[Federal Register Volume 66, Number 249 (Friday, December 28, 2001)]
[Rules and Regulations]
[Pages 67098-67108]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-31935]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[FRL-7122-5]
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: Final rule.

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SUMMARY: With today's action EPA is finalizing certain proposed 
modifications to the reformulated gasoline (RFG) and conventional 
gasoline regulations. Through the 1990 amendments to the Clean Air Act 
(CAA), Congress directed EPA to publish rules requiring that gasoline 
sold in certain areas be reformulated to reduce vehicle emissions of 
toxic and ozone-forming compounds. Congress also directed EPA to 
establish rules setting anti-dumping standards for non-reformulated, or 
``conventional'' gasoline. EPA published rules for the certification 
and enforcement of RFG and provisions for conventional gasoline on 
February 16, 1994 at 59 FR 7716.
    Based on experience gained since the promulgation of these 
regulations, on July 11, 1997, we proposed a variety of revisions to 
the regulations relating to emissions standards, emissions models, 
compliance-related requirements and enforcement provisions. In a final 
rule published on December 31, 1997, we took final action on several of 
the proposed revisions. Today's action finalizes certain other of the 
proposed revisions.
    The revisions in this final rule involve both RFG and conventional 
gasoline. This rule finalizes procedures for combining finished 
gasoline with other products to produce new blends of gasoline. These 
procedures allow refiners to use conventional gasoline to produce RFG, 
and to reclassify RFG with regard to VOC classification, activities 
which were previously prohibited under the regulations. This rule also 
identifies procedures and requirements regarding the change of service 
of gasoline storage tanks. The emissions benefits achieved from the RFG 
and conventional gasoline programs will not be reduced as a result of 
this final rule.
    On May 17, 2001 the National Energy Policy Development Group (NEPD) 
recommended that EPA ``study opportunities to maintain or improve the 
environmental benefits of state and local `boutique' clean fuel 
programs while exploring ways to increase the flexibility of the fuels 
distribution infrastructure, improve fungibility, and provide added 
market liquidity.'' In response to the NEPD charge, EPA included in its 
boutique fuel report a series of regulatory actions, including today's 
action regarding the use of finished gasoline to produce new blends of 
gasoline, intended to better facilitate seasonal gasoline transition 
and address gasoline supply and fungibility concerns during periods of 
low gasoline inventories. We are able to finalize this action now, in 
advance of other intended EPA actions, because it was previously 
proposed by EPA. We expect the flexibilities provided via today's 
action will promote improved availability of fuel meeting the range of 
environmental and market needs. Action on the other boutique fuel 
regulatory recommendations targeted at facilitating the transition from 
winter to summer fuel should be completed in advance of next year's 
ozone season.

DATES: This rule is effective on December 28, 2001.

ADDRESSES: Materials relevant to this FRM are contained in Public 
Docket No. A-97-03, Waterside Mall (Room M-1500), Environmental 
Protection Agency, Air Docket Section, 401 M Street, S.W., Washington, 
D.C. 20460. Materials relevant to the final rule establishing standards 
for RFG and anti-dumping standards for conventional gasoline are 
contained in Public Dockets--A-92-01 and A-92-12, and are incorporated 
by reference.

FOR FURTHER INFORMATION CONTACT: Marilyn Bennett, Transportation and 
Regional Programs Division, U.S. EPA, Ariel Rios Building, 1200 
Pennsylvania Avenue, N.W. (6406J), Washington, D.C. 20460; telephone: 
(202) 564-8989; FAX (202) 565-2085; e-mail [email protected].

SUPPLEMENTARY INFORMATION:

Regulated Entities

    Entities potentially affected by this action include those involved 
with the production and importation of gasoline motor fuel.
    The table below gives some examples of entities that may have to 
comply with the regulations. However, since these are only examples, 
you should carefully examine these and other existing regulations in 40 
CFR part 80. If you have any questions, please call the person listed 
in the FOR FURTHER INFORMATION CONTACT section above.

[[Page 67099]]



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              Category                     NAICSs codes a                SIC codes b                  Examples of potentially regulated parties
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Industry...........................  324110                      2911                        Petroleum refiners.
Industry...........................  422710                      5171                        Gasoline Marketers and Distributors.
                                     422720                      5172
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a North American Industry Classification System (NAICS).
b Standard Industrial Classification (SIC) system code.

Access to Rulemaking Documents Through the Internet

    Today's notice is available electronically on the day of 
publication from the Office of the Federal Register Internet Web site 
listed below. Electronic copies of the preamble, regulatory language 
and other documents associated with today's final rule are available 
from the EPA Office of Transportation and Air Quality (OTAQ) Web site 
listed below shortly after the fuel is signed by the Administrator. 
This service is free of charge, except any cost that you already incur 
for connecting to the Internet.
    EPA Federal Register Web Site: http://www.epa.gov/docs/fedrgstr/epa-air/

(Either select desired date or use Search feature)

    OTAQ Web Site: http://www.epa.gov/otaq/

(Look in ``What's New'' or under the specific rulemaking topic.)

    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.

Outline of This Preamble

I. Previously Certified Gasoline
II. Changing Service of Gasoline Storage Tanks
III. Public Participation
IV. Administrative Requirements
V. Statutory Provisions and Legal Authority

I. Previously Certified Gasoline

    Under 40 CFR 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 in the refinery's compliance calculations as 
part of another gasoline batch. Such gasoline is called ``previously 
certified gasoline,'' or ``PCG.'' PCG is required to be excluded from 
compliance calculations to avoid double counting of the gasoline, since 
PCG is gasoline that was previously accounted for in the refiner's or 
another refiner's compliance calculations.\1\
    Where PCG is combined with blendstock to produce a new blend of 
gasoline, the blendstock must be included in the refinery's compliance 
calculations, and the PCG must be excluded. The regulations at 
Sec. 80.101(g)(3) provide a method for calculating the emissions 
performance of a blendstock which may be used for purposes of including 
in compliance calculations a blendstock that is blended with PCG. 
However, this method only applies to previously certified conventional 
gasoline that is combined with blendstock to produce a new blend of 
conventional gasoline. The regulations prior to today's rule did not 
include provisions for using previously certified conventional gasoline 
to produce RFG, or previously certified RFG to produce new blends of 
gasoline.
    In the Notice of Proposed Rulemaking (NPRM) issued July 11, 1997, 
we proposed procedures for excluding PCG from compliance calculations 
which allow previously certified conventional gasoline or previously 
certified RFG to be used to produce new blends of gasoline, including 
RFG. Today's rule finalizes these PCG procedures. The provisions at 
Sec. 80.101(g)(3) for calculating the emissions performance of a 
blendstock continue to be available. Under certain circumstances, for 
example, where a refiner includes oxygenate blended at a downstream 
terminal in the refinery's anti-dumping compliance calculations, the 
provisions at Sec. 80.101(g)(3) may provide the most appropriate method 
for excluding PCG from compliance calculations. See 62 FR 37364 (July 
11, 1997), and 62 FR 68196 (December 31, 1997), for further discussion 
of the provisions at Sec. 80.101(g)(3).
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    \1\ The regulations at 40 CFR 80.2(d) define previously 
certified gasoline as ``gasoline or RBOB that previously has been 
included in a batch for purposes of complying with the standards for 
reformulated gasoline, conventional gasoline or gasoline sulfur, as 
appropriate.''
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    Where the PCG procedures finalized in today's rule are followed, 
refiners may reclassify conventional gasoline as RFG (or reformulated 
gasoline blendstock for oxygenate blending--``RBOB''), or reclassify 
RFG with regard to VOC control. Prior to today's final rule, the 
regulations allowed previously certified RFG to be reclassified as 
conventional gasoline for use in non-RFG areas; however, they 
prohibited refiners from combining RFG that is used in RFG areas with 
conventional gasoline, or combining RFG of different VOC designations. 
See Sec. 80.78. These prohibitions had the effect of prohibiting 
refiners from upgrading conventional gasoline to RFG, or reclassifying 
RFG with regard to its VOC control category.
    At the time the RFG regulations were promulgated, EPA was concerned 
that the overall quality of the various gasoline pools may be degraded 
if refiners were able to reclassify conventional gasoline as RFG or 
reclassify one category of RFG as another category of RFG. For example, 
a refiner could produce very ``clean'' conventional gasoline and 
include it in its anti-dumping compliance calculations, and then 
reclassify it as RFG with little or no additional blending, thus 
enabling the refiner to meet the anti-dumping standards using gasoline 
that, in fact, is used as RFG. This type of activity could result in a 
degradation of the quality of the conventional gasoline pool, with 
associated adverse environmental effects. However, the PCG procedures 
finalized in today's rule include requirements and limitations which 
allow conventional gasoline to be reclassified as RFG, and RFG to be 
reclassified with regard to VOC control, without the potential for 
adverse environmental effects. As a result, today's final rule revises 
the prohibitions in Sec. 80.78 to allow parties to combine RFG (or 
RBOB) with conventional gasoline or blendstock if the PCG procedures 
are followed.
    Under the PCG procedures finalized today, reclassifications using 
PCG may occur only at refineries, including terminal blending 
facilities registered as refineries. Refiners are required to determine 
the volume and properties of each batch of PCG used in the refinery 
operation along with the designation of the gasoline (RFG, RBOB or 
conventional), and, for RFG or RBOB, the designation relating to VOC 
control. The volume and properties of each batch of PCG must be 
reported to EPA as a negative batch under the same designation as the 
gasoline as it was received or produced by the refinery. The PCG then 
may be used by the

[[Page 67100]]

refiner as another blendstock, and the gasoline produced using the PCG 
is sampled and tested and included in compliance calculations without 
regard to the PCG content. The gasoline produced using the PCG will not 
necessarily have the same designation as the original PCG batch. As a 
result, these procedures allow conventional gasoline to be upgraded to 
RFG, non-VOC controlled RFG to be reclassified as VOC controlled RFG, 
and RFG VOC Region 2 gasoline to be reclassified as RFG VOC Region 1 
gasoline. Where previously certified RFG is blended with other 
components to produce conventional gasoline, the refiner must 
reclassify the RFG as conventional gasoline and follow the procedures 
for using previously certified conventional gasoline to produce new 
conventional gasoline.
    RFG standards may be met on an annual average basis or on a per-
gallon basis. When using PCG, these two situations are handled somewhat 
differently, as follows:
    (1) Where standards are met on average at a refinery, a refiner who 
uses PCG must meet each average standard based on the net average 
properties of gasoline in the relevant averaging pool, 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. Each averaging pool is required to have a net 
``positive'' gasoline volume.
    (2) 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, for this batch the refiner 
must meet the more stringent of: (1) The per-gallon standard that 
applies to the refinery under Sec. 80.41; or (2) the actual value for 
that parameter or emissions performance measure for the previously 
certified RFG used to produce the batch. Where previously certified 
conventional gasoline is used to produce a batch of RFG or RBOB, the 
gasoline produced must meet the per-gallon RFG standards under 
Sec. 80.41.
    Under the PCG procedures, any gasoline claimed as PCG must actually 
be used in a refinery's operation. This is to ensure that the PCG 
procedures will not cause a degradation in gasoline quality. For 
example, if a refinery receives a batch of ``dirty'' conventional 
gasoline and classifies it as PCG, but never uses it as a component for 
gasoline production, the PCG would be included as a negative batch in 
the refinery's compliance calculations and the refinery's conventional 
gasoline pool would appear ``cleaner'' than it actually is.
    The following table summarizes the PCG approach:

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                                                                                                     Compliance with standards when using PCG
     Type of previously certified gasoline (PCG)           Type of gasoline produced     ---------------------------------------------------------------
                                                                                                   Per-gallon                        Average
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RFG or RBOB.........................................  RFG or RBOB.......................  New batch must meet the more  Include PCG in RFG compliance
                                                                                           stringent of: Sec.  80.41     calculations as negative batch;
                                                                                           per gallon standards; or      include new batch in RFG
                                                                                           PCG properties.               compliance calculations.
                                                                                                                        All RFG pool volumes for
                                                                                                                         standards must be positive.
Conventional gasoline (CG)..........................  RFG or RBOB.......................  New batch must meet Sec.      Include PCG in CG compliance
                                                                                           80.41 per gallon standards.   calculations as negative batch;
                                                                                                                         include new batch in RFG
                                                                                                                         compliance calculations.
                                                                                                                        CG pool volume must be positive.
CG (or RFG) \1\.....................................  CG................................  None........................  Include PCG in CG compliance
                                                                                                                         calculations as a negative
                                                                                                                         batch; include new batch in CG
                                                                                                                         compliance calculations.
                                                                                                                        CG pool volume must be positive.
 
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\1\ Includes RFG used to produce CG, because previously certified RFG may be reclassified (``downgraded'') as previously certified CG.

    We received a number of favorable comments on the proposal 
regarding PCG. One commenter, however, said that requiring the net 
volume of gasoline in a refinery's anti-dumping compliance calculations 
to be positive creates an inconsistency with those parties who have 
elected to aggregate refineries for purposes of complying with the 
anti-dumping standards. We agree with the commenter, and today's final 
rule modifies the proposed regulatory language to clarify that for 
refiners who have elected to aggregate their refineries for anti-
dumping compliance, the requirement for the net volume of gasoline to 
be positive applies to the anti-dumping compliance calculations of the 
refiner's aggregation.
    Another commenter suggested that EPA clarify that tank heels do not 
have to be included in the volume accounted for as a negative batch, 
assuming that proper change of tank service procedures are followed. In 
the NPRM, we proposed procedures relating to the change of service of 
gasoline storage tanks. These procedures are also finalized by today's 
rule. See Sec. 80.78(a)(10), and Section II of this preamble for a 
discussion of these procedures. Under these procedures, tank heels are 
allowed to remain in a tank and may be mixed with products that 
normally are required to be segregated in a situation where a party is 
changing the service of a gasoline storage tank. The allowances under 
these provisions are limited specifically to circumstances where the 
change of service is for a legitimate operational reason and is not for 
the purpose of combining categories of gasoline that otherwise must be 
segregated, or for the purpose of combining gasoline with blendstock. 
Accordingly, these provisions include specific change-of-service 
requirements, one of which is that the volume of product in the tank 
must be made as low as possible through normal pumping operations 
before adding product of a new category. Where all of the requirements 
of Sec. 80.78(a)(10) are met, a refiner is not required to account for 
the volume of a PCG tank heel.
    Where gasoline is produced at a refinery in a blending tank, a tank 
heel of PCG must be tested and included in the refinery's compliance 
calculations as a negative batch in the appropriate category for the 
PCG. However, if the refiner has test results from the prior batch 
which included the volume of the heel, and no other PCG product is 
added to the tank, the test results from the prior batch may be used to 
fulfill the testing requirements for the PCG heel. In situations where 
other PCG product in addition to the PCG heel may be present in the 
blending tank, the entire volume of PCG, including the heel, must be

[[Page 67101]]

tested and included in the refinery's compliance calculations as a 
negative batch.
    One commenter said that the proposed treatment is appropriate for 
conventional gasoline that is upgraded at the same refinery where it 
was originally certified, but not for conventional gasoline that was 
produced at another refinery. In the latter case, the inclusion of a 
negative batch in the anti-dumping calculations has the effect of 
removing a batch of gasoline that was never included in the refiner's 
pool in the first instance. Where conventional gasoline certified at 
another refinery is upgraded to RFG or RBOB, the commenter suggested 
that the negative batch should be applied to the RFG calculations, 
leaving only the blendstocks combined with it in that refinery's RFG 
compliance calculations. The commenter said that the proposal as 
written would make it difficult for refineries that produce close to 
100% RFG to upgrade PCG and/or blendstocks from other refineries to 
RFG, since they may not produce sufficient volumes of conventional 
gasoline to offset the negative batches. This commenter also suggested 
that the source of the conventional gasoline (same refinery vs. 
different refinery) be acknowledged in the negative batch data, which, 
the commenter believes would preserve the flexibility for all refiners 
while eliminating the ``gaming'' that concerns EPA.
    As discussed above, the original prohibitions against reclassifying 
certain products were included in the RFG rule because of a concern 
that the overall quality of the gasoline pools could be degraded if 
refiners were able to reclassify conventional gasoline to RFG, or to 
reclassify certain categories of RFG into other categories of RFG. 
Therefore, to prevent a degradation of the overall quality of a 
gasoline pool, we believe that PCG used to produce gasoline of a 
different category should be included as a negative batch in the 
refinery's compliance calculations for the category originally 
designated for the PCG. Although requiring the source of the PCG to be 
included in the negative batch data may serve to deter persons from 
using PCG for purposes of ``gaming,'' as the commenter suggested, we 
believe this alone would not address the problem of degradation of the 
overall gasoline pool. Unless a refiner is required to include all PCG 
in compliance calculations as a negative batch, there may be the 
potential for negative environmental consequences. Moreover, we believe 
that it would be unreasonable and impractical to require a refiner who 
sells gasoline that is later used as PCG by another refiner to adjust 
its compliance calculations to reflect the other refiner's use of the 
PCG. As a result, we believe that the most appropriate approach is to 
require the refiner who uses the PCG to produce gasoline of a different 
category to include the PCG as a negative batch in the refinery's 
compliance calculations.
    We understand that there may be situations where a refiner is 
unable to avail itself of the flexibility provided by the PCG 
provisions because of the limitations on this approach, particularly 
those refiners who wish to upgrade PCG but who produce little or no 
gasoline of the same category as the PCG to offset the PCG batches. We 
are interested in extending the flexibility afforded by today's rule to 
such refiners if it is possible to devise practical and effective 
procedures for extending this flexibility without compromising the 
environmental benefits of the RFG/anti-dumping program. As a result, we 
are requesting comments on how the flexibility afforded in today's rule 
can be practically extended to refiners in this situation. If, based on 
the comments we receive, we are able to determine practical and 
effective procedures for extending this flexibility, we would adopt 
those procedures through notice and comment rulemaking. In the 
meantime, we believe that finalizing the previously proposed procedures 
for using PGC is appropriate as they will provide industry with 
additional blending flexibility without compromising environmental 
goals. We believe this additional flexibility will be beneficial to 
refiners and may ease potential supply problems, particularly with 
regard to RFG in the summertime.
    Several commenters said that the proposed revision of 
Sec. 80.78(a)(5), which prohibits the combining of RFG with 
conventional gasoline or blendstock except where a refiner does so 
under the requirements specified in Sec. 80.65(i), would have the 
unintended effect of prohibiting the downgrading of RFG to conventional 
gasoline. We agree this would be an unintended consequence of the 
revision of Sec. 80.78(a)(5) as proposed. As a result, Sec. 80.78(a)(5) 
is being finalized as proposed, except for minor word changes and the 
addition of language which specifically allows RFG to be combined with 
conventional gasoline or blendstock if the combined product is 
designated as conventional gasoline.
    To ensure effective enforcement of the RFG and conventional 
gasoline regulations, today's rule includes recordkeeping requirements 
applicable to the PCG option which require retention of 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. Today's rule also includes a requirement to submit 
information relating to PCG batches in compliance reports to EPA. In 
addition, today's rule includes attest procedures which 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 both 
the refiner's sampling and testing of the PCG and the PCG product 
transfer documents when received at the refinery.
    The recordkeeping and reporting requirements in today's rule were 
included in the NPRM in the case of PCG used to produce RFG, but were 
inadvertently omitted in the NPRM for PCG used to produce conventional 
gasoline. We believe these recordkeeping and reporting requirements are 
necessary enforcement tools for tracking the use of PCG for 
conventional gasoline as well as RFG, and are a logical outgrowth of 
the PCG proposal. The recordkeeping and reporting requirements for 
using PCG to produce conventional gasoline are minimal, as they are for 
RFG, and any burden associated with these requirements would be more 
than offset by the additional flexibility provided by the PCG 
provisions. We received no negative comments on the proposed 
recordkeeping and reporting requirements for RFG producers under the 
PCG rule, and we have no reason to believe that there would be any 
unique burdens associated with the recordkeeping and reporting 
requirements for conventional gasoline producers under the rule. 
Consideration of the burdens associated with recordkeeping and 
reporting for conventional gasoline producers as well as for RFG 
producers who use PCG was included in the ICR for the proposed rule.
    As a result, the recordkeeping and reporting provisions relating to 
PCG used to produce RFG are being finalized as proposed, except that in 
some cases the provisions have been reworded or reordered slightly from 
the proposed rule for purposes of clarity. These modifications do not 
change the substance of the rule as proposed. The recordkeeping and 
reporting requirements relating to use of PCG to produce conventional 
gasoline finalized in today's rule mirror the recordkeeping and 
reporting requirements for PCG used to produce RFG. We received no 
negative comments on the attest engagement requirements relating to the

[[Page 67102]]

PCG provisions, and these requirements being finalized as proposed.
    Section 80.340(c) of today's rule provides that the procedures for 
using PCG may be applied under the gasoline sulfur regulations in 
Subpart H. We believe that the PCG procedures in today's rule provide 
an appropriate alternative method to the existing methods in 
Sec. 80.340 for demonstrating compliance with the sulfur requirements 
where PCG is used to produce gasoline. Moreover, we believe that this 
approach is necessary for purposes of regulatory consistency. Under the 
gasoline sulfur regulations, parties are required to include in their 
annual averaging sulfur reports batch information as reported under the 
RFG/anti-dumping regulations. Where the PCG procedures in today's rule 
are used, the batch reports submitted under the RFG/anti-dumping 
regulations will reflect the PCG as a negative batch and the batch of 
gasoline produced using the PCG as a separate new batch. Therefore, 
where PCG is used, the method of demonstrating compliance under the 
gasoline sulfur regulations should relate to the batch reports 
submitted under the RFG/anti-dumping regulations. While this particular 
approach was not proposed, we believe that the provisions for allowing 
use of the PCG procedures under the gasoline sulfur regulations are a 
necessary and logical outgrowth of the proposal for using PCG.
    On May 17, 2001, the National Energy Policy Development Group 
(NEPD) recommended that EPA ``study opportunities to maintain or 
improve the environmental benefits of state and local `boutique' clean 
fuel programs while exploring ways to increase the flexibility of the 
fuels distribution infrastructure, improve fungibility, and provide 
added market liquidity.'' In response to the NEPD charge, EPA included 
in its boutique fuel report a series of regulatory actions, including 
today's action regarding PCG, intended to better facilitate seasonal 
gasoline transition and address gasoline supply and fungibility 
concerns during periods of low gasoline inventories. We are able to 
finalize the PCG procedures now, in advance of other intended EPA 
actions, because they were previously proposed by EPA. We expect that 
the flexibilities provided in today's action will promote improved 
availability of fuel meeting the range of environmental and market 
needs. Action on the other boutique fuel regulatory recommendations 
targeted at facilitating the transition from winter to summer fuel 
should be completed in advance of next year's ozone season.

II. Changing Service of Gasoline Storage Tanks

    Today's rule finalizes procedures for changing the service of 
gasoline storage tanks. These procedures were originally issued in 
Question and Answer guidance documents. See Reformulated Gasoline and 
Anti-Dumping Questions and Answers, November 21, 1994, February 21, 
1995. As discussed below, these procedures may be used for tank 
turnovers during the transition to VOC controlled gasoline in the 
spring. We are currently assessing other aspects of the regulatory 
requirements regarding the transition to the VOC control season. If we 
determine that additional changes to the regulations relating to the 
VOC transition period are appropriate, they will be addressed in a 
subsequent Federal Register notice.
    Section 80.78(a) requires the segregation of several categories of 
gasoline. Prior to today's final rule, these segregation requirements 
prohibited the mixing of any amount of the gasolines that must be 
segregated. As a result, if a refiner wishes to change a tank's 
service, and the old and new gasolines are types that are required to 
be segregated, the new gasoline may not be added unless the tank is 
completely free of any amount of the old gasoline. Moreover, under the 
regulations prior to today's rulemaking, a party who combines any 
volume of blendstock with RFG or conventional gasoline has produced an 
additional volume of gasoline which constitutes ``refining.'' For any 
such action, the refiner must meet all standards and requirements that 
apply to refiners of RFG or conventional gasoline. As a result, if a 
refiner were to change a gasoline storage tank's service in a manner 
that results in some volume of blendstocks being mixed with RFG or 
conventional gasoline, the refiner would be required to meet all of the 
standards and requirements for that ``batch'' of gasoline.
    We recognize 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. We believe it is very difficult and 
impractical to eliminate these residual volumes. As a result, we 
proposed that, under certain conditions and constraints, where a 
refiner changes the service of a gasoline storage tank, pipe, or 
manifold for legitimate business reasons (unrelated to any goal of 
mixing dissimilar gasolines or blendstock), such refiner would be 
allowed to mix products that normally must remain segregated.
    We also proposed an additional option that would apply to oxygenate 
blenders. We proposed that this option would be available only where 
the oxygenate blender is unable to meet the tank transition 
requirements discussed above. We proposed this option because, in some 
cases, the requirements for tank transition under the proposed 
provisions are not feasible without risk that a terminal would have to 
be closed during at least part of the transition period. For example, 
where a terminal operator supplies RFG containing MTBE during the 
summer VOC season, and RFG containing ethanol outside the VOC season, 
the 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. However, to meet this requirement, 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 may 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.
    To minimize the likelihood that a party would have to take a tank 
out of service to transition product types, we proposed to allow 
parties to receive RFG in a tank containing RBOB in the spring prior to 
the beginning of the VOC season, and receive RBOB in a tank containing 
RFG in the fall after the end of the VOC season. However, under this 
option, parties would be required to ensure that all RFG downstream 
standards, including the oxygen standard, are met during the 
transition. In addition, the transition must occur outside the period 
VOC control standards apply at the terminal (i.e., May 1 through 
September 15 each year). For further discussion, see the Notice of 
Proposed Rulemaking for this action at 62 FR 37358-59 (July 11, 1997).
    We received one comment on the proposal regarding change of service 
of gasoline storage tanks. The commenter said that the cite to 
Sec. 80.78(a)(1)(iii) in the change of service provisions appears to be 
incorrect. We agree with the comment, and the provisions for changing 
service of gasoline storage

[[Page 67103]]

tanks are being finalized as proposed, except that the cite to 
Sec. 80.78(a)(1)(iii) has been deleted.

III. Public Participation

    In the NPRM, we solicited comments on the need to take the actions 
proposed, including the actions finalized today. We have reviewed and 
considered all written comments on the provisions in today's rule. 
Responses to comments are contained in the preamble to this rule. All 
comments received by EPA are located in the EPA Air Docket, Docket A-
97-03 (See ADDRESSES section of this preamble). Comments solicited at 
the end of Section I. of this preamble should be submitted to the 
address listed in the ADDRESSES section of this preamble. Please also 
submit a copy to the person listed in the FOR FURTHER INFORMATION 
CONTACT section of this preamble.

IV. Administrative Requirements

A. Administrative Designation and Regulatory Analysis

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency is required to determine whether the regulatory action is 
``significant'' and therefore subject to review by the Office of 
Management and Budget (OMB) and the requirements of the Executive 
Order. The order defines a ``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.
    Pursuant to the terms of Executive Order 12866, we have determined 
that this final rule is not a ``significant regulatory action.''

B. Compliance With the Regulatory Flexibility Act

    We have determined that this rule would not have a significant 
impact on a substantial number of small entities, and that it is 
therefore not necessary to prepare a regulatory flexibility analysis in 
conjunction with this final rule. This rule would not have a 
significant impact on a substantial number of small entities because it 
involves optional provisions intended to promote successful 
implementation of the RFG and anti-dumping requirements and to afford 
regulated parties with greater flexibility to blend gasoline and 
implement tank turnovers. As such, this final rule will be beneficial 
to industry and may have the potential to ease gasoline supply 
shortages.

C. Paperwork Reduction Act

    The information collection requirements related to the provisions 
finalized today have been submitted for approval to the Office of 
Management and Budget (OMB) under the provisions of the Paperwork 
Reduction Act, 44 U.S.C. 3501 et seq. An Information Collection Request 
(ICR) was prepared by EPA (ICR No. 1591.12) and a copy may be obtained 
from Susan Auby, OIC Collection Strategies Division; U.S. Environmental 
Protection Agency (mail code 2822); 1200 Penn. Ave NW; Washington, DC 
20460, or by calling (202) 260-4901. Insert the ICR title and/or OMB 
control number in any correspondence. Copies may also be downloaded 
from the Internet at http://www.epa.gov.icr.
    Under today's final rule, EPA is requiring refiners to keep certain 
records associated with the provisions for using PCG to produce 
gasoline. However, EPA believes that this requirement will be met using 
documents created and kept for commercial business purposes; i.e., 
documents that show the movement of PCG to blending tanks and volume 
and parameter measurements. This requirement, therefore, is not 
expected to impose additional recordkeeping burdens on regulated 
parties. This final rule also requires refiners to include information 
regarding PCG batches in their RFG and anti-dumping compliance reports. 
However, since the required information regarding PCG batches, such as 
volume and parameter measurements, will be created for commercial 
business purposes, including this information in the EPA reports is 
expected to impose only a minimal additional burden on regulated 
parties. An estimate of the information collection burden is contained 
in the ICR for this rule.\2\
---------------------------------------------------------------------------

    \2\ There are no new recordkeeping or reporting requirements 
included in today's final tank change-over provisions. Any 
recordkeeping obligations associated with the refining or blending 
activities, and related sampling, described in the new tank change-
over provisions are covered by an existing reformulated gasoline 
ICR. OMB Control #2060.0277. Additionally, to the extent that the 
new tank change-over provisions allow for activities that would 
otherwise subject a party to regulation as a refiner, the very 
limited sampling and testing obligations of today's final rule 
represent a relaxation of the sampling and testing obligations 
otherwise applicable to refiners, and therefore a relaxation in any 
potential recordkeeping and reporting obligations.
---------------------------------------------------------------------------

    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 the 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 Chapter 15.

D. Intergovernmental Relations

1. Unfunded Mandates Reform Act
    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for federal agencies to assess the 
effects of their regulatory actions on state, local, and tribal 
governments, and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``federal mandates'' that 
may result in expenditures to state, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more for 
any single year. Before promulgating a rule, for which a written 
statement is needed, section 205 of the UMRA generally requires EPA to 
identify and consider a reasonable number of regulatory alternatives 
and adopt the least costly, most cost-effective, or least burdensome 
alternative that achieves the objectives of the rule. The provisions of 
section 205 do not apply when they are inconsistent with applicable 
law. Moreover, section 205 allows EPA to adopt an alternative that is 
not the least costly, most cost-effective, or least burdensome 
alternative if EPA provides an

[[Page 67104]]

explanation in the final rule of why such an alternative was adopted.
    Before we establish any regulatory requirement that may 
significantly or uniquely affect small governments, including tribal 
governments, we must develop a small government plan pursuant to 
section 203 of the UMRA. Such a plan must provide for notifying 
potentially affected small governments, and enabling officials of 
affected small governments to have meaningful and timely input in the 
development of our regulatory proposals with significant federal 
intergovernmental mandates. The plan must also provide for informing, 
educating, and advising small governments on compliance with the 
regulatory requirements.
    This final rule contains no federal mandates for state, local, or 
tribal governments as defined by the provisions of Title II of the 
UMRA. The rule imposes no enforceable duties on any of these 
governmental entities. Nothing in this final rule would significantly 
or uniquely affect small governments.
    EPA has determined that this rule contains no federal mandates that 
may result in expenditures of more than $100 million to the private 
sector in any single year. This action provides refiners with optional 
procedures for blending gasoline and performing tank turnovers. This 
action, in fact, is expected to reduce the burden on regulated entities 
by providing them with this additional flexibility. Therefore, the 
requirements of the Unfunded Mandates Act do not apply to this action.
2. Executive Order 13084: Consultation and Coordination With Indian 
Tribal Governments
    On January 1, 2001, Executive Order 13084 was superseded by 
Executive Order 13175. However, this rule was developed during the 
period when Executive Order 13084 was still in force, and so Tribal 
considerations were addressed under Executive Order 13084.
    Under Executive Order 13084, EPA may not issue a regulation that is 
not required by statute, that significantly or uniquely affects the 
communities of Indian Tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by the tribal governments, or EPA consults with those 
governments. If EPA complies by consulting, Executive Order 13084 
requires EPA to provide to the Office of Management and Budget, in a 
separately identified section of the preamble to the rule, a 
description of the extent of EPA's prior consultation with 
representatives of affected tribal governments, a summary of the nature 
of their concerns, and a statement supporting the need to issue the 
regulation. In addition, Executive Order 13084 requires EPA to develop 
an effective process permitting elected officials and other 
representatives of Indian tribal governments ``to provide meaningful 
and timely input in the development of regulatory policies on matters 
that significantly or uniquely affect their communities.''
    Today's rule does not significantly or uniquely affect the 
communities of Indian Tribal governments. The requirements for private 
businesses in today's document would have national applicability, and 
thus would not uniquely affect the communities of Indian Tribal 
Governments. Further, no circumstances specific to such communities 
exist that would cause an impact on these communities beyond those 
discussed in the other sections of today's document. Thus, EPA's 
conclusions regarding the impacts from the implementation of today's 
rule discussed in the other sections of this document are equally 
applicable to the communities of Indian Tribal governments. 
Accordingly, the requirements of section 3(b) of Executive Order 13084 
do not apply to this rule.
3. Executive Order 13132 (Federalism)
    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''
    Under Section 6 of Executive Order 13132, EPA may not issue a 
regulation that has federalism implications, that imposes substantial 
direct compliance costs, and that is not required by statute, unless 
the Federal government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments, or EPA 
consults with State and local officials early in the process of 
developing the proposed regulation. EPA also may not issue a regulation 
that has federalism implications and that preempts State law, unless 
the Agency consults with State and local officials early in the process 
of developing the proposed regulation.
    Section 4 of the Executive Order contains additional requirements 
for rules that preempt state or local law, even if those rules do not 
have federalism implications (i.e., the rules will not have substantial 
direct effects on the states, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government.) Those 
requirements include providing all affected state and local officials 
notice and an opportunity for appropriate participation in the 
development of the regulation. If the preemption is not based on 
express or implied statutory authority, EPA also must consult, to the 
extent practicable, with appropriate state and local officials 
regarding the conflict between state law and federally protected 
interests within the Agency's area of regulatory responsibility.
    This final rule does not have federalism implications. It will not 
have substantial direct effects on the states, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in Executive Order 13132. This rule allows industry 
greater flexibility to blend gasoline components in a manner that will 
not result in any negative effect on air quality. As a result, the 
effect of this rule on the states, if any, will be positive in that the 
blending flexibility afforded by this rule may help to ensure that 
adequate supplies of gasoline are available, particularly in areas that 
require RFG. Thus, the requirements of section 6 of the Executive Order 
do not apply to this rule.

E. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (NTTAA), Section 12(d) of Public Law 104-113, directs EPA 
to use voluntary consensus standards in its regulatory activities 
unless it would be inconsistent with applicable law or otherwise 
impractical. Voluntary consensus standards are technical standards 
(e.g., materials specifications, test methods, sampling procedures, and 
business practices) developed or adopted by voluntary consensus 
standards bodies. The NTTAA directs EPA to provide Congress, through 
OMB, explanations when the Agency decides not to use available and 
applicable voluntary consensus standards.

[[Page 67105]]

    Today's rule includes a provision which requires the testing of 
gasoline in a storage tank after the service of the tank has been 
changed. This provision is included in today's rule to ensure that the 
quality of the gasoline is not compromised through the process of 
changing the service of the tank. This provision is consistent with the 
NTTAA since it allows parties to use alternative test methods to 
fulfill this requirement rather than using the regulatory test methods, 
provided that the alternative methods are approved by the American 
Society of Testing and Materials (ASTM), the protocols of the ASTM 
methods are followed, and the alternative methods are correlated to the 
regulatory method.

F. Executive Order 13045: Children's Health Protection

    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that (1) is determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health or safety risk that EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, section 5-501 of the Order directs the Agency to 
evaluate the environmental health or safety effects of the planned rule 
on children, and explain why the planned regulation is preferable to 
other potentially effective and reasonably feasible alternatives 
considered by the Agency.
    This final rule is not subject to the Executive Order because it is 
not an economically significant regulatory action as defined by 
Executive Order 12866 and it does not concern an environmental health 
or safety risk that EPA has reason to believe may have a 
disproportionate effect on children. The reformulated gasoline program 
is designed to reduce vehicle emissions of toxic and ozone-forming 
substances. This rule will not affect the air quality benefits of the 
reformulated gasoline program.

G. Congressional Review Act

    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 summit 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 submitted a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the 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. 804(2).

H. Executive Order 13211 (Energy Effects)

    This rule is not subject to Executive Order 13211, ``Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use'' (66 FR 28355 (May 22, 2001)) because it is not a 
significant regulatory action under Executive Order 12866. Although no 
assessment is required under Executive Order 13211, we believe that 
today's rule should help to alleviate energy supply or distribution 
concerns in certain situations, since the additional flexibility 
provided to refiners under the rule will help to facilitate seasonal 
gasoline transitions and address gasoline supply and fungibility 
problems during periods of low gasoline inventories.

V. Statutory Provisions and Legal Authority

    Statutory authority for today's final rule comes from sections 
211(c) and 211(k) of the CAA (42.U.S.C. 7545(c) and (k)). Section 
211(c) allows EPA to regulate fuels that contribute to air pollution 
which endangers public health or welfare, or which impairs emission 
control equipment. Section 211(k) prescribes requirements for RFG and 
conventional gasoline and requires EPA to promulgate regulations 
establishing these requirements. Additional support for the procedural 
aspects of the fuels controls in today's rule comes from sections 
114(a) and 301(a) of the CAA.

List of Subjects in 40 CFR Part 80

    Environmental protection, Air pollution control, Fuel additives, 
Gasoline, Imports, Motor vehicle pollution, Reporting and recordkeeping 
requirements.

    Dated: December 19, 2001.
Christine Todd Whitman,
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: Secs. 114, 211, and 301(a) of the Clean Air Act, as 
amended (42 U.S.C. 7414, 7545 and 7601(a)).


    2. Section 80.65 is amended by revising paragraph (i) to read as 
follows:


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

* * * * *
    (i) Exclusion of previously certified gasoline. Any refiner who 
uses previously certified reformulated or conventional gasoline or RBOB 
to produce reformulated gasoline or RBOB must exclude the previously 
certified gasoline for purposes of demonstrating compliance with the 
standards under Sec. 80.41. This exclusion must be accomplished by the 
refiner as follows:
    (1)(i) Determine the volume and properties of each batch of 
previously certified gasoline used to produce reformulated gasoline or 
RBOB using the procedures in paragraph (e)(1) of this section and 
Sec. 80.66, and the independent analysis requirements in paragraph (f) 
of this section in the case of previously certified reformulated 
gasoline.
    (ii) In the case of previously certified reformulated gasoline or 
RBOB determine the emissions performances for toxics and 
NOX, and VOC for VOC-controlled gasoline, and the 
designations for VOC control.
    (iii) In the case of previously certified conventional gasoline 
determine the exhaust toxics and NOX emissions performances.
    (2) Determine the volume and properties, and the emissions 
performance for toxics and NOX, and VOC for VOC-controlled 
gasoline, of any batch of reformulated gasoline or RBOB produced at the 
refinery using previously certified gasoline and include each batch in 
the refinery's compliance calculations without regard to the presence 
of previously certified gasoline in the batch.
    (3) In the case of any parameter or emissions performance standard 
that the refiner has designated for the refinery to meet 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 by the refinery is as follows:
    (i) When using any previously certified reformulated gasoline or 
RBOB, 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 or RBOB 
used to produce the batch.
    (ii) When using any previously certified conventional gasoline, the 
per-gallon standard that applies to the refinery under Sec. 80.41.

[[Page 67106]]

    (4) In the case of any parameter or emissions performance standard 
that the refiner has designated for the refinery to meet on average 
under paragraph (d)(2)(v) of this section, any previously certified 
gasoline must be excluded from the refinery's compliance calculations 
as follows:
    (i) Where a refiner uses previously certified reformulated gasoline 
or RBOB to produce reformulated gasoline or RBOB:
    (A) The refiner must include the volume and properties of any batch 
of previously certified reformulated gasoline or RBOB in the refinery's 
compliance calculations for the standard under Sec. 80.67(g) as a 
negative batch, by multiplying the term Vi in 
Sec. 80.67(g)(1)(ii) (i.e., the batch volume) times negative 1; and
    (B) The negative batch under paragraph (i)(4)(i)(A) of this section 
must be included in the averaging categories that correspond to the 
designation regarding VOC control of the previously certified gasoline 
batch when received; and
    (C) The net volume of gasoline in the refinery's reformulated 
gasoline compliance calculations must be positive in each of the 
following categories where the standard is being met on average:

------------------------------------------------------------------------
                                             Gasoline category that must
                 Standard                     have net positive volume
------------------------------------------------------------------------
(1) Oxygen................................  All RFG \1\.
(2) Benzene...............................  All RFG and RBOB.
(3) VOC emissions performance.............  (i)RFG and RBOB that is VOC-
                                             controlled for Region 1.
                                            (ii) RFG and RBOB that is
                                             VOC-controlled for Region
                                             2.
(4) Toxics emissions performance..........  All RFG and RBOB.
(5) NOX emissions performance.............  (i) All RFG and RBOB.
                                            (ii) RFG and RBOB that is
                                             VOC-controlled.
------------------------------------------------------------------------
\1\ ``RFG'' is an abbreviation for reformulated gasoline.

    (ii) Where a refiner uses previously certified conventional 
gasoline to produce reformulated gasoline or RBOB:
    (A) The refiner must include the volume and properties of any batch 
of previously certified conventional gasoline as a negative batch in 
the refiner's anti-dumping compliance calculations under Sec. 80.101(g) 
for the refinery, or where applicable, the refiner's aggregation under 
Sec. 80.101(h); and
    (B) The net volume of gasoline in the refiner's anti-dumping 
compliance calculations for the refinery, or, where applicable, the 
refiner's aggregation under Sec. 80.101(h), must be positive.
    (5) The refiner must use any previously certified gasoline that the 
refiner includes as a negative batch under paragraph (i)(4) of this 
section in its compliance calculations for the refinery, or where 
appropriate, the refiner's aggregation, as a component in gasoline 
production during the annual averaging period in which the previously 
certified gasoline was included as a negative batch in the refiner's 
compliance calculations.
    (6) (i) Any refiner may use the procedures specified in this 
paragraph (i) to combine previously certified conventional gasoline 
with reformulated gasoline or RBOB, to reclassify conventional gasoline 
into reformulated gasoline or RBOB, or to change the designations of 
reformulated gasoline or RBOB with regard to VOC control.
    (ii) The procedures under this section are refinery procedures. Any 
person who uses the procedures under this section is a refiner who must 
meet all requirements applicable to refiners under this subpart.
    (7) Nothing in this paragraph (i) prevents any party from combining 
previously certified reformulated gasolines from different sources in a 
manner that does not violate the prohibitions in Sec. 80.78(a).

    3. Section 80.74 is amended by:
    a. Removing the word ``and'' at the end of paragraph (b)(5).
    b. Removing the period and adding a semicolon and the word ``and'' 
at the end of paragraph (b)(6).
    c. Adding paragraph (b)(7).
    The addition reads as follows:


Sec. 80.74  Recordkeeping requirements.

* * * * *
    (b)* * *
    (7) 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 
or RBOB.
* * * * *

    4. Section 80.75 is amended by:
    a. Removing the word ``and'' at the end of paragraph (a)(2)(vi).
    b. Removing the period and adding a semicolon and the word ``and'' 
to the end of paragraph (a)(2)(vii).
    c. Adding paragraph (a)(2)(viii).
    The addition reads as follows:


Sec. 80.75  Reporting requirements.

* * * * *
    (a) * * *
    (2) * * *
    (viii) 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 designation of the batch.
* * * * *

    5. Section 80.78 is amended by:
    a. Revising paragraphs (a)(5) and (a)(10).
    b. Removing the word ``or'' at the end of paragraph (a)(7)(i).
    c. Removing the period at the end of paragraph (a)(7)(ii) and 
adding in its place ``;or''.
    d. Adding paragraphs (a)(7)(iii) and (a)(11).
    The revisions and additions to read as follows:


Sec. 80.78  Controls and prohibitions on reformulated gasoline.

* * * * *
    (a) * * *
    (5) No person may combine any reformulated gasoline with any 
conventional gasoline or blendstock, except that a refiner may do so at 
a refinery under the requirements specified in Sec. 80.65(i), or if the 
combined product is designated as conventional gasoline.
* * * * *
    (7) * * *
    (iii) Under the terms of paragraph (a)(5) of this section.
* * * * *
    (10) The prohibitions against combining certain categories of 
gasoline under paragraphs (a)(5), (a)(7) and (a)(8) 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;

[[Page 67107]]

    (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 (ASTM), provided that the protocols of 
the ASTM method are followed and the alternative method is correlated 
to the method specified under Sec. 80.46.
    (11) 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)(10) of this section cannot 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 an oxygen 
content of less than 1.5 wt%, oxygenate must be blended into the 
reformulated gasoline at the loading rack such that the reformulated 
gasoline 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 
produced using the RBOB must meet all applicable standards that apply 
at the terminal; 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)(11)(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 (ASTM), provided that the protocols of the ASTM method are 
followed and the alternative method is correlated with the method 
specified under Sec. 80.46.
* * * * *

    6. Section 80.101 is amended by adding paragraph (g)(9) to read as 
follows:


Sec. 80.101  Standards applicable to refiners and importers.

* * * * *
    (g) * * *
    (9) Exclusion of previously certified gasoline and blendstock. (i) 
Any refiner who uses previously certified reformulated or conventional 
gasoline or RBOB, or blendstock that previously has been included in 
compliance calculations under Sec. 80.102, to produce conventional 
gasoline at a refinery, must exclude the previously certified gasoline 
and blendstock for purposes of demonstrating compliance with the 
standards under paragraph (b) of this section.
    (ii) To accomplish the exclusion required in paragraph (g)(9)(i) of 
this section, the refiner must determine the volume and properties of 
the previously certified gasoline or 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 paragraphs (g)(9)(iii) and (g)(9)(iv) of this section.
    (iii) For each batch of previously certified gasoline or blendstock 
that is used to produce conventional gasoline the refiner must:
    (A) Determine the volume and properties using the procedures in 
paragraph (i) of this section;
    (B) In the case of previously certified gasoline, determine the 
exhaust toxics and NOX emissions performance using the 
summer or winter complex model, as appropriate;
    (C) In the case of previously certified blendstock, determine the 
exhaust toxics and NOX equivalent emissions performance 
using the procedures in paragraph (g)(3) of this section;
    (D) Include the volume and emissions performance of the previously 
certified gasoline and/or blendstocks as a negative volume and a 
negative emissions performance in the refiner's compliance calculations 
for the refinery, or where applicable, the refiner's aggregation under 
paragraph (h) of this section, for exhaust toxics and NOX.
    (iv) For each batch of conventional gasoline produced at the 
refinery using previously certified gasoline or blendstock, the refiner 
must determine the volume and properties, and exhaust toxics and 
NOX emissions performance, 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.
    (v) The refiner must use any previously certified gasoline that the 
refiner includes as a negative batch in its compliance calculations for 
the refinery, or where appropriate, the refiner's aggregation, as a 
component in gasoline production during the annual averaging period in 
which the previously certified gasoline was included as a negative 
batch in the refiner's compliance calculations.
    (vi) Notwithstanding the provisions of this paragraph (g)(9), the 
provisions of paragraph (g)(3) of this section may be used to calculate 
the exhaust toxics and NOX emissions performance of a 
blendstock added to conventional gasoline for purposes of demonstrating 
compliance with the standards under paragraph (b) of this section.
* * * * *

    7. Section 80.104 is amended by adding paragraph (a)(2)(xii) to 
read as follows:


Sec. 80.104  Recordkeeping requirements.

* * * * *
    (a) * * *
    (2) * * *
    (xii) In the case of gasoline classified as previously certified 
gasoline under

[[Page 67108]]

the terms of Sec. 80.101(g)(9), the results of the tests to determine 
the properties and volume of the previously certified gasoline when 
received at the refinery and records that reflect the storage and 
movement of the previously certified gasoline to the point the 
previously certified gasoline is used to produce conventional gasoline.
* * * * *

    8. Section 80.105 is amended by adding paragraph (a)(5)(vi) to read 
as follows:


Sec. 80.105  Reporting requirements.

    (a) * * *
    (5) * * *
    (vi) In the case of any previously certified gasoline used in a 
refinery operation under the terms of Sec. 80.101(g)(9), 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 designation of the batch.
* * * * *

    9. Section 80.131 is added to Subpart F read as follows:


Sec. 80.131  Agreed upon attest engagement procedures for previously 
certified gasoline.

    The following are the agreed upon procedures which must be carried 
out pursuant to the attest engagement requirements of Sec. 80.125 where 
a refiner uses previously certified gasoline under the provisions of 
Sec. 80.65(i) and Sec. 80.101(g)(9):
    (a) Obtain a listing of all previously certified gasoline batches 
reported to EPA by the refiner. Agree the total volume of previously 
certified gasoline from the listing of previously certified gasoline 
received to the volume of previously certified gasoline reported to 
EPA.
    (b) Select a sample, in accordance with the guidelines in 
Sec. 80.127, from the listing obtained in paragraph (a) of this 
section, and for each previously certified gasoline batch selected 
perform the following:
    (1) Trace the previously certified gasoline batch to the tank 
activity records. Confirm that the previously certified gasoline was 
included in a batch of reformulated or conventional gasoline produced 
at the refinery.
    (2) Obtain the refiner's laboratory analysis and volume measurement 
for the previously certified gasoline 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.
    (3) Obtain the product transfer documents for the previously 
certified gasoline 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).

    10. Section 80.340 is amended by adding paragraph (c) to read as 
follows:


Sec. 80.340  What standards and requirements apply to refiners 
producing gasoline by blending blendstocks into previously certified 
gasoline (PCG)?

* * * * *
    (c) The procedures in Secs. 80.65(i) and 80.101(g)(9) may be 
applied for purposes of demonstrating compliance with the sulfur 
standards under this subpart.

[FR Doc. 01-31935 Filed 12-27-01; 8:45 am]
BILLING CODE 6560-50-P