[Federal Register Volume 65, Number 175 (Friday, September 8, 2000)]
[Rules and Regulations]
[Pages 54423-54433]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-22808]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80
[FRL-6864-8]
Establishment of Alternative Compliance Periods Under the Anti-
Dumping Program
AGENCY: Environmental Protection Agency (EPA).
ACTION: Direct final rule.
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SUMMARY: The Clean Air Act as amended in 1990 (``the Act'') directs the
Environmental Protection Agency (``EPA'' or ``we'') to issue
regulations requiring reformulated gasoline for major metropolitan
areas with the worst ozone air pollution problems. Other areas with
ozone levels exceeding the public health standards may voluntarily
choose to participate in the federal reformulated gasoline program. In
order to ensure that the ``dirtier'' components of reformulated
gasoline are not dumped into gasoline sold in areas not participating
in the reformulated gasoline program (``conventional gasoline'' areas),
the Act requires EPA to ensure that the quality of conventional
gasoline does not fall below 1990 levels. The Act also mandates that we
establish an appropriate compliance period or compliance periods
associated with meeting the anti-dumping standards. Under the existing
regulations for reformulated gasoline and anti-dumping, the compliance
period is one year. However, we believe that in certain limited
circumstances a longer conventional gasoline anti-dumping may be
appropriate on a temporary basis. Such an alternative compliance period
is only appropriate for a refiner who produces conventional gasoline
and who is starting up a refinery and facing significant hardship in
complying with the anti-dumping statutory baseline NOX
standard. Moreover, we believe that it is appropriate for any refinery
subject to an alternative compliance period to meet additional
substantive and administrative requirements to ensure that there is no
environmental detriment as a result of the longer averaging period.
This direct final rule sets forth procedures for
[[Page 54424]]
establishing alternative compliance periods under the anti-dumping
program and the standards applicable to refineries operating under such
compliance periods.
DATES: This direct final rule is effective October 23, 2000, unless we
receive adverse comments or a request for a public hearing by October
10, 2000. If the Agency receives adverse comment or a request for
public hearing by October 10, 2000, we will withdraw this direct final
rule by publishing a timely withdrawal in the Federal Register.
ADDRESSES: If you wish to submit comments or request a public hearing,
you should send any written materials to the docket address listed and
to Anne Pastorkovich, Attorney/Advisor, Transportation & Regional
Programs Division, U.S. Environmental Protection Agency, 1200
Pennsylvania Avenue, NW (6406J), Washington, DC 20460, (202) 564-8987.
Materials relevant to this direct final rule have been placed in docket
A-2000-27 located at U.S. Environmental Protection Agency, Air Docket
Section, Room M-1500, 401 M Street, SW, Washington, DC 20460. The
docket is open for public inspection from 8:00 a.m. until 5:30 p.m.,
Monday through Friday, except on Federal holidays. You may be charged a
reasonable fee for photocopying services.
FOR FURTHER INFORMATION CONTACT: If you would like further information
about this rule or to request a hearing, contact Anne Pastorkovich,
Attorney/Advisor, Transportation & Regional Programs Division, (202)
564-8987.
SUPPLEMENTARY INFORMATION:
I. Regulated Entities
Entities potentially regulated by the action are parties that
produce conventional gasoline. Regulated categories and entities
include:
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Category Examples
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Industry.................................. Gasoline refiners.
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This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists all entities that we are now aware could
potentially be regulated by this action. Other types of entities not
listed in this table could also be regulated by this action. To
determine whether your business is regulated by this action, you should
carefully examine the applicability criteria in part 80 of Title 40 of
the Code of Federal Regulations. If you have any questions regarding
the applicability of this action to a particular entity, consult the
person listed in the preceding section of this document.
II. Background
This section summarizes the anti-dumping program. Since refiners
who request flexibility under today's rule are likely to elect to use
sulfur-reducing technologies early in order to meet production
requirements under this rule, a brief overview of the Tier 2 gasoline
program is included as well.
The Anti-Dumping Program
The Clean Air Act required EPA to establish rules for reformulated
gasoline (RFG) designed to result in significant reductions in vehicle
emissions of ozone-forming and toxic air pollutants. Reformulated
gasoline is required to be used in specific metropolitan areas with the
worst ozone problems. Several other areas with ozone levels exceeding
the public health standard have voluntarily chosen to use RFG.
Additionally, the Act required us to establish regulations covering all
gasoline that is not reformulated. Such gasoline is called conventional
gasoline, and the standards governing it are called the anti-dumping
standards. We issued final reformulated gasoline and anti-dumping
regulations on December 15, 1993 \1\ and the standards in those
regulations became effective in January 1995.
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\1\ ``Regulaation of Fuels and Fuel Additives: Standard for
Reformulated and Conventional Gasoline--Final Rule,'' 59 FR 7812
(February 16, 1994). See 40 CFR part 80 subparts D, E, and F.
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The purpose of anti-dumping standards is to ensure that the quality
of a refiner's conventional gasoline does not get worse once the
reformulated gasoline program begins. To ensure that this does not
happen, the Act requires that each refiner's conventional gasoline be
at least as clean as the gasoline produced by that refiner during a
specific ``baseline'' year. The baseline reference year specified in
the Act is 1990. The anti-dumping program specifically governs the
exhaust toxics and NOX emissions of conventional gasoline.
These emissions are determined using the Complex Model, a tool which
uses the fuel specifications, or parameters, of a gasoline blend to
calculate the emissions associated with that gasoline. The fuel
parameters included in the Complex Model are aromatics, olefins,
benzene, sulfur, oxygen content and oxygenate type, the percent of fuel
evaporated at 200 deg.F and 300 deg.F (E200 and E300, respectively)
and Reid vapor pressure, or RVP.
Under the anti-dumping program, each refinery and importer has an
individual baseline consisting of a set of values for the Complex Model
fuel parameters and the exhaust toxics and NOX emissions
associated with those values representing the specification of the
gasoline that the refiner produced in 1990. An individual baseline can
be one of two types. The first type is the unique individual baseline.
A refinery or importer has a unique individual baseline if it was in
operation for at least 6 months in 1990 and had sufficient data and
supporting analysis to determine the actual quality of its 1990
gasoline to EPA's satisfaction. Those with unique individual baselines
also have an associated individual baseline volume, which is the volume
of gasoline produced or imported by that refiner in 1990. The other
type of individual baseline is the statutory baseline. The statutory
baseline consists of a set of fixed values for the Complex Model fuel
parameters and the emissions associated with those values which
represent the average quality of all gasoline produced or sold in the
United States in 1990. The summer portion of the statutory baseline was
specified in the Clean Air Act; the corresponding winter portion was
developed by EPA. Together, the summer and winter portions form the
annual average statutory baseline which is specified in 40 CFR Part
80.91(c)(5). There is no individual baseline volume for those
refineries or importers for which the statutory baseline is the
individual baseline.
Compliance with the anti-dumping requirements is determined on an
annual basis. Each batch of gasoline is evaluated under the appropriate
summer or winter portion of the Complex Model; the resulting emissions
calculated for batch are volume-weighted to determine the annual
average exhaust toxics and NOX emissions for the refinery or
importer. The resulting annual average emissions are compared to the
baseline emissions values to determine whether the refinery or importer
is in or out of compliance with its anti-dumping standards.
Section 211(k)(8)(D) of the Act directs us to establish ``an
appropriate compliance period or compliance periods'' to be used for
assessing compliance with the anti-dumping regulations. As mentioned
above, we have established a one year compliance period for anti-
dumping. A one year compliance period is consistent with other fuels
programs utilizing averaging and annual reporting, including the RFG
program. Generally, a one year compliance period is desirable because
it provides an effective monitoring period for environmental purposes
while permitting flexibility with respect
[[Page 54425]]
to averaging over the calendar year. A one year period gives more
assurance that gross violations will not occur before the violation is
discovered and appropriate action is taken and that those responsible
for the violation are held accountable. A one year period prevents a
company from violating for several years, generating a long-term
environmental detriment, and then going out of business before it can
be held accountable. A one year period is also simple for compliance
accounting purposes. Although we chose the one year compliance period
for the reasons just mentioned, we recognize that the Act permits us to
establish alternative anti-dumping compliance periods by regulation.
Tier 2 Gasoline
Since the passage of the 1990 Clean Air Act Amendments, the U.S.
has made significant progress in reducing emissions from passenger cars
and light trucks through implementation of programs like RFG and anti-
dumping. Nonetheless, due to increasing vehicle population and vehicle
miles traveled, passenger cars and light duty trucks will continue to
be significant contributors to air pollution. In light of this trend
and to build upon programs aimed at reducing emissions from motor
vehicles and motor vehicle fuels, EPA recently issued regulations
establishing lower sulfur content for all gasoline \2\ (i.e., ``Tier 2
gasoline'') and establishing stricter tailpipe emissions standards for
all passenger vehicles, including sport utility vehicles (SUVs),
minivans, and vans and pick-up trucks under 8,500 lbs. The Tier 2
program will also reduce ozone and particulate matter (PM) pollution.
Gasoline sulfur levels significantly affect NOX emissions.
Since NOX emissions are ozone precursors, a reduction in the
sulfur level of gasoline will reduce ozone pollution. The level of
gasoline sulfur control required under the Tier 2 program will also
benefit the environment by directly reducing emissions of sulfur
compounds.
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\2\ ``Control of Air Pollution from New Motor Vehicles: Tier 2
Motor Vehicles Emissions Standards and Gasoline Sulfur Control
Requirements--Final Rule,'' 65 FR 6698 (February 10, 2000). See also
40 CFR part 80 subpart H for regulations applicable to gasoline
sulfur.
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The Tier 2 gasoline standards will be fully implemented by 2006 by
all refiners except for those subject to geographic phase-in area (GPA)
requirements, who have until 2007, and certain other qualifying
refiners, who have until 2008. (If a hardship extension is granted, an
individual refiner may have until 2010 to meet the final standards.)
The Tier 2 program is structured to permit averaging in order to meet
the sulfur standard, with an average sulfur content standard of 30 ppm
and a per gallon sulfur limit of 80 ppm by the date of full
implementation. Benefits from the Tier 2 gasoline program may be seen
more immediately, as some refiners are expected to start lowering
sulfur levels as early as this year. Those who lead the way in reducing
sulfur earlier than required may generate marketable credits or
allotments. As with the RFG and anti-dumping programs, compliance is
demonstrated based upon a one year compliance period.
III. Today's Action
Need for and Purpose of Today's Action
As discussed above, section 211(k)(8)(D) of the Act directs EPA to
establish an appropriate compliance period or compliance periods for
the purpose of assessing compliance with anti-dumping requirements. At
the present time, the only compliance period that has been established
for anti-dumping is a one year compliance period. The one year
compliance period is consistent with the one year period established
under other existing fuels programs and, at the time the anti-dumping
regulations were developed, there was no compelling reason or
identified benefit to specifying any alternative compliance period.
We believe that achieving the Tier 2 gasoline sulfur reductions, at
the refinery level, as soon as possible is an extremely valuable
mechanism for reducing vehicle emissions, perhaps more so than any
other recently promulgated gasoline regulation. We are also aware of at
least one refinery in a start-up mode which would be able to achieve
the applicable Tier 2 gasoline sulfur reductions earlier than required,
but would not be able to comply with its anti-dumping standard, which
is the statutory baseline, in early production years. In order to
comply with its anti-dumping standard, the refiner would have to delay
the start-up process and significantly delay the time frame in which it
could produce gasoline meeting the Tier 2 gasoline sulfur standards.
Because we believe that achieving the Tier 2 gasoline sulfur levels
is critical to reducing ozone levels by reducing emissions of the ozone
precursor NOX (see the discussion in ``Summary of Today's
Action'' below), we believe it is appropriate to allow an alternative
anti-dumping compliance period for a refinery in start-up mode,
provided that the refiner can show that the refinery will achieve the
Tier 2 gasoline sulfur levels earlier than otherwise required. At the
same time, we want to ensure that no environmental detriment occurs as
a result of the flexibility we are providing, and have included other
requirements the refinery must meet which will provide the appropriate
environmental protection. The details of the flexibility are described
below.
Summary of Today's Action
We are permitting a refinery in start-up mode which is unable to
meet its anti-dumping standard during the start-up process, but which
would otherwise be able to meet the Tier 2 gasoline sulfur standards
earlier than required, to petition the Agency for an alternative
compliance period. The Tier 2 standards for most refiners take effect
in 2006. (See ``Tier 2 Gasoline,'' above, for a more detailed
discussion of refiner compliance dates.) A refinery eligible for this
relief must be starting up production of conventional gasoline and must
never have produced conventional gasoline that was subject to the anti-
dumping regulations. To ensure that the refinery will meet the
applicable Tier 2 gasoline standards early, the alternative compliance
period is limited to a two to five year span, as determined by the
Agency. Because of the other requirements associated with this rule, we
believe that a refinery would choose to request the shortest
alternative compliance period possible. Additionally, a refiner must
show that it would be unable to meet its anti-dumping NOX
requirement under the current, one year compliance period. While the
anti-dumping standard for a refinery involves both exhaust toxics and
NOX emissions, we are requiring that the proposed
alternative compliance period would only be available to a refinery
upon a showing that it would otherwise be unable to meet its
NOX standard. This is because sulfur significantly affects
NOX emissions,\3\ and decreasing sulfur will result in
significant NOX emission reductions by moving toward the
goal of the low sulfur levels required by the Tier 2 standards. Though
a refiner may have difficulty meeting its exhaust toxics anti-dumping
standard, for which fuel benzene and aromatics are the primary fuel
parameters, the refinery units which impact these two fuel parameters
are different than those used to reduce sulfur. (Most refineries will
need to install new equipment in order
[[Page 54426]]
to reduce sulfur to the levels required under the Tier 2 standards.)
Thus, reducing benzene and/or aromatics does not contribute to the goal
of achieving the Tier 2 gasoline sulfur levels early, and,
consequently, an alternative compliance period based on the inability
to meet the anti-dumping exhaust toxics standard would not be
appropriate given the considerations underlying today's rule.
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\3\ Under the Complex Model, the tool used to evaluate anti-
dumping performance, olefins is the other fuel parameter which
significantly impacts NOX emissions.
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In addition to meeting the Tier 2 gasoline sulfur standards early,
the gasoline produced by a refinery over the entire alternative
compliance period must result in a net NOX benefit (compared
to the statutory baseline) that is at least twice as large as the total
NOX deficit generated during the period of time during which
the refinery produced gasoline that did not comply with the statutory
baseline. Additionally, the refiner must purchase stationary source
NOX credits sufficient to offset any NOX deficit
generated (on a quarterly basis) and must meet the specific
requirements of this direct final rule, including additional reporting
requirements. By modifying the standards applicable to refineries with
an alternative compliance period, we are providing appropriate
assurance that no environmental disbenefit occurs as a result of
allowing an alternative compliance period.
When regulated entities cut emissions more than is required, the
``extra'' environmental benefit may be considered as a pollution
credit, usually measured in tons, that may be sold or banked for future
use. Emissions trading associations have been created to facilitate the
buying and selling of pollution credits. Marketable NOX
credits are currently generated through NOX reduction
programs in 13 states. In addition, there is a multi-state
NOX emission trading program operating in eight Northeastern
states that are members of the Ozone Transport Commission. Further
information on NOX trading programs is available on the
Internet at www.epa.gov/acidrain/programs.html.
As described below in ``How the Agency Will Act on a Petition'' and
``The Refiner's Responsibilities if a Petition is Granted,''
NOX credits purchased quarterly to offset any NOX
deficit must be held by a refinery that operates under an adjusted
compliance period under this rule. These banked credits function as
collateral against any NOX deficiency that the refiner
creates, to minimize the possibility of environmental harm in the event
the refinery does not fulfill its obligation under the other
requirements of this rule. If, as planned, the refinery eventually
produces gasoline that meets and then exceeds the NOX
baseline, the refiner may sell NOX credits equal to the
benefit produced during that quarter. If the refinery violates the
conditions under which its petition is granted, the NOX
credits may be forfeited. The intention of this provision is that
environment will suffer no net loss, although any NOX
deficit may occur in a different location than a NOX credit
was generated. Much of the gasoline in the U.S. is produced on the Gulf
Coast and other coastal areas and shipped throughout the country,
primarily by pipeline. Gasoline is fungible, and is normally
transported in pipelines mixed with other batches that meet the same
specifications. In general, it is not possible to predict where a
particular batch of gasoline included in larger shipment will end up;
as a result, it is not generally possible to predict where a
NOX deficit may occur. Similarly, it is not possible to
predict where the air quality benefit from the doubled payback of any
NOX deficit will occur.
Who May Petition for an Alternative Anti-Dumping Compliance Period
A refiner may petition EPA for an alternative compliance period for
any refinery that is starting up gasoline production for the first time
under the anti-dumping requirements, that is subject to the statutory
baseline, and that can demonstrate a significant hardship with regard
to producing gasoline conforming to the statutory baseline for
NOX in the early years of production. Flexibility with
regard to alternative anti-dumping compliance periods will be
particularly helpful for challenged refiners (as described in the Tier
2 gasoline sulfur rule), including small refiners; however, any refiner
who meets the threshold conditions above may submit a petition. The
petition may be for a domestic or foreign refinery. The refiner must
have specific plans to bring its gasoline into compliance with the
statutory baseline early enough through the alternative compliance
period in order to achieve the two-fold NOX payback.
Furthermore, the refiner must have specific and demonstrable plans to
produce gasoline to pay back any NOX deficit by the end of
the requested compliance period. For many refiners, these plans would
likely include early installation of sulfur-reducing technologies
necessary to meet the Tier 2 gasoline standards.
When Must Petitions Be Received?
A refiner who meets the threshold conditions may petition the
Agency for an alternative anti-dumping compliance period. For reasons
discussed in the preceding sections, we believe that the window during
which this flexibility is appropriate is the period before the Tier 2
gasoline program standards fully apply. Therefore, petitions for
alternative anti-dumping compliance periods of four or five years in
length must be received by no later than June 1, 2001. For an
alternative compliance period of two or three years in length, the
petition must be received no later than June 1, 2003. No alternative
anti-dumping compliance period may be designed to start, or requested
to start, after January 1, 2004 or to end after December 31, 2005.
What A Petition for an Alternative Anti-Dumping Compliance Period Must
Contain
A refiner may petition for an alternative anti-dumping compliance
period of two, three, four, or five years in length. The petition must,
at a minimum, contain:
The business name and address and any location(s) where
the refiner conducts operations.
The name and contact information for the responsible
corporate officer and a contact person who can provide further
clarification with regard to information in the petition.
A detailed explanation of why the refinery is eligible to
request an alternative anti-dumping compliance period. This explanation
would include documentation showing that the refinery is starting up
production and has never produced conventional gasoline subject to the
anti-dumping regulations and information demonstrating the hardship the
refinery will experience meeting the anti-dumping statutory baseline
NOX standard.
The length of the averaging period requested (2, 3, 4, or
5 years) and a justification for why that length of averaging period is
required.
An estimate as to when the refinery can produce gasoline
that will meet the statutory baseline standard for NOX.
The refinery's estimated gasoline production and average
NOX level for each of the years in which the alternative
averaging period is required.
A detailed description of the current refinery equipment
and configuration.
A detailed description of any changes or enhancements to
the refinery equipment and configuration that will occur during the
alternative averaging period requested.
The current nominal crude capacity of the refinery as
reported to the Energy Information Administration (EIA) of the
Department of Energy (DOE).
[[Page 54427]]
A detailed explanation of the refiner's plans to finance
capital improvements at the refinery in order to meet all current
applicable EPA gasoline and diesel fuel quality standards.
A demonstration that the refiner has the funds and
identified sources from which to purchase stationary source
NOX credits sufficient to offset the maximum projected
NOX deficit. An equation for calculating the NOX
deficit and NOX benefit is included in the regulations.
A full disclosure and explanation of any matters of non-
compliance or violations of any environmental statutes or requirements
for which the refiner has received notification by any state, local, or
Federal agency.
A signed agreement by any parent company or, in the case
of a joint venture, individual partners, if applicable, acknowledging
that they will be liable for any violations.
Any other information the Administrator may require in
order to fully evaluate the refiner's petition. Such information would
include requests for clarification of any item(s) included in the
petition that is necessary in order to render a final decision as to
whether to grant or reject the petition.
The above items represent, at a minimum, the topics that must be
addressed in the petition. The refiner may wish to elaborate on certain
topics--e.g., if it faces particular hardship because it is a small
business or if its refinery faces other, unique challenges that may
influence the Agency's decision on the petition.
If we find that any refiner has provided false or inaccurate
information in connection with its petition, we will notify the refiner
and the application of any alternative anti-dumping compliance period
will be void ab initio.
How the Agency Will Act on a Petition and the Refiner's
Responsibilities if a Petition Is Granted
Notification of Approval or Disapproval of Petition, and Dates by Which
the Refinery Must Meet the Statutory NOX Baseline Standard
and Pay Back Double the NOX Deficit
We will notify a refiner of approval or disapproval of its petition
by mail after considering a complete petition. If approved, we will
notify the refiner of the alternative anti-dumping compliance period
approved (i.e., two, three, four, or five years) and the interim
standards that must be met. The interim standards shall be as set forth
in the regulations and include two major standards that the refinery
must meet. The first standard sets forth the date by which the refinery
must start to comply with the statutory baseline NOX
standard, on average, for all its gasoline. For example, for a two year
averaging period, the refiner must achieve this by the seventh quarter.
Once the first date is reached, the refiner must continue to meet the
statutory baseline standard for NOX, on average, for all
gasoline it produces.
The second standard sets forth the date by which the refinery must
pay back double the NOX deficit. This date corresponds to
the end of the alternative averaging period. For example, for a two
year averaging period, the refinery must pay back double the
NOX deficit by the end of the second year. Failure to meet
one of these standards will result in a violation of the anti-dumping
regulations. The anti-dumping standards, including NOX
emissions, are defined in units of milligrams per mile. In order to
quantify the NOX deficit or benefit in tons under today's
rule, it is necessary to know the variance from the standard, the
volume of gasoline involved and the average fuel economy for the
overall national fleet of gasoline powered vehicles. For the purpose of
these calculations, we are using the most current data as presented in
the Calendar Year 1999 National Highway Traffic and Safety
Administration report to Congress of 24.5 miles per gallon. Thus the
constant figure in both equations of 2.7 x 10-\8\ is the
product of the above fuel economy factor and the conversion from
milligrams to tons. The average NOX level and volume of
gasoline produced during the quarter are self explanatory. The
equations for calculating NOX deficit and benefit are as
follows:
NOX Deficit:
[GRAPHIC] [TIFF OMITTED] TR08SE00.004
Where:
NOXDef=the NOX deficit for the quarter(s) the
refiner's annual average NOX performance exceeds the
applicable NOX standard of 1461 mg/mile, expressed in
tons.
NOXad=the average volume weighted NOX
emissions performance for the quarter(s) the refiner exceeds the
applicable NOX standard, measured in mg/mile.
Gd=the volume of gasoline produced during the quarter(s)
the refiner exceeds the applicable NOX standard, measured
in gallons.
NOX Benefit:
[GRAPHIC] [TIFF OMITTED] TR08SE00.005
Where:
NOXBen=the NOX benefit during the quarter(s)
the refiner's annual average NOX performance is below the
applicable NOX standard of 1461 mg/mile.
NOXab=the average volume weighted NOX
emissions performance for the quarter(s) the refiner is below the
applicable NOX standard, measured in mg/mile
Gb=the volume of gasoline produced during the quarter(s)
the refiner is below the applicable NOX standard,
measured in gallons.
The calculations are to be performed on a quarterly basis. As an
example, a 10,000 barrel per day refinery would produce 37.8 million
gallons during a given quarter. Assuming the gasoline, on average, met
a NOX standard of 1500 mg/mi, the total NOX
deficit for the quarter would be
[GRAPHIC] [TIFF OMITTED] TR08SE00.006
As an example of how the NOX deficit must be paid back
on a two for one basis, assume that the same refinery has a two year
alternative averaging period. Assuming that the refinery were to
produce the same quality and volume of gasoline for the first five
quarters and then began to produce gasoline meeting the statutory
baseline (in order to meet the first standard), the total
NOX deficit, in tons, would be 199 tons. In order to meet
the second standard, the paying back of double the NOX
deficit, the refiner would have to produce a total NOX
benefit of 199 * 2, or 398 tons of NOX benefit. Thus, the
alternative averaging period is designed to ensure that there is no
overall environmental detriment by requiring a certain about of
NOX overcompliance.
Interim Milestones
A refiner may qualify for an extended averaging period only if, at
the time of the petition, it activates a refinery that faces
substantial demonstrated hardship in producing gasoline which meets the
anti-dumping statutory baseline NOX standards during the
early years of production. EPA believes that this hardship is most
likely to be the result
[[Page 54428]]
of a lack of the necessary refinery processing equipment. Moreover, it
will be necessary for such a refiner to obtain this processing
equipment in order to begin producing gasoline that will allow the
refinery to comply with the overall alternative averaging period
NOX standard. However, if such a refiner fails to obtain
this processing equipment in a timely manner it is likely the refiner
will not be able to offset the NOX deficit created during
the first phase of the extended averaging period by the require
compliance deadline.
For this reason EPA believes it is appropriate for a refiner who
has been granted an extended averaging period to demonstrate that
reasonable progress is being made toward obtaining necessary processing
equipment. As a result, under today's rule EPA is requiring refiners to
include in extended averaging period petitions the expected dates for
key milestones for obtaining necessary processing equipment. These
milestones normally would include the dates for signing the contract
for equipment design, for obtaining necessary permits, for obtaining
financing commitments, and for breaking ground for construction. During
the petition review EPA intends to evaluate the milestones proposed by
the refiner and establish appropriate milestones that will be
incorporated into any petition approval. The refiner will be required
to submit reports to EPA demonstrating these milestones are met as a
contingency for continued operation under the alternative compliance
period.
Upon a refiner's failure to meet a milestone, or failure to submit
a milestone report by the required date, the Administrator would have
the discretion to accelerate the date by which the refiner would have
to produce gasoline that complies with the annual average statutory
baseline NOX standard, so that the gasoline produced by the
refinery beginning with the quarter immediately following the quarter
during which the failure occurred (and during each subsequent quarter)
would have to meet that standard. That is, a failure to meet a
milestone may result in a requirement for the refinery to begin
producing gasoline that complies with the statutory baseline beginning
with the next quarterly averaging period and continuing thereafter. The
acceleration of the requirement regarding compliance with the annual
average statutory baseline NOX standard would not affect any
of the other standards or requirements applicable to the refinery under
this section (e.g., the refinery would still be required to comply with
the overall alternative averaging period NOX standard by
producing gasoline that overcomplies with the annual average statutory
NOX standard by twice as much as the early NOX
deficit generated by the refinery). Moreover, upon the refiner's
failure to meet a milestone, or failure to submit a milestone report by
the required date, the refiner would forfeit any NOX credits
that it was required to have banked as of that time. EPA realizes that
a refiner in this situation may not be able to produce gasoline that
meets the statutory baseline and may be forced to produce products
other than gasoline, such as blendstocks, or to close the refinery.
However, allowing such a refiner to generate additional NOX
deficits would only result in additional environmental harm.
Additional Requirements
In addition to the requirements described in the preceding
paragraph, the following general requirements apply to a refinery for
which a petition is granted:
The refinery must meet all applicable statutory baseline
standards for an annual average compliance period, except the standard
for NOX. For example, this means that the refinery must
comply with the toxics standards on an annual basis.
The refiner must designate all gasoline produced during
the period of time that the refinery does not meet the annual average
statutory baseline standards as gasoline with a volatility of 9.0
pounds per square inch (psi).
A refiner for which a petition is granted must provide a
written demonstration that it has purchased and banked NOX
credits equal to the NOX deficit calculated for the end of
the preceding quarter and must retain these banked credits throughout
the current quarter. The NOX credits are necessary in order
to guarantee that the refinery does not generate a net NOX
detriment. The amount of NOX credits required to be banked
will be calculated each quarter. When the refinery begins to produce
conventional gasoline that, on average, meets the anti-dumping
NOX standard, it may sell NOX credits off in an
amount equal to any NOX benefit generated in the preceding
quarter. We believe that this approach permits more flexibility for the
start-up refinery than an approach that would require them to make a
significant up-front purchase of credits equal to the entire projected
NOX deficit for the alternative averaging period.
A refinery for which a petition is granted may not
generate any Tier 2 sulfur credits or allotments during the entire
alternative anti-dumping compliance period.
A refinery for which a petition is granted must submit
anti-dumping compliance reports more frequently than other conventional
gasoline refineries. This enhanced reporting will ensure that the
refinery is on target with meeting the interim performance goals. The
documents that must be submitted include quarterly batch reports and
anti-dumping averaging reports for gasoline produced during each
quarter, and documents that demonstrate the refiner has purchased and
banked the necessary amount of NOX credits to equal the
NOX deficit calculated for that quarter.
Change in Alternative Averaging Period
At any point during the pendency of the alternative conventional
gasoline anti-dumping compliance period the Administrator may, upon
application by a refiner, approve a different alternative compliance
period for a refinery already operating subject to an alternative
compliance period. For example, if a refinery originally received an
alternative compliance period with a duration of 2 years beginning on
January 1, 2001, at any time prior to the end of that compliance period
(January 1, 2003), the Administer may approve an application to assign
to the refinery the standards and requirements that would have been
applicable to the refinery had the refinery originally received one of
the other alternative compliance periods. Any refinery for which a
change in the applicable alternative compliance period is approved must
thereafter operate as if the refinery had originally requested and
received such new alternative compliance period, and shall be subject
to the standards and other requirements applicable under such new
alternative compliance period. Consequently, for a refinery with an
original alternative compliance period of 2 years beginning on January
1, 2001 (which would end on January 1, 2003), for which the
Administrator later approves a change to a 3 year compliance period on
January 1, 2002, the termination date for the new alternative
compliance period would be January 1, 2004, and the refinery would need
to begin producing gasoline that complies with the annual average
statutory baseline during the quarter beginning January 2004.
The Administrator will approve or disapprove any application for a
different alternative compliance period, in writing, within six months
of receipt, and in the case of an approval will include any conditions
or other requirements to which the approval is subject. No such
application may result
[[Page 54429]]
in an alternative compliance period that extends beyond January 1,
2006. A refinery for which the Administrator approves a change in the
alternative compliance period will be subject to all the standards and
other requirements of the new alternative compliance period as well as
any additional conditions or requirements that are included in the
approval of the application for a changed alternative compliance
period. Accept as specifically modified by this section, such refinery
must continue to comply with all other standards and other requirements
applicable under the conventional gasoline anti-dumping standards.
IV. Administrative Requirements
A. Executive Order 12866
Under Executive Order 12866 (58 FR 51735 (October 4, 1993)), the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to Office of Management and Budget (OMB) review
and the requirements of the Executive Order. The Order defines
``significant regulatory action'' as one that is likely to result in a
rule that may:
(1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another Agency;
(3) Materially alter the budgetary impact of entitlement, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
The Agency has determined that this regulation would result in none
of the economic effects set forth in Section 1 of the Order because it
generally relaxes the requirements of the anti-dumping program and
provides regulated parties with more flexibility with respect to
compliance with the anti-dumping requirements. Pursuant to the terms of
Executive Order 12866, OMB has notified us that it does not consider
this a ``significant regulatory action'' within the meaning of the
Executive Order and has waived review.
B. 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 direct final rule does not have federalism implications. This
direct final rule will not have substantial direct effects on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government, as specified in Executive Order 13132.
This rule would permit refiners to petition for alternative anti-
dumping compliance periods and does not impose any substantial direct
effects on the states. Thus, Executive Order 13132 does not apply to
this rule.
C. Executive Order 13084: Consultation and Coordination With Indian
Tribal Governments
Under Executive Order 13084, we may not issue a regulation that is
not required by statute, that significantly or uniquely affects the
communities of Indian tribal governments, or that imposes substantial
direct compliance costs on those communities, unless the Federal
government provides the funds necessary to pay the direct compliance
costs incurred by the tribal governments, or we consult with those
governments. If we comply by consulting, Executive Order 13084 requires
us to provide to the Office of Management and Budget, in a separately
identified section of the preamble to the rule, a description of the
extent of our prior consultation with representatives of affected
tribal governments, a summary of the nature of their concerns, and a
statement supporting the need to issue the regulation. In addition,
Executive Order 13084 requires us to develop an effective process
permitting elected and other representatives of Indian tribal
governments ``to provide meaningful and timely input in the development
of regulatory policies on matters that significantly or uniquely affect
their communities.''
Today's direct final rule does not significantly or uniquely affect
the communities of Indian tribal governments. Today's direct final rule
does not create a mandate for any tribal governments. This direct final
rule applies to gasoline refiners. Today's action makes some changes
that would generally provide flexibility within the Federal anti-
dumping requirements, and does not impose any enforceable duties on
communities of Indian tribal governments. Accordingly, the requirements
of section 3(b) of Executive Order 13084 do not apply to this direct
final rule.
D. Regulatory Flexibility Act (RFA), as Amended by the Small Business
Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et.
seq.
The RFA generally requires an agency to prepare a regulatory
flexibility analysis of any rule subject to notice and comment
rulemaking requirements under the Administrative Procedure Act or any
other statute unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
Small entities include small businesses, small organizations, and small
governmental jurisdictions.
For purposes of assessing the impacts of today's rule on small
entities, small entity is defined as: (1) A small business that has not
more than 1,500 employees (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 direct final rule
on small entities, the Administrator has determined that this action
will not have a significant economic impact on a substantial number of
small entities. In determining whether a rule has a significant
economic impact on a substantial number of small entities, the impact
of concern is any significant adverse economic impact on small
entities, since the primary purpose of the regulatory flexibility
analyses is to identify and address regulatory alternatives ``which
minimize any significant economic impact of the rule on small
entities.'' 5 U.S.C. 603 and 604. Thus, an agency may certify that a
rule will not have a significant economic impact on a substantial
number of small entities if the rule relieves regulatory burden, or
otherwise has a positive economic effect on all of the small entities
subject to the rule. Today's direct final rule would provide regulatory
relief by permitting regulated parties, including small entities, to
seek an extended anti-dumping compliance period. We have therefore
concluded
[[Page 54430]]
that today's direct final rule will relieve regulatory burden for all
small entities. We continue to be interested in the potential impacts
of the direct final rule on small entities and welcome comments on
issues related to such impacts.
E. Paperwork Reduction Act
This action establishes a petition process that involves the
collection of information. It also requires reports that will utilize
existing RFG and anti-dumping reporting forms. Refiners that request
alternative compliance periods for anti-dumping are already subject to
anti-dumping reporting requirements, which include annual compliance
reporting, but although refiners of RFG are required to submit
quarterly batch reports and laboratory reports, refiners of
conventional gasoline under the anti-dumping program are not generally
subject to this quarterly reporting requirement. A refiner granted an
alternative compliance period for anti-dumping under this rule would
become subject to quarterly batch reporting and laboratory reports.
Since this constitutes the collection of information as defined by the
Paperwork Reduction Act, 44 U.S.C. 3501 et seq., the existing
Information Collection Request (ICR) for the RFG and anti-dumping
program will be submitted to OMB for approval to the collection of any
information. A separate Federal Register notice will be published
regarding the ICR. The Office of Management and Budget (OMB) has
approved the information collection requirements contained in the final
RFG and anti-dumping rulemaking (See 59 FR 7716, February 16, 1994) and
has assigned OMB control number 2060-0277 (EPA ICR No. 1591.07).
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 our regulations are listed
in 40 CFR Part 9 and 48 CFR Chapter 15.
F. 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, we
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 a rule for which a written statement is
needed, section 205 of the UMRA generally requires us 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 us 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 establishing any regulatory
requirements that may significantly or uniquely affect small
governments, including tribal governments, an agency 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 regulatory proposals
with significant Federal intergovernmental mandates, and informing,
educating, and advising small governments on compliance with the
regulatory requirements.
Today's direct final 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. The direct final rule would
impose no enforceable duty on any State, local or tribal governments or
the private sector. This direct final rule applies to gasoline
refiners. Today's action would provide regulated parties with more
flexibility with respect to compliance with the anti-dumping
requirements.
G. Executive Order 13045: Children's Health Protection
Executive Order 13045: Protection of Children from Environmental
Health Risks and Safety Risks (62FR19885, April 23, 1997) applies to
any rule that: (1) Is determined to be economically significant as
defined under E.O. 12866, and (2) concerns an environmental health or
safety risk that we have 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.
We interpret E.O. 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 direct final rule is not subject to E.O.
13045, entitled ``Protection of Children from Environmental Health
Risks and Safety Risks'' (62FR19885, April 23, 1997), because it does
not involve decisions on environmental health risks or safety risks
that may disproportionately affect children. This direct final rule
permits flexibility in establishing extended anti-dumping compliance
periods in narrow circumstances where a net environmental benefit is
expected.
H. National Technology Transfer and Advancement Act of 1995 (NTTAA)
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104-113, 12(d) (15 U.S.C. 272 note)
directs us to use voluntary consensus standards in our 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 us to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards. Today's action
does not establish new technical standards or analytical test methods,
and does not affect existing technical standards or analytical test
methods.
[[Page 54431]]
I. Submission to Congress and the General Accounting Office
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement 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. We 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), and is not subject
to the 60 day requirement. This direct final rule will be effective
October 23, 2000, unless EPA receives adverse comments or a request for
a public hearing on the rule (see DATES section above).
J. Statutory Authority
Sections 114, 211, and 301(a) the Clean Air Act as amended (42
U.S.C. 7414, 7545, and 7601(a)).
List of Subjects in 40 CFR Part 80
Environmental protection, Air pollution control, Anti-dumping,
Reformulated gasoline.
Dated: August 30, 2000.
Carol M. Browner,
Administrator.
For the reasons described in the preamble, part 80 of title 40 of
the Code of Federal Regulations is amended as follows:
PART 80--[AMENDED]
1. The authority citation for part 80 continues to read as follows:
Authority: Sections 114, 211, and 301(a) of the Clean Air Act as
amended (42 USC 7414, 7545, and 7601(a).
* * * * *
2. Section 80.101 is amended by revising paragraph (a) and adding
paragraph (k) to read as follows:
Sec. 80.101 Standards applicable to refiners and importers.
* * * * *
(a) Averaging period. The averaging period for the standards
specified in this section shall be January 1 through December 31,
except as provided in paragraph (k) of this section.
* * * * *
* * *
(k) Petitions for an alternative anti-dumping averaging period.
(1) Eligibility for petition. (i) The Administrator may grant an
averaging period of two, three, four or five years upon petition of a
refiner who:
(A) Activates or plans to activate conventional gasoline production
at a refinery that has never produced gasoline subject to the anti-
dumping requirements of subpart E of this part; and
(B) Faces substantial, demonstrated hardship in meeting the anti-
dumping statutory baseline NOX standard during the early
years of production.
(ii) The Administrator will consider the refiner's or refinery's
compliance with all applicable Federal, state, and local environmental
statutes or requirements in evaluating the petition, including, but not
limited to, any applicable stationary source requirement or standards.
(2) Contents of a petition. A petition for a four or five year
averaging period must be submitted by June 1, 2001. A petition for a
two or three year averaging period must be submitted by June 1, 2003.
Regardless of the averaging period requested, the petition must
include:
(i) The business name and address of the affected refinery and any
location(s) where the refiner conducts operations.
(ii) The name, address, phone number, fax number, and e-mail
address of the responsible corporate officer and contact person who can
provide clarification and explanation with regard to any information in
the petition.
(iii) A detailed explanation of why the refinery is eligible for an
alternative anti-dumping compliance period under paragraph (k)(1) of
this section, including:
(A) Documentation the refinery has never produced gasoline that was
subject to the anti-dumping standards under subpart E of this part and
(B) Documentation demonstrating the hardship the refinery will
experience meeting the anti-dumping statutory baseline NOX
standard.
(iv) The length of the averaging period requested and a
justification for why that length of averaging period is required.
(v) An estimate as to when the refinery can produce gasoline that
will meet the statutory baseline standard for NOX.
(vi) The refinery's estimated gasoline production and annual
average NOX level for each of the years for which the
alternative averaging period is requested.
(vii) A detailed description of the current refinery equipment and
configuration.
(viii) A detailed description of changes to the refinery equipment
the refiner intends to complete in order to begin producing gasoline
that will allow the refinery to comply with the overall alternative
averaging period NOX standard, and for such changes the
intended dates for events the refiner believes are appropriate for
demonstrating reasonable progress towards completion of the changes,
including the following events:
(A) Sign the design contract;
(B) Obtain necessary permits;
(C) Obtain construction financing commitments;
(D) Begin construction.
(E) Complete construction
(ix) The current nominal crude capacity of the refinery as reported
to the Energy Information Administration (EIA) of the Department of
Energy (DOE).
(x) A detailed explanation of the refiner's plans to finance
capital improvements at the refinery in order to meet all current
applicable EPA gasoline and diesel fuel quality standards.
(xi) A demonstration that the refiner has the funds and identified
sources from which to purchase stationary source NOX credits
sufficient to offset the maximum projected NOX deficit as
calculated in accordance with paragraph (k)(4)(ii) of this section on a
quarterly basis.
(xii) A full disclosure and explanation of any matters of non-
compliance or violations of any environmental statutes or requirements
for which the refiner has received notification by any state, local, or
Federal agency.
(xiii) A signed agreement by any parent company or, in the case of
a joint venture, individual partners, if applicable, acknowledging that
they will be liable for any violations.
(xiv) Any other information the Administrator may require in order
to fully evaluate the refiner's petition.
(xv) The signature of a responsible corporate officer, certifying
that the information contained in the petition is true.
(3) NOX standards and other requirements applicable to
refineries operating under an alternative anti-dumping averaging
period. If a petition by a refiner is approved, the standards described
in this paragraph shall be the standards applicable to the refinery
identified in the petition for purposes of the anti-dumping program
during the period of the alternative averaging period. Except as
specifically modified by this section, the refinery must
[[Page 54432]]
continue to comply with all other standards applicable under the anti-
dumping standards of subpart E of this part.
(i) A refinery shall meet the following deadlines for compliance
with the statutory baseline, depending on the length of the alternative
averaging period applicable to the refinery:
------------------------------------------------------------------------
Refinery must comply with
Compliance period the Statutory Baseline
Length of compliance must start no. NOX standard, on average,
period in years later than for gasoline produced
January 1st of beginning with the
------------------------------------------------------------------------
2......................... 2004 7th quarter and all
subsequent quarters.
3......................... 2003 10th quarter and all
subsequent quarters.
4......................... 2002 13th quarter and all
subsequent quarters.
5......................... 2001 20th quarter and all
subsequent quarters.
------------------------------------------------------------------------
(ii) By the end of the applicable alternative averaging period, the
gasoline that the refinery has produced over the entire averaging
period must result in a net NOX benefit (compared to the
statutory baseline) that is at least twice as large as the total
NOX deficit generated during the period of time during which
the refinery produced gasoline that did not comply with the statutory
baseline. For the purposes of this paragraph, the NOX
deficit and the NOX benefit in tons shall be calculated in
accordance with the following equations:
NOX Deficit:
[GRAPHIC] [TIFF OMITTED] TR08SE00.007
Where:
NOXDef = the NOX deficit in tons for the
quarter(s) the refiner's annual average NOX performance
exceeds the applicable NOx standard of 1461 mg/mile.
NOXad = the average volume weighted NOx emissions
performance for the quarter(s) the refiner exceeds the applicable
NOX standard, measured in mg/mile.
Gd = the volume of gasoline produced during the
quarter(s) the refiner exceeds the applicable NOX
standard, measured in gallons.
NOX Benefit:
[GRAPHIC] [TIFF OMITTED] TR08SE00.008
Where:
NOXBen = the NOX benefit in tons during
the quarter(s) the refiner's annual average NOX
performance is below the applicable NOX standard of 1461
mg/mile.
NOXab = the average volume weighted NOX
emissions performance for the quarter(s) the refiner is below the
applicable NOX standard, measured in mg/mile.
Gb = the volume of gasoline produced during the
quarter(s) the refiner is below the applicable NOX
standard, measured in gallons.
(iii) For each quarter for which the refinery produces gasoline for
which there is a NOX deficit, the refiner shall purchase and
bank stationary source NOx credits that are equal to or
greater than the amount of the NOX deficit generated during
the previous quarter, and provide written demonstration of such
transaction to the Administrator. These NOX credits are in
addition to any credits purchased during any previous quarters.
NOX deficit is to be calculated on a quarterly basis in
accordance with the equation in paragraph (k)(3)(ii) of this section.
No NOX credits purchased by the refiner may contribute to
the refinery's compliance with the requirements of paragraphs (k)(3)(i)
and (k)(3)(ii). The refinery may sell NOX credits purchased
under this paragraph once the standard in paragraph (k)(3)(i) is met
and in an amount equal to the NOX benefit generated, as
calculated on a quarterly basis.
(iv) (A) The refinery shall not generate marketable credits or
allotments under the Tier 2 gasoline program provisions of Subpart H of
this part during the entire alternative averaging period and shall
provide a written statement, on a quarterly basis, certifying that the
refinery has not generated, produced, sold, or transferred any such
marketable credits or allotments under Subpart H of this part.
(B) If the final quarter of the alternative averaging period ends
on a date other than December 31, then the refiner may generate credits
for that portion of the year that was not subject to the alternative
averaging period.
(v) The refinery shall market any conventional gasoline it produces
that is subject to the requirements of Sec. 80.27 as 9.0 RVP gasoline
until the standard in paragraph (k)(3)(i) of this section is met.
(vi) A refinery that has been granted an averaging period under
this section must submit the following reports to the Administrator
within 30 days of the end of each calendar quarter:
(A) Quarterly batch reports and anti-dumping averaging reports for
gasoline produced during each quarter; and
(B)(1) Documents that demonstrate compliance with the requirements
under paragraph (k)(3)(iii) and (k)(3)(iv) of this section. including a
calculation of the NOX deficit or benefit for that quarter
and a current total, based upon all quarters, indicating the current
NOX deficit or NOX benefit balance for the
refinery; and
(2) A statement of the number of NOX credits purchased
or sold during the quarter and a current total, based upon all
quarters, indicating the current balance of NOX credits; and
(3) Any contractual documents, or other documents, evidencing the
purchasing and banking of NOX credits.
(vii) The Administrator may specify, as part of the approved
petition, deadlines by which a refiner is obligated to take certain
actions (including those listed in paragraph (k)(2)(viii) of this
section) demonstrating reasonable progress toward completion of the
refinery changes necessary to produce gasoline that will allow the
refinery to comply with the overall alternative averaging period
NOX standard.
(viii) The refiner shall submit reports demonstrating compliance
with deadline requirements under paragraph (k)(3)(vii) of this section
no later than 30 days after the applicable deadline occurs. Upon
failure to meet a deadline requirement under paragraph (k)(3)(vii) of
this section, the Administrator may accelerate the date by which the
refiner would have to produce gasoline that complies with the annual
average statutory baseline NOX standard under paragraph
(k)(3)(i) of this section such that the gasoline produced by the
refinery beginning with the quarter immediately following the quarter
during which the failure occurred (and during each subsequent quarter)
would have to meet that standard. The acceleration of the requirement
under paragraph (k)(3)(i) of this section, regarding compliance with
the annual average statutory baseline NOX standard, does not
affect the applicability of any other standard or requirement
applicable to the refinery under this or any other section of the Act
(e.g., the refinery must still comply with the overall alternative
averaging period NOX standard by producing gasoline that
overcomplies with the annual average statutory NOX standard
[[Page 54433]]
by twice as much as the early NOX deficit generated by the
refinery).
(ix) The refiner shall comply with any condition or requirement
prescribed by the Administrator as part of the petition approval.
(x) The refinery must comply with all standards in this paragraph
and with all applicable anti-dumping standards in Subpart E of this
section, except the NOX standard.
(4) Approval or disapproval of petitions. The Administrator will
approve or disapprove the petition within six months of receipt, in
writing, and in the case of an approval will include any conditions or
requirements to which the approval is subject.
(5) Effective date for alternative averaging period. (i) For an
approved petition, the alternative averaging period shall become
effective with the first day of the next calendar quarter, unless the
first day of a later calendar quarter is requested.
(ii) If the final quarter of the alternative averaging period ends
on a date other than December 31, then the refiner must demonstrate
compliance with anti-dumping standards for gasoline produced during the
remainder of that year and must demonstrate such compliance via the
annual report as specified in Sec. 80.105.
(6) Refinery request for a change in alternative averaging period.
At any point during the pendency of an alternative conventional
gasoline anti-dumping compliance period the Administrator may, upon
application by a refiner, approve a different alternative compliance
period for a refinery already operating subject to an alternative
compliance period. In any such case:
(i) A refinery for which a change in the applicable alternative
compliance period is approved shall thereafter operate as if the
refinery had originally requested and received such alternative
compliance period, and shall be subject to the standards and other
requirements applicable under such alternative compliance period.
(ii) The Administrator will approve or disapprove any application
for a different alternative compliance period, in writing, within six
months of receipt, and in the case of an approval will include any
conditions or other requirements to which the approval is subject;
(iii) Accept as specifically modified by this section, such
refinery must continue to comply with all other standards and other
requirements applicable under the conventional gasoline anti-dumping
standards; and
(iv) No application may result in an alternative compliance period
that extends beyond January 1, 2006.
(7) Violations under this paragraph (k). Any person who fails to
meet a standard or other requirement under this paragraph (k) shall be
liable for penalties under Sec. 80.5. Additionally, in the event that
the refiner fails to achieve the required NOX benefit
calculated under paragraph (k)(3)(ii) of this section, any
NOX credits still banked under paragraph (k)(3)(iii) of this
section shall be forfeit.
[FR Doc. 00-22808 Filed 9-7-00; 8:45 am]
BILLING CODE 6560-50-U