[Federal Register Volume 71, Number 108 (Tuesday, June 6, 2006)]
[Notices]
[Pages 32532-32536]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-8726]


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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2006-0340; FRL-8180-3]


Draft Boutique Fuels List Under Section 1541(b) of the Energy 
Policy Act and Request for Public Comment

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: The Energy Policy Act of 2005 includes a number of provisions 
addressing the issue of boutique fuels. Section 1541(b) of this Act 
requires EPA, in consultation with the Department of Energy, to 
determine the total number of fuels approved into all state 
implementation plans (SIPs) as of September 1, 2004, under section 
211(c)(4)(C) of the Clean Air Act (CAA). The EPAct also requires us to 
publish a list of such fuels, including the states and Petroleum 
Administration for Defense District (PADD) in which they are used for 
public review and comment. Today we are publishing the draft list along 
with an explanation of our rationale in developing it. The list 
consists of seven different types of SIP boutique fuels.

DATES: Comments must be received on or before August 7, 2006.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2006-0340, by one of the following methods:
     http://www.regulations.gov: Follow the on-line 
instructions for submitting comments.
     E-mail: [email protected].
     Fax: (202) 566-1741, Attention Docket ID No. EPA-HQ-OAR-
2006-0340.
     Mail: Air Docket, Attention Docket ID No. EPA-HQ-OAR-2006-
0340, Environmental Protection Agency, Mailcode: 6102T, 1200 
Pennsylvania Ave., NW., Washington, DC 20460.
     Hand Delivery: USEPA, Air Docket, 1301 Constitution Ave, 
NW., Room B102, Washington, DC 20004, Attention Docket ID No. EPA-HQ-
OAR-2006-0340. 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. EPA-HQ-OAR-
2006-0340. Our policy is that all comments received will be included in 
the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
confidential business information (CBI) or other information for which 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through http://www.regulations.gov. The http://www.regulations.gov Web site is an 
``anonymous access'' system, which means we 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 us without going 
through http://www.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, we recommend that you include your name 
and other contact information in the body of your comment and with any 
disk or CD you submit. If we cannot read your comment due to technical 
difficulties and cannot contact you for clarification, we may not be 
able to consider your comment. Electronic files should avoid the use of 
special characters, should not use any form of encryption, and should 
be free of any defects or viruses. For additional information about our 
public docket visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm. For additional instructions on 
submitting comments, go to Section I of the SUPPLEMENTARY INFORMATION 
section of this document.
    Docket: All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
for which disclosure is restricted by statute. Certain other material, 
such as copyrighted material, will be publicly available only in hard 
copy. Publicly available docket materials are available either 
electronically in http://www.regulations.gov or in hard copy at the Air 
Docket, EPA/DC, EPA West, Room B102, 1301 Constitution Ave., NW., 
Washington, DC. The Public Reading Room is 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: Anne Pastorkovich, Environmental 
Protection Agency, MC 6406J, 1200 Pennsylvania Ave., NW., Washington, 
DC 20460; telephone number: 202-343-9623; fax number: 202-343-2801; e-
mail address: [email protected].

SUPPLEMENTARY INFORMATION:

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

    1. Submitting CBI. Do not submit CBI to us through http://www.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 that you mail to EPA, mark the outside of the disk or CD as CBI and 
then identify electronically within the disk or CD 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

[[Page 32533]]

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:
     Identify the rule or notice by docket number and other 
identifying information (subject heading, Federal Register date and 
page number).
     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.
     Explain why you agree or disagree; suggest alternatives 
and substitute language for your requested changes.
     Describe any assumptions and provide any technical 
information and/or data that you used.
     If you estimate potential costs or burdens, explain how 
you arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
     Provide specific examples to illustrate your concerns, and 
suggest alternatives.
     Explain your views as clearly as possible, avoiding the 
use of profanity or personal threats.
     Make sure to submit your comments by the comment period 
deadline identified.
    3. Docket Copying Costs. You may be charged a reasonable fee for 
photocopying docket materials, as provided by 40 CFR part 2.

II. Publication of the Boutique Fuels List

A. Background

    Under the Clean Air Act (CAA),\1\ state fuel programs respecting a 
fuel characteristic or component that we have regulated under section 
211(c)(1) are preempted. EPA may waive preemption through approval of 
the fuel program into a State Implementation Plan (SIP). Approval into 
the SIP requires a demonstration that the state fuel program is 
necessary to achieve the National Ambient Air Quality Standards 
(NAAQS)\2\ that the plan implements. ``Necessary'' means that no other 
measures exist that would bring about timely attainment or that other 
measures exist and are technically possible to implement, but are 
unreasonable or impracticable.\3\ These state fuels programs are often 
referred to as ``boutique'' fuels programs because they differ from the 
Federal fuel required in the area, and have been adopted by the state 
to address a specific local air quality issue. The issue presented by 
boutique fuels is that when events (such as hurricanes or pipeline and 
refinery breakdowns) lead to fuel supply shortages, varying fuel 
standards can complicate the process of quickly solving the problem. 
The Energy Policy Act of 2005 (EPAct) amends the CAA and places three 
additional restrictions on our authority to waive preemption by 
approving a state fuel into the SIP. These restrictions are:
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    \1\ See CAA section 211(c)(1), 42 U.S.C. 7545(c)(1).
    \2\ NAAQS are standards for ambient levels of certain air 
pollutants (e.g. ground-level ozone) and are designed to protect 
public health and welfare.
    \3\ See CAA section 211(c)(4)(C)(i), 42 U.S.C. 7545(c)(4)(C)(i).
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     First, we may not approve a state fuel program into the 
SIP if it would cause an increase in the ``total number of fuels'' 
approved into SIPs as of September 1, 2004.\4\ To implement this 
provision, we are required to determine the total number of fuels 
approved as of that date and to publish a list identifying the fuels, 
including the states and PADD in which they are used. We may remove a 
fuel from the list if it ceases to be included in the SIP, or if it is 
identical to a Federal fuel control. This removal does not reduce the 
total number of fuels authorized under the list, but in effect ``makes 
room'' for potential approval of state fuel programs that were not on 
the list as of September 1, 2004.\5\
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    \4\ See CAA section 211(c)(4)(C)(v)(I), 42 U.S.C. 
7545(c)(4)(C)(v)(I).
    \5\ See CAA section 211(c)(4)(C)(v)(II)-(III), 42 U.S.C. 
7545(c)(4)(C)(v)(II)-(III).
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     Second, in cases where our approval would not increase the 
total number of fuels on the list because the total number of fuels in 
SIPs at that point is below the number of fuels as of the September 1, 
2004, then our approval requires a finding that the new fuel will not 
cause supply or distribution problems or have significant adverse 
impacts on fuel producibility in the affected or contiguous areas.\6\
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    \6\ See CAA section 211(c)(4)(C)(v)(IV), 42 U.S.C. 
7545(c)(4)(C)(v)(IV).
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     Third, we may not approve a state fuel unless that fuel is 
already approved in at least one SIP in the applicable PADD.\7\
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    \7\ See CAA section 211(c)(4)(C)(v)(V), 42 U.S.C. 
7545(c)(4)(C)(v)(V). As discussed later in this notice, there is an 
exception to the PADD restriction for a 7.0 psi RVP program.
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    In this Federal Register notice, we provide our provisional 
interpretation of the EPAct provisions and our determination of the 
total number of fuels approved under CAA section 211(c)(4)(C) as of 
September 1, 2004, based on this interpretation, and the resulting 
draft list of these fuels. We invite comment on all of these matters 
and after evaluating all comments we will issue a final list.

B. Fuel Type Versus State Specific Interpretation and Our Recommended 
Approach

    The first step in determining the total number of fuels approved 
under section 211(c)(4)(C) is to interpret what is meant by the term 
``total number of fuels.'' The EPAct does not define this term, and the 
legislative history is relatively limited and does not resolve what 
Congress meant. We believe that the central term ``total number of 
fuels'' is ambiguous and could potentially be interpreted in one of two 
basic ways:
     Fuel Type Interpretation--Each type or kind of fuel could 
be considered a separate fuel, without respect to the number of 
different state implementation plans that include such fuel. For 
example, all state fuels with a Reid Vapor Pressure\8\ of 7.8 pounds 
per square inch (psi) could be considered one fuel in determining the 
total number of fuels approved as of September 1, 2004. While several 
states had a 7.8 psi RVP program on that date, they would not be 
treated as different fuels in determining the ``total number of 
fuels,'' but as different states using a single fuel type. For ease of 
reference this will be called ``the fuel type interpretation.'' This 
would result in seven (7) different fuel types.
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    \8\ Reid Vapor Pressure is the common measure of fuel 
volatility. Volatility is the tendency of fuel to evaporate.
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     State Specific Interpretation--As an alternative to the 
``fuel type interpretation,'' each individual state using a type or 
kind of fuel in a SIP could be considered a separate fuel. For example, 
each state having 7.8 psi RVP in its SIP could be treated as having a 
separate fuel for purposes of determining the ``total number of 
fuels.'' For ease of reference, this will be called ``the state 
specific interpretation.'' The state specific interpretation would lead 
to as many fuels as there are state fuel programs in the various PADDs 
and would result in 15 different fuels.
    The two interpretations would lead to different results when 
considering approval of future state fuel programs. For example, under 
the fuel type interpretation, a state RVP program of 7.8 or 7.2 psi 
could generally be approved under the EPAct provisions, as long as that 
same RVP program was already in a SIP within that PADD. Under the fuel 
type interpretation, approval of that state RVP program would not 
increase the total number of

[[Page 32534]]

approved fuels because that type of RVP program is already on the list. 
It would expand the number of states using that fuel type, but would 
not increase the number of fuel types. However, under the state 
specific fuel interpretation, the same state RVP program could not be 
approved unless some other state fuel program had been removed from the 
list, in effect ``making room'' for the newer program.
    EPA recognizes that a few states had a 9.0 psi RVP fuel program in 
their SIP as of September 1, 2004. We do not believe that state RVP 
programs that require 9.0 psi should be included in the boutique fuels 
list required by EPAct. Beginning in 1989, we set RVP standards under 
CAA section 211(c) for gasoline sold during the summertime, in two 
phases (Phase I and II). Generally, under Phase I, which was effective 
in the summer of 1989, we set the RVP level at 10.5 psi in the northern 
states, and under Phase II, which was effective in the summer of 1992, 
we set RVP levels at 9.0 psi in the northern states. Between 1989 and 
1992, we also approved state 9.0 psi RVP fuel programs into the SIPs 
for several northeastern states, under CAA section 211(c)(4)(C). These 
fuel programs continue to be included in the state SIPs. As earlier 
mentioned, the EPAct requires that we publish a list based on the total 
number of fuels approved into SIPs under section 211(c)(4)(C) as of 
September 1, 2004.\9\ We are also required to remove a fuel from the 
published list if the fuel is ``identical to a Federal fuel formulation 
implemented by the Administrator.''\10\ Because the current Federal RVP 
requirement in all of these northeastern states is 9.0 psi RVP, reading 
these provisions literally would require EPA to include 9.0 psi RVP on 
the list but to remove it from the list at the same time. We believe, 
however, that Congress would not have intended this somewhat illogical 
approach, and we also do not believe that 9.0 psi RVP would be viewed 
as contributing to the proliferation of ``fuel islands'' that Congress 
was concerned about in enacting this new provision. We believe the 
appropriate way to reconcile these apparently conflicting provisions 
are not to include the current state 9.0 psi RVP programs on the list.
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    \9\ See CAA section 211(c)(4)(C)(v)(II), 42 U.S.C. 
7545(c)(4)(C)(v)(II).
    \10\ See CAA section 211(c)(4)(C)(v)(III), 42 U.S.C. 
7545(c)(4)(C)(v)(III).
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    In evaluating these two interpretations, we also looked to the 
EPAct provisions related to the boutique fuels list. The EPAct requires 
that we publish a list based on the total number of fuels approved into 
SIPs as of September 2004, identifying usage by state and PADD.\11\ 
Under the state specific fuel interpretation, the requirement to 
``includ[e] the states * * * in which they are used'' in the published 
list of fuels would appear to be redundant, as under that 
interpretation the identification of the fuel is by definition state 
specific. Under the fuel type interpretation, the requirement to 
provide usage by state and PADD is logically included for informational 
purposes.
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    \11\ See CAA section 211(c)(4)(C)(v)(II), 42 U.S.C. 
7545(c)(4)(C)(v)(II).
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    We must remove a fuel from the published list if the fuel is 
removed from ``a [SIP]'' or if ``a fuel in a [SIP]'' is identical to a 
federal fuel.\12\ Under the state specific interpretation, the use of 
the word ``a'' would mean that modification of a single SIP program 
would affect the list of fuels, regardless of fuel type. Under the fuel 
type interpretation, ``a [SIP]''would have to be read to mean all SIPs. 
A fuel type would be removed from the list only if it was removed from 
all SIPs with that type of fuel program.
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    \12\ See CAA section 211(c)(4)(C)(v)(III), 42 U.S.C. 
7545(c)(4)(C)(v)(III).
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    The EPAct refers to a ``new fuel.'' \13\ Specifically, it provides 
that before approving a ``new fuel'' into a SIP, where there is room on 
the list for additional fuels, we must make a finding concerning impact 
on fuel supply, distribution, and producibility. Under the state 
specific fuel interpretation, a ``new fuel'' would be a new state 
specific fuel that EPA has not already approved into a SIP. Under the 
fuel type interpretation, the term ``new fuel'' is problematic. A new 
fuel type would be a fuel type that is not already on the list. 
However, the PADD restriction\14\ would already preclude the approval 
of a new fuel type, because a new fuel type would not already be 
approved into a SIP in a PADD. There is, however, an exception to the 
PADD restriction, for a 7.0 psi RVP program, such that there are 
limited circumstances that would give meaning to the term ``new fuel'' 
under the fuel type interpretation.
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    \13\ See CAA section 211(c)(4)(C)(v)(IV), 42 U.S.C. 
7545(c)(4)(C)(v)(IV).
    \14\ See CAA section 211(c)(4)(C)(v)(V), 42 U.S.C. 
7545(c)(4)(C)(v)(V).
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    The EPAct constrains our approval of ``any fuel unless that fuel'' 
was already approved into at least one SIP in the applicable PADD.\15\ 
Under the state specific fuel interpretation, a state fuel could not be 
approved unless ``that fuel'' had already been approved into another 
state's SIP. In that context, ``that fuel'' would have to refer to the 
type of fuel, not the state specific fuel, as the state specific fuel 
could not be already approved into another state's SIP. Under the fuel 
type interpretation, this provision requires that at least one SIP in 
the PADD already have a program for that fuel type.\16\
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    \15\ See CAA section 211(c)(4)(C)(v)(V), 42 U.S.C. 
7545(c)(4)(C)(v)(V).
    \16\ As noted above, Congress exempted 7.0 psi RVP programs from 
this PADD restriction. While the other EPAct provisions on boutique 
fuels do apply to 7.0 psi RVP programs, the specific limitation on 
PADD usage in section 211(c)(4)(C)(v)(V) does not apply. This is the 
case under either interpretation.
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    We believe that the EPAct boutique fuels provisions are ambiguous 
and are susceptible to two plausible interpretations. However, the fuel 
type interpretation appropriately balances the concerns at the heart of 
the EPAct provision by preserving some flexibility for states to adopt 
state fuel programs that can be useful in attaining the NAAQS, while 
limiting the potential for fuel supply and distribution concerns by 
controlling the growth in state boutique fuel programs.\17\ We 
recognize that the PADD restriction \18\ places a strong constraint on 
future approval of state specific fuels under either interpretation 
because it effectively limits state fuels to the types currently in 
existence and to the PADDs in which they are currently found. For a 
state fuel program to be approved into a SIP in the future, the fuel 
type must have been approved into a SIP in that PADD as of September 1, 
2004 (with the one exception for 7.0 psi RVP programs). Under the fuel 
type interpretation, states could generally adopt fuels programs but 
only in those limited cases where that fuel type is already found in 
their PADD. This addresses the ``fuel islands'' concerns, while 
preserving an important degree of state flexibility in developing a 
state's air pollution control program. Under the state specific 
interpretation there is little, if any, opportunity for a state to 
adopt a fuel program in the future. This is because, in addition to the 
PADD restriction, some other state's fuel program would have to be 
removed from the list to make room for addition of the new state fuel 
program.
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    \17\ See 51 Cong. Rec. H6949-01, 6968-6969.
    \18\ See CAA section 211(c)(4)(C)(v)(V), 42 U.S.C. 
7545(c)(4)(C)(v)(V).
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    We believe the fuel type interpretation is the more appropriate of 
the two interpretations from the standpoint of state flexibility in 
establishing air pollution control programs. Our suggested 
interpretation would also strictly limit the burden of new state fuel 
programs upon regulated

[[Page 32535]]

industry, including small businesses. The fuel type interpretation, 
combined with the PADD restriction, clearly limits the introduction of 
new boutique fuels, avoiding future pressure on the production, 
distribution and storage of fuels, including small entities involved in 
those industries. We believe that issuing this list will reduce future 
burdens on all parties in the fuel production and distribution system, 
whether large entities or small entities. We believe that issuing this 
list will have no adverse impact on any such parties.
    For the reasons described above, we are issuing a draft list of 
seven (7) fuel types, as described in the following section.

C. Draft Boutique Fuel List

    A list of the seven (7) fuel types approved into SIPs under section 
211(c)(4)(C) as of September 1, 2004, the states, and the PADD they are 
used in is set forth in the following Table:

   Total Number of Fuels Approved in State Implementation Plans (SIPs)
         Under CAA Section 211(c)(4)(C) as of September 1, 2004
               [Draft based upon fuel type interpretation]
------------------------------------------------------------------------
        Type of fuel control           PADD          Region--state
------------------------------------------------------------------------
RVP of 7.8 psi.....................        1  1--ME (May 1-Sept. 15).
                                           1  3--PA
                                           2   5--IN
                                           2  5--MI
                                           3   6--TX (May 1-Oct. 1)
RVP of 7.2 psi.....................        2  5--IL
RVP of 7.0 psi.....................        2  7--KS
                                           2  7--MO
                                           3  4--AL
                                           3  6--TX
                                           5  9--AZ (June 1-Sept. 30).
RVP of 7.0 psi with sulfur                 1  4--GA
 provisions.
Low Emission Diesel................        3  6--TX
Cleaner Burning Gasoline...........        5  9--AZ
Winter Gasoline (aromatics &               5  9--NV
 sulfur).
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    We would use this recommended list in implementing the three EPAct 
criteria for approval of a state fuel into a SIP. Specifically:
     We could not approve a state fuel if it would cause an 
increase in the total number of fuel types on the list.\19\
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    \19\ See CAA section 211(c)(4)(C)(v)(I), 42 U.S.C. 
7545(c)(4)(C)(v)(I).
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     We would remove a fuel from the list if that fuel type 
either ceased to be included in any SIP or if it became identical to a 
Federal fuel. Removal of a fuel type from the list, however, would not 
change or impact the total number of fuel types authorized.\20\
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    \20\ See CAA section 211(c)(4)(C)(v)(III), 42 U.S.C. 
7545(c)(4)(C)(v)(III).
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    Our authority to approve a state fuel is limited to fuel types that 
are already in a SIP in that PADD.\21\ This restriction would not 
extend to the 7.0 psi RVP fuel type. EPA's approval of a 7.0 psi RVP 
program would, however, be subject to the other EPAct provisions.
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    \21\ See CAA section 211(c)(4)(C)(v)(V), 42 U.S.C. 
7545(c)(4)(C)(v)(V) and footnote 14.
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    We are not recommending a state specific interpretation, as 
explained above. However, we have generated the following table to 
illustrate the list under that alternative:

   Total Number of Fuels Approved in State Implementation Plans (SIPs)
    Under CAA Section 211(c)(4)(c) As of September 1, 2004 Alternate
                                Approach
            [Draft based upon state specific interpretation]
------------------------------------------------------------------------
        Type of fuel control           PADD           Area/state
------------------------------------------------------------------------
RVP of 7.0 psi.....................        2  Kansas City, MO (3
                                               counties).
RVP of 7.0 psi.....................        2  Kansas City, KS (2
                                               counties).
RVP of 7.0 psi.....................        3  El Paso, TX (El Paso
                                               County).
RVP of 7.0; extended summer season         5  Phoenix, AZ (Maricopa
 from June 1 to September 30.                  County).
RVP** of 7.0 psi; includes a               1  Atlanta, GA (45 county
 provision addressing sulfur                   area).
 content.
RVP of 7.0 psi; sulfur content and         3  Birmingham, AL (2
 crediting provision expired in                counties).
 2004, when overtaken by Federal
 Tier 2 limit.
RVP of 7.2 psi.....................        2  E. St. Louis, IL (3
                                               counties near St. Louis,
                                               MO).
RVP of 7.8 psi.....................        1  Pittsburgh, PA (7 county
                                               area).
RVP of 7.8 psi.....................        2  Clark & Floyd, IN (2
                                               counties near Louisville,
                                               KY).
RVP of 7.8 psi.....................        2  Detroit, MI (7 counties).
RVP of 7.8 psi; extended summer            1  Southern, ME (7 county
 season from May 1 to September 15.            area).
RVP of 7.8; extended summer season         3  Central & Eastern, TX (95
 from May 1 to October 1.                      county area).
Low emission diesel fuel with              3  Houston & Dallas, TX.
 maximum 10% volume aromatic
 hydrocarbon content and minimum
 cetane of 48 required. (Allows
 substitute Plans w/equivalent NOX
 reductions).
Cleaner Burning Gasoline; similar          5  Phoenix, AZ (Maricopa
 to Federal RFG or California RFG              County).
 in summer; in winter similar only
 to California RFG.

[[Page 32536]]

 
Winter gasoline controls on                5  Las Vegas, NV.
 aromatic hydrocarbons and sulfur.
------------------------------------------------------------------------

    We invite comment on all elements of this notice, especially with 
regard to the recommended and alternate lists and our interpretation of 
the relevant provisions of the EPAct. Interested parties should submit 
comments according to the guidelines described at the beginning of this 
notice. After fully considering comments received, we will generate and 
publish a final list in the Federal Register.

    Dated: May 31, 2006.
Stephen L. Johnson,
Administrator.
 [FR Doc. E6-8726 Filed 6-5-06; 8:45 am]
BILLING CODE 6560-50-P