan approved by EPA and involve sampling gasoline from retail 
outlets. If the gasoline in an area fails to meet standards set forth 
in the regulations for a particular parameter, the standards for that 
parameter are made more stringent and the number of surveys that must 
be conducted in the following year is increased.

[[Page 37352]]

    Some of the gasoline characteristics evaluated by the survey are 
chiefly of interest because of their role in causing or contributing to 
ambient ozone levels. Surveys for these parameters (e.g., VOC surveys) 
are passed or failed based upon the average of results from a week-long 
survey. Other parameters (like benzene and toxics) are of concern 
because of their cumulative effects over a longer period of time. 
Surveys for these latter characteristics are passed or failed based 
upon the average of a year-long series of one-week surveys. This 
discussion is primarily concerned with how the average of such a series 
of one-week surveys should be computed.
    Under the current regulations, determining the average for each 
survey series 16 involves computation of a simple average 
17 of parameter values from each gasoline sample across all 
of the samples gathered during the year (without any consideration of 
which week-long survey the sample was a part). If all of the individual 
week-long surveys had equal sample sizes, this approach to computation 
would yield as good a representation of the fuel supply as the timing 
and distribution of the week-long surveys throughout the year 
permitted.18 Practical considerations involved in the design 
and conduct of an efficient overall survey operation, though, dictate 
some substantial variations in sample size among the week-long surveys. 
One such effect, and probably the most important one, stems from the 
fact that high-ozone season surveys for ozone precursors must yield a 
confidence interval on the mean small enough to meet the precision 
requirements of the regulations (Sec. 80.68(c)(13)(iii)) for each 
individual survey. Since practical considerations dictate that surveys 
for the various parameters be conducted concurrently (i.e., each 
gasoline sample is analyzed for all parameters covered by the survey 
program), this situation results in larger-than-necessary sample sizes 
in the summer for non-ozone precursor parameters. Outside the summer 
ozone season there is no need to maintain precision standards for each 
individual survey, but only for the annual series of such surveys. In 
the interest of efficiency, the survey manager may be expected to cut 
back on sample sizes during these times at the beginning and end of the 
calendar year. As a result, the simple average substantially 
overrepresents summertime gasoline.
---------------------------------------------------------------------------

    \16\ Sec. 80.68(c)(9)(i)(B) for toxics; (10)(ii) for 
NOX; (11) for benzene; and (12) for oxygen.
    \17\ In the case of toxics, the computation introduces weights 
for the season (high-ozone season or outside of high-ozone season) 
since the statistical model used to compute the emissions is 
different in the two seasons. The weights substantially correct the 
overemphasis on summer that affects other non-ozone-related 
parameters, as discussed in the remainder of the text.
    \18\ While the design for each of the individual week-long 
surveys is probabilistic, a variety of considerations prevent EPA 
from distributing the surveys in a perfectly random manner with 
respect to time. The overall sampling approach for survey series 
thus departs, to some extent, from a purely probabilistic design.
---------------------------------------------------------------------------

    An additional reason for altering the prescribed approach to 
computing averages of series has to do with the weights attached to 
each sample to handle either lack of pre-survey information about an 
individual retail outlet's throughput or the situation where an outlet 
with unusually high throughput is located in a covered area with 
relatively few outlets and is consequently selected into the sample 
with certainty. For both situations the sample is not self-weighting 
and weights must be computed to properly represent the outlet's 
gallonage in the sample. The current approach, the simple average, 
requires that such weights be computed two different ways, once for the 
outlet's inclusion in the week-long survey for ozone-related parameters 
and then again for the annual average computation for non-ozone-related 
parameters. The latter set of weights cannot be computed until the 
year's data collection is complete, leaving some uncertainty up to the 
end of the year as to the status of survey results in areas where 
throughput data are not available for most outlets. This particular 
problem is a characteristic of the sample design approach currently 
being used by the industry survey organization, but that approach or 
some variant of it is likely to be used in any thorough attempt to meet 
the survey requirements in the regulations.
    Both the distortion and the difficulty in computing weights, as 
discussed above, can be eliminated by changing the method by which the 
average of each survey series is computed for a given parameter in a 
given RFG covered area. Instead of averaging all of the measurements on 
individual gasoline samples in the survey series, we are proposing the 
following: (1) That the measurements for each week-long survey in an 
area be averaged, regardless of the sample size, to create a set of 
means of week-long surveys, and then (2) that all of the resulting 
individual survey averages for the area be averaged, themselves, across 
all of the surveys in the series. This approach removes a significant 
source of distortion, simplifies calculations, and improves the 
representativeness of the number that we use to make the important 
decision on whether the gasoline in an area has passed or failed a 
survey series.
2. Clarification of Applicability of Survey Precision Requirements 
(Sec. 80.68(c)(13)(iii))
    The intent of the survey precision requirements set forth in the 
regulations (Sec. 80.68(c)(13)(iii)) was to ensure that errors (in 
either direction) in survey or survey series pass/fail determinations 
would be unlikely. Without these requirements survey managers would be 
able to trade off risk of inappropriate survey failure against survey 
costs, and the environment would not be protected against the increased 
risk of errors in the other direction resulting from insufficient 
sampling.
    Thus the precision requirements should apply to the body of data 
that serves as the basis of each pass/fail determination. As currently 
written, the regulations attach the precision requirements exclusively 
to individual surveys without making it clear that for certain survey 
parameters (for example, oxygen under the simple model) the pass/fail 
determination is made against a year-long series of surveys rather than 
against a single survey. The regulations would therefore be altered to 
attach the precision requirements to the appropriate body of data for 
each determination--to the individual survey where the parameters being 
evaluated are ozone-related and to the survey series for other 
parameters.

F. Downstream Oxygen Blending (Sec. 80.69)

1. Refiner ``Hand-Blending'' of RBOB (Secs. 80.69 (a)(2), (a)(8) and 
(a)(9))
    Under Sec. 80.65(c)(1) refiners and importers are required to meet 
all RFG standards for RBOB, except for the oxygen standard. Under 
Sec. 80.65(c)(2) the oxygen standard for RBOB is met by the oxygenate 
blender. Section 80.69(a)(2) requires refiners and importers to 
determine the non-oxygen properties of RBOB by blending the appropriate 
type and amount of oxygenate with a sample of the RBOB (sometimes 
called a ``hand blend''), and testing the properties of the resulting 
RFG. Under Sec. 80.69(a) an RBOB refiner or importer is allowed to hand 
blend the amount of oxygenate actually used by the oxygenate blender 
only if, inter alia, a quality assurance program is carried out over 
the oxygenate blending operation. In the absence of such a quality 
assurance program, under Sec. 80.69(a)(8) specified types and amounts 
of oxygenate must be hand blended.
    EPA is proposing to revise Sec. 80.69(a)(2) to provide additional 
guidance regarding the type and amount of oxygenate that must be hand 
blended, and to move the hand blending

[[Page 37353]]

instructions from Sec. 80.69(a)(8) to Sec. 80.69(a)(2) in order to 
improve the organization of this section. The additional guidance would 
apply in the case of ``refiner specified'' RBOB (i.e., neither ``any 
oxygenate'' nor ``ether only'') for which the refiner or importer has 
specified options for more than one oxygenate type, or for a range of 
oxygenate volumes. EPA is proposing that the hand blend for such RFG 
must be formulated with the most conservative options. For example, 
where an RBOB specification allowed ethanol and other oxygenates, the 
hand blend would have to be formulated using ethanol, because ethanol, 
as compared with other oxygenates at the same weight percent oxygen, 
generally results in RFG with worse emissions performance.
    Section 80.69(a)(9) specifies that where RBOB is designated as 
``refiner specified'' but the quality assurance program is not 
completed, the hand blend must be formulated with 4.0 vol% ethanol. EPA 
is proposing to merge this paragraph with Sec. 80.69(a)(2).
2. Deletion of Secs. 80.69 (a)(4) and (a)(10)
    Section 80.69(a)(4) requires refiners of RBOB to determine 
properties of the RBOB, which would allow downstream parties to 
determine if any contamination had occurred and thereby ensure that the 
RFG produced using the RBOB would meet applicable standards. Section 
80.69(a)(4) was included in the final reformulated gasoline regulation 
to facilitate quality assurance programs by downstream parties who 
handle RBOB, particularly where RBOB from a specific refinery travels 
as a segregated product. However, EPA believes that, in practice, most 
RBOB is being transported in a fungible manner. As a result, there is 
little value to Sec. 80.69(a)(4) and EPA is proposing to delete this 
requirement. EPA believes that downstream parties may conduct fully 
adequate quality assurance programs over RBOB by hand blending the 
oxygenate type and amount specified for the RBOB and testing the hand 
blended sample to determine compliance with applicable standards.
    Section 80.69(a)(10) requires refiners and importers of RBOB to 
include in the RBOB blending specifications a range of oxygenate types 
and amounts for all RBOB. This requirement was included in the RFG rule 
because at the time the RFG regulations were promulgated it was not 
clear the types of RBOB regulated parties would choose to produce. As a 
result, the regulations were structured to accommodate a wide variety 
of RBOB types. In practice, however, refiners and importers of RBOB 
have chosen to produce only a limited slate of RBOB types, and mainly 
only two types: generic ``ether-only'' RBOB, and RBOB with blending 
instructions that are specific to the refiner and that is shipped in a 
segregated manner. As a result, EPA now believes that Sec. 80.69(a)(10) 
creates a burden on refiners and importers of RBOB, yet provides little 
or no benefit to oxygenate blenders or to the environment. Accordingly, 
EPA is proposing to eliminate this requirement.
3. Refiner Evaluation of RFG Produced by Oxygenate Blender 
(Sec. 80.69(a)(7))
    In the case of a refiner of RBOB conducting oversight over the RFG 
produced at a downstream oxygen blending facility, the refiner of the 
RBOB is required to calculate the non-oxygen parameter values for the 
RFG produced using the RBOB. To do so, the refiner may use either the 
oxygen blending assumptions under Sec. 80.69(a)(2) or the actual oxygen 
blending levels if the refiner meets the contractual and quality 
assurance testing requirements specified in Sec. 80.69(a)(5) through 
(7).
    The quality assurance provisions of Sec. 80.69(a)(7) require the 
refiner to use sampling and testing to ensure that the RFG produced by 
the downstream oxygen blender meets ``applicable standards.'' The 
applicable standards are not further specified in that paragraph.
    EPA is proposing to amend Sec. 80.69(a)(7) to require the refiner 
to evaluate the RFG produced by an oxygenate blender for the oxygenate 
type and oxygen amount, but not for other RFG standards. The principal 
purpose of the Sec. 80.69(a)(7) oversight program is to ensure that the 
oxygenate blender uses the proper type and amount of oxygen, to support 
the refiner's RBOB compliance calculations. Other sections of the 
regulations address quality assurance sampling and testing for all 
standards that apply at all downstream locations, including at 
oxygenate blending facilities. See, for example, Sec. 80.79(c), which 
requires quality assurance sampling and testing as an affirmative 
defense for violations of downstream standards. As a result, EPA 
believes it is most appropriate to require sampling and testing only 
for oxygenate type and amount under Sec. 80.69(a)(7).
4. Oxygenate Blending Instructions (Sec. 80.69(b)(1))
    Under Sec. 80.69(b)(1) oxygenate blenders are required to blend 
with RBOB only the type and amount of oxygenate that is specified for 
the RBOB. EPA is proposing to amend this section to provide additional 
guidance to oxygenate blenders regarding this blending. In addition, 
EPA is proposing regulations that would specify the allowed quantity of 
de minimis, extraneous, oxygenates that may be present in an oxygenate 
blending operation.
    EPA is proposing oxygenate blending requirements under 
Sec. 80.69(b)(1) that are in accord with the RBOB blending 
instructions. In addition, EPA is proposing language that would clarify 
that the minimum oxygenate volume that could be used is the minimum 
volume specification for the RBOB, and that the oxygenate blender is 
free to add additional oxygenate up to the maximum oxygen standard 
under Sec. 80.41(g).
    EPA understands that when RBOB is blended with oxygenate to produce 
RFG at oxygenate blending facilities, the RFG may contain de minimis 
amounts of oxygenate other than the principal oxygenate that is 
blended. These oxygenates may result, for example, when RBOB is shipped 
via pipeline adjacent to RFG (that necessarily would contain 
oxygenate), and these products are imperfectly segregated. Also, when 
an oxygenate is produced it is normal that de minimis amounts of other 
oxygenates also are produced and that remain present in the principal 
oxygenate.
    EPA believes that de minimis quantities of oxygenate that are in 
addition to the principal oxygenate used to produce RFG do not degrade 
the quality of RFG beyond a trivial amount. As a result, EPA is 
proposing regulations that would specifically allow de minimis amounts 
of incidental oxygenate, and that would specify the oxygenate amounts 
that would be considered de minimis. However, EPA is also proposing 
that these incidental oxygenates could not have been intentionally 
blended, because the purpose of this proposed provision is to address 
inadvertent oxygenate anomalies and not to provide additional oxygenate 
blending options.
5. Every-Batch Sampling and Testing Requirement for Splash Blenders 
(Proposed Sec. 80.69(b)(5))
    Under Sec. 80.69(b)(4), an oxygenate blender who meets the oxygen 
standard on average is required to sample and test each batch of RFG 
produced to determine the batch's oxygen content, and assign a number 
to the batch for reporting purposes. This every-batch sampling and 
testing requirement was intended to be applied regardless of

[[Page 37354]]

whether the oxygenate blending is carried out in a large terminal tank 
or through blending in trucks (sometimes called splash blending).
    Every-batch sampling and testing is required in order to give the 
oxygenate blender the best information with which to calculate the 
average oxygen content of RFG produced. EPA believes that oxygenate 
blenders, like other parties who produce RFG, should use adequate 
procedures to determine, with great certainty, the oxygen content of 
RBOB produced. This is particularly true of parties who meet the oxygen 
standard (or other standards) on average, because, in part, any errors 
in calculating average oxygen content could result in the transfer to 
other parties of invalid oxygen credits. Every-batch sampling and 
testing provides this certainty.
    However, EPA believes that this every-batch sampling requirement 
adds significant difficulties in the case of oxygenate splash blenders. 
As a result, EPA is proposing to add Sec. 80.69(b)(5) which would allow 
oxygenate splash blenders to meet the oxygen standard on average 
without conducting every-batch sampling and testing under certain 
conditions. These conditions, which are described below, would require 
the oxygenate blender to use procedures that give certainty about 
oxygen use, and that, taken together, EPA believes are as effective as 
every-batch sampling.
    a. Computer-controlled oxygenate blending required. Under the 
proposal, the oxygenate blending would have to be carried out using 
computer-controlled in-line or sequential blending that operates in 
such a manner that the volumes of oxygenate and RBOB are automatically 
dispensed when a particular grade of gasoline is selected for loading 
into a truck, and where no operator instructions are required regarding 
the oxygenate-RBOB proportions when an individual truck is loaded. 
Thus, this alternative averaging approach would not be available where 
the oxygenate and RBOB are separately metered into a truck, regardless 
of whether the separate metering occurs at the same terminal or at 
different terminals.
    b. Oxygenate blender must operate blending equipment. The oxygenate 
blender would be required to be the party who operates the computer-
controlled in-line or sequential blending equipment. Thus, this 
alternative averaging approach would not be available to a party who 
receives delivery of splash blended RFG into trucks at a terminal if 
the terminal is not operated by that party, regardless of whether the 
receiving party is a registered oxygenate blender.
    c. Compliance calculations. The oxygenate blender would be required 
to base its compliance calculations on the volumes and properties of 
RBOB and oxygenate used during a period no longer than one calendar 
month. In calculating the oxygen content of the RFG produced, the 
oxygenate blender would be required to use either assumptions regarding 
the specific gravities of the oxygenate and RBOB blended, or the 
oxygenate blender would be required to measure the measured specific 
gravities of all oxygenate and RBOB blended in the blending operation. 
Similarly, with regard to the denaturant content of the ethanol (if 
used), an oxygenate blender would be required to use a denaturant 
content of 5 vol% and to support this value with documents from the 
ethanol supplier and a quality assurance program, or the oxygenate 
blender would be required to determine the denaturant content of all 
ethanol used through sampling and testing.
    d. Quality assurance sampling and testing. An oxygenate blender who 
meets the oxygen standard on average using these procedures would be 
required to conduct a program of quality assurance sampling and testing 
of the RFG produced, using the procedures and at the frequencies 
specified under Sec. 80.69(e)(2).
    e. Attest procedures (Secs. 80.129 and 80.134). Under Sec. 80.65(h) 
any oxygenate blender who meets the oxygen standard on average is 
required to commission an annual attest engagement, to be conducted 
under the terms of subpart F. EPA is proposing to add attest procedures 
that would apply in the case of an oxygenate splash blender who meets 
the oxygen standard on average under the proposed procedures. In 
addition, EPA is proposing record keeping requirements that would apply 
to such an oxygenate blender. The records which would be kept are those 
EPA believes are necessary to an EPA auditor, or an independent 
auditor, to ensure the proposed procedures were properly completed.

G. References to Renewable Oxygenate Requirements (Sec. 80.83)

    On August 2, 1994, EPA promulgated regulations that would have 
required the use of ``renewable'' oxygenates to meet a portion of the 
oxygenate standard for RFG. See, 59 FR 39290 (August 2, 1994). However, 
implementation of the renewable oxygenate requirements was stayed 
effective September 13, 1994, as a result of a legal challenge filed in 
the United States Court of Appeals for the DC Circuit. See, 59 FR 60715 
(November 28, 1994). The Court of Appeals ultimately held that the 
renewable oxygenate requirements for RFG are invalid, as they are not 
authorized under sections 211 (c) or (k) of the Clean Air Act. American 
Petroleum Institute v. EPA, 52 F.3rd 1113 (D.C. Cir. 1995).
    This proposal would remove the regulatory language covered by that 
decision.
    The proposed changes relating to renewable oxygenates are shown in 
the following table.

Sec.  80.2(ss)...............  Current paragraph is deleted because it  
                                applies only to renewable oxygenate     
                                requirements. A new paragraph (ss) is   
                                proposed which would define ``tank      
                                truck.''                                
Sec.  80.2(tt)...............  Paragraph is deleted because it applies  
                                only to renewable oxygenate             
                                requirements.                           
Sec.  80.2(uu)...............  Paragraph is deleted because it applies  
                                only to renewable oxygenate             
                                requirements.                           
Sec.  80.65(d)(2)(vi) (C)      Paragraphs are deleted because they apply
 through (E).                   only to renewable oxygenate             
                                requirements.                           
Sec.  80.83..................  Current section is deleted because it    
                                applies only to renewable oxygenate     
                                requirements. A new section 80.83 is    
                                proposed which would provide procedures 
                                for handling gasoline treated as        
                                blendstock.                             
Sec.  80.128(e)(2)...........  Paragraph is revised to delete language  
                                that applies only to renewable oxygenate
                                requirements.                           
Sec.  80.128(e)(6)...........  Paragraph is deleted because it applies  
                                only to renewable oxygenate             
                                requirements.                           
Sec.  80.129(a)..............  Paragraph is revised to delete language  
                                that applies only to renewable oxygenate
                                requirements.                           
Sec.  80.129(d)(3)(iii)......  Paragraph is deleted because it applies  
                                only to renewable oxygenate             
                                requirements.                           
                                                                        


[[Page 37355]]

    In certain cases, the deleted text is replaced by regulatory 
language discussed elsewhere in this proposal.

H. Covered Areas (Sec. 80.70)

    Under Clean Air Act Sec. 211(k)(10)(D), any ozone nonattainment 
area that is reclassified as Severe becomes an RFG covered area. This 
inclusion in the RFG program occurs one year following the date of 
reclassification.
    Effective June 1, 1995, the Sacramento, California, ozone 
nonattainment area was reclassified from Serious to Severe (60 FR 20237 
(April 25, 1995)). Sacramento, therefore, became a covered area as of 
June 1, 1996. Today's proposal would update the list of RFG covered 
areas in Sec. 80.70 to include Sacramento.

I. Record Keeping Requirements (Sec. 80.74)

1. Clarification of test results record keeping (Secs. 80.74(a) and 
80.104(a))
    Sections 80.74(a)(2)(iii) and 80.104(a)(2)(i) require regulated 
parties to keep the results of tests conducted of reformulated and 
conventional gasoline. Parties have asked EPA to clarify this 
requirement, and in particular have asked whether these regulations 
require parties to keep copies of all documents that contain test 
results.
    In order to clarify these requirements, EPA is proposing changes to 
Secs. 80.74(a)(2)(iii) and 80.104(a)(2)(i), that would specify that 
parties are required to keep the original result for each test 
performed. Thus, for example, where a test is performed using a testing 
apparatus that automatically generates a printed document containing 
the test result, this printed document must be kept. Where a test is 
performed using an apparatus that does not generate a print out EPA is 
proposing that the party would be required to keep the first recorded 
test result, such as the chemist's laboratory log book.
    In addition, EPA is proposing that parties would be required to 
keep any other record that contains a test result that is not identical 
to the original result. A non-identical test result could occur where a 
party determines that an original test result is in error because of 
laboratory error, for example. In such a case, the party would be 
required to keep both the original test result and the corrected test 
result. This proposed requirement would allow EPA, during the course of 
an audit or inspection, to review changes that are made to test 
results, to determine if the changes are appropriate.
2. Records To Be Kept by Refiners and Importers (Proposed 
Sec. 80.74(b)(7))
    EPA is proposing to add Sec. 80.74(b)(7) which would require 
retention of records that reflect the physical movement of gasoline 
treated as blendstock (GTAB) from the point of importation to the point 
of blending to produce reformulated gasoline. (See Preamble Section 
V.C. concerning the proposed requirements for GTAB.)
3. Records To Be Kept by Independent Laboratories (Proposed 
Sec. 80.74(h))
    EPA is proposing to add Sec. 80.74(h) which would require 
laboratories serving as independent laboratories under proposed 
Sec. 80.72 to retain records as required under Secs. 80.74(a)(2) and 
80.72(c)(1).

J. Product Transfer Documentation (Secs. 80.77 and 80.106)

    Product transfer documentation (PTD) requirements at Secs. 80.77 
and 80.106 are intended to insure that on each occasion that any person 
transfers custody or title of any RFG, RBOB or conventional gasoline, 
other than when gasoline is sold or dispensed for use in motor vehicles 
at a retail outlet or wholesale-purchaser-consumer facility, the 
transferor produce, and provide to the transferee, documents that 
contain certain information. This information would enable the 
transferee to know enough about the gasoline being received to meet the 
requirements of the RFG program. In addition, the PTD documents, which 
parties are required to keep under Secs. 80.74(a)(1) and 
80.104(a)(2)(vi) and (vii), help EPA identify the source of any 
gasoline found to violate applicable standards.
    EPA today is proposing to amend Secs. 80.77 and 80.106 to clarify 
the following PTD requirements.
1. Introductory Text of Secs. 80.77 and 80.106
    Section 80.77 requires a transferor to provide PTDs to the 
transferee on each occasion involving a transfer of custody or title of 
RFG or RBOB. Section 80.77 does not distinguish between transfers of 
custody and transfers of title concerning the timing necessary for 
transfer of PTD information. EPA, however, believes the two situations 
may differ in this regard. In the case of transfers of custody, the PTD 
information should be transferred before, during, or immediately 
following the actual transfer because the transferee will have custody 
of the gasoline in question and must know how to handle it. However, 
since transfers of title do not always involve the physical handling of 
the gasoline, EPA believes a transferee should have the option to rely 
on the custody transferee to properly handle the gasoline (e.g., where 
the custody transferee is a common carrier pipeline.) Therefore, in the 
case of title transfers, EPA believes there is little need for the 
required PTD information to be transferred at the time of the transfer 
of the product. Accordingly, EPA is proposing, in the case of title 
transfers, to allow up to thirty days in which to transfer the required 
information. EPA believes this timing would allow parties to transfer 
the required information using documents that are transferred as a part 
of normal business dealings, and as a result would ease the burden of 
meeting the PTD requirements.
    The introductory text of Sec. 80.77 excludes from the PTD 
requirements gasoline sold or dispensed for use in motor vehicles at a 
retail outlet or wholesale purchaser-consumer facility. Section 80.106 
does not contain this exclusion, which EPA believes was an inadvertent 
omission when the final rule was promulgated. Accordingly, EPA is 
proposing to revise Sec. 80.106 to conform to Sec. 80.77 in this 
regard. EPA is also proposing to modify the introductory text of 
Sec. 80.77 to clarify that this exclusion applies to gasoline sold or 
dispensed at a retail outlet or wholesale purchaser-consumer facility 
for use by any ultimate consumer, and not only for use in motor 
vehicles.
    In addition, EPA now believes that the PTD information is of little 
value when conventional gasoline is delivered to a retailer or 
wholesale purchaser-consumer in a conventional gasoline area. 
Accordingly, EPA is proposing to exclude from the PTD requirements 
transfers of conventional gasoline to retailers and wholesale-purchaser 
consumers in conventional gasoline areas. Note, however, that the PTD 
requirements of Sec. 80.106 would continue to apply for all other 
transfers of conventional gasoline. Note also that the PTD requirements 
of Sec. 80.77 for RFG and RBOB would continue to apply to all transfers 
of RFG and RBOB (other than when the gasoline is sold or dispensed by a 
retail outlet or wholesale purchaser-consumer facility for use by 
ultimate consumers), including transfers in which RFG is delivered to a 
retail outlet or wholesale purchaser-consumer.
2. Identification of the Gasoline (Sec. 80.77(f) and Sec. 80.77(g)(3)).
    EPA is proposing to amend Sec. 80.77(f) to delete reference to 
conventional gasoline, since the requirements of Sec. 80.77 do not 
apply to conventional gasoline. EPA is proposing to amend

[[Page 37356]]

Sec. 80.77(g)(3) to delete reference to RBOB. This section requires 
parties to identify whether the product contains ethanol, and RBOB, by 
definition, does not contain oxygenate. In addition, EPA is proposing 
to add references to RBOB to Secs. 80.77 (c) and (f) to specify that 
these PTD requirements apply to RBOB as well as to RFG and conventional 
gasoline.
3. Elimination of PTD Requirement for Inclusion of Registration Numbers 
(Sec. 80.77(j) and Sec. 80.106(a)(1)(vi))
    Sections 80.77(j) and 80.106(a)(1)(vi) require, in the case of 
transferors and transferees who are refiners, importers or oxygenate 
blenders, that the EPA assigned registration number of those persons be 
included on the PTDs. EPA received comments that this requirement is 
overly burdensome in certain circumstances, particularly downstream of 
the refiner/importer/oxygenate blender where such information may not 
be readily available. Based on experience with the program, EPA 
believes that this requirement has only limited value as a means of 
identifying and tracking the gasoline, and that EPA will be able to 
adequately enforce the regulations without inclusion of the assigned 
registration number on the transfer documents. As a result, EPA is 
proposing to eliminate the requirements to include registration numbers 
in PTDs.
4. Use of Product Codes (proposed Sec. 80.77(j))
    The petroleum industry historically has used product codes to 
identify product type in business transactions involving the transfer 
of title or custody of petroleum products. For example, all pipelines 
that transport refined petroleum products use codes to identify the 
various types of petroleum products that are transported. These product 
codes are well-known to persons who operate a pipeline, or who supply 
products to or receive products from a pipeline. These pipeline codes 
are used as a shorthand for the myriad petroleum products moving 
through the distribution system, and make product identification 
easier.19 In addition, product codes are used to identify 
petroleum products in many of the documents used to memorialize 
transfers of title and custody in normal business dealings, in part 
because the codes occupy less space on the documents than the full 
product names would require.
---------------------------------------------------------------------------

    \19\ For example, Colonial Pipeline product code A1 means: 
gasoline; RFG; VOC-controlled for Region 1; non-OPRG; simple model; 
87 octane; benzene maximum of 1.18 vol%; oxygen minimum of 1.5 wt% 
and maximum of 2.7 wt%; RVP maximum of 7.4 psi; and no heavy metals.
---------------------------------------------------------------------------

    EPA is proposing to add Sec. 80.77(j) to allow the use of product 
codes for certain information required on PTDs to accommodate this 
practice, but under conditions that would ensure that the codes would 
satisfy the goals of the PTD requirement. In particular, EPA is 
proposing that product codes could be used to satisfy PTD requirements 
related to identifying the product type (i.e., RFG, RBOB or 
conventional gasoline); for RFG and RBOB, the designations and minimum 
and maximum standards; and for RBOB, the oxygenate blending 
specifications. Product codes, used to meet these PTD requirements 
would have to fully reflect the PTD requirements. Thus, a product code 
that referred to ``VOC controlled RFG,'' without more, would not meet 
the requirement in Sec. 80.77(g)(1)(i) to separately identify RFG that 
is VOC controlled for Region 1 and Region 2. Similarly, where product 
codes are used to identify minimum and maximum standards, as required 
in Sec. 80.77(g)(2), the product codes would have to reflect the actual 
numerical value for the minimum and maximum standards.
    In addition, EPA is proposing that the codes would have to be 
standardized throughout the distribution system in which they are used, 
and that transferees would have to be given the information necessary 
to know the meaning of the product codes.
    EPA is not proposing that product codes could be used to satisfy 
PTD requirements unrelated to product types. It is EPA's understanding 
that product codes used in normal business practice are limited to 
product types. In addition, EPA believes that other PTD information, 
such as the name and address of the transferor and transferee, volume 
of product, and date of transfer, is included in full text in documents 
historically used to memorialize transfers of petroleum products.
    In addition, EPA is not proposing that product codes could be used 
for transfers of gasoline to truck carriers, retail outlets, or 
wholesale purchaser-consumer facilities. EPA believes that these types 
of regulated parties may not be sufficiently familiar with product 
codes to know their full meaning. This belief is based, in part, on 
EPA's experience in enforcing compliance with the RFG requirements by 
truck carriers, retailers and wholesale users. EPA has found that in 
most cases where codes were used to supply required PTD information to 
these parties, the parties did not know the meaning of the product 
codes even where the gasoline supplier had previously provided the 
information necessary to interpret the product codes.

V. Enforcement

A. Prohibitions (Sec. 80.78)

1. Clarification of Prohibitions (Sec. 80.78(a) (1) through (4))
    Sections 80.78(a) (1) and (2) prohibit activities that could result 
in the use of non-RFG in RFG covered areas. Specifically, these 
sections prohibit the manufacture and marketing of gasoline represented 
to be RFG unless the gasoline meets the requirements for federally 
certified RFG, and prohibit the distribution and sale of non-RFG for 
use by ultimate consumers in RFG covered areas. EPA believes, however, 
that the current text of Sec. 80.78(a) should be made clearer with 
regard to the scope of these prohibitions. As a result, EPA is 
proposing to revise the introductory text of Sec. 80.78(a)(1) and 
Sec. 80.78(a)(2), to clarify these prohibitions. In addition, EPA is 
proposing to delete Sec. 80.78(a)(3), since this section refers to a 
conventional gasoline marker and the regulations currently do not 
require a marker for a conventional gasoline. EPA is also proposing to 
revise Sec. 80.78(a)(4) for purposes of consistency with the revised 
text of Secs. 80.78(a) (1) and (2).
2. Addition of ``Causation'' of Prohibited Activities 
(Sec. 80.78(a)(10))
    Section 80.78(a) prohibits certain conduct on the part of parties 
who are engaged in gasoline industry activities such as gasoline 
manufacturing and selling, distributing, dispensing, supplying, 
storing, or transporting. Under this subsection, however, parties 
currently are liable for ``causing'' prohibited conduct only in the 
case of gasoline that is transported in violation of the regulations.
    EPA now believes there are other situations where a party may, in 
fact, cause another to commit a prohibited act, and in those cases, the 
causing party also should be liable for the violation. For example, a 
distributor who delivers to a retail outlet reformulated gasoline that 
fails to meet one or more standards would have caused the retailer to 
sell and offer for sale prohibited gasoline.
    As a result, EPA is proposing that parties would be liable not only 
for committing prohibited actions, but also for causing another party 
to commit a prohibited act.
3. Transition from Simple Model to Complex Model in 1998
    Under Sec. 80.41(i), refiners and importers of both reformulated 
and conventional gasoline have the option of using either the simple 
model or the

[[Page 37357]]

early complex model prior to January 1, 1998. Particularly in the case 
of producers of reformulated gasoline, EPA believes that most parties 
will elect the simple model standards. Beginning on January 1, 1998, 
however, refiners and importers must meet the complex model standards 
for all reformulated and conventional gasoline produced or imported. As 
a result, in January 1998, it will be necessary for parties to 
transition from the simple model to the complex model, yet the current 
regulations do not specify how regulated parties should accomplish this 
transition. Therefore, EPA now is proposing the manner in which this 
transition would occur.
    Under the proposal, any gasoline produced or imported during 
calendar year 1997, through December 31, 1997, would be subject to the 
simple or early complex model standards in the same manner as during 
calendar years 1995 and 1996. Thus, any simple or early complex model 
standards that are met on an annual average basis for 1997 would be met 
for all gasoline produced during calendar year 1997.
    Any gasoline produced or imported beginning on January 1, 1998, 
would be subject to the complex model standards. Thus, conventional 
gasoline produced during calendar 1998 would be subject to the annual 
average anti-dumping complex model standards specified in section 
101(b)(3), and reformulated gasoline produced during calendar 1998 
would be subject to the Phase I complex model standards specified in 
Secs. 80.41 (c) and (d).
    However, beginning on January 1, 1998, the gasoline located in the 
distribution system would be a mixture of gasoline produced to meet the 
simple model standards and gasoline produced to meet the complex model 
standards. In the case of reformulated gasoline, such a mixture may not 
meet certain standards that apply at downstream locations or that are 
evaluated under the gasoline quality surveys, i.e., the toxics and 
NOX emissions performance standards.20 As a 
result, EPA is proposing that gasoline quality surveys conducted during 
the period January 1, 1998, through March 31, 1998, will not include 
evaluation for toxics or NOX emissions performance. During 
this period, however, EPA would continue to enforce the complex model 
standards for oxygen and benzene content that apply at downstream 
locations, and gasoline quality surveys conducted during this period 
would include evaluations for oxygen and benzene content. Beginning on 
May 1, 1998, all applicable complex model standards would be enforced 
at all locations, and gasoline quality surveys would evaluate with all 
complex model standards.
---------------------------------------------------------------------------

    \20\ There is no simple model NOX standard, so that a 
mixture of simple model and complex model gasoline could fail to 
meet the complex model NOX standard. Similarly, a mixture 
of simple and complex model gasoline could not be evaluated for 
compliance with either the simple model or the complex model toxics 
emissions performance standards.
    The standards for oxygen and benzene content are the same under 
the simple and complex models, so that a mixture of simple and 
complex model reformulated gasoline could be evaluated for 
compliance with these standards. The standards for VOC and 
NOX emissions performance are not evaluated for 
downstream compliance until the beginning of the high ozone season 
on May 1 each year, and as a result should not be affected by the 
transition from the simple to the complex model in early 1998.
---------------------------------------------------------------------------

    EPA believes that the three month period, January through March 
1998, would be sufficient time for parties to transition the gasoline 
at all locations in the distribution system from gasoline produced to 
meet simple model standards to gasoline produced to meet complex model 
standards. This transition period is similar to the time necessary to 
transition to the VOC-control standards each Spring; i.e., terminals 
are able to complete their transition to the new standard about 60 days 
after refiners begin producing gasoline to the new standard, and retail 
outlets complete their transition during the next 30 days.
4. Amount of Oxygenate Permitted to be Added to RBOB (Sec. 80.78(a)(7))
    Section 80.78(a)(7) requires that RBOB may be blended only with 
oxygenate of the type and amount, or within the range of amounts, 
specified by the refiner or importer at the time the RBOB was produced 
or imported. Today's proposal revises Sec. 80.78(1)(7) to clarify that 
parties may add oxygenate amounts in excess of the minimum required by 
the refiner or importer up to the amount allowed by the oxygen maximum 
standard under Sec. 80.41(g).21
---------------------------------------------------------------------------

    \21\ The amount of oxygen added also may not exceed the maximum 
amount allowed under section 211(f) of the Clean Air Act. The 
maximum amount allowed under section 211(f) is the amount that is 
substantially similar to gasoline used in the motor vehicle 
certification process, or allowed under a waiver granted under 
section 211(f)(4). In 1991, EPA issued an interpretative rule 
increasing the maximum amount of oxygen that EPA believes is allowed 
under the substantially similar criteria of section 211(f) from 2.0 
to 2.7 wt% oxygen. See 56 FR 5352 (February 11, 1991). Ethanol is 
allowed in amounts up to 10% volume pursuant to a waiver granted 
under section 211(f)(4). See 44 FR 20777 (April 6, 1979).
---------------------------------------------------------------------------

5. Categories of Gasoline Use within Covered Areas that are Exempt from 
RFG Requirements (proposed Sec. 80.78(a)(11))
    Section 211(k)(5) of the Clean Air Act describes the scope of the 
requirement to use RFG in the reformulated gasoline covered areas:

    (5) Prohibition.--Effective beginning January 1, 1995, each of 
the following shall be a violation of this section:
    (A) The sale or dispensing by any person of conventional 
gasoline to ultimate consumers in any covered area.
* * * * *
This statutory prohibition on the sale or dispensing of conventional 
gasoline in RFG covered areas is not restricted to gasoline used to 
fuel motor vehicles, but rather applies to all gasoline sold or 
dispensed within an RFG covered area to any consumer, regardless of the 
use. The prohibition, therefore, would include gasoline sold or 
dispensed for uses such as in motor vehicles, boats, construction 
equipment, recreational vehicles, and lawn and garden equipment.
    EPA is proposing to exempt parties from this prohibition in the 
following limited situations: gasoline used for research, development 
and testing purposes; aviation gasoline sold or dispensed for use in 
aircraft, including gasoline that has properties identical to motor 
vehicle gasoline that is sold or dispensed solely for use in aircraft; 
and gasoline sold or dispensed for use in racing vehicles.
    EPA recognizes that there may be facilities located within an RFG 
covered area that conduct beneficial research, development, and testing 
programs which require the use of conventional gasoline. Today's 
proposed rule, therefore, contains provisions for obtaining an 
exemption from the prohibitions at Sec. 80.78(a)(1) for persons 
distributing, transporting, storing, selling or dispensing conventional 
gasoline used for research, development, and testing purposes within 
RFG covered areas.
    To be exempted from the prohibitions at Sec. 80.78(a)(1) for 
research, development or testing under today's proposed rule, the 
gasoline: would have to be properly identified in product transfer 
documents as conventional gasoline to be used only for research, 
development, or testing (as applicable); could not be sold to or from 
retail gasoline outlets; could not be sold to or from wholesale 
purchaser-consumer facilities unless the wholesale purchaser-consumer 
is associated with the research, development, or testing; and would 
have to be covered by an

[[Page 37358]]

annual research notification to EPA that includes information that 
describes the purpose and scope of the program. EPA believes that these 
are the least onerous requirements for industry which also will ensure 
that non-RFG gasoline is used only for a legitimate research, 
development, and testing purpose. Parties should be aware, however, 
that the exemption proposed in today's rule would not exempt gasoline 
used for research, development, and testing from complying with any 
federal conventional gasoline requirements.
    Under today's proposal, any person distributing, transporting, 
storing, selling or dispensing aviation and racing gasoline would be 
required to clearly identify the gasoline as not reformulated to be 
exempted from the prohibitions at Sec. 80.78(a)(1). If any of the 
restricted gasoline were used in a manner inconsistent with the 
restriction, a violation of the prohibited activity would have 
occurred, and any person selling, dispensing, or using the gasoline 
would be liable for the violation.
    EPA is proposing that the racing vehicle exemption would apply only 
in the case of vehicles that are used exclusively as racing vehicles in 
races that are sanctioned by generally recognized race sanctioning 
bodies. In addition, the exception would apply only in the case of 
vehicles that do not meet the definition of ``motor vehicle'' under 
Clean Air Act section 216(2) and section 85.1703 22 and that 
are not registered or licensed for use on or operated on public roads 
or highways. Examples of generally recognized race sanctioning bodies 
include the National Association for Stock Car Auto Racing, the Sports 
Car Club of America, the National Hot Rod Association, the American 
Motorcyclist Association, and the American Power Boat Association. The 
racing vehicle exemption applies to use of racing vehicles during 
practice and qualifying for, and competition in sanctioned races, and 
applies to motorcycles and boats used exclusively in sanctioned races.
---------------------------------------------------------------------------

    \22\  Under Sec. 85.1703 a vehicle is a ``motor vehicle'' if it 
is self propelled and capable of transporting a person or materials, 
unless the vehicle meets one or more of the following criteria: (1) 
A maximum speed of not more than 25 miles per hour; (2) the absence 
of features customary for street use, such as a reverse gear, a 
differential, and required safety features; or (3) the presence of 
features that render the vehicle highly unsuitable for street use, 
such as tracks.
---------------------------------------------------------------------------

    The rationale for the proposed exemption for aviation gasoline used 
to fuel aircraft is based on safety considerations. Aviation gasoline 
must satisfy performance criteria that are relevant to the safe 
operation of aircraft, and this safety consideration outweighs the very 
limited potential for adverse environmental effects from conventional 
gasoline used in this manner. In addition, aircraft emissions normally 
would not be confined to the covered area where the aircraft is fueled, 
and could occur in significant part outside any RFG covered area. The 
rationale for the proposed exemption for racing gasoline is based on 
the special performance requirements for true race vehicles and the 
limited volumes of gasoline involved. The environmental impact from 
these exemptions is trivial or minimal, and the burden from refusing 
these exemptions is potentially significant. EPA believes the 
exemptions are warranted under these limited circumstances. See Alabama 
Power Company v. Costle, 636 F.2d 323, 357 (D.C. Cir.1979).
    Nevertheless, EPA requests comments on whether the racing vehicle 
exemption would cause increased air pollution in RFG covered areas that 
is not trivial, and if so, whether such an environmental effect would 
make the racing vehicle exemption inappropriate.
6. Changing Service of Gasoline Storage Tanks (Sec. 80.78(a) (12) and 
(13))
    Section 80.78(a) requires the segregation of several categories of 
gasoline. These categories include the following:

Reformulated gasoline may not be mixed with conventional gasoline and 
sold as reformulated gasoline.
Reformulated gasoline blendstock for oxygenate blending (RBOB) may not 
be mixed with reformulated gasoline or conventional gasoline, and 
RBOB's that have different oxygen requirements must be segregated from 
each other.
During the period January 1 through September 15 each year VOC-
controlled reformulated gasoline that is produced using ethanol must be 
segregated from VOC-controlled reformulated gasoline that is produced 
using any other oxygenate, including at the retail level.
Oxygenated fuels program reformulated gasoline (OPRG) must be 
segregated from non-OPRG designated reformulated gasoline.

    These segregation requirements preclude the mixing of any amount of 
the gasolines that must be segregated.23 Thus, if the type 
of gasoline stored in a tank is changed (a change in the tank's 
service), and the old gasoline type and the new gasoline type must be 
segregated, the new gasoline may not be added unless the tank is 
completely free of any amount of the old gasoline type.
---------------------------------------------------------------------------

    \23\ Reformulated gasoline may be mixed with conventional 
gasoline, so long as the mixture is classified in the product 
transfer documents as conventional gasoline and is used only outside 
any reformulated gasoline covered area.
---------------------------------------------------------------------------

    A gasoline storage tank's service also may be changed in a manner 
that results in some volume of blendstocks being mixed with 
reformulated or conventional gasoline. For example, a storage tank's 
service could be changed from blendstock (e.g., natural gasoline, 
raffinate, naphtha) to reformulated or conventional gasoline, which 
would result in mixing some volume of blendstock with the reformulated 
or conventional gasoline. Under Secs. 80.65(c), 80.78(a)(5) and 
80.101(d)(1) a party who combines any volume of blendstock with 
reformulated or conventional gasoline has produced additional volume of 
gasoline, which constitutes refining for which the refiner must meet 
all standards and requirements that apply to refiners of reformulated 
or conventional gasoline.
    EPA recognizes that when many gasoline storage tanks are pumped as 
low as possible a residual volume of gasoline or blendstock remains in 
the tank (called the tank ``heel''), and in the terminal's manifolds 
and pipes that serve the tank. It is very difficult but not impossible 
to eliminate these residual volumes. As a result, EPA is proposing that 
in the limited situation related to changing the service of a gasoline 
storage tank, pipe, or manifold for legitimate business reasons that 
are unrelated to any goal of mixing dissimilar gasolines or blendstock, 
that parties would be allowed to mix products that normally must remain 
segregated. Under the proposal, parties changing the service of a 
gasoline storage tank, pipe or manifold would have to meet a number of 
conditions and constraints that are specified in the proposed 
regulations, including measures that would minimize the volumes of 
dissimilar gasolines that are mixed. In addition, when any mixture 
would be classified as reformulated gasoline the party would be 
required to sample and test the gasoline subsequent to mixing to show 
the mixture meets all applicable reformulated gasoline standards.
    EPA also is proposing an additional option that would apply in the 
case of a transition from reformulated gasoline blendstock for 
oxygenate blending (``RBOB'') to RFG, and vice versa, at a terminal 
where oxygenate is blended in trucks (splash-blended). This option 
would be available only in a case where the oxygenate blender is unable 
to meet the tank transition requirements discussed above.

[[Page 37359]]

    This option is being proposed because in some cases the 
requirements for tank transition under the proposed regulatory 
revisions are not feasible without risk that a terminal would have to 
be closed during at least part of the transition period. For example, 
consider a terminal operator who wants to supply RFG containing MTBE 
during the summer VOC season, and RFG containing ethanol outside the 
VOC season. During the VOC season this party's storage tank would 
contain MTBE-based RFG, while outside the VOC season the storage tank 
would contain RBOB that would be splash-blended with ethanol at the 
terminal. As a result, the party's terminal tank would have to 
transition from RBOB to RFG in the spring, and from RFG to RBOB in the 
fall. Under the change-of-service requirements described above, in the 
spring the storage tank's RBOB content would have to be drawn-down to 
the minimum level possible through normal pumping operations before any 
RFG could be added to the tank. In order to meet this requirement, 
however, the party may have to take the storage tank out of service if 
the ``minimum level'' is reached before new product is available to be 
transferred into the tank. If the terminal has limited tankage it could 
be unable to supply gasoline during the time the storage tank remains 
out of service, which could adversely affect gasoline supplies for some 
parties. The same difficulty could occur when transitioning from RFG to 
RBOB in the fall.
    As a result, EPA is proposing an option that would allow a party to 
receive RFG in a tank containing RBOB in the Spring prior to the 
beginning of the VOC season, and to receive RBOB in a tank containing 
RFG in the Fall subsequent to the end of the VOC season. This option is 
intended to minimize the likelihood a party would have to take a tank 
out of service in order to transition product types.
    Under this option, parties could have a mixture of RFG and RBOB in 
a storage tank during the transition period. The option would require 
parties to ensure that all RFG downstream standards, including the 
oxygen standard, are met during the transition. In particular, parties 
would be required to adjust the rate of splash-blended oxygenate based 
on sampling and testing of the RFG/RBOB mixture and the RFG produced 
subsequent to splash blending. In addition, the transition must occur 
outside the period VOC control standards apply at the terminal--
normally May 1 through September 15 each year.

B. Liability and Defenses (Sec. 80.79)

1. Branded Refiner Defenses for Violations at Branded Retail Outlets 
Directly Supplied by the Refiner (Sec. 80.79(b) (2) and (3))
    Section 80.79(b)(2) specifies the affirmative defense elements that 
must be shown by a refiner for violations of the reformulated gasoline 
standards that are found at branded downstream facilities. As currently 
promulgated, this section addresses violations that are caused by a 
reseller, distributor, oxygenate blender, or carrier that is supplied 
by the refiner, or by a retailer or wholesale purchaser-consumer who is 
supplied by one of these parties. The regulation does not specifically 
address the case of a branded retailer or wholesale purchaser-consumer 
who is supplied directly by the refiner. In addition, the current 
regulation is silent regarding the defenses that would apply in the 
case of a violation occurring at a facility carrying the brand name of 
an importer who is not also a refiner.
    EPA believes the defense provisions should address violations that 
occur at facilities that display the brand name of an importer that 
would parallel the defense elements that apply to branded refiners, as 
well as violations that are caused by retailers or wholesale purchaser-
consumers that are directly supplied by a refiner or importer. EPA 
believes that the degree of control available to importers over their 
branded retail outlets is the same as the degree of control available 
to refiners over their branded retail outlets. This control primarily 
is available through contractual obligations that the refiner and 
importer can impose on distributors and retailers who distribute or 
sell gasoline under the brand name. As a result, EPA is proposing 
modifications to Sec. 80.79(b)(2) that would make these changes.
2. Truck Carrier Defenses (Sec. 80.79(c)(3); Proposed Sec. 80.2(ss); 
Modifications to Secs. 80.28(g)(1)(iii); 80.30(g)(1)(i))
    Section 80.79(b) specifies the defenses for violations of the 
prohibited activities under the reformulated gasoline program. Section 
80.79(b)(1) states that a party, who is presumed liable for a 
violation, can avoid liability if it can show: (1) That it did not 
cause the violation, (2) the existence of appropriate product transfer 
documents for the gasoline in question, and (3) that it conducted an 
appropriate quality assurance sampling and testing program.
    These defenses apply to all regulated parties, including carriers. 
In addition, under Sec. 80.79(b)(1)(iii)(B) a carrier may rely on 
properly conducted quality assurance sampling and testing program 
conducted by another party. Carrier is defined at 40 CFR 80.2(t) as a 
party who stores or transports gasoline without taking title to the 
gasoline.
    For one category of carriers--truck carriers--sampling and testing 
may not always be the most appropriate form of quality assurance. The 
purpose of a quality assurance requirement is, first and foremost, to 
institutionalize preventive measures as the best way to detect and 
avoid violations. The most typical role of truck carriers in the 
gasoline distribution system is to transport gasoline from a terminal 
to a retail outlet or wholesale consumer. Most violations caused by 
truck carriers result when an inappropriate type of gasoline is 
delivered. For example, a truck carrier would have caused a violation 
if gasoline designated as conventional is delivered by the carrier to a 
retail outlet located in a reformulated gasoline covered area. The most 
appropriate quality assurance for a truck carrier to implement to avoid 
this type of violation would be driver training on the proper types of 
gasoline to deliver, and management oversight of product transfer 
documents to ensure the proper type of gasoline has been delivered.
    It is EPA's understanding that truck carriers almost always load 
gasoline into empty truck compartments. To the extent this is true, it 
would be very unlikely the carrier could be responsible if the gasoline 
loaded into the truck were off-spec for a regulated standard, such as 
benzene or oxygen content. As a result, sampling and testing of 
gasoline obtained from a truck compartment would not be particularly 
effective for detecting violations caused by the carrier. In addition, 
EPA has received comments from industry regarding the practicability of 
drawing samples from truck compartments during the loading process, or 
subsequent to loading. These comments conclude that the technical 
aspects of collecting gasoline samples from truck compartments make 
such sampling difficult, but not impossible. For example, the sampler 
normally would be required to climb onto the top of the truck trailer 
in order to gain access to the compartment lid, which could be 
difficult particularly in adverse weather conditions.
    As a result, EPA is proposing to modify the defense elements under 
40 CFR 80.79 as they pertain to truck carriers, to state that an 
oversight program by a truck carrier may consist of, instead of 
sampling and testing, a program to monitor compliance with the

[[Page 37360]]

requirements related to gasoline transport or storage, such as a 
program to properly train truck drivers and review product transfer 
documents to ensure that the proper type of gasoline is delivered. In 
addition, EPA is proposing to add a definition of tank truck carrier to 
40 CFR 80.2.
    EPA is not proposing a similar change to the reformulated gasoline 
defense provisions for carriers other than truck carriers, such as 
pipelines, barge operators, or for-hire terminals. EPA believes 
carriers in these other categories are better able to collect gasoline 
samples, and samples of the gasoline being transported or stored by 
these categories are collected for commercial reasons on a routine 
basis in the normal course of business. Nevertheless, EPA requests 
comments regarding whether the changes proposed for truck carriers 
should also be applied to other types of carriers.
    EPA also is proposing similar changes to the defense provisions for 
truck carriers in the case of violations of the volatility requirements 
at 40 CFR 80.28(g)(1), and violations of the diesel sulfur requirements 
at 40 CFR 80.30(g)(1). The rationale for changing the volatility and 
diesel sulfur defense provisions for truck carriers is the same as is 
discussed above for reformulated gasoline.

C. Gasoline Treated as Blendstock (Proposed Sec. 80.83; Minor Changes 
to Sec. 80.74 and Sec. 80.104)

    Under 40 CFR 80.65(c) and 80.101(d) an importer must include all 
imported product that meets the definition of gasoline in the 
importer's compliance calculations for either reformulated or 
conventional gasoline. If this imported gasoline is then processed by 
blending with additional blendstock, the subsequent blending 
constitutes a refinery operation for which all refiner requirements 
must be met, including refinery standards, refiner sampling and 
testing, independent sampling and testing in the case of reformulated 
gasoline, recordkeeping, reporting, and attest engagements. Further, 
the reformulated gasoline or anti-dumping standards for such an 
operation must be met solely on the basis of the blendstocks used, and 
the previously imported (and previously accounted for) gasoline may not 
be included. This is true regardless of whether the subsequent 
blending-refining is conducted by the original importer of the 
gasoline, or by another party.
    One consequence of this requirement is that importers are not able 
to conduct remedial blending of imported gasoline that is deficient 
with regard to a specification (i.e., is ``off-spec'') prior to 
certification as reformulated or conventional gasoline. For example, 
consider an importer who receives a cargo of gasoline that the importer 
intends to import as reformulated gasoline, but that on arrival in the 
United States has a benzene content of 1.35 vol%, which is in excess of 
the maximum benzene standard of 1.30 vol%. Because this gasoline fails 
to meet one of the reformulated gasoline standards it cannot be 
imported as reformulated, and the importers only option is to import 
the gasoline as conventional. Moreover, the importer cannot import the 
gasoline as reformulated and subsequently add blendstock to reduce the 
benzene content, and the gasoline cannot be imported as conventional 
and converted to reformulated subsequent to remedial blending. The 
financial consequences to an importer of downgrading a shipload of 
gasoline from reformulated to conventional could be significant.
    This constraint on imported gasoline does not apply in the case of 
a refinery where gasoline is produced that is off-spec. Consider a 
refiner who produces a batch of reformulated or conventional gasoline 
and who determines that the gasoline is off-spec prior to the gasoline 
leaving the refinery or being fungibly mixed at the refinery. The 
refiner can delay designating the gasoline as a batch of RFG, reblend 
the batch to correct the off-spec condition, and designate the 
reblended gasoline as a batch for refinery compliance calculations.
    EPA is proposing changes that would allow importers to treat 
imported conventional or reformulated gasoline as blendstocks (termed 
``gasoline treated as blendstock,'' or ``GTAB'') in order to conduct 
remedial blending of off-spec imported gasoline. An importer's ability 
to classify imported gasoline as GTAB would be subject to significant 
conditions and constraints, however, that are included in the proposed 
regulations. For example, the GTAB could not be sold or transferred by 
the importer to another company prior to the completion of remedial 
blending. As a result, the company that imports the gasoline and 
classifies it as GTAB in its importer capacity also would be required 
to conduct remedial blending and report the blended gasoline in its 
refiner capacity. This proposed constraint is included in order to 
curtail any commerce in gasoline that has not been certified. EPA is 
concerned that in the absence of this constraint gasoline could be lost 
in the fungible distribution system without ever having been certified.
    In addition, for standards that are based on a company's individual 
baseline (such as the standards for sulfur, T-90 and olefins for simple 
model reformulated gasoline, and all conventional gasoline standards) 
the company would be required each year to calculate an adjusted 
refinery compliance baseline for the refinery where the GTAB is used to 
produce gasoline. This adjusted compliance baseline would be calculated 
separately each calendar year averaging period when GTAB is used to 
produce gasoline, and would consist of the volume-weighted combination 
of the company's importer baseline at the GTAB volume for the year, and 
the refinery's individual baseline at refinery's gasoline volume 
exclusive of GTAB for the year. This proposed condition is intended to 
prevent a company with an individual refinery baseline that is less 
stringent than the company's importer baseline from using the GTAB 
option as a device to apply the less stringent refinery baseline to 
imported gasoline.
    EPA has previously allowed use of this GTAB option in guidance 
included in Reformulated Gasoline and Anti-Dumping Questions and 
Answers (February 6, 1995). EPA experience since this guidance was 
issued has been that the GTAB option has been effective in providing 
importers appropriate flexibility to correct off-spec imported 
gasoline, and that the conditions and limitations have been effective 
in preventing compliance difficulties.

D. Treatment of Interface and Transmix (Proposed Sec. 80.84)

    When refined petroleum products are transported by pipeline the 
products normally are pumped sequentially, but as a continuous flow, 
through the pipeline. Thus, for example, the products in a pipeline may 
consist of the following in sequence: Premium conventional gasoline, 
regular conventional gasoline, premium reformulated gasoline, regular 
reformulated gasoline, diesel fuel, number 2 heating oil, jet fuel, 
etc. Where there is no mechanical separation of the product types in 
the pipeline, and normally there is none, some mixing of adjacent 
product types occurs. While the magnitude of this mixing typically is 
small, there nevertheless is some amount of mixing.
    The petroleum product in a pipeline between two surrounding batches 
of petroleum product that consists of a mixture of the two surrounding 
batches is called ``interface.'' Where interface product consists of a 
mixture of gasoline and distillate (e.g., diesel fuel, heating

[[Page 37361]]

oil, or jet fuel), the interface is called ``transmix.''
    It is EPA's understanding that historic pipeline industry practice 
regarding interface has been to blend the interface mixture into the 
two adjoining products that created the interface. Thus, for example, 
half of the interface between premium and regular gasoline is blended 
into the premium gasoline and half into the regular gasoline--called a 
``fifty percent cut'' or a ``mid-point cut.'' EPA further understands 
that certain product types are not mixed with any other product type, 
such as jet fuel. As a result, for example, where there is an interface 
between jet fuel and heating oil, none of the interface is blended into 
the jet fuel, and all of the interface is blended into the heating 
oil--called a ``clean cut.''
    Lastly, EPA understands that certain types of interface mixtures 
cannot easily be blended into either of the adjoining products. This 
would be the case where interface consists of a mixture of gasoline and 
distillate, commonly called ``transmix.'' EPA's understanding is that 
the current pipeline industry practice, when possible, is to transmit 
transmix via pipeline or barge to a facility designed to separate the 
gasoline and distillate portions--a ``transmix processing'' facility. 
Where transmix cannot be transported to a transmix processing facility 
the transmix is blended into gasoline in very small amounts, typically 
0.25% to 0.5% of the gasoline by volume.
    Under 40 CFR 80.78(a) parties are required to segregate certain 
categories of gasoline. For example, 40 CFR 80.78(a)(10) states that 
``(n)o person may combine any reformulated gasoline with any 
conventional gasoline and sell the resulting mixture as reformulated 
gasoline.'' Thus, in order to sell gasoline as reformulated the 
gasoline cannot have been mixed with any conventional gasoline.
    Under 40 CFR 80.2 (h) and (i), 80.65(a), and 80.101 the 
reformulated gasoline and antidumping requirements apply at any 
facility where gasoline is produced. Gasoline most commonly is produced 
at refineries where crude oil is processed into blending components, 
that are then combined to create gasoline. Gasoline also is produced at 
any other location where blendstocks are combined to create gasoline, 
or where blendstocks are added to gasoline to create additional 
gasoline volume. Moreover, EPA believes that gasoline is produced when 
transmix is separated into gasoline and distillate portions.
    EPA now is proposing regulations that would clarify the manner in 
which interface product, including transmix, would be treated under the 
reformulated gasoline program.
    The proposed regulations contain requirements for transmix 
processors (parties who separate transmix into diesel and gasoline), 
and transmix blenders (parties who blend transmix into gasoline without 
first separating it into diesel and gasoline). Further, the 
requirements for transmix processors and blenders would be different 
depending upon whether the gasoline produced or blended is reformulated 
or conventional gasoline.
    Transmix processors who classify the gasoline produced as 
conventional would be required to exclude this transmix-based product 
from anti-dumping compliance calculations. If the transmix processor 
used blendstocks other than the transmix-based product, however, the 
processor would be classified as a refiner and would have to include 
the blendstocks (but not the transmix-based product) in anti-dumping 
compliance calculations for the refinery. This approach is being 
proposed because the gasoline portion of the transmix would have been 
included in the compliance calculations of the refinery that produced 
the gasoline, and for the transmix processor also to include the 
gasoline would result in double-counting. Any blendstock used in the 
operation normally would not previously have been accounted for, 
however, and therefore would have to be included in the transmix 
processor's accounting.
    Transmix processors who classify the gasoline produced as 
reformulated, in contrast, would be required to include the transmix-
based product, as well as any other blendstocks used, in the 
reformulated gasoline compliance calculations for the refinery. This 
difference in treatment for reformulated gasoline produced using 
transmix would be appropriate because it is possible the gasoline 
produced would not meet all reformulated gasoline standards. This 
possibility is avoided if the transmix processor were required to meet 
all reformulated gasoline standards.
    Parties would be allowed to blend transmix into conventional 
gasoline where certain conditions are met: (1) The transmix must result 
from normal pipeline operations; and (2) either there must be no means 
of transporting the transmix to a transmix processor via pipeline or 
water, or there was a historical practice of blending transmix at the 
facility before 1995. In addition, the rate of transmix blending would 
be limited to the greater of 0.25% by volume, or the demonstrated 
blending rate in 1994.
    Parties would be allowed to blend transmix into reformulated 
gasoline under conditions that are more restrictive than are proposed 
for conventional gasoline. The transmix would be required to result 
from normal pipeline operations, there could be no means of 
transporting the transmix to a transmix processor via pipeline or 
water, and the party must be unable to blend the transmix into 
conventional gasoline. In addition, the rate of transmix blending would 
be limited to a maximum of 0.25% by volume. Lastly, the party would be 
required to carry out a program of sampling and testing the 
reformulated gasoline subsequent to transmix blending to ensure the 
downstream standards are met, at frequencies that are included in the 
proposed regulations.

VI. Anti-Dumping Requirements

A. Individual Baseline Determination (Sec. 80.91)

1. Negligible Quantities (Secs. 80.91(d)(3) and 80.91(d)(5)(iii))
    The negligible quantities provision in Sec. 80.91(d)(3) was written 
to promote simplification of baseline determination and to excuse 
testing in certain limited circumstances. Under this provision, if a 
refiner can show that a fuel component exists only in negligible 
quantities in a blendstock stream, testing that stream for the 
component in question is not required, and a value of zero is assigned 
to that component. The fuel components to which this provision applies 
are aromatics, olefins, benzene, sulfur, and oxygen content. Negligible 
quantities are defined as levels which fall below the minimum levels 
given in Sec. 80.91(d)(3). This provision is not a requirement, but 
rather is an option designed to simplify baseline development for those 
refiners who can and choose to take advantage of it.
    Although the negligible quantities provision was designed to 
simplify baseline determinations, some refiners questioned the use of 
zero values for components which existed in negligible quantities. 
Instead, they proposed the use of the minimum values given in the 
provision. Doing so would negate the original intention of the 
provision to simplify baseline determinations, but it would also 
recognize that the minimum values represent values below which the 
components cannot be measured accurately. Although the use of the 
minimum values would result in slightly dirtier (more lenient) 
baselines than would result with the use of zero values, EPA is 
proposing to revise Sec. 80.91(d)(3) to allow the use of the minimum 
values in lieu of zero values

[[Page 37362]]

at the refiner's discretion. In promulgating the negligible quantities 
provision, EPA determined that assuming a zero value relative to the 
negligible threshold values would not significantly affect emissions. 
The same determination applies with regard to allowing the option to 
use the minimum values in lieu of zero values.
    The negligible quantities provision applies only to Method 3 data 
collection for two reasons. First, the provision applies only to 
blendstocks, not finished gasoline. Since only Method 2 and 3 data are 
blendstock data, the provision cannot apply to Method 1 data. Second, 
the primary action of the negligible quantities provision is to excuse 
testing in certain cases. The only time a refiner must choose whether 
or not to do additional testing is when considering the sufficiency of 
its Method 3 data.
    The negligible quantities provision reduces the burden placed on 
refiners collecting Method 3 data to satisfy the minimum data 
requirements. If a refiner can ``show'' that a fuel component exists 
only in negligible quantities, testing for the blendstock stream in 
question is not required. Instead, a refiner can assume that the level 
of a component is zero or, under today's proposal, the minimum value 
given in Sec. 80.91(d)(3). Clearly, the showing indicates engineering 
judgment or past experience. A showing cannot refer to actual test data 
for the blendstock stream in question, because the very purpose of the 
negligible quantities provision is to excuse testing. Thus if a refiner 
has data on the stream in question, that data must be used in the 
determination of the baseline per Sec. 80.91(d)(1)(i)(B).
    A refiner could too easily generate a fictitiously more lenient 
baseline if EPA allowed test data to be used as a showing of negligible 
quantities. Such a refiner could test a given blendstock stream for 
components that are found to be essentially absent, and then lay claim 
to the minimum values given in the negligible quantities provision. The 
EPA has chosen to interpret the negligible quantities provision in a 
manner that is consistent with the original intent, provides additional 
flexibility, and yet maintains the primary goal of developing baselines 
which accurately represent a refiner's actual 1990 production. As a 
result, EPA is proposing to revise Sec. 80.91(d)(3) to clarify that a 
showing under this section refers to engineering judgment or past 
experience and not actual test data.
    One caveat on the use of actual data in the baseline determination 
should be clarified. If a refiner measures a blendstock stream and 
discovers that the measured component level of that stream is below the 
applicable range for the test method used, the low end of the 
applicable range may be substituted for the actual measured value in 
the baseline determination. For example, if a sulfur test method has an 
applicable range of .20-200 ppm and a blendstock stream is discovered 
to have a sulfur content of 11 ppm with that test method, the stream 
can be assumed to contain 20 ppm for the purposes of determining the 
baseline. Paragraph (d)(5)(iii) has been added to Sec. 80.91 to codify 
this allowance.
2. Closely Integrated Facilities (Sec. 80.91(e)(1))
    Section 80.91(e)(1)(i) of the reformulated gasoline regulation 
provides for determination of a single set of baseline fuel parameters, 
upon petition and approval, for two or more facilities that are 
geographically proximate to each other, yet not within a single 
refinery gate, and whose 1990 operations were significantly 
interconnected in 1990. While the existing provision permits EPA to set 
a single baseline that would then apply for each of several refineries, 
it does not permit these ``closely integrated facilities'' to be 
grouped together for all compliance purposes (including registration, 
recordkeeping and reporting). Rather, the provision allows a single 
baseline to be set for each facility it represents, and Sec. 80.41(h) 
and 80.101(h) require that each refinery comply with this baseline 
separately, except where authorized to group refineries for compliance 
purposes. 24 Similarly, Sec. 80.91(e)(1)(ii) permits EPA to 
set a single baseline for a blending facility which received 75 percent 
of its 1990 blendstock from a single refinery, or from one or more 
refineries owned by the same refiner and that are part of an aggregate 
baseline.
---------------------------------------------------------------------------

    \24\  Combined reports may be submitted for compliance with RFG 
baseline-related parameters (sulfur, olefin, and T90) and anti-
dumping. Other reports must be filed by each facility.
---------------------------------------------------------------------------

    EPA is proposing to amend the RFG and anti-dumping regulations by 
adding Sec. 80.91(e)(1)(iii), which would require facilities that have 
been determined to be ``closely integrated'' and granted a single 
baseline by EPA to demonstrate compliance with all RFG and anti-dumping 
requirements as if they were one facility. Furthermore, the ``closely 
integrated'' facilities would have a single registration and would file 
a single set of compliance reports. EPA believes that this change will 
reduce costs (including paperwork costs) to industry without any 
significant negative environmental impact.
3. Extending the Valid Range for Sulfur in Conventional Gasoline 
(Sec. 80.91(f)(2)(ii))
    Under the anti-dumping provisions of the final rule, refiners use 
their individual 1990 baselines to determine compliance with the 
regulations under both the simple and complex models. To comply with 
the anti-dumping regulations, a refiner using the complex model is 
subject to valid range limits for oxygen content, sulfur content, RVP, 
E200, E300, aromatics content, olefins content, and benzene content. 
All of these fuel parameters are represented in the complex model 
equations applicable to conventional gasoline.
    Section 80.91(f)(2)(ii) allows a refiner to extend the conventional 
gasoline valid range for the complex model if the benzene, aromatics, 
or olefins values for its individual 1990 baseline fuel falls outside 
of the valid range specified in Sec. 80.45(f)(1)(ii). This provision 
was clarified in a Direct Final Rulemaking published on July 20, 1994 
(59 FR 36944). At the time of this Direct Final Rulemaking, the Agency 
had no reason to believe that provisions for the extension of the valid 
range for fuel parameters other than benzene, aromatics, and olefins on 
either the low or high ends were necessary. Peripheral limitations such 
as ASTM specifications and the volatility rule were expected to 
eliminate the need for valid range extensions in other cases. Since 
publication of the Direct Final Rule, the Agency has determined that, 
despite such peripheral limitations, some individual refiner baselines 
contained sulfur levels beyond the 1000 ppm valid range limit. 
According to the current regulatory requirements, such baseline fuels 
cannot be evaluated with the complex model. The Agency has determined 
that the provision for extension of the valid range limit, previously 
applicable only to benzene, aromatics, and olefins, should also be 
applicable to sulfur.
    By definition, the valid range limit defines that range of values 
for a given fuel parameter within which the complex model is considered 
accurate. Extensions of the valid range limits, therefore, cannot be 
boundless. If the valid range limit for sulfur is extended, the refiner 
in question must still be limited by a valid range to eliminate the 
possibility that the complex model will be used for sulfur values that 
are very high, which might compromise the primary objective of the 
anti-dumping program.
    The Agency has determined that the best approach to limiting the 
extension of the valid range for fuel benzene,

[[Page 37363]]

aromatics, olefins, or sulfur content is to allow target fuels to have 
values at least up to the baseline level. Since the baseline fuel is an 
``average'' fuel of sorts, the Agency has also determined that refiners 
should be given some flexibility beyond the baseline value. For sulfur 
this flexibility will be fixed at a value of 50 ppm. Thus the extended 
valid range limit for sulfur would be equal to the individual refiner's 
baseline fuel value for sulfur, plus 50 ppm.
    The Agency continues to believe that the valid range limits 
specified in Sec. 80.45(f)(1)(ii) delineate the range of fuel parameter 
values beyond which the accuracy of the complex model is questionable. 
Thus the Agency has determined that any extension of the specified 
valid ranges for conventional gasoline should incorporate flat-line 
extrapolation. Under flat-line extrapolation, the complex model 
provides no emissions benefit or detriment when raising the value of 
sulfur above 1000 ppm. This flat-line extrapolation will apply to both 
the baseline fuel and any target fuels evaluated with the complex model 
under the anti-dumping regulations.

B. Anti-Dumping Standards (Sec. 80.101)

1. Application of Compliance Baselines Under the Complex Model 
(Sec. 80.101(f) (1) and (2))
    Clean Air Act section 211(k)(8), the ``anti-dumping'' section, 
requires EPA to promulgate regulations that maintain the quality of 
gasoline produced by each refinery, based on each refinery's 1990 
gasoline quality, or ``baseline.'' The intent of this section is to 
prevent refiners from shifting ``dirty'' blendstocks from RFG 
production to conventional gasoline production. This section thereby 
prevents the degradation in overall quality of the nation's 
conventional gasoline as compared to gasoline quality in 1990.
    The anti-dumping regulations, at Subpart E,implement this Clean Air 
Act section through conventional gasoline standards that are set in 
relation to each refinery's 1990 baseline gasoline 
quality.25 See, Sec. 80.101. However, in the case of a 
refinery that produces a volume of gasoline during an averaging period 
that exceeds the refinery's 1990, or baseline, volume, Sec. 80.101 
requires that the excess volume meet anti-dumping standards that are 
set in relation to a baseline that reflects average U.S. gasoline 
quality in 1990, called the ``statutory'' baseline. Thus, under 
Sec. 80.101(f) a refiner who operates a refinery with such excess 
gasoline volume during an averaging period is required to calculate a 
``compliance baseline'' that adjusts the 1990 baseline to reflect the 
excess volume over 1990 levels.
---------------------------------------------------------------------------

    \25\ The discussion in this preamble section, VI.B.1, applies to 
importers and the gasoline imported by importers in the same way 
that it applies to refiners and the gasoline produced at refineries, 
but the text refers only to refiners and refineries for purposes of 
drafting economy.
---------------------------------------------------------------------------

    The rationale for using compliance baselines is the same for both 
simple and complex model standards. See discussion at 57 FR 13488 
(April 16, 1992). However, under Sec. 80.101(b) compliance baselines 
apply only to simple model standards. EPA believes the absence of a 
requirement to use compliance baselines for complex model standards was 
an error of omission when Sec. 80.101 was promulgated, and as a result 
is now proposing to require use of compliance baselines under the 
complex model.
    EPA is not proposing to require use of compliance baselines under 
the optional complex model, even though the rationale for their use 
would apply. The optional complex model may be used only through 1997, 
and today's proposed changes will not become final until well into 
1997. As a result, EPA believes it is not practical to apply compliance 
baselines to the optional complex model at this time.
    Section 80.101(f) provides the methodology for calculating a 
refinery's compliance baseline. Under this provision, the calculation 
is based on a refinery's production volume of conventional gasoline, 
reformulated gasoline, RBOB and California gasoline. However, 
oxygenates that are blended downstream of a refinery and subsequently 
included in the refinery's compliance calculations for conventional 
gasoline and oxygenates added to RBOB are not currently included in the 
calculation. EPA now believes that such oxygenates should be included 
in a refinery's total annual production as it compares to its 1990 
volume for the purpose of determining the refinery's compliance 
baseline . EPA believes this change is appropriate in order to keep the 
various provisions of Sec. 80.101 consistent.
    EPA also is proposing to change the organization of Sec. 80.101(f), 
in order to make the requirements of this subsection clearer. This 
reorganization would not, in itself, change the substantive 
requirements of the subsection.
2. Elimination of the Baseline Adjustment by Refiners Who Also Are 
Importers (Sec. 80.101(f)(3))
    Under the anti-dumping program all domestic refineries have 
individual baselines, while almost all imported gasoline is subject to 
the statutory baseline. However, Sec. 80.101(f)(3) requires an importer 
who also operates one or more refineries to use a baseline for imported 
gasoline that is the average of the individual refinery baselines. This 
requirement is intended to address a particular ``gaming'' concern: 
that a refiner who operates a refinery with a stringent refinery 
baseline (a baseline cleaner than the statutory baseline), would 
produce conventional gasoline that would be exported and thereby would 
be excluded from the refinery's compliance calculations, but that then 
would be imported under the less stringent statutory baseline.
    EPA now believes the requirement at Sec. 80.101(f)(3) may be 
unnecessary. There may be little risk of the form of gaming described 
above, in part due to the cost of transporting large volumes of 
gasoline out of the United States in order to be exported, and then 
transporting the same gasoline back into the United States in order to 
be imported. In addition, the current requirement provides a 
competitive advantage to refiner/importers who operate refineries with 
baselines that are dirtier than the statutory baseline. Further, EPA 
now believes the gaming concern could be appropriately addressed by 
simply prohibiting parties from exporting and then importing gasoline 
for the purpose of obtaining a more favorable baseline for the 
gasoline.
    As a result, EPA is proposing to eliminate the requirement for 
refiner/importers to calculate a special baseline for imported 
gasoline, and is proposing to substitute a requirement, as proposed 
Sec. 80.101(j), that would prohibit the form of gaming described above.
3. Compliance Calculations for Blendstocks (Sec. 80.101(g)(3))
    Under Sec. 80.101(d)(4), and subject to certain conditions, 
refiners are allowed to include in a refinery's anti-dumping compliance 
calculations oxygenate that is added to the gasoline produced at a 
refinery where that oxygenate is blended at a facility downstream from 
the refinery. 26 In the case of the simple model standards, 
which are based only on volume-weighted parameter averages, the 
mechanism for including an oxygenate batch in a refinery's compliance 
calculations is straightforward--the oxygenate batch is included based 
on its volume and

[[Page 37364]]

measured levels for sulfur, olefins, aromatics, etc.
---------------------------------------------------------------------------

    \26\  These conditions are aimed at ensuring that the oxygenate 
is blended with gasoline produced at the specific refinery in whose 
compliance calculations the oxygenate is included.
---------------------------------------------------------------------------

    However, in the case of the complex model's emissions performance 
standards the mechanism for including oxygenates in compliance 
calculations is less clear, because the emissions performance of an 
oxygenate batch cannot be directly calculated using the complex model. 
This difficulty results from the valid range limits of the complex 
model--the complex model is valid only for fuels with parameter values 
that are all within the valid range limits, and most oxygenates have at 
least some parameter values that are outside these limits. For example, 
pure ethanol has an RVP of 2.5 psi, which is less than the 6.4 psi 
minimum valid range limit for RVP.
    Section 80.101(g)(3) includes a method for calculating the 
emissions performance of blendstocks, including oxygenates, based on 
the difference in emissions performance between a baseline gasoline, 
and the emissions performance of a hypothetical blend of baseline 
gasoline and an appropriate amount of the applicable blendstock. 
However, the Sec. 80.101(g)(3) method is of limited use in that it only 
applies for refineries that only produce gasoline by adding blendstocks 
to finished gasoline at a single facility. It has been brought to EPA's 
attention that in the case of a refinery that also includes gasoline 
batches in its compliance calculations this method is not appropriate. 
27 As a result, EPA is proposing to modify the 
Sec. 80.101(g)(3) method in order that blendstock batches may be 
included in compliance calculations along with gasoline batches. 
28
---------------------------------------------------------------------------

    \27\  Under the Sec. 80.101(g)(3) method a refiner calculates, 
for each blendstock batch, the amount the emissions performance that 
the batch differs from the refinery's baseline; the net difference 
for all blendstock batches used during an averaging period must be 
zero. In effect, the blendstock batches constitute a separate 
averaging ``pool'' for compliance calculation purposes, that is not 
merged with the compliance calculations for a refinery's gasoline 
batches. As a result, for example, the Sec. 80.101(g)(3) method 
would not allow a refiner to use the relatively ``clean'' emissions 
performance of ethanol blended with a refinery's gasoline at a 
downstream terminal, to help meet standards by gasoline produced at 
the refinery.
    \28\ The proposed compliance calculation method involving 
previously certified gasoline (PCG), discussed in Preamble Section 
IV.C.6., also would be available to a conventional gasoline refiner. 
Under the PCG proposal a refinery's compliance would be based only 
on the volume and properties of blendstocks that are blended by 
excluding the volume and properties of PCG. However, the PCG method 
requires the refiner to sample and test each batch of gasoline 
received, and each batch of gasoline produced, which may not be 
feasible where oxygenate is blended at a downstream terminal.
---------------------------------------------------------------------------

    Under the proposal, a refiner would first determine the volume and 
properties of each batch of blendstock used. This determination would 
require the refiner to sample and test each batch of blendstock 
received. However, in the case of oxygenates and butane the refiner 
could use these blendstocks' normal properties instead of sampling and 
testing each batch received, provided that the refiner completes 
proposed procedures, discussed in Preamble sections IV.F.5 and VI.B.8, 
that would confirm the purity of these blendstocks.
    The refiner then would determine the blending rate of the 
blendstock. Where a blendstock batch is blended into multiple batches 
of gasoline, the refiner could use the cumulative blending rate. For 
example, consider a refiner who blends reformate into gasoline at a 
terminal. 29 If this refiner receives a batch of 25,000 
gallons of reformate, and blends this blendstock with 300,000 gallons 
of gasoline, the blending rate would be 0.077 
(25,000325,000=0.077). This would be true whether the 25,000 
gallons of reformate were blended with a single 300,000 gallon gasoline 
batch, or with six 50,000 gallon gasoline batches regardless of the 
individual blending rates for the six batches.
---------------------------------------------------------------------------

    \29\ The terminal in this situation would be classified as a 
``refinery'' because gasoline volume is being produced through the 
blending of non-oxygenate blendstocks, and the refiner would be 
required to meet the anti-dumping standards based on the volume and 
properties of the blendstock used at this refinery. The gasoline 
used in the blending operation could not be included in compliance 
calculations because it would have been previously certified.
---------------------------------------------------------------------------

    However, EPA is proposing that a blendstock batch that is used to 
produce some gasoline that is classified as ``summer'' and other 
gasoline that is classified as ``winter'' would have to be treated as 
two separate batches, based on the volumes of blendstock used to 
produce gasoline in these two ``seasonal'' categories. In addition, and 
subject to this seasonal constraint, EPA is proposing that a refiner 
who blends oxygenate or butane at a downstream terminal would be 
allowed to treat as a single batch the volume of blendstock received 
during a period of up to one month.
    Next, the refiner would calculate the properties of a hypothetical 
gasoline, that would reflect the properties that would result if 
gasoline having the refinery's ``summer'' or ``winter'' baseline 
values, as appropriate, were blended with the blendstock at the 
blending rate previously determined. These properties would be the 
volume weighted average for each property. Although certain properties 
such as distillation and RVP do not blend linearly, EPA is proposing 
this approach as a reasonable approximation since there is no other 
method to more accurately attribute the emissions effect of such 
downstream blending operations. Consider again the example of the 
refiner blending 25,000 gallons of reformate into 300,000 of gasoline 
at a terminal. Assume the terminal-refinery is subject to the statutory 
baseline, that the reformate has a benzene content of 2.10 vol%, and 
that all of the gasoline produced using the reformate is classified as 
``summer.'' Under Secs. 80.91(b)(5)(i) and 80.45(b)(2) the ``summer'' 
benzene statutory baseline is 1.53 vol%. The benzene content for the 
hypothetical gasoline blend (Bh) would be calculated as 1.57 
vol% using the following equation:
[GRAPHIC] [TIFF OMITTED] TP11JY97.000

In the case of the calculated values for sulfur and oxygen, the 
specific gravities of the blendstock and gasoline would be included in 
the calculation. The measured specific gravity of the blendstock would 
be used. However, EPA is proposing that refiners would be required to 
use a specific gravity value of 0.749 for ``summer'' gasoline and 0.738 
for ``winter'' gasoline, because a refiner using the proposed procedure 
normally would not have measured the gasoline's specific gravity.
    The emissions performance of the hypothetical gasoline then would 
be determined using the complex model. Under the complex model, these 
are the exhaust toxics and NOX emissions performance, in mg/
mi. Like for other compliance calculations involving the complex model, 
the ``summer'' complex model would be used for gasoline blends that are 
intended for use in an area subject to an EPA summertime RVP standard 
at a time these standards are in effect, and that has an RVP value that 
meets this standard. The emissions performance for all other gasoline 
blends would be determined using the ``winter'' complex model.
    In addition, the refiner would determine the emissions performance 
of a gasoline having the refinery's baseline values, using the same 
complex model version--``summer'' or ``winter''--that was used to 
calculate the emissions performance of the hypothetical gasoline.
    Finally, EPA is proposing an equation that would be used to 
calculate the emissions performance of the blendstock portion of the 
hypothetical gasoline blend, called the ``equivalent emissions 
performance.'' The equivalent emissions performance values for the 
blendstock, together with the blendstock

[[Page 37365]]

volume, would be included in the refinery's compliance calculations as 
a separate batch.
    Consider again the example of the terminal-refiner using reformate, 
and assume the hypothetical gasoline blend, when evaluated under the 
summer complex model, had a NOX emissions performance of 
685.6 mg/mi. Using the summer baseline emissions performance for 
NOX under Sec. 80.45(b)(3) (660.0 mg/mi) and the blendstock 
volume fraction previously calculated (0.077), the blendstock's 
NOX equivalent emissions performance (EEP) would be 
calculated to be 353.13 mg/mi using the following equation:
[GRAPHIC] [TIFF OMITTED] TP11JY97.001

    The refiner in this example would include in the refinery's annual 
NOX emissions performance compliance calculations a batch 
with a volume of 25,000 gallons (the blendstock volume), and a 
NOX emissions performance of 353.13 mg/mi.
    EPA is proposing that these changes to the blendstock calculation 
method would be effective beginning January 1, 1998. As a result, any 
refiner who has elected to use the early complex model and who combines 
blendstock with previously certified gasoline during the 1997 averaging 
period would use the current calculation method in Sec. 80.101(g)(3). 
EPA believes this proposed timing is appropriate because it avoids the 
confusion and difficulties of reporting that would result if refiners 
used two different calculation methods during the same averaging 
period.
    EPA also is proposing to change the organization of Sec. 80.101(g), 
in order to make the requirements of this subsection clearer. This 
reorganization would not, in itself, change the substantive 
requirements of the subsection.
    4. Classifying Gasoline as Summer or Winter Gasoline
(Delete Secs. 80.101(g) (5) and (6); Proposed Sec. 80.101(g)(3)(ii))
    Refiners and importers who are subject to complex model standards 
are required to determine the emissions performance of each batch of 
gasoline using the ``summer'' or ``winter'' version of the complex 
model, as appropriate. Sections 80.101(g) (5) and (6) currently provide 
instructions for classifying gasoline as either summer or winter, based 
on the RVP of the gasoline. Gasoline with an RVP value that is less 
than the value required under the volatility regulations at Sec. 80.27 
must be classified as summer gasoline, and all other gasoline must be 
classified as winter gasoline. No other criteria is included in the 
regulations.
    Separate summer and winter complex models are included in the 
regulations in order to address the seasonal factors that influence 
emission levels.30 As a result, the summer complex model is 
appropriate for determining the emissions only for gasoline used during 
the summer, which generally corresponds to the high ozone season, and 
the winter complex model is appropriate for determining the emissions 
only for gasoline used outside the summer. In consequence, EPA believes 
the criteria for classifying gasoline as summer versus winter should 
include the season when the gasoline is used, and not only the RVP of 
the gasoline.
---------------------------------------------------------------------------

    \30\ The principal difference between the summer and the winter 
complex models is that the summer model includes evaporative 
emissions, while the winter complex model does not. Evaporative 
emissions largely are a function of ambient temperatures.
---------------------------------------------------------------------------

    Another issue regarding the appropriate seasonal complex model 
involves gasoline used outside the continental United States in areas 
such as Alaska, Hawaii, Puerto Rico and the Virgin Islands. Gasoline is 
classified as summer gasoline for baseline purposes, under 
Sec. 80.91(d)(1)(i)(A)(1), only when the gasoline is ``produced and 
intended for sale to satisfy federal summer volatility standards.'' The 
federal summer volatility standards, in Sec. 80.27, apply only to 
gasoline used in the continental United States. As a result, the 
emissions of all gasoline used outside the continental United States 
were calculated using the winter complex model for baseline purposes.
    The anti-dumping standards are based on a comparison of the 
emissions of a refinery's gasoline during an averaging period with the 
refinery's baseline emissions. This comparison is valid only if the 
same criteria are used in the baseline and in the averaging period for 
classifying gasoline as summer or winter.
    As a result, under proposed Sec. 80.101(g)(3)(ii), gasoline would 
be classified as summer gasoline only where the gasoline both meets a 
federal RVP standard under Sec. 80.27, and is intended for use in an 
area subject to the RVP standards during the period these standards are 
in effect. Thus, all gasoline produced for use in the continental 
United States between May 1 and September 15 each year would be 
classified as summer gasoline. In addition, any low RVP gasoline 
produced before May that is intended to ``blend-down'' the RVP of 
gasoline storage tanks in advance of the RVP season also would be 
classified as summer gasoline. Lastly, all gasoline produced for use 
outside the continental United States, where the federal RVP standards 
do not apply, would be classified as winter gasoline year-round.
5. Adjustment and Aggregation of Refineries That Exchange Ownership and 
That Are Not Wholly Owned (Sec. 80.101(h))
    Section 80.101(h) provides that refiners who operate more than one 
refinery may aggregate their refineries for purposes of achieving 
compliance with the anti-dumping standards. However, the regulations 
include no instructions regarding whether a refiner may aggregate a 
refinery that is operated by more than one refiner. EPA is concerned 
that enforcement difficulties could result if refiners were allowed 
aggregation of refineries with joint owners. Consider for example, 
hypothetical refinery 1, that is jointly owned by refiners A and B and 
hypothetical refinery 2 that is jointly owned by refiners A and C. In 
this example, refineries 1 and 2 are aggregated and these aggregated 
refineries fail to meet the anti-dumping standards. In this situation 
both refiners B and C could argue that the violation occurred as a 
result of actions that occurred at a refinery with which they were not 
involved and consequently should not be liable. In consequence, it 
would be difficult to establish the liable party in such a situation.
    As a result, EPA believes that aggregation should be available only 
for refineries with a single person who meets the definition of 
``refiner'' for the refinery, or where the persons who meet the 
definition of refiner for multiple refineries are identical, and is 
proposing to require this aggregation condition.
    Section 80.91(f)(4) provides instructions regarding the adjustment 
of aggregate baselines where a refinery that is part of an aggregation 
is shut down or is transferred to another owner. This section provides 
that where an aggregated refinery is shut down or transferred the 
baseline is recalculated to reflect the loss of the shut down or 
transferred refinery, and where a refinery is acquired the acquiring 
refiner must make an aggregation election regarding the acquired 
refinery. However, there are no parallel instructions in Sec. 80.101(h) 
regarding compliance for an aggregated refinery that is shut down or 
transferred.
    EPA believes the baseline requirements and the compliance 
requirements regarding aggregated refineries should be consistent.

[[Page 37366]]

Therefore, EPA is proposing to adopt for compliance purposes the 
instructions in Sec. 80.91(f)(4). In addition, EPA is proposing to 
require that when a refinery is transferred during the course of an 
averaging period that each refiner would be responsible for meeting 
applicable standards during the period it was the refiner for the 
refinery. EPA also is proposing that the aggregation election for an 
acquired refinery would have to be made effective at the beginning of 
the subsequent averaging period. This timing proposal would minimize 
the number of refineries that could be part of different aggregations 
during a single averaging period, and the confusion and enforcement 
difficulties that result from such a situation.
6. Elimination of Composite Sampling and the Inclusion of Sample 
Retention Requirements (Current Sec. 80.101(i)(2); Proposed 
Sec. 80.101(i)(1)(iii))
    Section 80.101(i), in general, requires that refiners and importers 
sample and test every batch of conventional gasoline, and under certain 
circumstances blendstocks used to produce conventional gasoline, for 
the purpose of demonstrating compliance with the requirements of this 
subpart. For the purpose of meeting this requirement, refiners and 
importers currently may combine samples from more than one batch of 
gasoline for testing purposes in accordance with the specified 
protocols under Sec. 80.101(i)(2). It was EPA's initial belief that 
since this procedure was permitted for the development of baseline 
data, it would be appropriate for demonstrating compliance.
    EPA now is concerned that composite sampling may not provide the 
accurate results necessary for measuring compliance by refiners and 
importers under the anti-dumping program, and may also pose significant 
risk with regard to the enforcement and assurance of compliance. EPA's 
primary concern is that the accuracy of composite sampling relies on 
accurate volumetric proportioning and blending of individual batch 
samples. Since these normally will be relatively small volumes of 
gasoline, there is a substantial potential for inaccurate proportioning 
and blending. For example, one refiner commented to the Agency that the 
current compositing option has the potential for causing inconsistent 
lab results. EPA now believes this is a difficult process to complete 
accurately. Equally significant is EPA's concern that the volume 
fractions can readily be altered, either intentionally or 
inadvertently, with little or no backup means for EPA to detect or 
verify such alterations. Such alterations would render the reported 
analyses invalid thus providing little or no assurance of compliance 
with this subpart by regulated parties.
    Further, compositing of samples has the potential to expand the 
effect of any errors in formulating or testing a composite sample. 
Compliance with the conventional gasoline standards is calculated using 
sample test results weighted for the volume of gasoline represented by 
the sample. As a result, any incorrect test result for a composite 
sample would apply to the entire volume of gasoline represented by the 
composite sample, which could be all gasoline produced during a month, 
and not just to the volume of a single gasoline batch.
    For the above reasons, EPA believes that composite sampling and 
analysis as provided under Sec. 80.101(i)(2) is inappropriate. 
Therefore, EPA is proposing to eliminate the sample compositing option 
under Sec. 80.101(i)(2). EPA's objective in this proposal is to provide 
certainty of the accuracy of reports of conventional gasoline quality 
that generally are comparable to the certainty that results from per 
batch testing. EPA seeks comments on the cost of this proposal and 
other options that would achieve this objective at a reduced burden to 
regulated parties.
    One alternative option would be to require every-batch testing for 
certain parameters, and to allow parties to use composite samples for 
other parameters. In order to evaluate this alternative option, EPA 
seeks comments on which parameters parties normally test on an every 
batch basis, whether for operational or commercial purposes. In 
addition, EPA requests comment on any cost savings that would result 
from this option as compared to testing all parameters for every batch.
    Another alternative option would allow compositing, but with a cap 
on the volume of gasoline that could be included in any composite 
sample. The objective of this alternative option would be to mitigate 
the cost of sampling and testing for refiners, typically small 
refiners, who produce a large number of very small batches. As a 
result, the volume cap could be set at the typical batch size for a 
typical refinery. EPA requests comment on the magnitude of the volume 
cap that would be appropriate under this alternative option, and on the 
cost savings that would result from this option as compared to every-
batch testing.
    In addition, EPA is concerned that since there is no independent 
verification of the accuracy of test results of individual batches of 
gasoline, EPA has a very limited ability to monitor compliance with the 
conventional gasoline requirements. Although the independent sampling 
and testing requirement of the reformulated gasoline program is 
critical to ensuring compliance with the stringent RFG standards, the 
same requirement may be excessive for the anti-dumping program. 
However, EPA believes some limited ability to verify the accuracy of 
sample analysis results is appropriate as a means of encouraging 
quality control and monitoring compliance as a deterrent to cheating.
    Therefore, EPA is proposing a new requirement under 
Sec. 80.101(i)(1)(iii) that refiners and importers retain samples from 
each batch of conventional gasoline produced or imported for a period 
of 30 days and provide such samples to EPA upon request. EPA would plan 
to periodically request samples from individual refiners, either on a 
random basis or when it has reason to be suspect, in order to perform 
its own gasoline quality analyses. This requirement would apply to 
conventional gasoline, gasoline blendstocks that become conventional 
gasoline solely upon the addition of oxygenate and blendstocks required 
for compliance calculations purposes under Sec. 80.102(e)(2). The 
sample retention requirement would not apply to oxygenates blended 
downstream of the refinery or import facility. The Agency believes that 
refiners and importers often retain samples for some period for their 
own internal quality control purposes and, as a result, this 
requirement will not create a significantly increased burden for the 
industry. EPA seeks comments on the cost or other impacts of this 
proposal. In addition, EPA seeks comment on the cost savings that would 
result if the required retention period were reduced to 15 days.
    EPA recognizes that some refiners blend conventional gasoline ``in-
line'' and ship directly to the pipeline without transferring completed 
batches to a storage tank. In this case, sampling in-line using a 
``compositing'' methodology as the batch is being produced is the only 
practical means to obtain a representative sample from such batches. 
Today's proposal to eliminate composite sampling of multiple batches 
would allow continued use of in-line blend compositing within a batch. 
Further, EPA does not intend to establish any formal means of 
petitioning for conventional gasoline in-line blending as currently 
exists for reformulated gasoline blending. Therefore, EPA believes that 
refiners

[[Page 37367]]

that blend in-line, without transferring the final blend to a storage 
tank, should continue to composite in-line provided they do so in 
accordance with the industry established automatic sampling procedures 
established by ASTM D 4177-95, ``Standard Practice for Automatic 
Sampling of Petroleum and Petroleum Products''. The manual compositing 
of samples from an in-line blender creates the same quality and 
compliance concerns discussed earlier. Further, EPA believes the 
automatic sampling requirements proposed under Sec. 80.8(b), and as 
referenced in proposed Sec. 80.47 and revised Sec. 80.101, already 
establish the procedures required for refiners in order to continue in-
line blending of conventional gasoline.
    One of the issues surrounding the elimination of compositing as a 
method for compliance verification by conventional gasoline producers 
is the cost of the additional testing. EPA recognizes that the cost of 
meeting the additional testing requirements by using an outside 
laboratory may pose a significant expense for some refineries and, 
therefore, it would be preferable if refiners could meet their testing 
requirements internally. Based on the results of recent refinery 
compliance monitoring since the beginning of the RFG/Anti-dumping 
program, EPA believes that most refiners have equipment required to 
perform the regulatory tests at their refinery except for sulfur under 
the current regulatory test method ASTM D 2622. In an effort to 
minimize the potential cost of the additional testing required through 
the proposed elimination of sample compositing, EPA examined cost 
effective alternative test methods to ASTM D 2622 available for 
determining sulfur content in conventional gasoline. EPA has observed 
data that suggests that ASTM D 5453-93 (``Standard Test Method for 
Determination of Total Sulfur in Light Hydrocarbons, Motor Fuels and 
Oils by Ultraviolet Fluorescence''), when properly calibrated and 
correlated to ASTM D 2622, can be used on gasoline samples containing 
sulfur in the range typical of commercial gasoline. EPA is, therefore, 
proposing that ASTM D 5453-93 be allowed as an alternative test method 
for determining sulfur content in conventional gasoline only until 
September 1, 1998. This date is being proposed based on EPA's 
anticipated completion of a performance based test method rulemaking as 
discussed at 61 FR 58305, November 13, 1996. EPA requests comment on 
the cost of this equipment and whether this method provides sulfur test 
results comparable to the current regulatory method.
7. Imports of Gasoline From Canada by Truck (Sec. 80.101(i)(3))
    Under 40 CFR 80.65 (b) and (c), and 80.101(d) and (i), the 
requirements that apply to imported gasoline apply to each batch of 
imported gasoline regardless of the mode of transportation. The 
requirements for each batch include sampling and testing, independent 
sampling and testing for reformulated gasoline, record keeping, 
reporting and attest engagements. Thus, an importer who imports 
gasoline into the United States by truck is required to meet these 
requirements, including sampling and testing, for each gasoline batch, 
and in such a situation a batch would consist of the gasoline contained 
in the truck if homogeneous or in each truck compartment if the truck's 
gasoline is not homogeneous.
    EPA understands that the every-batch requirements may be difficult 
to meet when gasoline is imported by truck, because of the relatively 
small batch volumes. As a result, EPA is proposing a limited 
alternative method by which certain importers could meet the 
requirements for conventional gasoline that is imported into the United 
States via truck. This proposed approach would be limited to imported 
conventional gasoline, and would not apply in the case of imported 
reformulated gasoline, because of the additional level of environmental 
concern associated with reformulated gasoline.
    This proposed approach would be based on the importer meeting the 
conventional gasoline standards on a per-gallon basis, which is 
different than the normal approach of meeting conventional gasoline 
standards on average. Per-gallon compliance is being proposed because 
under this proposal the importer would not be required to sample and 
test each truck load--each batch--of imported gasoline, which is 
necessary in order to demonstrate compliance with a standard on 
average. Rather, the importer would be allowed to rely on sampling and 
testing conducted by the operator of the truck loading terminal in 
Canada or Mexico to verify that the gasoline meets all conventional 
gasoline standards that apply to the importer.
    For example, if an importer's gasoline is subject to the statutory 
baseline set out at Sec. 80.91(c)(5), under the simple model the 
standards for imported conventional gasoline, specified at 
Sec. 80.101(b)(1), are the following: sulfur--422.5 ppm; T90--415 
deg.F; olefins--13.5 vol%; and exhaust benzene emissions--6.45. Under 
Sec. 80.101(a) these conventional gasoline standards are met on average 
over each calendar year averaging period. If this importer elected to 
import gasoline via truck under the proposed approach, however, the 
importer would be required to demonstrate that each gallon of this 
gasoline met each of these standards. The environmental consequences of 
this proposal would be neutral, because by meeting the average standard 
on an every-gallon basis the standard also is being met on average.
    The proposal also includes the means by which the importer would be 
required to demonstrate the gasoline meets the applicable standards on 
an every-gallon basis. The gasoline in the storage tank from which the 
importer's trucks are loaded would have to be sampled and tested 
subsequent to each receipt of gasoline, and these tests would have to 
show the gasoline meets the applicable standards. This sampling and 
testing could be conducted by the terminal operator. For each truck 
load of imported gasoline the importer would have to obtain from the 
terminal operator documents that state the properties of the gasoline. 
The importer then would treat each truck load of imported conventional 
gasoline as a separate batch for purposes of the record keeping and 
reporting requirements.
    The terminal operator in most cases would not be subject to United 
States laws, so the proposal contains safeguards that are intended to 
ensure the gasoline in fact meets the applicable standards. First, the 
importer would be required to conduct an independent program of quality 
assurance sampling and testing of the gasoline dispensed to the 
importer. This sampling and testing would have to be at a rate 
specified in the proposed regulations, and the sampling would have to 
be unannounced to the terminal operator. In addition, EPA inspectors 
would have to be given access to conduct inspections at the truck 
loading terminal and at any laboratory where samples collected pursuant 
to this proposed approach are analyzed. These inspections could be 
unannounced, and would include sampling and testing, and record 
reviews.
    EPA previously has allowed conventional gasoline to be imported by 
truck in a manner that essentially is identical to the option now being 
proposed, in guidance included in Reformulated Gasoline and Anti-
Dumping Questions and Answers (October 29, 1994). EPA's experience 
since this guidance was issued has been that the approach facilitates 
imports of conventional gasoline by truck, and that

[[Page 37368]]

the sampling and testing requirements are appropriate enforcement 
safeguards.
    EPA requests comment on this proposed approach for parties who 
import conventional gasoline via truck. In particular, EPA requests 
comment of the proposed provisions that deal with requirements that 
apply to persons located outside the United States, and to the need for 
EPA inspectors to conduct inspections at terminals located outside the 
United States.
8. Butane Blending Issue (Sec. 80.101(i)(4))
    The addition of blendstock, including butane, to reformulated or 
conventional gasoline constitutes the production of gasoline, with the 
result that such a blender is considered a refiner under the 
reformulated and conventional gasoline regulations, who is subject to 
all standards and requirements that apply to refiners. These 
requirements include meeting the standards applicable to reformulated 
and conventional gasoline, sampling and testing, record keeping, and 
reporting. Under Secs. 80.65(i) and 80.101(e)(1) the reformulated or 
conventional gasoline with which the blendstock is blended must be 
excluded from the blender-refiner's compliance calculations. In effect, 
the reformulated and conventional gasoline standards must be met based 
on the blendstock properties alone. Under Sec. 80.101(i)(1)(i), 
refiners who produce conventional gasoline by combining blendstock with 
previously-certified conventional gasoline may determine compliance 
with the anti-dumping standards by sampling and testing the blendstock 
following each receipt of blendstock.
    EPA understands that butane is a blendstock that historically has 
been blended with gasoline, particularly in the wintertime. This butane 
blending occurs in part because butane increases the volatility of 
gasoline, and the commercial specifications for wintertime gasoline 
allows (or requires) higher volatility levels than for summertime 
gasoline. In addition, there are economic reasons for blending butane, 
because butane generally costs less than gasoline. Butane generally is 
not blended with gasoline that will be used during the high ozone 
season (May 1 through September 15), because the increased volatility 
of gasoline blended with butane could violate the federal or state 
volatility standards that apply during that period.
    EPA understands that a significant impediment to blending butane 
into gasoline outside the high ozone season is the requirement that 
refiners must sample each batch of conventional or reformulated 
gasoline produced, or in the case of conventional gasoline sampling 
each batch of blendstock. This sampling requirement interferes with 
butane blending because butane typically arrives at blend terminals, 
and is blended in relatively small quantities. As a result, a butane 
blending operation would be required to sample at a frequency that 
could be restrictive for some parties.
    In the case of butane blending into conventional gasoline that 
occurs outside the high ozone season, EPA believes there may be little 
adverse environmental impact provided that the butane is of sufficient 
purity, and that much of the butane used for blending with gasoline is 
of such purity. However, ozone is of environmental concern during the 
``shoulder'' periods immediately preceding and immediately following 
the high ozone season, and the increased RVP from butane that is 
blended during the shoulder periods may cause adverse environmental 
impacts particularly in ozone non-attainment areas.
    Nevertheless, EPA is proposing an alternative sampling and testing 
option that would be available to parties who blend butane into 
conventional gasoline that is used outside the high ozone season. Under 
this proposed option a party who blends butane into conventional 
gasoline would continue to be classified as a refiner, and would be 
liable for all refiner requirements. However, the blender would have an 
additional sampling and testing option. The blender-refiner would be 
able to demonstrate compliance with the conventional gasoline standards 
on the basis of the butane specifications provided by the butane 
supplier, subject to certain conditions that are specified in the 
proposed regulations.
    EPA is not proposing that parties who blend butane into RFG would 
be able to use this relaxed approach to sampling and testing because of 
concern for adverse environmental impacts during the shoulder periods. 
If butane blending with RFG were made more convenient, as is proposed 
for conventional gasoline, an increase in the volatility of RFG during 
the high ozone season's shoulder periods could result.
    EPA requests comment on the potential for adverse environmental 
effects from butane blending with conventional gasoline during the 
shoulder periods, particularly at terminals serving non-RFG ozone non-
attainment areas, and whether any such potential would be reason for 
EPA to decline to promulgate the proposed regulatory changes to 
facilitate butane blending with conventional gasoline. In particular, 
EPA requests comment on whether the flexibility for butane blending 
with conventional gasoline should be limited to terminals serving areas 
that are in attainment for ozone, which would be consistent with the 
decision to not propose change to facilitate butane blending with RFG. 
In addition, EPA requests comment on whether butane blending with 
conventional gasoline should be facilitated only during a period that 
is outside the high ozone season plus a shoulder period--for example, 
between October 15 through March 31 each year.
    EPA previously has allowed butane blending in a manner that 
essentially is identical to the option now being proposed, in guidance 
included in Reformulated Gasoline and Anti-Dumping Questions and 
Answers (October 3, 1994). EPA's experience since this guidance was 
issued has been that the approach facilitates butane blending with 
conventional gasoline, and that certification mechanisms are 
appropriate.
    EPA requests comment on this proposal to relax the sampling and 
testing associated with blending butane with conventional gasoline. In 
addition, EPA requests comment on the proposal that this additional 
flexibility not be extended to butane blending with reformulated 
gasoline.

C. Controls Applicable to Blendstocks (Sec. 80.102)

    Under the anti-dumping program refiners are required to track the 
volume of certain blendstocks produced and transferred to others and to 
include blendstocks in their compliance calculations if the blendstock 
volume exceeds certain thresholds. The purpose of these blendstock 
requirements is to prevent a particular form of ``gaming'': 
transferring blendstock produced at a refinery with a baseline more 
stringent than the statutory baseline to a refinery with the statutory 
baseline to be blended into gasoline in order that the blendstock would 
be subject to more lenient standards. See the discussion at 59 FR 7801 
(February 16, 1994).
    As a result of comments received from industry since the anti-
dumping program began, EPA now is proposing several modifications to 
the blendstock tracking and accounting requirements.
1. Blendstock Tracking for Refineries With the Statutory Baseline 
(Sec. 80.102(f)(1)(i))
    Section 80.102(f)(1)(i) exempts a refinery with a baseline less 
stringent than the statutory baseline from blendstock tracking. 
However, the form of gaming that is the focus of blendstock tracking 
also is not possible in the case

[[Page 37369]]

of a refinery with a baseline that is equal to the statutory baseline, 
and EPA believes the omission of such refineries from the 
Sec. 80.102(f)(1)(i) exemption was an error at the time this section 
was promulgated. As a result, EPA is proposing to add refineries with 
the statutory baseline to the Sec. 80.102(f)(1)(i) exemption.
2. Products That May Be Excluded From the Blendstock Tracking 
Requirements (Sec. 80.102(a))
    Categories of blendstock that are unlikely to be involved in the 
blendstock gaming scenario are exempt from the blendstock tracking 
requirements. Thus, for example, the list of applicable blendstocks 
that must be tracked under Sec. 80.102(a) is limited to blendstocks 
that adversely impact air quality; Sec. 80.102(d)(3) excludes from 
blendstock tracking those blendstocks that are not likely to be used 
for conventional gasoline blending; and Sec. 80.102(f) exempts certain 
parties with limited blendstock production volume from blendstock 
accounting.
    EPA now believes that the blendstock tracking requirements could be 
further limited without jeopardizing the environmental purpose of this 
section. The proposed changes relate to petroleum products that would 
be unlikely candidates for conventional gasoline blending. EPA believes 
that petroleum products with an initial boiling point less than 75 
deg.F or an end point greater than 450  deg.F are not suitable for 
gasoline blending and, therefore, could be excluded from the category 
of blendstocks that refiners must track. As a result, EPA is proposing 
to exclude products with these boiling ranges from blendstock tracking.
    EPA also now believes that certain highly refined or pure grade 
petroleum products are unlikely to be used for gasoline blending, and 
that these products can be identified by price or tendered volume. For 
example, EPA believes that where a petroleum product is sold at a price 
that is 100% above the market price of regular conventional gasoline it 
is unlikely the purchaser will use the product for blending gasoline. 
Similarly, EPA believes that products tendered in volumes less than 
1,000 gallons are unlikely to be used in gasoline blending. Therefore, 
EPA is proposing to exempt products that meet either of these criteria 
from the blendstock tracking requirements. Further, blendstocks for 
which the refiner has evidence are used to produce RFG need not be 
included in the ratio calculations. EPA is proposing that such products 
also be excluded under Sec. 80.102(d)(3).
3. Inclusion of Products in the Blendstock to Gasoline Ratio 
Calculations (Sec. 80.102(d) (1) and (2))
    As discussed previously under the compliance baseline calculations, 
oxygenates added to either conventional gasoline or RBOB had been 
previously excluded from such calculations. EPA now believes such 
products are significant to the total volume considerations of a 
refiner and for consistency should be included in the blendstock to 
gasoline ratio calculations as well. EPA, therefore, is proposing in 
Secs. 80.102(d) (1) and (2) that oxygenates blended downstream into 
conventional gasoline under Sec. 80.101(d)(4)(ii) and oxygenates added 
to RBOB, as determined under Sec. 80.65(e)(1)(ii), be included in the 
denominator of the compliance year ratio calculations.
4. Exclusion of Products From the Blendstock Accounting Requirements 
(Sec. 80.102(d)(3)).
    Section 80.102(d)(3) exempts certain categories of petroleum 
products from the blendstock tracking requirements, where the product's 
use makes blendstock tracking inappropriate. For example, petroleum 
products are exempt from blendstock tracking if the products are 
exported, are used as a refinery feedstock, or are transferred between 
aggregated refineries. Under Sec. 80.102(e) a party that has exceeded 
certain blendstock volume thresholds is required to include all 
blendstocks in its compliance calculations, and the exemptions under 
Sec. 80.102(d)(3) are not applied.
    EPA now believes the exemptions in Sec. 80.102(d)(3) also should 
apply to the blendstock accounting requirements, under the same 
rationale that justifies these exclusion under blendstock tracking, and 
is proposing this change to the blendstock accounting requirements 
under Sec. 80.102(e).
5. Attest Engagements Involving Aggregated Refineries (Sec. 80.102 
Introductory Text and Secs. 80.102 (b) and (c); Subpart F)
    Section 80.101(h)(2)(iii) states that the aggregation election 
applies to the blendstock tracking requirements, and 
Sec. 80.102(d)(3)(iv) exempts from blendstock tracking the blendstocks 
that are transferred between aggregated refineries. However, EPA 
believes that for purposes of conducting attest engagements under 
subpart F, the attest engagements should be conducted separately for 
each refinery, but this refinery-specific approach to blendstock 
tracking attest procedures is not clear in Sec. 80.102 or in subpart F.
    The attest requirements are organized around individual refineries, 
and it would create unnecessary complications to require a different 
organization only for the purpose of reviewing compliance with the 
blendstock tracking requirements. As a result, EPA is proposing to 
clarify the attest procedures in Subpart F to clarify that blendstock 
tracking attest procedures must be conducted separately for each 
refinery. In the case of aggregated refineries the blendstock tracking 
attest procedures would be separately performed for each refinery, 
taking into account the blendstock transfers to refineries in the same 
aggregation. If each refinery in an aggregation separately satisfies 
the blendstock tracking requirements, then EPA believes the aggregated 
refineries would have satisfied these requirements overall.

D. Record Keeping Requirements (Sec. 80.104)

    EPA is proposing to modify Sec. 80.104 to clarify that batch 
information must be kept for oxygenate blended downstream of a refinery 
where the oxygenate is included in the refinery's compliance 
calculations.
    In addition, EPA is proposing record keeping requirements that 
would apply in the case of imported GTAB, that would reflect the 
physical movement of GTAB to the point of blending to produce gasoline. 
(See Preamble Section V.C. concerning requirements for GTAB generally.)

E. Reporting Requirements (Sec. 80.105)

1. Modification of Information That Must Be Reported 
(Sec. 80.105(a)(5)(iv))
    Section 80.105 requires refiners and importers to report various 
information regarding each batch of conventional gasoline produced or 
imported during the averaging period. This includes the grade of the 
gasoline produced. Sec. 80.105(a)(5)(iv). EPA now believes it is 
unnecessary to include this grade information in reports to EPA, and is 
proposing to eliminate this reporting requirement.
    In addition, EPA now believes that in the case of ethanol batches 
it is unnecessary to include the ethanol properties in the batch report 
to EPA, because the properties of a pure compound, such as ethanol, are 
known. Therefore, EPA is proposing to eliminate the requirement that 
parties report the properties of ethanol.

[[Page 37370]]

2. Date for Submission of Attest Engagement Reports (Sec. 80.105(c))
    Section 80.105(c) requires that attest engagement reports involving 
conventional gasoline must be submitted by May 30 each year. However, 
Sec. 80.75(m) requires that attest engagement reports for RFG must be 
submitted by May 31 each year. This inconsistency in reporting 
deadlines was inadvertent when these sections were promulgated, and, as 
a result, EPA is proposing to conform the dates by adopting May 31 as 
the deadline for submitting conventional gasoline attest reports.

VII. Attest Engagements

    Under Secs. 80.65(h), 80.75(m), and 80.105(c) refiners and 
importers, and reformulated gasoline oxygenate blenders who achieve 
compliance on average, are required to commission an audit each year to 
review compliance with certain requirements of the reformulated 
gasoline and anti-dumping program. The audit requirements are specified 
in 40 CFR part 80, subpart F. Under these regulations the auditor 
evaluates compliance with the specified requirements by completing 
audit procedures, called ``agreed upon procedures,'' that are included 
in the regulations for each requirement--the auditor ``attests'' to the 
results of the agreed upon procedures. As a result, the overall audit 
is called an ``attest engagement.''
    EPA now is proposing a number of changes to the attest engagement 
requirements.
1. Modified Agreed Upon Procedures (Secs. 80.128 and 80.129; Proposed 
Secs. 80.133 and 80.134))
    The agreed upon procedures for refiners and importers are specified 
in Sec. 80.128, and for oxygenate blenders in Sec. 80.129. In addition, 
the headnotes of Sec. 80.128 allow parties to satisfy the attest 
engagement requirement using other agreed upon procedures if the party 
obtains prior approval from EPA.
    EPA received comments from industry, and from auditors who 
conducted attest engagements under this program, that the agreed upon 
procedures in Secs. 80.128 and 80.129 should be modified in order to be 
more efficient. Moreover, a group of auditors who were working in this 
area convened under the auspices of the American Institute of Certified 
Public Accountants (AICPA) to develop new attest procedures. This group 
submitted modified attest procedures to EPA in January 1996, and asked 
EPA to approve these procedures for use. On March 15, 1996, EPA 
approved use of the attest procedures AICPA submitted, with certain 
modifications, under the authority of Sec. 80.128. EPA now is proposing 
to include these modified attest procedures in the regulations.
    The modified attest procedures do not differ significantly in 
substance from the procedures in Secs. 80.128 and 80.129. The principal 
difference between the modified attest procedures and the procedures in 
Secs. 80.128 and 80.129 is that the modified procedures includes 
criteria for identifying when certain attest procedures, or categories 
of attest procedures, are unnecessary for a particular attest 
engagement. For example, attest procedures address the blendstock 
tracking requirements under Sec. 80.102. Under Sec. 80.128, the auditor 
is required to complete a full slate of attest procedures that 
scrutinize each category of blendstocks relevant to the Sec. 80.102 
requirements. Under the modified attest procedures for blendstock 
tracking, however, the procedures are arranged in a sequence that 
allows the auditor to identify categories of blendstock tracking attest 
procedures that are unnecessary, and to avoid conducting these 
procedures.
    These modified attest procedures were used successfully by numerous 
auditors for attest engagements for the 1995 reporting period.
    The modified attest procedures also include definitions not 
included in the original procedures, but these definitions do not 
change the substance of the original procedures. However, in today's 
version of the modified attest procedures, EPA is proposing a new 
definition for ``laboratory analysis'' that would constitute a 
substantive change.
    Under both the original and modified attest procedures, auditors 
are required to review laboratory analysis results of various types, 
and, inter alia, compare the results with reports to EPA. The form of 
the laboratory analysis results that an auditor must review has not 
been specified, however. EPA has learned that, as a result, auditors 
often review only a company's laboratory analysis results as 
transcribed into the computer system used to calculate compliance with 
standards. EPA has found through its own audits of refiners and 
importers, however, that the original laboratory results and the 
results recorded in a computer system sometimes are different. These 
differences often result from simple data entry errors, although on 
occasion the reason for the difference is less benign. As a result, EPA 
is proposing that where attest procedures call for the review of a 
laboratory analysis result, the auditor would be required to review the 
original laboratory result. Thus, for example, in the case of a testing 
apparatus that generates a printout of the test results, only review of 
this printout would satisfy an attest procedure that calls for review 
of the laboratory result, or where test results are first recorded in 
the chemist's laboratory log book, only review of this log book would 
satisfy the requirement. Review of a transcribed version of these 
original test results would not suffice.
    This proposed definition of laboratory analysis is consistent with 
the proposed change to the record keeping requirement dealing with 
laboratory analyses, discussed above, that requires parties to keep 
copies of original test results.
    EPA is proposing that the original attest procedures in 
Secs. 80.128 and 80.129 would continue to be available as alternatives 
to the attest procedures now being proposed, but only through the 
attest for the 1997 reporting period. Under this proposal, only the 
attest procedures in proposed Secs. 80.133 and 80.134 could be used to 
meet the attest engagement requirements beginning with the attest 
engagements for the 1998 reporting period.
    EPA is proposing to phase out the original attest procedures 
because we believe the modified attest procedures are superior, and 
ultimately should be used for all attest engagements. In addition, EPA 
believes oversight of the attest requirement, including reviews of 
attest reports, would be more efficient if all attest engagements were 
based on the same agreed upon procedures. Nevertheless, EPA requests 
comment on whether the original attest procedures should be available 
for use indefinitely.
    In addition, EPA is proposing that during the period when both the 
original and the modified attest procedures are available parties would 
be required to use either the original attest procedures for refiners 
and importers under Sec. 80.128 in its entirety, or the modified attest 
procedures for refiners and importers under Sec. 80.133 in its 
entirety. A party would not be allowed to use a mixture of attest 
procedures from Sec. 80.128 and Sec. 80.133. Similarly, an oxygenate 
blender would be required to use the attest procedures in Sec. 80.129 
or in Sec. 80.134, and could mix attest procedures from both sections. 
The reason for this constraint is that the different attest procedure 
sections contain different requirements that are organized differently, 
and, at least in part, the logic of the sections would be lost if these 
sections are not completed in their entirety.

[[Page 37371]]

2. Agreed Upon Procedure Reports (Sec. 80.130(a))
    Section 80.130 requires the CPA or CIA who conducts an attest 
engagement to issue a report that summarizes the procedures performed 
and findings. The regulations do not specify greater detail of what 
must be included in an attest report, however. EPA now believes it is 
necessary to specify certain items of information that should be 
included in each attest engagement report. This conclusion by EPA 
results from its review of the first attest engagement reports, for the 
1995 reporting period, that were submitted to EPA at the end of May, 
1996. These attest reports varied significantly in the amount of detail 
that was included, but many reports were too scant to allow any 
meaningful review by EPA. In fact, some attest reports stated simply 
that the attest engagement had been conducted, and nothing more.
    The purpose of the attest engagement reports is, at least in part, 
to enable the regulated party, and EPA, to gauge whether the attest 
engagement was properly performed through a review of the report, and 
in the case of findings, to put those findings into perspective 
including whether the findings raise issues regarding compliance by the 
refiner or importer. Where the attest report includes none of the 
details of the procedures completed, this review is not possible. As a 
result EPA now is proposing certain information about each attest 
engagement that must be included in all attest engagement reports.
    Initially, EPA is proposing that attest engagement reports would 
have to identify who conducted the attest engagement, and give a 
telephone number of the auditor. This would allow EPA to easily contact 
the auditor in case questions arise. In addition, the report would have 
to identify the company and facility that was the subject of the audit.
    More substantively, attest engagement reports would be required to 
include the volumes of gasoline, and the number of batches, ascertained 
during the engagement in various categories. Auditors are required to 
verify the volume and batch number information, so this information is 
easily available to the auditor for inclusion in the report. EPA 
believes the required volume and batch information could be included in 
the report in the form of a simple table, which would require little 
effort to prepare.
    In numerous instances the attest procedures require the auditor to 
obtain listings of all documents in various categories, and to review 
in more detail a random sampling of the documents. The procedures for 
selecting these samples are specified in Sec. 80.127. EPA is proposing 
that for each occasion when such a sample is selected, the audit report 
would be required to include certain details of this sampling process, 
including the size of the population being sampled, the size of the 
sample selected, and the method used to ensure the sample was randomly 
selected. Inclusion of these details would enable EPA to verify that 
the sampling was properly completed, and to put in better perspective 
any findings that result from the auditor's review of the sample.
3. Attest Engagement Document Retention (Sec. 80.130(b))
    Section 80.130(b) currently requires CPAs and CIAs who conduct 
attest engagements to retain ``all records pertaining to the 
performance of each agreed upon procedure and pertaining to the 
creation of the agreed upon procedures report* * *.'' EPA's normal 
practice when conducting an enforcement audit of a refiner, importer or 
oxygenate blender is to include an audit of the attest engagement, to 
ensure the engagement was completed as required. These audits of attest 
engagements require EPA to review the auditor's audit records.
    During the course of conducting these enforcement audits, however, 
EPA discovered that many auditors retained a scant record of the 
conduct of their attest engagements. This absence of more comprehensive 
documentation made EPA's audits of the attest engagements more 
difficult.
    As a result, EPA is proposing more specific regulatory requirements 
regarding the documents that auditors would be required to retain. The 
first category would be documents the auditor reviews that are created 
by the company that is the subject of the attest engagement. These 
company-created documents include laboratory analyses, inventory 
reconciliations and product transfer documents. The second category 
would be documents prepared by the auditor during the course of the 
attest engagement that summarize the conduct and work product of the 
attest engagement, commonly called ``work papers.'' The third category 
would include computer data and/or the input, output and results of 
computer programs used by the auditor to conduct the audit. The last 
category would be correspondence between the auditor and the company 
being audited on the subject of the attest engagement.
    EPA believes the proposed record retention requirements would not 
expand the current record retention requirements, which apply to 
``all'' records pertaining to attest engagements. The proposed 
requirements merely clarify that certain records are in the scope of 
the records EPA intends that auditors should retain.
4. Attest Procedures for GTAB (Proposed Sec. 80.131)
    EPA is proposing procedures by which importers may treat imported 
gasoline as blendstock (``gasoline treated as blendstock'' or ``GTAB'') 
in proposed Sec. 80.83. As a result, EPA also is proposing attest 
procedures that would apply in the case of an importer who utilizes the 
GTAB option. The proposed GTAB attest procedures follow the general 
model of the attest procedures included in Secs. 80.128, 80.129, 80.133 
and 80.140. In particular, the attest procedures proposed for GTAB 
would instruct the auditor to track the movement of a portion of the 
GTAB batches to ensure the movement and subsequent use of the GTAB is 
consistent with the GTAB requirements.
5. Attest Procedures for Refiners With In-Line Blending Waivers From 
Independent Sampling and Testing (Sec. 80.65(f); Proposed Sec. 80.132)
    Under Sec. 80.65(f) refiners and importers of reformulated gasoline 
are required to carry out a program of independent sampling and 
testing, with one exception. This exception applies in the case of a 
refiner who has obtained an EPA-approved waiver from the independent 
sampling and testing requirements on the basis of producing 
reformulated gasoline using an appropriately sophisticated computer-
controlled in-line blending operation (an ``in-line blending waiver''). 
See, Sec. 80.65(f)(4). In addition, under Sec. 80.65(f)(4)(ii) any 
refiner with an in-line blending waiver is required to carry out an 
independent audit of each batch produced using the in-line blending 
operation. These audits constitute a check on the reported gasoline 
properties for in-line blended gasoline, which is a surrogate for the 
independent sampling and testing required for gasoline not produced 
under an in-line blending waiver.
    The current regulations do not adequately describe the scope of in-
line blending audits, however, and EPA is concerned that the in-line 
blending audits refiners have conducted have not been sufficiently 
comprehensive. As a result, EPA is proposing attest procedures that 
would have to be

[[Page 37372]]

conducted for any refiner with an in-line blending waiver.
    All in-line blending waivers that EPA has granted require the 
refiner to collect a volumetrically proportional composite sample of 
each batch of in-line blended gasoline. This sample is collected using 
an automatic sampling apparatus that collects a portion of the gasoline 
being produced during the entire blending period, that is proportional 
to the volume of gasoline being produced any time. The refiner is 
required, by the terms of its waiver, to use the analysis of this 
composite sample as the basis of the report to EPA of the batch 
properties, i.e., as the ``certification'' analysis, or the ``primary 
analysis result.''
    In-line blending waivers also require the refiner to obtain 
secondary analysis results for each regulated parameter, for use during 
the in-line blending audit to corroborate the primary analysis results. 
These confirmatory analysis results are of three general types: (1) 
Results from analyzers that automatically collect and analyze samples 
from the blend on a continuous or very frequent basis, called ``on-
line'' analysis results; (2) results from samples that are collected 
from the batch on a less frequent basis and analyzed at a separate 
laboratory, sometimes called ``grab samples'' or ``off-line'' analysis 
results; and (3) results from samples of the blendstocks used to 
produce the batch, together with the proportions of the blendstocks 
used.
    The attest procedures proposed for in-line blending waiver 
situations are divided into two broad parts. First, the auditor would 
review the EPA-approved in-line blending waiver, to identify the 
requirements regarding the collection, analysis and recording of the 
primary analysis result, and all confirmatory analysis results. In the 
second part of the procedures, the auditor would compare the primary 
analysis result with the confirmatory analysis results for each 
regulated parameter. Detailed attest procedures are proposed for these 
primary/confirmatory comparisons.
    In the case of parameters that are confirmed using on-line analysis 
results, the auditor would identify the on-line analysis results that 
correspond to twelve discrete times during the blend. These twelve 
confirmatory results then would be compared with the primary result.
    In the case of parameters confirmed using off-line analysis 
results, the auditor would compare the primary result with a randomly 
selected portion of the confirmatory results.
    For parameters confirmed using blendstock analysis results, the 
auditor would, for twelve discrete times during the blend, identify the 
proportions of the different blendstocks being used, and the analysis 
results for these blendstocks. The confirmatory analysis result for the 
parameter at issue for each discrete time then would be calculated as 
the volume-weighted total of the blendstock analysis results for that 
parameter.
    Under the proposed attest procedures, each confirmatory analysis 
result would be evaluated in several ways. First, the auditor would 
determine if the confirmatory sample was collected, analyzed and 
recorded in accordance with the petition as approved by EPA. Second, 
the confirmatory analysis result would be compared with the primary 
analysis result. EPA understands that there normally will be some 
difference between the primary and confirmatory analysis results. 
Nevertheless, the magnitude and direction of the differences would give 
the auditor, the refiner, and EPA important information relevant to 
whether the primary analysis result is accurate.
    The third evaluation of the confirmatory analysis result would 
address compliance with per-gallon standards. The per-gallon standards 
are oxygen and benzene under the complex model--the per-gallon minimum 
or maximum where the standard is being met on average, or the per-
gallon standard where the standard is being met per gallon. In 
addition, and as discussed above in preamble section III.A.1, the 
complex model valid range limits are per-gallon standards for all 
parameters. Under Sec. 80.41, each of these standards must be met on a 
per-gallon basis, and no portion of in-line blended gasoline may 
violate these standards even if a blend meets the standards overall. 
The auditor would report as a finding any analysis result that violates 
an applicable per-gallon standard.
    EPA is proposing that the in-line blending waiver attest engagement 
initially would review a random sample of the in-line blended batches. 
This would be a departure from the current requirement that each batch 
of in-line blended gasoline must be audited. Under the proposal, if any 
primary/confirmatory comparison differed by an amount greater than the 
ranges specified in Sec. 80.65(e) for independent sampling and testing 
analysis comparisons, or if any sample violated a per-gallon standard, 
this random sample would be expanded.
    Under Sec. 80.65(f)(4)(ii)(C), reports for attest engagements must 
be submitted by February 28 each year for the prior calendar year. This 
attest reporting deadline is significantly earlier than the May 31 
deadline for other attest reports. EPA now believes that the overall 
attest engagement activity, and the reports for those attest 
engagements, would benefit if the dates were harmonized. As a result, 
EPA is proposing that the in-line blending waiver attest reports would 
be submitted by May 31 each year for the prior calendar year's 
activity. As a result of this proposed timing change, EPA believes that 
refiners would be able to commission a single attest engagement that 
would address all refinery activities, including the proposed in-line 
blending waiver attest procedures, and to submit reports for all attest 
engagement work at the same time.
    EPA requests comment on this proposal to harmonize the reporting 
date for attest engagements, and the requirement that a single report 
be submitted that reflects all attest engagement work for a calendar 
year reporting period.
    EPA also requests comment on the proposed in-line blending waiver 
attest procedures in general. In particular, EPA requests comment on 
whether each batch of in-line blended gasoline should be audited in 
every case, as opposed to the statistical sampling approach being 
proposed. In addition, EPA requests comment on an option of auditing a 
portion of the batches of each grade of in-line blended gasoline. The 
rationale for requiring grade-specific sampling is that for any 
particular refinery the diversity in gasoline quality between grades is 
likely to be greater than the diversity in quality between batches of 
the same grade.

VIII. Environmental and Economic Impacts

    The environmental impacts of today's proposal would be minimal, if 
any. Most of the revisions proposed today are the result of a 
determination that certain regulatory requirements may be relaxed 
without detriment to the environment. Economic impacts would be 
generally beneficial to affected parties due to the additional 
flexibility proposed in today's notice. Anti-competitive effects would 
not be 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.

IX. 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

[[Page 37373]]

supporting data and detailed analysis should also be submitted to allow 
EPA to make maximum use of the comments. All comments should be 
directed to the EPA Air Docket, Docket A-97-03 (See ADDRESSES). See the 
DATES section for the deadline for submission of comments.
    Today's rule proposes a variety of modifications to the standards 
and requirements for reformulated and conventional gasoline. While many 
of the proposed modifications would reduce compliance burdens on 
industry, a few modifications may have the effect of restricting 
compliance flexibility. EPA specifically solicits comments on the need 
to take the actions that would reduce this flexibility, including 
comments on whether there are less restrictive measures that EPA may 
take.
    Any proprietary information being submitted for the Agency's 
consideration should be markedly distinguished from other submittal 
information and clearly labeled ``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.

X. Regulatory Flexibility

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities. Small entities include small 
businesses, small not-for-profit enterprises, and small governmental 
jurisdictions.
    I certify that this action will not have a significant economic 
impact on a substantial number of small entities. The proposed 
revisions contained in today's action would affect small business 
refiners, importers, oxygenate blenders, distributors, wholesale 
purchaser-consumers, and retailers of gasoline. In addition, this 
action would affect small business laboratories that serve as 
independent laboratories for purposes of fulfilling the independent 
sampling and testing requirement for reformulated gasoline. However, 
for the following reasons, EPA has determined that this action would 
not have an adverse economic impact on these entities.
    In the case of small business oxygenate blenders, distributors, 
wholesale purchaser-consumers and retailers of gasoline, the proposed 
revisions would provide greater flexibility and clarity with regard to 
existing requirements and would not have an adverse impact on these 
entities. However, the revision which would disallow the use of 
composite sampling of conventional gasoline would impose an additional 
burden on small refiners and importers that do not have the laboratory 
capability to test for all parameters and must send samples to other 
laboratories for testing. Composite sampling allows refiners and 
importers to demonstrate compliance based on the testing of fewer 
gasoline samples. EPA believes, however, that the increased flexibility 
created by the relaxation and deletion of other refiner and importer 
requirements under today's action would more than offset any burden 
created by disallowing composite sampling. Today's action, for example, 
proposes provisions which would: Allow importers to treat finished 
gasoline as blendstock to provide flexibility to correct off-spec 
imported gasoline; allow refiners to use conventional gasoline to 
produce RFG, which is currently prohibited; modify the sampling and 
testing requirements for refiners who produce gasoline by blending 
butane; eliminate the requirement for refiners of conventional gasoline 
who also import gasoline to calculate a special baseline for their 
imported gasoline; modify the requirements for every-batch testing of 
gasoline imported by truck; make the requirements for the accounting of 
blendstocks for conventional gasoline less restrictive; make the attest 
engagement procedures more efficient; and modify the reporting 
requirements for conventional gasoline to delete the requirements to 
report the grade of gasoline and include ethanol properties in the 
batch report. Other provisions would aid refiners and importers by 
clarifying and providing additional guidance with regard to existing 
requirements. EPA is also proposing provisions which would minimize the 
effect of disallowing composite sampling by allowing an alternative 
test method for sulfur content. EPA believes that most refiners have 
the equipment required to perform the regulatory tests at their 
refinery except for sulfur under the current regulatory test method. 
Today's action would allow the use of a cost effective alternative test 
method for sulfur until September 1, 1998, the date on which EPA 
anticipates completion of a performance based test method rulemaking.
    With regard to small business laboratories, there would be no 
increase in economic burden as a result of today's action. This action 
proposes to impose regulatory liability on entities serving as 
independent laboratories for failure to perform the duties necessary to 
fulfill the independent sampling and testing requirement (i.e., 
following prescribed procedures, retaining records, reporting to EPA). 
However, there would be no additional costs to either the laboratories 
or the refiners or importers who contract for the laboratory services, 
since the refiners and importers would continue to contract and pay for 
these services as they do under the current regulations. In addition, 
this action is not expected to affect a substantial number of small 
business laboratories, as the total number of laboratories currently 
registered with EPA is well under 100.
    The EPA prepared a Regulatory Flexibility Analysis (RFA) for the 
final rule establishing standards for reformulated and conventional 
gasoline (59 FR 7716 (February 16, 1994)), which includes an analysis 
of the impact of these regulations on small refiners. The RFA is in the 
docket for that rulemaking: EPA Air Docket A-92-2.

XI. Executive Order 12866

    Under 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 entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    It has been determined that this rule is not a significant action 
under the

[[Page 37374]]

terms of the Executive Order 12866, and is therefore not subject to OMB 
review.

XII. Paperwork Reduction Act

    The information collection requirements in this proposed rule have 
been submitted for approval to the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. An 
Information Collection Request (ICR) document has been prepared by EPA 
(ICR No. 1591.09) and a copy may be obtained from Sandy Farmer, OPPE 
Regulatory Information Division; U.S. Environmental Protection Agency 
(2137); 401 M St., SW., Washington, DC 20460 or by calling (202) 260-
2740.
    Although many of the revisions proposed in today's rule will have 
the effect of reducing the information collection requirements of the 
RFG/anti-dumping regulations, the proposed deletion of the composite 
sampling provision will mean that refiners and importers of 
conventional gasoline will be required to test each batch of gasoline 
rather than test a composite sample comprised of samples of two or more 
batches of gasoline. As discussed in Preamble Section VI.B.6., EPA is 
proposing this revision because EPA believes that composite sampling 
may not provide the accurate results necessary for measuring compliance 
by refiners and importers under the anti-dumping program, and may pose 
a significant risk with regard to the enforcement and assurance of 
compliance.
    The EPA estimates that refiners and importers currently spend 
approximately 1.67 hours of information collection per batch for 
compliance testing of conventional gasoline pursuant to the 
reformulated gasoline and anti-dumping final rule. This is the 
estimated burden above the hours refiners had expended on testing prior 
to promulgation of the rule. Most refiners had been testing every batch 
of conventional gasoline for some of the same properties for which 
testing is required under the rule.
    Under the current rule, samples of conventional gasoline may be 
composited over a period up to one month. At a rate of one test per 
month, the number of hours spent per refiner/importer per year would be 
20.04 hours. EPA estimates that there are approximately 230 refiners 
and importers subject to this rule. If all of these refiners and 
importers were to base their compliance on one composite sample per 
month, the total burden on industry would be 4,609.20 hours per year. 
EPA believes, however, that many refiners and importers currently 
conduct tests on every batch of gasoline rather than on composite 
samples, or test composite samples comprised of fewer batches than are 
produced over a one-month period. EPA believes, therefore, that, in 
practice, the number of hours currently spent on testing by industry is 
likely to be much greater than this figure.
    EPA estimates that, without the composite sampling option, refiners 
and importers would test an average of approximately 158 batches of 
conventional gasoline per refiner/importer per year. Applying the 
estimate of 1.67 hours per batch, the total number of hours per 
refiner/importer per year would be 263.86 hours, or a total of 
60,687.80 hours industry-wide. If all 230 refiners and importers 
currently were basing compliance on one composite sample per month, the 
incremental burden of this action on industry would be 56,078.60 hours. 
At an estimated cost of $53.31 per test for information collection, the 
total incremental cost of the additional testing burden to industry 
would be approximately $1,790,150. However, as discussed above, most 
refiners conducted every-batch testing of some properties prior to 
promulgation of the final rule, and many refiners currently test every 
batch for compliance purposes rather than base compliance on the 
testing of composite samples. Therefore, EPA believes that the 
incremental burden of this proposed action on industry would be much 
smaller.
    This action also proposes to eliminate the per-gallon 
NOX minimum standards for complex model averaged RFG, and 
increase the number of compliance surveys required beginning in 1998 
and thereafter from 50 to 70. EPA is proposing to eliminate the 
NOX per-gallon minimum standards because these standards may 
impose substantial costs in producing RFG without commensurate benefits 
to the environment. (See Preamble Section III.A.1.). The NOX 
per-gallon minimum standards were included in the final rule as a tool 
to assure an even distribution of NOX benefits from area to 
area. However, EPA believes that a less costly alternative, an increase 
in the number of required surveys, would achieve a similar level of 
assurance of even distribution of NOX benefits. EPA 
estimates that the incremental cost burden of these additional surveys 
will be roughly $1,100,000 industry-wide (20 additional surveys at 
approximately $55,000 each), or about $7,333 per RFG refiner or 
importer ($1,100,000 150 refiners/importers). The increased cost burden 
due to the additional survey requirement, however, would be more than 
offset by the elimination of the burden on industry imposed by the per-
gallon NOX minimum standards.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An Agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed in 40 CFR part 9 and 48 CFR Chapter 15.
    Comments are requested on the Agency's need for this information, 
the accuracy of the provided burden estimates, and any suggested 
methods for minimizing respondent burden, including through the use of 
automated collection techniques. Send comments on the ICR to the 
Director, OPPE Regulatory Information Division; U.S. Environmental 
Protection Agency (2137), 401 M St., SW., Washington, DC 20460; and to 
the Office of Information and Regulatory Affairs, Office of Management 
and Budget, 725 17th St., NW., Washington, DC 20503, marked 
``Attention: Desk Officer for EPA.'' Include the ICR number in any 
correspondence. Since OMB is required to make a decision concerning the 
ICR between 30 and 60 days after July 11, 1997, a comment to OMB is 
best assured of having its full effect if OMB receives it by August 11, 
1997. The final rule will respond to any OMB or public comments on the 
information collection requirements contained in this proposal.

XIII. Unfunded Mandates Act

    Under 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

[[Page 37375]]

aggregate; or by the private section, 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 the 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 proposed 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 
burdens of the reformulated gasoline program on regulated entities. 
Therefore, the requirements of the Unfunded Mandates Act do not apply 
to this action.

XIV. 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 Subject in 40 CFR Part 80

    Environmental Protection, Air pollution control, Fuel additives, 
Gasoline, Motor vehicle pollution, Incorporation by reference, 
Reporting and recordkeeping requirements.

    Dated: June 24, 1997.
Carol M. Browner,
Administrator.
    For the reasons set out in the preamble, part 80 of title 40 of the 
Code of Federal Regulations is proposed to be amended as follows:

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

    1. The authority citation for part 80 continues 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 80.2 is amended by removing and reserving paragraphs 
(y), (z), (tt) and (uu), and revising paragraphs (w), (ee), (gg) and 
(ss) to read as follows:


Sec. 80.2  Definitions.

* * * * *
    (w) Previously certified gasoline means reformulated or 
conventional gasoline or RBOB that has been produced by a refiner or 
oxygenate blender, or imported by an importer, in accordance with 
applicable standards and requirements, and that the refiner, oxygenate 
blender or importer has included or will include in the compliance 
calculations for reformulated or conventional gasoline.
* * * * *
    (ee) Reformulated gasoline means any gasoline whose formulation has 
been certified under Sec. 80.40, and which meets each of the standards 
and requirements prescribed under Sec. 80.41.
* * * * *
    (gg) Batch of gasoline means a quantity of gasoline that is 
homogeneous with regard to those properties that are specified for 
conventional or reformulated gasoline.
* * * * *
    (ss) Tank truck means a truck and/or trailer used to transport or 
cause the transportation of gasoline or diesel fuel, that meets the 
definition of motor vehicle in section 216(2) of the Act.
* * * * *
    3. Section 80.3 is revised to read as follows:


Sec. 80.3  Test methods.

    (a) Lead content. Lead content shall be determined in accordance 
with American Society for Testing and Materials (ASTM) standard method 
D 3237-90, entitled ``Standard Test Method for Lead in Gasoline by 
Atomic Absorption Spectroscopy'', or ASTM standard method D 5059-92, 
entitled ``Standard Test Method for Lead in Gasoline by X-Ray 
Spectroscopy''.
    (b) Phosphorus content. Phosphorus content shall be determined 
using ASTM standard method D 3231-94, entitled ``Standard Test Method 
for Phosphorus in Gasoline''.
    (c) Reid vapor pressure (RVP). Reid Vapor Pressure (RVP) shall be 
determined using the test method specified in Sec. 80.46(c).
    (d) Oxygen and oxygenate content. Oxygen and oxygenate content, 
including ethanol content in percentage by volume, shall be determined 
using the test methods specified in Sec. 80.46(g). The volume per-cent 
ethanol in fuel shall be calculated using the following equation:

VEtoh(%) = (WtEtoh(%)) * (Dfuel/
0.7939)

Where:

Vetoh = Concentration of Ethanol by Volume.
WtEtoh = Concentration of Ethanol by Weight.
Dfuel = Relative Density of Fuel under Study @ 60  deg.F.

    (e) Cetane index. The cetane index of diesel fuel shall be 
determined using ASTM standard method D 976-91, entitled ``Standard 
Methods for Calculated Cetane Index of Distillate Fuels.''
    (f) Sulfur content. Sulfur content shall be determined using the 
test method specified in Sec. 80.46(a). ASTM D 4294-90 may be used as 
an alternative method for determining the sulfur content in diesel 
fuel.
    (g) Aromatic content of diesel fuel. The aromatic content of diesel 
fuel shall be determined using ASTM standard method D 5186-96, entitled 
``Standard Test Method for Determination of Aromatic Content of Diesel 
Fuel by Supercritical Fluid Chromatography.'' Mass per-cent diesel 
aromatics shall be converted to volume per-cent diesel aromatics using 
the following equation:

Vol% = (Mass% * 0.916) + 1.33

Where Mass% refers to the output from D 5186-96.

    (h) Incorporations by reference. ASTM standard test methods, D 
3237-90, D 5059-92, D 3231-94, D 976-91, and D 5186-96 are incorporated 
by reference. These incorporations by reference were approved by the 
Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 
1 CFR part 51. Copies may be obtained from the American Society for 
Testing and Materials, 100 Barr Harbor Dr., West Conshohocken, PA 
19428. Copies may be inspected at the Air Docket Section (LE-131), room 
M-1500, U.S. Environmental Protection Agency, Docket No. A-97-03, 401 M 
Street, SW, Washington, DC 20460, or at the Office of the Federal 
Register, 800 North Capitol Street, NW, suite 700, Washington, DC.
    4. Section 80.8 is added to subpart A to read as follows:


Sec. 80.8  Sampling methods for gasoline and diesel fuel.

    The sampling methods specified in this section shall be used to 
collect samples of gasoline and diesel fuel for purposes of determining 
compliance with the requirements of this part.
    (a) Manual sampling. Manual sampling of tanks and pipelines shall 
be performed according to the applicable procedures specified in 
American Society for Testing and Materials (ASTM) method D 4057-95, 
entitled ``Standard Practice for Manual Sampling of Petroleum and 
Petroleum Products.''
    (b) Automatic sampling. Automatic sampling of petroleum products in 
pipelines shall be performed according to the applicable procedures 
specified in ASTM method D 4177-95, entitled ``Standard Practice for 
Automatic Sampling of Petroleum and Petroleum Products.''
    (c) Sampling and sample handling for volatility measurement. 
Samples to be analyzed for Reid Vapor Pressure (RVP)

[[Page 37376]]

shall be collected and handled according to the applicable procedures 
in ASTM method D 5842-95, entitled ``Standard Practice for Sampling and 
Handling of Fuels for Volatility Measurement.''
    (d) Sample compositing. Composite samples shall be prepared using 
the applicable procedures in ASTM method D 5854-96, entitled ``Standard 
Practice for Mixing and Handling of Liquid Samples of Petroleum and 
Petroleum Products.''
    (e) Incorporations by reference. ASTM standard practices D 4057-95, 
D 4177-95, D 5842-95, and D 5854-96, are incorporated by reference. 
These incorporations by reference were approved by the Director of the 
Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. 
Copies may be obtained from the American Society for Testing and 
Materials, 100 Barr Harbor Dr., West Conshohocken, PA 19428. Copies may 
be inspected at the Air Docket Section (LE-131), room M-1500, U.S. 
Environmental Protection Agency, Docket No. A-97-03, 401 M Street, SW, 
Washington, DC 20460, or at the Office of the Federal Register, 
National Archives and Records Administration, Washington, DC 20408, 
(202) 523-4534.
    5. Section 80.27 is amended by revising paragraph (b) and the first 
three sentences of paragraph (d)(2) to read as follows:


Sec. 80.27  Controls and prohibitions on gasoline volatility.

* * * * *
    (b) Determination of compliance. Compliance with the standards 
listed in paragraph (a) of this section shall be determined using the 
sampling methods specified in Sec. 80.8, and the testing method 
specified Sec. 80.3(c).
* * * * *
    (d) * * *
    (2) In order to qualify for the special regulatory treatment 
specified in paragraph (d)(1) of this section, gasoline must contain 
denatured, anhydrous ethanol. The concentration of the ethanol, 
excluding the required denaturing agent, must be at least 9% and no 
more than 10% (by volume) of the gasoline. The ethanol content of the 
gasoline shall be determined using the test method specified in 
Sec. 80.3(d). * * *
* * * * *
    6. Section 80.28 is amended by adding paragraph (g)(1)(iii) to read 
as follows:


Sec. 80.28  Liability for violations of gasoline volatility controls 
and prohibitions.

* * * * *
    (g) * * *
    (1) * * *
    (iii) An oversight program under paragraph (g)(1)(ii) of this 
section need not include periodic sampling and testing of gasoline in a 
tank truck operated by a common carrier, but in lieu of such tank truck 
sampling and testing, the common carrier shall demonstrate evidence of 
an oversight program for monitoring compliance with the volatility 
requirements of Sec. 80.27 relating to the transport or storage of 
gasoline by tank truck, such as appropriate guidance to drivers on 
compliance with applicable requirements and the periodic review of 
records normally received in the ordinary course of business concerning 
gasoline quality and delivery.
* * * * *
    7. Section 80.29 is amended by revising paragraph (b) to read as 
follows:


Sec. 80.29  Controls and prohibitions on diesel fuel quality.

* * * * *
    (b) Determination of compliance. (1) Any diesel fuel that does not 
show visible evidence of being dyed with either 1,4-dialkylamino-
anthraquinone (which has a characteristic blue-green color in diesel 
fuel) or dye solvent red 164 (which has a characteristic red color in 
diesel fuel) shall be considered to be available for use in diesel 
motor vehicles and motor vehicle engines, and shall be subject to the 
prohibitions of paragraph (a) of this section.
    (2) Compliance with the standards listed in paragraph (a) of this 
section shall be determined using the applicable sampling methods 
specified in Sec. 80.8, and the testing methods specified in Sec. 80.3.
* * * * *
    8. Section 80.30 is amended by revising paragraph (g)(1)(i) to read 
as follows:


Sec. 80.30  Liability for violations of diesel fuel control and 
prohibitions.

* * * * *
    (g) * * *
    (1) * * *
    (i) Evidence of an oversight program conducted by the carrier, for 
monitoring the diesel fuel stored or transported by that carrier, such 
as periodic sampling and testing of the cetane index and sulfur 
percentage of incoming diesel fuel. Such an oversight program need not 
include periodic sampling and testing of diesel fuel in a tank truck 
operated by a common carrier, but in lieu of such tank truck sampling 
and testing the common carrier shall demonstrate evidence of an 
oversight program for monitoring compliance with the diesel fuel 
requirements of Sec. 80.29 relating to the transport or storage of 
diesel fuel by tank truck, such as appropriate guidance to drivers on 
compliance with applicable requirements and the periodic review of 
records normally received in the ordinary course of business concerning 
diesel fuel quality and delivery; and
* * * * *
    9. Section 80.41 is amended by revising paragraphs (d) and (f), 
introductory text the tables in paragraphs (d) and (f); adding 
paragraph (h)(3); and revising paragraph (p) to read as follows:


Sec. 80.41  Standards and requirements for compliance.

* * * * *
    (d) Phase I complex model averaged standards. The Phase I ``complex 
model'' standards for compliance when achieved on average are as 
follows:

                Phase I Complex Model Averaged Standards                
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
VOC emissions performance reduction (percent)Gasoline                   
 designated for VOC-Control Region 1:                                   
    Standard..............................................  3
                                                                    6.6 
    Per-Gallon Minimum....................................  3
                                                                    2.6 
Gasoline designated for VOC-Control Region 2:                           
    Standard..............................................  1
                                                                    7.1 
    Per-Gallon Minimum....................................  1
                                                                    3.1 
Toxics air pollutants emissions performance reduction                   
 (percent)................................................  1
                                                                    6.5 
NOX emissions performance reduction (percent).............  1
                                                                     .5 
Oxygen content (percent, by weight)                                     
    Standard..............................................  2
                                                                     .1 
    Per-Gallon Minimum....................................  1
                                                                     .5 
Benzene (percent, by volume):                                           
    Standard..............................................  0
                                                                     .95

[[Page 37377]]

                                                                        
    Per-Gallon Maximum....................................  1
                                                                     .30
------------------------------------------------------------------------

* * * * *
    (f) Phase II complex model averaged standards. The Phase II 
``complex model'' standards for compliance when achieved on average are 
as follows:

                Phase II Complex Model Averaged Standards               
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
VOC emissions performance reduction (percent) Gasoline                  
 designated for VOC-Control Region 1:                                   
    Standard..................................................  X emissions performance reduction (percent).................          
Gasoline designated as VOC-Controlled.........................  VOC(t) shall be defined for 
Phase I:

YVOC(t)=100%  x  0.52  x  [exp(v1(et))/
exp(v1(b))-1]
    +100%  x  0.48  x  [exp(v2(et))/exp(v2(b))-1]
    +{100%  x  0.52  x  [exp(v1(et)) /exp(v1(b))]
      x  [{[(0.0002144  x  E200et) -0.014470]  x  
E200}
    +{[(0.0008174  x  E300et)-0.068624
    -(0.000348  x  AROet)]  x  E300}
    +{(-0.000348  x  E300et)+0.0323712  x   ARO}]}
    +{100%  x  0.48  x  [exp(v2(et))/exp(v2(b))]
      x  [{[(0.000212  x  E200et)-0.01350]  x  
E200}
    +{[(0.000816  x  E300et)-0.06233
    -(0.00029  x  AROet)]  x  E300}
    +{[ (-0.00029  x  E300et) +0.028204]  x  ARO}]}

    (2) For Phase II:

YVOC(t)=100%  x  0.444  x  [exp(v1(et))/
exp(v1(b))-1]
    +100%  x  0.556  x  [exp(v2(et))/
exp(v2(b))-1]
    +{100%  x  0.444  x  [exp(v1(et))/exp(v1(b))]
      x  [{[(0.0002144  x  E200et) -0.014470]  x  
E200}
    +{[(0.0008174  x  E300et)-0.068624
    -(0.000348  x  AROet)]  x  E300}
    +{[(-0.000348  x  E300et) + 0.0323712]  x  
ARO}]}
    +{100%  x  0.556  x  [exp(v2(et))/exp(v2(b))]
      x  [{[(0.000212  x  E200et)-0.01350]  x  
E200}
    +{[(0.000816  x  E300et)-0.06233
    -(0.00029  x  AROet)]  x  E300}
    +{[(-0.00029  x  E300et) +0.028204]  x  ARO}]}
* * * * *
    (C) * * *
    (6) If [80.32+(0.390  x  ARO)] exceeds 94 for the target fuel, and 
the target fuel value for E300 exceeds 94, then the E300 value for the 
``edge target'' fuel shall be set equal to 94 volume percent.
* * * * *
    (D) * * *
    (6) If [79.75+(0.385  x  ARO)] exceeds 94 for the target fuel, and 
the target fuel value for E300 exceeds 94, then the E300 value for the 
``edge target'' fuel shall be set equal to 94 volume percent.
* * * * *
    (12) If the E300 level of the target fuel is less than 72 percent, 
then E300 shall be set equal to (E300-72 percent).
    (13) If the E300 level of the target fuel is greater than 94 volume 
percent and (79.75 + (0.385  x  ARO) also is greater than 94, then 
E300 shall be set equal to (E300-94 volume percent)* * *
* * * * *
    (d) * * *
    (1) * * *
    (iv) * * *
    (B) For fuels with SUL, OLE, and/or ARO levels outside the ranges 
defined in Table 7 of paragraph (d)(1)(iv)(A) of this section, 
YNOX(t) shall be defined as:
    (1) For Phase I:

YNOX(t)=100%  x  0.82  x  [exp(n1(et))/
exp(n1(b))-1]
    +100%  x  0.18  x  [exp(n2(et))/exp(n2(b))-1]
    +{100%  x  0.82  x  [exp(n1(et))/exp(n1(b))]
      x  [{[(-0.00000133  x  SULet)+0.000692]  x  
SUL}
      x  {[(-0.000238  x  AROet)+0.0083632]  x  
ARO}
    +{[(0.000733  x  OLEet)-0.002774]  x  OLE}]}

[[Page 37378]]

    +{100%  x  0.18  x  [exp(n2(et))/exp(n2(b))]
      x  [{0.000252  x  SUL}
    +{[(-0.0001599  x  AROet)+0.007097]  x  ARO}
    +{[(0.000732  x  OLEet)-0.00276]  x  OLE}]}

    For Phase II:
* * * * *
    (f) * * *
    (1) * * *
    (i) * * *
    For reformulated gasolines:

------------------------------------------------------------------------
              Fuel  property                      Acceptable range      
------------------------------------------------------------------------
Oxygen....................................  0.00--4.0 weight percent.   
Sulfur....................................  0.0--500.0 parts per million
                                             by weight.                 
RVP.......................................  6.4--10.0 pounds per square 
                                             inch.                      
E200......................................  30.0--70.0 evaporated       
                                             percent.                   
E300......................................  70.0--100.0 evaporated      
                                             percent.                   
Aromatics.................................  0.0--55.0 volume percent.   
Olefins...................................  0.0--25.0 volume percent.   
Benzene...................................  0.0--2.0 volume percent.    
------------------------------------------------------------------------

* * * * *
    11. Section 80.46 is amended by revising paragraphs (a) through (e) 
(f)(3), (g) and (h); and adding paragraph (i) to read as follows:


Sec. 80.46  Measurement of reformulated and conventional gasoline fuel 
parameters.

    (a) Sulfur. (1) Sulfur content shall be determined using American 
Society for Testing and Materials (ASTM) standard method D 2622-94, 
entitled ``Standard Test Method for Sulfur in Petroleum Products by X-
Ray Spectrometry.''
    (2) Alternative test method for conventional gasoline.
    (i) Prior to September 1, 1998, any refiner or importer may 
determine sulfur content in conventional gasoline using standard method 
ASTM D 5453-93, entitled ``Standard Test Method for Determination of 
Total Sulfur in Light Hydrocarbons, Motor Fuels and Oils by Ultraviolet 
Fluorescence'', provided that
    (ii) the test result is correlated with the method specified in 
paragraph (a)(1) of this section.
    (b) Olefins. Olefin content shall be determined using ASTM standard 
method D 1319-95a, entitled ``Standard Test Method for Hydrocarbon 
Types in Liquid Petroleum Products by Fluorescent Indicator 
Adsorption.''
    (c) Reid vapor pressure (RVP). (1) Reid Vapor Pressure (RVP) shall 
be determined using ASTM standard method D 5191-96, entitled ``Standard 
Test Method for Vapor Pressure of Petroleum Products (Mini Method),'' 
provided that--
    (2) The RVP equivalent is calculated using the following equation:

RVP (PSI) = (0.956 * x) - 0.347
    or
RVP (kPa) = (0.956 * x) - 2.39

Where:

x = The total measured pressure in PSI or kPa

    (d) Distillation. (1) Distillation parameters shall be determined 
using ASTM standard method D 86-96, entitled ``Standard Test Method for 
Distillation of Petroleum Products;'' except that
    (2) The figures for repeatability and reproducibility given in 
degrees Fahrenheit in Table 9 in the ASTM method are incorrect, and 
shall not be used.
    (e) Benzene. Benzene content shall be determined using either:
    (1)(i) ASTM standard method D 3606-96, entitled ``Standard Test 
Method for Determination of Benzene and Toluene in Finished Motor and 
Aviation Gasoline by Gas Chromatography;'' except that
    (ii) Instrument parameters must be adjusted to ensure complete 
resolution of the benzene, ethanol and methanol peaks because ethanol 
and methanol may cause interference with ASTM standard method D 3606-96 
when present; or
    (2) The gas chromatography method specified in paragraphs (f) (1) 
and (2) of this section.
    (f) * * *
    (3)(i) Prior to September 1, 1998, any refiner or importer may 
determine aromatics content using ASTM standard method D 1319-95a, 
entitled ``Standard Test Method for Hydrocarbon Types in Liquid 
Petroleum Products by Fluorescent Indicator Adsorption,'' for purposes 
of meeting any testing requirement involving aromatics content; 
provided that
    (ii) The refiner or importer test result is correlated with the 
method specified in paragraph (f)(1) of this section.
    (g) Oxygen and oxygenate content. (1) Oxygen and oxygenate content 
shall be determined using ASTM standard method D 5599-95, entitled 
``Standard Test Method for Determination of Oxygenates in Gasoline by 
Gas Chromatography and Oxygen Sensitive Flame Ionization Detection.''
    (2)(i) Prior to September 1, 1998, and when the oxygenates present 
are limited to MTBE, ETBE, TAME, DIPE, tertiary-amyl alcohol, and 
C1 to C4 alcohols, any refiner, importer, or 
oxygenate blender may determine oxygen and oxygenate content using ASTM 
standard method D 4815-94a, entitled ``Standard Test Method for 
Determination of MTBE, ETBE, TAME, DIPE, tertiary-Amyl Alcohol and 
C1 to C4 Alcohols in Gasoline by Gas 
Chromatography,'' for purposes of meeting any testing requirement; 
provided that
    (ii) The refiner or importer test result is correlated with the 
method set forth in paragraph (g)(1) of this section.
    (h) Butane test methods. (1) Sulfur content in butane shall be 
determined using ASTM D 5623-94, entitled ``Standard Test Method for 
Sulfur Compounds in Light Petroleum Liquids by Gas Chromatography and 
Sulfur Selective Detection.''
    (2) Light hydrocarbon content in butane shall be determined using 
ASTM D 2163-91, entitled ``Standard Test Method for Analysis of 
Liquefied Petroleum (LP) Gas and Propene Concentrates by Gas 
Chromatography.''
    (3) Benzene and aromatic content of butane shall be determined 
using the Gas Producers Association (GPA) method 2186-95, entitled 
``Tentative Method for the Extended Analysis of Hydrocarbon Liquid 
Mixtures Containing Nitrogen and Carbon Dioxide by Temperature 
Programmed Gas Chromatography.''
    (i) Incorporations by reference. ASTM standard methods D 3606-96, D 
1319-95a, D 4815-94a, D 2622-94, D 5453-93, D 86-96, D 5191-96, D 5599-
95, D 5623-94, D 2163-91, and GPA 2186-95 are incorporated by 
reference. These incorporations by reference were approved by the 
Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 
1 CFR Part 51. Copies of the ASTM standard methods may be obtained from 
the American Society of Testing Materials, 100 Barr Harbor Dr., West 
Conshohocken, PA 19428. Copies of GPA method 2186-95 may be obtained 
from the Gas Producers Association, 6526 East 60th Street, Tulsa, OK 
74145. Copies may be inspected at the Air Docket Section (LE-131), room 
M-1500, U.S. Environmental Protection Agency, Docket No. A-97-03, 401 M 
Street SW., Washington, DC 20460 or at the Office of the Federal 
Register, National Archives and Records Administration, Washington, DC 
20408, (202) 523-4534.
    12. Section 80.47 is added to subpart D to read as follows:


Sec. 80.47  Sampling of reformulated and conventional gasoline and 
RBOB.

    (a) Sample collection, handling, and compositing procedures. Any 
person who samples reformulated or conventional gasoline, or 
blendstocks used to produce reformulated or conventional gasoline, in 
order to meet any requirement of subparts D or E shall follow the 
procedures specified in Sec. 80.8.

[[Page 37379]]

    (b) Determination of homogeneity for reformulated and conventional 
gasoline. Homogeneity of the gasoline shall be determined prior to 
preparation of, or analysis of, the sample used to establish the batch 
properties for purposes of Secs. 80.65(e), 80.72 and 80.101(i). 
Homogeneity shall be determined as follows.
    (1) Where the gasoline contained in a single tank or compartment is 
to be treated as a single batch:
    (i) By collecting, at a minimum, upper, middle, and lower spot or 
tap samples following the procedures referenced in Secs. 80.8 (a) and 
(c); or
    (ii)(A) By following procedures for tank mixing that result in 
complete tank homogeneity, that the party is able to demonstrate 
through historic sampling and testing data for the same types of 
blendstocks, storage tank configuration, mixing apparatus, and mixing 
protocol; and
    (B) By collecting, at a minimum, upper, middle, and lower spot or 
tap samples of the batch, analyzing these samples for gravity, and 
demonstrating that the gravity values do not differ by more than 
0.3 deg. API, unless it is not possible to collect spot or tap samples 
from the storage tank.
    (2) Where the product contained in a marine vessel with multiple 
compartments is to be treated as a single batch, by collecting a sample 
from each compartment using the running sample collection procedure 
referenced in Secs. 80.8 (a) and (c).
    (3) The samples collected under paragraphs (b)(1)(i) and (b)(2) of 
this section shall be analyzed for each parameter for which the batch 
is subject to, or that is used to calculate an emissions performance 
for which the batch is subject to, a standard specified in Sec. 80.41 
or Sec. 80.101.
    (4) The analyses under paragraph (b)(3) of this section shall use 
the test methods specified in Sec. 80.46, or alternative test methods 
for which the party is able to demonstrate correlation to the values 
obtained by the methods specified in Sec. 80.46.
    (5)(i) For gasoline to be considered homogeneous, the maximum 
difference in the analytical results of samples collected under 
paragraphs (b)(1)(i) and (b)(2) of this section shall be no larger than 
the range specified in Sec. 80.65(e)(2)(i) for each parameter; however
    (ii) In no case may any sample violate a per-gallon minimum or 
maximum standard under Sec. 80.41 that is applicable to the batch.
    (6) If the gasoline meets the criteria to be considered 
homogeneous, it may be treated as a batch pursuant to Sec. 80.2(gg).
    (c) Additional sampling options for imported gasoline. (1) In the 
case of imported reformulated gasoline, the gasoline contained in 
marine vessels with multiple compartments may be treated as a single 
batch of reformulated gasoline and the properties may be based on a 
volume weighted composite sample prepared using the procedures 
referenced in Sec. 80.8(d) provided that:
    (i) All of the gasoline contained in the multiple compartments is 
transferred to a single shore tank; or
    (ii) The gasoline from the vessel is transferred to multiple shore 
tanks and is determined for each tank separately to meet all per-gallon 
minimum or maximum standards under Sec. 80.41 that are applicable to 
the batch, using the following procedure:
    (A) The gasoline contained in the storage tanks prior to the 
transfer of any gasoline from the vessel (the ``heels'') shall be 
sampled and tested using the test methods specified in Sec. 80.46, or 
alternative test methods for which the party is able to demonstrate 
correlation to the values obtained by the methods specified in 
Sec. 80.46;
    (B) The gasoline contained in the storage tanks subsequent to the 
transfer of all gasoline from the vessel shall be sampled and tested 
using the test methods specified in Sec. 80.46, or alternative test 
methods for which the party is able to demonstrate correlation to the 
values obtained by the methods specified in Sec. 80.46; and
    (C) The volume and properties of the heels shall be subtracted from 
the volume and properties of the filled tanks to determine the volume 
and properties of the gasoline from the vessel only.
    (iii) RVP is determined using the volume weighted average of the 
individual compartment sample results, analyzed prior to preparation of 
the batch composite sample.
    (2) In the case of imported reformulated gasoline, the gasoline 
transferred to shore tanks from marine tank vessels may be certified 
based on shore tank sampling following the procedures of paragraphs 
(c)(1)(ii) (A) through (C) of this section, except that testing must be 
performed using only the methods specified in Sec. 80.46.
    (3) In the case of imported conventional gasoline the gasoline 
contained in marine vessels with multiple compartments may be treated 
as a single batch, provided that gasolines of different octane grades 
(e.g., premium, mid-grade and regular) are treated as separate batches.
    (d) Requirements for RBOB. Each requirement of this section that 
applies to reformulated gasoline also applies to RBOB.
    13. Section 80.49 is amended by revising the paragraph (a) 
introductory text, the entry for ``New Parameter'' in the table in 
paragraph (a)(1), paragraph (a)(3), introductory text, and the first 
three sentences in paragraph (b), introductory text, to read as 
follows:


Sec. 80.49  Fuels to be used in augmenting the complex emission model 
through vehicle testing.

* * * * *
    (a) Seven fuels (hereinafter called the ``addition fuels'') shall 
be tested for the purpose of augmenting the complex emission model with 
a parameter not currently included in the complex emission model. The 
properties of the addition fuels are specified in paragraphs (a)(1) and 
(2) of this section. The addition fuels shall be specified with at 
least the same level of detail and precision as in Sec. 80.49(a)(5)(i), 
and
    (1) * * *

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Fuels                                             
                     Fuel property                     -------------------------------------------------------------------------------------------------
                                                              1             2             3             4             5             6             7     
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                        
                                    *                   *                   *                   *                   *                                   
New Parameter\1\......................................             C            (C+B)/2       B              C            B              C            B 
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ C = Candidate level, B = Baseline level.                                                                                                            

* * * * *
    (3) The addition fuels shall be specified with at least the same 
level of detail and precision as in Sec. 80.49(a)(5)(i), and this 
information shall be included in the petition submitted to the 
Administrator

[[Page 37380]]

requesting augmentation of the complex emission model.
* * * * *
    (b) Three fuels (hereinafter called ``extention fuels'') shall be 
tested for the purpose of extending the valid range of the complex 
emission model for a parameter currently included in the complex 
emission model. The properties of the extension fuels are specified in 
paragraphs (b)(2) through (4) of this section. The extension fuels 
shall be specified with at least the same level of detail and precision 
as in Sec. 80.49(a)(5)(i), and * * *
* * * * *
    14. Section 80.50 is amended by revising paragraph (a)(2) to read 
as follows:


Sec. 80.50  General test procedure requirements for augmentation of the 
emission models.

    (a) * * *
    (2) Toxics emissions must be measured when testing the extension 
fuels per the requirements of Sec. 80.49(b) or when testing addition 
fuels 1, 2, or 3 per the requirements of Sec. 80.49 (a).
* * * * *
    15. Section 80.65 is amended by:
    a. Revising paragraphs (d)(2)(vi)(A), (B), and (C); removing 
paragraphs (d)(2)(vi)(D) and (d)(2)(vi)(E); and revising paragraph 
(d)(3);
    b. Revising paragraph (e)(1); to adding an entry for ``total oxygen 
content'' in the table in paragraph (e)(2)(i), and revising the first 
sentence of paragraph (e)(2)(ii)(B);
    c. Revising paragraphs (f), (g), (h), and (i); and
    d. Adding paragraph (j), to read as follows:


Sec. 80.65  General requirements for refiners, importers, and oxygenate 
blenders.

* * * * *
    (d) * * *
    (2) * * *
    (vi) * * *
    (A) Any oxygenate;
    (B) Ether only; or
    (C) Oxygenate of a type and amount that is specified by the refiner 
or importer.
    (3)(i) The requirements of this paragraph (d)(3) apply to each 
batch of:
    (A) Reformulated or conventional gasoline, or RBOB, produced by a 
refiner, or imported by an importer;
    (B) Reformulated gasoline produced by an oxygenate blender who 
meets the oxygen standard on average;
    (C) Oxygenate added to conventional gasoline downstream of the 
refinery where the oxygenate is included in refinery compliance 
calculations under Sec. 80.101(g); and
    (D) Each batch of blendstock produced or imported and transferred 
if blendstock accounting is required under Sec. 80.102(e).
    (ii) Each batch identified in paragraph (d)(3)(i) of this section 
shall be assigned a number (the ``batch number''), consisting of the 
EPA-assigned refiner, importer or oxygenate blender registration 
number, the EPA-assigned facility registration number, the last two 
digits of the year in which the batch was produced, imported or 
blended, and a unique number for the batch, beginning with the number 
one for the first batch produced, imported or blended each calendar 
year and each subsequent batch during the calendar year being assigned 
the next sequential number (e.g. 4321-54321-95-0000001, 4321-54321-95-
0000002, etc.).
    (e) Determination of volume and properties. (1) Each refiner or 
importer shall for each batch of reformulated gasoline or RBOB produced 
or imported determine the volume, and the value of each of the 
properties specified in paragraph (e)(2)(i) of this section, except 
that the value for RVP must be determined only in the case of 
reformulated gasoline or RBOB that is VOC-controlled. These 
determinations shall:
    (i) Be based on a representative sample of the reformulated 
gasoline or RBOB that is:
    (A) Collected from a quantity of gasoline or RBOB that has been 
determined to be homogeneous as specified in Sec. 80.47(b);
    (B) Collected using the methodologies specified in Sec. 80.8; and
    (C) Analyzed using the methodologies specified in Sec. 80.46;
    (ii) In the case of RBOB, follow the oxygenate blending 
instructions specified in Sec. 80.69(a)(2);
    (iii) Be carried out either by the refiner or importer, or by an 
independent laboratory, as part of an independent analysis program 
under Sec. 80.72 ; and
    (iv) Be completed prior to the gasoline or RBOB leaving the 
refinery or import facility for each parameter that is subject to, or 
that is used to calculate an emissions performance that is subject to, 
a minimum or maximum standard specified in Secs. 80.41 (a) through (f).
* * * * *
    (2) * * *
    (i) * * *

------------------------------------------------------------------------
              Fuel property                            Range            
------------------------------------------------------------------------
                                                                        
                  *        *        *        *        *                 
Total oxygen content.....................  0.10wt%.                     
------------------------------------------------------------------------

    (ii)* * *
    (B) The refiner or importer shall have the gasoline analyzed for 
the property at one additional independent laboratory.* * *
    (f) Independent analysis requirement. (1) Any refiner or importer 
of reformulated gasoline or RBOB shall meet the independent analysis 
requirements specified under Sec. 80.72; except that
    (2) Any refiner that produces reformulated gasoline using computer-
controlled in-line blending equipment is exempt from the independent 
sampling and testing requirements specified in paragraphs (f)(1) of 
this section, provided that such refiner:
    (i) Obtains from EPA an exemption from these requirements. In order 
to seek such an exemption, the refiner shall submit a petition to EPA, 
such petition to include:
    (A) A description of the refiner's computer-controlled in-line 
blending operation, including a description of:
    (1) The location of the operation;
    (2) The length of time the refiner has used the operation;
    (3) The volumes of gasoline produced using the operation since the 
refiner began the operation or during the previous three years, 
whichever is shorter, by grade;
    (4) The movement of the gasoline produced using the operation to 
the point of fungible mixing, including any points where all or 
portions of the gasoline produced is accumulated in gasoline storage 
tanks;
    (5) The physical lay-out of the operation;
    (6) The automated control system, including the method of 
monitoring and controlling blend properties and proportions;
    (7) Any sampling and analysis of gasoline that is conducted as a 
part of the operation, including on-line, off-line, and composite, and 
a description of the methods of sampling, the methods of analysis, the 
parameters analyzed and the frequency of such analyses, and any 
written, printed, or computer-stored results of such analyses, 
including information on the retention of such results;
    (8) Any sampling and analysis of gasoline produced by the operation 
that occurs downstream from the blending operation prior to fungible 
mixing of the gasoline, including any such sampling and analysis by the 
refiner and by any purchaser, pipeline or other carrier, or by 
independent laboratories;
    (9) Any quality assurance procedures that are carried out over the 
operation; and

[[Page 37381]]

    (10) Any occasion(s) during the previous three years when the 
refiner adjusted any physical or chemical property of any gasoline 
produced using the operation downstream from the operation, including 
the nature of the adjustment and the reason the gasoline had properties 
that required adjustment; and
    (B) A description of the independent audit program of the refiner's 
computer-controlled in-line blending operation that the refiner 
proposes will satisfy the requirements of this paragraph (f)(2); and
    (ii) Carries out an attest engagement of the refinery's computer-
controlled in-line blending operation for each calendar year reporting 
period, as follows:
    (A) The audit shall follow the in-line blending attest procedures 
specified in Sec. 80.132;
    (B) The results of the in-line blending attest engagement shall be 
reported as specified in Sec. 80.130, and shall be included in the 
attest report submitted to EPA no later than May 31 of each year; and
    (C) The attest engagement shall be carried out by an auditor who 
meets the criteria specified in Sec. 80.125; and
    (iii) Complies with any other requirements that EPA includes as 
part of the exemption.
* * * * *
    (g) [Reserved]
    (h) Compliance audits. Any refiner or importer of reformulated 
gasoline or RBOB, and any oxygenate blender of any RBOB who meets the 
oxygen standard on average, shall have the reformulated gasoline and 
RBOB it produced, imported or blended during each calendar year audited 
for compliance with the requirements of this subpart D, in accordance 
with the requirements of subpart F, at the conclusion of each calendar 
year. This audit requirement must be met separately for each refinery 
and for each importer.
    (i) Exclusion of previously certified gasoline. Any refiner who 
combines blendstock with previously certified reformulated or 
conventional gasoline to produce reformulated gasoline or RBOB shall 
exclude the previously certified gasoline for purposes of demonstrating 
compliance with the standards under Sec. 80.41. This exclusion shall be 
accomplished separately by the refiner for each refinery as follows.
    (1)(i) Determine the volume and properties for each batch of 
previously certified gasoline received that is used to produce 
reformulated gasoline or RBOB, using the procedures in paragraph (e)(1) 
of this section and in Sec. 80.66, and the independent analysis 
requirements in paragraph (f) of this section in the case of previously 
certified reformulated gasoline.
    (ii) (A) In the case of previously certified reformulated gasoline 
determine the emissions performances for toxics and NOX, and 
VOC for VOC-controlled reformulated gasoline, and the designations for 
VOC control and OPRG.
    (B) In the case of previously certified conventional gasoline 
determine the exhaust toxics and NOX emissions performances.
    (2) The volume and properties of any batch of gasoline produced 
using previously certified gasoline shall be determined without regard 
to the previously certified gasoline content.
    (3) In the case of any parameter or emissions performance standard 
that has been designated by the refiner, for the refinery, to be met on 
a per-gallon basis under paragraph (d)(2)(v) of this section, the per-
gallon standard that applies to any batch of reformulated gasoline or 
RBOB produced:
    (i) Using any previously certified reformulated gasoline shall be 
the more stringent of:
    (A) The per-gallon standard that applies to the refinery under 
Sec. 80.41; or
    (B) the most stringent value for that parameter or emissions 
performance for any previously certified reformulated gasoline used to 
produce the batch; or
    (ii) Using any previously certified conventional gasoline shall be 
the standard that applies to the refinery under Sec. 80.41.
    (4) In the case of any parameter or emissions performance standard 
that has been designated by the refiner, for the refinery, to be met on 
average under paragraph (d)(2)(v) of this section, any previously 
certified gasoline shall be excluded from the refinery's compliance 
calculations as follows.
    (i) The volume and properties of any batch of previously certified 
reformulated gasoline received at the refinery that is used to produce 
reformulated gasoline or RBOB shall be included in compliance 
calculations for the standard under Sec. 80.67(g):
    (A) As a negative batch, by multiplying the term Vi in 
Sec. 80.67(g)(1)(ii) (i.e., the batch volume) times negative 1;
    (B) In the averaging categories that correspond to the designations 
regarding VOC control and OPRG of the previously certified gasoline 
batch when received; and
    (C) The net volume of gasoline in the refinery's compliance 
calculations shall be positive in each of the following categories 
where the standard is being met on average:

------------------------------------------------------------------------
                                  Gasoline category that must have net  
           Standard                         positive volume             
------------------------------------------------------------------------
Oxygen.......................  All RFG.\1\                              
                               RFG that is non-OPRG.                    
Benzene......................  All RFG and RBOB.                        
VOC emissions performance....  RFG and RBOB that is VOC-controlled for  
                                Region 1.                               
                               RFG and RBOB that is VOC-controlled for  
                                Region 2.                               
Toxics emissions performance.  All RFG and RBOB.                        
NOX emissions performance....  All RFG and RBOB.                        
                               RFG and RBOB that is VOC-controlled.     
------------------------------------------------------------------------
\1\ ``RFG'' is an abbreviation for reformulated gasoline.               

    (ii) The volume and properties of any batch of previously certified 
conventional gasoline received at the refinery that is used to produce 
reformulated gasoline or RBOB:
    (A) Shall be included in the refinery's anti-dumping compliance 
calculations under Sec. 80.101(g) as a negative batch; and
    (B) The net volume of gasoline in the refinery's anti-dumping 
compliance calculations shall be positive.
    (5) Any refiner, but no other person, may use the procedures 
specified in this paragraph (i) to combine previously certified 
conventional gasoline with reformulated gasoline, to reclassify 
conventional gasoline into reformulated gasoline, or to change the 
designations of reformulated gasoline with regard to VOC control and 
OPRG.
    (6) Nothing in this paragraph (i) prevents any party from combining

[[Page 37382]]

previously certified reformulated gasolines from different sources in a 
manner that does not violate the prohibitions in Sec. 80.78(a).
    (j) Importer certification of marine tank vessels. Importers shall 
sample each batch of imported RFG, RBOB, and conventional gasoline:
    (1) At the time and place that is allowed by the U.S. Customs 
Service under 19 CFR 151.42 Controls on unlading and gauging; and
    (2) Following the sampling requirements in Sec. 80.47; however, in 
no case shall the volume of a single batch be larger than the volume 
reported as a single item of merchandise in the U.S. Customs Service 
entry for summary documentation as specified by 19 CFR part 141, 
Subparts D, E, and F, and 19 CFR part 142, subparts A and B.
    16. Section 80.67 is amended by adding paragraph (g)(1)(iii) and 
revising paragraph (h)(1)(iv) to read as follows:


Sec. 80.67  Compliance on average.

* * * * *
    (g) * * *
    (1) * * *
    (iii) Where the product being evaluated is RBOB, the Vi 
term under paragraphs (g)(1) (i) and (ii) of this section shall be the 
volume of reformulated gasoline that will result when the RBOB is 
blended with the type and amount of oxygenate specified for the RBOB 
under Sec. 80.69(a)(2)(i).
* * * * *
    (h) * * *
    (1) * * *
    (iv) The credits are transferred, either through inter-company or 
intra-company transfers, directly from the refiner, importer, or 
oxygenate blender that creates the credits to the refiner, importer, or 
oxygenate blender that uses the credits to achieve compliance;
* * * * *
    17. Section 80.68 is amended by:
    a. Revising paragraphs (b)(1)(iv) and (b)(2)(ii);
    b. Revising paragraphs (c)(4)(i) and (c)(4)(ii);
    c. Revising paragraphs (c)(9)(i)(B) and (c)(9)(ii)(B);
    d. Revising paragraph (c)(10)(ii), and adding paragraphs 
(c)(10)(iii), (c)(10)(iv) and (c)(10)(v);
    e. Revising paragraph (c)(11);
    f. Revising paragraph (c)(12); and
    g. Revising paragraphs (c)(13)(iii) (A) and (B), to read as 
follows:


Sec. 80.68  Compliance surveys.

* * * * *
    (b) * * *
    (1) * * *
    (iv) 70 surveys shall be conducted in 1998 and thereafter.
    (2) * * *
    (ii) In the event that any covered area(s) fails a survey or survey 
series according to the criteria set forth in paragraph (c) of this 
section, the annual decreases in the numbers of surveys prescribed by 
paragraph (b)(1) of this section, as adjusted by paragraph (b)(2)(i) of 
this section, shall be adjusted as follows in the year following the 
year of the failure. * * *
* * * * *
    (c) * * *
    (4) * * *
    (i) An oxygen and benzene survey series shall consist of all 
surveys conducted in a single covered area during a single calendar 
year, and a toxics survey series shall consist of all surveys conducted 
in a single covered area during a single calendar year except for 
surveys conducted during the period January 1, 1998 through April 30, 
1998.
    (ii) A NOX survey series shall consist of all surveys 
conducted in a single covered area during the periods January 1 through 
May 31 (except for surveys conducted during the period January 1, 1998 
through April 30, 1998), and September 16 through December 31 during a 
single calendar year.
* * * * *
    (9)(i) * * *
    (B) The annual average of the toxics emissions reduction 
percentages for all samples from a survey series shall be calculated 
according to the following formula 31:
---------------------------------------------------------------------------

    \31\ The formula requires, first, that the toxic reductions of 
samples taken in each one-week survey be averaged to obtain an 
average for each such survey. Then these survey averages are, 
themselves, averaged separately for high-ozone and non-high-ozone 
season surveys, to obtain two overall averages. These overall 
averages are each to be multiplied by a seasonal weight (0.468 for 
high-ozone season and 0.532 for non-high ozone season) and the 
resulting products added together to obtain the average annual toxic 
emission reduction. 
[GRAPHIC] [TIFF OMITTED] TP11JY97.002

---------------------------------------------------------------------------
Where:

AATER=the annual average toxics emissions reduction
TER1,j=the toxics emissions reduction for sample j of 
gasoline collected during the high ozone season
TER2,j=the toxics emissions reduction for sample j of 
gasoline collected outside the high ozone season
n1=the number of gasoline samples collected during a one-
week survey conducted within the high ozone season
s1=the number of one-week surveys conducted within the high 
ozone season
n2=the number of gasoline samples collected during a one-
week survey conducted outside the high ozone season
s2=the number of one-week surveys conducted outside of the 
high ozone season
* * * * *
    (ii) * * *
    (B) The annual average of the toxics emissions reduction 
percentages for a

[[Page 37383]]

survey series shall be calculated according to the formula specified in 
paragraph (c)(9)(i)(B) of this section; and
* * * * *
    (10) * * *
    (ii) The average NOX emission reduction percentage for 
each single week-long NOX survey shall be calculated as the 
average of all NOX emission reduction percentages from the 
survey.
    (iii) The covered area shall have failed a NOX survey if 
the average NOX emissions reduction percentage for all 
survey samples is less than the applicable Phase I or Phase II complex 
model per-gallon standard for NOX emissions reduction.
    (iv) The average NOX emission reduction percentage for a 
NOX survey series shall be calculated according to the 
following formula:
[GRAPHIC] [TIFF OMITTED] TP11JY97.003

Where:

ANER=the average NOX emission reduction percentage for a 
NOX survey series,
n=the number of gasoline samples taken in the course of a week-long 
NOX survey,
NERj=the NOX emissions reduction percentage for 
gasoline sample j determined according to the appropriate methodology 
at Sec. 80.45, and
S=the number of week-long NOX surveys conducted during the 
year

    (v) The covered area shall have failed a NOX survey 
series if the average NOX emissions reduction percentage for 
the series, as computed in paragraph (c)(10)(iv) of this section, is 
less than the applicable Phase I or Phase II complex model per gallon 
standard for NOX emissions reduction.
    (11)(i) The results of each benzene content survey series conducted 
in any covered area shall be determined according to the following 
formula:
[GRAPHIC] [TIFF OMITTED] TP11JY97.004

Where:

AABC = the annual average benzene content for a benzene content survey 
series,
n = the number of gasoline samples taken in the course of a week-long 
benzene content survey,
BCj = the benzene content for gasoline sample j taken in the 
course of a week-long benzene content survey, and
S = the number of week-long benzene content surveys conducted during 
the year.

    (ii) If the annual average benzene content computed in paragraph 
(c)(11)(i) of this section is greater than 1.000 percent by volume, the 
covered area shall have failed a benzene content survey series.
    (12)(i) The results of each oxygen content survey series conducted 
in any covered area shall be determined according to the following 
formula:
[GRAPHIC] [TIFF OMITTED] TP11JY97.005

Where:

AAOC = the annual average oxygen content for an oxygen content survey 
series,
n = the number of gasoline samples taken in the course of a week-long 
oxygen content survey,
Ocj = the oxygen content for gasoline sample j taken in the 
course of a week-long oxygen content survey, and
S = the number of week-long oxygen content surveys conducted during the 
year.

    (ii) If the annual average oxygen content computed in paragraph 
(c)(12)(i) of this section is less than 2.00 percent by weight, the 
covered area shall have failed an oxygen content survey series.
* * * * *
    (13) * * *
    (iii) Include procedures such that the number of samples included 
in each survey or survey series (whichever is applicable) assures that:
    (A) In the case of simple model surveys or survey series, the 
average levels of oxygen, benzene, RVP, and aromatic hydrocarbons are 
determined with a 95% confidence level, with error of less than 0.1 psi 
for RVP, 0.05% for benzene (by volume), and 0.1% for oxygen (by 
weight); and
    (B) In the case of complex model surveys or survey series, the 
average levels of oxygen, benzene, RVP, aromatic hydrocarbons, olefins, 
T-50, T-90 and sulfur are determined with a 95% confidence level, with 
error of less than 0.1 psi for RVP, 0.05% for benzene (by volume), 0.1% 
for oxygen (by weight), 0.5% for olefins (by volume), 5 deg. F. for T-
50 and T-90, and 10 ppm for sulfur; or an equivalent level of precision 
for the complex model-determined emissions parameters; and
* * * * *
    18. Section 80.69 is amended by:
    a. Revising paragraphs (a)(2), (a)(6)(iv), and the introductory 
text of (a)(7);
    b. Removing and reserving paragraph (a)(4), and removing paragraphs 
(a)(8), (a)(9), and (a)(10);
    c. Revising paragraph (b)(1), and adding paragraph (b)(5); and
    d. Revising (paragraph (e), introductory text, paragraphs 
(e)(2)(i)(A) and (e)(2)(v) to read as follows:


Sec. 80.69  Requirements for downstream oxygenate blending.

* * * * *
    (a) * * *
    (2) * * *
    (i) Adding oxygenate to a representative sample of the RBOB, as 
follows:
    (A) Where the RBOB is designated as any-oxygenate, add ethanol so 
that the resulting reformulated gasoline has a maximum oxygen content 
of 2.0 wt%;
    (B) Where the RBOB is designated as ether-only, add MTBE so that 
the resulting reformulated gasoline has a maximum oxygen content of 2.0 
wt%; or
    (C) Where the RBOB has oxygenate blending instructions other than 
``any-oxygenate'' or ``ether-only'' and where the refiner or importer 
meets the contractual and quality assurance requirements in paragraphs 
(a)(5) through (a)(7) of this section:
    (1) Add the oxygenate specified for the RBOB, or if more than one 
oxygenate is allowed, from the following list of oxygenates add the 
first that is specified: Ethanol, MTBE, ETBE, any other specified 
oxygenate; and
    (2) Add the volume of oxygenate specified for the RBOB, or if a 
range is specified, add the minimum vol%; or
    (D) Where the RBOB has oxygenate blending instructions other than 
``any-oxygenate'' or ``ether-only,'' and where the refiner or importer 
fails to meet the contractual and quality assurance requirements in 
paragraphs (a)(5) through (a)(7) of this section, add 4.0 vol% ethanol; 
and
    (ii) Determining the properties and characteristics, including the 
oxygen and oxygenate content, of the resulting

[[Page 37384]]

gasoline using the methodology specified in Sec. 80.65(e).
* * * * *
    (4) [Reserved]
* * * * *
    (6) * * *
    (iv) Carry out the quality assurance sampling and testing 
requirements for oxygenate blenders specified in Sec. 80.69(e)(2);
    (7) Conduct a quality assurance sampling and testing program to be 
carried out at the facilities of each oxygenate blender who blends any 
RBOB produced or imported by the refiner or importer with any 
oxygenate, to determine whether the reformulated gasoline which has 
been produced through blending contains the oxygen type and oxygen 
amount specified by the refiner or importer, and complies with the 
standard for oxygen specified in Sec. 80.41. The testing shall use the 
oxygen and oxygenate test method specified in Sec. 80.46(g).
* * * * *
    (b) * * *
    (1) Add oxygenate as follows.
    (i) For RBOB designated as ``any oxygenate'' add any oxygenate.
    (ii) For RBOB designated as ``ether-only'' add an ether oxygenate 
(e.g., MTBE, ETBE, TAME, or butanol).
    (iii) For RBOB designated as either ``any-oxygenate'' or ``ether-
only'' add an amount of oxygenate that:
    (A) Is equal to or greater than the minimum oxygen or oxygenate 
content specified for the RBOB, or the amount of oxygenate necessary 
for the resulting reformulated gasoline to meet the applicable oxygen 
minimum standard, whichever is greater; and
    (B) Does not exceed the applicable oxygen maximum content 
requirement.
    (iv) For RBOB not designated ``any-oxygenate'' or ``ether-only'' 
add oxygenate of the type specified for the RBOB, and in an amount that 
is equal to or greater than the minimum amount specified for the RBOB 
and that is equal to or less than the oxygen maximum standards in 
Sec. 80.41.
    (v) In addition to the oxygenates specified in paragraphs (b)(1)(i) 
through (b)(1)(iv) of this section, the RFG produced using RBOB may 
contain an amount of other oxygenate, provided that the other 
oxygenate:
    (A) Has a maximum volume of:
    (1) 0.4 volume % ethanol; or
    (2) 0.6 volume % MTBE, ETBE, TAME or butanol; or
    (3) 0.2 volume % methanol; and
    (B) Was not added intentionally.
* * * * *
    (5) Oxygenate blenders who blend oxygenate in trucks are not 
subject to the requirements of paragraph (b)(4) of this section, 
provided that the following requirements are met:
    (i) The oxygenate blending shall be carried out using computer-
controlled in-line or sequential blending that operates in such a 
manner that the volumes of oxygenate and RBOB are automatically 
dispensed when a particular grade of gasoline is selected for loading 
into a truck, and no operator instructions are required regarding the 
oxygenate-RBOB proportions when an individual truck is loaded.
    (ii) The oxygenate blender shall be the party who operates the 
computer-controlled in-line or sequential blending equipment.
    (iii) The oxygenate blender shall base its compliance calculations 
on the volumes and properties of RBOB and oxygenate used during a 
period not longer than one calendar month.
    (iv)(A) In calculating the oxygen content of for each batch of RFG 
produced, the oxygenate blender shall use the following equation:
[GRAPHIC] [TIFF OMITTED] TP11JY97.006

Where:

Wo=weight percent oxygen in blend from oxygenate
Vo=volume percent oxygenate
do = density of oxygenate (g/ml)
Oo=weight fraction oxygen in oxygenate
Vg=volume of gasoline
dg=density of gasoline

    (B) And where the densities and weight fractions of oxygen are 
used:

------------------------------------------------------------------------
                                                 Density at     Weight  
                   Oxygenate                     60  deg.F     fraction 
                                                  (gm/ml)       oxygen  
------------------------------------------------------------------------
ethanol.......................................       0.7939       0.3473
ethyl t-butyl ether (ETBE)....................       0.7452       0.1566
ethyl t-amyl ether (ETAE).....................       0.7452       0.1566
methanol......................................       0.7963       0.4993
methyl t-butyl ether (MTBE)...................       0.7460       0.1815
t-amyl methyl ether (TAME)....................       0.7758       0.1566
diisopropyl ether (DIPE)......................       0.7282       0.1566
t-butyl alcohol...............................       0.7922       0.2158
n-propanol....................................       0.8080       0.2662
------------------------------------------------------------------------

    (v) In determining the volume % ethanol to use in paragraph 
(b)(5)(iv) of this section, the denaturant content of ethanol (if 
used), shall be either:
    (A) 5 vol%, provided that the oxygenate blender conducts a program 
of quality assurance sampling the ethanol used, as follows:
    (1) The frequency of the sampling and testing shall be at least one 
sample every month;
    (2) In the event an ethanol sample from this quality assurance 
program has an oxygenate purity level of less than 92.1%, the oxygenate 
blender must:
    (i) Use the greater denaturant content for all oxygen compliance 
calculations for the ethanol that was tested, and;
    (ii) Increase the frequency of quality assurance sampling and 
testing to one sample every two weeks, and must maintain this frequency 
until four successive samples show an ethanol purity content that is 
equal to or greater than 92.1%.
    (3) The formula for calculating denaturant content based upon 
ethanol purity is the following:
[GRAPHIC] [TIFF OMITTED] TP11JY97.007

Where:

DC=denaturant content, in vol%
OP=measured ethanol purity, expressed as decimal or

    (B) The measured denaturant content for each batch of oxygenate 
used to produce RFG.
    (vi) During each oxygen averaging period, the oxygenate blender 
shall use only the assumed denaturant content of ethanol (if used) or 
only the measured denaturant content for all compliance

[[Page 37385]]

calculations for an oxygenate blending facility.
    (vii) The oxygenate blender shall conduct a program of quality 
assurance sampling and testing the RFG produced using the procedures 
and at the frequencies specified under Sec. 80.69(e)(2).
* * * * *
    (e) Additional requirements for oxygenate blenders who blend 
oxygenate in trucks. Any oxygenate blender, other than a terminal 
storage tank blender specified in Sec. 80.69(c), shall:
* * * * *
    (2) * * *
    (i) * * *
    (A) Prior to combining the resulting gasoline with any other 
gasoline; or
* * * * *
    (v) In the event the testing results for any sample indicate the 
gasoline does not contain the specified type and amount of oxygenate 
(within the ranges specified in Sec. 80.65(e)(2)(i)):
* * * * *
    19. Section 80.70 is amended by adding paragraph (l) to read as 
follows:


Sec. 80.70  Covered areas.

* * * * *
    (l) The Sacramento, California, ozone nonattainment area, 
redesignated as a severe ozone nonattainment area effective June 1, 
1995, is a covered area for purposes of subpart D, beginning on June 1, 
1996. The Sacramento, California ozone nonattainment area is comprised 
of:
    (1) All portions of El Dorado County except that portion of El 
Dorado County within the drainage area naturally tributary to Lake 
Tahoe including said Lake. (See 40 CFR 81.275)
    (2) All portions of Placer County except that portion of Placer 
County within the drainage area naturally tributary to Lake Tahoe 
including said Lake, plus that area in the vicinity of the head of the 
Truckee River described as follows: commencing at the point common to 
the aforementioned drainage area crest line and the line common to 
Townships 15 North and 16 North, Mount Diablo Base and Meridian 
(M.D.B.&M.), and following that line in a westerly direction to the 
northwest corner of Section 3, Township 15 North, Range 16 East, 
M.D.B.&M., thence south along the west line of Sections 3 and 10, 
Township 15 North, Range 16 East, M.D.B.&M., to the intersection with 
the said drainage area crest line, thence following the said drainage 
area boundary in a southeasterly, then northeasterly direction to and 
along the Lake Tahoe Dam, thence following the said drainage area crest 
line in a northeasterly, then northwesterly direction to the point of 
beginning. (See 40 CFR 81.275)
    (3) That portion of Solano County which lies north and east of a 
line described as follows. Description of boundary in Solano County 
between San Francisco and Sacramento: Beginning at the intersection of 
the westerly boundary of Solano County and the \1/4\ section line 
running east and west through the center of Section 34; T. 6 N., R. 2 
W., M.D.B.&M., thence east along said \1/4\ section line to the east 
boundary of Section 36, T. 6 N., R. 2 W., thence south \1/2\ mile and 
east 2.0 miles, more or less, along the west and south boundary of Los 
Putos Rancho to the northwest corner of Section 4, T. 5 N., R. 1 W., 
thence east along a line common to T. 5 N. and T. 6 N. to the northeast 
corner of Section 3, T. 5 N., R. 1 E., thence south along section lines 
to the southeast corner of Section 10, T. 3 N., R. 1 E., thence east 
along section lines to the south \1/4\ corner of Section 8, T. 3 N., R. 
2 E., thence east to the boundary between Solano and
    (4) The southern portion of Sutter County described as follows. 
South of a line connecting the northern border of Yolo County to the 
southwest tip of Yuba County and continuing along the southern Yuba 
County border to Placer County.
    (5) The northern portion of Sutter County described as follows: 
North of a line connecting the northern border of Yolo County to the 
southwest tip of Yuba County and continuing along the southern Yuba 
County border to Placer County.
    20. Section 80.72 is added to subpart D to read as follows:


Sec. 80.72  Independent analysis requirements.

    (a) Independent sampling and analysis required. Any refiner or 
importer of reformulated gasoline or RBOB shall carry out a program of 
independent sample collection and analyses for the reformulated 
gasoline it produces or imports, which meets the requirements of one of 
the following two options:
    (1) Option 1. The refiner or importer shall, for each batch of 
reformulated gasoline or RBOB that is produced or imported, have the 
gasoline sampled and tested by the designated independent laboratory 
according to the requirements specified in this section.
    (2) Option 2. The refiner or importer shall have a periodic 
independent testing program carried out for all reformulated gasoline 
or RBOB produced or imported, which shall consist of the designated 
independent laboratory sampling each batch of reformulated gasoline or 
RBOB, and analyzing each sample identified under paragraph (d) of this 
section, according to the requirements specified in this section.
    (b) Designation of independent laboratory. (1) Any refiner or 
importer shall designate one independent laboratory for each refinery 
or import facility at which reformulated gasoline or RBOB is produced 
or imported, and shall identify this laboratory to EPA under the 
registration requirements of Sec. 80.76.
    (2) In order to be considered independent:
    (i) The laboratory shall not be operated by any refiner or importer 
who produces or imports reformulated gasoline or RBOB, or by any 
refiner or importer that is part of a corporate organization that 
includes a refiner or importer of reformulated gasoline or RBOB, 
including subsidiary corporations, parent corporations and subsidiaries 
thereof, and employees of any of these corporations;
    (ii) The laboratory shall be free from any interest in any refiner 
or importer; and
    (iii) The refiner or importer shall be free from any interest in 
the laboratory; however
    (iv) Notwithstanding the restrictions in paragraphs (b)(2)(i) 
through (iii) of this section, a laboratory shall be considered 
independent if it is owned or operated by a gasoline pipeline company, 
regardless of ownership or operation of the gasoline pipeline company 
by refiners or importers, provided that such pipeline company is owned 
and operated by four or more refiners or importers.
    (3) Use of a laboratory that is debarred, suspended, or proposed 
for debarment pursuant to the Governmentwide Debarment and Suspension 
regulations, 40 CFR part 32, or the Debarment, Suspension and 
Ineligibility provisions of the Federal Acquisition Regulations, FAR 48 
subpart 9.4, shall be deemed noncompliance with the requirements of 
this section.
    (4) Any laboratory that fails to comply with the requirements of 
this section shall be subject to debarment or suspension under 
Governmentwide Debarment and Suspension regulations, 40 CFR part 32, or 
the Debarment, Suspension and Ineligibility regulations, Federal 
Acquisition Regulations FAR 48 subpart 9.4.
    (c) Sampling and reporting. For all samples collected or analyzed 
pursuant to the requirements of this section, the

[[Page 37386]]

refiner or importer shall have the independent laboratory:
    (1) Collect a representative sample from the batch of reformulated 
gasoline following the sampling procedures specified in Sec. 80.47;
    (2) Determine which standards are being met on a per-gallon basis 
and which standards are being met on average, and obtain the refiner's 
or importer's assigned batch number for the batch being sampled;
    (3) Determine the volume of the batch;
    (4) Determine the identification number of the gasoline storage 
tank or tanks in which the batch was stored at the time the sample was 
collected;
    (5) Determine the date and time the batch became finished 
reformulated gasoline, and the date and time the sample was collected;
    (6) Determine the grade of the batch (e.g., premium, mid-grade, or 
regular); and
    (7) In the case of reformulated gasoline produced through computer-
controlled in-line blending, determine the date and time the blending 
process began and the date and time the blending process ended, unless 
exempt under Sec. 80.65(f)(2);
    (8) Retain each sample for a period of 30 days, except that this 
period shall be extended to a period of up to 180 days upon request by 
EPA; and
    (9) Supply to EPA any sample collected or a portion of any such 
sample, according to the requirements of paragraph (f) of this section.
    (d) Selecting samples for analysis. A refiner or importer shall 
have any laboratory serving as the independent laboratory under the 
periodic independent analysis option of paragraph (a)(2) of this 
section, for each refinery or importer, analyze gasoline samples 
identified as follows:
    (1) General instructions. (i) Samples must be selected for analysis 
for each two week period. Each two-week period begins on Sunday night 
at midnight, and lasts for the subsequent two weeks. The first two-week 
period begins at midnight on August 7, 1994, the second two-week period 
begins at midnight on August 21, 1994, etc.
    (ii) EPA may issue special instructions for selecting samples for 
analysis for any specific refiner, refinery, importer, or independent 
lab that differ in whole or in part from the instructions contained in 
this paragraph (d), and if such special instructions are issued they 
must be followed instead of the instructions contained in this 
protocol.
    (2) Identify samples for the current analysis cycle. (i) Identify 
each sample of RFG or RBOB collected during the preceding two-week 
period, and the refiner or importer assigned batch identification 
number for each sample.
    (ii) Add any samples carried over from a prior analysis cycle, from 
paragraphs (d)(3)(i) and (ii) of this section.
    (iii) Order the samples from the preceding two-week period, plus 
any carry over samples, in chronological order using the batch 
identification number for each sample.
    (3) Determine the number of samples to be analyzed.
    (i) The number of samples that must be analyzed for the current 
analysis cycle is the number of samples identified under paragraph 
(d)(2) of this section that is evenly divisible by ten.
    (ii) Any remainder from this division is the number of samples that 
must be carried over to the subsequent analysis cycle. Any carry over 
samples must be those with the largest batch identification numbers.

    Example. If the number of samples identified under paragraph 
(d)(2) is thirty seven, with batch numbers 4321-54321-95-002534 
through 4321-54321-95-002570, the number of samples that must be 
analyzed in the current analysis cycle is three, and seven samples 
must be carried over to the subsequent analysis cycle. The specific 
samples that must be carried over are those seven with the largest 
batch identification numbers, or samples 4321-54321-95-002564 
through 4321-54321-95-002570.

    (iii) To the extent any sample carry over would result in a sample 
being retained by the independent lab for more than 30 days, this 
sample shall be retained by the independent laboratory until the sample 
is not carried over to a subsequent analysis cycle, but for a maximum 
of 180 days.
    (iv)(A) If the number of samples identified under paragraph (d)(2) 
of this section is less than ten, then all samples should be carried 
over to the subsequent analysis cycle.
    (B) If the number of samples identified under paragraph (d)(2) of 
this section is less than ten, and any sample carry over would result 
in a sample being retained for more than 180 days, then one sample must 
be analyzed from the number, and none of the samples would be carried 
over to the subsequent analysis cycle.
    (4) Identify which samples to analyze. (i) Identify the beginning 
point for using the Random Number Table at paragraph (d)(4)(ii) of this 
section for the current analysis cycle.
    (A) Identify the last two digits from the closing point for the Dow 
Jones Industrial Average as reported in the Wall Street Journal for the 
first day the New York Stock Exchange is open following the close of 
the preceding two-week period.

    Example. For the two-week period ending at midnight on Sunday, 
August 20, the relevant two digits would be the last two digits for 
the close for the Dow Jones Industrial Average for Monday, August 
21, as reported in the Wall Street Journal for Tuesday, August 22. 
If this Dow Jones Industrial Average close is 3,741.06, the relevant 
two digits would be 06.

    (B) The beginning point for the Random Number Table at paragraph 
(d)(4)(ii) of this section for the current analysis cycle is the row 
number (from Column A of the Random Number Table) that corresponds to 
the number identified under paragraph (d)(4)(i)(A) of this section. 
Using the example from paragraph (d)(4)(i)(A) of this section, the 
applicable row number would be 06, and the first random number would be 
27.
    (ii) Random Number Table:

------------------------------------------------------------------------
                                 Column                                 
-------------------------------------------------------------------------
                               A                                    B   
------------------------------------------------------------------------
00.............................................................       60
01.............................................................       77
02.............................................................       38
03.............................................................       16
04.............................................................       45
05.............................................................       39
06.............................................................       27
07.............................................................       93
08.............................................................       97
09.............................................................       37
10.............................................................       06
11.............................................................       18
12.............................................................       98
13.............................................................       05
14.............................................................       92
15.............................................................       72
16.............................................................       71
17.............................................................       87
18.............................................................       20
19.............................................................       41
20.............................................................       00
21.............................................................       78
22.............................................................       33
23.............................................................       61
24.............................................................       75
25.............................................................       25
26.............................................................       54
27.............................................................       80
28.............................................................       32
29.............................................................       17
30.............................................................       15
31.............................................................       63
32.............................................................       04
33.............................................................       21
34.............................................................       90
35.............................................................       68
36.............................................................       58
37.............................................................       13
38.............................................................       47
39.............................................................       91
40.............................................................       95
41.............................................................       01
42.............................................................       02
43.............................................................       76
44.............................................................       79

[[Page 37387]]

                                                                        
45.............................................................       19
46.............................................................       11
47.............................................................       88
48.............................................................       73
49.............................................................       43
50.............................................................       74
51.............................................................       12
52.............................................................       31
53.............................................................       85
54.............................................................       94
55.............................................................       35
56.............................................................       40
57.............................................................       55
58.............................................................       86
59.............................................................       34
60.............................................................       22
61.............................................................       46
62.............................................................       89
63.............................................................       70
64.............................................................       50
65.............................................................       03
66.............................................................       09
67.............................................................       67
68.............................................................       42
69.............................................................       82
70.............................................................       84
71.............................................................       96
72.............................................................       28
73.............................................................       66
74.............................................................       49
75.............................................................       23
76.............................................................       26
77.............................................................       81
78.............................................................       65
79.............................................................       29
80.............................................................       64
81.............................................................       57
82.............................................................       59
83.............................................................       83
84.............................................................       10
85.............................................................       52
86.............................................................       53
87.............................................................       30
88.............................................................       48
89.............................................................       69
90.............................................................       24
91.............................................................       62
92.............................................................       99
93.............................................................       51
94.............................................................       56
95.............................................................       36
96.............................................................       08
97.............................................................       14
98.............................................................       07
99.............................................................       44
------------------------------------------------------------------------

    (iii) For each sample for the current analysis cycle under 
paragraph (d)(2) of this section, excluding any samples carried over to 
the subsequent analysis cycle under paragraphs (d)(3)(ii) or 
(d)(3)(iv)(A) of this section, identify the last two digits of the 
batch identification number. This process is illustrated in the 
following table:

------------------------------------------------------------------------
                                                               The last 
                  If the batch number is:                     two digits
                                                                 are:   
------------------------------------------------------------------------
4321-54321-95-002533.......................................           33
4321-54321-95-002593.......................................           93
------------------------------------------------------------------------

    (iv) Compare the two digit number from Column B of the Random 
Number Table at the beginning point identified under paragraph 
(d)(4)(ii) of this section (the first random number) with each of the 
two digit sample numbers identified under paragraph (d)(4)(iii) of this 
section.
    (v) If the first random number matches any sample number, this 
sample is identified as a sample for analysis. If the random number 
matches more than one sample number, only the sample with the lowest 
batch identification number is identified as a sample for analysis.
    (vi) If the first random number does not match any sample number, 
then move to the next number in the Random Number Table, and repeat the 
process described under paragraph (d)(4)(v) of this section. In the 
example under paragraph (d)(4)(iii) of this section, there is no match 
for the first random number (27), but there is a match for the second 
random number (93), and sample number 4321-54321-95-002593 would be 
identified for analysis.
    (vii) Continue this process until the number of samples identified 
for analysis equals the number under paragraphs (d)(3)(i) or (d)(4)(ii) 
of this section.
    (e) Analysis of samples. (1) Any independent laboratory who 
analyzes a sample under the requirements of this section shall use the 
analysis methodologies specified in Sec. 80.46.
    (2) If a sample to be analyzed is of RBOB, the sample first must be 
blended with oxygenate as follows:
    (i) If the RBOB is designated as any-oxygenate, ethanol shall be 
blended at a volume that results in 2.0 wt% oxygen;
    (ii) If the RBOB is designated as ether-only, MTBE shall be blended 
at a volume that results in 2.0 wt% oxygen;
    (iii) If the RBOB is other than any-oxygenate or ether-only, the 
RBOB shall be blended with the oxygenate specified for the RBOB, or if 
more than one oxygenate is allowed, from the following list of 
oxygenates the first that is allowed by the refiner's instructions: 
Ethanol, MTBE, ETBE, any other specified oxygenate. The volume of 
oxygenate shall be the volume specified in the refiner's instructions, 
or if a range is specified, the minimum volume specified.
    (f) Shipment of samples to EPA.--(1) Quality assurance samples. Any 
laboratory serving as the independent laboratory under this section 
shall, for each refinery or importer, supply certain gasoline samples 
to EPA according to the following requirements. Notwithstanding the 
gasoline samples identified in this paragraph (f), EPA may specify a 
different frequency for sending samples to EPA for any refiner, 
refinery, importer, or independent lab, and if such different frequency 
is specified it must be followed.
    (2) Refiners and importers using the periodic independent analysis 
option. (i) In the case of samples identified for analysis under 
paragraph (d) of this section, for each thirty-third sample that is 
analyzed for each refinery or importer a portion of the sample must be 
sent to EPA.
    (ii) In the case of samples that are not identified for analysis 
under paragraph (d) of this section, each thirty-third sample that is 
collected for each refinery or importer but that is not analyzed by the 
independent laboratory must be sent to EPA.
    (3) Refiners and importers using the 100% independent analysis 
option. In the case of refiners and importers using the 100% 
independent analysis option of paragraph (a)(1) of this section, for 
every thirty-third sample that is analyzed for each refinery or 
importer, a portion of the sample must be sent to EPA.
    (4) Samples that violate applicable standards. (i) The remaining 
portion of each sample that violates an applicable per-gallon standard 
must be labeled as such and shipped to EPA.
    (ii) The applicable standards are those specified under Sec. 80.41. 
In the case of standards being met on a per-gallon basis, the per-
gallon standards are the applicable standards. In the case of standards 
being met on an average basis,

[[Page 37388]]

the per-gallon minimums and maximums are the applicable standards. 
Beginning on January 1, 1998, per-gallon standards include the complex 
model range limits specified under Sec. 80.41(h)(3).
    (5) Sample shipping procedures. (i) Each sample sent to EPA must be 
sealed in containers and transported in accordance with the procedures 
specified in Sec. 80.8, and identified with the independent lab's name 
and registration number and the sample information specified in 
paragraphs (e)(1) through (7) of this section.
    (ii) The quantity of sample that must be sent is: in the case of 
samples that have been analyzed by the independent lab, the entire 
volume remaining following the laboratory analysis which should be a 
minimum of 330mL; and in the case of samples that have not been 
analyzed by the independent lab, a minimum of 70% of one quart.
    (iii) Samples identified for shipping to EPA must be sent via an 
overnight package service or a comparable means to the address and 
following procedures specified by EPA.
    21. Section 80.74 is amended by revising paragraphs (a)(2)(iii), 
(b)(2), (b)(5) and (b)(6), and adding paragraphs (b)(7), (b)(8), 
(b)(9), and (h) to read as follows:


Sec. 80.74  Recordkeeping requirements.

* * * * *
    (a) * * *
    (2) * * *
    (iii) (A) The results of the test as originally printed by the 
testing apparatus, or where no printed result is generated by the 
testing apparatus, the results as originally recorded by the person who 
performed the tests; and
    (B) Any record that contains results for the test that are not 
identical to the results recorded in paragraph (a)(2)(iii)(A); and
* * * * *
    (b) * * *
    (2) The information specified in Sec. 80.47(b) used to establish 
gasoline homogeneity;
* * * * *
    (5) In the case of any refinery or importer subject to the simple 
model standards, the calculations used to determine the 1990 baseline 
levels of sulfur, T-90, and olefins, and the calculations used to 
determine compliance with the standards for these parameters;
    (6) In the case of any refinery or importer subject to the complex 
model standards before January 1, 1998, the calculations used to 
determine the baseline levels of VOC, toxics, and NOx 
emissions performance;
    (7) In the case of any imported GTAB, records that reflect the 
storage and physical movement of the GTAB from the point of importation 
to the point of blending to produce reformulated gasoline; and
    (8) In the case of any gasoline classified as previously certified 
gasoline under the terms of Sec. 80.65(i):
    (i) Results of the tests to determine the properties and volume of 
the previously certified gasoline when received at the refinery; and
    (ii) Records that reflect the storage and movement of the 
previously certified gasoline within the refinery to the point the 
previously certified gasoline is used to produce reformulated gasoline.
    (9) In the case of any transmix blended with gasoline, records that 
reflect the volumes of gasoline and transmix that are blended.
* * * * *
    (h) Independent laboratories. The refiner or importer shall have 
any laboratory serving as an independent laboratory under Sec. 80.72 
keep the records specified in paragraphs (a)(2) (i) through (iii), (b) 
(1) through (3), and (b)(4)(i) of this section, and records containing 
the information specified under Sec. 80.72(c)(1).
* * * * *
    22. Section 80.75 is amended by:
    (a) Revising paragraph (a), introductory text;
    (b) Revising paragraphs (a)(2)(vi) and(a)(2)(vii), and adding 
paragraphs (a)(2)(viii) and (a)(2)(ix);
    (c) Revising paragraph (a)(3);
    (d) Revising and redesignating paragraph (n) as paragraph (o), and 
adding paragraph (n) to read as follows:


Sec. 80.75  Reporting requirements.

* * * * *
    (a) Quarterly reports for reformulated gasoline. Any refiner or 
importer that produces or imports any reformulated gasoline or RBOB, 
and any oxygenate blender that produces reformulated gasoline meeting 
the oxygen standard on average, shall submit quarterly reports to the 
Administrator for each refinery or oxygenate blending facility at which 
such reformulated gasoline or RBOB was produced and for all such 
reformulated gasoline or RBOB imported by each importer. The refiner, 
importer or oxygenate blender shall include notification to EPA of per-
gallon versus average election with the first quarterly reports 
submitted each year.
* * * * *
    (2) * * *
    (vi) For any importer, the PADD in which the import facility is 
located;
    (vii) For any oxygenate blender, the oxygen content;
    (viii) In the case of any imported GTAB, identification of the 
gasoline as such; and
    (ix) In the case of any previously certified gasoline used in a 
refinery operation under the terms of Sec. 80.65(i), the following 
information relative to the previously certified gasoline when received 
at the refinery:
    (A) Identification of the previously certified gasoline as such;
    (B) The batch number assigned by the receiving refinery;
    (C) The date of receipt; and
    (D) The volume, properties and designations of the batch.
    (3)(i) The following formula shall be used to convert weight 
percent oxygen from an oxygenate to volume percent oxygenate:
[GRAPHIC] [TIFF OMITTED] TP11JY97.008

Where:

Vo=volume percent oxygenate
Wo=weight percent oxygen in blend from oxygenate
Wg=weight percent gasoline in blend from gasoline
do=density of oxygenate (g/ml)
dg=density of gasoline (g/ml)

    (ii) The following densities and weight fractions of oxygen should 
be used for these calculations:

------------------------------------------------------------------------
                                                 Density at     Weight  
                   Oxygenate                     60  deg.F     fraction 
                                                  (gm/ml)       oxygen  
------------------------------------------------------------------------
ethanol.......................................       0.7939       0.3473
ethyl t-butyl ether (ETBE)....................       0.7452       0.1566
ethyl t-amyl ether (ETAE).....................       0.7452       0.1566
methanol......................................       0.7963       0.4993
methyl t-butyl ether (MTBE)...................       0.7460       0.1815
t-amyl methyl ether (TAME)....................       0.7758       0.1566
diisopropyl ether (DIPE)......................       0.7282       0.1566
t-butyl alcohol...............................       0.7922       0.2158
n-propanol....................................       0.8080       0.2662
------------------------------------------------------------------------

* * * * *
    (n) Reports by independent laboratories. The refiner or importer 
shall have any laboratory serving as an independent laboratory under 
Sec. 80.72 submit to EPA the following reports:
    (1) A report for the period January through March shall be 
submitted by May 31; a report for the period April through June shall 
be submitted by August 31; a report for the period July through 
September shall be submitted by November 30; and a report for the

[[Page 37389]]

period October through December shall be submitted by February 28;
    (2) Each report shall include, for each sample of reformulated 
gasoline that was analyzed during a period, the analysis results for 
the sample and the information specified in Secs. 80.72 (c) (1) through 
(7).
    (o) Report submission. The reports required by this section shall 
be:
    (1) Submitted on forms and following procedures specified by the 
Administrator; and
    (2) Signed and certified as correct by the owner or a responsible 
corporate officer of the refiner, importer, oxygenate blender, or 
independent laboratory.
    23. Section 80.77 is amended by revising the introductory text and 
paragraphs (c), (f), (g)(3) and (j), to read as follows:


Sec. 80.77  Product transfer documentation.

    On each occasion when any person transfers custody or title to any 
reformulated gasoline or RBOB, other than when gasoline is sold or 
dispensed for use by ultimate consumers at a retail outlet or wholesale 
purchaser-consumer facility, the transferor shall provide to the 
transferee documents which include the information specified in this 
section. These documents shall be transferred no later than the time of 
the physical transfer of the gasoline in the case of custody transfers, 
and within 30 days following the transfer in the case of title 
transfers.
* * * * *
    (c) The volume of gasoline or RBOB which is being transferred;
* * * * *
    (f) The proper identification of the product as reformulated 
gasoline or RBOB;
    (g) * * *
    (3) In the case of VOC-controlled reformulated gasoline that 
contains ethanol, identification or the gasoline as containing ethanol.
* * * * *
    (j) With the exception of custody transfers to truck carriers, 
retail outlets and wholesale purchaser-consumer facilities, the 
information required in paragraphs (f), (g) and (i) of this section may 
be in the form of product codes, provided that:
    (1) The codes are standardized for the distribution system in which 
they are used; and
    (2) The transferee is given the information to interpret the codes.
    24. Section 80.78 is amended by:
    (a) Revising the introductory text of paragraph (a)(1);
    (b) Revising paragraph (a)(1)(v)(C) and adding paragraph (a)(1)(vi) 
;
    (c) Revising paragraph (a)(2);
    (d) Removing and reserving paragraph (a)(3);
    (e) Revising paragraphs (a) (4) through (7);
    (f) Revising paragraph (a)(10);
    (g) Adding paragraphs (a)(11), (a)(12), and (a)(13), to read as 
follows:


Sec. 80.78  Controls and prohibitions on reformulated gasoline.

    (a) Prohibited activities. (1) No person may produce, import, sell, 
distribute, offer for sale or distribution, dispense, supply, offer for 
supply, store or transport any gasoline for use by ultimate consumers 
in a reformulated gasoline covered area unless the gasoline meets the 
definition of reformulated gasoline, and
* * * * *
    (v) * * *
    (C) Unless each gallon of such gasoline that is subject to complex 
model standards has a VOC and NOX emissions reduction 
percentage which is greater than or equal to the applicable minimum 
specified in Sec. 80.41; and
    (vi) Unless each gallon of such gasoline that is subject to complex 
model standards has property values that are within the acceptable 
range limits for the complex model specified under Sec. 80.45(f)(1)(i).
* * * * *
    (2) No person may produce, import, sell or distribute, offer for 
sale or distribution, dispense, supply, offer for supply, store, or 
transport any gasoline represented as reformulated gasoline or RBOB:
* * * * *
    (3) [Reserved]
    (4) Gasoline shall be presumed to be for use by ultimate consumers 
in a reformulated gasoline covered area unless the product transfer 
documentation accompanying such gasoline clearly indicates, as 
specified in Sec. 80.106, that the gasoline is intended for sale and 
use only outside any covered area.
    (5) No person may combine any reformulated gasoline with any 
conventional gasoline or blendstock, except a refiner who does so at a 
refinery under the requirements specified in Sec. 80.65(i).
    (6) No person may add any oxygenate to reformulated gasoline, 
except oxygenate of the type that was used to produce the reformulated 
gasoline and in an amount such that the reformulated gasoline meets the 
oxygen maximum standard in Sec. 80.41(g) after the oxygenate has been 
added.
    (7) No person may combine any RBOB with any other gasoline, 
blendstock, or oxygenate, except:
    (i) Oxygenate of the type specified for the RBOB, and in an amount 
that is equal to or greater than the minimum amount specified for the 
RBOB and is equal to or less than the amount allowed by the oxygen 
maximum standard in Sec. 80.41(g);
    (ii) Other RBOB for which the same oxygenate type is specified, in 
which case the minimum oxygenate volume specification for the blended 
RBOB will be the largest minimum volume specification for any of the 
RBOB's that are combined; or
    (iii) Under the terms of paragraph (a)(5) of this section.
* * * * *
    (10) No person may cause another person to commit the actions 
prohibited under this paragraph (a).
    (11) Exemptions.
    (i) The prohibited activities specified in paragraphs (a)(1) of 
this section do not apply in the case of gasoline that is used for 
research, development, or testing purposes, provided that:
    (A) The research, development, or testing program:
    (1) Has a purpose that constitutes an appropriate basis for 
exemption;
    (2) Necessitates the exemption;
    (3) Is reasonable in scope; and
    (4) Has a degree of control consistent with the purpose of the 
program; and
    (B) The product transfer documentation associated with such 
gasoline shall identify the gasoline as conventional gasoline for use 
in research, development, or testing, as applicable, and shall state 
that it is to be used only for research, development, or testing 
purposes;
    (C) The gasoline shall not be sold, distributed, offered for sale 
or distribution, dispensed, supplied, offered for supply, transported 
to or from, or stored by a gasoline retail outlet in a covered area 
specified in Sec. 80.70. The gasoline also shall not be sold, 
distributed, offered for sale or distribution, dispensed, supplied, 
offered for supply, or transported to or from, or stored by a wholesale 
purchaser-consumer facility in a covered area specified in Sec. 80.70, 
unless such facility is associated with the research, development or 
testing program that uses the gasoline;
    (D) Prior to the initial use of the product, and subsequently at 
least on an annual basis, the party using the gasoline for research, 
development, or testing purposes shall submit to EPA the following 
information:
    (1) A description of the research, development, or testing program 
and the purpose of the program, including the range of noncomplying 
properties of the fuel expected to be used in the program;

[[Page 37390]]

    (2) The expected dates on which the program will begin and end, and 
the mileage duration of the program;
    (3) The identification of any vehicles or engines in which the 
gasoline is to be used;
    (4) The location where the gasoline will be stored, and the 
location where the gasoline will be used;
    (5) The volume of the product to be used;
    (6) The identification of the source (e.g., the gasoline 
distributor) of the gasoline; and
    (7) An explanation of why reformulated gasoline cannot be used in 
the program.
    (8) An explanation of why the program cannot be conducted in an 
area that is not a covered area specified in Sec. 80.70.
    (E) The party using the gasoline for the research, development or 
testing program shall submit to EPA the program results upon completion 
of the program.
    (F) The submissions required under paragraphs (a)(11)(i) (D) and 
(E) of this section shall be:
    (1) Certified as being accurate by the owner or president of the 
company or business performing the research, development, or testing; 
and
    (2) Submitted to the following EPA addresses:

Director (6406J) Fuels and Energy Division, U.S. Environmental 
Protection Agency, 401 M Street SW., Washington, D.C. 20460
    and
Director (2242A), Air Enforcement Division, U.S. Environmental 
Protection Agency, 401 M Street, SW., Washington, D.C. 20460

    (G) The exemption in this paragraph (a)(11) shall be null and void 
upon written notification by EPA.
    (ii)(A) The prohibited activities specified in paragraphs (a)(1) of 
this section do not apply in the case of gasoline that is used to fuel 
aircraft, or racing motor vehicles or racing boats that are used only 
in sanctioned racing events, provided that product transfer documents 
associated with such gasoline, and any pump stand from which such 
gasoline is dispensed, identify the gasoline either as conventional 
gasoline that is restricted for use in aircraft, or as conventional 
gasoline that is restricted for use in racing motor vehicles or racing 
boats that are used only in sanctioned racing events.
    (B) A vehicle shall be considered to be a racing vehicle only if 
the vehicle:
    (1) Is operated only in conjunction with sanctioned racing events;
    (2) Exhibits racing features and modifications such that it is 
incapable of safe and practical street or highway use;
    (3) Is not licensed, and is not licensable, by any state for 
operation on public streets or highways;
    (4) Is not currently, and previously has not been, operated on 
public streets or highways; and
    (5) Could not be converted to public street or highway use at a 
cost that is reasonable compared to the value of the vehicle.
    (12) The prohibitions against combining certain categories of 
gasoline under paragraphs (a)(1)(iii), (a)(5), (a)(7), (a)(8), and 
(a)(10) of this section do not apply in the case of a party who is 
changing the type of gasoline stored in a gasoline storage tank or the 
type of gasoline transported through a gasoline pipe or manifold within 
a single facility (a gasoline storage tank, pipe, or manifold change of 
service ), or in the case of a change of service that involves mixing 
gasoline with blendstock, provided that:
    (i) The change of service is for a legitimate operational reason 
and is not for the purpose of combining the categories of gasoline or 
of combining gasoline with blendstock;
    (ii) Prior to adding product of the new category the volume of 
product of the old category in the tank, pipe or manifold is made as 
low as possible through normal pumping operations;
    (iii) The volume of product of the new category that is added to 
the tank, pipe or manifold is as large as possible taking into account 
the availability of product of the new category; and
    (iv) In any case where the new category of product is reformulated 
gasoline, subsequent to adding the gasoline of the new category a 
representative sample from the tank, pipe or manifold is collected and 
analyzed, and such analysis shows compliance with each standard under 
Sec. 80.41 that is relevant to the new gasoline category. The analysis 
for each standard must be conducted using the method specified under 
Sec. 80.46, or using another method that is approved by the American 
Society of Testing and Materials provided that the other method is 
correlated with the method specified under Sec. 80.46.
    (13) The prohibition against combining reformulated gasoline with 
RBOB under paragraph (a)(8)of this section does not apply in the case 
of a party who is changing the type of product stored in a tank from 
which trucks are loaded, from reformulated gasoline to RBOB, or vice 
versa, provided that:
    (i) The change of service requirements described in paragraph 
(a)(12) of this section can not be met without taking the storage tank 
out of service;
    (ii) Prior to adding product of the new category the volume of 
product of the old category in the tank is drawn down to the lowest 
point which allows trucks to be loaded during the transition;
    (iii) The volume of product of the new category that is added to 
the tank is as large as possible taking into account the availability 
of product of the new category;
    (iv) When transitioning from RBOB to reformulated gasoline:
    (A) If the reformulated gasoline in the storage tank has a oxygen 
content of less than 1.5 wt%, oxygenate must be blended into the RFG at 
the loading rack such that the RFG has a minimum oxygen content of 1.5 
wt%;
    (B) Subsequent to any oxygenate blending, the reformulated gasoline 
must meet all applicable standards that apply at the terminal; and
    (C) Prior to the date the VOC-control standards apply to the 
terminal the reformulated gasoline in the storage tank must have an 
oxygen content of not less than 1.5 wt%;
    (v) When transitioning from reformulated gasoline to RBOB:
    (A) The oxygen content of the reformulated gasoline produced using 
the RBOB must be not less than the minimum oxygen amount specified in 
the RBOB product transfer documents;
    (B) Subsequent to any oxygenate blending, the reformulated gasoline 
must meet all applicable standards; and
    (C) The transition from reformulated gasoline to RBOB may not begin 
until the date the VOC-control standards no longer apply to the 
terminal; and
    (vi) The party must demonstrate compliance with the requirements 
specified in paragraphs (a)(13)(iv) and (v) of this section through 
testing of samples collected from the terminal storage tank and from 
trucks loaded at the terminal subsequent to each receipt of new product 
until the transition is complete. The analyses must be conducted using 
the test method specified under Sec. 80.46, or using another test 
method that is approved by the American Society of Testing and 
Materials provided that the other method is correlated with the method 
specified under Sec. 80.46.
    25. Section 80.79 is amended by revising paragraphs (b)(2) and 
adding paragraphs (b)(3) and (c)(3) to read as follows:


Sec. 80.79  Liability for violations of the prohibited activities.

* * * * *

[[Page 37391]]

    (b) * * *
    (2) Where a violation is found at a facility which is operating 
under the corporate, trade or brand name of a refiner or importer, that 
refiner or importer must show, in addition to the defense elements 
required by paragraph (b)(1) of this section, that the violation was 
caused by:
    (i) An act in violation of law (other than the Act or this part), 
or an act of sabotage or vandalism; or
    (ii) The action of any retailer or wholesale purchaser-consumer 
supplied by the refiner or importer in violation of a contractual 
undertaking imposed by the refiner or importer designed to prevent such 
action, and despite periodic sampling and testing by the refiner or 
importer to ensure compliance with such contractual obligation; or
    (iii) The action of any reseller, distributor, oxygenate blender, 
carrier, or a retailer or wholesale purchaser-consumer supplied by any 
of these persons, in violation of a contractual undertaking imposed by 
the refiner or importer designed to prevent such action, and despite 
periodic sampling and testing by the refiner or importer to ensure 
compliance with such contractual obligation; or
    (iv) The action of any carrier or other distributor not subject to 
a contract with the refiner or importer but engaged by the refiner or 
importer for transportation of gasoline, despite specification or 
inspection of procedures and equipment by the refiner or importer which 
are reasonably calculated to prevent such action.
    (3) In this paragraph (b), to show that the violation ``was 
caused'' by any of the specified actions the party must demonstrate by 
reasonably specific showings, by direct or circumstantial evidence, 
that the violation was caused or must have been caused by another.
    (c) * * *
    (3) An oversight program conducted by a carrier under paragraph 
(c)(1) of this section need not include periodic sampling and testing 
of gasoline in a tank truck operated by a common carrier, but in lieu 
of such tank truck sampling and testing the common carrier shall 
demonstrate evidence of an oversight program for monitoring compliance 
with the requirements of Sec. 80.78 relating to the transport or 
storage of gasoline by tank truck, such as appropriate guidance to 
drivers on compliance with applicable requirements and the periodic 
review of records normally received in the ordinary course of business 
concerning gasoline quality and delivery.
* * * * *
    26. Section 80.83 is revised to read as follows:


Sec. 80.83  Gasoline treated as blendstock.

    An importer may treat imported gasoline as blendstock (Gasoline 
Treated as Blendstock, or GTAB) and exclude the GTAB from its importer 
compliance calculations under Sec. 80.65(c) for reformulated gasoline 
or Sec. 80.101(d) for conventional gasoline provided the importer meets 
the requirements specified in this section.
    (a) GTAB must be included in the compliance calculations for 
gasoline produced at a refinery operated by the same person that is the 
importer (the ``GTAB importer-refiner'').
    (b) The GTAB importer-refiner may not transfer title to GTAB to 
another person until the GTAB has been used to produce gasoline and all 
refinery standards and requirements have been met for the gasoline 
produced.
    (c) The refinery at which GTAB is used to produce gasoline must be 
physically located at the same terminal at which the GTAB is first 
discharged upon arrival in the United States (the import facility), or 
at a facility to which the GTAB is directly transported from the import 
facility.
    (d) GTAB must be completely segregated from any other gasoline, 
whether conventional or RFG, and including any gasoline tank bottoms, 
prior to the point of blending, and sampling and testing, in the 
refinery operation, except that:
    (1) GTAB may be placed in a storage tank that contains other GTAB 
imported by that importer; or
    (2) GTAB may be placed in a storage tank that contains gasoline 
provided that:
    (i) The gasoline has the same designations under Sec. 80.65(d) as 
the gasoline which will be produced using the GTAB;
    (ii) The blending is performed in that storage tank; and
    (iii) The properties and volume the gasoline produced using GTAB is 
determined in a manner that excludes the volume and properties of the 
gasoline.
    (e) Each year that GTAB is used to produce gasoline, the GTAB 
importer-refiner must determine an adjusted baseline for the refinery 
where the GTAB is used to produce gasoline that would apply in the case 
of conventional gasoline standards under Sec. 80.101(b) and 
reformulated gasoline standards under Sec. 80.41(h)(2)(i) for all 
gasoline produced at that refinery for that year. The following 
formulas must be used to calculate the adjusted refinery baseline where 
GTAB is used to produce conventional gasoline:
[GRAPHIC] [TIFF OMITTED] TP11JY97.009

[GRAPHIC] [TIFF OMITTED] TP11JY97.010

    And the following formula must be used to calculate the adjusted 
refinery baseline where GTAB is used to produce RFG:
[GRAPHIC] [TIFF OMITTED] TP11JY97.011

Where:

ABi = Adjusted baseline for parameter or emissions 
performance i.
V1990 = 1990 baseline volume for the refinery.

[[Page 37392]]

Va = Volume of RFG, conventional gasoline and RBOB produced 
at the refinery during the year (averaging period) in question.
VRFG = Volume of RFG and RBOB produced at the refinery 
during the year in question.
VConv = Volume of conventional gasoline produced at the 
refinery during the year in question.
VRGTAB = Volume of GATB used to produce conventional 
gasoline at the refinery during the year in question.
VCGtab = Volume of GTAB used to produce conventional 
gasoline at the refinery during the year in question.
RBi = 1990 refinery baseline for parameter or emissions 
performance i.
IBi = Baseline for parameter or emissions performance i that 
applies to the GTAB importer-refiner in its importer capacity.
SBi = Statutory baseline for parameter or emissions 
performance i.

    (f)(1) The GTAB importer-refiner must complete all requirements for 
the GTAB at the time it is imported as if the GTAB were imported 
gasoline, including sampling and testing, independent sampling and 
testing for GTAB used to produce reformulated gasoline, record keeping 
and reporting.
    (2) The volume and properties of GTAB that has been combined with 
other GTAB may be determined by subtracting the volume and properties 
of the GTAB in the tank prior to receipt of the new product, from the 
volume and properties of the GTAB in the tank subsequent to receipt of 
the new product.
    (3) Any GTAB batch that is used in whole or in part to produce 
reformulated gasoline must be treated as imported reformulated gasoline 
for purposes of sampling and testing, and reporting, under paragraph 
(f)(1) of this section; except that the sampling and testing may be 
based on vessel composite samples without regard to whether the 
gasoline in individual ship compartments separately meets the 
reformulated gasoline downstream standards.
    (4) Any reports to EPA for imported GTAB must identify the GTAB as 
such.
    (5) Any GTAB that ultimately is not used to produce gasoline must 
be treated as newly imported gasoline, for which all required sampling 
and testing, record keeping and reporting must be accomplished, and the 
gasoline must be included in the GTAB importer-refiner's importer 
compliance calculations for the averaging period that includes the date 
this sampling and testing occurs.
    27. Section 80.84 is added to subpart D to read as follows:


Sec. 80.84  Treatment of interface and transmix.

    (a) Definitions. For purposes of this section, the following 
definitions apply:
    (1) Interface: A quantity of petroleum product in a pipeline 
between two surrounding batches of petroleum product that consists of a 
mixture of the two surrounding batches.
    (2) Transmix: An interface that consists of a mixture of gasoline 
and distillate fuel oil.
    (b) Classification of interface. Interface shall be classified in 
the following manner:
    (1) Interface mixtures of RFG or RBOB, and conventional gasoline 
shall be classified as conventional gasoline;
    (2) Interface mixtures of VOC-controlled RFG and non-VOC-controlled 
RFG shall be classified as non-VOC-controlled RFG;
    (3) Interface mixtures of VOC-controlled RFG for Region 1 and VOC-
controlled RFG for Region 2 shall be classified as VOC-controlled RFG 
for Region 2 or as non-VOC-controlled RFG;
    (4) Interface mixtures of RBOB and RFG shall be classified as RBOB; 
and
    (5) Interface mixtures of gasoline and blendstock shall be 
classified as blendstock.
    (c) Transmix processing. (1) Any person who separates transmix 
where the gasoline portion is classified as conventional gasoline shall 
exclude from compliance calculations under section 101 any gasoline or 
gasoline blendstock produced from the transmix.
    (2) Any person who separates transmix where the gasoline portion is 
classified as reformulated gasoline shall meet all requirements and 
standards that apply to a refinery under 40 CFR subparts D and F with 
regard to the transmix operation, and shall include the transmix 
gasoline portion in compliance calculations for the refinery.
    (d) Transmix Blending. (1) Any person may blend transmix into 
conventional gasoline only if:
    (i) The transmix results from normal pipeline operations;
    (ii) (A) The transmix cannot be transported by pipeline or water to 
a transmix processing facility; or
    (B) Transmix was blended at the terminal before 1995; and
    (iii) The transmix is blended at a rate that does not exceed the 
greater of:
    (A) The demonstrated blending rate at that terminal during 1994; or
    (B) 0.25 percent by volume.
    (2) Any person may blend transmix into reformulated gasoline only 
if:
    (i) The transmix results from normal pipeline operations;
    (ii) The transmix cannot be transported by pipeline or water to a 
transmix processing facility;
    (iii) The transmix cannot be blended into conventional gasoline 
under paragraph (d)(1) of this section;
    (iv) The transmix is blended at a rate that does not exceed 0.25 
percent by volume; and
    (v) After blending the reformulated gasoline is shown through 
sampling and testing to meet all applicable reformulated gasoline 
standards that apply at the terminal. This sampling and testing shall 
be at one of the following rates:
    (A) In the case of transmix that is blended in a storage tank, 
following each occasion transmix is blended; or
    (B) In the case of transmix that is blended in-line, at least twice 
each calendar month during which transmix is blended.
    28. Section 80.91 is amended by:
    a. Revising paragraph (d)(3) and adding paragraph (d)(5)(iii);
    b. Adding paragraph (e)(1)(iii);
    c. Revising paragraph (f)(2)(ii) introductory text;
    d. Revising paragraphs (f)(2)(ii)(D), (f)(2)(ii)(E), and 
(f)(2)(ii)(F);
    e. Revising paragraph (f)(2)(ii)(G) introductory text;
    f. Removing paragraphs (f)(2)(ii)(G)(1) and (f)(2)(ii)(G)(2);
    g. Revising paragraph (f)(2)(ii)(H) introductory text;
    h. Revising paragraphs (f)(2)(ii)(H)(1) and (f)(2)(ii)(H)(2):
    i. Removing paragraph (f)(2)(ii)(H)(3);
    j. Adding paragraph (f)(2)(ii)(I).
    The revisions, additions, and removals are set out to read as 
follows:


Sec. 80.91  Individual baseline determination.

* * * * *
    (d) * * *
    (3) Negligible quantity sampling. Post-1990 testing of a blendstock 
stream for a fuel parameter listed in this paragraph (d)(3) is not 
required if the refiner can show, through engineering judgement or past 
experience, that the fuel parameter exists in the stream at less than 
or equal to the amount, on average, shown in this paragraph (d)(3) for 
that fuel parameter. Any fuel parameter shown to exist in a refinery 
stream in negligible amounts shall be assigned a value of 0.0 or the 
negligible amount shown below at the refiner's discretion:
Aromatics, volume percent--1.0
Benzene, volume percent--0.15
Olefins, volume percent--1.0
Oxygen, weight percent--0.2
Sulfur, ppm--30.0
* * * * *
    (5) * * *
    (iii) If a refiner measures a blendstock stream for aromatics, 
benzene, olefins,

[[Page 37393]]

oxygen, or sulfur content and discovers that the measured component 
level of that stream is below the applicable range for the test method 
used, the low end of the applicable range may be substituted for the 
actual measured value in the baseline determination. This paragraph 
(d)(5)(iii) is not applicable to blendstock streams that have not been 
explicitly measured.
* * * * *
    (e) * * *
    (1) * * *
    (iii) For facilities determined to be closely integrated gasoline 
producing facilities and for which EPA has granted a single set of 
baseline fuel parameter values per this paragraph (e)(1):
    (A) All reformulated gasoline and anti-dumping standards shall be 
met by such closely integrated facilities on an aggregate basis;
    (B) A combined facility registration shall be submitted under 
Secs. 80.76 and 80.103; and
    (C) Record keeping requirements under Secs. 80.74 and 80.104 and 
reporting requirements under Secs. 80.75 and 80.105 shall be met for 
such closely integrated facilities on an aggregate basis.
* * * * *
    (f) * * *
    (2) * * *
    (ii) If the baseline fuel value for aromatics, olefins, benzene, 
and/or sulfur (determined per paragraph (e) of this section) is higher 
than the high end of the valid range limits specified in 
Sec. 80.42(c)(1) if compliance is being determined under the Simple 
Model, or in Sec. 80.45(f)(1)(ii) if compliance is being determined 
under the Complex Model, then the valid range limits may be extended 
for conventional gasoline in the following manner:
* * * * *
    (D) The new high end of the valid range for sulfur is determined 
from the following equation:

NSULLIM=SULBASE+50 ppm

Where:

NSULLIM=The new high end of the valid range limit for sulfur, in parts 
per million
SULBASE=The seasonal baseline fuel value for sulfur, in parts per 
million

    (E) The extension of the valid range is limited to the applicable 
summer or winter season in which the baseline fuel values for 
aromatics, olefins, benzene, and/or sulfur exceed the high end of the 
valid range as described in paragraph (f)(2)(ii) of this section. Also, 
the extension of the valid range is limited to use by the refiner whose 
baseline value for aromatics, olefins, benzene, and/or sulfur was 
higher than the valid range limits as described in paragraph (f)(2)(ii) 
of this section.
    (F) Any extension of the Simple Model valid range limits is 
applicable only to the Simple Model. Likewise any extension of the 
Complex Model valid range limits is applicable only to the Complex 
Model.
    (G) The valid range extensions calculated in paragraphs (f)(2)(ii) 
(A), (B), (C), and (D) of this section are applicable to both the 
baseline fuel and target fuel for the purposes of determining the 
compliance status of conventional gasolines. The extended valid range 
limit represents the maximum value for that parameter above which fuels 
cannot be evaluated with the applicable compliance model.
    (H) Under the Simple Model, baseline and compliance calculations 
shall subscribe to the following limitations:
    (1) If the aromatics valid range has been extended per paragraph 
(f)(2)(ii)(A) of this section, an aromatics value equal to the high end 
of the valid range specified in Sec. 80.42(c)(1) shall be used for the 
purposes of calculating the exhaust benzene fraction.
    (2) If the fuel benzene valid range has been extended per paragraph 
(f)(2)(ii)(C) of this section, a benzene value equal to the high end of 
the valid range specified in Sec. 80.42(c)(1) shall be used for the 
purposes of calculating the exhaust benzene fraction.
    (I) Under the Complex Model, baseline and compliance calculations 
shall subscribe to the following limitations:
    (1) If the aromatics valid range has been extended per paragraph 
(f)(2)(ii)(A) of this section, an aromatics value equal to the high end 
of the valid range specified in Sec. 80.45(f)(1)(ii) shall be used for 
the purposes of calculating emissions performances.
    (2) If the olefins valid range has been extended per paragraph 
(f)(2)(ii)(B) of this section, an olefins value equal to the high end 
of the valid range specified in Sec. 80.45(f)(1)(ii) shall be used for 
the target fuel for the purposes of calculating emissions performances.
    (3) If the benzene valid range has been extended per paragraph 
(f)(2)(ii)(C) of this section, a benzene value equal to the high end of 
the valid range specified in Sec. 80.45(f)(1)(ii) shall be used for the 
target fuel for the purposes of calculating emissions performances.
    (4) If the sulfur valid range has been extended per paragraph 
(f)(2)(ii)(D) of this section, a sulfur value equal to the high end of 
the valid range specified in Sec. 80.45(f)(1)(ii) shall be used for the 
target fuel for the purposes of calculating emissions performances.
* * * * *
    29. Section 80.101 is amended by:
    (a) Revising paragraphs (b)(2) and (b)(3);
    (b) Adding paragraph (d)(4)(iii);
    (c) Revising paragraph (f);
    (d) Revising paragraph (g);
    (e) Revising paragraphs (h)(1)(ii) and (i)(2);
    (f) Adding paragraphs (h)(4), (i)(1)(i)(C), (i)(1)(iii), (i)(3), 
and (i)(4);
    (g) Adding paragraph (j) to read as follows:


Sec. 80.101  Standards applicable to refiners and importers.

* * * * *
    (b) * * *
    (2) Optional complex model standards. Annual average levels of 
exhaust benzene emissions, weighted by volume weighted for each batch 
and calculated using the applicable complex model under Sec. 80.45, 
shall not exceed the refiner's or importer's compliance baseline for 
exhaust benzene emissions.
    (3) Complex model standards. (i) Annual average levels of exhaust 
toxics emissions and NOx emissions, weighted by volume for 
each batch and calculated using the applicable complex model under 
Sec. 80.45, shall not exceed the refiner's or importer's compliance 
baseline for exhaust toxics emissions and NOx emissions, 
respectively.
    (ii) On a per-gallon basis,
    (A) No conventional gasoline may have properties that are outside 
the complex model acceptable range limits specified at 
Sec. 80.45(f)(1)(ii); except that
    (B) For a refinery with a baseline parameter value that is outside 
the acceptable range limits, the value of this parameter for gasoline 
produced at this refinery shall not exceed the value determined in 
Sec. 80.91(f)(2) .
* * * * *
    (d) * * *
    (4) * * *
    (iii) Where oxygenate is included in a refinery's or importer's 
compliance calculations, only the oxygenate volume, excluding 
denaturant, water and impurities, shall be included in the compliance 
calculations.
* * * * *
    (f) Compliance baseline determination. The compliance baseline for 
any refinery or importer, for each parameter or emissions performance, 
and for each averaging period, shall be calculated as follows.
    (1) Calculate the refinery's or importer's averaging period volume 
(Va) as the total volume of the following products produced, 
imported or blended during the averaging period:
    (i) Conventional gasoline;
    (ii) Oxygenates blended with conventional gasoline downstream if

[[Page 37394]]

allowed under paragraph (d)(4)(ii) of this section;
    (iii) Reformulated gasoline;
    (iv) RBOB;
    (v) Oxygenates added to RBOB as determined under 
Sec. 80.65(e)(1)(ii); and
    (vi) California gasoline as defined in Sec. 80.81(a)(2).
    (2) Calculate the baseline to averaging period volume ratio (VR) 
using the following equation:
[GRAPHIC] [TIFF OMITTED] TP11JY97.012

where:

VRa=baseline to averaging period volume ratio for averaging 
period a
V1990=the refinery's or importer's 1990 baseline volume as 
determined in Sec. 80.91(f)(1)
Va=the averaging period volume as calculated in paragraph 
(f)(1) of this section

    (3) If VRa is equal to or greater than 1, the refinery's 
or importer's compliance baseline shall be the baseline as determined 
in Sec. 80.91(f)(1).
    (4) If VRa is less than 1, the refinery's or importer's 
compliance baseline shall be calculated using the following equation:

CBi=(Bi  x  VRa)+(DBi  x  
(1-VRa))

Where:

CBi=compliance baseline for parameter or emissions 
performance i
Bi=the refinery's or importer's baseline for parameter or 
emissions performance i
DBi=the statutory baseline for parameter or emissions 
performance i in Secs. 80.91(c)(5) (iii) and (iv)

    (g) Compliance calculations.--(1) Determination of batch parameter 
and emissions performance values. (i) In the case of each batch subject 
to the simple model standards, determine the values for sulfur, T-90, 
olefins, benzene, and aromatics as specified in paragraph (i) of this 
section.
    (ii) In the case of each batch subject to the early complex or 
complex model standards:
    (A) Determine the values for each parameter required under the 
complex model as specified in paragraph (i) of this section;
    (B) In the case of each batch subject to the early complex model 
standards, calculate the exhaust benzene emissions using the complex 
model in Sec. 80.45; and
    (C) In the case of each batch subject to the complex model 
standards, calculate the exhaust toxics and NOX emissions 
using the complex model in Sec. 80.45.
    (2) Compliance determinations--(i) Refineries and importers with an 
individual baseline. In the case of any refinery or importer subject to 
an individual baseline, for each parameter or emissions performance 
subject to a standard under paragraph (b) of this section:
    (A) Except exhaust benzene emissions under the simple model, 
calculate the annual average parameter value, or annual average 
emissions performance in mg/mi, using the following formula:
[GRAPHIC] [TIFF OMITTED] TP11JY97.013

Where:

Pa = annual average value for parameter or emissions 
performance
Vi = volume of batch i
Pi = parameter or emissions performance for batch i
i = each batch of gasoline or blendstock included in a refinery's or 
importer's compliance calculations under paragraph (d) of this section

    (B) In the case of exhaust benzene emissions under the simple model 
calculate the annual average value using the following formula:

EXHBEN = 1.884 + (0.949  x  BZ) + (0.113  x  (AR - BZ))

Where:

EXHBEN = annual average simple model exhaust benzene emissions
BZ = annual average benzene content, calculated under paragraph 
(g)(2)(i)(A) of this section
AR = annual average aromatics content, calculated under paragraph 
(g)(2)(i)(A) of this section

    (C) In order to achieve compliance the annual average value shall 
be equal to or less than the refinery's or importer's standard under 
paragraph (b) of this section.
    (ii) Refineries and importers with the statutory baseline. In the 
case of any refinery or importer subject to the statutory baseline, for 
each parameter or emissions performance subject to a standard under 
paragraph (b) of this section:
    (A) Calculate the compliance total based on the standard under 
paragraph (b) of this section for each parameter, or emissions 
performance in mg/mi, using the formula in Sec. 80.67(g)(1)(i).
    (B) Calculate the actual total for each parameter, or emissions 
performance in mg/mi, for the gasoline and blendstocks under paragraph 
(d) of this section, using the formula in Sec. 80.67(g)(1)(ii).
    (C) In order to achieve compliance the actual total shall be equal 
to or less than the compliance total.
    (3) Additional compliance requirements. (i) Any calculations 
involving sulfur content or wt% oxygen shall be adjusted for specific 
gravity.
    (ii) The emissions performance of gasoline that is intended for use 
in an area subject to an RVP standard in Sec. 80.27 during the period 
such standard applies and that meets this RVP standard shall be 
determined using the ``summer'' complex model. The emissions 
performance of all other gasoline shall be determined using the 
``winter'' complex model.
    (4) Oxygen election for NOX. (i) For the 1998 and 1999 
averaging periods, any refiner for a refinery, or any importer, may 
elect to determine compliance with the NOX emissions 
performance standard:
    (A) With oxygenates added downstream from the refinery under 
Sec. 80.91(e)(4) included in the compliance calculations, and a 
baseline NOX emissions performance that includes oxygenate; 
or
    (B) With such oxygenates excluded from compliance calculations, and 
a baseline NOX emissions performance that excludes 
oxygenate.
    (ii) The election under paragraph (g)(4)(i) of this section for 
1999 shall apply for all subsequent averaging periods.
    (5) Exclusion of previously certified gasoline and blendstock. (i) 
Any refiner who uses previously certified reformulated or conventional 
gasoline, or blendstock that previously has been included in compliance 
calculations under Sec. 80.102(e)(2), to produce gasoline at a 
refinery, shall exclude the previously certified gasoline and 
blendstock for purposes of demonstrating compliance with the standards 
under Sec. 80.101(b).
    (ii) In order to accomplish the exclusion required in paragraph 
(g)(5)(i) of this section, the refiner shall either:
    (A) Determine the volume and properties of blendstock used at the 
refinery, and use the compliance calculation procedures in paragraph 
(g)(5)(iii) of this section; or
    (B) Determine the volume and properties of the previously certified 
gasoline and the previously certified blendstock used at the refinery, 
and the volume and properties of gasoline produced at the refinery, and 
use the compliance calculation procedures in paragraph (g)(5)(iv) of 
this section.
    (iii) (A) Determine the volume and properties of each batch of 
blendstock used at the refinery, and of oxygenate blended with a 
refinery's gasoline under paragraph (d)(4)(ii) of this section, with 
the exception of previously certified

[[Page 37395]]

blendstock, using the procedures in paragraph (i) of this section.
    (B) Determine the blendstock volume fraction (F) based on the 
volume of blendstock, and the volume of gasoline with which the 
blendstock is blended, using the following equation:
[GRAPHIC] [TIFF OMITTED] TP11JY97.014

Where:

F = blendstock volume fraction
Vb = volume of blendstock
Vg = volume of gasoline with which the blendstock is 
blended.

    (C) For each parameter required by the complex model, calculate the 
parameter value that would result by combining, at the blendstock 
volume fraction (F), the blendstock with a gasoline having properties 
equal to the refinery's or importer's baseline, using the following 
formula:
[GRAPHIC] [TIFF OMITTED] TP11JY97.015

Where:

CPj = calculated value for parameter j
BAPj = baseline value for parameter j
BLPj = value of parameter j for the blendstock
j = each parameter required by the complex model

    (1) The baseline value shall be the refinery's ``summer'' or 
``winter'' baseline, based on the ``summer'' or ``winter'' 
classification of the gasoline produced as determined under paragraph 
(g)(3)(iii) of this section. In the case of a refinery that is 
aggregated under paragraph (h) of this section, the refinery baseline 
shall be used, and not the aggregate baseline.
    (2) The sulfur content and oxygen wt% adjustment required under 
paragraph (g)(3)(i) of this section shall use a gasoline specific 
gravity of 0.749 for ``summer'' gasoline and of 0.738 for ``winter'' 
gasoline.
    (3) In the case of ``summer'' gasoline, where the blendstock is 
ethanol and the volume fraction calculated under paragraph 
(g)(5)(iii)(B) of this section is equal to or greater than 0.015, the 
value for RVP shall be 1.0 psi greater than the RVP calculated using 
the equation in this paragraph (g)(5)(iii)(C).
    (D) Using the summer or winter complex model, as appropriate, 
calculate the exhaust toxics and NOX emissions performance, 
in mg/mi, of:
    (1) A hypothetical gasoline having properties equal to those 
calculated in paragraph (g)(5)(iii)(C) of this section (HEP); and
    (2) A gasoline having properties equal to the refinery's or 
importer's baseline (BEP).
    (E) Calculate the exhaust toxics and NOX equivalent 
emissions performance (EEP) of the blendstock, in mg/mi, using the 
following equation:
[GRAPHIC] [TIFF OMITTED] TP11JY97.016

Where:

EEPJ = equivalent emissions performance of the blendstock 
for emissions performance j
BEPJ = emissions performance j of a gasoline having the 
properties of the refinery's baseline.
HEPJ = emissions performance j of a hypothetical blendstock/
gasoline blend
F = blendstock volume fraction
J = exhaust toxics or NOX emissions performance

    (F) For each blendstock batch, the volume, and exhaust toxics and 
NOX equivalent emissions performance (EEP), shall be 
included in the refinery's compliance calculations.
    (G)(1) The portions of a blendstock batch used to produce 
``summer'' and ``winter'' gasoline, as determined in paragraph 
(g)(3)(iii) of this section, shall be treated as separate batches for 
purposes of this paragraph (g)(5)(iii).
    (2) In the case of oxygenates or butane blended with a refinery's 
gasoline under paragraph (d)(4)(ii) of this section, the oxygenate or 
butane volume blended during a maximum of one month may be treated as a 
single batch for purposes of this paragraph (g)(5)(iii).
    (iv)(A) For each batch of previously certified gasoline or 
blendstock received that is used to produce conventional gasoline:
    (1) Determine the volume and properties using the procedures in 
paragraph (i) of this section;
    (2) In the case of previously certified gasoline, determine the 
exhaust toxics and NOX emissions performance using the 
summer or winter complex model, as appropriate.
    (3) In the case of previously certified blendstock, determine the 
exhaust toxics and NOX equivalent emissions performance 
using the procedures in paragraph (g)(5)(iii) of this section.
    (4) Include the volume and emissions performance, as a negative 
volume and a negative emissions performance, in the refinery's 
compliance calculations for exhaust toxics and NOX.
    (B) Determine the volume and properties, and exhaust toxics and 
NOX emissions performance, for each batch of conventional 
gasoline produced at the refinery using previously certified gasoline 
or blendstock, and include each batch in the refinery's compliance 
calculations for exhaust toxics and NOX without regard to 
the presence of previously certified gasoline or blendstock in the 
batch.
    (h) Refinery grouping for determining compliance. (1) * * *
    (ii) Elect to achieve compliance on an aggregate basis for a group, 
or for groups, of one or more refineries, provided that:
    (A) Compliance is achieved for each refinery separately or as part 
of a group;

[[Page 37396]]

    (B) The data for any refinery is included in only one compliance 
calculation;

and

    (C) Where more than one person meets the definition of refiner for 
a refinery, the refinery may not be aggregated with any other refinery 
unless the same persons meet the definition of refiner for . each 
refinery in the aggregation.
* * * * *
    (4) Where any refinery that has been included in an aggregation is 
transferred to another refiner, or is shut down:
    (i) The aggregation requirements and baselines calculated under 
Sec. 80.91(f)(4) shall apply;
    (ii) The aggregated baseline for the refiner who transfers or shuts 
down the refinery shall be calculated for the averaging period during 
which the refinery is transferred or is shut down using an adjusted 
baseline volume for the refinery calculated using the following 
equation:
[GRAPHIC] [TIFF OMITTED] TP11JY97.017

Where:

ABV = adjusted baseline volume
BV = baseline volume for the transferred or shut down refinery
Days = number of days during the averaging period the party was the 
refiner of the refinery or that the refinery was in operation

    (iii) In the case of a transferred refinery:
    (A) The new refiner's aggregation election shall be made for the 
averaging period during which the refinery is transferred, and shall 
apply for all subsequent averaging periods;
    (B) If the new refiner elects to aggregate the refinery, the 
aggregated baseline for the new refiner shall be calculated for the 
averaging period during which the refinery is transferred using an 
adjusted baseline volume for the transferred refinery calculated using 
the equation in paragraph (h)(4)(ii) of this section; and
    (C) Each refiner of a transferred refinery shall demonstrate 
compliance for the gasoline produced during the period it was the 
refiner of the refinery.
    (i) Sampling and testing. (1) * * *
    (i) * * *
    (C) Sampling under this paragraph (i)(1)(i) shall follow the 
requirements of Sec. 80.47.
* * * * *
    (iii) Retain a minimum of 330 ml of every sample analyzed under 
paragraph (i)(1)(i)(A) of this section for not less than 30 days from 
the date of production or import, and provide this remaining sample to 
the Administrator's authorized representative upon request.
    (2) In the case of oxygenate that is included in a refinery's 
compliance calculations under paragraph (d)(4) of this section the 
refiner may use the properties of the pure oxygenate instead of 
sampling and testing each oxygenate batch, provided that the refiner 
obtains documents from the oxygenate supplier that state the purity of 
any oxygenate used.
    (3) An importer who imports conventional gasoline into the United 
States by truck may meet the sampling and testing requirements under 
paragraph (i)(1) of this section as follows.
    (i) The imported conventional gasoline must meet the applicable 
conventional gasoline standards, specified under paragraph (b) of this 
section, on an every-gallon basis.
    (ii) The optional complex model standards and the complex model 
standards, under paragraphs (b)(2) and (3) of this section:
    (A) May be met separately for ``summer'' gasoline and for 
``winter'' gasoline, as defined in paragraphs (g)(5) and (6) of this 
section, based on the baselines applicable to the importer for these 
two periods; or
    (B) May be met for all gasoline during a calendar year on the basis 
of the annual baseline applicable to the importer.
    (iii)(A) The importer must demonstrate that every gallon of 
imported gasoline meets the applicable conventional gasoline standards, 
through test results of samples of the gasoline contained in the 
storage tank from which the trucks used to transport gasoline into the 
United States are loaded.
    (B) The frequency of this sampling and testing must be subsequent 
to each receipt of gasoline into the storage tank, or immediately prior 
to each transfer of gasoline to the importer's truck.
    (C) The testing must be for each applicable parameter specified 
under Sec. 80.65(e)(2)(i), using the test methods specified under 
Sec. 80.46.
    (D) The importer must obtain a copy of the terminal test results 
that reflects the quality of each truck load of gasoline that is 
imported into the United States.
    (iv)(A) The importer must conduct separate programs of periodic 
quality assurance sampling and testing of the gasoline obtained from 
each truck-loading terminal, to ensure the accuracy of the terminal 
test results.
    (B) The quality assurance samples must be obtained from the truck-
loading terminal by the importer, and terminal operator may not know in 
advance when samples are to be collected.
    (C) The importer must test each sample (or use a laboratory that is 
independent under Sec. 80.65(f)(2)(iii) to test the sample) for the 
parameters specified under Sec. 80.65(e)(2)(i) using the test methods 
specified under Sec. 80.46, and the results must correlate with the 
terminal's test results within the ranges specified under 
Sec. 80.65(e)(2)(i).
    (D) The frequency of quality assurance sampling and testing must be 
at least one sample for each fifty of an importer's trucks that are 
loaded at a terminal, or one sample per month, whichever is more 
frequent.
    (v) The importer must treat each truck load of imported gasoline as 
a separate batch for purposes of assigning batch numbers under 
Sec. 80.101(i), record keeping under Sec. 80.104, and reporting under 
Sec. 80.105.
    (vi) EPA inspectors or auditors, and auditors conducting attest 
engagements under subpart F, must be given full and immediate access to 
the truck-loading terminal and any laboratory at which samples of 
gasoline collected at the terminal are analyzed, and be allowed to 
conduct inspections, review records, collect gasoline samples, and 
perform audits. These inspections or audits may be either announced or 
unannounced.
    (vii) In the event the requirements specified in paragraphs 
(i)(3)(i) through (vi) of this section are not met, in whole or in 
part, the importer shall immediately lose the option of importing 
gasoline under the terms of this paragraph (i)(3).
    (4) A refiner who produces gasoline by blending butane into 
conventional gasoline may meet sampling and testing requirements of 
paragraph (i)(1) of this section as follows:
    (i) Commercial grade butane is defined as butane for which test 
results demonstrate the butane is 95% pure and has the following 
properties:

olefins  1.0 vol%
aromatics  2.0 vol%

[[Page 37397]]

benzene  0.03 vol%
sulfur  140 ppm

    (ii) Non-commercial grade butane is defined as butane for which 
test results demonstrate the butane has the following properties:

olefins  10.0 vol%
aromatics  2.0 vol%
benzene  0.03 vol%
sulfur  140 ppm

    (iii) Any refiner who blends butane for which the refiner has 
documents from the butane supplier which demonstrate the butane is 
commercial grade shall include the butane in compliance calculations 
based on the properties specified in paragraph (i)(4)(i) of this 
section;
    (iv) Any refiner who blends butane for which the refiner has 
documents from the butane supplier which demonstrate the butane is non-
commercial grade shall include the butane in compliance calculations 
based on the properties specified in paragraph (i)(4)(ii) of this 
section, provided the refiner:
    (A) Conducts a quality assurance program of sampling and testing 
the butane obtained from each separate butane supplier that demonstrate 
the butane has the properties specified under paragraph (i)(4)(ii) of 
this section; and
    (B) The frequency of butane sampling and testing for the butane 
received from each butane supplier must be one sample for every 50,000 
gallons of butane received, or one sample every three months, whichever 
is more frequent; and
    (v) When butane is blended under this paragraph (i)(4) during the 
period May 1 through September 15 the refiner shall demonstrate through 
sampling and testing that any gasoline blended with butane meets the 
volatility standards specified under 40 CFR 80.27.
    (vi) Butane that is blended during a period of up to one month may 
be included in a single batch for purposes of reporting to EPA, 
however, commercial grade butane and non-commercial grade butane shall 
be reported as separate batches.
    (j) Evasion of standards through exporting and importing gasoline. 
Notwithstanding the requirements of this section, no refiner or 
importer shall export gasoline and import the same or other gasoline 
for the purpose of evading a more stringent baseline requirement.
    30. Section 80.102 is amended by:
    (a) Adding introductory text;
    (b) Revising the introductory text of paragraph (a) and revising 
paragraphs (a)(1)(viii) and (a)(2), and adding paragraph (a)(3);
    (c) Revising the first sentence of paragraphs (b)(1) and (c);
    (d) Revising the introductory text of paragraphs (d)(1) and (d)(2); 
revising the ``Vg'' portion of the formula in paragraphs 
(d)(1)(i) and (d)(2)(i); revising paragraph (d)(3)(iv) and (d)(3)(v); 
and adding paragraphs (d)(3)(vi) and(d)(3)(vii);
    (e) Revising the introductory text of paragraphs (e)(1) and (e)(2) 
and revising paragraphs (e)(2)(i) and (e)(3);
    (f) Revising the introductory text of paragraph (f)(1) and revising 
paragraph (f)(1)(i);
    (g) Revising paragraph (g), to read as follows:


Sec. 80.102  Controls applicable to blendstocks

    The requirements of this section shall be met separately for each 
refinery by the refiner, and by each importer.
    (a) For the purposes of this subpart E the following 
classifications apply.
    (1) * * *
    (viii) Dimate; except that
    (2) No petroleum product shall be considered ``applicable 
blendstocks'' if it has an initial boiling point that is less than 75 
deg. F or a boiling end point that is greater than 450  deg. F; and
    (3) Any gasoline blendstock with properties such that, if oxygenate 
only is added to the blendstock the resulting blend meets the 
definition of gasoline under Sec. 80.2(c), shall be considered 
gasoline.
    (b) (1) Determine the baseline blendstock-to-gasoline ratio for 
each calendar year 1990 through 1993 using the following formula:* * *
* * * * *
    (c) Determine the cumulative blendstock-to-gasoline ratio using the 
following formula:* * *
* * * * *
    (d)(1) For each averaging period:
    (i) * * *

Vg = Volume of conventional gasoline, oxygenates blended 
downstream under Sec. 80.101(d)(4)(ii), reformulated gasoline and RBOB, 
including oxygenates added to RBOB as determined under 
Sec. 80.65(e)(1)(ii), produced or imported during the averaging period, 
excluding California gasoline as defined in Sec. 80.81(a)(2).
* * * * *
    (2) Beginning on January 1, 1998, for each averaging period:
    (i) * * *
Vg,i = Volume of conventional gasoline, oxygenates blended 
downstream under Sec. 80.101(d)(4)(ii), reformulated gasoline and RBOB, 
including oxygenates added to RBOB as determined under 
Sec. 80.65(e)(1)(ii), produced or imported during averaging i, 
excluding California gasoline as defined in Sec. 80.81(a)(2).
* * * * *
    (3) * * *
    (iv) Transferred between refineries that have been aggregated under 
Sec. 80.101(h);
    (v) Used to produce California gasoline as defined in 
Sec. 80.81(a)(2);
    (vi) Sold at a price that is not less than 100% greater than the 
average price of the refinery's regular grade conventional gasoline 
when sold in bulk during the same month; or
    (vii) Tendered in a volume not exceeding 1,000 gallons.
    (e)(1) The blendstock-to-gasoline ratio percentage change threshold 
shall have been exceeded if:
* * * * *
    (2) Any refiner for a refinery, or any importer, that exceeds the 
blendstock-to-gasoline ratio percentage change threshold shall, without 
further notification:
    (i) Include all blendstocks, except blendstocks that meet the 
criteria for exclusion under paragraph (d)(3) of this section, produced 
or imported and transferred to others in its compliance calculations 
under Sec. 80.101 for two averaging periods beginning on January 1 of 
the averaging period subsequent to the averaging period when the 
exceedance occurs;
* * * * *
    (3) Any refiner for a refinery, or any importer, that has 
previously exceeded the blendstock-to-gasoline ratio percentage change 
threshold, and subsequently exceeds the threshold for an averaging 
period and is not granted a waiver pursuant to paragraph (f)(2)(i) of 
this section, shall, without further notification, meet the 
requirements specified in paragraphs (e)(2)(i) through (iii) of this 
section for four averaging periods, beginning on January 1 of the 
averaging period following the averaging period when the subsequent 
accedence occurs.
    (f)(1) The refinery or importer blendstock accounting requirements 
specified under paragraph (e) of this section shall not apply in the 
case of any refinery or importer:
    (i) Whose 1990 baseline value for each regulated fuel property and 
emissions performance as determined in accordance with Secs. 80.91 and 
80.92, is equal to or less stringent than the anti-dumping statutory 
baseline value for that parameter or emissions performance;
* * * * *

[[Page 37398]]

    (g) Notwithstanding the requirements of paragraphs (a) through (f) 
of this section, any refiner for a refinery, or any importer, who 
transfers applicable blendstocks to another refinery or importer with a 
less stringent baseline, either directly or indirectly, for the purpose 
of evading a more stringent baseline requirement, shall include such 
blendstock(s) in determining compliance with the applicable 
requirements of this subpart.
    31. Section 80.104 is amended by revising paragraphs (a)(1)(i), 
(a)(1)(ii), (a)(2)(i), (a)(2)(iv), (a)(2)(ix) and (a)(2)(x), and adding 
paragraphs (a)(2)(xi) and (a)(2)(xii) to read as follows:


Sec. 80.104  Record keeping requirements.

* * * * *
    (a) * * *
    (1) * * *
    (i) Each batch of conventional gasoline produced; and
    (ii) Each batch of blendstock that is included in compliance 
calculations.
    (2)(i)(A) The result of tests performed in accordance with 
Sec. 80.101(i) as originally printed by the testing apparatus, or where 
no printed result is generated by the testing apparatus, the results as 
originally recorded by the person who performed the tests; and
    (B) Any record that contains results for the tests that are not 
identical to the results recorded in paragraph (a)(2)(i)(A) of this 
section; and
* * * * *
    (iv) The date of production, importation, blending or receipt;
* * * * *
    (ix) In the case of any refinery-produced or imported products 
listed in Sec. 80.102(a) that are excluded under Sec. 80.102(d)(3), 
documents that demonstrate the basis for exclusion;
    (x) In the case of oxygenate that is added by a person other than 
the refiner or importer under Sec. 80.101(d)(4)(ii)(B), documents that 
support the volume of oxygenate claimed by the refiner or importer, 
including the contract with the oxygenate blender and records relating 
to the audits, sampling and testing, and inspections of the oxygenate 
blender operation; and
    (xi) In the case of any imported GTAB, documents that reflect the 
physical movement of the GTAB from the point of importation to the 
point of blending to produce gasoline.
    (xii) In the case of refiners who blend butane into conventional 
gasoline, documents reflecting the volume and purity of butane blended.
* * * * *
    32. Section 80.105 is amended by revising (a)(5)(iv), removing 
paragraph (a)(5)(v), and revising paragraph (c) to read as follows:


Sec. 80.105  Reporting requirements.

    (a) * * *
    (5) * * *
    (iv) The properties, except for oxygenates blended downstream of 
the refinery or import facility, pursuant to Sec. 80.101(i); and
* * * * *
    (c) For each averaging period, each refiner and importer shall 
cause to be submitted to the Administrator of EPA, by May 31 of each 
year, a report in accordance with the requirements for Attest 
Engagements of Secs. 80.125 through 80.131 for each refinery and for 
each importer.
* * * * *
    33. Section 80.106 is amended by revising the introductory text of 
paragraph (a)(1), revising paragraph (a)(1)(vi), removing paragraph 
(a)(1)(vii), and adding paragraph (a)(3) to read as follows:


Sec. 80.106  Product transfer documents.

    (a)(1) On each occasion when any person transfers custody or title 
to any conventional gasoline, other than when gasoline is transferred 
to a retail outlet or wholesale purchaser-consumer facility located 
outside any covered area, or is sold or dispensed for use in motor 
vehicles at a retail outlet or wholesale purchaser-consumer facility, 
the transferor shall provide to the transferee documents that include 
the following information:
* * * * *
    (vi)(A) The following statement: ``This product does not meet the 
requirements for reformulated gasoline, and may not be used in any 
reformulated gasoline covered area.''
    (B) With the exception of custody transfers to truck carriers, 
retail outlets and wholesale purchaser-consumer facilities, the 
statement required in paragraph (a)(vi) of this section may be in the 
form of product codes, provided that:
    (1) The codes are standardized for the distribution system in which 
they are used; and
    (2) The transferee is given the information necessary to interpret 
the codes.
* * * * *
    (3) The information required in this paragraph (a) shall be 
transferred:
    (i) No later than the time of the transfer in the case of transfers 
of custody; and
    (ii) Within thirty days following the transfer in the case of 
transfers of title.
* * * * *
    34. Section 80.125 is amended by adding paragraphs (a)(1) through 
(a)(4) to read as follows:


Sec. 80.125  Attest engagements.

    (a) * * *
    (1) In the case of any refiner or importer of reformulated or 
conventional gasoline, the attest procedures in Sec. 80.133 shall be 
completed, or, prior to the 1998 reporting period, the attest 
procedures in Sec. 80.128 may be completed as an alternative to the 
attest procedures in Sec. 80.133.
    (2) In the case of any oxygenate blender who meets the oxygen 
standard on average, the attest procedures in Sec. 80.134 shall be 
completed, or, prior to the 1998 reporting period, the attest 
procedures in Sec. 80.129 may be completed as an alternative to the 
Sec. 80.134 attest procedures.
    (3) In the case of any importer who imports any gasoline classified 
as GTAB under Sec. 80.83, the attest procedures in Sec. 80.131 shall be 
completed.
    (4) In the case of any refiner who produces reformulated gasoline 
under an in-line blending waiver from independent sampling and testing 
under Sec. 80.65(f), the attest procedures in Sec. 80.132 shall be 
completed.
* * * * *
    35. Section 80.126 is amended by adding paragraphs (h), (i), (j), 
(k), (l), (m), (n), and (o) to read as follows:


Sec. 80.126  Definitions.

* * * * *
    (h) Attestor means the CPA or CIA performing the agreed-upon 
procedures engagement under this subpart.
    (i) Foot (or crossfoot) means to add a series of numbers, generally 
in columns (or rows), to a total amount. When applying the attestation 
procedures in this subpart F, the attestor may foot to subtotals on a 
sample basis in those instances where subtotals (e.g., page totals) 
exist. In such instances, the total should be footed from the subtotals 
and the subtotals should be footed on a test basis using no less than 
25% of the subtotals.
    (j) Gasoline Treated as Blendstock, or GTAB, means imported 
gasoline that is excluded from the import facility's compliance 
calculations, but is treated as blendstock in a related refinery that 
includes the GTAB in its refinery compliance calculations.
    (k) Laboratory Analysis means the original test result for each 
analysis that was used to determine a product's properties. Original 
test result means the document in which a test result is first 
recorded, and not a transcribed version of the test result. For

[[Page 37399]]

laboratories using test methods that must be correlated to the standard 
test method, the correlation factors and results shall be included as 
part of the laboratory analysis. For refineries or importers that 
produce reformulated gasoline or RBOB and use the 100% independent lab 
testing, the laboratory analysis shall consist of the results reported 
to the refinery or importer by the independent lab. Where assumed 
properties are used (e.g., for butane) the assumed properties may serve 
as the test results. In the case of attest engagements for in-line 
blending operations under Sec. 80.132, the term laboratory analysis 
shall include both the ``primary analysis'' results under 
Sec. 80.132(c) and the ``confirmatory analysis'' results under 
Sec. 80.132(d).
    (l) Non-finished-gasoline petroleum products means liquid petroleum 
products that have boiling ranges greater than 75 degrees Fahrenheit, 
but less than 450 degrees Fahrenheit, as per ASTM D86 or equivalent.
    (m) Product transfer documents means copies of documents 
represented by the refiner/importer/oxygenate blender as having been 
provided to the transferee, and that reflect the transfer of ownership 
or physical custody of gasoline or blendstock (e.g., invoices, 
receipts, bills of lading, manifests, and/or pipeline tickets).
    (n) Reporting period means the time period relating to the reports 
filed with EPA by the refiner, importer, or oxygenate blender, and 
generally is the calendar year.
    (o) Tender means the transfer of ownership or physical custody of a 
volume of gasoline or other petroleum product all of which has the same 
identification (reformulated gasoline, conventional gasoline, RBOB, and 
other non-finished-gasoline petroleum products), and characteristics 
(time and place of use restrictions for reformulated gasoline and 
RBOB).
    36. Section 80.127 is amended by revising paragraph (a) to read as 
follows:


Sec. 80.127  Sample size guidelines

* * * * *
    (a) Sample items shall be selected in such a way as to comprise a 
simple random sample of each relevant population
    (1) The relevant population may be treated as the entire population 
included in the annual averaging period, or
    (2) The relevant population may be treated as the aggregation of 
portions of the population stratified on a quarterly basis; and
* * * * *
    37. Section 80.128 is amended by revising the heading and 
introductory text; revising paragraphs (d)(2), (e)(2), (e)(4) and 
(e)(5); and removing (e)(6) and (f) to read as follows:


Sec. 80.128  Alternative agreed upon procedures for refiners and 
importers.

    Prior to the attest report for the 1998 reporting period, the 
following minimum attest procedures may be carried out for a refinery 
or importer, in lieu of the attest procedures specified in Sec. 80.132.
* * * * *
    (d) * * *
    (2) Compare the product transfer documents' designation for 
consistency with the time and place, and compliance model designations 
for the tender (VOC-controlled or non-VOC-controlled, VOC region for 
VOC-controlled, OPRG versus non-OPRG, summer or winter gasoline, and 
simple or complex model certified; and
* * * * *
    (e) * * *
    (2) Determine that the requisite contract was in place with the 
downstream blender designating the required blending procedures, or 
that the refiner or importer accounted for the RBOB using the 
assumptions in Sec. 80.69(a)(2);
* * * * *
    (4) Trace back to the batch or batches in which the RBOB was 
produced or imported. Obtain the refiner's or importer's internal lab 
analysis for each batch and agree the consistency of the type and 
volume of oxygenate required to be added to the RBOB with that 
indicated in the applicable tender's product transfer documents; and
    (5) Agree the sampling and testing frequency of the refiner's or 
importer's downstream oxygenated blender quality assurance program with 
the sampling and testing rates as required in Sec. 80.69(a)(7).
* * * * *
    38. Section 80.129 is amended by:
    (a) Revising the heading and introductory text;
    (b) Revising paragraph (a);
    (c) Revising paragraphs (d)(3)(iii) and (d)(3)(iv), and removing 
paragraph (d)(3)(v); and
    (d) Adding paragraph (f), to read as follows:


Sec. 80.129  Alternative agreed upon procedures for oxygenate blenders.

    Prior to the attest report for the 1998 reporting period, the 
following minimum attest procedures may be carried out for an oxygenate 
blending facility that is subject to the requirements of this subpart 
F, in lieu of the attest procedures specified in Sec. 80.134.
    (a) Read the oxygenate blender's reports filed with EPA for the 
previous year as required by Sec. 80.75.
* * * * *
    (d) * * *
    (3) * * *
    (iii) Recalculate the actual oxygen content based on the volumes 
blended and agree to the report to EPA on oxygen; and
    (iv) Review the time and place designations in the product transfer 
documents prepared for the batch by the blender, for consistency with 
the time and place designations in the product transfer documents for 
the RBOB (e.g., VOC controlled or non-VOC controlled).
* * * * *
    (f) In the case of any oxygenate blender who meets the oxygen 
standard on average without separately sampling and testing each batch, 
under the terms of Sec. 80.69(b)(5), the following procedures also 
shall be carried out.
    (1) Obtain a listing of the oxygen compliance calculations, test 
the mathematical accuracy of the listing, and agree the volumetric 
calculations to the material balance analysis.
    (2) Select a representative sample of the oxygen compliance 
calculations using the guidelines in Sec. 80.127, and for each 
calculation selected:
    (i) Confirm that the calculation represented gasoline production 
for a period no longer than one month;
    (ii) Confirm that the oxygenate blender properly performed the 
calculation required in Sec. 80.69(b)(5), including that the oxygenate 
blender used the proper values for specific gravities, mole fraction, 
and denaturant content; and
    (iii) Agree the calculated oxygen value to the corresponding batch 
report to EPA.
    (3) Obtain records of the oxygenate blender's quality assurance 
program of sampling and testing, as required in Sec. 80.69(b)(5), 
select a representative sample of the quality assurance samples using 
the guidelines in Sec. 80.127, and for each quality assurance sample 
selected, confirm the sample was collected within the required 
frequency.
    39. Section 80.130 is revised to read as follows:


Sec. 80.130  Agreed upon procedures record keeping and reporting.

    (a) Reports. (1) The CPA or CIA shall issue to the refiner, 
importer, or blender a report summarizing the procedures performed and 
the findings in accordance with the attest engagement or internal audit 
performed in

[[Page 37400]]

compliance with this subpart. This report shall include the information 
specified below, or an explanation of why the information does not 
apply to the subject of the attest engagement.
    (2) The name and registration number of the refiner, importer or 
oxygenate blender who is the subject of the attest engagement, and in 
the case of refineries and oxygenate blending facilities, the name and 
registration number.
    (3) The name, address and telephone number of each CPA or CIA who 
participated in the conduct of the attest engagement, and the name of 
the CPA's firm if any.
    (4)(i) The information required in this paragraph (a)(4) shall be 
reported separately for the following product types:
    (A) Reformulated gasoline;
    (B) Conventional gasoline;
    (C) Non-finished-gasoline petroleum products, in the following 
categories:
    (1) Applicable blendstock included in a party's blendstock tracking 
calculations pursuant to Secs. 80.102(b) through (d);
    (2) Applicable blendstock not included in a party's blendstock 
tracking calculations; and
    (3) All other non-finished-gasoline petroleum products;
    (D) RBOB designated for ``any-oxygenate'' and 2.0 weight percent 
oxygen;
    (E) RBOB designated for ``ether-only'' and 2.0 weight percent 
oxygen;
    (F) All other RBOB;
    (G) Gasoline treated as blendstock;
    (H) In the case of oxygenate blenders, oxygenate; and
    (I) In the case of refiners with in-line blending waivers from 
independent sampling and testing, the gasoline produced using such an 
in-line blending operation, segregated into the categories specified in 
paragraphs (a)(4)(i) (A), (D), (E) and (F) of this section.
    (ii) The volumes from:
    (A) The inventory reconciliation analysis;
    (B) The listing of tenders; and
    (C) The listing of batches.
    (iii) The number of tenders; and
    (iv) The number of batches; and
    (5) For each attest procedure specified in the relevant regulatory 
section:
    (A) Identify the section number, and a statement that the procedure 
was performed or an explanation of why the procedure was not performed;
    (B) On each occasion when a sample is selected in accordance with 
the guidelines in Sec. 80.127, report the option under Sec. 80.127 that 
was used to select the sample, the size of the population, the size of 
the sample, and the method used to ensure the sample was a simple 
random sample of the relevant population;
    (C) Any information the attest procedure identifies to report, or 
to report as a finding; and
    (D) The nature of each discrepancy found.
    (b) Submission of reports to EPA. The refiner, importer, or blender 
shall provide a copy of the auditor's report to EPA within the times 
specified in Secs. 80.65(f)(2)(ii)(C), 80.75(m) and 80.105(c).
    (c) Document retention. (1) The CPA or CIA shall retain all 
documents pertaining to the performance of each agreed upon procedure 
and pertaining to the creation to the agreed upon procedures report, or 
copies of such documents, including, but not limited to, the following 
documents:
    (i) Documents that are reviewed as part of the attest engagement, 
including:
    (A) Inventory reconciliation records;
    (B) Product transfer documents; and
    (C) Laboratory reports;
    (ii) Documents that are prepared by the CPA or CIA as part of the 
attest engagement or in preparation of the attest engagement report, 
commonly called ``work papers;''
    (iii) Computer data and the results of computer programs that are 
used by the auditor to assist in the conduct of the attest engagement; 
and
    (iv) Correspondence between the CPA or CIA and the refiner, 
importer or oxygenate blender on the subject of the attest engagement.
    (2) The term document includes computer records where the 
information specified in paragraph (c)(1) of this section is in the 
form of computer records.
    (3) The documents specified in paragraph (c)(1) of this section 
shall be retained by the CPA or CIA for a period of five years from the 
date the attest engagement report is submitted to EPA, and shall 
deliver such documents to the Administrator's authorized representative 
upon request.
    40. Section 80.131 is added to subpart F to read as follows:


Sec. 80.131  Agreed upon procedures for GTAB, certain conventional 
gasoline imported by truck, previously certified gasoline used to 
produce gasoline, and butane blenders.

    (a) Attest procedures for GTAB. The following are the attest 
procedures to be carried out in the case of an importer who imports 
gasoline classified as blendstock (or ``GTAB'') under the terms of 
Sec. 80.83:
    (1) Obtain a listing of all GTAB volumes imported for the reporting 
period. Agree the total volume of GTAB from the listing to the 
inventory reconciliation analysis under Sec. 80.132.
    (2) Obtain a listing of all GTAB batches reported to EPA by the 
importer. Agree the total volume of GTAB from the listing to the GTAB 
volumes reported to EPA. Note that the EPA report includes a notation 
that the batch is not included in the compliance calculations because 
the imported product is GTAB. Also, agree these volumes to the Import 
Summary received from the U.S. Customs Service.
    (3) Select a sample, in accordance with the guidelines in 
Sec. 80.127, from the listing of GTAB batches obtained in paragraph 
(a)(2) of this section, and for each GTAB batch selected perform the 
following:
    (i) Trace the GTAB batch to the tank activity records. From the 
tank activity records, determine the volumes of conventional gasoline 
and of RFG produced. Agree the volumes from the tank activity records 
to the batch volume reported to the EPA as reformulated or conventional 
gasoline.
    (ii) Agree the location of the refinery represented by the tank 
activity records obtained in paragraph (a)(3)(i) of this section for 
the gasoline produced from GTAB, to the location that the GTAB arrived 
in the U.S. or at a facility to which GTAB is directly transported from 
the import facility using records representing location (e.g., US 
Customs Service entry records). Using product transfer records, trace 
volumes transported from the import facility directly to the refinery 
as applicable.
    (iii) Obtain tank activity records for all batches of GTAB received 
and blended. Using the tank activity records, determine whether the 
GTAB was received into an empty tank, or into a tank containing other 
GTAB imported by that importer or finished gasoline of the same 
category as the gasoline that will be produced using the GTAB.
    (iv) Using the tank activity records obtained under paragraph 
(a)(3)(iii) of this section, determine the volume of any tank bottom 
(beginning tank inventory) that is previously certified gasoline before 
GTAB is added to the tank. Using lab reports, batch reports, or product 
transfer documents, determine the properties of the tank bottom.
    (v) Determine whether the properties and volume of gasoline 
produced using GTAB were determined in a manner that excludes the 
volume and properties of any gasoline that previously has been included 
in any refiners or importers compliance calculations, as follows:
    (A) Note documented tank mixing procedures.
    (B) Determine the volume and properties of the gasoline contained 
in

[[Page 37401]]

the storage tank after blending is complete. Mathematically subtract 
the volume and properties of the previously certified gasoline to 
determine the volume and properties of the GTAB plus blendstock added. 
Agree the volume and properties of the GTAB plus blendstock added to 
the volume reported to EPA as a batch of gasoline produced; or
    (C) In the alternative, using the tank activity records, note that 
only GTAB and blending components were combined, and that no gasoline 
was added to the tank. Agree the volumes and properties of the 
shipments from the tank after the GTAB and blendstock are added, 
blended, and sampled and tested, to the volumes and properties reported 
to the EPA by the refiner.
    (vi) Obtain the importer's laboratory analysis for each batch of 
GTAB selected, and agree the properties listed in the corresponding 
batch report submitted to the EPA, to the laboratory analysis.
    (b) Attest procedures for certain truck imports. The following 
procedures are to be carried out in the case of an importer who imports 
conventional gasoline into the United States by truck using the 
sampling and testing option in Sec. 80.101(i)(3) (``Sec. 101(i)(3) 
truck imports'').
    (1) Obtain a listing of all volumes of Sec. 101(i)(3) truck imports 
for the reporting period. Agree the total volume of Sec. 101(i)(3) 
truck imports from the listing to the inventory reconciliation analysis 
under Sec. 80.132.
    (2) Obtain a listing of all Sec. 101(i)(3) truck import batches 
reported to EPA by the importer. Agree the total volume of 
Sec. 101(i)(3) truck imports from the listing to the volume of 
Sec. 101(i)(3) truck imports reported to EPA. Also, agree these totals 
to the Import Summary received from the U.S. Customs Service.
    (3) Select a sample, in accordance with the guidelines in 
Sec. 80.127, from the listing obtained in paragraph (b)(2) of this 
section, and for each Sec. 101(i)(3) truck import batch selected 
perform the following:
    (i) Obtain the copy of the terminal test results for the batch, 
under Sec. 80.101(i)(3)(iii)(A), and determine that the sample was 
analyzed using the test methods specified in Sec. 80.46, and agree the 
terminal test results to the batch properties reported to EPA; and
    (ii) Obtain tank activity records for the terminal storage tank 
showing receipts, discharges, and sampling, and determine that the 
sample under paragraph (b)(3)(i) of this section was collected 
subsequent to the most recent receipt into the storage tank.
    (4) Obtain listings for each terminal where Sec. 101(i)(3) truck 
import gasoline was loaded, of all quality assurance samples collected 
by the importer, and for each terminal select a sample in accordance 
with the guidelines in Sec. 80.127 from the listing. For each quality 
assurance sample selected perform the following:
    (i) Determine that the sample was analyzed by the importer or by an 
independent laboratory, and that the analysis was performed using the 
test methods specified in Sec. 80.46;
    (ii) Obtain the terminal's test results that correspond in time to 
the time the quality assurance sample was collected, and agree the 
terminal's test results with the quality assurance test results; and
    (iii) Determine that the quality assurance sample was collected 
within the frequency specified in Sec. 80.101(i)(3)(iv)(D).
    (c) Attest procedures for previously certified gasoline. The 
following procedures are to be carried out in the case of a refiner who 
uses previously certified gasoline (PCG) under the requirements of 
Sec. 80.65(i).
    (1) Obtain a listing of all batches of PCG received at the refinery 
during the reporting period. Agree the total volume of PCG from the 
listing to the inventory reconciliation analysis under Sec. 80.132.
    (2) Obtain a listing of all PCG batches reported to EPA by the 
refiner. Agree the total volume of PCG from the listing of PCG received 
to the volume of PCG reported to EPA.
    (3) Select a sample, in accordance with the guidelines in 
Sec. 80.127, from the listing obtained in paragraph (c)(2) of this 
section, and for each PCG batch selected perform the following:
    (i) Trace the PCG batch to the tank activity records. Confirm that 
the PCG was included in a batch of reformulated or conventional 
gasoline produced at the refinery.
    (ii) Obtain the refiner's laboratory analysis and volume 
measurement for the PCG when received and agree the properties and 
volume listed in the corresponding batch report submitted to the EPA, 
to the laboratory analysis and volume measurements.
    (iii) Obtain the product transfer documents for the PCG when 
received and agree the designations from the product transfer documents 
to designations in the corresponding batch report submitted to EPA 
(reformulated gasoline, RBOB or conventional gasoline, and designations 
regarding VOC control and OPRG).
    (d) Attest procedures for butane blenders. The following procedures 
shall be carried out by a refiner who blends butane under 
Sec. 80.101(i)(4).
    (1) Obtain a listing of all butane batches received at the refinery 
during the reporting period.
    (2) Obtain a listing of all butane batches reported to EPA by the 
refiner for the reporting period. Agree the total volume of butane from 
the receipt listing to the volume of butane reported to EPA.
    (3) Select a sample, in accordance with the guidelines in 
Sec. 80.127, from the listing of butane batches reported to EPA, and 
for each butane batch selected perform the following:
    (i) Trace the butane included in the batch to the documents 
provided to the refiner by the butane supplier for the butane. 
Determine, and report as a finding, whether these documents establish 
the butane was commercial grade, non-commercial grade, or neither 
commercial nor non-commercial grade as defined in Sec. 80.101(i)(4).
    (ii) In the case of non-commercial grade butane, obtain the 
refiner's sampling and testing results for butane, and confirm that the 
frequency of the sampling and testing was consistent with the 
requirements in Sec. 80.101(i)(4).
    41. Section 80.132 is added to subpart F to read as follows:


Sec. 80.132  Agreed upon procedures for refiners with in-line blending 
waivers from independent sampling and testing.

    The following are the procedures to be carried out at each refinery 
where reformulated gasoline or RBOB is produced under an exemption from 
independent sampling and testing obtained under Sec. 80.65(f)(2) (an 
``in-line blending exemption'').
    (a) Review waiver requirements. (1) Review the refiner's petition 
submitted under Sec. 80.65(f)(2), and of EPA's approval of this 
petition.
    (2) Note, and report as a finding, for each parameter specified in 
Sec. 80.65(e)(2)(i), and for each form of sampling and/or testing to be 
carried out under the terms of in-line blending exemption petition and/
or under EPA's petition approval:
    (i) The location where the sample is to be collected;
    (ii) The manner in which the sample is to be collected;
    (iii) The number of samples to be collected during each separate 
blend;
    (iv) How the refiner is to determine the time when each sample is 
collected;
    (v) Who is to collect the sample;
    (vi) The type of analysis to be performed;
    (vii) Where the analysis is to be performed;
    (viii) Who is to perform the analysis; and
    (ix) The manner in which the analysis results are to be recorded 
and reported.

[[Page 37402]]

    (b) Batch listings. (1) Obtain a listing of all batches of 
reformulated gasoline and RBOB produced during the prior year under an 
in-line blending exemption, and test the mathematical accuracy of the 
volumetric calculations contained in the listing.
    (2) Select a representative sample of the reformulated gasoline and 
RBOB batches produced under an in-line blending exemption using the 
guidelines specified under Sec. 80.127, and for each batch selected 
obtain the laboratory analysis results for the batch, as identified in 
paragraph (a)(2) of this section.
    (3) The procedures specified in paragraphs (c) and (d) of this 
section shall be carried out for each batch identified in paragraph 
(b)(2) of this section, and for each parameter that is subject to, or 
that is used to calculate an emissions performance that is subject to, 
a standard specified in Sec. 80.41 for the batch.
    (c) Primary analysis results. (1) Identify the laboratory analysis 
that formed the basis for the refiner's report to EPA for the parameter 
(the ``primary analysis'') and report this result as a finding;
    (2) Agree the primary analysis to the refiner's report to EPA; and
    (3) Confirm that the sample was collected, analyzed, and reported 
as specified under paragraph (a)(2) of this section.
    (d) Confirmatory analysis. Identify the laboratory analysis results 
that, under the terms of the in-line blending exemption petition, are 
to be used to confirm the accuracy of the primary analysis (the 
``confirmatory analysis''), and for each parameter complete the 
procedures specified in this paragraph (d).
    (1) Where the confirmatory analysis results are from an analyzer 
that operates continually or with great frequency as part of the in-
line blending operation (``on-line'' analysis results), identify twelve 
confirmatory analysis results as follows:
    (i) Separate the blend into twelve equal time segments;
    (ii) For each time segment, identify the mid-point of the time 
segment; and
    (iii) Identify the on-line analysis result that reflects the 
quality of gasoline being produced most close to the mid-point of the 
time segment.
    (2) Where the confirmatory analysis results are from samples that 
are collected during the blending operation and analyzed at a separate 
laboratory (``off-line'' analysis results), select a representative 
sample of the off-line confirmatory analysis results using the 
guidelines specified in Sec. 80.127 as confirmatory analysis results.
    (3) Where the confirmatory analysis results are from samples of 
blendstocks used in the in-line blending operation:
    (i) Identify the analysis result that reflects the properties, and 
proportions, of each blendstock being used at the times identified in 
paragraph (d)(1) of this section; and
    (ii) Calculate the expected parameter value for the gasoline or 
RBOB based on the blendstock proportions and property values at each 
time as twelve confirmatory analysis results.
    (4) For any confirmatory analysis result identified under 
paragraphs (d) (1) through (3) of this section:
    (i) Agree the confirmatory analysis result with:
    (A) The primary analysis result; and
    (B) The applicable per-gallon standard for the parameter;
    (ii) Confirm that the confirmatory sample was collected, analyzed, 
and reported as specified under paragraph (a)(2) of this section; and
    (iii) Report the confirmatory analysis result as a finding.
    (e) Expansion of sample. If for any batch selected under paragraph 
(b)(2) of this section the difference between any primary analysis 
result and the corresponding confirmatory analysis result under 
paragraph (d) of this section is greater than the value for that 
parameter specified in Sec. 80.65(e)(2)(i), the following procedure 
shall be followed:
    (1) Select an additional sample from the listing of batches under 
paragraph (b)(1) of this section using the guidelines specified under 
Sec. 80.127 based on the total number of batches, but in a manner that 
randomly selects only from batches that were not selected under 
paragraph (b)(2) of this section; and
    (2) Complete the procedures specified in paragraphs (c) and (d) of 
this section for each batch selected, and for each parameter that is 
subject to, or that is used to calculate an emissions performance that 
is subject to, a standard specified in Sec. 80.41 for the batch.
    42. Section 80.133 is added to subpart F to read as follows:


Sec. 80.133  Agreed-upon procedures for refiners and importers.

    The following are the minimum attest procedures that shall be 
carried out for each refinery and importer. Agreed upon procedures may 
vary from the procedures stated in this section due to the nature of 
the refiner's or importer's business or records, provided that any 
refiner or importer desiring to use modified procedures obtains prior 
approval from EPA.
    (a) EPA Reports. (1) Obtain and read a copy of the refinery's or 
importer's reports (except for batch reports) filed with the EPA as 
required by Secs. 80.75 and 80.105 for the reporting period.
    (2) In the case of a refiner's report to EPA that represents 
aggregate calculations for more than one refinery, obtain the refinery-
specific volume and property information that was used by the refiner 
to prepare the aggregate report. Foot and crossfoot the refinery-
specific totals and agree to the values in the aggregate report. The 
procedures in paragraphs (b) through (m) of this section then are 
performed separately for each refinery.
    (3) Obtain a written representation from a company representative 
that the report copies are complete and accurate copies of the reports 
filed with the EPA.
    (4) Identify, and report as a finding, the name of the commercial 
computer program used by the refiner or importer to track the data 
required by these regulations, if any.
    (b) Inventory reconciliation analysis. Obtain an inventory 
reconciliation analysis for the refinery or importer for the reporting 
period by product type (i.e., reformulated gasoline, RBOB, conventional 
gasoline, and non-finished-gasoline petroleum products), and perform 
the following:
    (1) Foot and crossfoot the volume totals reflected in the analysis; 
and
    (2) Agree the beginning and ending inventory amounts in the 
analysis to the refinery's or importer's inventory records. If the 
analysis shows no production of conventional gasoline or if the 
refinery or importer represents under paragraph (l) of this section 
that it has a baseline less stringent or equal to the statutory 
baseline, the analysis may exclude non-finished-gasoline petroleum 
products.
    (3) Report as a finding the volume totals for each product type.
    (c) Listing of tenders. For each product type other than non-
finished gasoline petroleum products (i.e., reformulated gasoline, 
RBOB, conventional gasoline), obtain a separate listing of all tenders 
from the refinery or importer for the reporting period. Each listing 
should provide for each tender the volume shipped and other information 
as needed to distinguish tenders. Perform the following:
    (1) Foot to the volume totals per the listings; and
    (2) For each product type listed in the inventory reconciliation 
analysis obtained in paragraph (b) of this section, agree the volume 
total on the listing to

[[Page 37403]]

the tender volume total in the inventory reconciliation analysis.
    (d) Listing of batches. For each product type other than non-
finished gasoline petroleum products (i.e., reformulated gasoline, 
RBOB, and conventional gasoline), obtain separate listings of all 
batches reported to the EPA and perform the following:
    (1) Foot to the volume totals per the listings; and
    (2) Agree the total volumes in the listings to the production 
volume in the inventory reconciliation analysis obtained in paragraph 
(b) of this section.
    (e) Reformulated gasoline tenders. Select a sample, in accordance 
with the guidelines in Sec. 80.127, from the listing of reformulated 
gasoline tenders obtained in paragraph (c) of this section, and for 
each tender selected perform the following:
    (1) Obtain product transfer documents associated with the tender 
and agree the volume on the tender listing to the volume on the Product 
transfer documents; and
    (2) Note whether the product transfer documents evidencing the date 
and location of the tender and the compliance model designations for 
the tender (VOC-controlled for Region 1 or 2, non VOC-controlled, and 
simple or complex model certified).
    (f) Reformulated gasoline batches. Select a sample, in accordance 
with the guidelines in Sec. 80.127, from the listing of reformulated 
gasoline batches obtained in paragraph (d) of this section, and for 
each batch selected perform the following:
    (1) Agree the volume shown on the listing, to the volume listed in 
the corresponding batch report submitted to EPA; and
    (2) Obtain the refinery's or importer's laboratory analysis and 
agree the properties listed in the corresponding batch report submitted 
to EPA, to the properties listed in the laboratory analysis.
    (g) RBOB tenders. Select a sample, in accordance with the 
guidelines Sec. 80.127, from the listing of RBOB tenders obtained in 
paragraph (c) of this section, and for each tender selected perform the 
following:
    (1) Obtain product transfer documents associated with the tender 
and agree the volume on the tender listing to the volume on the product 
transfer documents; and
    (2) Inspect the product transfer documents evidencing the type and 
amount of oxygenate to be added to the RBOB.
    (h) RBOB batches. Select a sample, in accordance with the 
guidelines in Sec. 80.127, from the listing of RBOB batches obtained in 
paragraph (d) of this section, and for each batch selected perform the 
following:
    (1) Obtain from the refiner or importer the oxygenate type and 
volume, and oxygen volume required to be hand blended with the RBOB, in 
accordance with Secs. 80.69(a)(2) and (8);
    (2) Agree the volume shown on the listing, as adjusted to reflect 
the oxygenate volume determined under paragraph (h)(1) of this section, 
to the volume listed in the corresponding batch report submitted to 
EPA; and
    (3) Obtain the refinery's or importer's laboratory analysis of the 
RBOB hand blend and agree:
    (i) The oxygenate type and oxygen amount determined under paragraph 
(h)(1) of this section, to the tested oxygenate type and oxygen amount 
listed in the laboratory analysis; and
    (ii) The properties listed in the corresponding batch report 
submitted to EPA to the properties listed in the laboratory analysis.
    (4)(i) Categorize the RBOB batch reports into two groups:
    (A) RBOB Batch reports showing:
    (1) ``RBOB-any oxygenate'' with ethanol as oxygenate and an oxygen 
content of 2.0 weight percent; and
    (2) ``RBOB-ethers only'' with only MTBE as oxygenate and an oxygen 
content of 2.0 weight percent; and
    (B) All other RBOB batch reports.
    (ii) Perform the following procedures for each batch report 
included in paragraph (h)(4)(i)(B) of this section:
    (A) Obtain and inspect a copy of the executed contract with the 
downstream oxygenate blender (or with an intermediate owner), and 
confirm that the contract:
    (1) Was in effect at the time of the corresponding RBOB transfer; 
and
    (2) Allowed the company to sample and test the reformulated 
gasoline made by the blender.
    (B) Obtain a listing of RBOB blended by downstream oxygenate 
blenders and the refinery's or importer's oversight test results, and 
select a representative sample, in accordance with the guidelines in 
Sec. 80.127, from the listing of test results and for each test 
selected perform the following:
    (1) Obtain the laboratory analysis for the batch, and agree the 
type of oxygenate used and the oxygen content appearing in the 
laboratory analysis to the instructions stated on the product transfer 
documents corresponding to a RBOB receipt immediately preceding the 
laboratory analysis and used in producing the reformulated gasoline 
batch selected;
    (2) Calculate the frequency of sampling and testing or the volume 
blended between the test selected and the next test; and
    (3) Agree the frequency of sampling and testing or the volume 
blended between the test selected and the next test to the sampling and 
testing frequency rates stated in Sec. 80.69(a)(7).
    (i) Conventional gasoline and conventional gasoline blendstock 
tenders. Select a sample, in accordance with the guidelines in 
Sec. 80.127, from the listing of the tenders of conventional gasoline 
and conventional gasoline blendstock that becomes gasoline through the 
addition of oxygenate only, and for each tender selected perform the 
following:
    (1) Obtain product transfer documents associated with the tender 
and agree the volume on the tender listing to the volume on the product 
transfer documents; and
    (2) Inspect the product transfer documents evidencing that the 
information required in Sec. 80.106(a)(1)(vii) is included.
    (j) Conventional gasoline batches. Select a sample, in accordance 
with the guidelines in Sec. 80.127, from the conventional gasoline 
batch listing obtained in paragraph (d) of this section, and for each 
batch selected perform the following:
    (1) Agree the volume shown on the listing, to the volume listed in 
the corresponding batch report submitted to EPA; and
    (2) Obtain the refinery's or importer's laboratory analysis and 
agree the properties listed in the corresponding batch report submitted 
to EPA, to the properties listed in the laboratory analysis.
    (k) Conventional gasoline oxygenate blending. Obtain a listing of 
each downstream oxygenate blending facility and its blender, as 
represented by the refiner/importer, as adding oxygenate used in the 
compliance calculations for the refinery or importer, or a written 
representation from the refiner for the refinery or importer that it 
has not used any downstream oxygenate blending in its conventional 
gasoline compliance calculations.
    (1) For each downstream oxygenate blender facility, obtain a 
listing from the refiner or importer of the batches of oxygenate 
included in its compliance calculations added by the downstream 
oxygenate blender and foot to the total volume of batches per the 
listing;
    (2) Obtain a listing from the downstream oxygenate blender of the 
oxygenate blended with conventional gasoline or sub-octane blendstock 
that was produced or imported by the refinery or importer and perform 
the following:

[[Page 37404]]

    (i) Foot to the total volume of the oxygenate batches per the 
listing; and
    (ii) Agree the total volumes in the listing obtained from the 
downstream oxygenate blender, to the listing obtained from the refiner 
or importer in paragraph (k)(1) of this section.
    (3) Where the downstream oxygenate blender is a person other than 
the refiner or importer, as represented by management of the refinery 
or importer, perform the following:
    (i) Obtain the contract from the refiner or importer with the 
downstream blender and inspect the contract evidencing that it covered 
the period when oxygenate was blended;
    (ii) Obtain company documents evidencing that the refiner or 
importer has records reflecting that it conducted physical inspections 
of the downstream blending operation during the period oxygenate was 
blended;
    (iii) Obtain company documents reflecting the refiner or importer 
audit over the downstream oxygenate blending operation and note whether 
these records evidencing the audit included a review of the overall 
volumes and type of oxygenate purchased and used by the oxygenate 
blender to be consistent with the oxygenate claimed by the refiner or 
importer, and that this oxygenate was blended with the refinery's or 
importer's gasoline or blending stock; and
    (iv) Obtain a listing of test results for the sampling and testing 
conducted by the refiner or importer over the downstream oxygenate 
blending operation, and select a sample, in accordance with the 
guidelines in Sec. 80.127, from this listing. For each test selected, 
agree the tested oxygenate volume with the oxygenate volume in the 
listing obtained from the oxygenate blender in paragraph (k)(2) of this 
section for this gasoline.
    (l) Blendstock tracking.
    (1) Either:
    (i) Obtain a written representation from management of the refinery 
or importer that it has a baseline for each property that is less 
stringent or equal to the statutory baseline and as a result is exempt 
from blendstock tracking under Sec. 80.102(f)(1)(i); or
    (ii) Perform the following procedures.
    (2) Obtain listings for those tenders of non-finished-gasoline 
petroleum products classified by the refiner or importer as:
    (i) Applicable blendstock that is included in the refinery's or 
importer's blendstock tracking calculations pursuant to Secs. 80.102 
(b) through (d);
    (ii) Applicable blendstock that is exempt pursuant to 
Sec. 80.102(d)(3) from inclusion in the refinery's or importer's 
blendstock tracking calculations pursuant to Secs. 80.102 (b) through 
(d); and
    (iii) All other non-finished-gasoline petroleum products;
    (3) Foot to the totals of the tender volumes contained in the 
listings obtained from the refinery or importer in paragraph (l)(2) of 
this section;
    (4) Agree the total volume of tenders per the listings to the total 
tender volume of non-finished-gasoline products on the gasoline 
inventory reconciliation analysis obtained in paragraph (b) of this 
section; and
    (5) Compute and report as a finding the refinery's or importer's 
ratio of all non-finished petroleum products to total gasoline 
production. Total gasoline production is the volume total of the 
batches from paragraph (d) of this section for reformulated gasoline, 
RBOB, and conventional gasoline, exclusive of California gasoline.
    (6) No procedures must be performed under paragraph (l)(7) through 
(18) of this section if:
    (i) The ratio in paragraph (l)(5) of this section is less than or 
equal to 3%; and
    (ii) The refiner represents in writing that blendstock accounting 
is not required under Sec. 80.102(g).
    (7) Select a sample, in accordance with the guidelines in 
Sec. 80.127, from the tender listing obtained in paragraph (l)(2)(ii) 
of this section, and for each tender selected perform the following:
    (i) Obtain the refinery's or importer's company documents that 
evidence the transfer of the product to another party and agree the 
volumes contained in these records to the listing of tenders; and
    (ii) Obtain documents from the refinery or importer that support 
the exclusion of the applicable blendstock from the blendstock-to-
gasoline ratio, and agree that the documented purpose is one of those 
specified at Sec. 80.102(d)(3);
    (8) Agree the total tender volume obtained in paragraph (l)(2)(ii) 
of this section to the ``total volume of applicable blendstock produced 
or imported, transferred to others and excluded from blendstock ratio 
calculations' reported to EPA, or to the refinery-specific volume under 
paragraph (a)(2) of this section used to prepare an aggregate report 
submitted to EPA.
    (9) Compute and report as a finding the refinery's ratio of 
applicable blendstocks included in the tracking calculation under 
paragraph (l)(2)(i) of this section plus all other non-finished-
gasoline petroleum products under paragraph (l)(2)(iii) of this 
section, to total gasoline production. Total gasoline production is the 
volume total of the batches from paragraph (d) of this section for 
reformulated gasoline, RBOB, oxygenates blended downstream of the 
refinery or import facility, and conventional gasoline, exclusive of 
California gasoline.
    (10) No procedures must be performed under paragraphs (l) (11) 
through (18) of this section if :
    (i) The ratio in paragraph (l)(9) of this section is less than or 
equal to 3%;
    (ii) No exceptions were noted in paragraph (l)(7) of this section; 
and
    (iii) The refiner represents in writing that blendstock accounting 
is not required under Sec. 80.102(g).
    (11) Select a sample, in accordance with the guidelines in 
Sec. 80.127, from the listing obtained in paragraph (l)(2)(iii) of this 
section, and for each tender selected perform the following:
    (i) Obtain the records that evidence the transfer of the product to 
another party and agree the volume contained in these records to the 
volume on the listing of tenders; and
    (ii) Inspect the product type assigned by the refiner or importer 
on the transfer document (i.e., alkylate, raffinate, etc.) and agree 
that this product type is not included in the applicable blendstock 
list at Sec. 80.102(a).
    (12) Agree the total tender volume obtained in paragraph (l)(2)(i) 
of this section to the ``total volume of applicable blendstock produced 
or imported, transferred to others and included in blendstock ratio 
calculations' reported to EPA, or to the refinery-specific volume under 
paragraph (a)(2) of this section used to prepare an aggregate report 
submitted to EPA.
    (13) Compute and report as a finding the refinery's ratio of 
applicable blendstocks included in the tracking calculation under 
paragraph (l)(1)(i) of this section to total gasoline production. Total 
gasoline production is the volume total of the batches from paragraph 
(d) of this section for reformulated gasoline, RBOB, oxygenate blended 
downstream of the refinery or import facility, and conventional 
gasoline, exclusive of California gasoline.
    (14) No procedures must be performed under paragraphs (l) (15) 
through (18) of this section if:
    (i) The ratio in paragraph (l)(13) of this section is less than or 
equal to 3%; and
    (ii) The refiner represents in writing that blendstock accounting 
is not required under Sec. 80.102(g).
    (15) Obtain the refinery's or importer's blendstock-to-gasoline 
ratios for calendar years 1990 through 1993.

[[Page 37405]]

    (16)(i) In the case of averaging periods prior to 1998, compute and 
report as a finding the peak year blendstock-to-gasoline ratio 
percentage change as required under Sec. 80.102(d)(1)(ii); or
    (ii) In the case of averaging periods beginning in 1998, compute 
and report as a finding the running cumulative compliance period 
blendstock-to-gasoline ratio as required under Sec. 80.102(d)(2)(i), 
and the cumulative blendstock-to-gasoline ratio percentage change as 
required under Sec. 80.102(d)(2)(ii).
    (17) Obtain from the refiner or importer the prior year's peak year 
blendstock-to-gasoline ratio percentage change if the prior year was 
prior to 1998, or running cumulative compliance period blendstock-to-
gasoline ratio if the prior year was 1998 or later.
    (18) No procedures must be performed under paragraph (m) of this 
section if:
    (i) For the prior year the peak year blendstock-to-gasoline ratio 
percentage change (for 1995 through 1997), or the cumulative 
blendstock-to-gasoline ratio percentage change (for 1998 and after), is 
less than ten; and
    (ii) The refiner represents in writing that blendstock accounting 
is not required under Sec. 80.102(g).
    (m) Blendstock accounting. (1) Obtain listings for those tenders of 
non-finished-gasoline petroleum products tenders classified by the 
refinery or importer as:
    (i) Blendstock that is included in the compliance calculations for 
the refinery or importer under Sec. 80.102(e)(2)(i); and
    (ii) All other non-finished-gasoline petroleum products;
    (2) Foot the total volume of tenders per the listings;
    (3) Agree the total volume of tenders per the listings to the 
gasoline inventory reconciliation analysis obtained in paragraph (b) of 
this section;
    (4) Select a sample, in accordance with the guidelines in 
Sec. 80.127, from the listing of blendstock tenders that are included 
in the compliance calculations for the refinery or importer, and for 
each tender selected perform the following:
    (i) Agree the volumes to company documents evidencing the transfer 
of the tender to another party;
    (ii) Note the product transfer documents includes the statement 
indicating the blendstock has been accounted-for, and may not be 
included in another party's compliance calculations; and
    (5) Agree the total tender volume obtained in paragraph (m)(1)(i) 
of this section to the ``total volume of blendstocks included in 
compliance calculations'' reported to EPA, or to the refinery-specific 
volume under paragraph (a)(2) of this section used to prepare an 
aggregate report submitted to EPA.
    (6) Select a sample, in accordance with the guidelines in 
Sec. 80.127, from the listing of tenders of non-finished-gasoline 
petroleum products that are excluded from the refinery's or importer's 
compliance calculations, and for each tender selected confirm that 
company documents demonstrate that the petroleum products were used for 
a purpose other than the production of gasoline within the United 
States.
    43. Section 80.134 is added to subpart F to read as follows:


Sec. 80.134  Agreed-upon procedures for downstream oxygenate blenders.

    The following are the minimum attest procedures that shall be 
carried out for each oxygenate blending facility that is subject to the 
requirements of this subpart F. Agreed upon procedures may vary from 
the procedures stated in this section due to the nature of the 
oxygenate blender's business or records, provided that any oxygenate 
blender desiring to use modified procedures obtains prior approval from 
EPA.
    (a) EPA Blender Reports. Obtain and read a copy of the blender's 
reports filed with the EPA as required by Sec. 80.75 for the reporting 
period. Obtain a written representation from a company representative 
that the copies are complete and accurate copies of the reports filed 
with the EPA.
    (b) Inventory reconciliation analysis. (1) Obtain from the blender 
an inventory reconciliation analysis for the reporting period that 
summarizes:
    (i) Receipts of RBOB, reformulated gasoline, and oxygenate;
    (ii) Beginning and ending inventories of RBOB , reformulated 
gasoline, and oxygenate;
    (iii) Production of reformulated gasoline; and
    (iv) Tenders of RBOB and reformulated gasoline.
    (2) Foot and the crossfoot volume totals reflected in the analysis.
    (3) Agree the beginning and ending inventory amounts in the 
analysis to the blender's inventory records.
    (c) RBOB receipts. Obtain a listing of all RBOB receipts for the 
reporting period, and perform the following:
    (1) Foot to the total volume of RBOB receipts per the listing;
    (2) Agree the total RBOB receipts volume reflected on the listing 
to the RBOB receipts volume on the inventory reconciliation analysis;
    (3) Select a sample, in accordance with the guidelines in 
Sec. 80.127, of RBOB receipts from the listing. For each selected RBOB 
receipt, obtain product transfer documents specifying the type and 
volume of oxygenate to be added to the RBOB.
    (d) Oxygenate receipts. Obtain a listing of all oxygenate receipts 
for the reporting period, and perform the following:
    (1) Foot to the total volume of oxygenate receipts per the listing;
    (2) Agree the total oxygenate receipts volume reflected on the 
listing to the oxygenate receipts volume on the inventory 
reconciliation analysis.
    (e) Reformulated gasoline tenders. Obtain a listing of all 
reformulated gasoline tenders for the reporting period, and perform the 
following:
    (1) Foot to the total reformulated gasoline tenders per the 
listing;
    (2) Agree the total reformulated gasoline tenders volume reflected 
on the listing to the reformulated gasoline tenders volume on the 
inventory reconciliation analysis;
    (3) Select a sample, in accordance with the guidelines in 
Sec. 80.127, of reformulated gasoline tenders from the listing, and for 
each tender selected perform the following:
    (i) Obtain the product transfer documents associated with the 
tender and agree the volume on the tender listing to the volume on the 
product transfer documents.
    (ii) Inspect the product transfer documents evidencing the date and 
location of the tender and the compliance model designations for the 
tender (VOC-controlled for Region 1 or 2, non VOC-controlled, and 
simple or complex model certified).
    (f) RBOB tenders. Obtain a listing of all RBOB tenders during the 
reporting period, and perform the following:
    (1) Foot to the total volume of RBOB per the listing;
    (2) Agree the total RBOB tenders volume reflected on the listing to 
the RBOB tenders volume on the inventory reconciliation analysis.
    (g) Reformulated gasoline batches. Obtain a listing of all 
reformulated gasoline batches produced during the reporting period, and 
perform the following:
    (1) Foot to the total volume of reformulated gasoline batches 
produced per the listing;
    (2) Agree the total reformulated gasoline batch volume reflected on 
the listing to the reformulated gasoline batch volume on the inventory 
reconciliation analysis.
    (h) Blender sampling and testing. (1) For blenders who meet the 
oxygenate blending requirements by sampling and testing each batch of 
reformulated

[[Page 37406]]

gasoline, select a sample, in accordance with the guidelines in 
Sec. 80.127, of reformulated gasoline batches from the listing obtained 
in paragraph (g) of this section, and for each batch selected perform 
the following:
    (i) Obtain the internal laboratory analysis for the batch, and 
agree the type of oxygenate used and the oxygen content appearing in 
the laboratory analysis to the instructions stated on the product 
transfer documents corresponding to a RBOB receipt immediately 
preceding the laboratory analysis and used in producing the 
reformulated gasoline batch selected.
    (ii) Agree the oxygen content results of the laboratory analysis to 
the corresponding batch information reported to EPA.
    (2) For blenders who meet the oxygen content standard on average 
without separately sampling and testing each batch, under the terms of 
Sec. 80.69(b)(5), the following procedures shall be carried out:
    (i) Obtain a listing of the oxygen compliance calculations, test 
the mathematic accuracy of the listing, and agree the volumetric 
calculations to the material balance analysis.
    (ii) Select a representative sample of the oxygen compliance 
calculations using the guidelines in Sec. 80.127, and for each 
calculation selected:
    (A) Confirm that the calculation represented gasoline production 
for a period no longer than one month;
    (B) Confirm that the oxygenate blender properly performed the 
calculation required in Sec. 80.69(b)(5), including that the oxygenate 
blender used the proper values for specific gravities, mole fraction, 
and denaturant content; and
    (C)Agree the calculated oxygen value to the corresponding batch 
report to EPA.
    (iii) Obtain records of the oxygenate blender's quality assurance 
program of sampling and testing as required in Sec. 80.69(b)(5), select 
a representative sample of the quality assurance sample selected using 
the guidelines in Sec. 80.127, and for each quality assurance sample 
selected confirm the sample was collected within the required 
frequency.
    44. Appendices A through G to Part 80 [Removed]

[FR Doc. 97-17029 Filed 7-10-97; 8:45 am]
BILLING CODE 6560-50-P