[Federal Register Volume 71, Number 249 (Thursday, December 28, 2006)]
[Rules and Regulations]
[Pages 78086-78094]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-22310]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 80 and 86

[EPA-HQ-OAR-2006-0363; FRL-8263-4]
RIN 2060-AN66


Amendment to Tier 2 Vehicle Emission Standards and Gasoline 
Sulfur Requirements: Partial Exemption for U.S. Pacific Island 
Territories

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: EPA is taking direct final action to exempt the three U.S. 
Pacific Island Territories--American Samoa, Guam, and the Commonwealth 
of the Northern Mariana Islands (C.N.M.I.)--from the gasoline sulfur 
requirements that EPA promulgated in the Tier 2 motor vehicle rule. The 
Governor of American Samoa petitioned us for an exemption from the Tier 
2 gasoline sulfur requirement because of the potential for gasoline 
shortages, the added cost, and the minimal air quality benefits the 
Tier 2 gasoline sulfur requirement would provide to American Samoa. 
Representatives of the Governors of Guam and C.N.M.I. have also 
requested an exemption referencing the petition submitted by American 
Samoa. Generally, the Far East market, primarily Singapore, supplies 
gasoline to the U.S. Pacific Island Territories. The Tier 2 sulfur 
standard effectively requires special gasoline shipments, which would 
increase the cost and could jeopardize the security of the gasoline 
supply to the Pacific Island Territories. The air quality in American 
Samoa, Guam, and C.N.M.I. is generally pristine, due to the wet 
climate, strong prevailing winds, and considerable distance from any 
pollution sources. We recognize that exempting the U.S. Pacific Island 
Territories from the gasoline sulfur standard will result in smaller 
emission reductions. However, Tier 2 vehicles using higher sulfur 
gasoline still emit 30% less hydrocarbons and 60% less NOX than Tier 1 
vehicles and negative effects on the catalytic converter due to the 
higher sulfur levels are, in many cases, reversible. Additionally, 
these reduced benefits are acceptable due to the pristine air quality, 
the fact that gasoline quality will not change, and the cost and 
difficulty of consistently acquiring Tier 2 compliant gasoline. The 
Tier 2 motor vehicle rule also sets standards for vehicle emissions. 
Vehicles in use on the U.S. Pacific Island Territories will not be 
exempt from the Tier 2 vehicle emission standards. However, additional 
flexibility will be afforded due to the lack of low sulfur gasoline.

DATES: This direct final rule is effective on March 28, 2007 without 
further notice, unless EPA receives adverse comments by January 29, 
2007. If we receive adverse comments, we will publish a timely 
withdrawal in the Federal Register informing the public that this rule 
will not take effect.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2006-0363, by one of the following methods:
     http://www.regulations.gov: Follow the on-line 
instructions for submitting comments.
     Mail: Air Docket, Environmental Protection Agency, 
Mailcode: 6102T, 1200 Pennsylvania Ave., NW., Washington, DC 20460, 
Attention Docket ID No. EPA-HQ-OAR-2006-0363. In addition, please mail 
a copy of your comments on the information collection provisions to the 
Office of Information and Regulatory Affairs, Office of Management and 
Budget (OMB), Attn: Desk Officer for EPA, 725 17th St. NW., Washington, 
DC 20503.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2006-0363. 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.regulations.gov, 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 http://www.regulations.gov or e-mail. The http://www.regulations.gov Web site 
is an ``anonymous access'' system, 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 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, 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.
    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 
whose 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.

    Note: The EPA Docket Center suffered damage due to flooding 
during the last week

[[Page 78087]]

of June 2006. The Docket Center is continuing to operate. However, 
during the cleanup, there will be temporary changes to Docket Center 
telephone numbers, addresses, and hours of operation for people who 
wish to make hand deliveries or visit the Public Reading Room to 
view documents. Consult EPA's Federal Register notice at 71 FR 38147 
(July 5, 2006) or the EPA Web site at http://www.epa.gov/epahome/dockets.htm for current information on docket operations, locations 
and telephone numbers. The Docket Center's mailing address for U.S. 
mail and the procedure for submitting comments to 
www.regulations.gov are not affected by the flooding and will remain 
the same.


FOR FURTHER INFORMATION CONTACT: Sean Hillson, Office of Transportation 
and Air Quality, Transportation and Regional Programs Division, 
Mailcode AASMCG, Environmental Protection Agency, 2000 Traverwood 
Drive, Ann Arbor, MI 48105; telephone number: (734) 214-4789; fax 
number: (734) 214-4052; e-mail address: [email protected].

SUPPLEMENTARY INFORMATION: EPA is publishing this rule without a prior 
proposal because we view this action as noncontroversial and anticipate 
no adverse comment. However, in the ``Proposed Rules'' section of 
today's Federal Register publication, we are publishing a separate 
document that will serve as the proposal to adopt the provisions in 
this direct final rule if adverse comments are filed. This rule will be 
effective on March 28, 2007 without further notice unless we receive 
adverse comment by January 29, 2007 or a request for a public hearing 
by January 12, 2007. If we receive adverse comment on one or more 
distinct amendments, paragraphs, or sections of this rulemaking, we 
will publish a timely withdrawal in the Federal Register indicating 
which provisions are being withdrawn due to adverse comment. We may 
address all adverse comments in a subsequent final rule based on the 
proposed rule. We will not institute a second comment period on this 
action. Any parties interested in commenting must do so at this time. 
Any distinct amendment, paragraph, or section of today's rulemaking for 
which we do not receive adverse comment will become effective on the 
date set out above, notwithstanding any adverse comment on any other 
distinct amendment, paragraph, or section of today's rule.
    Today's action is also available electronically on the date of 
publication from EPA's Federal Register Internet Web site listed below. 
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/fedrgstr/EPA-AIR/ 
(Either select a desired date or use the Search feature).
    The contents of this preamble are listed in the following outline:

I. General Information
II. Background
III. American Samoa
IV. Guam
V. Commonwealth of the Northern Mariana Islands (C.N.M.I.)
VI. What Is EPA Promulgating?
VII. Statutory and Executive Order Reviews
VIII. Statutory Provisions and Legal Authority

I. General Information

A. Does this Action Apply to Me?

    This action will affect you if you produce new motor vehicles, 
alter individual imported motor vehicles to address U.S. regulation, or 
convert motor vehicles to use alternative fuels for use in the U.S. 
Pacific Island Territories--American Samoa, Guam, and Commonwealth of 
the Northern Mariana Islands (C.N.M.I.). It will also affect you if you 
produce, import, distribute, or sell gasoline fuel for use in the U.S. 
Pacific Island Territories. The following table gives some examples of 
entities that may have to follow the regulations. But because these are 
only examples, you should carefully examine the regulations in 40 CFR 
parts 80 and 86. If you have questions, call the person listed in the 
FOR FURTHER INFORMATION CONTACT section of this preamble.

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    Examples of potentially regulated       NAICS codes
                entities                        \a\        SIC codes \b\
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Motor Vehicle Manufacturers.............          336111            3711
                                                  336112
                                                  336120
Alternative Fuel Vehicle Converters.....          336311            3592
                                                  336312            3714
                                                  422720            5172
                                                  454312            5984
                                                  811198            7549
                                                  541514            8742
                                                  541690            8931
Commercial Importers of Vehicles and              811112            7533
 Vehicle Components.....................
                                                  811198            7549
                                                  541514            8742
Petroleum Refiners......................          324110            2911
Gasoline Marketers and Distributers.....          422710            5171
                                                  422720            5172
Gasoline Carriers.......................          484220            4212
                                                  484230           4213
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\a\ North American Industry Classification System (NAICS).
\b\ Standard Industrial Classification (SIC).

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

1. Submitting CBI
    Do not submit confidential business information to EPA 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-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.

[[Page 78088]]

2. Tips for Preparing Your Comments
    When submitting comments, remember to:
     Identify the rulemaking 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.

II. Background

A. What Is the Tier 2 Rule?

    The Tier 2 rule (65 FR 6697, February 10, 2000) instituted a 
comprehensive regulatory program designed to significantly reduce the 
emissions from new passenger cars and light trucks, including pickup 
trucks, vans, minivans, and sport-utility vehicles. These reductions 
provide for cleaner air and greater public health protection, primarily 
by reducing ozone and PM pollution. The program treats vehicles and 
fuels as a system, combining requirements for much cleaner vehicles 
with requirements for much lower levels of sulfur in gasoline. The 
program phases in a single set of tailpipe emission standards that 
apply to all passenger cars, light trucks, and larger passenger 
vehicles operated on any fuel. To enable the very clean Tier 2 vehicle 
emission control technology to be introduced and to maintain its 
effectiveness, we also require reduced gasoline sulfur levels. The 
reduction in sulfur levels contributes directly to cleaner air in 
addition to its beneficial effects on vehicle emission control systems. 
Refiners have installed additional refining equipment to remove sulfur 
in their refining processes. Importers of gasoline are required to 
import and market only gasoline meeting the sulfur standards. These 
standards currently apply to the U.S. Pacific Island Territories--
American Samoa, Guam, and the Commonwealth of the Northern Mariana 
Islands (C.N.M.I.). However, these Territories have received 
enforcement discretion \1\ from the Office of Enforcement and 
Compliance Assurance which is applicable until November 1, 2007, or 
once the final rule becomes effective, whichever is earlier.
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    \1\ EPA, ``Exercise of Enforcement Discretion for Gasoline 
Sulfur Regulations for the Commonwealth of the Northern Mariana 
Islands, American Samoa, and the Territory of Guam'', October 30, 
2006.
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B. Summary of American Samoa's Petition

    Section 325(a)(1) of the Clean Air Act \2\ states in relevant part:
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    \2\ 42 U.S.C. 7625-l(a)(1).
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    Upon petition by the Governor of Guam, American Samoa, the 
Virgin Islands, or the Commonwealth of the Northern Mariana Islands, 
the Administrator is authorized to exempt any person or source or 
class of persons in such territory from any requirement under this 
chapter other than section 7412 of this title or any requirement 
under section 7410 of this title or part D of subchapter I of this 
chapter necessary to attain or maintain a national primary ambient 
air quality standard. Such exemption may be granted if the 
Administrator finds that the compliance with such requirement is not 
feasible or is unreasonable due to unique geographical, 
meteorological or economic factors of such territory, or such other 
local factors as the Administrator deems significant.
    Pursuant to Section 325(a)(1) of the Clean Air Act, the Honorable 
Togiola Tulafono, Governor of American Samoa, petitioned \3\ the EPA to 
exempt all persons in American Samoa from the Tier 2 gasoline sulfur 
requirements promulgated by the EPA pursuant to Section 211(c)(1) of 
the Clean Air Act and set forth at 40 CFR Part 80, Subpart H 
(``Gasoline Sulfur Regulations''). According to the petition, 
compliance with these requirements in American Samoa is unreasonable 
due to the unique geographical, meteorological and economic factors of 
the Territory. The reasons supporting this petition include the 
following:
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    \3\ Tulafono, T., Governor of American Samoa, ``Petition for 
Exemption from the Gasoline Sulfur Regulations'', February 10, 2004.
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     Transportation costs dictate that gasoline be supplied to 
American Samoa from Far East markets, and the imposition of the rules 
would cause the American Samoan market to be even less attractive to 
foreign suppliers in an already limited market and, therefore, 
compromise the security of the American Samoa gasoline supply;
     Compliance with the Tier 2 gasoline sulfur regulations 
would result in higher prices for gasoline in an already fragile 
economy, resulting in added economic hardship to American Samoan 
residents, the majority of which live below the poverty level; and
     The isolation and small volumes of gasoline used in 
American Samoa obviate any measurable danger to the environment with 
respect to an exemption for American Samoa from the Tier 2 rule.

C. Rationale for Guam and C.N.M.I. Tier 2 Exemption

    Representatives of the Governors of C.N.M.I. and Guam have also 
filed requests 4 5 for exemption from the Tier 2 gasoline 
sulfur standards. These territories have referenced the American Samoa 
petition as they have the same fuel suppliers and similar geographical, 
meteorological and economic factors as American Samoa. Gasoline is 
transported to the U.S. Pacific Island Territories from Far East 
markets. Imposing the Tier 2 regulations on the Territories would make 
the market less attractive to foreign suppliers. This compromises the 
security of the gasoline supply. One supplier has already pulled out of 
the market due to difficulty in supplying compliant gasoline.
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    \4\ Rabauliman, F., Director of the C.N.M.I. Division of 
Environmental Quality, ``Request for Exemption from Gasoline Sulfur 
Requirements'', August 10, 2006.
    \5\ Soto, A., Acting Administrator of the Guam Environmental 
Protection Agency, ``Request for Exemption from Gasoline Sulfur 
Requirements'', August 14, 2006.
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III. American Samoa

A. American Samoa's Geography and Climate

    American Samoa is a group of five volcanic islands and two coral 
atolls. It is located in Polynesia, approximately 2300 miles southwest 
of Hawaii and 1600 miles north of New Zealand. American Samoa is an 
unincorporated Territory of the United States.
    American Samoa is comprised of approximately 76 square miles, most 
of which is mountainous. Over 96 percent of the population lives on the 
largest island, Tutuila, which is approximately 53 square miles. The 
small island of Annu'u lies near the east end of the Tutuila. The 
Manu's Islands (Ta'u, Ofu and Olesega) are located approximately 60 
miles east of Tutuila. Swains Island and the uninhabited Rose Atoll are 
the two remaining islands in the American Samoan group.
    American Samoa's closest neighbor is Western Samoa, lying about 60 
miles to the west. There are no major population centers in the 
vicinity of American

[[Page 78089]]

Samoa--the nearest is New Zealand, 1600 miles away.
    American Samoa has a tropical maritime climate, with abundant rain, 
winds, and warm, humid days and nights. Rainfall is about 125 inches a 
year near the airport but varies greatly over small distances because 
of the mountainous topography. The mean annual temperature is 
approximately 80 degrees Fahrenheit and remains fairly constant 
throughout the year. The prevailing winds throughout the year are the 
Easterly Trades. The average wind speed is 12.1 miles per hour, and 
does not vary to a great degree throughout the year. The lowest monthly 
average wind speeds occur in February, March and April and average 
about 8.5 miles per hour.

B. What Is the Air Quality Impact for American Samoa?

    Due to the wet climate, strong prevailing winds, and the remoteness 
of American Samoa, the air quality is generally pristine. It is in 
attainment with EPA's air quality standards, including the National 
Ambient Air Quality Standards for ozone and SO2. Exempting 
American Samoa from the Tier 2 gasoline sulfur standards would not 
cause an increase in emissions. As noted above, American Samoa has 
received enforcement discretion for the Tier 2 gasoline sulfur 
standards from the onset of the program and therefore the gasoline sent 
to American Samoa has not been required to meet the Tier 2 sulfur 
levels. Emissions from older vehicles will remain unchanged. Tier 2 
vehicles using high sulfur gasoline will be cleaner than Tier 1 
vehicles. Tier 2 vehicles using gasoline with 330 ppm sulfur emit 30% 
less hydrocarbons and 60% less NOX than Tier 1 vehicles \6\. 
While this rule will lead to a smaller reduction in emissions than 
would occur if the Tier 2 sulfur regulations are required, American 
Samoa's current air quality does not require further reductions. 
Because of American Samoa's remoteness, there are no cross border 
issues.
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    \6\ EPA, ``EPA Staff Paper on Gasoline Sulfur Issues'', May 1, 
1998, EPA420-R-98-005.
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C. Special Market Limitations for American Samoa

    American Samoa's gasoline market has unique characteristics due to 
American Samoa's remoteness. It is not realistic to supply America 
Samoa from the mainland United States. Consequently, the majority of 
American Samoa's gasoline is supplied from the Far East market 
(Singapore and Australia).
    The American Samoa petroleum market poses unique challenges, and 
suppliers periodically withdraw from the market. The amount of fuel 
purchased by American Samoa is so small that America Samoa is only a 
minor part of the business of its current suppliers. These suppliers 
may not be willing to modify their refineries to comply with the EPA's 
Tier 2 gasoline sulfur requirements simply to supply the small American 
Samoa market. For instance, Australia currently enforces a gasoline 
sulfur standard higher than the Tier 2 standard and Singapore does not 
regulate gasoline sulfur content \7\.
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    \7\ International Fuel Quality Center, ``Asia/Australasia: 2005 
Regional Fuel Quality Overview and Outlook for 2006'', February 23, 
2006.
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    In addition, American Samoa is economically challenged. According 
to the 2000 U.S. Census, 61 percent of American Samoans lived below the 
poverty level \8\. Its 2000 per capita gross domestic product 
purchasing power parity was $5,825, compared to the 2005 U.S. per 
capita GDP purchasing power parity of $41,800 \9\. Revenue transfers 
from the U.S. government add substantially to its economic well-being. 
American Samoa's economic activity is primarily fishing and processing 
and canning of tuna.
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    \8\ U.S. Census Bureau, ``American Samoa: 2000 Social, Economic, 
and Housing Characteristics'', 2001.
    \9\ Central Intelligence Agency, ``World Fact Book'', June 2006.
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IV. Guam

A. Guam's Geography and Climate

    Guam is the southern-most island in the Marianas Archipelago. It is 
located in Polynesia, approximately 3,700 miles west-southwest of 
Honolulu and 1,550 miles south of Tokyo. The island is about 28 miles 
long and between 4 and 8.5 miles wide, with a total land area of 209 
square miles, about three times the size of Washington, DC. It has a 
tropical climate with consistently warm and humid weather and westward 
prevailing trade winds. There is no land mass downwind of Guam within 
600 miles.

B. What Is the Air Quality Impact for Guam?

    Guam is in attainment with the primary NAAQS, with the exception of 
sulfur dioxide in two areas. This action is not expected to have any 
significant impact on the ambient air quality status of Guam, including 
the status of the two areas designated as nonattainment for sulfur 
dioxide. Both areas are designated nonattainment for sulfur dioxide as 
a result of monitored and modeled exceedences in the 1970's prior to 
implementing changes to power generation facilities.
    In the 1990's both plants were rebuilt, upgrading their emission 
controls. Guam has submitted a redesignation request to EPA. That 
pending redesignation request shows that they are now in attainment. An 
emissions inventory shows that the power plants are the major source of 
SO2 on Guam. Both plants are on the western side of the 
island. The Trade Winds blow persistently from east-to-west, further 
lessening the impact of the SO2 emissions on the people of 
Guam from the power plants.
    Mobile sources, like cars, are a minor contributor to the 
SO2 emission budget. Exempting Guam from the Tier 2 gasoline 
sulfur and vehicle emission standards would not cause an increase in 
emissions. Guam has received enforcement discretion for the Tier 2 
gasoline sulfur standards from the onset of the program and therefore 
the gasoline sent to Guam has not been required to meet the Tier 2 
sulfur levels. Emissions from older vehicles will remain unchanged. 
Tier 2 vehicles using high sulfur gasoline will be cleaner than Tier 1 
vehicles. Tier 2 vehicles using gasoline with 330 ppm sulfur emit 30% 
less hydrocarbons and 60% less NOX than Tier 1 vehicles. 
While this rule will lead to a smaller reduction in emissions than 
would occur if the Tier 2 sulfur regulations are required, Guam's 
current air quality does not require further reductions. Because of 
Guam's remoteness, there are no cross border issues

C. Special Market Limitations for Guam

    The history of the Guam gasoline market has unique characteristics 
due to its remoteness. It is not realistic to supply Guam from the 
mainland United States. Consequently, the majority of Guam's gasoline 
is supplied from Singapore refineries. The shipments to Guam are in 
relatively small quantities because the island lacks the economy of 
scale for bigger bulk purchases. These suppliers may not be willing to 
modify their refineries to comply with the EPA's Tier 2 gasoline sulfur 
standard simply to supply the small Guam market. As stated earlier, 
Singapore currently does not regulate gasoline sulfur content.
    In addition, Guam is economically challenged. According to the 2000 
U.S. Census, Guam's population was 148,060 with 23% living below 
poverty \10\. Its 2005 per capita GDP purchasing power parity was 
$15,000, compared to the

[[Page 78090]]

U.S. per capita GDP purchasing power parity in 2005 of $41,800 \11\. 
Guam's economy depends significantly on U.S. military spending and on 
revenue from the tourism industry. Most food and industrial goods are 
imported, about 75% from the U.S.
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    \10\ U.S. Census Bureau, ``Guam: 2000 Social, Economic, and 
Housing Characteristics'', 2003.
    \11\ Central Intelligence Agency, ``World Fact Book'', June 
2006.
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V. Commonwealth of the Northern Mariana Islands (C.N.M.I.)

A. C.N.M.I. Geography and Climate

    The C.N.M.I. consists of 14 islands of volcanic origin that extend 
in a general north-south direction for 388 nautical miles. It lies in 
the Western part of the Pacific Ocean about 1,150 miles south of Tokyo, 
108 miles north of Guam, and 5,280 miles from the U.S. mainland. The 
land area is 176.5 square miles, about 2.5 times the size of 
Washington, DC. It has a tropical climate with consistently warm and 
humid weather and westward prevailing trade winds. According to the 
U.S. Census Bureau, in 2000 the population was 68,775, with population 
centers primarily on the western side of Saipan, and to a much lesser 
extent on Tinian and Rota. C.N.M.I. has approximately 200 miles of 
roads, of which approximately 50 percent are paved.

B. What is the Air Quality Impact for C.N.M.I.?

    The concentration of development on the west side of the islands, 
meteorology (westward trade winds), and lack of heavy industry all have 
a beneficial impact on C.N.M.I.'s air quality. C.N.M.I. is in 
attainment with EPA's air quality standards, including the National 
Ambient Air Quality standard for ozone and SO2. Exempting 
C.N.M.I. from the Tier 2 gasoline sulfur and vehicle emission standards 
would not cause an increase in emissions. C.N.M.I. has received 
enforcement discretion for the Tier 2 gasoline sulfur standards from 
the onset of the program and therefore the gasoline sent to C.N.M.I. 
has not been required to meet the Tier 2 sulfur levels. Emissions from 
older vehicles will remain unchanged. Tier 2 vehicles using high sulfur 
gasoline will be cleaner than Tier 1 vehicles. Tier 2 vehicles using 
gasoline with 330 ppm sulfur emit 30% less hydrocarbons and 60% less 
NOX than Tier 1 vehicles. While this rule will lead to a 
smaller reduction in emissions than would occur if the Tier 2 sulfur 
regulations are required, C.N.M.I.'s current air quality does not 
require further reductions. Because of its remoteness, there are no 
cross border issues.

C. Special Market Limitations for C.N.M.I.

    The history of the C.N.M.I. gasoline market has unique 
characteristics due to its remoteness. It is not realistic to supply 
C.N.M.I. from the mainland United States. Consequently, the majority of 
C.N.M.I. gasoline is supplied from the Far East market where gasoline 
sulfur content may be unregulated or does not meet Tier 2 levels. 
Gasoline is shipped from Singapore to Guam and then to C.N.M.I. in one 
ship. Several factors impact the wholesale pricing of gasoline in 
C.N.M.I., including small volumes, a lack of purchasing power leverage, 
high transportation costs, and lack of competition. The Tier 2 gasoline 
sulfur requirements would make the C.N.M.I. market even less attractive 
to suppliers.
    In addition, C.N.M.I. is economically challenged, with 46% of the 
population living below the poverty level in 2000 \12\. The GDP per 
capita purchasing power parity in 2000 was $12,500, compared to the 
United States per capita GDP purchasing power parity in 2005 of $41,800 
\13\. The economy benefits substantially from financial assistance from 
the United States, but this assistance has declined as locally 
generated government revenues have grown. Chief sources of income are 
tourism and garment production.
---------------------------------------------------------------------------

    \12\ U.S. Census Bureau, ``Commonwealth of the Northern Mariana 
Islands: 2000 Social, Economic, and Housing Characteristics'', 2003.
    \13\ Central Intelligence Agency, ``World Fact Book'', June 
2006.
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VI. What Is EPA Promulgating?

A. Gasoline Sulfur Requirements

1. Standards
    We are exempting American Samoa, Guam, and C.N.M.I. from the Tier 2 
gasoline sulfur standard due to the high economic burden of compliance, 
isolated nature of the territories, both in terms of gasoline 
importation and pollution transport, and minimal air quality effects. 
American Samoa, Guam, and C.N.M.I. have each filed a request for 
exemption from the Tier 2 gasoline sulfur standards. American Samoa has 
also submitted a petition providing justification for the exemption, 
which Guam and C.N.M.I. have referenced in their requests as they have 
the same fuel suppliers and similar geographical, meteorological, and 
economic factors as American Samoa.
2. Rationale
    EPA's Gasoline Sulfur Regulations were published on February 10, 
2000. The rules are designed to lower sulfur levels in gasoline in 
order to reduce emissions from mobile sources of sulfur compounds, 
ozone, air toxics, and particulate matter. The rules currently apply to 
the U.S. Pacific Island Territories (65 FR 6713, f.n. 24, February 10, 
2000). However, the U.S. Pacific Island Territories have received 
enforcement discretion of the Tier 2 gasoline sulfur standards until 
November 1, 2007.
    Compliance with the EPA's Tier 2 gasoline sulfur standards would 
result in undue economic hardship in the U.S. Pacific Island 
Territories. All three of the territories lack internal petroleum 
supplies and refining capabilities and rely on long distance imports. 
Given their remote location from Hawaii and the U.S. mainland, most 
petroleum products are imported from East Rim nations, particularly 
Singapore where no gasoline sulfur regulations are in place.
    The economies of the Territories are underdeveloped compared with 
the U.S. mainland, with poverty rates ranging between 23% and 61%. 
Gasoline must be imported over long distances and in small cargo 
parcels. This makes the cost of gasoline in the Pacific Island 
Territories higher than on the mainland United States, exclusive of the 
effects of taxes. Higher gasoline prices adversely affect the economies 
of the Territories.
    Imposition of the low sulfur gasoline standards would result in a 
further limitation in potential suppliers to the U.S. Pacific Island 
Territories. Suppliers will either be dissuaded from supplying the 
Territories at all, or they would charge prices that would make the 
importation of the gasoline economically impracticable for its 
residents. One supplier has pulled out of the market in American Samoa 
because they were unable to provide compliant gasoline. The fact that a 
major supplier of gasoline has pulled out of the market speaks to the 
impracticality of supplying Tier 2 gasoline to the Territories.

B. Vehicle Emission Standards

1. Standards
    We are not exempting American Samoa, Guam, and C.N.M.I. from the 
Tier 2 vehicle emission standards. However, we are providing additional 
flexibilities for Tier 2 vehicles since low sulfur gasoline is 
unavailable. These flexibilities are similar to the flexibilities which 
EPA provided for 1999-2003 model vehicles meeting National Low Emission 
Vehicle (NLEV) emission standards and 2004-2007 model year vehicles 
meeting either Interim non-Tier 2 or Tier 2 vehicle

[[Page 78091]]

emission standards. Under current EPA regulations, these flexibilities 
are set to expire at the end of the 2007 model year. Today's action 
extends the flexibilities to 2008 and later model year vehicles 
introduced into commerce in American Samoa, C.N.M.I., and Guam. The 
flexibilities (1) allow additional preconditioning prior to conducting 
exhaust emission tests (to remove sulfur deposits on the catalyst and 
emission control system components) and (2) allow special OBD system 
considerations to account for higher levels of sulfur present in 
gasoline.
2. Sulfur Effects on Tier 2 and NLEV Vehicle Exhaust Emissions and OBD 
Systems
    The effects of sulfur levels in gasoline on vehicle emissions and 
OBD systems have been well documented in recent years in various 
Society of Automotive Engineer (SAE) papers and other references. A 
discussion of sulfur effects on vehicle emissions and OBD systems can 
be found in the Tier 2 final rule (65 FR 6729, February 10, 2000). In 
brief, sulfur in gasoline has a negative impact on vehicle emissions, 
reducing the effectiveness of the catalytic converter. Sulfur compounds 
attach to some of the precious metal sites in the catalyst, 
neutralizing some of the catalytic action. Tier 2 and NLEV vehicles are 
more sensitive to sulfur poisoning than Tier 1 and Tier 0 vehicles. The 
amount of reduced activity depends on many factors such as the catalyst 
precious metal formulation, the oxygen storage capacity of the 
catalyst, the catalyst location, catalyst temperature environment, the 
air/fuel calibration of the engine, vehicle speed, vehicle load, etc.
    Data presented in the Tier 2 final rule (65 FR 6729, February 10, 
2000) indicates that for vehicles meeting LEV emission standards, NMHC 
and NOX emissions can increase by approximately 150 percent 
and 50 percent, respectively, on the FTP (city) test if the vehicle was 
operated on gasoline containing 330 ppm sulfur. While sulfur poisoning 
is reversible, the amount of reversibility also depends on many 
factors. Sulfur can be removed from some catalysts by operating the 
vehicle with a rich exhaust (absence of oxygen) while the catalyst 
experiences a high temperature environment (above 700 [deg]C).
    As discussed in the Tier 2 final rule (65 FR 6729, February 10, 
2000), sulfur poisoning has a potential to adversely affect the on-
board diagnostic (OBD) system of the vehicle. First, sulfur poisoning 
can impair the decisions made by the OBD system, and affect the ability 
of the OBD system to accurately detect catalyst efficiency problems. 
For example, the OBD system could operate properly on low-sulfur 
gasoline, but falsely indicate sulfur-induced passes when exposed to 
high sulfur gasoline. Second, sulfur poisoning has a potential to 
affect consumer confidence in the OBD system itself. For example, if 
the OBD system were to detect a substantially higher rate of (sulfur 
induced) catalyst efficiency problems when operating on high sulfur 
gasoline, the more frequent illumination of the OBD warning light could 
lead to a loss of consumer confidence in the OBD system itself. Thus, 
consumers might become inclined to ignore the OBD warning light and 
drive potentially high emitting vehicles with emission-related problems 
unrelated to sulfur in gasoline.
3. Discussion of Vehicle Requirements
    Today's action extends the flexibilities of Tier 2 OBD and in-use 
testing requirements while allowing American Samoa, Guam, and C.N.M.I. 
to use in-use fuels with sulfur levels above the Tier 2 requirements. 
We believe that it is appropriate to retain the Tier 2 vehicle emission 
standards for many reasons, including the following:
    a. Exhaust emission benefits. EPA Tier 2 emission standards are 
significantly lower than Tier 1 emission standards. For example, Tier 1 
exhaust emission standards for passenger cars are approximately 5-6 
times higher than Tier 2 standards. Tier 1 exhaust emission standards 
for large light-duty trucks and medium duty passenger vehicles are 
approximately 12 times higher than Tier 2 emission standards. Although 
Tier 2 vehicles operating in American Samoa, Guam, and C.N.M.I. on high 
sulfur gasoline would not be expected to achieve the same emissions 
performance as Tier 2 vehicles operated on low sulfur fuel, the 
emission reductions realized by Tier 2 vehicles even when operating on 
high sulfur fuel remain significant relative to a fleet of Tier 1 
vehicles operating on such fuels. As noted above, Tier 2 vehicles using 
gasoline with 330 ppm sulfur emit 30% less hydrocarbons and 60% less 
NOX than Tier 1 vehicles.
    b. Evaporative emission benefits and other benefits. EPA Tier 2 
evaporative emission standards are approximately 50 percent lower than 
Tier 1 evaporative emission standards (a reduction which is unaffected 
by the sulfur level of in-use gasoline). Other beneficial requirements 
of Tier 2 regulations include extending the passenger car useful life 
mileage from 100,000 miles to 120,000 miles; eliminating redundant idle 
CO emission standards for trucks; eliminating adjusted loaded weight 
(ALVW) test requirements for heavy light-duty trucks; reducing the 
Supplemental Federal Test Procedure emission standards; and requiring 
vehicles to have leak-free exhaust systems.
    c. No significant in-use testing problems to date. EPA conducts 
``as received'' in-use surveillance tests on approximately 50 classes 
of vehicles each year. Three vehicles are normally tested in each 
class, for a total of approximately 150 vehicles per year. Although EPA 
tests have been instrumental in several emission-related recalls, we 
have found that the vast majority of 1999 to 2004 model year vehicles 
comply with the applicable NLEV/Tier 2 emission standards (even though 
low sulfur fuel was not available during much of this period). In some 
cases, the ``as received'' emission test failed to comply with 
applicable emission standards and the vehicle was retested after 
performing additional (sulfur removal) preconditioning. For the 
majority of these retests, emissions changed very little, however in 
one case, NOX emissions decreased by approximately 50 
percent. There have been no sulfur-related OBD failures to date. 
Beginning in the 2005 calendar year, automobile manufacturers were also 
required to perform ``as received'' in-use testing on approximately 
1500 vehicles per year. The results of the manufacturer tests generally 
agree with the results of the EPA tests. The manufacturer tests also 
showed a high level of compliance with the NLEV and Tier 2 emission 
standards and no sulfur-related OBD problems. A list of vehicle recalls 
is available at http://www.epa.gov/otaq/recall.htm.
    During the time when EPA and manufacturers were conducting their 
in-use tests on NLEV and Tier 2 vehicles, the nationwide average sulfur 
levels of gasoline in the United States ranged from approximately 300 
ppm in 1999 to 80 ppm in 2004. We note that sulfur levels averaged 300 
ppm in 2002 and 130 ppm in 2004 in the Detroit, Michigan area (where 
test vehicles were recruited for all EPA tests and many manufacturer 
tests).
    While EPA believes that the Tier 2 vehicle standards should 
continue to apply for vehicles introduced in American Samoa, Guam, and 
C.N.M.I., we believe that the pre-existing flexibilities provided for 
vehicles that are exposed to high sulfur gasoline should be extended 
for vehicles introduced in these Territories. Flexibilities provided in 
the Tier 2 rule (1) allow additional preconditioning prior to 
conducting exhaust emission

[[Page 78092]]

tests (to remove sulfur deposits on the catalyst and emission control 
system components) and (2) allow special OBD system considerations to 
account for sulfur which is present in gasoline. The specific 
requirements of these flexibilities are found in the current 
regulations (40 CFR 86.1806-05(d) and 40 CFR 86.1845-04(a)), and are 
applicable to vehicles up to the 2007 model year. The revised 
regulations provided with today's action extend these provisions beyond 
the 2007 model year for vehicles in American Samoa, C.N.M.I., and Guam. 
The flexibility to allow additional preconditioning prior to emission 
testing is being extended to accommodate any possible emission testing 
which may be performed on American Samoa, Guam, or C.N.M.I. vehicles. 
The OBD flexibilities are being extended (even though current data 
indicate that they will probably not be needed) because EPA cannot 
conclude with certainty that they will not be needed for future 
technology vehicles.

VII. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    This action is not a ``significant regulatory action'' under the 
terms of Executive Order (EO) 12866 (58 FR 51735, October 4, 1993) and 
is therefore not subject to OMB review.

B. Paperwork Reduction Act

    This action does not impose an information collection burden under 
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. 
This rule does not create new requirements. Its purpose is to relieve a 
burden imposed on the three U.S. Pacific Island Territories.
    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 in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (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 small business as defined 
by the Small Business Administration's (SBA) regulations at 13 CFR 
121.201; (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 rule on small 
entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. This rule 
would exempt the three U.S. Pacific Island Territories--American Samoa, 
Guam and the Commonwealth of the Northern Mariana Islands--from the 
Tier 2 rule for gasoline sulfur requirements and extend related 
existing flexibilities to the vehicle emission standards for the three 
territories. It does not create new requirements. Its purpose is to 
relieve a burden imposed on the three U.S. Pacific Island Territories. 
We have therefore concluded that today's rule will relieve regulatory 
burden for all affected small entities.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. 
L. 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.
    Today's rule contains no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) for State, local, or tribal 
governments or the private sector. This rule imposes no enforceable 
duty on any State, local or tribal governments or the private sector. 
It does not create new requirements. Its purpose is to relieve a burden 
imposed on the three U.S. Pacific Island Territories.

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 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

[[Page 78093]]

distribution of power and responsibilities among the various levels of 
government, as specified in Executive Order 13132. Thus, Executive 
Order 13132 does not apply to this rule. Although section 6 of 
Executive Order 13132 does not apply to this rule, EPA did consult with 
representatives of the U.S. Pacific Island Territories in developing 
this rule. A summary of the concerns raised during that consultation 
and EPA's response to those concerns is provided in previous sections 
of this preamble.

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 9, 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.'' This rule does not have 
tribal implications, as specified in Executive Order 13175. This rule 
would exempt the three U.S. Pacific Island Territories--American Samoa, 
Guam and the Commonwealth of the Northern Mariana Islands--from the 
Tier 2 rule for gasoline sulfur requirements and extend related 
existing flexibilities to the vehicle emission standards for the three 
territories. It applies only to the three U.S. Pacific Island 
Territories. Thus, Executive Order 13175 does not apply to this rule.

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

    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, 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.
    EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that are based on health or safety risks, such that 
the analysis required under section 5-501 of the Order has the 
potential to influence the regulation. This rule is not subject to 
Executive Order 13045 because it does not establish an environmental 
standard intended to mitigate health or safety risks.

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

    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.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law No. 104-113, 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 rulemaking does not involve technical standards. 
Therefore, EPA is not considering the use of any voluntary consensus 
standards.

J. 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 submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective March 28, 2007.

VIII. Statutory Provisions and Legal Authority

    Statutory authority for today's final rule is found in the Clean 
Air Act, 42 U.S.C. 7401 et seq., in particular, sections 325, 211 and 
202 of the Act, 42 U.S.C. 7521. This rule is being promulgated under 
the administrative and procedural provisions of Clean Air Act section 
307(d), 42 U.S.C. 7607(d).

List of Subjects

40 CFR Part 80

    Environmental protection, Adminstrative practice and procedure, 
Gasoline, Reporting and recordkeeping requirements.

40 CFR Part 86

    Environmental protection, Administrative practice and procedure, 
Motor vehicle pollution.

    Dated: December 21, 2006.
Stephen L. Johnson,
Administrator.

0
For the reasons set forth in the preamble, chapter I, title 40 of the 
Code of Federal Regulations is amended as follows:

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

0
1. The authority citation for part 80 continues to read as follows:

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

Subpart H--[Amended]

0
2. A new Sec.  80.382 is added to Subpart H to read as follows:


Sec.  80.382  What requirements apply to gasoline for use in American 
Samoa, Guam and the Commonwealth of the Northern Mariana Islands?

    The gasoline sulfur standards of Sec. Sec.  80.195 and 80.240(a) do 
not apply to gasoline that is produced, imported, sold, offered for 
sale, supplied, offered for supply, stored, dispensed, or transported 
for use in the Territories of Guam, American Samoa or the Commonwealth 
of the Northern Mariana Islands, provided that such gasoline is:
    (a) Designated by the refiner or importer as high sulfur gasoline 
only for use in Guam, American Samoa, or the Commonwealth of the 
Northern Mariana Islands;
    (b) Used only in Guam, American Samoa, or the Commonwealth of the 
Northern Mariana Islands;
    (c) Accompanied by documentation that complies with the product 
transfer document requirements of Sec.  80.365; and
    (d) Segregated from non-exempt high sulfur fuel at all points in 
the distribution system from the point the fuel is designated as exempt 
fuel only for use in Guam, American Samoa, or the Commonwealth of the 
Northern

[[Page 78094]]

Mariana Islands, while the exempt fuel is in the United States but 
outside these Territories.

PART 86--CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES 
AND ENGINES

0
3. The authority citation for part 86 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart S--[Amended]

0
4. Section 86.1806-05 is amended by revising paragraph (d)(2) to read 
as follows:


Sec.  86.1806-05  On-board diagnostics.

* * * * *
    (d) * * *
    (2)(i) For interim non-Tier 2 and Tier 2 LDV/LLDTs and HLDT/MDPVs 
produced through the 2007 model year, upon a manufacturer's written 
request, EPA will consider allowing the use of an on-board diagnostic 
system during the certification process that functions properly on low-
sulfur gasoline but indicates sulfur-induced passes when exposed to 
high sulfur gasoline. After the 2007 model year, this provision can be 
used only for interim non-Tier 2 and Tier 2 LDV/LLDTs and HLDT/MDPVs 
introduced into commerce in American Samoa, Guam, and the Commonwealth 
of the Northern Mariana Islands, but this provision only can be used 
for such vehicles in any of those locations if low sulfur gasoline is 
determined by the Administrator to be unavailable in that specific 
location.
    (ii) For interim non-Tier 2 and Tier 2 LDV/LLDTs and HLDT/MDPVs, if 
vehicles produced through the 2007 model year exhibit illuminations of 
the emission control diagnostic system malfunction indicator light due 
to high sulfur gasoline, EPA will consider, upon a manufacturer's 
written request, allowing modifications to such vehicles on a case-by-
case basis so as to eliminate the sulfur induced illumination. After 
the 2007 model year, this provision can be used only for interim non-
Tier 2 and Tier 2 LDV/LLDTs and HLDT/MDPVs introduced into commerce in 
American Samoa, Guam, and the Commonwealth of the Northern Mariana 
Islands, but this provision only can be used for such vehicles in any 
of those locations if low sulfur gasoline is determined by the 
Administrator to be unavailable in that specific location.
* * * * *

0
5. Section 86.1845-04 is amended by revising paragraph (a)(3) to read 
as follows:


Sec.  86.1845-04  Manufacturer in-use verification testing 
requirements.

    (a) * * *
    (3) Upon a manufacturer's written request, prior to in-use testing, 
that presents information to EPA regarding pre-conditioning procedures 
designed solely to remove the effects of high sulfur in gasoline from 
vehicles produced through the 2007 model year, EPA will consider 
allowing such procedures on a case-by-case basis. EPA's decision will 
apply to manufacturer in-use testing conducted under this section and 
to any in-use testing conducted by EPA. Such procedures are not 
available for complete HDVs. After the 2007 model year, this provision 
can be used only for in-use vehicles in American Samoa, Guam, and the 
Commonwealth of the Northern Mariana Islands, but this provision only 
can be used for such vehicles in any of those locations if low sulfur 
gasoline is determined by the Administrator to be unavailable in that 
specific location.
* * * * *

0
6. Section 86.1846-01 is amended by revising paragraph (a)(4) to read 
as follows:


Sec.  86.1846-01  Manufacturer in-use confirmatory testing 
requirements.

    (a) * * *
    (4) Upon a manufacturer's written request, prior to in-use testing, 
that presents information to EPA regarding pre-conditioning procedures 
designed solely to remove the effects of high sulfur in gasoline from 
vehicles produced through the 2007 model year, EPA will consider 
allowing such procedures on a case-by-case basis. EPA's decision will 
apply to manufacturer in-use testing conducted under this section and 
to any in-use testing conducted by EPA. This provision does not apply 
to heavy-duty vehicles and engines. After the 2007 model year, this 
provision can be used only for in-use vehicles in American Samoa, Guam, 
and the Commonwealth of the Northern Mariana Islands, but this 
provision only can be used for such vehicles in any of those locations 
if low sulfur gasoline is determined by the Administrator to be 
unavailable in that specific location.
* * * * *
 [FR Doc. E6-22310 Filed 12-27-06; 8:45 am]
BILLING CODE 6560-50-P