[Federal Register Volume 70, Number 2 (Tuesday, January 4, 2005)]
[Proposed Rules]
[Pages 640-646]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-42]



[[Page 639]]

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Part VI





Environmental Protection Agency





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40 CFR Part 80



Control of Emissions of Hazardous Air Pollutants From Mobile Sources: 
Default Baseline Revision; Proposed Rules

  Federal Register / Vol. 70, No. 2 / Tuesday, January 4, 2005 / 
Proposed Rules  

[[Page 640]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[OAR-2002-0042; FRL-7856-9]
RIN 2060-AJ97


Control of Emissions of Hazardous Air Pollutants From Mobile 
Sources: Default Baseline Revision

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: This action proposes revised default baseline values for 
reformulated gasoline and conventional gasoline under EPA's mobile 
source air toxics (MSAT) program. EPA's final rule, Control of 
Emissions of Hazardous Air Pollutants From Mobile Sources (66 FR 17230, 
March 29, 2001), requires that the annual average toxic performance of 
gasoline must be at least as clean as the average performance of the 
gasoline produced or imported during the period 1998-2000 (known as the 
``baseline period''). The baseline performance is determined separately 
for each refinery and importer, and the rule established default toxics 
baseline values for refineries that could not develop individual toxics 
baselines. The default toxics baseline values are based on the national 
average performance of gasoline during the baseline period. However, at 
the time of the final rule, gasoline toxics performance data were not 
yet available for the year 2000. Therefore, the final rule included 
regulations directing the EPA to revise the default toxics baseline 
values in the rule to reflect the entire 1998-2000 baseline period once 
the appropriate data became available. With this action, EPA is 
proposing to revise the default toxics baseline values for refineries 
and importers to reflect the national average toxics performance of 
gasoline during 1998-2000.

DATES: Comments: Send written comments on this proposed rule by 
February 3, 2005.
    Hearings: If anyone contacts the EPA requesting to speak at a 
public hearing by January 24, 2005, a public hearing will be held on 
February 3, 2005. If a public hearing is requested, it will be held at 
10 a.m. at the EPA Office Building, 2000 Traverwood, Ann Arbor, MI 
48105, or at an alternate site nearby. To request to speak at a public 
hearing, send a request to the contact in FOR FURTHER INFORMATION 
CONTACT.
    See Section III for more information.

ADDRESSES: Submit your comments, identified by Docket ID No. OAR-2002-
0042, by one of the following methods:
    1. Federal eRulemaking Portal: http://www.regulations.gov. Follow 
the on-line instructions for submitting comments.
    2. Agency Web site: http://www.epa.gov/edocket. EDOCKET, EPA's 
electronic public docket and comment system, is EPA's preferred method 
for receiving comments. Follow the on-line instructions for submitting 
comments.
    3. E-mail: [email protected].
    4. Fax: (734) 214-4816.
    5. Mail: U.S. Environmental Protection Agency, EPA West (Air 
Docket), 1200 Pennsylvania Ave., NW., Room B108, Mail Code 6102T, 
Washington, DC 20460, Attention Docket ID No. OAR-2002-0042. Please 
include a total of 2 copies.
    6. Hand Delivery: EPA Docket Center, EPA/DC, EPA West, Room B102, 
1301 Constitution Ave., NW., Washington, DC. Such deliveries are only 
accepted during the Docket's normal hours of operation, and special 
arrangements should be made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. OAR-2002-0042. 
EPA's policy is that all comments received will be included in the 
public docket without change and may be made available online at http://www.epa.gov/edocket, including any personal information provided, 
unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through EDOCKET, regulations.gov, or e-
mail. The EPA EDOCKET and the Federal regulations.gov Web sites are 
``anonymous access'' systems, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through EDOCKET or regulations.gov, your e-mail address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses. For additional information about EPA's public 
docket visit EDOCKET on-line or see the Federal Register of May 31, 
2002 (67 FR 38102).
    Docket: All documents in the docket are listed in the EDOCKET index 
at http://www.epa.gov/edocket. Although listed in the index, some 
information is not publicly available, i.e., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, is not placed on the Internet and will be 
publicly available only in hard copy form. Publicly available docket 
materials are available either electronically in EDOCKET or in hard 
copy at the EPA Docket Center, EPA/DC, EPA West, Room B102, 1301 
Constitution Ave., NW., Washington, DC. This Docket Facility and the 
Public Reading Room are open from 8:30 a.m. to 4:30 p.m., Monday 
through Friday, excluding legal holidays. The telephone number for the 
Public Reading Room is (202) 566-1744, and the telephone number for the 
Air Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Christine Brunner, OTAQ, ASD 
Environmental Protection Agency, 2000 Traverwood, Ann Arbor, MI 48105, 
telephone number: (734) 214-4287; fax number: (734) 214-4816; e-mail 
address: [email protected].

SUPPLEMENTARY INFORMATION: 

I. General Information

A. Does This Action Apply to Me?

    Entities potentially affected by this proposed action include those 
involved with the production, distribution and sale of gasoline motor 
fuel. Regulated categories and entities include:

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                                                         Examples of
          Category            NAICS \1\   SIC \2\        potentially
                                codes      codes     regulated entities
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Industry....................     324110       2911  Petroleum Refiners.
Industry....................     422710       5171  Gasoline or Diesel
                                                     Marketers and
                                                     Distributors.
                                 422720       5172  ....................
Industry....................     484220       4212  Gasoline or Diesel
                                                     Carriers.
                                 484230       4213  ....................
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\1\ North American Industry Classification System (NAICS)
\2\ Standard Industrial Classification (SIC) system code.

    This table is not intended to be exhaustive, but provides a guide 
for readers regarding entities likely to be regulated by this action. 
This table lists the types of entities that EPA is now aware could 
potentially be affected by this proposed action. Other types of 
entities not listed in the table could also be affected. To decide 
whether your organization might be affected by this proposed action, 
you should carefully examine today's notice and the existing 
regulations in 40 CFR part 80. If you have any questions regarding the 
applicability of this action to a particular entity, consult the 
persons listed in the preceding FOR FURTHER INFORMATION CONTACT 
section.

B. What Should I Consider as I Prepare My Comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through 
EDOCKET, regulations.gov or e-mail. Clearly mark the part or all of the 
information that you claim to be CBI. For CBI information in a disk or 
CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as 
CBI and then identify electronically within the disk or CD ROM the 
specific information that is claimed as CBI). In addition to one 
complete version of the comment that includes information claimed as 
CBI, a copy of the comment that does not contain the information 
claimed as CBI must be submitted for inclusion in the public docket. 
Information so marked will not be disclosed except in accordance with 
procedures set forth in 40 CFR part 2.
    2. Tips for Preparing Your Comments. When submitting comments, 
remember to:
    i. Identify the rulemaking by docket number and other identifying 
information (subject heading, Federal Register date and page number).
    ii. Follow directions--The agency may ask you to respond to 
specific questions or organize comments by referencing a Code of 
Federal Regulations (CFR) part or section number.
    iii. Explain why you agree or disagree; suggest alternatives and 
substitute language for your requested changes.
    iv. Describe any assumptions and provide any technical information 
and/or data that you used.
    v. If you estimate potential costs or burdens, explain how you 
arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
    vi. Provide specific examples to illustrate your concerns, and 
suggest alternatives.
    vii. Explain your views as clearly as possible, avoiding the use of 
profanity or personal threats.
    viii. Make sure to submit your comments by the comment period 
deadline identified.
    3. Docket Copying Costs. A reasonable fee may be charged by EPA for 
copying docket materials, as provided in 40 CFR part 2.

Outline of This Preamble

I. Background
II. Proposed Action
    A. Summary
    B. Methodology
    C. Effective Date
    D. Correction
    E. Environmental and Economic Impact
III. Public Participation
IV. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination with 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children from 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions that Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
V. Statutory Provisions and Legal Authority

I. Background

    The regulations promulgated in the final rule, Control of Emissions 
of Hazardous Air Pollutants From Mobile Sources,\1\ also known as the 
Mobile Source Air Toxics (MSAT) rule, require that the annual average 
toxics performance of gasoline produced or imported beginning in 2002 
must be at least as clean as the average performance of the gasoline 
produced or imported during the three-year period 1998-2000 (40 CFR 
part 80, subpart J). The period 1998-2000 is called the baseline 
period. The average 1998-2000 toxics performance level, or baseline, is 
determined separately for each refinery and importer, except for those 
who comply with the anti-dumping requirements for conventional gasoline 
\2\ on an aggregate basis, in which case the MSAT requirements for 
conventional gasoline must be met on the same aggregate basis. Toxics 
performance is determined separately for reformulated gasoline (RFG) 
and conventional gasoline (CG), in the same manner as the toxics 
determinations required by the reformulated gasoline \3\ and 
conventional gasoline rules. An MSAT baseline volume is associated with 
each unique individual MSAT baseline value of a refinery or importer. 
The MSAT baseline volume reflects the average annual volume of such 
gasoline produced or imported during the baseline period.
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    \1\ 66 FR 17230, March 29, 2001.
    \2\ 40 CFR part 80, subpart E.
    \3\ 40 CFR part 80, subpart D.
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    To establish a unique individual MSAT baseline, EPA requires each 
refiner and importer to submit documentation supporting the 
determination of the baseline. Most refiners and many importers in 
business during the baseline period had sufficient data to establish an 
individual baseline for their refineries. However, a few refiners and 
importers did not have sufficient refinery production or imports during 
that period, and thus, based on the criteria specified in Sec. Sec.  
80.855(a) and 80.915(a), cannot establish a unique individual MSAT 
baseline. Refiners and importers without a unique individual MSAT 
baseline have the default baseline provided in Sec.  80.855(b)(1) as 
their individual MSAT baseline. As discussed in the rule, the default 
baseline is based on the average toxics performance of gasoline 
produced and imported for use in the United States during the baseline 
period. At the time

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of the rulemaking, year 2000 batch data from refiners and importers 
were not available, so EPA included in the regulations an estimate of 
the default baseline, as well as a requirement at Sec.  80.855(b)(2) 
that EPA update this estimate to reflect the gasoline produced during 
the entire baseline period, including the year 2000. This proposed rule 
would complete that requirement.

II. Proposed Action

A. Summary

    EPA is proposing to update the MSAT default compliance baseline 
values, or ``default baseline values,'' in Sec.  80.855(b)(1). For RFG, 
the proposed revised value is 26.78 percent reduction. For CG, the 
proposed revised value is 97.38 mg/mile. These revised values include 
the appropriate compliance margins. These values reflect the average 
nationwide \4\ toxics performance of gasoline produced and imported 
during the period 1998-2000. The revised default toxics values were 
calculated using 1998, 1999, and 2000 toxics performance data that 
refiners and importers submitted to EPA under the RFG and anti-dumping 
programs. This toxics performance data was submitted for each batch of 
gasoline produced or imported. Batch toxics performance data most 
closely represents actual gasoline produced during the baseline period 
because the toxics performance is calculated from the batch's own set 
of fuel parameter values. We are also proposing that the revised values 
would be effective beginning with the 2005 annual compliance period. We 
believe that this start date provides affected parties sufficient lead 
time to prepare for the changes proposed today, yet does not further 
delay any environmental benefits associated with the baseline value 
revisions.
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    \4\ Excluding gasoline used in California and in other specified 
situations. See 40 CFR 80.820.
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B. Methodology

    EPA considered two approaches for determining the revised MSAT 
default baseline values. Both used data submitted to EPA by refiners 
and importers under the RFG and anti-dumping programs. The first 
approach is the ``Fuel Parameter'' method. The volume-weighted average 
is calculated for fuel parameters values, each season, and the fuel 
parameter average is then used to determine the average toxics 
emissions. This is done separately for RFG and CG, for each baseline 
year for each refiner or importer. The Phase 2 version of the Complex 
Model \5\ is used to calculate emissions. We then calculated the 
overall annual average toxics performance values for RFG and CG by 
volume-weighting the seasonal refiner and importer toxics performance 
values.
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    \5\ 40 CFR 80.45.
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    The second approach is the ``Batch Performance'' method. The toxics 
performance of each batch of CG and RFG is calculated based on each 
batch's fuel parameters. The batch by batch results are used to 
calculate the overall volume weighted average toxics performance for CG 
and RFG for the baseline period. The Batch Performance method is 
similar to the methodology used to develop the current default baseline 
values.
    The national average 1998-2000 toxics performance determined by the 
two methods differs, as shown in Table 1. The RFG value determined by 
the Fuel Parameter method is slightly more stringent than that 
determined by the Batch Performance method. The RFG value by both 
methods is more stringent than the value currently in effect, as would 
be expected by the inclusion of year 2000 data. For the CG analysis, 
the results were mixed: compared to the value contained in the final 
rule, the Fuel Parameter method resulted in a more stringent value, and 
the Batch Performance method in a less stringent value. There are at 
least two reasons for this variation in the CG results. First, the CG 
default baseline contained in the final rule was based on batch 
information available just prior to the final rule (the best available 
data at the time). However, during the process of approving individual 
baselines, many errors in the submitted CG data were discovered. The 
resulting data set upon which the analyses for this proposal were based 
is a much different data set than that upon which the value contained 
in the final rule was determined, even apart from the inclusion of year 
2000 data. Evaluation of oxygen use under the two methods (Fuel 
Parameter and Batch) is the second likely cause of discrepancy between 
this analysis and the final rule analysis. Averaging oxygen use, and 
accounting for different oxygenates, across all batches is probably 
less certain than accounting for oxygen use on a per batch basis.

                                     Table 1.--MSAT Default Baseline Values
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                                                                                                Revised*
                                                                                       -------------------------
                                                              Final rule (66 FR 17230,      Fuel        Batch
                                                                      3/29/01)           parameter   performance
                                                                                           basis        basis
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RFG (% reduction)................  1998-2000 Average........  26.01...................        28.80        27.48
                                   Default baseline value**.  26.71 \6\ (correct value        28.10        26.78
                                                               = 25.31).
CG (mg/mile).....................  1998-2000 Average........  92.14...................        90.89        94.88
                                   Default Baseline Value**.  94.64...................        93.39       97.38
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* ``Revised'' refers to new values determined from data from the period 1998-2000
** Includes compliance margin of 0.7 % reduction for RFG, and 2.5 mg/mile for CG, per 80.915(h)


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    \6\ The 2001 final rule, at 80.915(h), listed the compliance 
margin for reformulated gasoline as -0.75. However, when EPA 
calculated the default baseline for RFG, it incorrectl7y added a 
value of 0.7 to the estimated average 1998-1999 gasoline toxics 
performance of 26.01% reduction (instead of subtracting 0.7). See 
MSAT Technical Support Document at p.157. Therefore, EPA incorrectly 
listed the default baseline value for RFG in the March 29, 2001 
final rule as a 26.71% reduction (25.01 + 0.7), The correct 
estimated value for inclusion in the final MSAT rule should have 
been a 25.31% reduction (26.01 - 0.7). As discussed below, today's 
action corrects this mistake for the 2002-2004 compliance year. The 
average reformulated gasoline toxics performance calculated using 
data from the baseline period 1998 through 200 is a 27.48% 
reduction. Applying the compliance margin to this value results in a 
reformulated gasoline default compliance baseline value of 26.78% 
reduction (27.48 - 0.7).
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    The Batch Performance approach for calculating the average toxics 
performance during 1998-2000 is a more appropriate methodology than the 
Fuel Parameter approach. The Batch Performance method better reflects 
and accounts for the actual gasoline (based on composition) that was in 
the market

[[Page 643]]

during 1998-2000. Also, the Batch Performance method most closely 
resembles how refiners and importers determine compliance--on a batch 
by batch basis--by analyzing each batch and then determining the 
average toxics performance of the batches. This batch by batch 
calculation also avoids introduction of inaccuracy into the averaging 
process from the non-linear nature of the emissions model. Thus EPA is 
proposing that the revised MSAT default baseline values be based on the 
Batch Performance method.

C. Effective Date

    EPA is proposing that the revised MSAT default baseline values 
proposed today be effective beginning with the 2005 annual compliance 
period. The CG revised default baseline value requires no consideration 
of lead time or feasibility as it is less stringent than the current 
value. The proposed revised RFG default baseline value is slightly more 
stringent than the current value, and does require lead time and 
feasibility considerations. While it was evident from our initial 
rulemaking that there would be an adjustment to the default baseline 
values, EPA believes it is reasonable to provide an appropriate amount 
of lead time for affected parties to consider and plan for compliance 
with the new standards. This primarily affects those parties subject to 
the default RFG baseline who are planning to produce or import RFG 
during 2005. EPA does not expect that those parties subject to the RFG 
default baseline who are not planning to produce or import RFG prior to 
2006 will be significantly impacted by the revised value proposed 
today. Flexibilities provided by the MSAT program, such as deficit and 
credit carryover, are available to affected parties should they 
encounter compliance difficulties with the proposed revised standard in 
2005.
    As discussed, the increase in stringency of the MSAT default RFG 
standard is not unexpected, as the RFG toxics performance standard 
increased from 16.5% reduction for 1998 and 1999 to 21.5% reduction in 
2000. Refiners and importers subject to the MSAT RFG default baseline 
could look to the RFG Survey \7\ results for the periods 1998, 1999, 
and 2000 to estimate the likely change in the RFG default baseline 
value when year 2000 data was included. The year 2000 average RFG 
toxics performance calculated by the Batch Performance method is very 
close to the corresponding value estimated using the RFG survey data 
(29.1 and 30.1 % reduction, respectively). EPA believes the magnitude 
of the change in the RFG default baseline value is small enough that it 
can be addressed by small modifications in fuel composition during the 
course of the year.
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    \7\ The RFG Survey Association is an association of refiners, 
importers and blenders that performs surveys, or sampling, of 
reformulated gasoline at the retail level. This sampling is required 
under the reformulated gasoline regulations. These surveys collect 
and analyze samples from retail gasoline stations in the major 
cities where RFG is required. Each individual survey is conducted 
during a one-week period. Currently, over 150 surveys are conducted 
each year in federal RFG ares, with a total of more than 10,000 
samples collected and analyzed. On the EPA website, EPA publishes 
estimates of the average toxics performance of gasoline in a given 
survey area based on the survey information.
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    Compliance with the gasoline sulfur requirements (Sec.  80.195) 
will further assist compliance with the proposed slightly more 
stringent RFG MSAT default baseline standard. Beginning in 2005, the 
gasoline sulfur regulations require that a refinery's average sulfur 
(across all its gasoline) not exceed 30 ppm, with a 300 ppm per-gallon 
cap in 2005 and an 80 ppm per-gallon cap beginning in 2006. During the 
MSAT baseline period, RFG sulfur averaged less than 200 ppm. Most 
affected parties will have to significantly reduce their gasoline pool 
sulfur levels through production or import of appropriate batches. In 
the Complex Model, changes in sulfur levels have a directionally 
consistent impact on toxics performance; a reduction in sulfur reduces 
toxics emissions, or in the case of RFG, increases the percent 
reduction in toxics emissions.
    Further, EPA believes that delaying the implementation of the 
revised RFG default baseline reduces the small decrease in RFG toxic 
emissions that results from the revision proposed today. Thus, EPA 
believes that implementing the revised default baseline values 
beginning in 2005 is feasible and appropriate.

D. Correction

    Today's proposed action would also correct, for calendar years 
2002, 2003, and 2004, the RFG default MSAT value listed in the March 
29, 2001, final rule. In that action, the compliance margin was 
incorrectly applied to the RFG average toxics reduction estimated for 
the period 1998-1999. We continue to believe that this compliance 
margin is appropriate based on the reasoning provided in the 2001 final 
rule. Thus, in addition to proposing the default toxics baseline that 
would apply beginning in 2005, today's action would also correct the 
RFG default toxics baseline applicable to 2002, 2003 and 2004, 
gasoline, by appropriately applying the compliance margin to the RFG 
average toxics reduction estimated in the 2001 final rule. Subtracting 
the 0.7 compliance margin from the 26.01% reduction performance 
estimate produces an RFG default baseline of 25.31% reduction.\8\ 
Accordingly, for the 2002, 2003, and 2004, compliance periods, the 
default toxics baseline for RFG is a 25.31% reduction.
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    \8\ MSAT Technical Support Document, p.157.
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E. Environmental and Economic Impact

    EPA included a discussion of the environmental and economic impacts 
of the MSAT rule in the March 2001 preamble to the rule. Today's 
proposal to update the default baseline values would not significantly 
change the environmental or economic analyses discussed in the final 
MSAT rule. However, EPA expects that there are likely minor impacts. 
First, because the proposed RFG default baseline value becomes slightly 
more stringent, there may be some cost to affected parties to comply 
with this revised value over the current value. However, as discussed 
above, it was very clear from the final rule that the default values 
would be revised. Because of the increase in the RFG toxics performance 
standard in 2000, and the fact that the reason for the revision to the 
MSAT default baseline was primarily to include year 2000 data, one 
could reasonably expect that the revised RFG value would be more 
stringent than that included in the final MSAT rule. With this slight 
increase in stringency will likely come a small increase in 
environmental benefits compared to the current standard. However, it is 
difficult to estimate the full impact (both economic and environmental) 
since most of those subject to the MSAT default RFG baseline do not 
import or produce RFG on a regular basis or do not produce significant 
quantities of RFG or may never produce RFG. Based on 2003 compliance 
reports, we estimate that about 40% of the RFG suppliers (refiners and 
importers) are subject to the MSAT default baseline, and none of those 
are considered small refiners or importers. Additionally, we estimate 
that these entities supplied less than 10 percent of the RFG volume.
    The change in the CG default baseline value may result in an 
increase in emissions compared to the current standard. Given the 
discrepancy in CG data quality between the data used in the baseline 
calculation in the final rule and in this proposal, it is difficult to 
fully determine the environmental impact of this change. Most of those 
subject to the CG default baseline are

[[Page 644]]

importers or blenders who do not produce or import large quantities of 
CG and/or who produce or import on an irregular basis. The bulk of the 
CG volume is subject to an individual MSAT standard. Thus, for the 
total pool of CG, the environmental effect of this change in the 
default baseline is likely to be small.

III. Public Participation

    We request comments on all aspects of this proposal. The comment 
period for this proposed rule will end 30 days after publication in the 
Federal Register.
    If you would like to speak at a public hearing on this proposed 
rule, please contact us within 20 days of publication of the proposal 
in the Federal Register, as described above in DATES. If a request to 
speak at a public hearing is received, we will hold the hearing at 
least 30 days after publication of the proposal in the Federal 
Register. The public hearing would start at 10 a.m. local time at the 
EPA Office Building, 2000 Traverwood, Ann Arbor, MI 48105, or at an 
alternate site nearby.
    To contact us for updated information about the possibility of a 
public hearing, please see the FOR FURTHER INFORMATION CONTACT section.
    If you would like to present testimony at a public hearing, we ask 
that you notify the contact person listed above at least ten days 
beforehand. You should estimate the time you will need for your 
presentation and identify any needed audio/visual equipment. We suggest 
that you bring copies of your statement or other material for the EPA 
panel and the audience. It would also be helpful if you send us a copy 
of your statement or other materials before the hearing.
    We will arrange for a written transcript of the hearing and keep 
the official record of the hearing open for 30 days to allow for the 
public to supplement the record. You may make arrangements for copies 
of the transcript directly with the court reporter.

IV. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866, (58 FR 51735 (October 4, 1993)) the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant regulatory action'' as 
one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    It has been determined that this proposed rule is not a 
``significant regulatory action'' under the terms of Executive Order 
12866 and is therefore not subject to OMB review.

B. Paperwork Reduction Act

    Because the amendments in this proposed rule would not change the 
information collection requirements of the underlying MSAT rule, this 
action does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. 
Burden means the total time, effort, or financial resources expended by 
persons to generate, maintain, retain, or disclose or provide 
information to or for a Federal agency. This includes the time needed 
to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An Agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.

C. Regulatory Flexibility Act

    The RFA generally requires an agency to prepare a regulatory 
flexibility analysis of any rule subject to notice and comment 
rulemaking requirements under the Administrative Procedure Act or any 
other statute unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Small entities include small businesses, small organizations, and small 
governmental jurisdictions.
    For purposes of assessing the impacts of today's rule on small 
entities, small entity is defined as: (1) A petroleum refining company 
with fewer than 1500 employees or a petroleum wholesaler or broker with 
fewer than 100 employees, based on the North American Industrial 
Classification System (NAICS); (2) a small governmental jurisdiction 
that is a government of a city, county, town, school district or 
special district with a population of less than 50,000; and (3) a small 
organization that is any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.
    After considering the economic impacts of today's proposed rule on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities.
    We have determined that approximately 25 refiners and importers 
meet the NAICS criteria described above and are subject to the MSAT 
default baseline for their reformulated gasoline. None of these 
entities produced or imported RFG during the MSAT baseline period or 
since then. Based on our knowledge of these refiners and importers, in 
fact, we would not expect any of them to produce or import RFG in the 
near future. Thus, we do not expect the revised RFG MSAT default value 
to adversely impact these small entities compared to the current RFG 
MSAT default value. In the event these refiners and importers choose to 
produce or import RFG, they will have had sufficient notice of the 
standard. Additionally, because the toxics determination is a function 
of many fuel parameters, as well as the volumes of the batches, the 
slight increase in stringency of the RFG MSAT default value should not 
pose a significant burden toward achieving compliance.
    Although this proposed rule would not have a significant economic 
impact on a substantial number of small entities, the impact of this 
proposed rule will be reduced for small entities by various provisions 
in the MSAT rule. The MSAT rule contains deficit and credit 
carryforward provisions which provide compliance flexibility to 
regulated entities. Under these provisions, refiners and importers are 
allowed to carry a toxics deficit (indicating noncompliance with their 
MSAT standard) forward for one year, using credits generated in the 
prior or post years to make up the deficit. The underlying rule also 
includes a compliance margin to account for

[[Page 645]]

ordinary variations in fuel quality. Because RFG toxics performance is 
a function of many fuel parameters, as well as the volumes of the 
batches, the slight increase (about 6%) in the stringency of the RFG 
MSAT default value should not pose a significant burden toward 
achieving compliance. Beginning in 2005, the requirement that a 
refiner's or importer's average gasoline sulfur level not exceed 30 ppm 
should provide additional assistance to regulated entities in complying 
with the MSAT requirements, since sulfur reductions also decrease 
toxics emissions, as determined by the Complex Model.
    We continue to be interested in the potential impacts of the 
proposed rule on small entities and welcome comments on issues related 
to such impacts.

D. 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 in any 
one year. Before promulgating an EPA 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 other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why that 
alternative was not adopted. Before EPA establishes any regulatory 
requirements that may significantly or uniquely affect small 
governments, including tribal governments, it must have developed under 
section 203 of the UMRA a small government agency plan. The plan must 
provide for notifying potentially affected small governments, enabling 
officials of affected small governments to have meaningful and timely 
input in the development of EPA regulatory proposals with significant 
Federal intergovernmental mandates, and informing, educating, and 
advising small governments on compliance with the regulatory 
requirements.
    EPA has determined that this proposed rule does not contain 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. Today's action would simply modify the 
original rule in a limited manner, and would not significantly change 
the original rule. Thus, today's proposed rule is not subject to the 
requirements of sections 202 and 205 of the UMRA.
    EPA has also determined that this proposed rule contains no 
regulatory requirements that might significantly or uniquely affect 
small governments, because it would be applicable only to parties which 
produce or import gasoline.

E. 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.''
    This proposed 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. The rule would amend existing 
regulatory provisions applicable only to producers and importers of 
gasoline and would not alter State authority to regulate these 
entities. The amendments will impose no direct costs on State or local 
governments. Thus, Executive Order 13132 does not apply to this 
proposed rule.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 6, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' ``Policies that have tribal 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on one or more Indian tribes, on 
the relationship between the Federal government and the Indian tribes, 
or on the distribution of power and responsibilities between the 
Federal government and Indian tribes.''
    This proposed rule does not have tribal implications. It will not 
have substantial direct effects on tribal governments, on the 
relationship between the Federal government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
government and Indian tribes, as specified in Executive Order 13175. 
The rule would amend existing regulatory provisions applicable only to 
producers and importers of gasoline and will impose no direct costs on 
State or local governments. Thus, Executive Order 13175 does not apply 
to this proposed rule.

G. Executive Order 13045: Protection of Children From Environmental 
Health & Safety Risks

    Executive Order 13045: ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62FR19885, 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, the Agency must 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 proposed rule is not subject to Executive Order 13045 because 
it is not economically significant as defined in Executive Order 12866. 
Nevertheless, as we explained in the preamble to the final MSAT rule in 
March 2001, we believe it is important to develop a better 
understanding of the effects on public health, including children's 
health. EPA is considering children's health issues in our Technical 
Analysis Plan.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This proposed rule is not subject to Executive Order 13211, 
``Actions Concerning Regulations That Significantly Affect Energy 
Supply,

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Distribution, or Use'(66 FR 28355 (May 22, 2001)) because it is not a 
significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C. 
272 note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so 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) that are 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.
    This proposed action does not involved technical standards. 
Therefore, EPA did not consider the use of any voluntary consensus 
standards.

V. Statutory Provisions and Legal Authority

    The statutory authority for the fuels controls in today's proposed 
rule can be found in sections 202 and 211(c) of the Clean Air Act 
(CAA), as amended. Support for any procedural and enforcement-related 
aspects of the fuel controls in today's proposed rule, including 
recordkeeping requirements, comes from sections 114(a) and 301(a) of 
the CAA.

List of Subjects in 40 CFR Part 80

    Administrative practice and procedure, Air pollution control, 
Confidential business information, Environmental protection, Gasoline, 
Labeling, Motor vehicle fuel, Motor vehicle pollution, Penalties, 
Reporting and recordkeeping requirements.

    Dated: December 22, 2004.
Michael O. Leavitt,
Administrator.

    For the reasons set forth in the preamble, 40 CFR part 80 is 
proposed to be amended as set forth below:

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

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

    Authority: 42 U.S.C. 7414, 7545, and 7601(a).

    2. Section 80.855 is amended by revising paragraphs (b)(1)(i) and 
(b)(1)(ii) to read as follows:


Sec.  80.855  What is the compliance baseline for refineries or 
importers with insufficient data?

* * * * *
    (b)(1) * * *
    (i) For conventional gasoline, prior to January 1, 2005, 94.64 mg/
mile; starting January 1, 2005, 97.38 mg/mile.
    (ii) For reformulated gasoline, prior to January 1, 2005, 25.31 
percent reduction from statutory baseline; starting January 1, 2005, 
26.78 percent reduction from statutory baseline.
* * * * *
[FR Doc. 05-42 Filed 1-3-05; 8:45 am]
BILLING CODE 6560-50-P