[Federal Register Volume 75, Number 39 (Monday, March 1, 2010)]
[Rules and Regulations]
[Pages 9107-9111]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-4085]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[EPA-HQ-OAR-2008-0924; FRL-9119-3]
RIN 2060-AP40


Regulation of Fuels and Fuel Additives: Federal Volatility 
Control Program in the Denver-Boulder-Greeley-Ft. Collins-Loveland, CO, 
1997 8-Hour Ozone Nonattainment Area

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: This action establishes an applicable standard of 7.8 pounds 
per square inch (psi) Reid vapor pressure (RVP) under the federal 
volatility control program in the Denver-Boulder-Greeley-Ft. Collins-
Loveland, Colorado, 1997 8-hour ozone nonattainment area during the 
high ozone season--June 1st to September 15th of each year-- beginning 
in 2010. This action requires the use of 7.8 psi RVP gasoline in Adams, 
Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties, 
and in portions of Larimer, and Weld counties.

DATES: This final rule is effective March 31, 2010.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. EPA-HQ-OAR-2008-0924. All documents in the docket are listed on the 
http://www.regulations.gov Web site. 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, is not placed on the Internet and will be 
publicly available only in hard copy form.

[[Page 9108]]

Publicly available docket materials are available either electronically 
through http://www.regulations.gov or in hard copy at the Air and 
Radiation Docket, EPA/DC, EPA West, Room 3334, 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 and Radiation Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Kurt Gustafson, Office of 
Transportation and Air Quality, Transportation and Regional Programs 
Division, Mailcode 6406J, Environmental Protection Agency, 1200 Penn 
Ave., NW., Washington, DC 20460; telephone number: (202) 343-9219; fax 
number: (202) 343-9219; e-mail address: [email protected].

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does This Action Apply to Me?

    Regulated Entities. Entities potentially affected by this rule are 
fuel producers and distributors who do business in Colorado. Regulated 
entities include:

------------------------------------------------------------------------
                                                                 NAICS
          Examples of potentially regulated entities           codes \a\
------------------------------------------------------------------------
Petroleum Refineries.........................................     324110
Gasoline Marketers and Distributors..........................     424710
                                                                  424720
Gasoline Retail Stations.....................................     447110
Gasoline Transporters........................................     484220
                                                                  484230
------------------------------------------------------------------------
\a\ North American Industry Classification System (NAICS).

    This table provides only a guide for readers regarding entities 
likely to be regulated by this action. You should carefully examine the 
regulations in 40 CFR 80.27 to determine whether your facility is 
impacted. If you have further questions, call the person listed in the 
FOR FURTHER INFORMATION CONTACT section of this preamble.

II. Background

    Section 211(h) of the Clean Air Act (CAA), requires that EPA 
promulgate regulations establishing a maximum RVP of 9.0 psi for 
gasoline introduced into commerce during the high ozone season. It also 
provides that EPA shall ``establish more stringent Reid Vapor Pressure 
standards in a nonattainment area as the Administrator finds necessary 
to generally achieve comparable evaporative emissions (on a per-vehicle 
basis) in nonattainment areas, taking into consideration the 
enforceability of such standards, the need of an area for emission 
control, and economic factors.'' In today's action, EPA is establishing 
an applicable standard for gasoline at 7.8 pounds per square inch (psi) 
under the federal volatility control program in the Denver-Boulder-
Greeley-Ft. Collins-Loveland, Colorado 8-hour ozone nonattainment area 
(as codified in volume 40 of the Code of Federal Regulations (CFR) Part 
81) during the high ozone season. This action requires the use of 7.8 
psi RVP gasoline in Adams, Arapahoe, Boulder, Broomfield, Denver, 
Douglas and Jefferson counties, and in portions of Larimer and Weld 
counties.
    Gasoline with 7.8 psi RVP is already required in the former 1-hour 
ozone nonattainment area, which represents a significant portion of the 
fuel used in the newly expanded area. The change codified in this 
action extends the low RVP fuel requirement to portions of Larimer and 
Weld counties and into the remaining portions of Arapahoe, Adams, 
Boulder and Broomfield counties. Denver is located in Petroleum 
Administration for Defense Districts (PADD) IV, which is the most 
isolated area within the 48 lower states of the U.S. in terms of 
supply. PADD IV includes the Rocky Mountain states (Montana, Idaho, 
Wyoming, Utah, and Colorado). Gasoline supply to the Denver market 
originates from 6 main refiners. These refiners vary in size, refining 
capacity and complexity. The refineries are: Suncor (Commerce City, 
CO), Valero Corp. (Commerce City, CO), Conoco-Phillips (Borger, TX), 
Valero Corp. (Sunray, TX), Sinclair Oil Corp. (Casper and Rawlings, 
WY), and Frontier Oil Corp. (Cheyenne, WY and El Dorado, KS).

III. Final Action

    EPA is establishing an applicable standard of 7.8 psi RVP under the 
federal volatility control program in the Denver-Boulder-Greeley-Ft. 
Collins-Loveland, Colorado, 1997 8-hour ozone nonattainment area (as 
codified in volume 40 of the Code of Federal Regulations (CFR) Part 81) 
during the high ozone season--June 1st to September 15th of each year-- 
beginning in 2010. This action requires the use of 7.8 psi RVP gasoline 
in Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson 
counties, and in portions of Larimer, and Weld counties.
    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 30 days after publication in the 
Federal Register.

IV. Response to Comments

    Only one comment was submitted in response to EPA's Notice of 
Proposed Rulemaking. Frontier Refining, having identified themselves as 
a small refiner, commented that it would be unable to provide 
supplemental volumes of low (7.8 psi) RVP gasoline above its current 
volume to the Denver metro area and asked for small refiner relief. 
Frontier commented that it supplies 3,000 barrels a day of conventional 
(9.0 psi) gasoline that would no longer be available for the market in 
the 2010 summer control period when a lower vapor pressure is required, 
but that it would have the ability to produce the low RVP gasoline for 
the 2011 summer control period.
    EPA understands the commenter's concerns. We believe that granting 
an exemption that would allow Frontier to sell 9.0 RVP fuel in areas 
where 7.8 RVP fuel is required would create significant enforcement 
issues. The 3,000 barrel per day allocation that Frontier Refining 
indicates that it would be unable to convert to lower RVP fuel 
represents approximately 3.7% of the total volume supplied daily to the 
Denver 8-hour nonattainment area. Although this volume of 9.0 fuel, 
which would be sold in the 7.8 areas, would be relatively small, EPA 
would likely not be able to determine if fuel at a retail outlet having 
an RVP exceeding 7.8 psi is in violation either because it is fuel from 
a refinery without an exemption, or fuel supplied by Frontier Refining. 
Further, we believe there are other factors such as economic 
incentives, for distributors and retailers to sell as much 9.0 RVP fuel 
supplied by Frontier Refining as possible in the 7.8 RVP areas, due to 
price differentials between products that would exacerbate this 
problem. This would likely result in more 9.0 RVP fuel being sold in 
the 7.8 RVP area than predicted and thus, affect the emissions 
reductions needed in the area. Also, we believe that distributors and 
retailers might sell, within the 7.8 RVP fuel

[[Page 9109]]

areas, 9.0 RVP fuel produced by large refiners to obtain the advantage 
of the price differential. We do not believe that requiring product 
transfer document information, indicating that 9.0 RVP fuel is being 
supplied by a small refiner and is useable in the 7.8 RVP fuel areas, 
would alleviate the enforcement issues largely because fuel is fungible 
as a result of mixing at terminals. This would mean much larger volumes 
of fuel would be eligible for the exemption than just the volume 
supplied by Frontier Refining, making enforcement by retail sampling 
and testing difficult.
    Additionally, we have significant concerns about the emission 
increases associated with providing this relief, even if the 
enforcement problems noted above could be resolved to limit the fuel 
receiving the relief. This is because the Denver-Boulder-Greeley-Ft. 
Collins-Loveland 8-hour ozone nonattainment area is required to attain 
the standard as expeditiously as practicable, but no later than 
November 2010. On June 18, 2009, the State submitted an Ozone SIP 
revision with a dispersion modeled attainment demonstration. The 
attainment demonstration's truncated 2010 design value was 84 ppb; the 
modeled design value, however, was 84.8 ppb which is 0.2 ppb below a 
violation for the 1997 .08 ppm ozone NAAQS. In addition, the State's 
supporting documentation and SIP revision submittal also contain 
information (see submission in docket EPA-HQ-OAR-2008-0924) showing 
that 7.8 RVP fuel will provide additional reductions of VOC emissions, 
which will help ensure the success of Colorado's ozone action plan. 
Specifically, implementation of this fuel requirement will provide 
approximately three tons per day of additional VOC emission reductions, 
which will help the area towards its attainment goal in 2010. As shown 
by the attainment demonstration, there is no room in the area for 
increased emissions. The risk of failure to attain increases 
significantly if the area does not get all the emission reductions 
expected from the gasoline volatility program. We also believe the 
State's request to implement this program in the expanded 8-hour 
nonattainment area is a valid and reasonable request. We note that the 
economic hardship for Frontier Refining is limited to the 2010 ozone 
season only, and that there are other markets available for its 9.0 psi 
gasoline, which means that its product would not be stranded by this 
rule. Therefore, we believe that the risk of failure to attain, and the 
consequences connected to that outcome, is too great to warrant 
granting the relief requested.
    Further, we have spoken to other refiners that supply the market 
and all have expressed support for the rule. And at least one refiner 
has stated it has the capacity to provide more low RVP gasoline to the 
area; therefore, it is reasonable to expect that the difference can be 
replaced with low RVP gasoline from other sources. In this case the 
clear need for the state to receive the emission reductions expected 
from this rule, both during the summer of 2010 and later, and the 
apparent ability of the industry overall to supply the required low RVP 
gasoline warrant not providing the individualized exception to this 
rule requested by Frontier Refining.

V. Environmental Impact

    The Colorado Department of Public Health and Environment estimated 
that 2.7 tons per day of hydrocarbon (HC) emissions would be reduced 
from lowering gasoline volatility to 7.8 psi RVP in the expanded Non-
Attainment Area (see docket for analysis).

VI. 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 
therefore is not subject to review under the EO.
    The Colorado Department of Public Health and Environment prepared 
an analysis of the potential costs and benefits associated with this 
action. This analysis is contained in ``Analysis of Expansion of Low 
RVP Area by the State of Colorado''. A copy of the analysis is 
available in the docket for this action.

B. Paperwork Reduction Act

    This action does not impose any new information collection burden. 
However, the Office of Management and Budget (OMB) has previously 
approved the information collection requirements contained in the 
existing regulations, the phase I and phase 2 volatility rules (55 FR 
11868, March 22, 1989 and 55 FR 23658, June 11, 1990) under the 
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and 
has assigned OMB control number 2060-0178. 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 final rule on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. The small 
entities directly regulated by this final rule are refiners, importers 
or blenders of gasoline that choose to produce or import low RVP 
gasoline for sale in the expanded portion of the Denver-Boulder-
Greeley-Ft. Collins-Loveland, CO, 8-hour ozone nonattainment area not 
already covered by low RVP requirements, and gasoline distributors and 
retail stations in those areas. We have determined that only one small 
refiner would be affected by the low RVP requirements. Other small 
entities, such as gasoline distributors and retail stations located in 
the area that will become a covered area as a result of today's action, 
will be subject to the same requirements as those small entities which 
are located in the current covered area. EPA believes the impacts these 
small entities (e.g. small blenders, importers, retailers, etc) would 
occur primarily in the form of a slightly higher wholesale gasoline 
price which would then be passed along in product price increases. In 
the proposed rule, we estimated low RVP incremental costs to be 0.45 to 
3.4 cents/gallon during the summer volatility season. There would be no 
fuel or price difference outside the summer control season. In the 
proposed rule, we indicated that out of total 3.4 million gallons of 
gasoline consumed per day in the Denver-Boulder-Greeley-Ft. Collins-
Loveland area during the control season, approximately 133,000 gallons 
per day of fuel would need to meet the more stringent low RVP standard. 
Applying an average price of $2.50 per gallon for gasoline, the

[[Page 9110]]

incremental costs to produce the needed volume of low RVP gasoline 
equates to 0.002% to 0.02% of the total yearly consumer cost of 
gasoline in the Denver-Boulder-Greeley-Ft. Collins-Loveland NAA. For 
any one retail station that would have to convert entirely from a 
stream of 9.0 psi gasoline to low RVP gasoline in the summer season, 
the incremental costs, applying the same $2.50 per gallon retail price, 
would be 0.2% to 1.4% of the gas revenue during the control season or 
0.05% to 0.4% on an annual basis. However, since all wholesale 
suppliers would increase prices by about the same amount, the 
competitive environment for small entities purchasing that gasoline 
should not be affected significantly.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and tribal governments, in 
the aggregate, or to the private sector of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost effective or least burdensome alternative 
that achieves the objectives of the rule. The provisions of section 205 
do not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why that 
alternative was not adopted. Before EPA establishes any regulatory 
requirements that may significantly or uniquely affect small 
governments, including tribal governments, it must have developed under 
section 203 of the UMRA a small government agency plan. The plan must 
provide for notifying affected small governments, enabling officials of 
affected small governments to have meaningful and timely input in the 
development of EPA regulatory proposals with significant Federal 
intergovernmental mandates, and informing, educating, and advising 
small governments on compliance with the regulatory requirements.
    EPA has determined that this rule does not contain a Federal 
mandate that may result in expenditures of $100 million or more for 
State, local, and tribal governments, in the aggregate, or the private 
sector in any one year. Today's rule affects portions of the Denver-
Boulder-Greeley-Ft. Collins-Loveland, CO, 8-hour ozone nonattainment 
area that were not previously part of the 1-Hour ozone nonattainment 
area. EPA estimates that 133,000 gallons a day of gasoline would be 
affected by this rule; resulting in an economic impact of less than 
$700,000 per summer. Today's rule, therefore, is not subject to the 
requirements of sections 202 and 205 of the UMRA.
    EPA has determined that this rule contains no regulatory 
requirements that might significantly or uniquely affect small 
governments.

E. Executive Order 13132: Federalism

    Under Executive Order 13132, EPA may not issue an action that has 
federalism implications and that preempts State law, unless the Agency 
consults with State and local officials early in the process of 
developing the proposed action.
    EPA has concluded that this action will have federalism 
implications. Moreover, it also may preempt State law. Current gasoline 
performance standards adopted by the state require 9.0 psi gasoline in 
the affected area where this rule would require 7.8 psi gasoline. 
Accordingly, EPA provides the following federalism summary impact 
statement as required by section 6(c) of Executive Order 13132.
    EPA consulted with State and local officials early in the process 
of developing the proposed action to permit them to have meaningful and 
timely input into its development. The State indicated to EPA (see 
State's docket submission) that the use of 7.8 psi gasoline in the 
entire Denver-Boulder-Greeley-Ft. Collins-Loveland, CO, 8-hour ozone 
nonattainment area was necessary to ensure the success of Colorado's 
ozone action plan. The state requested EPA undertake this rulemaking to 
update the boundaries of the low RVP summer gasoline program to 
correspond to current 8-hour ozone nonattainment area boundaries. 
Gasoline with 7.8 psi RVP is already required in the former 1-hour 
ozone nonattainment area, which represents a significant portion of the 
fuel used in the newly expanded area. The change requested by the state 
and codified in this action extends the low RVP fuel requirement to 
portions of Larimer and Weld counties and into the remaining portions 
of Arapahoe, Adams, Boulder and Broomfield counties.

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

    This action does not have tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000). This final rule 
impacts portions of the Denver-Boulder-Greeley-Ft. Collins-Loveland, 
Colorado, 1997 8-hour ozone nonattainment area not previously part of 
the 1-Hour nonattainment area. There are no Tribal lands in the 
regulated area. Thus, Executive Order 13175 does not apply to this 
action.

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

    This action is not subject to EO 13045 (62 FR 19885, April 23, 
1997) because it is not economically significant as defined in EO 
12866, and because the Agency does not believe the environmental health 
or safety risks addressed by this action present a disproportionate 
risk to children.

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. NTTAA directs EPA to 
provide Congress, through OMB, explanations when the Agency decides not 
to use available and applicable voluntary consensus standards.
    This action does not involved technical standards. Therefore, EPA 
did not consider the use of any voluntary consensus standards.

[[Page 9111]]

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

    Executive Order (EO) 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 final rule will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it does not 
affect the applicable 8-hour ozone NAAQS which establishes the level of 
protection provided to human health or the environment. This rule will 
tighten the applicable volatility standard of gasoline during the 
summer resulting in slightly lower mobile source emissions. Therefore 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations are not an anticipated 
result.

VII. Legal Authority and Statutory Provisions

    Authority for this final action is in sections 211(h) and 301(a) of 
the Clean Air Act, 42 U.S.C. 7545(h) and 7601(a).

List of Subjects in 40 CFR Part 80

    Administrative practice and procedures, Air pollution control, 
Environmental protection, Fuel additives, Gasoline, Motor vehicle and 
motor vehicle engines, Motor vehicle pollution, Penalties, Reporting 
and recordkeeping requirements.

    Dated: February 19, 2010.
Lisa P. Jackson,
Administrator.


0
Title 40, chapter I, part 80 of the Code of Federal Regulations is 
amended as follows:

PART 80--[AMENDED]

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

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


0
2. In Sec.  80.27(a)(2)(ii), the table is amended by revising the entry 
for Colorado and footnote 2 to read as follows:


Sec.  80.27  Controls and prohibitions on gasoline volatility.

    (a) * * *
    (2) * * *
    (ii) * * *

                                                    Appicable Standards \1\ 1992 and Subsequent Years
--------------------------------------------------------------------------------------------------------------------------------------------------------
                               State                                       May              June             July            August         September
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
                                                                      * * * * * * *
Colorado \2\.......................................................             9.0              7.8              7.8              7.8              7.8
 
                                                                      * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Standards are expressed in pounds per square inch (psi).
\2\ The Colorado Covered Area encompasses the Denver-Boulder-Greeley-Ft. Collins-Loveland, CO, 8-hour ozone nonattainment area (see 40 CFR part 81).

* * * * *
[FR Doc. 2010-4085 Filed 2-26-10; 8:45 am]
BILLING CODE 6560-50-P