[Federal Register Volume 73, Number 49 (Wednesday, March 12, 2008)]
[Proposed Rules]
[Pages 13163-13167]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-4915]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[EPA-HQ-2005-0036; FRL-8542-2]
RIN 2060-AO89


Control of Hazardous Air Pollutants From Mobile Sources: Early 
Credit Technology Requirement Revision

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to revise the February 26, 2007 mobile source 
air toxics rule's requirements that specify the benzene control 
technologies that qualify a refiner to generate early benzene credits. 
We are proposing to allow another specific benzene control technology, 
benzene alkylation, in addition to the four operational or 
technological changes that the 2007 rule currently allows. We are also 
proposing a general provision that would allow a refiner to submit a 
request to EPA to approve other benzene-reducing operational changes or 
technologies for the purpose of generating early credits. In the 
``Rules and Regulations'' section of this Federal Register we are 
revising the February 26, 2007 rule as discussed above via a direct 
final rule without a prior proposed rule. If we receive no adverse 
comment, we will not take further action on this proposed rule.

DATES: Written comments must be received by April 11, 2008.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
2005-0036, by mail to: EPA-HQ-2005-0036, Environmental Protection 
Agency, Mailcode: 2822T, 1200 Pennsylvania Ave., NW., Washington, DC 
20460. Comments may also be submitted electronically or through hand 
delivery/courier by following the detailed instructions in the 
ADDRESSES section of the direct final rule located in the rules section 
of this Federal Register.

FOR FURTHER INFORMATION CONTACT: Christine Brunner, Office of 
Transportation and Air Quality, Assessment and Standards Division, 
Environmental Protection Agency, 2000 Traverwood, Ann Arbor, MI 48105; 
telephone number: (734) 214-4287; fax number: (734) 214-4816; e-mail 
address: [email protected]. Alternative contact: Assessment and 
Standards Division Hotline, telephone number: (734) 214-4636; e-mail 
address: [email protected].

SUPPLEMENTARY INFORMATION:

Why is EPA Issuing This Proposed Rule?

    This document proposes to revise the early credit technology 
requirement under the MSAT2 benzene rule. We have published a direct 
final rule that takes this action in the ``Rules and Regulations'' 
section of this Federal Register because we view this as a 
noncontroversial action and anticipate no adverse comment. We have 
explained our reasons for this action in the preamble to the direct 
final rule.
    If we receive no adverse comment, we will not take further action 
on this proposed rule. If we receive adverse comment, we will withdraw 
the direct final rule and it will not take effect. We would address all 
public comments in any subsequent final rule based on this proposed 
rule.
    We do not intend to institute a second comment period on this 
action. Any parties interested in commenting must do so at this time. 
For further information, please see the information provided in the 
ADDRESSES section of this document.

Does this Action Apply to Me?

    This action may affect you if you produce gasoline. The following 
table gives some examples of entities that may have to follow the 
regulations.

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               Category                  NAICS \1\ codes    SIC \2\ codes                    Examples of potentially regulated entities
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Industry..............................            324110              2911  Petroleum Refiners.
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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 action. Other types of entities not 
listed in the table could also be affected. To decide whether your 
organization might be affected by this action, you should carefully 
examine today's proposed action and the existing regulations in 40 CFR 
part 80. If you have any questions regarding the applicability of this 
action to a

[[Page 13164]]

particular entity, consult the persons listed in the preceding FOR 
FURTHER INFORMATION CONTACT section.

Outline of This Preamble

I. Background
II. Today's Action
III. Environmental and Economic Impact
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 & Safety Risks
    H. Executive Order 13211: Actions that Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
Statutory Provisions and Legal Authority
List of Subjects

I. Background

    The Mobile Source Air Toxics rule (MSAT2), published on February 
26, 2007 (72 FR 8428), requires that refiners and importers produce 
gasoline that has an annual average benzene content of 0.62 volume 
percent (vol%) or less, beginning in 2011. (See Sec.  80.1230(a).) The 
rule also requires that no refiner or importer have an actual average 
gasoline benzene level greater than 1.3 volume percent. After achieving 
an actual annual average benzene level of 1.3 vol%, refiners and 
importers may use benzene credits to reduce their average benzene level 
to 0.62 vol%. Refiners may generate benzene credits for their own use 
or to sell to others, in two ways. Once the program begins in 2011, a 
refiner generates credits (known as standard credits) when its average 
annual gasoline benzene level is less than 0.62 vol%. Importers can 
also generate standard credits. Refiners may also generate credits 
prior to 2011.\1\ These credits are called early credits. The final 
rule allowed for the generation of early benzene credits in any annual 
averaging period prior to 2011 (i.e., 2008, 2009, and 2010), as well as 
for the partial year period June 1--December 31, 2007. Early credits 
are generated on a refinery basis. In order to generate early credits, 
a refinery must meet several requirements:
    (1) Establish a benzene baseline based on the average benzene level 
of the gasoline produced at the refinery during the two-year period 
2004-05. (See Sec.  80.1285.)
    (2) Make operational changes or improvements in benzene control 
technology that will result in real benzene reductions. (See Sec.  
80.1275(d).)
    (3) Achieve an annual average benzene level at least 10% lower than 
its baseline level. (See Sec.  80.1275(a)).
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    \1\ Importers are not allowed to generate early credits because 
they do not have the ability to make the benzene reduction 
technology changes that would lower benzene levels in the gasoline 
pool.
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    In Sec.  80.1275(d)(1) of the MSAT2 final rule, we specified four 
types of operational changes and benzene control technology 
improvements that would allow a refinery to qualify for generating 
early credits if it implemented the changes after 2005 and if it also 
met the other related requirements. These operational changes and 
technology improvements are:
    (1) Treating the heavy straight run naphtha entering the reformer 
using light naphtha splitting and/or isomerization.
    (2) Treating the reformate stream exiting the reformer using 
benzene extraction or benzene saturation.
    (3) Directing additional refinery streams to the reformer for 
treatment as described in (1) and (2) above.
    (4) Directing reformate streams to other refineries with treatment 
capabilities as described in (2) above.
    We included in this list all the strategies we thought would reduce 
benzene and be cost-effective. The provision was intended to not allow 
early credit generation solely by benzene reductions achieved through 
ethanol blending. A refinery needs to implement at least one of the 
listed improvements.
    The final rule did not provide a way for EPA to consider 
alternative means of reducing benzene, no matter how efficacious the 
alternative might be. Soon after the rule was finalized, it came to our 
attention that at least one refinery had plans to install benzene 
alkylation technology. Benzene alkylation is not one of the four 
operational or technological changes enumerated in the final rule. 
Although EPA regards benzene alkylation as a legitimate benzene 
reduction technology, we did not expect it to be used. (See the 
Regulatory Impact Analysis (EPA 420-R-07-002, February 2007), Chapter 
6, Page 36.)

II. Today's Action

    We published a Questions and Answers document related to the MSAT2 
program on August 16, 2007. (http://epa.gov/otaq/regs/toxics/420f07053.pdf) In that document, we specifically addressed benzene 
alkylation and indicated that benzene alkylation meets the intent of 
the technology requirement for early credits. As discussed in the 
preamble of the final rule, early credits are generated based on 
innovations in gasoline benzene control technology that result in real 
benzene reductions prior to the start of the program in 2011. (See 72 
FR 8486.) The use of benzene alkylation directly results in lower 
gasoline benzene levels.
    We are proposing to revise Sec.  80.1275(d)(1) to include benzene 
alkylation in the list of acceptable benzene reduction operational and 
technological strategies. We are also proposing a general provision 
that would allow a refiner to petition EPA to use an operational or 
technological change that is not listed in the regulation for the 
purpose of generating early credits. The refiner would have to 
demonstrate that the benzene control technology improvement or 
operational change results in a net reduction in the refinery's average 
gasoline benzene level, exclusive of benzene reductions due simply to 
blending practices. The petition would have to be submitted to EPA 
prior to the start of the first averaging period in which the refinery 
plans to generate early credits. EPA expects it would act on such a 
petition before the end of that averaging period. The refiner would 
also have to provide additional information requested by EPA.
    The other requirements for generating early credits are unchanged. 
These include submitting a benzene baseline, reducing the refinery's 
baseline benzene level by at least 10% in a given averaging period, and 
not moving gasoline or blendstock streams between refineries for the 
purpose of generating early credits (See 72 FR 8486.)

III. Environmental and Economic Impact

    We believe there will be no negative environmental or economic 
impacts resulting from the proposed changes. This action would allow 
those companies that have alternative means or strategies for reducing 
gasoline benzene to request EPA approval to use them for the purpose of 
generating early benzene credits. Average gasoline benzene levels from 
such refiners would decrease faster and earlier than if they had not 
generated early credits, and such credits would help provide for a 
robust credit pool when the program starts in 2011.

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IV. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    This action would revise the February 26, 2007 mobile source air 
toxics rule's requirements that specify the benzene control 
technologies that qualify a refiner to generate early benzene credits. 
It would allow another specific benzene control technology, benzene 
alkylation, to be used for the purpose of generating early credits, and 
would allow a refiner to submit a request to EPA to approve other 
benzene-reducing operational changes or technologies for the purpose of 
generating early credits. This action is not expected to have an annual 
impact on the economy of more than $100 million, nor does it raise any 
novel legal or policy issues. This action is not a ``significant 
regulatory action'' under the terms of Executive Order 12866 (58 FR 
51735, October 4, 1993) and is therefore not subject to review under 
the Executive Order.

B. Paperwork Reduction Act

    This proposed action would not impose an information collection 
burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 
3501 et seq because the proposed amendments do not change the 
information collection requirements of the underlying rule.
    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

    EPA has determined that it is not necessary to prepare a regulatory 
flexibility analysis in connection with this proposed rule because this 
action would not have a significant economic impact on a substantial 
number of small entities.
    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.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.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.
    This proposed 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. 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. 
This proposed rule simply modifies the original rule in a limited 
manner, and would not significantly change the original rule. Thus, 
this proposed rule is not subject to the requirements of sections 202 
and 205 of the UMRA.
    EPA has determined that this proposed rule contains no regulatory 
requirements that might significantly or uniquely affect small 
governments, because it applies only to parties that produce 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 would 
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 of gasoline and 
would not alter State authority to regulate these entities. The 
amendments would 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

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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, as specified 
in Executive Order 13175. It would 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 proposed rule would amend 
existing regulatory provisions applicable only to producers of gasoline 
and would impose no direct costs on tribal 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'' (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.
    This proposed rule is not subject to Executive Order 13045 because 
it is not an economically significant regulatory action as defined in 
Executive Order 12866.

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, 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 involve technical standards. 
Therefore, EPA did not consider the use of any voluntary consensus 
standards.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes 
federal executive policy on environmental justice. Its main provision 
directs federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies and activities on minority populations and low-income 
populations in the United States.
    EPA has determined that this proposed rule will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations. We believe there will be 
no negative environmental or economic impacts resulting from the 
proposed changes compared to the February 26, 2007 rule this action 
proposes to modify.

Statutory Provisions and Legal Authority

    The statutory authority for the fuels controls in this 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 this proposal, including recordkeeping 
requirements, comes from sections 114(a) and 301(a) of the CAA.

List of Subjects in 40 CFR Part 80

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

    Dated: March 6, 2008.
Stephen L. Johnson,
Administrator.
    For the reasons set forth in the preamble, 40 CFR part 80 is 
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, 7542, 7545 and 7601(a).

    2. Section 80.1275 is amended as follows:
    a. By adding paragraph (d)(1)(v).
    b. By redesignating paragraph (d)(2) as paragraph (d)(3).
    c. By adding paragraph (d)(2).


Sec.  80.1275  How are early benzene credits generated?

* * * * *
    (d) * * *
    (1) * * *
    (v) Providing for benzene alkylation.
    (2)(i) A refiner may petition EPA to approve, for purposes of 
paragraph (d)(1) of this section, the use of operational changes and/or 
improvements in benzene control technology that are not listed in 
paragraph (d)(1) of this section to reduce gasoline benzene levels at a 
refinery.
    (ii) The petition specified in paragraph (d)(2)(i) of this section 
must be sent to: U.S. EPA, NVFEL-ASD, Attn: MSAT2 Early Credit Benzene 
Reduction Technology, 2000 Traverwood Dr., Ann Arbor, MI 48105.
    (iii) The petition specified in paragraph (d)(2)(i) of this section 
must show how the benzene control technology improvement or operational 
change results in a net reduction in the refinery's average gasoline 
benzene level, exclusive of benzene reductions due simply to blending 
practices.
    (iv) The petition specified in paragraph (d)(2)(i) of this section 
must be submitted to EPA prior to the start of the first averaging 
period in which the refinery plans to generate early credits.
    (v) The refiner must provide additional information as requested by 
EPA.
    (3) Has not included gasoline blendstock streams transferred to, 
from,

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or between refineries, except as noted in paragraph (d)(1)(iv) of this 
section.
* * * * *
 [FR Doc. E8-4915 Filed 3-11-08; 8:45 am]
BILLING CODE 6560-50-P