[Federal Register Volume 63, Number 111 (Wednesday, June 10, 1998)]
[Rules and Regulations]
[Pages 31627-31631]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-15449]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[FRL-6106-6]


Approval of Colorado's Petition to Relax the Federal Gasoline 
Reid Vapor Pressure Volatility Standard for 1998, 1999, and 2000

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rulemaking.

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SUMMARY: The Environmental Protection Agency (EPA or the Agency) is 
approving the State of Colorado's January 21, 1998, petition to relax 
the Reid Vapor Pressure (RVP) standard that applies to gasoline 
introduced into commerce in the Denver-Boulder area from June 1 to 
September 15. The standard is relaxed from 7.8 pounds per square inches 
(psi) to 9.0 psi for the years 1998, 1999, and 2000. This action is 
being taken under section 211(h)(1) of the Clean Air Act as Amended in 
1990 (CAA) to modify EPA's gasoline volatility regulations promulgated 
June 11, 1990 and modified December 12, 1991. The Agency does not 
believe that this action will cause environmental harm to Denver-
Boulder's residents. The area has been in compliance with the ozone 
standard since 1987. The Denver-Boulder area's gasoline has had a 9.0 
psi

[[Page 31628]]

standard since 1992. In addition to today's approval, EPA has approved 
relaxations of Denver-Boulder's RVP standard from 7.8 psi to 9.0 psi 
for the past six years, from 1992 through 1997.

DATES: This rule is effective on July 27, 1998 without further 
notification unless the Agency receives relevant comments by July 10, 
1998. Should the Agency receive such comments, it will publish a timely 
withdrawal of the rule in the Federal Register.

ADDRESSES: Materials relevant to this rulemaking have been placed in 
Docket A-98-04 by EPA. The docket is located at the Docket Office of 
the U.S. Environmental Protection Agency, 401 M Street, SW, Washington, 
DC 20460, Room M-1500 in Waterside Mall and may be inspected from 8:30 
a.m. to 5:30 p.m., Monday through Friday. A duplicate public docket CO-
RVP-98 has been established at U. S. EPA Region VIII, 999 18th Street, 
Suite 500, Denver, CO, 80202-2466, and is available for inspection 
during normal working hours. Interested persons wishing to examine the 
documents in this docket should make an appointment with the 
appropriate contact at least 24 hours before the visiting day. Contact 
Scott P. Lee at (303) 312-6736. As provided in 40 CFR part 2, a 
reasonable fee may be charged for copying docket material. Comments 
should be submitted (in duplicate if possible) to the two dockets 
listed above at the above addresses.
    A copy should also be sent to the EPA contact person listed below 
at the following address: U.S. Environmental Protection Agency, Office 
of Air and Radiation, 401 M Street, SW (6406-J), Washington, DC 20460.

FOR FURTHER INFORMATION CONTACT: Marilyn Winstead McCall of the Fuels 
and Energy Division at 202-564-9029 at the above address.

SUPPLEMENTARY INFORMATION:

I. Background

A. Regulated Entities

    Entities potentially affected by this action are those involved 
with the production, distribution, and sale of conventional gasoline 
that is supplied and consumed in the Denver-Boulder, Colorado area. 
Regulated categories include:

------------------------------------------------------------------------
           Category                  Examples of regulated entities     
------------------------------------------------------------------------
Industry.....................  Gasoline refiners and importers, gasoline
                                terminals, gasoline truckers, gasoline  
                                retailers and wholesale purchaser-      
                                consumers.                              
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B. Regulatory History of Gasoline Volatility

    In 1987, EPA determined that gasoline had become increasingly 
volatile, causing an increase in evaporative emissions from gasoline-
powered sources. These emissions from gasoline, referred to as volatile 
organic compounds (VOCs), are precursors for ozone and are a major 
contributor to the nation's serious ground-level ozone problem. Ground-
level ozone causes health problems, including damaged lung tissue, 
reduced lung function, and lungs that are sensitized to other 
pollutants.
    Under authority in section 211(c)(4) of the Clean Air Act (as 
Amended in 1977), EPA promulgated regulations on March 22, 1989 that, 
beginning in 1989, set maximum volatility levels for gasoline sold 
during the summer ozone control season. These regulations were referred 
to as Phase I of a two-phase nationwide 1 program, which was 
designed to reduce the volatility of commercial gasoline during the 
summer high ozone season 2 by setting maximum RVP standards. 
On June 11, 1990, EPA promulgated more stringent volatility controls 
for Phase II.3 The requirements established maximum 
volatility standards of 9.0 psi and 7.8 psi (depending upon the state 
and the month, and the area's ozone attainment status) during the ozone 
control season.
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    \1\ Hawaii, Alaska and U. S. territories were excepted.
    \2\ For more details, see 54 FR, 11868 (March 22, 1989).
    \3\ For more details, see 55 FR 23658 (June 11, 1990).
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    The 1990 CAA Amendments established a new section 211(h) to address 
fuel volatility. Section 211(h) requires EPA to promulgate regulations 
making it unlawful to sell, offer for sale, dispense, supply, offer for 
supply, transport, or introduce into commerce gasoline with an RVP 
level in excess of 9.0 psi during the high ozone season. It further 
requires EPA to establish more stringent RVP standards in nonattainment 
areas if EPA finds such standards ``necessary to generally achieve 
comparable evaporative emissions (on a per vehicle basis) in 
nonattainment areas, taking into consideration the enforceability of 
such standards, the need of an area for emission control, and economic 
factors.'' Section 211(h) bans EPA from establishing a volatility 
standard more stringent than 9.0 psi in an attainment area, except that 
EPA may impose a lower standard in any former ozone nonattainment area 
redesignated to attainment.
    On December 12, 1991, EPA promulgated regulations to modify the 
Phase II volatility regulations 4 pursuant to section 
211(h). The modified regulations prohibited the sale of gasoline with 
an RVP above 9.0 psi during the summer ozone season in all areas 
designated attainment for ozone, beginning in 1992. Areas designated as 
nonattainment retained the original Phase II standards published on 
June 11, 1990.
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    \4\ For more details, see 56 FR 64704 (December 12, 1991).
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    As stated in the preamble for the Phase II volatility controls 
5 and reiterated in the proposed change to the volatility 
standards published on May 29, 1991,6 EPA will rely on 
states to initiate changes to the EPA volatility program that they 
believe will enhance local air quality and/or increase the economic 
efficiency of the program, within the statutory limits. The Governor of 
a state may petition EPA to set a less stringent volatility standard 
for some month or months in a nonattainment area. The petition must 
demonstrate the existence of a particular local economic impact that 
makes such changes appropriate and must demonstrate that sufficient 
alternative programs are available to achieve attainment and 
maintenance of the ozone National Ambient Air Quality Standard (NAAQS).
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    \5\ The Phase II final rulemaking discussed procedures by which 
states could petition EPA for more or less stringent volatility 
standards. 55 FR at 23660 (June 11, 1990).
    \6\ 56 FR 24242 (May 29, 1991).
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C. Colorado's Petition

    On January 21, 1998, Governor Roy Romer sent a letter to William 
Yellowtail, EPA Regional Administrator for Region VIII, requesting EPA 
to waive the federal RVP standard for the Denver-Boulder area. The 
specific change requested was to ``retain the 9.0 psi Reid Vapor 
Pressure standard for gasoline volatility in the Denver-Boulder area 
for the summers of 1998 and 1999.'' (Denver-Boulder has received 
waivers of

[[Page 31629]]

the 7.8 psi RVP standard since 1992.) The Governor further stated that 
this waiver should only be necessary until EPA acts on the submittal of 
the ozone maintenance plan for the area or takes an alternative action 
regarding the implementation of the new standard for ozone. The request 
was based on discussions and reviews held in November 1997, by the 
Colorado Air Quality Control Commission (AQCC) of the environmental and 
economic impacts of the 7.8 psi standard. On December 10, 1997, the 
AQCC issued a resolution which recommended that the Governor submit a 
petition to EPA to request EPA to waive the 7.8 psi standard and 
replace it with a 9.0 psi standard.

D. History of Denver-Boulder Ozone Attainment Status Prior to 
Establishment of New NAAQS for Ozone

    On November 6, 1991, the Denver-Boulder metropolitan area was 
designated nonattainment for the ozone NAAQS (see 56 FR 56694 (November 
6, 1991)). The nonattainment area encompasses Denver's entire six-
county Consolidated Metropolitan Statistical Area, with the exception 
of Rocky Mountain National Park in Boulder County and the eastern 
portions of Adams and Arapahoe Counties.
    Under the Phase II rule promulgated on December 12, 1991, the 
standard applicable in the Denver-Boulder nonattainment area beginning 
in 1992 was 9.0 psi in May and 7.8 psi from June 1 to September 15. The 
standard applicable in other areas of Colorado was 9.0 psi from May 1 
to September 15.
    On November 6, 1991, EPA issued ozone nonattainment designations 
pursuant to section 107(d)(1)(C) of the Act (56 FR 56694). In that 
notice, EPA designated the Denver-Boulder area as a nonattainment area 
and classified it as a ``transitional area'' as determined under 
section 185A of the CAA. Section 185A defines a transitional area as 
``an area designated as an ozone nonattainment area as of the date of 
enactment of the Clean Air Act Amendments of 1990 [that] has not 
violated the national primary ambient air quality standard for ozone 
for the 36-month period commencing on January 1, 1987, and ending on 
December 31, 1989.'' In fact, according to monitoring data, the Denver-
Boulder area attained and has continued to maintain the 0.12 parts per 
million (ppm) 1-hour standard since 1987.

E. Establishment of the New NAAQS for Ozone and Denver-Boulder's 
Current Attainment Status

    On July 18, 1997, EPA promulgated a new 8-hour ozone standard of 
0.08 ppm effective September 16, 1997 (see 62 FR 38856). EPA indicated 
in its December 29, 1997, guidance memorandum entitled ``Guidance for 
Implementing the 1-Hour Ozone and Pre-Existing PM 10 NAAQS'' 
that designations for areas regarding the new 8-hour ozone NAAQS would 
take place in the future. EPA currently plans to designate areas as 
nonattainment for the new 8-hour ozone standard by July 2000, based on 
the most recently available three years of air quality data at that 
time (e.g., 1997, 1998, and 1999). Therefore, EPA is granting 
Colorado's request to relax the 7.8 psi standard until the year 2000. 
Taking into account Denver-Boulder's ozone attainment status for the 
new 8-hour standard, EPA will make a determination at that time as to 
which volatility standard will apply to the Denver-Boulder area.

F. Previous Petitions for Waivers of the 7.8 psi RVP Standard Granted 
by EPA

    In separate rulemakings, EPA previously granted petitions by the 
Governor of Colorado for a relaxation of the Federal RVP volatility 
standard for the Denver-Boulder area for the years 1992 and 
1993,7 for the years 1994 and 1995,8 and for the 
years 1996 and 1997.9 For in-depth discussions of these 
actions, please refer to the Federal Register notices.
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    \7\ For more details, see 53 FR 26067 (April 30, 1993).
    \8\ For more details, see 59 FR 15629 (April 4, 1994).
    \9\ For more details, see 61 FR 16391 (April 15, 1996).
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    In summary, EPA granted these petitions to relax the 7.8 psi 
standard based on evidence presented to EPA by Colorado that showed 
economic hardship to consumers and industry if the 7.8 psi standard 
were retained. Evidence also demonstrated that the 7.8 psi standard was 
not necessary given the area's record of continued attainment of the 
0.12 ppm 1-hour ozone standard.

G. Justification for Granting Colorado's Petition to Waive the 7.8 psi 
RVP Standard for 1998, 1999, and 2000

    The Denver-Boulder area has attained the 1-hour ozone standard and 
EPA has proposed to revoke that standard for the area (see Notice of 
Proposed Rulemaking, 63 FR 2804, January 16, 1998). Ambient air quality 
data archived in EPA's national data base--Aerometric Information and 
Retrieval System (AIRS)--show continuous attainment of the 1-hour 
standard in Denver-Boulder since 1987, with a summertime gasoline RVP 
of 9.0 psi. Furthermore, even with the 9.0 RVP gasoline, data in AIRS 
show that the Denver-Boulder area has been attaining the new 8-hour 
ozone standard for 1994, 1995, and 1996, and in addition, a preliminary 
analysis also indicates continued attainment of the 8-hour standard 
through 1997. Thus, the Denver-Boulder area to date has been able to 
attain the 1-hour standard and the 8-hour standard with a 9.0 psi RVP 
gasoline standard in place.
    Available evidence indicates that retention of the 7.8 psi standard 
would impose significant, additional costs for consumers and the 
gasoline industry in the area. Previous documentation submitted in 
support of Colorado's petitions for relaxation of the 7.8 psi RVP 
standard indicate that implementation of that standard would be costly. 
This documentation shows that implementation of the 7.8 psi RVP 
standard would cost the consumer about 1.1 cents more per gallon of 
gasoline with an overall seasonal cost of over $3,000,000.
    In a letter of June 20, 1995, the local refinery industry stated 
that the imposition of a 7.8 psi standard in the Denver-Boulder area at 
that time would cause many refiners to make irreversible capital 
improvements. It was stated that these improvements may not be needed 
if Denver-Boulder implemented a 9.0 psi RVP standard after 
redesignation to attainment, which at that time seemed imminent. EPA 
notes that because the rest of the Colorado market requires a 9.0 psi 
RVP standard, any refinery changes made in order to comply with the 7.8 
psi standard would be in response only to the market demand in the 
Denver-Boulder areas.
    In testimony and documentation presented at a 1995 hearing held 
before the Colorado Air Quality Control Commission, the Air Pollution 
Control Board of the Colorado Department of Health stated that these 
increased costs would vary among refiners. Also minutes and 
documentation from that hearing indicated that the Air Pollution 
Control Board supported a relaxation of the RVP standard since there 
had been no monitored violations of the ozone (1-hour) NAAQS since 
1986.
    As stated above, with a 9.0 RVP gasoline standard in place, the 
Denver-Boulder area has attained the 1-hour ozone standard since 1992, 
(when the Phase II volatility standards were implemented), and has 
shown attainment with the 8-hour standard for 1994, 1995, and 1996, 
(with a

[[Page 31630]]

preliminary analysis also showing attainment for 1997). Therefore, EPA 
believes that keeping in place the 9.0 psi RVP gasoline standard for 
the next three years in Denver-Boulder will not cause Denver-Boulder's 
air quality to deteriorate significantly. Additionally, since 1989, 
summertime gasoline volatility has been reduced significantly through 
federal volatility regulations. Moreover, ongoing vehicle fleet 
turnover, as well as several requirements under the 1990 CAA Amendments 
(tighter tailpipe standards, longer periods for a vehicle's ``useful 
life'' during which it must comply with the standards, requirements for 
on-board diagnostic equipment to detect failures of the emissions 
control system, requirements for on-board vapor recovery equipment to 
capture emissions during refueling, and enhanced inspection and 
maintenance requirements) will continue to help control overall mobile 
source emissions of VOCs in the Denver-Boulder area.
    Under the CAA, EPA has up to three years from promulgation of a new 
NAAQS to designate areas for the new NAAQS. If an area is designated in 
2000 as nonattainment for the 8-hour NAAQS, that area will be required 
to develop and submit a State Implementation Plan (SIP) revision to 
provide for attainment of the 8-hour standard. EPA believes that when 
the Agency determines the Denver-Boulder area's ozone attainment status 
for purposes of the initial designations (by July 2000), that will be 
the appropriate time to assign a permanent RVP standard for the Denver-
Boulder area.

II. Direct Final Rulemaking

    This action is being taken without prior proposal because EPA 
believes that this continuation of the relaxation of the RVP 
requirements is noncontroversial. The effect of this rulemaking is 
limited to the Denver-Boulder, Colorado nonattainment area, and EPA 
anticipates no significant comments on this action. This action extends 
the RVP standard that has been in effect in the Denver-Boulder area 
since 1992.

III. Administrative Requirements

A. Public Participation

    This rule will become effective without further notification unless 
the Agency receives relevant adverse comments on the parallel document 
of proposed rulemaking published in today's Federal Register within 30 
days of this document. Should the Agency receive such comments, it will 
publish a notice informing the public that this rule did not take 
effect. All relevant public comments received within the 30-day comment 
period will then be addressed in a subsequent final rule based on EPA's 
proposal to approve Colorado's petition published in the proposed rules 
section of today's Federal Register. No second comment period on this 
rule will be instituted.

B. Environmental Impact

    The proposed amendment is not expected to have any adverse 
environmental effects. The Denver-Boulder six-county area has met the 
1-hour NAAQS for ozone since 1987. Current air quality is expected to 
be further maintained by a 9.0 psi RVP gasoline standard for the years 
1998, 1999, and 2000.

C. Economic Impact

    The proposed continued relaxation of the 7.8 psi RVP gasoline 
standard to 9.0 psi will avoid a cost increase in gasoline refining and 
decrease in summertime gasoline supply levels in the Denver-Boulder 
area. No new economic burdens will be placed on the local refining 
industry to implement a change in the RVP standard.

D. Executive Order 12866

    Under Executive Order 12886 10, the Agency must 
determine whether a 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:
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    \10\ 58 FR 51735 (October 4, 1993).
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    (1) have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments 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 
regulatory action'' under the terms of Executive Order 12866 and is 
therefore not subject to OMB review. Specifically, this rule will not 
have an annual effect on the economy in excess of $100 million, have a 
significant adverse impact on competition, investment, employment or 
innovation, or result in a major price increase. In fact, as discussed 
above, this action will reduce the cost of compliance with Federal 
requirements in this area.

E. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1980, 44 U.S.C. 3501, EPA must 
obtain OMB clearance for any activity that will involve collecting 
substantially the same information from ten or more non-Federal 
respondents. This direct final rule does not create any new information 
requirements or contain any new information collection activities.

F. Regulatory Flexibility Act

    EPA has determined that it is not necessary to prepare a regulatory 
flexibility analysis in connection with this direct final rule. EPA has 
also determined that this rule will not have significant economic 
impact on substantial number of small entities. Small entities include 
small businesses, small for profit enterprises, and small governmental 
jurisdictions. This rule will not have a significant impact on a 
substantial number of small entities because the overall impact of this 
rule is a net decrease in requirements on all entities including small 
entities. Therefore, I certify that this action will not have a 
significant economic impact on a substantial number of small entities.

G. Unfunded Mandates

    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
that the Agency prepare a budgetary impact statement before 
promulgating a rule that includes a Federal mandate that may result in 
expenditure by State, local, and tribal governments, in aggregate, or 
by the private sector, of $100 million or more in any one year. Section 
203 requires the Agency to establish a plan for obtaining input from 
and informing, educating, and advising any small governments that may 
be significantly or uniquely affected by the rule.
    Under section 205 of the Unfunded Mandates Act, the Agency must 
identify and consider a reasonable number of regulatory alternatives 
before promulgating a rule for which a budgetary impact statement must 
be prepared. The Agency must select from those alternatives the least 
costly, most cost-effective, or least burdensome alternative that 
achieves the objectives of the rule, unless the Agency explains why 
this alternative is not selected or

[[Page 31631]]

the selection of this alternative is inconsistent with the law.
    The Agency has determined that this rule does not include a federal 
mandate that may result in expenditures of $100 million or more for 
State, local, and tribal governments, in the aggregate, or the private 
sector in any one year. This rule reduces costs to such entities by 
relaxing a regulatory requirement. Because small governments will not 
be significantly or uniquely affected by this rule, the Agency is not 
required to develop a plan with regard to small governments.

H. Submission to Congress and the Comptroller General

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. This rule is not a 
``major rule'' as defined by 5 U.S.C. section 804(2).

I. Petitions for Judicial Review

    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by August 10, 1998. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rule for the purposes of judicial 
review nor does it extend the time within which a petition for judicial 
review may be filed, and it shall not postpone the effectiveness of 
such rule or action. This action may not be challenged later in 
proceedings to enforce its requirements. (See section 307(b)(2).)

J. Electronic Copies of Rulemaking

    A copy of this action is available on the Internet at www.epa.gov/
OMSWWW under the title: ``Relaxation of Federal Gasoline RVP Standard 
in Denver-Boulder Metropolitan Area.''

K. Statutory Authority

    The promulgation of this regulation is authorized by sections 
211(h) and 301(a) of the Clean Air Act as amended by the Clean Air Act 
Amendments of 1990(42 U.S.C. 7545(h) and 7601(a)).

L. Children's Health Protection

    This direct final rule is not subject to E.O. 13045, entitled 
``Protection of Children from Environmental Health Risks and Safety 
Risks'' (62 FR 19885, April 23, 1997), because it does not involve 
decisions on environmental health risks or safety risks that may 
disproportionately affect children.

List of Subjects in 40 CFR Part 80

    Environmental Protection, Administrative practice and procedures, 
Air pollution control, Fuel additives, Gasoline, Motor vehicle and 
motor vehicle engines, Motor vehicle pollution, Penalties, Reporting 
and recordkeeping requirements.

    Dated: May 28, 1998.
Carol M. Browner,
Administrator.

    For the reasons set forth in the preamble, part 80 of title 40 of 
the Code of Federal Regulations is amended as follows:

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

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

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

    2. In Sec. 80.27(a)(2), the table is amended by revising the entry 
for Colorado and footnote 2 to read as follows:


Sec. 80.27  Controls and prohibitions on gasoline volatility.

* * * * *
    (a) * * *
    (2) * * *

                               Applicable Standards \1\ 1992 and Subsequent Years                               
----------------------------------------------------------------------------------------------------------------
                     State                           May          June         July        August     September 
----------------------------------------------------------------------------------------------------------------
                                                                                                                
*                  *                  *                  *                  *                  *                
                                                        *                                                       
Colorado\2\....................................          9.0          7.8          7.8          7.8          7.8
                                                                                                                
*                  *                  *                  *                  *                  *                
                                                        *                                                       
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\1\ Standards are expressed in pounds per square inch (psi).                                                    
\2\ The standard for 1992 through 2000 in the Denver-Boulder area designated nonattainment for the 1-hour ozone 
  NAAQS in 1991 (see 40 CFR 81.306) will be 9.0 for June 1 through September 15.                                

[FR Doc. 98-15449 Filed 6-9-98; 8:45 am]
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