[Federal Register Volume 71, Number 60 (Wednesday, March 29, 2006)]
[Proposed Rules]
[Pages 15804-15963]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-2315]
[[Page 15803]]
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Part II
Environmental Protection Agency
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40 CFR Parts 59, 80, 85 and 86
Control of Hazardous Air Pollutants From Mobile Sources; Proposed Rule
Federal Register / Vol. 71, No. 60 / Wednesday, March 29, 2006 /
Proposed Rules
[[Page 15804]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 59, 80, 85 and 86
[EPA-HQ-OAR-2005-0036; FRL-8041-2]
RIN 2060-AK70
Control of Hazardous Air Pollutants From Mobile Sources
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: Today EPA is proposing controls on gasoline, passenger
vehicles, and portable gasoline containers (gas cans) that would
significantly reduce emissions of benzene and other hazardous air
pollutants (``mobile source air toxics''). Benzene is a known human
carcinogen, and mobile sources are responsible for the majority of
benzene emissions. The other mobile source air toxics are known or
suspected to cause cancer or other serious health effects.
We are proposing to limit the benzene content of gasoline to an
annual average of 0.62% by volume, beginning in 2011. We are also
proposing to limit exhaust emissions of hydrocarbons from passenger
vehicles when they are operated at cold temperatures. This standard
would be phased in from 2010 to 2015. For passenger vehicles we also
propose evaporative emissions standards that are equivalent to those in
California. Finally, we are proposing a hydrocarbon emissions standard
for gas cans beginning in 2009, which would reduce evaporation and
spillage of gasoline from these containers.
These controls would significantly reduce emissions of benzene and
other mobile source air toxics such as 1,3-butadiene, formaldehyde,
acetaldehyde, acrolein, and naphthalene. This proposal would result in
additional substantial benefits to public health and welfare by
significantly reducing emissions of particulate matter from passenger
vehicles.
We project annual nationwide benzene reductions of 35,000 tons in
2015, increasing to 65,000 tons by 2030. Total reductions in mobile
source air toxics would be 147,000 tons in 2015 and over 350,000 tons
in 2030. Passenger vehicles in 2030 would emit 45% less benzene. Gas
cans meeting the new standards would emit almost 80% less benzene.
Gasoline would have 37% less benzene overall. We estimate that these
reductions would have an average cost of less than 1 cent per gallon of
gasoline and less than $1 per vehicle. The average cost for gas cans
would be less than $2 per can. The reduced evaporation from gas cans
would result in significant fuel savings, which would more than offset
the increased cost for the gas can.
DATES: Comments must be received on or before May 30, 2006. Under the
Paperwork Reduction Act, comments on the information collection
provisions must be received by OMB on or before April 28, 2006.
Hearing: We will hold a public hearing on April 12, 2006. The
hearing will start at 10 a.m. local time and continue until everyone
has had a chance to speak. If you want to testify at the hearing,
notify the contact person listed under FOR FURTHER INFORMATION CONTACT
by April 3, 2006.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2005-0036, by one of the following methods:
http://www.regulations.gov: Follow the on-line
instructions for submitting comments.
Fax your comments to: (202) 566-1741.
Mail: Air Docket, Environmental Protection Agency,
Mailcode: 6102T, 1200 Pennsylvania Ave., NW., Washington, DC 20460. In
addition, please mail a copy of your comments on the information
collection provisions to the Office of Information and Regulatory
Affairs, Office of Management and Budget (OMB), Attn: Desk Officer for
EPA, 725 17th St. NW., Washington, DC 20503.
Hand Delivery: EPA Docket Center, (EPA/DC) EPA West, Room
B102, 1301 Constitution Ave., NW., Washington, DC 20004. Such
deliveries are only accepted during the Docket's normal hours of
operation, and special arrangements should be made for deliveries of
boxed information.
Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2005-0036. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
www.regulations.gov, including any personal information provided,
unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through www.regulations.gov or e-mail.
The www.regulations.gov website is an ``anonymous access'' system,
which means EPA will not know your identity or contact information
unless you provide it in the body of your comment. If you send an e-
mail comment directly to EPA without going through www.regulations.gov
your e-mail address will be automatically captured and included as part
of the comment that is placed in the public docket and made available
on the Internet. If you submit an electronic comment, EPA recommends
that you include your name and other contact information in the body of
your comment and with any disk or CD-ROM you submit. If EPA cannot read
your comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses. For additional
information about EPA's public docket visit the EPA Docket Center
homepage at http://www.epa.gov/epahome/dockets.htm. For additional
instructions on submitting comments, go to section XI, Public
Participation, of the SUPPLEMENTARY INFORMATION section of this
document.
Docket: All documents in the docket are listed in the
www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, will be publicly available only in hard copy.
Publicly available docket materials are available either electronically
in www.regulations.gov or in hard copy at the Air Docket, EPA/DC, EPA
West, Room B102, 1301 Constitution Ave., NW., Washington, DC. The
Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Public
Reading Room is (202) 566-1744, and the telephone number for the Air
Docket is (202) 566-1742.
Hearing: The public hearing will be held at Sheraton Crystal City
Hotel, 1800 Jefferson Davis Highway, Arlington, Virginia 22202,
Telephone: (703) 486-1111. See section XI, Public Participation, for
more information about public hearings.
FOR FURTHER INFORMATION CONTACT: Mr. Chris Lieske, U.S. EPA, Office of
Transportation and Air Quality, Assessment and Standards Division
(ASD), Environmental Protection Agency, 2000 Traverwood Drive, Ann
Arbor, MI 48105; telephone number: (734) 214-4584; fax number: (734)
214-4816; email address: [email protected], or Assessment and
Standards Division
[[Page 15805]]
Hotline; telephone number: (734) 214-4636; e-mail address:
[email protected].
SUPPLEMENTARY INFORMATION:
General Information
A. Does this Action Apply to Me?
Entities potentially affected by this action are those that produce
new motor vehicles, alter individual imported motor vehicles to address
U.S. regulation, or convert motor vehicles to use alternative fuels. It
would also affect you if you produce gasoline motor fuel or manufacture
portable gasoline containers. Regulated categories include:
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NAICS SIC codes
Category codes \a\ \b\ Examples of potentially affected entities
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Industry...................... 336111 3711 Motor vehicle manufacturers.
Industry...................... 335312 3621 Alternative fuel vehicle converters.
424720 5172
811198 7539
........... 7549 ......................................................
Industry...................... 811111 7538 Independent commercial importers.
811112 7533 ......................................................
811198 7549 ......................................................
Industry...................... 324110 2911 Gasoline fuel refiners.
Industry...................... 326199 3089 Portable fuel container manufacturers.
332431 3411 ......................................................
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\a\ North American Industry Classification System (NAICS).
\b\ Standard Industrial Classification (SIC) system code.
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 the types of entities that EPA is now aware
could potentially be regulated by this action. Other types of entities
not listed in the table could also be regulated. To determine whether
your activities are regulated by this action, you should carefully
examine the applicability criteria in 40 CFR parts 59, 80, 85, and 86.
If you have any questions regarding the applicability of this action to
a particular entity, consult the person listed in the preceding FOR
FURTHER INFORMATION CONTACT section.
B. What Should I Consider as I Prepare My Comments for EPA?
1. Submitting CBI
Do not submit this information to EPA through www.regulations.gov
or e-mail. Clearly mark the part or all of the information that you
claim to be confidential business information (CBI). For CBI
information in a disk or CD ROM that you mail to EPA, mark the outside
of the disk or CD ROM as CBI and then identify electronically within
the disk or CD ROM the specific information that is claimed as CBI. In
addition to one complete version of the comment that includes
information claimed as CBI, a copy of the comment that does not contain
the information claimed as CBI must be submitted for inclusion in the
public docket. Information so marked will not be disclosed except in
accordance with procedures set forth in 40 CFR part 2.
2. Tips for Preparing Your Comments
When submitting comments, remember to:
Explain your views as clearly as possible.
Describe any assumptions that you used.
Provide any technical information and/or data you used
that support your views.
If you estimate potential burden or costs, explain how you
arrived at your estimate.
Provide specific examples to illustrate your concerns.
Offer alternatives.
Make sure to submit your comments by the comment period
deadline identified.
To ensure proper receipt by EPA, identify the appropriate
docket identification number in the subject line on the first page of
your response. It would also be helpful if you provided the name, date,
and Federal Register citation related to your comments.
Outline of This Preamble
I. Introduction
A. Summary
B. What Background Information is Helpful to Understand this
Proposal?
1. What Are Air Toxics and Related Health Effects?
2. What is the Statutory Authority for Today's Proposal?
a. Clean Air Act Section 202(l)
b. Clean Air Act Section 183(e)
c. Energy Policy Act
3. What Other Actions Has EPA Taken Under Clean Air Act Section
202(l)?
a. 2001 Mobile Source Air Toxics Rule
b. Technical Analysis Plan
II. Overview of Proposal
A. Why Is EPA Making This Proposal?
1. National Cancer Risk from Air Toxics
2. Noncancer Health Effects
3. Exposure Near Roads and From Attached Garages
4. Ozone and Particulate Matter
B. What Is EPA Proposing?
1. Light-Duty Vehicle Emission Standards
2. Gasoline Fuel Standards
3. Portable Gasoline Container (Gas Can) Controls
III. What Are Mobile Source Air Toxics (MSATs) and Their Health
Effects?
A. What Are MSATs?
B. Compounds Emitted by Mobile Sources and Identified in IRIS
C. Which Mobile Source Emissions Pose the Greatest Health Risk
at Current Levels?
1. National and Regional Risk Drivers in 1999 National-Scale Air
Toxics Assessment
2. 1999 NATA Risk Drivers with Significant Mobile Source
Contribution
D. What Are the Health Effects of Air Toxics?
1. Overview of Potential Cancer and Noncancer Health Effects
2. Health Effects of Key MSATs
a. Benzene
b. 1,3-Butadiene
c. Formaldehyde
d. Acetaldehyde
e. Acrolein
f. Polycyclic Organic Matter (POM)
g. Naphthalene
h. Diesel Particulate Matter and Diesel Exhaust Organic Gases
E. Gasoline PM
F. Near-Roadway Health Effects
G. How Would This Proposal Reduce Emissions of MSATs?
IV. What Are the Air Quality and Health Impacts of Air Toxics, and
How do Mobile Sources Contribute?
A. What Is the Health Risk to the U.S. Population from
Inhalation Exposure to Ambient Sources of Air Toxics, and How Would
It be Reduced by the Proposed Controls?
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B. What is the Distribution of Exposure and Risk?
1. Distribution of National-Scale Estimates of Risk from Air
Toxics
2. Elevated Concentrations and Exposure in Mobile Source-
Impacted Areas
a. Concentrations Near Major Roadways
b. Exposures Near Major Roadways
i. Vehicles
ii. Homes and Schools
iii. Pedestrians and Bicyclists
c. Exposure and Concentrations in Homes with Attached Garages
d. Occupational Exposure
3. What Are the Size and Characteristics of Highly Exposed
Populations?
4. What Are the Implications for Distribution of Individual
Risk?
C. Ozone
1. Background
2. Health Effects of Ozone
3. Current and Projected 8-hour Ozone Levels
D. Particulate Matter
1. Background
2. Health Effects of PM
3. Current and Projected PM2.5 Levels
4. Current PM10 Levels
E. Other Environmental Effects
1. Visibility
a. Background
b. Current Visibility Impairment
c. Future Visibility Impairment
2. Plant Damage from Ozone
3. Atmospheric Deposition
4. Materials Damage and Soiling
V. What Are Mobile Source Emissions Over Time and How Would This
Proposal Reduce Emissions, Exposure and Associated Health Effects?
A. Mobile Source Contribution to Air Toxics Emissions
B. VOC Emissions from Mobile Sources
C. PM Emissions from Mobile Sources
D. Description of Current Mobile Source Emissions Control
Programs that Reduce MSATs
1. Fuels Programs
a. RFG
b. Anti-dumping
c. 2001 Mobile Source Air Toxics Rule (MSAT1)
d. Gasoline Sulfur
e. Gasoline Volatility
f. Diesel Fuel
g. Phase-Out of Lead in Gasoline
2. Highway Vehicle and Engine Programs
3. Nonroad Engine Programs
4. Voluntary Programs
E. Emission Reductions from Proposed Controls
1. Proposed Vehicle Controls
a. Volatile Organic Compounds (VOC)
b. Toxics
c. PM2.5
2. Proposed Fuel Benzene Controls
3. Proposed Gas Can Standards
a. VOC
b. Toxics
4. Total Emission Reductions from Proposed Controls
a. Toxics
b. VOC
c. PM2.5
F. How Would This Proposal Reduce Exposure to Mobile Source Air
Toxics and Associated Health Effects?
G. Additional Programs Under Development That Will Reduce MSATs
1. On-Board Diagnostics for Heavy-Duty Vehicles Over 14,000
Pounds
2. Standards for Small SI Engines
3. Standards for Locomotive and Marine Engines
VI. Proposed New Light-duty Vehicle Standards
A. Why are We Proposing New Standards?
1. The Clean Air Act and Air Quality
2. Technology Opportunities for Light-Duty Vehicles
3. Cold Temperature Effects on Emission Levels
a. How Does Temperature Affect Emissions?
b. What Are the Current Emissions Control Requirements?
c. Opportunities for Additional Control
B. What Cold Temperature Requirements Are We Proposing?
1. NMHC Exhaust Emissions Standards
2. Feasibility of the Proposed Standards
a. Currently Available Emission Control Technologies
b. Feasibility Considering Current Certification Levels,
Deterioration and Compliance Margin
c. Feasibility and Test Programs for Higher Weight Vehicles
3. Standards Timing and Phase-in
a. Phase-In Schedule
b. Alternative Phase-In Schedules
4. Certification Levels
5. Credit Program
a. How Credits Are Calculated
b. Credits Earned Prior to Primary Phase-In Schedule
c. How Credits Can Be Used
d. Discounting and Unlimited Life
e. Deficits Could Be Carried Forward
f. Voluntary Heavy-Duty Vehicle Credit Program
6. Additional Vehicle Cold Temperature Standard Provisions
a. Applicability
b. Useful Life
c. High Altitude
d. In-Use Standards for Vehicles Produced During Phase-in
7. Monitoring and Enforcement
C. What Evaporative Emissions Standards Are We Proposing?
1. Current Controls and Feasibility of the Proposed Standards
2. Evaporative Standards Timing
3. Timing for Multi-Fueled Vehicles
4. In-Use Evaporative Emission Standards
5. Existing Differences Between California and Federal
Evaporative Emission Test Procedures
D. Opportunities for Additional Exhaust Control Under Normal
Conditions
E. Vehicle Provisions for Small Volume Manufacturers
1. Lead Time Transition Provisions
2. Hardship Provisions
3. Special Provisions for Independent Commercial Importers
(ICIs)
VII. Proposed Gasoline Benzene Control Program
A. Overview of Today's Proposed Fuel Control Program
B. Description of the Proposed Fuel Control Program
C. Development of the Proposed Gasoline Benzene Standard
1. Why Are We Focusing on Controlling Benzene Emissions?
a. Other MSAT Emissions
b. MSAT Emission Reductions Through Lowering Gasoline Volatility
or Sulfur Content
i. Gasoline Sulfur Content
ii. Gasoline Vapor Pressure
c. Toxics Performance Standard
d. Diesel Fuel Changes
2. Why Are We Proposing To Control Benzene Emissions By
Controlling Gasoline Benzene Content?
a. Benzene Content Standard
b. Gasoline Aromatics Content Standard
c. Benzene Emission Standard
3. How Did We Select the Level of the Proposed Gasoline Benzene
Content Standard?
a. Current Gasoline Benzene Levels
b. The Need for an Average Benzene Standard
c. Potential Levels for the Average Benzene Standard
d. Comparison of Other Benzene Regulatory Programs
4. How Do We Address Variations in Refinery Benzene Levels?
a. Overall Reduction in Benzene Level and Variation
b. Consideration of an Upper Limit Standard
i. Per-Gallon Cap Standard
ii. Maximum Average Standard
5. How Would the Proposed Program Meet or Exceed Related
Statutory and Regulatory Requirements?
D. Description of the Proposed Averaging, Banking, and Trading
(ABT) Program
1. Overview
2. Standard Credit Generation (2011 and Beyond)
3. Credit Use
a. Credit Trading Area
b. Credit Life
4. Early Credit Generation (2007-2010)
a. Establishing Early Credit Baselines
b. Early Credit Reduction Criteria (Trigger Points)
c. Calculating Early Credits
5. Additional Credit Provisions
a. Credit Trading
b. Pre-Compliance Reporting Requirements
6. Special ABT Provisions for Small Refiners
E. Regulatory Flexibility Provisions for Qualifying Refiners
1. Hardship Provisions for Qualifying Small Refiners
a. Qualifying Small Refiners
i. Regulatory Flexibility for Small Refiners
ii. Rationale for Small Refiner Provisions
b. How Do We Propose to Define Small Refiners for the Purpose of
the Hardship Provisions?
c. What Options Would Be Available For Small Refiners?
i. Delay in Standards
ii. ABT Credit Generation Opportunities
iii. Extended Credit Life
iv. ABT Program Review
d. How Would Refiners Apply for Small Refiner Status?
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e. The Effect of Financial and Other Transactions on Small
Refiner Status and Small Refiner Relief Provisions
2. General Hardship Provisions
a. Temporary Waivers Based on Unforeseen Circumstances
b. Temporary Waivers Based on Extreme Hardship Circumstances
c. Early Compliance with the Proposed Benzene Standard
F. Technological Feasibility of Gasoline Benzene Reduction
1. Benzene Levels in Gasoline
2. Technologies for Reducing Gasoline Benzene Levels
a. Why is Benzene Found in Gasoline?
b. Benzene Control Technologies Related to the Reformer
i. Routing Around the Reformer
ii. Routing to the Isomerization Unit
iii. Benzene Saturation
iv. Benzene Extraction
c. Other Benzene Reduction Technologies
d. Impacts on Octane and Strategies for Recovering Octane Loss
e. Experience Using Benzene Control Technologies
f. What Are the Potential Impacts of Benzene Control on Other
Fuel Properties?
3. Feasible Level of Benzene Control
4. Lead time
5. Issues
a. Small Refiners
b. Imported Gasoline
G. How Does the Proposed Fuel Control Program Satisfy the
Statutory Requirements?
H. Effect on Energy Supply, Distribution, or Use
I. How Would the Proposed Gasoline Benzene Standard Be
Implemented?
1. General provisions
a. What Are the Implementation Dates for the Proposed Program?
b. Which Regulated Parties Would Be Subject to the Proposed
Benzene Standards?
c. What Gasoline Would Be Subject to the Proposed Benzene
Standards?
d. How Would Compliance With the Benzene Standard Be Determined?
2. Averaging, Banking and Trading Program
a. Early Credit Generation
b. How Would Refinery Benzene Baselines Be Determined?
c. Credit Generation Beginning in 2011
d. How Would Credits Be Used?
3. Hardship and Small Refiner Provisions
a. Hardship
b. Small Refiners
4. Administrative and Enforcement Related Provisions
a. Sampling/Testing
b. Recordkeeping/Reporting
c. Attest Engagements, Violations, Penalties
5. How Would Compliance With the Provisions of the Proposed
Benzene Program Affect Compliance With Other Gasoline Toxics
Programs?
VIII. Gas Cans
A. Why Are We Proposing an Emissions Control Program for Gas
Cans?
1. VOC Emissions
2. Technological Opportunities to Reduce Emissions from Gas Cans
3. State Experiences Regulating Gas Cans
B. What Emissions Standard is EPA Proposing, and Why?
1. Description of Emissions Standard
2. Determination of Best Available Control
3. Emissions Performance vs. Design Standard
4. Automatic Shut-Off
5. Consideration of Retrofits of Existing Gas Cans
6. Consideration of Diesel, Kerosene and Utility Containers
C. Timing of Standard
D. What Test Procedures Would Be Used?
1. Diurnal Test
2. Preconditioning to Ensure Durable In-Use Control
a. Durability cycles
b. Preconditioning Fuel Soak
c. Spout Actuation
E. What Certification and In-Use Compliance Provisions Is EPA
Proposing?
1. Certification
2. Emissions Warranty and In-Use Compliance
3. Labeling
F. How Would State Programs Be Affected By EPA Standards?
G. Provisions for Small Gas Can Manufacturers
1. First Type of Hardship Provision
2. Second Type of Hardship Provision
IX. What are the Estimated Impacts of the Proposal?
A. Refinery Costs of Gasoline Benzene Reduction
1. Tools and Methodology
a. Linear Programming Cost Model
b. Refiner-by-Refinery Cost Model
c. Price of Chemical Grade Benzene
d. Applying the Cost Model to Special Cases
2. Summary of Costs
a. Nationwide Costs of the Proposed Program
b. Regional Distribution of Costs
c. Cost Effects of Different Standards
d. Effect on Cost Estimates of Higher Benzene Prices
3. Economic Impacts of MSAT Control Through Gasoline Sulfur and
RVP Control and a Total Toxics Standard
B. What Are the Vehicle Cost Impacts?
C. What Are The Gas Can Cost Impacts?
D. Cost Per Ton of Emissions Reduced
E. Benefits
1. Unquantified Health and Environmental Benefits
2. Quantified Human Health and Environmental Effects of the
Proposed Cold Temperature Vehicle Standard
3. Monetized Benefits
4. What Are the Significant Limitations of the Benefit Analysis?
5. How Do the Benefits Compare to the Costs of The Proposed
Standards?
F. Economic Impact Analysis
1. What Is an Economic Impact Analysis?
2. What Is the Economic Impact Model?
3. What Economic Sectors Are Included in this Economic Impact
Analysis?
4. What Are the Key Features of the Economic Impact Model?
5. What Are the Key Model Inputs?
6. What Are the Results of the Economic Impact Modeling?
X. Alternative Program Options
A. Fuels
B. Vehicles
C. Gas cans
XI. Public Participation
A. How Do I Submit Comments?
B. How Should I Submit CBI to the Agency?
C. Will There Be a Public Hearing?
D. Comment Period
E. What Should I Consider as I Prepare My Comments for EPA?
XII. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act (RFA), as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5
U.S.C. 601 et. seq
1. Overview
2. Background
3. Summary of Regulated Small Entities
a. Highway Light-Duty Vehicles
b. Gasoline Refiners
c. Portable Gasoline Container Manufacturers
4. Potential Reporting, Record Keeping, and Compliance
5. Relevant Federal Rules
6. Summary of SBREFA Panel Process and Panel Outreach
a. Significant Panel Findings
b. Panel Process
c. Small Business Flexibilities
i. Highway Light-Duty Vehicles
(a) Highway Light-Duty Vehicle Flexibilities
(b) Highway Light-Duty Vehicle Hardships
ii. Gasoline Refiners
(a) Gasoline Refiner Flexibilities
(b) Gasoline Refiner Hardships
iii. Portable Gasoline Containers
(a) Portable Gasoline Container Flexibilities
(b) Portable Gasoline Container Hardships
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
G. Executive Order 13045: Protection of Children from
Environmental Health and Safety Risks
H. Executive Order 13211: Actions that Significantly Affect
Energy Supply, Distribution, or Use
I. National Technology Transfer Advancement Act
J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
XIII. Statutory Provisions and Legal Authority
I. Introduction
A. Summary
Mobile sources emit air toxics that can cause cancer and other
serious health effects. Section III of this preamble and Chapter 1 of
the
[[Page 15808]]
Regulatory Impact Analysis (RIA) for this rule describe these compounds
and their health effects. Mobile sources contribute significantly to
the nationwide risk from breathing outdoor sources of air toxics.
Mobile sources were responsible for about 44% of outdoor toxic
emissions, almost 50% of the cancer risk, and 74% of the noncancer risk
according to EPA's National-Scale Air Toxics Assessment (NATA) for
1999. In addition, people who live or work near major roads or live in
homes with attached garages are likely to have higher exposures and
risk, which are not reflected in NATA. Sections II.A and IV of this
preamble and Chapter 3 of the RIA provide more detail about NATA, as
well as our analysis of exposures near roadways.
According to NATA for 1999, there are a few mobile source air
toxics that pose the greatest risk based on current information about
ambient levels and exposure. These include benzene, 1,3-butadiene,
formaldehyde, acrolein, naphthalene, and polycyclic organic matter
(POM). All of these compounds are hydrocarbons except POM. Benzene is
the most significant contributor to cancer risk from all outdoor air
toxics, according to NATA for 1999. NATA does not include a
quantitative estimate of cancer risk for diesel exhaust, but it
concludes that diesel exhaust (specifically, diesel particulate matter
and diesel exhaust organic gases) is one of the pollutants that pose
the greatest relative cancer risk. Although we expect significant
reductions in mobile source air toxics in the future, cancer and
noncancer health risks will remain a public health concern, and
exposure to benzene will remain the largest contributor to this risk.
As discussed in detail in Section V of this preamble and Chapter 2
of the RIA, this proposal would significantly reduce emissions of the
many air toxics that are hydrocarbons, including benzene, 1,3-
butadiene, formaldehyde, acetaldehyde, acrolein, and naphthalene. The
proposed fuel benzene standard and hydrocarbon standards for vehicles
and gas cans would together reduce total emissions of mobile source air
toxics by 350,000 tons in 2030, including 65,000 tons of benzene.
Mobile sources were responsible for 68% of benzene emissions in 1999.
As a result of this proposal, in 2030 passenger vehicles would emit 45%
less benzene, gas cans would emit 78% less benzene, and the gasoline
would have 37% less benzene overall.
In addition, EPA has already taken significant steps to reduce
diesel emissions from mobile sources, which will result in a 70%
reduction between 1999 and 2020. We have adopted stringent standards
for diesel trucks and buses, and nonroad diesel engines (engines used,
for example, in construction, agricultural, and industrial
applications). We also have additional programs underway to reduce
diesel emissions, including voluntary programs and a proposal that is
being developed to reduce emissions from diesel locomotives and marine
engines.
The proposed reductions in mobile source air toxics emissions would
reduce exposure and predicted risk of cancer and noncancer health
effects, including in environments where exposure and risk may be
highest, such as near roads, in vehicles, and in homes with attached
garages. In addition, the hydrocarbon reductions from the vehicle and
gas can standards would reduce VOC emissions (which are a precursor to
ozone and PM2.5) by over 1 million tons in 2030. The
proposed vehicle standards would reduce direct PM2.5
emissions by 20,000 tons in 2030 and would also reduce secondary
formation of PM2.5. Although ozone and PM2.5 are
considered criteria pollutants rather than ``air toxics,'' reductions
in ozone and PM2.5 are important co-benefits of this
proposal. More details on emissions, cancer risks, and adverse health
and welfare effects associated with ozone and PM are found in sections
II.A, IV and V of this preamble and Chapters 2 and 3 of the RIA.
Section II.B of this preamble provides an overview of the
regulatory program that EPA is proposing for passenger vehicles,
gasoline, and gas cans. We are proposing standards to limit the exhaust
hydrocarbons from passenger vehicles during cold temperature operation.
We are also proposing evaporative hydrocarbon emissions standards for
passenger vehicles. We are proposing to limit the average annual
benzene content of gasoline. Finally, we are proposing hydrocarbon
emissions standards for gas cans that would reduce evaporation,
permeation, and spillage from these containers. Detailed discussion of
each of these programs is in sections VI, VII, and VIII of the preamble
and Chapters 5, 6, and 7 of the RIA.
We estimate that the benefits of this proposal would be about $6
billion in 2030, based on the direct PM2.5 reductions from
the vehicle standards, plus unquantified benefits from reductions in
mobile source air toxics and VOC. We estimate that the annual net
social costs of this proposal would be about $200 million in 2030
(expressed in 2003 dollars). These net social costs include the value
of fuel savings from the proposed gas can standards, which would be
worth $82 million in 2030.
The proposed reductions would have an average cost of 0.13 cents
per gallon of gasoline, less than $1 per vehicle, and less than $2 per
gas can. The reduced evaporation from gas cans would result in fuel
savings that would more than offset the increased cost for the gas can.
In 2030, the long-term cost per ton of the proposed standards (in
combination, and including fuel savings) would be $450 per ton of total
mobile source air toxics reduced; $2,400 per ton of benzene reduced;
and no cost for the hydrocarbon and PM reductions (because the vehicle
standards would have no cost in 2020 and beyond). Section IX of the
preamble and Chapters 8-13 of the RIA provide more details on the
costs, benefits, and economic impacts of the proposed standards. The
impacts on small entities and the flexibilities we are proposing are
discussed in section XII.C of this preamble and Chapter 14 of the RIA.
B. What Background Information is Helpful to Understand this Proposal?
1. What Are Air Toxics and Related Health Effects?
Air toxics, which are also known in the Clean Air Act as
``hazardous air pollutants,'' are those pollutants known or suspected
to cause cancer or other serious health or environmental effects. For
example, some of these pollutants are known to have negative effects on
people's respiratory, cardiovascular, neurological, immune,
reproductive, or other organ systems, and they may also have
developmental effects. They may pose particular hazards to more
susceptible and sensitive populations, such as children, the elderly,
or people with pre-existing illnesses.
Mobile source air toxics (MSATs) are those toxics emitted by motor
vehicles, nonroad engines (such as lawn and garden equipment, farming
and construction equipment, aircraft, locomotives, and ships), and
their fuels. Toxics are also emitted by stationary sources such as
power plants, factories, oil refineries, dry cleaners, gas stations,
and small manufacturers. They can also be produced by combustion of
wood and other organic materials. There are also indoor sources of air
toxics, such as solvent evaporation and outgassing from furniture and
building materials.
Some MSATs of particular concern include benzene, 1,3-butadiene,
formaldehyde, acrolein, naphthalene, and diesel particulate matter and
diesel exhaust organic gases. Benzene and 1,3-butadiene are both known
human
[[Page 15809]]
carcinogens. Section III of this preamble provides more detail on the
health effects of each of these pollutants.
MSATs are emitted as a result of various processes. Some MSATs are
present in fuel or fuel additives and are emitted to the air when the
fuel evaporates or passes through the engine. Some MSATs are formed
through engine combustion processes. Some compounds, like formaldehyde
and acetaldehyde, are also formed through a secondary process when
other mobile source pollutants undergo chemical reactions in the
atmosphere. Finally, some air toxics, such as metals, result from
engine wear or from impurities in oil or fuel.
2. What is the Statutory Authority for Today's Proposal?
a. Clean Air Act Section 202(l)
Section 202(l)(2) of the Clean Air Act requires EPA to set
standards to control hazardous air pollutants from motor vehicles,
motor vehicle fuels, or both. These standards must reflect the greatest
degree of emission reduction achievable through the application of
technology which will be available, taking into consideration the motor
vehicle standards established under section 202(a) of the Act, the
availability and cost of the technology, and noise, energy and safety
factors, and lead time. The standards are to be set under Clean Air Act
sections 202(a)(1) or 211(c)(1), and they are to apply, at a minimum,
to benzene and formaldehyde emissions.
Section 202(a)(1) of the Clean Air Act directs EPA to set standards
for new motor vehicles or new motor vehicle engines which EPA judges to
cause or contribute to air pollution which may reasonably be
anticipated to endanger public health or welfare. We are proposing a
cold-temperature hydrocarbon emission standard for passenger vehicles
under this authority.
Section 211(c)(1)(A) of the Clean Air Act authorizes EPA (among
other things) to control the manufacture of fuel if any emission
product of such fuel causes or contributes to air pollution which may
reasonably be anticipated to endanger public health or welfare. We are
proposing a benzene standard for gasoline under this authority.
Clean Air Act section 202(l)(2) requires EPA to ``from time to time
revise'' its regulations controlling hazardous air pollutants from
motor vehicles and fuels. As described in more detail in section I.F.
below, EPA has previously set standards under section 202(l), and we
committed in that rule to engage in further rulemaking to implement
section 202(l). This proposal fulfills that commitment.
b. Clean Air Act Section 183(e)
Clean Air Act section 183(e)(3) requires EPA to list categories of
consumer or commercial products that the Administrator determines,
based on an EPA study of VOC emissions from such products, contribute
at least 80 percent of the VOC emissions from such products in areas
violating the national ambient air quality standard for ozone. EPA
promulgated this list at 60 FR 15264 (March 23, 1995). EPA plans to
publish a Federal Register notice announcing that EPA has added
portable gasoline containers to the list of consumer products to be
regulated. This action must be taken by EPA prior to issuing a final
rule for gas cans. EPA is required to develop rules reflecting ``best
available controls'' to reduce VOC emissions from the listed products.
``Best available controls'' are defined in section 183(e)(1)(A) as
follows:
The term ``best available controls'' means the degree of
emissions reduction that the Administrator determines, on the basis
of technological and economic feasibility, health, environmental,
and energy impacts, is achievable through the application of the
most effective equipment, measures, processes, methods, systems, or
techniques, including chemical reformulation, product or feedstock
substitution, repackaging, and directions for use, consumption,
storage, or disposal.''
Section 183(e)(4) also allows these standards to be implemented by
means of ``any system or systems of regulation as the Administrator may
deem appropriate, including requirements for registration and labeling,
self-monitoring and reporting * * * concerning the manufacture,
processing, distribution, use, consumption, or disposal of the
product.'' We are proposing a hydrocarbon standard for gas cans under
the authority of section 183(e).
c. Energy Policy Act
Section 1504(b) of the Energy Policy Act of 2005 requires EPA to
adjust the toxics emissions baselines for reformulated gasoline to
reflect 2001-2002 fuel qualities. However, the Act provides that this
action becomes unnecessary if EPA takes action which results in greater
overall reductions of toxics emissions from vehicles in areas with
reformulated gasoline. As described in section VII of this preamble, we
believe today's proposed action would in fact result in greater
reductions than would be achieved by adjusting the baselines under the
Energy Policy Act. Accordingly, under the provisions of the Energy
Policy Act, this proposed action would obviate the need for readjusting
emissions baselines for reformulated gasoline.
3. What Other Actions Has EPA Taken Under Clean Air Act Section 202(l)?
a. 2001 Mobile Source Air Toxics Rule
EPA published a final rule under Clean Air Act section 202(l) on
March 29, 2001, entitled, ``Control of Emissions of Hazardous Air
Pollutants from Mobile Sources'' (66 FR 17230). This rule established
toxics emissions performance standards for gasoline refiners. These
standards were designed to ensure that the over compliance to the
standard seen in the in-use fuels produced in the years of 1998-2000
would continue in the future.
EPA adopted this anti-backsliding requirement as a near-term
control that could be implemented and take effect within a year or two.
We did not adopt long-term controls, those controls that require a
longer lead time to implement, because we lacked information to address
the costs and benefits of potential fuel controls in the context of the
fuel sulfur controls that we had finalized in February 2000. However,
the March 2001 rule did commit to additional rulemaking that would
evaluate the need for and feasibility of additional controls.\1\
Today's proposal fulfills that commitment, and represents the second
step of the two-step approach originally envisioned in the 2001 rule.
---------------------------------------------------------------------------
\1\ See Sierra Club v. EPA, 325 F. 3d 374, 380 (D.C. Cir. 2003),
which upholds this approach.
---------------------------------------------------------------------------
The 2001 rule did not set additional air toxics controls for motor
vehicles, because the technology-forcing Tier 2 light-duty vehicle
standards and 2007 heavy-duty engine and vehicle standards had just
been promulgated. We found that those standards represented the
greatest degree of toxics control achievable at that time under section
202(l).\2\
---------------------------------------------------------------------------
\2\ 66 FR 17241-17245 (March 29, 2001).
---------------------------------------------------------------------------
b. Technical Analysis Plan
The 2001 rulemaking also included a Technical Analysis Plan that
described toxics-related research and activities that would inform our
future rulemaking to evaluate the need for and appropriateness of
additional mobile source air toxic controls. Specifically, we
identified four critical areas where there were data gaps requiring
long-term efforts:
Developing better air toxics emission factors for nonroad
sources;
Improving estimation of air toxics exposures in
microenvironments;
[[Page 15810]]
Improving consideration of the range of total public
exposures to air toxics; and
Increasing our understanding of the effectiveness and
costs of vehicle, fuel and nonroad controls for air toxics.
EPA and other outside researchers have conducted significant
research in these areas since 2001. The findings of this research are
described in more detail in other sections of this preamble and in the
regulatory impact analysis for this proposal. Following are some
highlights of our activities.
Nonroad emissions testing. EPA has tested emissions of nonroad
diesel engines for a comprehensive suite of hydrocarbons and inorganic
compounds. These emissions tests employed steady-state as well as
transient test cycles, using typical nonroad diesel fuel and low-sulfur
nonroad diesel fuel. In addition, EPA tested small gasoline-powered
engines such as lawnmowers, leaf blowers, chainsaws and string
trimmers.
Improved estimation of exposures in microenvironments and
consideration of the range of public exposures. EPA and other
researchers have conducted a substantial amount of research and
analysis in these areas, which is discussed in section IV of this
preamble and in the regulatory impact analysis. This research has
involved monitoring as well as the development and application of
enhanced modeling tools. For example, personal exposure monitoring and
ambient monitoring has been conducted at homes and schools near
roadways; in vehicles; in homes with attached garages; and in
occupational settings involving both diesel and gasoline nonroad
equipment. We have also applied dispersion modeling techniques with
greater spatial refinement to estimate gradients of toxic pollutants
near roadways. A variety of improvements to our emissions, dispersion,
and exposure modeling tools are improving our ability to consider the
range of exposure people experience. These include the MOBILE6
emissions model, improved spatial and temporal allocation of emissions,
development of the Community Multiscale Air Quality (CMAQ) model, and
updates to the HAPEM exposure model. Many of these improvements were
applied in EPA's National-Scale Air Toxics Assessment for 1999 and
other analyses EPA performed to support this proposal. In fact, EPA
developed a modification of the HAPEM exposure model to account for
higher pollutant concentrations near major roads.
Research in these areas is continuing both inside and outside EPA,
including work under the auspices of the Health Effects Institute and
the Mickey Leland National Urban Air Toxics Research Center.
Costs and effectiveness of vehicle, fuel, and nonroad controls for
air toxics. EPA's analysis of the costs and effectiveness of vehicle
and fuel controls is described in section IX of this preamble and in
the regulatory impact analysis. In addition, as described in section V,
EPA is currently developing rules that will examine controls of small
gasoline engines and diesel locomotive and marine engines.
II. Overview of Proposal
A. Why Is EPA Making This Proposal?
People experience elevated risk of cancer and other noncancer
health effects from exposure to air toxics. Mobile sources are
responsible for a significant portion of this risk. For example,
benzene is the most significant contributor to cancer risk from all
outdoor air toxics,\3\ and most of the nation's benzene emissions come
from mobile sources. These risks vary depending on where people live
and work and the kinds of activities in which they engage. People who
live or work near major roads, or people that spend a large amount of
time in vehicles, are likely to have higher exposures and higher risks.
Although we expect significant reductions in mobile source air toxics
in the future, predicted cancer and noncancer health risks will remain
a public health concern. Benzene will remain the largest contributor to
this risk. In addition, some mobile source air toxics contribute to the
formation of ozone and PM2.5, which contribute to serious
public health problems, which are discussed further in section II.A.4.
---------------------------------------------------------------------------
\3\ Based on quantitative estimates of risk, which do not
include diesel particular matter and diesel exhaust organic gases.
---------------------------------------------------------------------------
Sections II.A.1-3 discuss the risks posed by outdoor toxics now and
in the future, based on national-scale estimates such as EPA's
National-Scale Air Toxics Assessment (NATA). EPA's NATA for 1999
provides some perspective on the average risk of cancer and noncancer
health effects resulting from breathing air toxics from outdoor
sources, and the contribution of mobile sources to these
risks.4 5 This assessment did not include indoor sources of
air toxics. Also, it estimates average concentrations within a census
tract, and therefore does not reflect elevated concentrations and
exposures near roadways within a census tract. Nevertheless, its
findings are useful in providing a perspective on the magnitude of
risks posed by outdoor sources of air toxics generally, and in
identifying what pollutants and sources are important contributors to
these health risks.
---------------------------------------------------------------------------
\4\ http://www.epa.gov/ttn/atw/nata 1999.
\5\ NATA does not include a quantitative estimate of cancer risk
for diesel particulate matter and diesel exhaust organic gases. EPA
has concluded that while diesel exhaust is likely to be a human
carcinogen, available data are not sufficient to develop a
confidential estimate of cancer unit risk.
---------------------------------------------------------------------------
EPA also performed a national-scale assessment for future years,
using the same modeling tools and approach as the 1999 NATA. Finally,
we also performed national-scale exposure modeling that accounts for
the higher toxics concentrations near roads. This latter modeling
provides a perspective on the mobile source contribution to risk from
air toxics that is not reflected in our other national-scale
assessments.
1. National Cancer Risk from Air Toxics
According to NATA, the average national cancer risk in 1999 from
all outdoor sources of air toxics was 42 in a million. That is, 42 out
of one million people would be expected to contract cancer from a
lifetime of breathing air toxics at 1999 levels. Mobile sources were
responsible for 44% of outdoor toxic emissions and almost 50% of the
cancer risk. Considering only the subset of compounds emitted by mobile
sources (see Table IV.C-2), the national average cancer risk in 1999,
including the stationary source contribution to these pollutants, was
23 in a million.
Benzene is the largest contributor to cancer risk of all 133
pollutants quantitatively assessed in the 1999 NATA. The national
average cancer risk from benzene alone was 11 in a million. Over 120
million people in 1999 were exposed to a risk level above 10 in a
million due to chronic inhalation exposure to benzene. Mobile sources
were responsible for 68% of benzene emissions in 1999.
Although air toxics emissions are projected to decline in the
future as a result of standards EPA has previously adopted, cancer risk
will continue to be a public health concern. The predicted national
average cancer risk from MSATs in 2030 will be 18 in a million,
according to EPA analysis (described in more detail in section IV of
this preamble and Chapter 3 of the Regulatory Impact Analysis). In
fact, in 2030 there will be more people exposed to the highest levels
of risk. The number of Americans above the 10 in a million cancer risk
level from exposure to MSATs is projected to increase from 214 million
in 1999 to 240 million in 2030. Mobile sources will continue to be a
significant contributor to risk in the future, accounting for 22% of
total air
[[Page 15811]]
toxic emissions in 2020, and 44% of benzene emissions.
2. Noncancer Health Effects
According to the NATA for 1999, nearly the entire U.S. population
was exposed to an average level of air toxics that has the potential
for adverse respiratory health effects (noncancer).\6\ This will
continue to be the case in 2030, even though toxics levels will be
lower.
---------------------------------------------------------------------------
\6\ That is, the respiratory hazard index exceeded 1. See
section III.D of this preamble for more information.
---------------------------------------------------------------------------
Mobile sources were responsible for 74% of the noncancer
(respiratory) risk from outdoor air toxics in 1999. The majority of
this risk was from acrolein, and formaldehyde also contributed to the
risk of respiratory health effects. Mobile sources will continue to be
responsible for the majority of noncancer risk from outdoor air toxics
in 2030.
Although not included in NATA's estimates of noncancer risk, PM
from gasoline and diesel mobile sources contribute significantly to the
health effects associated with ambient PM, for which EPA has
established a National Ambient Air Quality Standard. There is extensive
human data showing a wide spectrum of adverse health effects associated
with exposure to ambient PM.
3. Exposure Near Roads and From Attached Garages
The national-scale risks described above do not account for higher
exposures experienced by people who live near major roadways, or people
who live in homes with attached garages. A substantial number of
studies show elevated concentrations of multiple MSATs in close
proximity to major roads. We also conducted an exposure modeling study
for three geographically distinct states (Colorado, New York, and
Georgia) and found that when the elevated concentrations near roadways
are accounted for, the distribution of benzene exposure is broader,
with a larger fraction of the population exposed to higher
concentrations. The largest effect on personal exposure occurs for the
population living near major roads. A U.S. Census survey of housing
found that in 2003 12.6% of U.S. housing units were within 300 feet of
a major transportation source.\7\ The potential population exposed to
elevated concentrations near major roadways is therefore large. In
addition, our analysis indicates that benzene exposure experienced by
people living in homes with attached garages may be twice the national
average benzene exposure estimated by NATA for 1999. More details on
exposure near roads and from attached garages can be found in section
IV of this preamble.
---------------------------------------------------------------------------
\7\ United States Census Bureau. (2004) American Housing Survey
web page. [Online at http://www.cenus.gov/hhes/www/housing/ahs/ahs03/ahs03.html] Table IA-6.
---------------------------------------------------------------------------
4. Ozone and Particulate Matter
Many MSATs are part of a larger category of mobile source emissions
known as volatile organic compounds (VOC), which contribute to the
formation of ozone and particulate matter (PM). In addition, some MSATs
are emitted directly as PM rather than being formed through secondary
processes. Thus, MSATs contribute to adverse health effects both as
individual pollutants, and as precursors to ozone and PM. Mobile
sources contribute significantly to national emissions of VOC and PM.
In addition, gas cans are a source of both VOC and benzene emissions.
Both ozone and PM contribute to serious public health problems,
including premature mortality, aggravation of respiratory and
cardiovascular disease (as indicated by increased hospital admissions
and emergency room visits, school absences, work loss days, and
restricted activity days), changes in lung function and increased
respiratory symptoms, changes to lung tissues and structures, altered
respiratory defense mechanisms, chronic bronchitis, and decreased lung
function.
In addition, ozone and PM cause significant harm to public welfare.
Specifically, ozone causes damage to vegetation, which leads to crop
and forestry economic losses, as well as harm to national parks,
wilderness areas, and other natural systems. PM contributes to the
substantial impairment of visibility in many parts of the U.S.,
including national parks and wilderness areas. The deposition of
airborne particles can also reduce the aesthetic appeal of buildings
and culturally important articles through soiling, and can contribute
directly (or in conjunction with other pollutants) to structural damage
by means of corrosion or erosion.
Finally, atmospheric deposition and runoff of polycyclic organic
matter (POM), metals, and other mobile-source-related compounds
contribute to the contamination of water bodies such as the Great Lakes
and coastal waters (e.g., the Chesapeake Bay).
B. What Is EPA Proposing?
1. Light-Duty Vehicle Emission Standards
As described in more detail in section VI, we are proposing new
standards for both exhaust and evaporative emissions from passenger
vehicles. The new exhaust emissions standards would significantly
reduce non-methane hydrocarbon (NMHC) emissions from passenger vehicles
at cold temperatures. These hydrocarbons include many mobile source air
toxics (including benzene), as well as VOC.
Current vehicle emission standards require that the certification
testing of NMHC is performed at 75 [deg]F. Recent research and analysis
indicates that these standards are not resulting in robust control of
NMHC at lower temperatures. We believe that cold temperature NMHC
control can be substantially improved using the same technological
approaches that are generally already being used in the Tier 2 vehicle
fleet to meet the stringent standards at 75 [deg]F. These cold-
temperature NMHC controls would also result in lower direct PM
emissions at cold temperatures.
Accordingly, we are proposing that light-duty vehicles, light-duty
trucks, and medium-duty passenger vehicles would be subject to a new
non-methane hydrocarbon (NMHC) exhaust emissions standard at 20 [deg]F.
Vehicles at or below 6,000 pounds gross vehicle weight rating (GVWR)
would be subject to a sales-weighted fleet average NMHC level of 0.3
grams/mile. Vehicles between 6,000 and 8,500 pounds GVWR and medium-
duty passenger vehicles would be subject to a sales-weighted fleet
average NMHC level of 0.5 grams/mile. For lighter vehicles, the
standard would phase in between 2010 and 2013. For heavier vehicles,
the new standards would phase in between 2012 and 2015. We are also
proposing a credit program and other provisions designed to provide
flexibility to manufacturers, especially during the phase-in periods.
These provisions are designed to allow the earliest possible phase-in
of standards and help minimize costs and ease the transition to new
standards.
We are also proposing a set of nominally more stringent evaporative
emission standards for all light-duty vehicles, light-duty trucks, and
medium-duty passenger vehicles. The proposed standards are equivalent
to California's Low Emission Vehicle II (LEV II) standards, and they
reflect the evaporative emissions levels that are already being
achieved nationwide. The standards we are proposing today would codify
the approach that most
[[Page 15812]]
manufacturers are already taking for 50-state evaporative systems, and
the standards would thus prevent backsliding in the future. We are
proposing to implement the evaporative emission standards in 2009 for
lighter vehicles and in 2010 for the heavier vehicles.
Section VI provides details on the proposed exhaust and evaporative
standards and their implementation, and our rationale for proposing
them.
2. Gasoline Fuel Standards
As described in more detail in section VII, we are proposing to
limit the benzene content of all gasoline, both reformulated and
conventional. We propose that beginning January 1, 2011, refiners would
meet an average gasoline benzene content standard of 0.62% by volume on
all their gasoline. We are not proposing a standard for California,
however, because it is already covered by a similar state program.
This proposed fuel standard would result in air toxics emissions
reductions that are greater than required under all existing gasoline
toxics programs. As a result, EPA is proposing that upon full
implementation in 2011, the regulatory provisions for the benzene
control program would become the single regulatory mechanism used to
implement the RFG and Anti-dumping annual average toxics requirements.
The current RFG and Anti-dumping annual average provisions thus would
be replaced by the proposed benzene control program. The MSAT2 benzene
control program would also replace the MSAT1 requirements. In addition,
the program would satisfy certain fuel MSAT conditions of the Energy
Policy Act of 2005 and obviate the need to revise toxics baselines for
reformulated gasoline otherwise required by the Energy Policy Act. In
all of these ways, we would significantly consolidate and simplify the
existing national fuel-related MSAT regulatory program.
We also propose that refiners could generate benzene credits and
use or transfer them as a part of a nationwide averaging, banking, and
trading (ABT) program. From 2007-2010 refiners could generate benzene
credits by taking early steps to reduce gasoline benzene levels.
Beginning in 2011 and continuing indefinitely, refiners could generate
credits by producing gasoline with benzene levels below the 0.62%
average standard. Refiners could apply the credits towards company
compliance, ``bank'' the credits for later use, or transfer (``trade'')
them to other refiners nationwide (outside of California) under the
proposed program. Under this program, refiners could use credits to
achieve compliance with the benzene content standard.
This proposed ABT program would allow us to set a more stringent
benzene standard than would otherwise be possible, and it would allow
implementation to occur earlier. Under this proposed benzene content
standard and ABT program, gasoline in all areas of the country would
have lower benzene levels than they have today. Overall benzene levels
would be 37% lower. This would reduce benzene emissions and exposure
nationwide.
Finally, we propose hardship provisions. Refiners approved as
``small refiners'' would be eligible for certain temporary relief
provisions. In addition, any refiner facing extreme unforeseen
circumstances or extreme hardship circumstances could apply for similar
temporary relief.
Section VII of this preamble provides a detailed explanation and
rationale for the proposed fuel program and its implementation. It also
discusses and seeks comment on a variety of alternatives that we
considered.
3. Portable Gasoline Container (Gas Can) Controls
Portable gasoline containers, or gas cans, are consumer products
used to refuel a wide variety of gasoline-powered equipment, including
lawn and garden equipment, recreational equipment, and passenger
vehicles that have run out of gas. As described in section VIII, we are
proposing standards that would reduce hydrocarbon emissions from
evaporation, permeation, and spillage. These standards would
significantly reduce benzene and other toxics, as well as VOC more
generally. VOC is an ozone precursor.
We propose a performance-based standard of 0.3 grams per gallon per
day of hydrocarbons, based on the emissions from the can over a diurnal
test cycle. The standard would apply to gas cans manufactured on or
after January 1, 2009. We also propose test procedures and a
certification and compliance program, in order to ensure that gas cans
would meet the emission standard over a range of in-use conditions. The
proposed standards would result in the use of best available control
technologies, such as durable permeation barriers, automatically
closing spouts, and cans that are well-sealed.
California implemented an emissions control program for gas cans in
2001, and since then, several other states have adopted the program.
Last year, California adopted a revised program, which will take effect
July 1, 2007. The revised California program is very similar to the
program we are proposing. Although a few aspects of the program we are
proposing are different, we believe manufacturers would be able to meet
both EPA and California requirements with the same gas can designs.
III. What Are Mobile Source Air Toxics (MSATs) and Their Health
Effects?
A. What Are MSATs?
Section 202(l) refers to ``hazardous air pollutants from motor
vehicles and motor vehicle fuels.'' We use the term ``mobile source air
toxics (MSATs)'' to refer to compounds that are emitted by mobile
sources and have the potential for serious adverse health effects.
There are a variety of ways in which to identify compounds that have
the potential for serious adverse health effects. For example, EPA's
Integrated Risk Information System (IRIS) is EPA's database containing
information on human health effects that may result from exposure to
various chemicals in the environment. In addition, Clean Air Act
section 112(b) contains a list of hazardous air pollutants that EPA is
required to control through regulatory standards; other agencies or
programs such as the Agency for Toxic Substances and Disease Registry
and the California EPA have developed health benchmark values for
various compounds; and the International Agency for Research on Cancer
and the National Toxicology Program have assembled evidence of
substances that cause cancer in humans and issue judgments on the
strength of the evidence. Each source of information has its own
strengths and limitations. For example, there are inherent limitations
on the number of compounds that have been investigated sufficiently for
EPA to conduct an IRIS assessment. There are some compounds that are
not listed in IRIS but are considered to be hazardous air pollutants
under Clean Air Act section 112(b) and are regulated by the Agency
(e.g., propionaldehyde, 2,2,4-trimethylpentane).
B. Compounds Emitted by Mobile Sources and Identified in IRIS
In its 2001 MSAT rule, EPA identified a list of 21 MSATs. We listed
a compound as an MSAT if it was emitted from mobile sources, and if the
Agency had concluded in IRIS that the compound posed a potential cancer
hazard and/or if IRIS contained an inhalation reference concentration
or ingestion reference dose for the compound. Since 2001, EPA has
conducted an extensive review of the
[[Page 15813]]
literature to produce a list of the compounds identified in the exhaust
or evaporative emissions from onroad and nonroad equipment, using
baseline as well as alternative fuels (e.g., biodiesel, compressed
natural gas). This list, the Master List of Compounds Emitted by Mobile
Sources (``Master List''), currently includes approximately 1,000
compounds. It is available in the public docket for this rule and on
the web (www.epa.gov/otaq/toxics.htm). Table III.B-1 lists those
compounds from the Master List that currently meet those 2001 MSAT
criteria, based on the current IRIS.
Table III.B-1 identifies all of the compounds from the Master List
that are present in IRIS with (a) a cancer hazard identification of
known, probable, or possible human carcinogens (under the 1986 EPA
cancer guidelines) or carcinogenic to humans, likely to be carcinogenic
to humans, or suggestive evidence of carcinogenic potential (under the
2005 EPA cancer guidelines); and/or (b) an inhalation reference
concentration or an ingestion reference dose. Although all these
compounds have been detected in emissions from mobile sources, many are
emitted in trace amounts and data are not adequate to develop an
inventory. Those compounds for which we have developed an emissions
inventory are summarized in Table IV.C-2. There are several compounds
for which IRIS assessments are underway and therefore are not included
in Table III.B-1. These compounds are: Cerium, copper, ethanol, ethyl
tertiary butyl ether (ETBE), platinum, propionaldehyde, and 2,2,4-
trimethylpentane.
The fact that a compound is listed in Table III.B-1 does not imply
a risk to public health or welfare at current levels, or that it is
appropriate to adopt controls to limit the emissions of such a compound
from motor vehicles or their fuels. In conducting any such further
evaluation, pursuant to sections 202(a) or 211(c) of the Act, EPA would
consider whether emissions of the compound from motor vehicles cause or
contribute to air pollution which may reasonably be anticipated to
endanger public health or welfare.
Table III.B-1.--Compounds Emitted by Mobile Sources That Are Listed in
IRIS*
------------------------------------------------------------------------
------------------------------------------------------------------------
1,1,1,2-Tetrafluoroethane... Cadmium............. Manganese.
1,1,1-Trichloroethane....... Carbon disulfide.... Mercury, elemental.
1,1-Biphenyl................ Carbon tetrachloride Methanol.
1,2-Dibromoethane........... Chlorine............ Methyl chloride.
1,2-Dichlorobenzene......... Chlorobenzene....... Methyl ethyl ketone
(MEK).
1,3-Butadiene............... Chloroform.......... Methyl isobutyl
ketone (MIBK).
2,4-Dinitrophenol........... Chromium III........ Methyl tert-butyl
ether (MTBE).
2-Methylnaphthalene......... Chromium VI......... Molybdenum.
2-Methylphenol.............. Chrysene............ Naphthalene.
4-Methylphenol.............. Crotonaldehyde...... Nickel.
Acenaphthene................ Cumene (isopropyl Nitrate.
benzene).
Acetaldehyde................ Cyclohexane......... N-
Nitrosodiethylamine
.
Acetone..................... Cyclohexanone....... N-
Nitrosodimethylamin
e.
Acetophenone................ Di(2- N-Nitroso-di-n-
ethylhexyl)phthalat butylamine.
e.
Acrolein (2-propenal)....... Dibenz[a,h]anthracen N-Nitrosodi-N-
e. propylamine.
Ammonia..................... Dibutyl phthalate... N-
Nitrosopyrrolidine.
Anthracene.................. Dichloromethane..... Pentachlorophenol.
Antimony.................... Diesel PM and Diesel Phenol.
exhaust organic
gases.
Arsenic, inorganic.......... Diethyl phthalate... Phosphorus.
Barium and compounds........ Ethylbenzene........ Phthalic anhydride.
Benz[a]anthracene........... Ethylene glycol Pyrene.
monobutyl ether.
Benzaldehyde................ Fluoranthene........ Selenium and
compounds.
Benzene..................... Fluorene............ Silver.
Benzo[a]pyrene (BaP)........ Formaldehyde........ Strontium.
Benzo[b]fluoranthene........ Furfural............ Styrene.
Benzo[k]fluoranthene........ Hexachlorodibenzo-p- Tetrachloroethylene.
dioxin, mixture
(dioxin/furans).
Benzoic acid................ n-Hexane............ Toluene.
Beryllium and compounds..... Hydrogen cyanide.... Trichlorofluorometha
ne.
Boron (Boron and Borates Hydrogen sulfide.... Vanadium.
only).
Bromomethane................ Indeno[1,2,3- Xylenes.
cd]pyrene.
Butyl benzyl phthalate...... Lead and compounds Zinc and compounds.
(inorganic).
------------------------------------------------------------------------
* Compounds listed in IRIS as known, probable, or possible human
carcinogens and/or pollutants for which the Agency has calculated a
reference concentration or reference dose.
C. Which Mobile Source Emissions Pose the Greatest Health Risk at
Current Levels?
The 1999 National-Scale Air Toxics Assessment (NATA) provides some
perspective on which mobile source emissions pose the greatest risk at
current estimated ambient levels.\8\ We also conducted a national-scale
assessment for future years, which is discussed more fully in section
IV of this preamble and Chapters 2 and 3 of the RIA. Our understanding
of what emissions pose the greatest risk will evolve over time, based
on our understanding of the ambient levels and health effects
associated with the compounds.\9\
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\8\ It is, of course, not necessary for EPA to show that a
compound is a national or regional risk driver to show that its
emission from motor vehicles may reasonably cause or contribute to
endangerment of public health or welfare. A showing that motor
vehicles contribute some non-trivial percentage of the inventory of
a compound known to be associated with adverse health effects would
normally be sufficient. Cf. Bluewater Network v. EPA, 370 F. 3d 1,
15 (D.C. Cir. 2004).
\9\ The discussion here considers risks other than those
attributed to ambient levels of criteria pollutants.
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1. National and Regional Risk Drivers in 1999 National-Scale Air Toxics
Assessment
The 1999 NATA evaluates 177 hazardous air pollutants currently
listed under CAA section 112(b), as well as
[[Page 15814]]
diesel PM.\10\ NATA is described in greater detail in Chapters 2 and 3
of the Regulatory Impact Analysis for this proposed rule. Additional
information can also be obtained from the NATA website (http://www.epa.gov/ttn/atw/nata1999). Based on the assessment of inhalation
exposures associated with outdoor sources of these hazardous air
pollutants, NATA has identified cancer and noncancer risk drivers on a
national and regional scale (Table III.C-1). A cancer risk driver on a
national scale is a hazardous air pollutant for which at least 25
million people are exposed to risk greater than ten in one million.
Benzene is the only compound identified in the 1999 NATA as a national
cancer risk driver. A cancer risk driver on a regional scale is a
hazardous air pollutant for which at least one million people are
exposed to risk greater than ten in one million or at least 10,000
people are exposed to risk greater than 100 in one million. Twelve
compounds (or groups of compounds in the case of POM) were identified
as regional cancer risk drivers. The 1999 NATA concludes that diesel
particulate matter is among the substances that pose the greatest
relative risk, although the cancer risk cannot be quantified.
---------------------------------------------------------------------------
\10\ NATA does not include a quantitative estimate of cancer
risk for diesel particulate matter and diesel exhaust organic gases.
---------------------------------------------------------------------------
A noncancer risk driver at the national scale is a hazardous air
pollutant for which at least 25 million people are exposed at a
concentration greater than the inhalation reference concentration. The
RfC is an estimate (with uncertainty spanning perhaps an order of
magnitude) of a daily exposure to the human population (including
sensitive subgroups) that is likely to be without appreciable risk of
deleterious effects during a lifetime. Acrolein is the only compound
identified in the 1999 NATA as a national noncancer risk driver. A
noncancer risk driver on a regional scale is defined as a hazardous air
pollutant for which at least 10,000 people are exposed to an ambient
concentration greater than the inhalation reference concentration.
Sixteen regional-scale noncancer risk drivers were identified in the
1999 NATA (see Table III.C-1.).
Table III.C-1.--National and Regional Cancer and Noncancer Risk Drivers
in 1999 NATA
------------------------------------------------------------------------
Cancer \1\ Noncancer
------------------------------------------------------------------------
National drivers \2\...................... National drivers \4\
Benzene................................... Acrolein
Regional drivers \3\...................... Regional drivers \5\
Arsenic compounds......................... Antimony
Benzidine................................. Arsenic compounds
1,3-Butadiene............................. 1,3-Butadiene
Cadmium compounds......................... Cadmium compounds
Carbon tetrachloride...................... Chlorine
Chromium VI............................... Chromium VI
Coke oven................................. Diesel PM
Ethylene oxide............................ Formaldehyde
Hydrazine................................. Hexamethylene 1-6-
diisocyanate
Naphthalene............................... Hydrazine
Perchloroethylene......................... Hydrochloric acid
Polycyclic organic matter................. Maleic anhydride
Manganese compounds
Nickel compounds
2,4-Toluene diisocyanate
Triethylamine
------------------------------------------------------------------------
\1\ The list of cancer risk drivers does not include diesel particulate
matter. However, the 1999 NATA concluded that it was one of the
pollutants that posed the greatest relative cancer risk.
\2\ At least 25 million people exposed to risk >10 in 1 million.
\3\ At least 1 million people exposed to risk >10 in 1 million or at
least 10,000 people exposed to risk >100 in 1 million.
\4\ At least 25 million people exposed to a hazard quotient > 1.0.
\5\ At least 10,000 people exposed to a hazard quotient > 1.
2. 1999 NATA Risk Drivers with Significant Mobile Source Contribution
Among the national and regional-scale cancer and noncancer risk
drivers identified in the 1999 NATA, seven compounds have significant
contributions from mobile sources: benzene, 1,3-butadiene,
formaldehyde, acrolein, polycyclic organic matter (POM), naphthalene,
and diesel particulate matter and diesel exhaust organic gases (Table
III.C-2.). For example, mobile sources contribute 68% of the national
benzene inventory, with 49% from on-road sources and 19% from nonroad
sources.
Table III.C-2.--Mobile Source Contribution to 1999 NATA Risk Drivers
------------------------------------------------------------------------
Percent Percent
contribution contribution
1999 NATA risk drivers from all from on-road
mobile sources mobile sources
(percent) (percent)
------------------------------------------------------------------------
Benzene................................. 68 49
1,3-Butadiene........................... 58 41
Formaldehyde............................ 47 27
Acrolein................................ 25 14
Polycyclic organic matter *............. 6 3
Naphthalene............................. 27 21
Diesel PM and Diesel exhaust organic 100 38
gases..................................
------------------------------------------------------------------------
* This POM inventory includes the 15 POM compounds:
benzo[b]fluoranthene, benz[a]anthracene, indeno(1,2,3-c,d)pyrene,
benzo[k]fluoranthene, chrysene, benzo[a]pyrene, dibenz(a,h)anthracene,
anthracene, pyrene, benzo(g,h,i)perylene, fluoranthene,
acenaphthylene, phenanthrene, fluorene, and acenaphthene.
[[Page 15815]]
D. What Are the Health Effects of Air Toxics?
1. Overview of Potential Cancer and Noncancer Health Effects
Air toxics can cause a variety of cancer and noncancer health
effects. A number of the mobile source air toxic pollutants described
in section III are known or likely to pose a cancer hazard in humans.
Many of these compounds also cause adverse noncancer health effects
resulting from chronic,\11\ subchronic,\12\ or acute \13\ inhalation
exposures. These include neurological, cardiovascular, liver, kidney,
and respiratory effects as well as effects on the immune and
reproductive systems. Section III.D.2 discusses the health effects of
air toxic compounds listed in Table III.C-2, as well as acetaldehyde.
The compounds in Table III.C-2 were all identified as national and
regional-scale cancer and noncancer risk drivers in the 1999 National-
Scale Air Toxics Assessment (NATA), and have significant inventory
contributions from mobile sources. Acetaldehyde is included because it
is a likely human carcinogen, has a significant inventory contribution
from mobile sources, and was identified as a risk driver in the 1996
NATA. We are also including diesel particulate matter and diesel
exhaust organic gases in this discussion. Although 1999 NATA did not
quantify cancer risks associated with exposure to this pollutant, EPA
has concluded that diesel exhaust ranks with the other substances that
the national-scale assessment suggests pose the greatest relative
risk.\14\
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\11\ Chronic exposure is defined in the glossary of the
Integrated Risk Information (IRIS) database (www.epa.gov/iris) as
repeated exposure by the oral, dermal, or inhalation route for more
than approximately 10 of the life span in humans (more than
approximately 90 days to 2 years in typically used laboratory animal
species).
\12\ Defined in the IRIS database as exposure to a substance
spanning approximately 10 of the lifetime of an organism.
\13\ Defined in the IRIS database as exposure by the oral,
dermal, or inhalation route for 24 hours or less.
\14\ http://www.epa.gov/ttn/atw/nata1999.
---------------------------------------------------------------------------
Inhalation cancer risks are usually estimated by EPA as ``unit
risks,'' which represent the excess lifetime cancer risk estimated to
result from continuous exposure to an agent at a concentration of 1
[mu]g/m\3\ in air. Some air toxics are known to be carcinogenic in
animals but lack data in humans. These have been assumed to be human
carcinogens. Also, relationships between exposure and probability of
cancer are assumed to be linear. In addition, these unit risks are
typically upper bound estimates. Upper bound estimates are more likely
to overestimate than underestimate risk. Where there are strong
epidemiological data, a maximum likelihood (MLE) estimate may be
developed. An MLE is a best scientific estimate of risk. The benzene
unit risk is an MLE. A discussion of the confidence in a quantitative
cancer risk estimate is provided in the IRIS file for each compound.
The discussion of the confidence in the cancer risk estimate includes
an assessment of the source of the data (human or animal),
uncertainties in dose estimates, choice of the model used to fit the
exposure and response data and how uncertainties and potential
confounders are handled.
Potential noncancer chronic inhalation health risks are quantified
using reference concentrations (RfCs) and noncancer chronic ingestion
health risks are quantified using reference doses (RfDs). The RfC is an
estimate (with uncertainty spanning perhaps an order of magnitude) of a
daily exposure to the human population (including sensitive subgroups)
that is likely to be without appreciable risk of deleterious effects
during a lifetime. Sources of uncertainty in the development of the
RfCs and RfDs include intraspecies extrapolation (animal to human) and
interspecies extrapolation (average human to sensitive human).
Additional sources of uncertainty can be using a lowest observed
adverse effect level in place of a no observed adverse effect level,
and other data deficiencies. A statement regarding the confidence in
the RfC and/or RfD is developed to reflect the confidence in the
principal study or studies on which the RfC or RfD are based and the
confidence in the underlying database. Factors that affect the
confidence in the principal study include how well the study was
designed, conducted and reported. Factors that affect the confidence in
the database include an assessment of the availability of information
regarding identification of the critical effect, potentially
susceptible populations and exposure scenarios relevant to assessment
of risk.
The RfC may be used to estimate a hazard quotient, which is the
environmental exposure to a substance divided by its RfC. A hazard
quotient greater than one indicates adverse health effects are
possible. The hazard quotient cannot be translated to a probability
that adverse health effects will occur, and is unlikely to be
proportional to risk. It is especially important to note that a hazard
quotient exceeding one does not necessarily mean that adverse effects
will occur. In NATA, hazard quotients for different respiratory
irritants were also combined into a hazard index (HI). A hazard index
is the sum of hazard quotients for substances that affect the same
target organ or organ system. Because different pollutants may cause
similar adverse health effects, it is often appropriate to combine
hazard quotients associated with different substances. However, the HI
is only an approximation of a combined effect because substances may
affect a target organ in different ways.
2. Health Effects of Key MSATs
a. Benzene
The EPA's IRIS database lists benzene, an aromatic hydrocarbon, as
a known human carcinogen (causing leukemia) by all routes of
exposure.\15\ A number of adverse noncancer health effects including
blood disorders and immunotoxicity have also been associated with long-
term occupational exposure to benzene.
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\15\ U.S. EPA (2000). Integrated Risk Information System File
for Benzene. This material is available electronically at http://www.epa.gov/iris/subst/0276.htm.
---------------------------------------------------------------------------
Inhalation is the major source of human exposure to benzene in the
occupational and non-occupational setting. Long-term inhalation
occupational exposure to benzene has been shown to cause cancer of the
hematopoetic (blood cell) system in adults. Among these are acute
nonlymphocytic leukemia \16\ and chronic lymphocytic
leukemia.17 18
[[Page 15816]]
Leukemias, lymphomas, and other tumor types have been observed in
experimental animals exposed to benzene by inhalation or oral
administration. Exposure to benzene and/or its metabolites has also
been linked with chromosomal changes in humans and animals
19 20 and increased proliferation of mouse bone marrow
cells.21 22
---------------------------------------------------------------------------
\16\ Leukemia is a blood disease in which the white blood cells
are abnormal in type or number. Leukemia may be divided into
nonlymphocytic (granulocytic) leukemias and lymphocytic leukemias.
Nonlymphocytic leukemia generally involves the types of white blood
cells (leukocytes) that are involved in engulfing, killing, and
digesting bacteria and other parasites (phagocytosis) as well as
releasing chemicals involved in allergic and immune responses. This
type of leukemia may also involve erythroblastic cell types
(immature red blood cells). Lymphocytic leukemia involves the
lymphocyte type of white blood cells that are responsible for the
immune responses. Both nonlymphocytic and lymphocytic leukemia may,
in turn, be separated into acute (rapid and fatal) and chronic
(lingering, lasting) forms. For example; in acute myeloid leukemia
there is diminished production of normal red blood cells
(erythrocytes), granulocytes, and platelets (control clotting),
which leads to death by anemia, infection, or hemorrhage. These
events can be rapid. In chronic myeloid leukemia (CML) the leukemic
cells retain the ability to differentiate (i.e., be responsive to
stimulatory factors) and perform function; later there is a loss of
the ability to respond.
\17\ U.S. EPA (1985) Environmental Protection Agency, Interim
quantitative cancer unit risk estimates due to inhalation of
benzene, prepared by the Office of Health and Environmental
Assessment, Carcinogen Assessment Group, Washington, DC, for the
Office of Air Quality Planning and Standards, Washington, DC, 1985.
\18\ U.S. EPA. (1993). Motor Vehicle-Related Air Toxics Study.
Office of Mobile Sources, Ann Arbor, MI. http://www.epa.gov/otaq/regs/toxics/tox_archive.htm.
\19\ International Agency for Research on Cancer (IARC) (1982)
IARC monographs on the evaluation of carcinogenic risk of chemicals
to humans, Volume 29, Some industrial chemicals and dyestuffs,
International Agency for Research on Cancer, World Health
Organization, Lyon, France, p. 345-389.
\20\ U.S. EPA (1998) Environmental Protection Agency,
Carcinogenic Effects of Benzene: An Update, National Center for
Environmental Assessment, Washington, DC. EPA600-P-97-001F. http://www.epa.gov/ncepihom/Catalog/EPA600P97001F.html.
\21\ Irons, R.D., W.S. Stillman, D.B. Colagiovanni, and V.A.
Henry (1992) Synergistic action of the benzene metabolite
hydroquinone on myelopoietic stimulating activity of granulocyte/
macrophage colony-stimulating factor in vitro, Proc. Natl. Acad.
Sci. 89:3691-3695.
\22\ U.S. EPA (1998) Environmental Protection Agency,
Carcinogenic Effects of Benzene: An Update, National Center for
Environmental Assessment, Washington, DC. EPA600-P-97-001F. http://www.epa.gov/ncepihom/Catalog/EPA600P97001F.html.
---------------------------------------------------------------------------
The latest assessment by EPA places the excess risk of developing
acute nonlymphocytic leukemia from inhalation exposure to benzene at
2.2 x 10-\6\ to 7.8 x 10-\6\ per [mu]g/m\3\. In
other words, there is a risk of about two to eight excess leukemia
cases in one million people exposed to 1 [mu]g/m\3\ of benzene over a
lifetime.\23\ This range of unit risks are the MLEs calculated from
different exposure assumptions and dose-response models that are linear
at low doses. At present, the true cancer risk from exposure to benzene
cannot be ascertained, even though dose-response data are used in the
quantitative cancer risk analysis, because of uncertainties in the low-
dose exposure scenarios and lack of clear understanding of the mode of
action. A range of estimates of risk is recommended, each having equal
scientific plausibility. There are confidence intervals associated with
the MLE range that reflect random variation of the observed data. For
the upper end of the MLE range, the 5th and 95th percentile values are
about a factor of 5 lower and higher than the best fit value. The upper
end of the MLE range was used in NATA.
---------------------------------------------------------------------------
\23\ U.S. EPA (1998). Environmental Protection Agency,
Carcinogenic Effects of Benzene: An Update, National Center for
Environmental Assessment, Washington, DC. EPA600-P-97-001F. http://www.epa.gov/ncepihom/Catalog/EPA600P97001F.html.
---------------------------------------------------------------------------
It should be noted that not enough information is known to
determine the slope of the dose-response curve at environmental levels
of exposure and to provide a sound scientific basis to choose any
particular extrapolation/exposure model to estimate human cancer risk
at low doses. EPA risk assessment guidelines suggest using an
assumption of linearity of dose response when (1) there is an absence
of sufficient information on modes of action or (2) the mode of action
information indicates that the dose-response curve at low dose is or is
expected to be linear.\24\ Since the mode of action for benzene
carcinogenicity is unknown, the current cancer unit risk estimate
assumes linearity of the low-dose response. Data that were considered
by EPA in its carcinogenic update suggested that the dose-response
relationship at doses below those examined in the studies reviewed in
EPA's most recent benzene assessment may be supralinear. They support
the inference that cancer risks are as high or are higher than the
estimates provided in the existing EPA assessment.\25\ Data discussed
in the EPA IRIS assessment suggest that genetic abnormalities occur at
low exposure in humans, and the formation of toxic metabolites plateaus
above 25 ppm (80,000 [mu]g/m3).\26\ More recent data on
benzene adducts in humans, published after the most recent IRIS
assessment, suggest that the enzymes involved in benzene metabolism
start to saturate at exposure levels as low as 1 ppm.\27\ Because there
is a transition from linear to saturable metabolism below 1 ppm, the
assumption of low-dose linearity extrapolated from much higher
exposures could lead to substantial underestimation of leukemia risks.
This is consistent with recent epidemiological data which also suggest
a supralinear exposure-response relationship and which ``[extend]
evidence for hematopoietic cancer risks to levels substantially lower
than had previously been established.'' 28 29 These data are
from the largest cohort study done to date with individual worker
exposure estimates. However, these data have not yet been formally
evaluated by EPA as part of the IRIS review process, and it is not
clear whether these data provide sufficient evidence to reject a linear
dose-response curve. A better understanding of the biological mechanism
of benzene-induced leukemia is needed.
---------------------------------------------------------------------------
\24\ U.S. EPA (2005) Guidelines for Carcinogen Risk Assessment.
Report No. EPA/630/P-03/001F. http://cfpub.epa.gov/ncea/raf/recordisplay.cfm?deid=116283.
\25\ U.S. EPA (1998) Carcinogenic Effects of Benzene: An Update.
EPA/600/P-97/001F.
\26\ Rothman, N; Li, GL; Dosemeci, M; et al. (1996)
Hematotoxicity among Chinese workers heavily exposed to benzene. Am.
J. Indust. Med. 29:236-246.
\27\ Rappaport, S.M.; Waidyanatha, S.; Qu, Q.; Shore, R.; Jin,
X.; Cohen, B.; Chen, L.; Melikian, A.; Li, G.; Yin, S.; Yan, H.; Xu,
B.; Mu, R.; Li, Y.; Zhang, X.; and Li, K. (2002) Albumin adducts of
benzene oxide and 1,4-benzoquinone as measures of human benzene
metabolism. Cancer Research 62:1330-1337.
\28\ Hayes, R.B.; Yin, S.; Dosemeci, M.; Li, G.; Wacholder, S.;
Travis, L.B.; Li, C.; Rothman, N.; Hoover, R.N.; and Linet, M.S.
(1997) Benzene and the dose-related incidence of hematologic
neoplasms in China. J. Nat. Cancer Inst. 89:1065-1071.
\29\ Hayes, R.B.; Songnian, Y.; Dosemeci, M.; and Linet, M.
(2001) Benzene and lymphohematopoietic malignancies in humans. Am.
J. Indust. Med. 40:117-126.
---------------------------------------------------------------------------
Children may represent a subpopulation at increased risk from
benzene exposure, due to factors that could increase their
susceptibility. Children may have a higher unit body weight exposure
because of their heightened activity patterns which can increase their
exposures, as well as different ventilation tidal volumes and
frequencies, factors that influence uptake. This could entail a greater
risk of leukemia and other toxic effects to children if they are
exposed to benzene at similar levels as adults. There is limited
information from two studies regarding an increased risk to children
whose parents have been occupationally exposed to
benzene.30 31 Data from animal studies have shown benzene
exposures result in damage to the hematopoietic (blood cell formation)
system during development.32 33 34 Also, key changes related
to the development of childhood leukemia occur in the developing
fetus.\35\ Several studies have reported that genetic changes related
to eventual leukemia development occur before birth. For example, there
is one study of genetic changes in twins who developed T cell leukemia
at 9 years of
[[Page 15817]]
age.\36\ An association between traffic volume, residential proximity
to busy roads and occurrence of childhood leukemia has also been
identified in some studies, although some studies show no association.
---------------------------------------------------------------------------
\30\ Shu, X.O,; Gao, Y.T.; Brinton, L.A.; et al. (1988) A
population-based case-control study of childhood leukemia in
Shanghai. Cancer 62:635-644.
\31\ McKinney, P.A.; Alexander, F.E.; Cartwright, R.A.; et al.
(1991) Parental occupations of children with leukemia in west
Cumbria, north Humberside, and Gateshead, Br. Med. J. 302:681-686.
\32\ Keller, KA; Snyder, CA. (1986) Mice exposed in utero to low
concentrations of benzene exhibit enduring changes in their colony
forming hematopoietic cells. Toxicology 42:171-181.
\33\ Keller, KA; Snyder, CA. (1988) Mice exposed in utero to 20
ppm benzene exhibit altered numbers of recognizable hematopoietic
cells up to seven weeks after exposure. Fundam. Appl. Toxicol.
10:224-232.
\34\ Corti, M; Snyder, CA. (1996) Influences of gender,
development, pregnancy and ethanol consumption on the hematotoxicity
of inhaled 10 ppm benzene. Arch. Toxicol. 70:209-217.
\35\ U.S. EPA. (2002). Toxicological Review of Benzene
(Noncancer Effects). National Center for Environmental Assessment,
Washington, DC. Report No. EPA/635/R-02/001F. http://www.epa.gov/iris/toxreviews/0276-tr[1].pdf.
\36\ Ford, AM; Pombo-de-Oliveira, MS; McCarthy, KP; MacLean, JM;
Carrico, KC; Vincent, RF; Greaves, M. (1997) Monoclonal origin of
concordant T-cell malignancy in identical twins. Blood 89:281-285.
---------------------------------------------------------------------------
A number of adverse noncancer health effects, including blood
disorders such as preleukemia and aplastic anemia, have also been
associated with long-term exposure to benzene.37 38 People
with long-term occupational exposure to benzene have experienced
harmful effects on the blood-forming tissues, especially in bone
marrow. These effects can disrupt normal blood production and suppress
the production of important blood components, such as red and white
blood cells and blood platelets, leading to anemia (a reduction in the
number of red blood cells), leukopenia (a reduction in the number of
white blood cells), or thrombocytopenia (a reduction in the number of
blood platelets, thus reducing the ability of blood to clot). Chronic
inhalation exposure to benzene in humans and animals results in
pancytopenia,\39\ a condition characterized by decreased numbers of
circulating erythrocytes (red blood cells), leukocytes (white blood
cells), and thrombocytes (blood platelets).40 41 Individuals
that develop pancytopenia and have continued exposure to benzene may
develop aplastic anemia, whereas others exhibit both pancytopenia and
bone marrow hyperplasia (excessive cell formation), a condition that
may indicate a preleukemic state.42 43 The most sensitive
noncancer effect observed in humans, based on current data, is the
depression of the absolute lymphocyte count in blood.44 45
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\37\ Aksoy, M. (1989) Hematotoxicity and carcinogenicity of
benzene. Environ. Health Perspect. 82:193-197.
\38\ Goldstein, B.D. (1988) Benzene toxicity. Occupational
medicine. State of the Art Reviews 3: 541-554.
\39\ Pancytopenia is the reduction in the number of all three
major types of blood cells (erythrocytes, or red blood cells,
thrombocytes, or platelets, and leukocytes, or white blood cells).
In adults, all three major types of blood cells are produced in the
bone marrow of the vertebra, sternum, ribs, and pelvis. The bone
marrow contains immature cells, known as multipotent myeloid stem
cells, that later differentiate into the various mature blood cells.
Pancytopenia results from a reduction in the ability of the red bone
marrow to produce adequate numbers of these mature blood cells.
\40\ Aksoy, M. (1991) Hematotoxicity, leukemogenicity and
carcinogenicity of chronic exposure to benzene. In: Arinc, E.;
Schenkman, J.B.; Hodgson, E., Eds. Molecular Aspects of
Monooxygenases and Bioactivation of Toxic Compounds. New York:
Plenum Press, pp. 415-434.
\41\ Goldstein, B.D. (1988) Benzene toxicity. Occupational
medicine. State of the Art Reviews 3: 541-554.
\42\ Aksoy, M., S. Erdem, and G. Dincol. (1974) Leukemia in
shoe-workers exposed chronically to benzene. Blood 44:837.
\43\ Aksoy, M. and K. Erdem. (1978) A follow-up study on the
mortality and the development of leukemia in 44 pancytopenic
patients associated with long-term exposure to benzene. Blood 52:
285-292.
\44\ Rothman, N., G.L. Li, M. Dosemeci, W.E. Bechtold, G.E.
Marti, Y.Z. Wang, M. Linet, L.Q. Xi, W. Lu, M.T. Smith, N. Titenko-
Holland, L.P. Zhang, W. Blot, S.N. Yin, and R.B. Hayes (1996)
Hematotoxicity among Chinese workers heavily exposed to benzene. Am.
J. Ind. Med. 29: 236-246.
\45\ EPA 2005 ``Full IRIS Summary for Benzene (CASRN 71-43-2)''
Environmental Protection Agency, Integrated Risk Information System
(IRIS), Office of Health and Environmental Assessment, Environmental
Criteria and Assessment Office, Cincinnati, OH http://www.epa.gov/iris/subst/0276.htm.
---------------------------------------------------------------------------
EPA's inhalation reference concentration (RfC) for benzene is 30
[mu]g/m3, based on suppressed absolute lymphocyte counts as
seen in humans under occupational exposure conditions. The overall
confidence in this RfC is medium. Since development of this RfC, there
have appeared human reports of benzene's hematotoxic effects in the
literature that provides data suggesting a wide range of hematological
endpoints that are affected at occupational exposures of less than 5
ppm (about 16 mg/m3) \46\ and even at air levels of 1 ppm
(about 3 mg/m3) or less among genetically susceptible
populations.\47\ One recent study found benzene metabolites in mouse
liver and bone marrow at environmental doses, indicating that even
concentrations in urban air can elicit a biochemical response in
rodents that indicates toxicity.\48\ EPA has not formally evaluated
these recent studies as part of the IRIS review process to determine
whether or not they will lead to a change in the current RfC. EPA does
not currently have an acute reference concentration for benzene. The
Agency for Toxic Substances and Disease Registry Minimal Risk Level for
acute exposure to benzene is 160 [mu]g/m3 for 1-14 days
exposure.
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\46\ Qu, Q., R. Shore, G. Li, X. Jin, L.C. Chen, B. Cohen, et
al. (2002). Hematological changes among Chinese workers with a broad
range of benzene exposures. Am. J. Industr. Med. 42: 275-285.
\47\ Lan, Qing, Zhang, L., Li, G., Vermeulen, R., et al. (2004).
Hematotoxically in Workers Exposed to Low Levels of Benzene. Science
306: 1774-1776.
\48\ Turtletaub, K.W. and Mani, C. (2003). Benzene metabolism in
rodents at doses relevant to human exposure from Urban Air. Res Rep
Health Effect Inst 113.
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b. 1,3-Butadiene
EPA has characterized 1,3-butadiene, a hydrocarbon, as a
leukemogen, carcinogenic to humans by inhalation.49 50 The
specific mechanisms of 1,3-butadiene-induced carcinogenesis are
unknown; however, it is virtually certain that the carcinogenic effects
are mediated by genotoxic metabolites of 1,3-butadiene. Animal data
suggest that females may be more sensitive than males for cancer
effects; nevertheless, there are insufficient data from which to draw
any conclusions on potentially sensitive subpopulations. The upper
bound cancer unit risk estimate is 0.08 per ppm or 3x10-5
per [mu]g/m3 (based primarily on linear modeling and
extrapolation of human data). In other words, it is estimated that
approximately 30 persons in one million exposed to 1 [mu]g/
m3 of 1,3-butadiene continuously for their lifetime would
develop cancer as a result of this exposure. The human incremental
lifetime unit cancer risk estimate is based on extrapolation from
leukemias observed in an occupational epidemiologic study.\51\ This
estimate includes a two-fold adjustment to the epidemiologic-based unit
cancer risk applied to reflect evidence from the rodent bioassays
suggesting that the epidemiologic-based estimate (from males) may
underestimate total cancer risk from 1,3-butadiene exposure in the
general population, particularly for breast cancer in females.
Confidence in the excess cancer risk estimate of 0.08 per ppm is
moderate.
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\49\ U.S. EPA. (2002). Health Assessment of 1,3-Butadiene.
Office of Research and Development, National Center for
Environmental Assessment, Washington Office, Washington, DC. Report
No. EPA600-P-98-001F. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=54499.
\50\ U.S. EPA (1998). A Science Advisory Board Report: Review of
the Health Risk Assessment of 1,3-Butadiene. EPA-SAB-EHC-98.
\51\ Delzell, E, N. Sathiakumar, M. Macaluso, et al. (1995). A
follow-up study of synthetic rubber workers. Submitted to the
International Institute of Synthetic Rubber Producers. University of
Alabama at Birmingham. October 2, 1995.
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1,3-Butadiene also causes a variety of reproductive and
developmental effects in mice; no human data on these effects are
available. The most sensitive effect was ovarian atrophy observed in a
lifetime bioassay of female mice.\52\ Based on this critical effect and
the benchmark concentration methodology, an RfC was calculated. This
RfC for chronic health effects is 0.9 ppb, or about 2 [mu]g/
m3. Confidence in the inhalation RfC is medium.
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\52\ Bevan, C.; Stadler, J.C.; Elliot, G.S.; et al. (1996)
Subchronic toxicity of 4-vinylcyclohexene in rats and mice by
inhalation. Fundam. Appl. Toxicol. 32:1-10.
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c. Formaldehyde
Since 1987, EPA has classified formaldehyde, a hydrocarbon, as a
[[Page 15818]]
probable human carcinogen based on evidence in humans and in rats,
mice, hamsters, and monkeys.\53\ Recently released research conducted
by the National Cancer Institute (NCI) found an increased risk of
nasopharyngeal cancer among workers exposed to
formaldehyde.54 55 A recent National Institute of
Occupational Safety and Health (NIOSH) study of garment workers also
found increased risk of death due to leukemia among workers exposed to
formaldehyde.\56\ In 2004, the working group of the International
Agency for Research on Cancer concluded that formaldehyde is
carcinogenic to humans (Group 1 classification), on the basis of
sufficient evidence in humans and sufficient evidence in experimental
animals--a higher classification than previous IARC evaluations. In
addition, the National Institute of Environmental Health Sciences
recently nominated formaldehyde for reconsideration as a known human
carcinogen under the National Toxicology Program. Since 1981 it has
been listed as a ``reasonably anticipated human carcinogen.''
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\53\ U.S. EPA (1987). Assessment of Health Risks to Garment
Workers and Certain Home Residents from Exposure to Formaldehyde,
Office of Pesticides and Toxic Substances, April 1987.
\54\ Hauptmann, M.; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.;
Blair, A. 2003. Mortality from lymphohematopoetic malignancies among
workers in formaldehyde industries. Journal of the National Cancer
Institute 95: 1615-1623.
\55\ Hauptmann, M.; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.;
Blair, A. 2004. Mortality from solid cancers among workers in
formaldehyde industries. American Journal of Epidemiology 159: 1117-
1130.
\56\ Pinkerton, L. E. 2004. Mortality among a cohort of garment
workers exposed to formaldehyde: an update. Occup. Environ. Med. 61:
193-200.
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In the past 15 years there has been substantial research on the
inhalation dosimetry for formaldehyde in rodents and primates by the
CIIT Centers for Health Research, with a focus on use of rodent data
for refinement of the quantitative cancer dose-response
assessment.57 58 59 CIIT's risk assessment of formaldehyde
incorporated mechanistic and dosimetric information on formaldehyde.
The risk assessment analyzed carcinogenic risk from inhaled
formaldehyde using approaches that are consistent with EPA's draft
guidelines for carcinogenic risk assessment. In 2001, Environment
Canada relied on this cancer dose-response assessment in their
assessment of formaldehyde.\60\ In 2004, EPA also relied on this cancer
unit risk estimate during the development of the plywood and composite
wood products national emissions standards for hazardous air pollutants
(NESHAPs).\61\ In these rules, EPA concluded that the CIIT work
represented the best available application of the available mechanistic
and dosimetric science on the dose-response for portal of entry cancers
due to formaldehyde exposures. EPA is reviewing the recent work cited
above from the NCI and NIOSH, as well as the analysis by the CIIT
Centers for Health Research and other studies, as part of a
reassessment of the human hazard and dose-response associated with
formaldehyde.
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\57\ Conolly, RB, JS Kimbell, D Janszen, PM Schlosser, D
Kalisak, J Preston, and FJ Miller. 2003. Biologically motivated
computational modeling of formaldehyde carcinogenicity in the F344
rat. Tox. Sci. 75: 432-447.
\58\ Conolly, RB, JS Kimbell, D Janszen, PM Schlosser, D
Kalisak, J Preston, and FJ Miller. 2004. Human respiratory tract
cancer risks of inhaled formaldehyde: Dose-response predictions
derived from biologically-motivated computational modeling of a
combined rodent and human dataset. Tox. Sci. 82: 279-296.
\59\ Chemical Industry Institute of Toxicology (CIIT). 1999.
Formaldehyde: Hazard characterization and dose-response assessment
for carcinogenicity by the route of inhalation. CIIT, September 28,
1999. Research Triangle Park, NC.
\60\ Health Canada. 2001. Priority Substances List Assessment
Report. Formaldehyde. Environment Canada, Health Canada, February
2001.
\61\ U.S. EPA. 2004. National Emission Standards for Hazardous
Air Pollutants for Plywood and Composite Wood Products Manufacture:
Final Rule. (69 FR 45943, 7/30/04).
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Noncancer effects of formaldehyde have been observed in humans and
several animal species and include irritation to eye, nose and throat
tissues in conjunction with increased mucous secretions.
d. Acetaldehyde
Acetaldehyde, a hydrocarbon, is classified in EPA's IRIS database
as a probable human carcinogen and is considered moderately toxic by
inhalation.\62\ Based on nasal tumors in rodents, the upper confidence
limit estimate of a lifetime extra cancer risk from continuous
acetaldehyde exposure is about 2.2x10-\6\ per [mu]g/m\3\. In
other words, it is estimated that about 2 persons in one million
exposed to 1 [mu]g/m\3\ acetaldehyde continuously for their lifetime
(70 years) would develop cancer as a result of their exposure, although
the risk could be as low as zero. In short-term (4 week) rat studies,
compound-related histopathological changes were observed only in the
respiratory system at various concentration levels of
exposure.63 64 Data from these studies showing degeneration
of the olfactory epithelium were found to be sufficient for EPA to
develop an RfC for acetaldehyde of 9 [mu]g/m\3\. Confidence in the
principal study is medium and confidence in the database is low, due to
the lack of chronic data establishing a no observed adverse effect
level and due to the lack of reproductive and developmental toxicity
data. Therefore, there is low confidence in the RfC. The agency is
currently conducting a reassessment of risk from inhalation exposure to
acetaldehyde.
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\62\ U.S. EPA. 1988. Integrated Risk Information System File of
Acetaldehyde. This material is available electronically at http://www.epa.gov/iris/subst/0290.htm.
\63\ Appleman, L. M., R. A. Woutersen, V. J. Feron, R. N.
Hooftman, and W. R. F. Notten. (1986). Effects of the variable
versus fixed exposure levels on the toxicity of acetaldehyde in
rats. J. Appl. Toxicol. 6: 331-336.
\64\ Appleman, L.M., R.A. Woutersen, and V.J. Feron. (1982).
Inhalation toxicity of acetaldehyde in rats. I. Acute and subacute
studies. Toxicology. 23: 293-297.
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The primary acute effect of exposure to acetaldehyde vapors is
irritation of the eyes, skin, and respiratory tract.\65\ Some
asthmatics have been shown to be a sensitive subpopulation to
decrements in functional expiratory volume (FEV1 test) and
bronchoconstriction upon acetaldehyde inhalation.\66\
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\65\ U.S. EPA (1988). Integrated Risk Information System File of
Acetaldehyde. This material is available electronically at http://www.epa.gov/iris/subst/0290.htm.
\66\ Myou, S.; Fujimura, M.; Nishi K.; Ohka, T.; and Matsuda, T.
(1993) Aerosolized acetaldehyde induces histamine-mediated
bronchoconstriction in asthmatics. Am. Rev. Respir.Dis.148(4 Pt 1):
940-3.
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e. Acrolein
Acrolein, a hydrocarbon, is intensely irritating to humans when
inhaled, with acute exposure resulting in upper respiratory tract
irritation and congestion. The Agency has developed an RfC for acrolein
of 0.02 [mu]g/m\3\.\67\ The overall confidence in the RfC assessment is
judged to be medium. The Agency is also currently in the process of
conducting an assessment of acute health effects for acrolein. EPA
determined in 2003 using the 1999 draft cancer guidelines that the
human carcinogenic potential of acrolein could not be determined
because the available data were inadequate. No information was
available on the carcinogenic effects of acrolein in humans and the
animal data provided inadequate evidence of carcinogenicity.
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\67\ U.S. Environmental Protection Agency (2003) Integrated Risk
Information System (IRIS) on Acrolein. National Center for
Environmental Assessment, Office of Research and Development,
Washington, D.C. 2003. This material is available electronically at
http://www.epa.gov/iris/subst/0364.htm.
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f. Polycyclic Organic Matter (POM)
POM is generally defined as a large class of organic compounds
which have multiple benzene rings and a boiling point greater than 100
degrees Celsius. Many of the compounds included in the class of
compounds known as POM are classified by EPA as probable human
carcinogens based on animal data. One
[[Page 15819]]
of these compounds, naphthalene, is discussed separately below.
Polycyclic aromatic hydrocarbons (PAHs) are a chemical subset of
POM. In particular, EPA frequently obtains data on 16 of these POM
compounds. Recent studies have found that maternal exposures to PAHs in
a population of pregnant women were associated with several adverse
birth outcomes, including low birth weight and reduced length at
birth.\68\ These studies are discussed in the Regulatory Impact
Analysis.
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\68\ Perara, F.P.; Rauh, V.; Tsai, W-Y.; et al. (2002) Effect of
transplacental exposure to environmental pollutants on birth
outcomes in a multiethnic population. Environ Health Perspect. 111:
201-205.
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g. Naphthalene
Naphthalene is a PAH compound consisting of two benzene rings fused
together with two adjacent carbon atoms common to both rings. In 2004,
EPA released an external review draft (External Review Draft, IRIS
Reassessment of the Inhalation Carcinogenicity of Naphthalene, U.S.
EPA. http://www.epa.gov/iris) of a reassessment of the inhalation
carcinogenicity of naphthalene.\69\ The draft reassessment completed
external peer review in 2004 by Oak Ridge Institute for Science and
Education.\70\ Based on external comments, additional analyses are
being considered. California EPA has also released a new risk
assessment for naphthalene with a cancer unit risk estimate of
3x10-\5\ per [mu]g/m\3\.\71\ The California EPA value was
used in the 1999 NATA and in the analyses done for this rule. In
addition, IARC has reevaluated naphthalene and re-classified it as
Group 2B: possibly carcinogenic to humans.\72\ The cancer data form the
basis of an inhalation RfC of 3 [mu]g/m\3\.\73\ A low to medium
confidence rating was given to this RfC, in part because it cannot be
said with certainty that this RfC will be protective for hemolytic
anemia and cataracts, the more well-known human effects from
naphthalene exposure.
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\69\ U.S. EPA. (2004) External Review Draft, IRIS Reassessment
of the Inhalation Carcinogenicity of Naphthalene. http://
www.epa.gov/iris
\70\ Oak Ridge Institute for Science and Education. (2004)
External Peer Review for the IRIS Reassessment of the Inhalation
Carcinogenicity of Naphthalene. August 2004. http://cfpub2.epa.gov/ncea/cfm/recordisplay.cfm?deid=86019
\71\ California EPA. (2004) Long Term Health Effects of Exposure
to Naphthalene. Office of Environmental Health Hazard Assessment.
http://www.oehha.ca.gov/air/toxic_contaminants/draftnaphth.html
\72\ International Agency for Research on Cancer (IARC). (2002)
Monographs on the Evaluation of the Carcinogenic Risk of Chemicals
for Humans. Vol. 82. Lyon, France.
\73\ EPA 2005 ``Full IRIS Summary for Naphthalene (CASRN 91-20-
3)'' Environmental Protection Agency, Integrated Risk Information
System (IRIS), Office of Health and Environmental Assessment,
Environmental Criteria and Assessment Office, Cincinnati, OH http://www.epa.gov/iris/subst/0436.htm.
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h. Diesel Particulate Matter and Diesel Exhaust Organic Gases
In EPA's Diesel Health Assessment Document (HAD),\74\ diesel
exhaust was classified as likely to be carcinogenic to humans by
inhalation at environmental exposures, in accordance with the revised
draft 1996/1999 EPA cancer guidelines. A number of other agencies
(National Institute for Occupational Safety and Health, the
International Agency for Research on Cancer, the World Health
Organization, California EPA, and the U.S. Department of Health and
Human Services) have made similar classifications. EPA concluded in the
Diesel HAD that it is not possible currently to calculate a cancer unit
risk for diesel exhaust due to a variety of factors that limit the
current studies, such as limited quantitative exposure histories in
occupational groups investigated for lung cancer.
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\74\ U.S. EPA (2002) Health Assessment Document for Diesel
Engine Exhaust. EPA/600/8-90/057F Office of Research and
Development, Washington DC. This document is available
electronically at http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060.
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However, in the absence of a cancer unit risk, the EPA Diesel HAD
sought to provide additional insight into the significance of the
cancer hazard by estimating possible ranges of risk that might be
present in the population. The possible risk range analysis was
developed by comparing a typical environmental exposure level for
highway diesel sources to a selected range of occupational exposure
levels. The occupationally observed risks were then proportionally
scaled according to the exposure ratios to obtain an estimate of the
possible environmental risk. A number of calculations are needed to
accomplish this, and these can be seen in the EPA Diesel HAD. The
outcome was that environmental risks from diesel exhaust exposure could
range from a low of 10-\4\ to 10-\5\ to as high
as 10-\3\, reflecting the range of occupational exposures
that could be associated with the relative and absolute risk levels
observed in the occupational studies. Because of uncertainties, the
analysis acknowledged that the risks could be lower than
10-\4\ or 10-\5\, and a zero risk from diesel
exhaust exposure was not ruled out.
The acute and chronic exposure-related effects of diesel exhaust
emissions are also of concern to the Agency. EPA derived an RfC from
consideration of four well-conducted chronic rat inhalation studies
showing adverse pulmonary effects.75 76 77 78 The RfC is 5
[mu]g/m\3\ for diesel exhaust as measured by diesel PM. This RfC does
not consider allergenic effects such as those associated with asthma or
immunologic effects. There is growing evidence, discussed in the Diesel
HAD, that diesel exhaust can exacerbate these effects, but the
exposure-response data are presently lacking to derive an RfC.
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\75\ Ishinishi, N; Kuwabara, N; Takaki, Y; et al. (1988) Long-
term inhalation experiments on diesel exhaust. In: Diesel exhaust
and health risks. Results of the HERP studies. Ibaraki, Japan:
Research Committee for HERP Studies; pp. 11-84.
\76\ Heinrich, U; Fuhst, R; Rittinghausen, S; et al. (1995)
Chronic inhalation exposure of Wistar rats and two different strains
of mice to diesel engine exhaust, carbon black, and titanium
dioxide. Inhal. Toxicol. 7:553-556.
\77\ Mauderly, JL; Jones, RK; Griffith, WC; et al. (1987) Diesel
exhaust is a pulmonary carcinogen in rats exposed chronically by
inhalation. Fundam. Appl. Toxicol. 9:208-221.
\78\ Nikula, KJ; Snipes, MB; Barr, EB; et al. (1995) Comparative
pulmonary toxicities and carcinogenicities of chronically inhaled
diesel exhaust and carbon black in F344 rats. Fundam. Appl. Toxicol.
25:80-94.
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The Diesel HAD also briefly summarizes health effects associated
with ambient PM and the EPA's annual National Ambient Air Quality
Standard (NAAQS) of 15 [mu]g/m\3\. There is a much more extensive body
of human data showing a wide spectrum of adverse health effects
associated with exposure to ambient PM, of which diesel exhaust is an
important component. The RfC is not meant to say that 5 [mu]g/m\3\
provides adequate public health protection for ambient
PM2.5. In fact, there may be benefits to reducing diesel PM
below 5 [mu]g/m\3\ since diesel PM is a major contributor to ambient
PM2.5.
E. Gasoline PM
Beyond the specific areas of quantifiable risk discussed above in
section III.C, EPA is also currently investigating gasoline PM.
Gasoline exhaust is a complex mixture that has not been evaluated in
EPA's IRIS, in contrast to diesel exhaust, which has been evaluated in
IRIS. However, there is evidence for the mutagenicity and cytotoxicity
of gasoline exhaust and gasoline PM. Seagrave et al. investigated the
combined particulate and semivolatile organic fractions of gasoline
engine emissions.\79\ Their results demonstrate that emissions from
gasoline engines are mutagenic and can induce inflammation and have
cytotoxic effects. Gasoline exhaust is a ubiquitous
[[Page 15820]]
source of particulate matter, contributing to the health effects
observed for ambient PM which is discussed extensively in the EPA
Particulate Matter Criteria Document.\80\ The PM Criteria Document
notes that the PM components of gasoline and diesel engine exhaust are
hypothesized, important contributors to the observed increases in lung
cancer incidence and mortality associated with ambient
PM2.5.\81\ Gasoline PM is also a component of near-roadway
emissions that may be contributing to the health effects observed in
people who live near roadways (see section III.F).
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\79\ Seagrave, J.; McDonald, J.D.; Gigliotti, A.P.; Nikula,
K.J.; Seilkop, S.K.; Gurevich, M. and Mauderly, J.L. (2002)
Mutagenicity and in Vivo Toxicity of Combined Particulate and
Semivolatile Organic Fractions of Gasoline and Diesel Engine
Emissions. Toxicological Sciences 70:212-226.
\80\ U.S. Environmental Protection Agency (2004) Air Quality
Criteria for Particulate Matter. Research Triangle Park, NC:
National Center for Environmental Assessment--RTP Office; Report No.
EPA/600/P-99/002aF (PM Criteria Document).
\81\ PM Criteria Document, p. 8-318.
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EPA is working to improve the understanding of PM emissions from
gasoline engines, including the potential range of emissions and
factors that influence emissions. EPA led a cooperative test program
that recently completed testing approximately 500 randomly procured
vehicles in the Kansas City metropolitan area. The purpose of this
study was to determine the distribution of gasoline PM emissions from
the in-use light-duty fleet. Results from this study are expected to be
available in 2006. Some source apportionment studies show gasoline and
diesel PM can result in larger contributions to ambient PM than
predicted by EPA emission inventories.82 83 These source
apportionment studies were one impetus behind the Kansas City study.
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\82\ Fujita, E.; Watson, M.J.; Chow, M.C.; et al. (1998)
Northern Front Range Air Quality Study, Volume C: Source
apportionment and simulation methods and evaluation. Prepared for
Colorado State University, Cooperative Institute for Research in the
Atmosphere, by Desert Research Institute, Reno, NV.
\83\ Schauer, J.J.; Rogge, W.F.; Hildemann, L.M.; et al. (1996)
Source apportionment of airborne particulate matter using organic
compounds as tracers. Atmos. Environ. 30(22):3837-3855.
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Another issue related to gasoline PM is the effect of gasoline
vehicles and engines on ambient PM, especially secondary PM. Ambient PM
is composed of primary PM emitted directly into the atmosphere and
secondary PM that is formed from chemical reactions in the atmosphere.
The issue of secondary organic aerosol formation from aromatic
precursors is an important one to which EPA and others are paying
significant attention. This is discussed in more detail in Section
1.4.1 of the RIA.
F. Near-Roadway Health Effects
Over the years there have been a large number of studies that have
examined associations between living near major roads and different
adverse health endpoints. These studies generally examine people living
near heavily-trafficked roadways, typically within several hundred
meters, where fresh emissions from motor vehicles are not yet fully
diluted with background air.
Several studies have measured elevated concentrations of pollutants
emitted directly by motor vehicles near road as compared to overall
urban background levels. These elevated concentrations generally occur
within approximately 200 meters of the road, although the distance may
vary depending on traffic and environmental conditions. Pollutants
measured with elevated concentrations include benzene, polycyclic
aromatic hydrocarbons, carbon monoxide, nitrogen dioxide, black carbon,
and coarse, fine, and ultrafine particulate matter. In addition,
concentrations of road dust, and wear particles from tire and brake use
also show concentration increases in proximity of major roadways.
The near-roadway health studies provide stronger evidence for some
health endpoints than others. Evidence of adverse responses to traffic-
related pollution is strongest for non-allergic respiratory symptoms,
cardiovascular effects, premature adult mortality, and adverse birth
outcomes, including low birth weight and size. Some evidence for new
onset asthma is available, but not all studies have significant
orrelations. Lastly, among studies of childhood cancer, in particular
childhood leukemia, evidence is inconsistent. Several small studies
report positive associations, though such effects have not been
observed in two larger studies. As described above, benzene and 1,3-
butadiene are both known human leukemogens in adults. As previously
mentioned, there is evidence of increased risk of leukemia among
children whose parents have been occupationally exposed to benzene.
Though the near-roadway studies are equivocal, taken together with the
laboratory studies and other exposure environments, the data suggest a
potentially serious children's health concern could exist. Additional
research is needed to determine the significance of this potential
concern.
Significant scientific uncertainties remain in our understanding of
the relationship between adverse health effects and near-road exposure,
including the exposures of greatest concern, the importance of chronic
versus acute exposures, the role of fuel type (e.g. diesel or gasoline)
and composition (e.g., % aromatics), relevant traffic patterns, the
role of co-stressors including noise and socioeconomic status, and the
role of differential susceptibility within the ``exposed'' populations.
For a more detailed discussion, see Chapter 3 of the Regulatory Impact
Analysis.
These studies provide qualitative evidence that reducing emissions
from on-road mobile sources will provide public health benefits beyond
those that can be quantified using currently available information.
G. How Would This Proposal Reduce Emissions of MSATs?
The benzene and hydrocarbon standards proposed in this action would
reduce benzene, 1,3-butadiene, formaldehyde, acrolein, polycyclic
organic matter, and naphthalene, as well as many other hydrocarbon
compounds that are emitted by motor vehicles, including those that are
listed in Table III.B-1 and discussed in more detail in Chapter 1 of
the RIA. The emission reductions expected from today's controls are
reported in section V.E of this preamble and Chapter 2 of the RIA.
EPA believes that the emission reductions from the standards
proposed today for motor vehicles and their fuels, combined with the
standards currently in place, represent the maximum achievable
reductions of emissions from motor vehicles through the application of
technology that will be available, considering costs and the other
factors listed in section 202(l)(2). This conclusion applies whether
you consider just the compounds listed in Table III.B-1, or consider
all of the compounds on the Master List of emissions, given the breadth
of EPA's current and proposed control programs and the broad groups of
emissions that many of the control technologies reduce.
EPA has already taken significant steps to reduce diesel emissions
from mobile sources. We have adopted stringent standards for on-highway
diesel trucks and buses, and nonroad diesel engines (engines used, for
example, in construction, agricultural, and industrial applications).
We also have additional programs underway to reduce diesel emissions,
including voluntary programs and a proposal that is being developed to
reduce emissions from diesel locomotives and marine engines.
Emissions from motor vehicles can be chemically categorized as
hydrocarbons, trace elements (including metals) and a
[[Page 15821]]
few additional compounds containing carbon, nitrogen and/or halogens
(e.g., chlorine). For the hydrocarbons, which are the vast majority of
these compounds, we believe that with the controls proposed today, we
would control the emissions of these compounds from motor vehicles to
the maximum amount currently feasible or currently identifiable with
available information. Section VI of this preamble provides more
details about why the proposed and existing standards represent maximum
achievable reduction of hydrocarbons from motor vehicles. There are not
motor vehicle controls to reduce individual hydrocarbons selectively;
instead, the maximum emission reductions are achieved by controls on
hydrocarbons as a group. There are fuel controls that could selectively
reduce individual air toxics (e.g., formaldehyde, acetaldehyde, 1,3-
butadiene), as well as controls that reduce hydrocarbons more
generally. Section VII of this preamble describes why the standards we
are proposing today represent the maximum emission reductions
achievable through fuel controls, considering the factors required by
Clean Air Act section 202(l).
Motor vehicle emissions also contain trace elements, including
metals, which originate primarily from engine wear and impurities in
engine oil and gasoline or diesel fuel. EPA does not have authority to
regulate engine oil, and there are no feasible motor vehicle controls
to directly prevent engine wear. Nevertheless, oil consumption and
engine wear have decreased over the years, decreasing emission of
metals from these sources. Metals associated with particulate matter
will be captured in emission control systems employing a particulate
matter trap, such as heavy-duty vehicles meeting the 2007 standards. We
believe that currently, particulate matter traps, in combination with
engine-out control, represent the maximum feasible reduction of both
motor vehicle particulate matter and toxic metals present as a
component of the particulate matter.
The mobile source contribution to the national inventory for metal
compounds is generally small. In fact, the emission rate for most
metals from motor vehicles is small enough that quantitative
measurement requires state-of-the art analytical techniques that are
only recently being applied to this source category. We have efforts
underway to gather information regarding trace metal emissions,
including mercury emissions, from motor vehicles (see Chapter 1 of the
RIA for more details).
A few metals and other elements are used as fuel additives. These
additives are designed to reduce the emission of regulated pollutants
either in combination with or without an emission control device (e.g.,
a passive particulate matter trap). Clean Air Act section 211 provides
EPA with various authorities to regulate fuel additives in order to
reduce the risk to public health from exposure to their emissions. It
is under this section that EPA requires manufacturers to register
additives before their introduction into commerce. Registration
involves certain data requirements that enable EPA to identify products
whose emissions may pose an unreasonable risk to public health. In
addition, section 211 provides EPA with authority to require health
effects testing to fill any gaps in the data that would prevent a
determination regarding the potential for risk to the public. Clean Air
Act section 211(c) provides the primary mechanism by which EPA would
take actions necessary to minimize exposure to metals or other
additives to diesel and gasoline. It is under section 211 that EPA is
currently generating the information needed to update an assessment of
the potential human health risks related to having manganese in the
national fuel supply.
Existing regulations limit sulfur in gasoline and diesel fuel to
the maximum amount feasible and will reduce emissions of all sulfur-
containing compounds (e.g., hydrogen sulfide, carbon disulfide) to the
greatest degree achievable.84 85 86 For the remaining
compounds (e.g., chlorinated compounds), we currently have very little
information regarding emission rates and conditions that impact
emissions. This information would be necessary in order to evaluate
potential controls under section 202(l). Emissions of hydrocarbons
containing chlorine (e.g., dioxins/furans) would likely be reduced with
control measures that reduce total hydrocarbons, just as these
emissions were reduced with the use of catalytic controls that lowered
exhaust hydrocarbons.
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\84\ 65 FR 6697, February 10, 2000.
\85\ 66 FR 5001, January 18, 2001.
\86\ 69 FR 38958, June 29, 2004.
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IV. What Are the Air Quality and Health Impacts of Air Toxics, and How
Do Mobile Sources Contribute?
A. What Is the Health Risk to the U.S. Population from Inhalation
Exposure to Ambient Sources of Air Toxics, and How Would It be Reduced
by the Proposed Controls?
EPA's National-Scale Air Toxics Assessment (NATA) assesses human
health impacts from chronic inhalation exposures to outdoor sources of
air toxics. It assesses lifetime risks assuming continuous exposure to
levels of air toxics estimated for a particular point in time. The most
recent NATA was done for the year 1999.\87\
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\87\ www.epa.gov/ttn/atw/nata1999.
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The NATA modeling framework has a number of limitations, but it
remains very useful in identifying air toxic pollutants and sources of
greatest concern. Among the significant limitations of the framework,
which are discussed in more detail in the regulatory impact analysis,
is that it cannot be used to reliably identify ``hot spots,'' such as
areas in immediate proximity to major roads, where the air
concentration, exposure and/or risk might be significantly higher
within a census tract \88\ or county. These ``hot spots'' are discussed
in more detail in section IV.B.2. The framework also does not account
for risk from sources of air toxics originating indoors, such as
stoves, out-gassing from building materials, or evaporative benzene
emissions from cars in attached garages. There are also limitations
associated with the dose-response values used to quantify risk; these
are discussed in Section I of the preamble. Importantly, it should be
noted that the 1999 NATA does not include default adjustments for early
life exposures recently recommended in the Supplemental Guidance for
Assessing Susceptibility from Early-Life Exposure to Carcinogens.\89\
These adjustments would be applied to compounds which act through a
mutagenic mode of action. EPA will determine as part of the IRIS
assessment process which substances meet the criteria for making
adjustments, and future assessments will reflect them. If warranted,
incorporation of such adjustments would lead to higher estimates of
risk assuming constant lifetime exposure.
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\88\ A census tract is a subdivision of a county that typically
contains roughly 4000 people. In urban areas, these tracts can be
very small, on the order of a city block, whereas in rural areas,
they can be large.
\89\ U. S. EPA. (2005) Supplemental Guidance for Assessing
Susceptibility from Early-Life Exposure to Carcinogens. Report No.
EPA/630/R-03/003F. Available electronically at http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=116283.
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Because of its limitations, EPA notes that the NATA assessment
should not be used as the basis for developing risk reduction plans or
regulations to control specific sources or pollutants. Additionally,
this assessment should not be used for estimating risk at the local
level, for quantifying benefits of reduced air toxic emissions, or for
identifying localized hotspots. In this
[[Page 15822]]
rule, we have evaluated air quality, exposure, and risk impacts of
mobile source air toxics using the 1999 NATA, as well as projections of
risk to future years using the same tools as 1999 NATA. In addition, we
also evaluate more refined local scale modeling, measured ambient
concentrations, personal exposure measurements, and other data. This
information is discussed below, as well as in Chapter 3 of the RIA. It
serves as a perspective on the possible risk-related implications of
the rule.
Overall, the average nationwide lifetime population cancer risk in
1999 NATA was 42 in a million, assuming continuous exposure to 1999
levels. The average noncancer respiratory hazard index was 6.4.\90\
Highway vehicles and nonroad equipment account for almost 50% of the
average population cancer risk, and 74% of the noncancer risk These
estimates are based on the contribution of sources within 50 kilometers
of a given emission point and do not include the contribution to
ambient concentrations from transport beyond 50 kilometers. Ambient
concentrations from transport beyond 50 kilometers, referred to as
``background'' in NATA, are responsible for almost 50% of the average
cancer risk in NATA.
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\90\ A hazard index above 1 indicates the potential for adverse
health effects. It cannot be translated into a probability that an
adverse effect will occur, and is not likely to be proportional to
risk. A hazard index greater than one can be best described as only
indicating that a potential may exist for adverse health effects.
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Section III.C.1 discusses the pollutants that the 1999 National-
Scale Air Toxics Assessment identifies as national and regional risk
drivers. As summarized in Table III.C-1, benzene is the only pollutant
described as a national cancer risk driver. Twenty-four percent of the
total cancer risk in the 1999 National-Scale Air Toxics Assessment was
due to benzene. In 1999, 68% of nationwide benzene emissions were
attributable to mobile sources. 1,3-Butadiene and naphthalene are
regional cancer risk drivers that have a large mobile source
contribution. As presented in Table III.C-2, 58% of nationwide 1,3-
butadiene emissions in 1999 came from mobile sources. Twenty-seven
percent of nationwide naphthalene emissions in 1999 came from mobile
sources.
One compound, acrolein, was identified as a national risk driver
for noncancer health effects, and 25% of primary acrolein emissions
were attributable to mobile sources. Over 70% of the average ambient
concentration of acrolein is attributable to mobile sources. This is
due to the large contribution from mobile source 1,3-butadiene, which
is transformed to acrolein in the atmosphere.
Table III.C-2 provides additional information on the mobile source
contribution to emissions of national and regional risk drivers. The
standards proposed in this rule will reduce emissions of all these
pollutants.
In addition to the 1999 NATA, we have estimated future-year risks
for those pollutants included in the 1999 NATA whose emissions
inventories include a mobile source contribution (see Table IV.B-1).
This analysis indicates that cancer and noncancer risk will continue to
be a public health concern due to exposure to mobile-source-related
pollutants.
Figure IV.A-1 summarizes changes in average population inhalation
cancer risk for the MSATs in Table IV.A-1. Despite significant
reductions in risk from these pollutants, average inhalation cancer
risks are expected to remain well above 1 in 100,000. In addition,
because of population growth (using projected populations from the U.S.
Bureau of Census), the number of Americans above the 1 in 100,000
cancer risk level from exposure to these mobile source air toxics is
projected to increase from about 214 million in 1999 to 240 million in
2030. Benzene continues to account for a large fraction of the total
inhalation cancer risk from mobile source air toxics, decreasing
slightly from 45% of the risk in 1999 to 37% in 2030. Similarly,
although the average noncancer respiratory hazard index for MSATs
decreases from over 6 in 1999 to 3.2 in 2030, the population with a
hazard index above one increases from 250 million in 1999 to 273
million in 2030. That is, in 2030 nearly the entire U.S. population
will still be exposed to levels of these pollutants that have the
potential to cause adverse respiratory health effects (other than
cancer).
These projected risks were estimated using the same tools and
methods as the 1999 NATA, but with future-year projected inventories.
More detailed information on the methods used to do these projections,
and associated limitations and uncertainties, can be found in Chapter 3
of the RIA for this rule. Projected risks assumed 1999 ``background''
levels. For MSATs, ``background'' accounts for slightly less than 20%
of the average cancer risk in 1999, increasing to 24% in 2030. However,
background levels should decrease along with emissions. A sensitivity
analysis of this assumption is presented in Chapter 3 of the RIA. It
should also be noted that the projected inventories used for this
modeling do not include some more recent revisions, such as higher
emissions of hydrocarbons, including gaseous air toxics, at cold
temperatures. These revisions are discussed in section V and increase
the overall magnitude of the inventory.
[[Page 15823]]
[GRAPHIC] [TIFF OMITTED] TP29MR06.000
Table IV.A-1.--Pollutants Included in Risk Modeling for Projection Years
*
------------------------------------------------------------------------
------------------------------------------------------------------------
1,3-Butadiene............................. Ethyl Benzene
2,2,4-Trimethylpentane.................... Fluoranthene **
Acenaphthene **........................... Fluorene **
Acenaphthylene **......................... Formaldehyde
Acetaldehyde.............................. Hexane
Acrolein.................................. Indeno(1,2,3,c,d)-pyrene **
Anthracene **............................. Manganese
Benzene................................... Methyl tert-butyl ether
(MTBE)
Benz(a)anthracene **...................... Naphthalene
Benzo(a)pyrene **......................... Nickel
Benzo(b)fluoranthene **................... Phenanthrene **
Benzo(g,h,i)perylene **................... Propionaldehyde
Benzo(k)fluoranthene **................... Pyrene **
Chromium (includes Chromium III, Chromium Styrene
VI, and non-speciated Chromium).
Chrysene **............................... Toluene
Dibenzo(a,h)anthracene **................. Xylenes
------------------------------------------------------------------------
* This list includes compounds from the 1999 National-Scale Air Toxics
Assessment with a mobile source emissions contribution, for which data
were sufficient to develop an emissions inventory.
** POM compound as discussed in Section III.
B. What Is the Distribution of Exposure and Risk?
1. Distribution of National-Scale Estimates of Risk From Air Toxics
National-scale modeling indicates that 95th percentile average
cancer risk from exposure to mobile source air toxics is more than
three times higher than median risk. In addition, the 95th percentile
cancer risk is more than 10 times higher than the 5th percentile risk.
This is true for all years modeled, from 1999 to 2030. Table IV.B-1
gives the median and 5th and 95th percentile cancer risk distributions
for mobile source air toxics. As previously mentioned, the tools used
in this assessment are inadequate for identifying ``hot spots'' and do
not account for significant sources of inhalation exposure, such as
benzene emissions within attached garages from vehicles, equipment, and
portable fuel containers. If these hot spots and additional sources of
exposure were accounted for, a larger percentage of the population
would be exposed to higher risk levels. (Sections IV.B.2-4 provides
more details on ``hot spots'' and the implications for distribution of
risk.) In addition, the modeling underestimates the contribution of
hydrocarbon and particulate matter emissions at cold temperatures.
These modeling results are discussed in more detail in Chapter 3 of the
RIA.
[[Page 15824]]
Table IV.B--1.--Median and 5th and 95th Percentile Lifetime Inhalation Cancer Risk Distributions for Inhalation
Exposure to Outdoor Sources of Mobile Source Air Toxics
[Based on modeled average census tract risks]
----------------------------------------------------------------------------------------------------------------
1999 2020
Pollutant -----------------------------------------------------------------------
5th Median 95th 5th Median 95th
----------------------------------------------------------------------------------------------------------------
All MSATs............................... 4.0x10-6 1.9x10-5 5.9x10-5 3.6x10-6 1.3x10-5 4.4x10-5
Benzene................................. 2.4x10-6 8.9x10-6 2.5x10-5 2.1x10-6 5.6x10-6 1.4x10-5
1,3-Butadiene........................... 1.6x10-7 3.1x10-6 1.2x10-5 7.5x10-8 2.0x10-6 7.5x10-6
Acetaldehyde............................ 1.0x10-6 2.5x10-6 6.9x10-6 9.3x10-7 1.6x10-6 3.6x10-6
Naphthalene............................. 1.1x10-7 1.4x10-6 7.6x10-6 1.0x10-7 1.4x10-6 8.5x10-6
----------------------------------------------------------------------------------------------------------------
2. Elevated Concentrations and Exposure in Mobile Source-Impacted Areas
Air quality measurements near roads often identify elevated
concentrations of air toxic pollutants at these locations. The
concentrations of air toxic pollutants near heavily trafficked roads,
as well as the pollutant composition and characteristics, differ from
those measured distant from heavily trafficked roads. Exposures for
populations residing, working, or going to school near major roads are
likely higher than for other populations. The vehicle and fuel
standards proposed in this rule will reduce those elevated exposures.
Following is an overview of concentrations of air toxics and exposure
to air toxics in areas heavily impacted by mobile source emissions.
a. Concentrations Near Major Roadways
The 1999 NATA estimates average concentrations within a census
tract, but it does not differentiate between locations near roadways
and those further away (within the same tract). Local-scale modeling
can better characterize distributions of concentrations, using more
refined allocation of highway vehicle emissions. Urban-scale
assessments done in Houston, TX and Portland, OR illustrated steep
gradients of air toxic concentrations along major roadways, as well as
better agreement with monitor data.91-92 93 Results of the
Portland study show average concentrations of motor vehicle-related
pollutants are ten times higher at 50 meters from a road than they are
at greater than 400 meters a road. These findings are consistent with
pollutant dispersion theory, which predicts that pollutants emitted
along roadways will show highest concentrations nearest a road, and
concentrations exponentially decrease with increasing distance
downwind. These near-road pollutant gradients have been confirmed by
measurements of both criteria pollutants and air toxics, and they are
discussed in detail in Chapter 3 of the RIA.
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\91-92\ Kinnee, E.J.; Touma, J.S.; Mason, R.; Thurman, J.;
Beidler, A., Bailey, C.; Cook, R. (2004) Allocation of onroad mobile
emissions to road segments for air toxics modeling in an urban area.
Transport. Res. Part D 9: 139-150.
\93\ Cohen, J.; Cook, R.; Bailey, C.R.; Carr, E. (2005)
Relationship between motor vehicle emissions of hazardous
pollutants, roadway proximity, and ambient concentrations in
Portland, Oregon. Environ. Modelling & Software 20: 7-12.
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Air quality monitoring is another means of evaluating pollutant
concentrations at locations near sources such as roadways. It is also
used to evaluate model performance at a given point and, given adequate
data quality, can be statistically analyzed to determine associations
with different source types. EPA has been deploying fixed-site ambient
monitors that monitor concentrations of multiple air toxics, including
benzene, over time. Several studies have found that concentrations of
benzene and other mobile source air toxics are significantly elevated
near busy roads compared to ``urban background'' concentrations
measured at a fixed site. These studies are discussed in detail in
Chapter 3 of the RIA.
Ambient VOC concentrations were measured around residences in
Elizabeth, NJ, as part of the Relationship among Indoor, Outdoor, and
Personal Air (RIOPA) study. Data from that study was analyzed to assess
how concentrations are influenced by proximity to known ambient
emission sources.94 95 The ambient concentrations of
benzene, toluene, ethylbenzene, and xylene isomers (BTEX) were found to
be inversely associated with distances to interstate highways and major
urban roads, and with distance to gasoline stations. The data indicate
that BTEX concentrations around homes within 200 meters of roadways and
gas stations are 1.5 to 4 times higher than urban background levels.
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\94\ Kwon, J. (2005) Development of a RIOPA database and
evaluation of the effect of proximity on the potential residential
exposure to VOCs from ambient sources. Rutgers, the State University
of New Jersey and University of Medicine and Dentistry of New
Jersey. PhD dissertation. This document is available in Docket EPA-
HQ-OAR-2005-0036.
\95\ Weisel, C.P. (2004) Assessment of the contribution to
personal exposures of air toxics from mobile sources. Final report.
Submitted to EPA Office of Transportation and Air Quality.
Environmental & Occupational Health Sciences Institute, Piscataway,
NJ. This document is available in Docket EPA-HQ-OAR-2005-0036.
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b. Exposures Near Major Roadways
The modeling assessments and air quality monitoring studies
discussed above have increased our understanding of ambient
concentrations of mobile source air toxics and potential population
exposures. Results from the following exposure studies reveal that
populations spending time near major roadways likely experience
elevated personal exposures to motor vehicle related pollutants. In
addition, these populations may experience exposures to differing
physical and chemical compositions of certain air toxic pollutants
depending on the amount of time spent in close proximity to motor
vehicle emissions. Following is a detailed discussion on exposed
populations near major roadways.
i. Vehicles
Several studies suggest that significant exposures may be
experienced while driving in vehicles. A recent in-vehicle monitoring
study was conducted by EPA and consisted of in-vehicle air sampling
throughout work shifts within ten police patrol cars used by the North
Carolina State Highway Patrol (smoking not permitted inside the
vehicles).\96\ Troopers operated their vehicles in typical patterns,
including highway and city driving and refueling. In-vehicle benzene
concentrations averaged 12.8 [mu]g/m3, while concentrations
measured at an ``ambient'' site located outside a nearby state
environmental office averaged 0.32 [mu]g/m3. The study also
found that the benzene concentrations were closely
[[Page 15825]]
associated with other fuel-related VOCs measured.
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\96\ Riediker, M.; Williams, R.; Devlin, R.; et al. (2003)
Exposure to particulate matter, volatile organic compounds, and
other air pollutants inside patrol cars. Environ Sci. Technol. 37:
2084-2093.
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In Boston, the exposure of commuters to VOCs during various
commuting modes was examined.\97\ For commuters driving a car, the mean
time-weighted concentrations of benzene, toluene, and xylenes in-
vehicle were measured at 17.0, 33.1, and 28.2 [mu]g/m3,
respectively.
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\97\ Chan C.-C., Spengler J. D., Ozkaynak H., and Lefkopoulou M.
(1991) Commuter Exposures to VOCs in Boston, Massachusetts. J. Air
Waste Manage. Assoc. 41: 1594-1600.
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The American Petroleum Institute funded a screening study of high-
end exposure microenvironments as required by section 211(b) of the
Clean Air Act.\98\ The study included vehicle chase measurements and
measurements in several vehicle-related microenvironments in several
cities for benzene and other air toxics. In-vehicle microenvironments
(average benzene concentrations in parentheses) included the vehicle
cabin tested on congested freeways (17.5 [mu]g/m\3\), in parking
garages above-ground (155 [mu]g/m\3\) and below-ground (61.7 [mu]g/
m\3\), in urban street canyons (7.54 [mu]g/m\3\), and during refueling
(46.0 [mu]g/m\3\).
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\98\ Zielinska, B.; Fujita, E.M.; Sagebiel, J.C.; et al. (2002)
Interim data report for Section 211(B) Tier 2 high end exposure
screening study of baseline and oxygenated gasoline. Prepared for
American Petroleum Institute. November 19, 2002. This document is
available in Docket EPA-HQ-OAR-2005-0036.
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In 1998, the California Air Resources Board published an extensive
study of concentrations of in-vehicle air toxics in Los Angeles and
Sacramento, CA.\99\ The data set is large and included a variety of
sampling conditions. On urban freeways, benzene in-vehicle
concentrations ranged from 3 to 15 [mu]g/m\3\ in Sacramento and 10 to
22 [mu]g/m\3\ in Los Angeles. In comparison, ambient benzene
concentrations ranged from 1 to 3 [mu]g/m\3\ in Sacramento and 3 to 7
[mu]g/m\3\ in Los Angeles.
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\99\ Rodes, C.; Sheldon, L.; Whitaker, D.; et al. (1998)
Measuring concentrations of selected air pollutants inside
California vehicles. Final report to California Air Resources Board.
Contract No. 95-339.
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Similar findings of elevated concentrations of pollutants have also
been found in studies done in diesel buses.100 101 102
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\100\ Fitz, D.R.; Winer, A.M.; Colome, S.; et al. (2003)
Characterizing the Range of Children's Pollutant Exposure During
School Bus Commutes. Prepared for the California Resources Board.
\101\ Sabin, L.D.; Behrentz, E.; Winer, A.M.; et al. (2005)
Characterizing the range of children's air pollutant exposure during
school bus commutes. J. Expos. Anal. Environ. Epidemiol. 15: 377-
387.
\102\ Batterman, S.A.; Peng, C.Y.; and Braun, J. (2002) Levels
and composition of volatile organic compounds on commuting routes in
Detroit, Michigan. Atmos. Environ. 36: 6015-6030.
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Overall, these studies show that concentrations experienced by
commuters and other roadway users are substantially higher than those
measured in typical urban air. As a result, the time a person spends in
a vehicle will significantly affect their overall exposure.
ii. Homes and Schools
The proximity of schools to major roads may result in elevated
exposures for children due to potentially increased concentrations
indoors and increased exposures during outdoor activities. Here we
discuss international studies in addition to the limited number of U.S.
studies, because while fleets and fuels outside the U.S. can differ
significantly, the spatial distribution of concentrations is relevant.
In the Fresno Asthmatic Children's Environment Study (FACES),
traffic-related pollutants were measured on selected days from July
2002 to February 2003 at a central site, and inside and outside of
homes and outdoors at schools of asthmatic children.\103\ Preliminary
data indicate that PAH concentrations are higher at elementary schools
located near primary roads than at elementary schools distant from
primary roads (or located near primary roads with limited access). PAH
concentrations also appear to increase with increase in annual average
daily traffic on nearest major collector. Remaining results regarding
the variance in traffic pollutant concentrations at schools in relation
to proximity to roadways and traffic density will be available in 2006.
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\103\ Personal communication with FACES Investigators Fred
Lurmann, Paul Roberts, and Katharine Hammond. Data is currently
being prepared for publication.
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The East Bay Children's Respiratory Health Study studied traffic-
related air pollution outside of schools near busy roads in the San
Francisco Bay Area in 2001.\104\ Concentrations of the traffic
pollutants PM10, PM2.5, black carbon, total
NOX, and NO2 were measured at 10 school sites in
neighborhoods that spanned a busy traffic corridor during the spring
and fall seasons. The school sites were selected to represent a range
of locations upwind and downwind of major roads. Differences were
observed in concentrations between schools nearby (< 300 m) versus
those more distant (or upwind) from major roads. Investigators found
spatial variability in exposure to black carbon, NOX, NO,
and (to a lesser extent) NO2, due specifically to roads with
heavy traffic within a relatively small geographic area.
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\104\ Kim J.J.; Smorodinsky S.; Lipsett M.; et al. (2004)
Traffic-related air pollution near busy roads. Am. J. Respir. Crit.
Care Med. 170: 520-526.
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A study to assess children's exposure to traffic-related air
pollution while attending schools near motorways was performed in the
Netherlands.\105\ Investigators measured PM2.5,
NO2 and benzene inside and outside of 24 schools located
within 400 m of motorways. The indoor average benzene concentration was
3.2 [mu]g/m\3\ with a range of 0.6-8.1 [mu]g/m\3\. The outdoor average
benzene concentration was 2.2 [mu]g/m\3\ with a range of 0.3-5.0 [mu]g/
m\3\. Overall results indicate that indoor pollutant concentrations are
significantly correlated with traffic density and composition,
percentage of time downwind, and distance from major roadways.
---------------------------------------------------------------------------
\105\ Janssen, N.A.H.; van Vliet, P.H.N.; Aarts, F.; et al.
(2001) Assessment of exposure to traffic related air pollution of
children attending schools near motorways. Atmos. Environ. 35: 3875-
3884.
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The Toxic Exposure Assessment--Columbia/Harvard (TEACH) study
measured the concentrations of VOCs, PM2.5, black carbon,
and metals outside the homes of high school students in New York
City.\106\ The study was conducted during winter and summer of 1999 on
46 students and their homes. Average winter (and summer) indoor
concentrations exceeded outdoor concentrations by a factor of 2.3
(1.3). In addition, analyses of spatial and temporal patterns of MTBE
concentrations were consistent with traffic patterns. MTBE is a tracer
for motor vehicle pollution.
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\106\ Kinney, P.L.; Chillrud, S.N.; Ramstrom, S.; et al. (2002)
Exposures to multiple air toxics in New York City. Environ Health
Perspect. 110 (Suppl 4): 539-546.
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Children are exposed to elevated levels of air toxics not only in
their homes, classrooms, and outside on school grounds, but also during
their commute to school. See the discussion of in-vehicle
concentrations of air toxics above and in Chapter 3 of the RIA.
iii. Pedestrians and Bicyclists
Researchers have noted that pedestrians and cyclists along major
roads experience elevated exposures to motor vehicle related
pollutants. Although commuting near roadways leads to higher levels of
exposure to traffic pollutants, the general consensus is that exposure
levels of those commuting by walking or biking is lower than for those
who travel by car or bus, (see discussion on in-vehicle exposure in
previous section above). These studies are discussed in Chapter 3 of
the RIA for this rule.
[[Page 15826]]
c. Exposure and Concentrations in Homes with Attached Garages
People living in homes with attached garages are potentially
exposed to substantially higher concentrations of benzene, toluene, and
other VOCs indoors. Homes with attached garages present a special
concern related to infiltration of components of fuel, exhaust, and
other materials stored in garages (including gasoline in gas cans). A
study from the early 1980's found that approximately 30% of an average
nonsmoker's benzene exposure originated from sources in attached
garages.\107\
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\107\ Wallace, L. (1996) Environmental exposure to benzene: an
update. Environ Health Perspect. 104 (Suppl 6): 1129-1136.
---------------------------------------------------------------------------
Concentrations within garages are often substantially higher than
those found outdoors or indoors. A recently-completed study in Michigan
found that average concentrations in residential garages were 36.6
[mu]g/m\3\, compared to 0.4 [mu]g/m\3\ outdoors.\108\ A recent study in
Alaska, where fuel benzene concentrations are higher, cold start
emissions are higher, and homes are more tightly sealed than in most of
the U.S., found average garage concentrations of 101 [mu]g/m\3\.\109\
Air passing from these high-benzene locations can cause increased
concentrations indoors.
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\108\ Batterman, S.; Hatzivasilis, G.; Jia, C. (2006)
Concentrations and emissions of gasoline and other vapors from
residential vehicle garages. Atmos. Environ. 30: 1828-1844.
\109\ George, M.; Kaluza, P.; Maxwell, B.; Moore, G.; Wisdom, S.
(2002) Indoor air quality & ventilation strategies in new homes in
Alaska. Alaska Building Science Network. www.cchrc.org. This
document is available in Docket EPA-HQ-OAR-2005-0036.
---------------------------------------------------------------------------
Measurement studies have found that homes with attached garages can
have significantly higher concentrations of benzene and other VOCs. One
study from Alaska found that in homes without attached garages, average
benzene concentrations were 8.6 [mu]g/m\3\, while homes with attached
garages had average concentrations of 70.8 [mu]g/m\3\.\110\ Another
showed that indoor CO and total hydrocarbon (THC) concentrations rose
sharply following a cold vehicle starting and pulling out of the
attached garage, persisting for an hour or more.\111\ The study also
showed that cold start emissions accounted for 13-85% of indoor non-
methane hydrocarbons (NMHC), while hot soak emissions accounted for 9-
71% of indoor NMHC. Numerous other studies have shown associations
between VOCs in indoor air and the presence of attached garages. These
studies are discussed in Chapter 3 of the RIA.
---------------------------------------------------------------------------
\110\ Schlapia, A.; Morris, S. (1998) Architectural, behavioral,
and environmental factors associated with VOCs in Anchorage homes.
Proceedings of the Air & Waste Management Associations 94th Annual
Conference. Paper 98-A504.
\111\ Graham, L.A.; Noseworthy, L.; Fugler, D.; O'Leary, K.;
Karman, D.; Grande, C. (2004) Contribution of vehicle emissions from
an attached garage to residential indoor air pollution levels. J.
Air & Waste Manage. Assoc. 54: 563-584.
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EPA has conducted a modeling analysis to examine the influence of
attached garages on personal exposure to benzene.\112\ The analysis
modeled the air flow between the outdoor environment, indoor
environment, and the garage, and accounted for the fraction of home air
intake from the garage. Compared to national average exposure
concentrations of 1.36 [mu]g/m\3\ modeled for 1999 in the National-
Scale Air Toxics Assessment, which do not account for emissions
originating in attached garages, average exposure concentrations for
people with attached garages could more than double. For additional
details, see Chapter 3 of the RIA.
---------------------------------------------------------------------------
\112\ Bailey, C. (2005) Additional contribution to benzene
exposure from attached garages. Memorandum to the Docket. This
document is available in Docket EPA-HQ-OAR-2005-0036.
---------------------------------------------------------------------------
Overall, emissions of VOCs within attached garages result in
substantially higher concentrations of benzene and other pollutants
indoors. Proposed reductions in fuel benzene content, new standards for
cold temperature exhaust emissions during vehicle starts, and reduced
emissions from gas cans are all expected to significantly reduce this
major source of exposure.
d. Occupational Exposure
Occupational settings can be considered a microenvironment in which
exposure to benzene and other air toxics can occur. Occupational
exposures to benzene from mobile sources or fuels can be several orders
of magnitude greater than typical exposures in the non-occupationally
exposed population. Several key occupational groups include workers in
fuel distribution, storage, and tank remediation; handheld and non-
handheld equipment operators; and workers who operate gasoline-powered
engines such as snowmobiles and ATV's. Exposures in these occupational
settings are discussed in Chapter 3 of the RIA.
In addition, some occupations require that workers spend
considerable time in vehicles, which increases the time they spend in a
higher-concentration microenvironment. In-vehicle concentrations are
discussed in a previous section above.
3. What Are the Size and Characteristics of Highly Exposed Populations?
A study of the populations in three states (Colorado, Georgia, and
New York) indicated that more than half of the population lives within
200 meters of a major road.\113\ In addition, analysis of data from the
Census Bureau's American Housing Survey suggests that approximately 37
million people live within 300 feet of a 4- or more lane highway,
railroad, or airport. American Housing Survey statistics, as well as
epidemiology studies, indicate that those houses sited near major
transportation sources are more likely to be lower in income or have
minority residents than houses not located near major transportation
sources. These data are discussed in detail in Chapter 3 of the RIA.
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\113\ Major roads are defined as those roads defined by the U.S.
Census as one of the following: ``limited access highway,''
``highway,'' ``major road,'' or ``ramp.''
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Other population studies also indicate that a significant fraction
of the population resides in locations near major roads. At present,
the available studies use different indicators of ``major road'' and of
``proximity,'' but the estimates range from 12.4% of student enrollment
in California attending schools within 150 meters of roads with 25,000
vehicles per day or more, to 13% of Massachusetts veterans living
within 50 meters of a road with at least 10,000 vehicles per
day.114 115 Using a more general definition of a ``major
road,'' between 22% and 51% of different study populations live near
such roads.
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\114\ Green, R.S.; Smorodinsky, S.; Kim, J.J.; McLaughlin, R.;
Ostro, B. (2004) Proximity of California public schools to busy
roads. Environ. Health Perspect. 112: 61-66.
\115\ Garshick, E.; Laden, F.; Hart, J.E.; Caron, A. (2003)
Residence near a major road and respiratory symptoms in U.S.
veterans. Epidemiol. 14: 728-736.
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4. What Are the Implications for Distribution of Individual Risk?
We have made revisions to HAPEM5, which is the exposure model used
in our national-scale modeling, in order to account for near-road
impacts. The effect of the updated model is best understood as widening
the distribution of exposure, with a larger fraction of the population
being exposed to higher benzene concentrations. Including the effects
of residence locations near roads can result in exposures to some
individuals that are up to 50% higher than those predicted by HAPEM5.
The revised model, HAPEM6, was run for three states representing
different parts of the country. These areas are intended to represent
different
[[Page 15827]]
geographies, development patterns, and housing densities. The states
modeled include Georgia, Colorado, and New York. Overall, these study
results indicate that proximity to major roads can significantly
increase personal exposure for populations living near major roads.
These modeling tools will be extended to a national scale for the final
rulemaking.
For details on the modeling study with HAPEM6, refer to Chapter 3.2
of the RIA. We used geographic information systems to estimate the
population within each U.S. census tract living at various distances
from a major road (within 75 meters; between 75 and 200 meters; or
beyond 200 meters). An exposure gradient was determined for people
living in each zone, based on dispersion modeling.\116\ These gradients
were confirmed with monitoring studies funded by EPA.\117\ The HAPEM5
model was updated to account for elevated concentrations within these
defined distances from roadways and the population living in these
areas.
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\116\ Cohen, J.; Cook, R.; Bailey, C.R.; Carr, E. (2005)
Relationship between motor vehicle emissions of hazardous
pollutants, roadway proximity, and ambient concentrations in
Portland, Oregon. Environ Modelling & Software 20: 7-12.
\117\ Kwon, J. (2005) Development of a RIOPA database and
evaluation of the effect of proximity on the potential residential
exposure to VOCs from ambient sources. PhD Dissertation. Rutgers,
The State University of New Jersey and University of Medicine and
Dentistry of New Jersey. Written under direction of Dr. Clifford
Weisel. This document is available in Docket EPA-HQ-OAR-2005-0036.
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C. Ozone
While the focus of this rule is on air toxics, the proposed vehicle
and gas can standards will also help reduce volatile organic compounds
(VOCs), which are precursors to ozone.
1. Background
Ground-level ozone, the main ingredient in smog, is formed by the
reaction of VOCs and nitrogen oxides (NOX) in the atmosphere
in the presence of heat and sunlight. These pollutants, often referred
to as ozone precursors, are emitted by many types of pollution sources,
such as highway and nonroad motor vehicles and engines, power plants,
chemical plants, refineries, makers of consumer and commercial
products, industrial facilities, and smaller ``area'' sources. VOCs can
also be emitted by natural sources such as vegetation. The gas can
controls proposed in this action would help reduce VOC emissions by
reducing evaporation, permeation and spillage from gas cans. The
proposed vehicle controls will also reduce VOC emissions; however,
because these reductions will occur at cold temperatures the ozone
benefits will be limited.
The science of ozone formation, transport, and accumulation is
complex.\118\ Ground-level ozone is produced and destroyed in a
cyclical set of chemical reactions, many of which are sensitive to
temperature and sunlight. When ambient temperatures and sunlight levels
remain high for several days and the air is relatively stagnant, ozone
and its precursors can build up and result in more ozone than typically
would occur on a single high-temperature day. Further complicating
matters, ozone also can be transported into an area from pollution
sources found hundreds of miles upwind, resulting in elevated ozone
levels even in areas with low VOC or NOX emissions. As a
result, differences in VOC and NOX emissions contribute to
daily, seasonal, and yearly differences in ozone concentrations across
different locations.
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\118\ U.S. EPA (1996). Air Quality Criteria for Ozone and
Related Photochemical Oxidants, EPA600-P-93-004aF. This document is
available in Docket EPA-HQ-OAR-2005-0036.
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The current ozone National Ambient Air Quality Standards (NAAQS)
has an 8-hour averaging time. The 8-hour ozone NAAQS, established by
EPA in 1997, is based on well-documented science demonstrating that
more people were experiencing adverse health effects at lower levels of
exertion, over longer periods, and at lower ozone concentrations than
addressed by the previous one-hour ozone NAAQS. It addresses ozone
exposures of concern for the general population and populations most at
risk, including children active outdoors, outdoor workers, and
individuals with pre-existing respiratory disease, such as asthma. The
8-hour ozone NAAQS is met at an ambient air quality monitoring site
when the average of the annual fourth-highest daily maximum 8-hour
average ozone concentration over three years is less than or equal to
0.084 ppm.
2. Health Effects of Ozone
The health and welfare effects of ozone are well documented and are
critically assessed in the EPA ozone criteria document (CD) and EPA
staff paper.119 120 In August 2005, the EPA released the
second external review draft of a new ozone CD which is scheduled to be
released in final form in February 2006.\121\ This document summarizes
the findings of the 1996 ozone criteria document and critically
assesses relevant new scientific information which has emerged in the
past decade. Additional information on health and welfare effects of
ozone can also be found in the draft RIA for this proposal.
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\119\ U.S. EPA (1996). Air Quality Criteria for Ozone and
Related Photochemical Oxidants, EPA600-P-93-004aF. This document is
available in Docket EPA-HQ-OAR-2005-0036.
\120\ U.S. EPA (1996) Review of National Ambient Air Quality
Standards for Ozone, Assessment of Scientific and Technical
Information, OAQPS Staff Paper, EPA-452/R-96-007. This document is
available in Docket EPA-HQ-OAR-2005-0036.
\121\ U.S. EPA (2005) Air Quality Criteria for Ozone and Related
Photochemical Oxidants (Second External Review Draft). This document
is available in Docket EPA-HQ-OAR-2005-0036.
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Ozone can irritate the respiratory system, causing coughing, throat
irritation, and/or uncomfortable sensation in the chest. Ozone can
reduce lung function and make it more difficult to breathe deeply, and
breathing may become more rapid and shallow than normal, thereby
limiting a person's normal activity. Ozone can also aggravate asthma,
leading to more asthma attacks that require a doctor's attention and/or
the use of additional medication. In addition, ozone can inflame and
damage the lining of the lungs, which may lead to permanent changes in
lung tissue, irreversible reductions in lung function, and a lower
quality of life if the inflammation occurs repeatedly over a long time
period. People who are of particular concern with respect to ozone
exposures include children and adults who are active outdoors. Those
people particularly susceptible to ozone effects are people with
respiratory disease (e.g., asthma), people with unusual sensitivity to
ozone, and children.
There has been new research that suggests additional serious health
effects beyond those that had been known when the 1996 ozone CD was
published. Since then, over 1,700 new ozone-related health and welfare
studies have been published in peer-reviewed journals.\122\ Many of
these studies have investigated the impact of ozone exposure on such
health effects as changes in lung structure and biochemistry,
inflammation of the lungs, exacerbation and causation of asthma,
respiratory illness-related school absence, hospital and emergency room
visits for asthma and other respiratory causes, and premature
[[Page 15828]]
mortality. EPA is currently in the process of evaluating these and
other studies as part of the ongoing review of the air quality criteria
document and NAAQS for ozone. Key new health information falls into
four general areas: development of new-onset asthma, hospital
admissions for young children, school absence rate, and premature
mortality.
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\122\ New Ozone Health and Environmental Effects References,
Published Since Completion of the Previous Ozone AQCD, National
Center for Environmental Assessment, Office of Research and
Development, U.S. Environmental Protection Agency, Research Triangle
Park, NC 27711 (7/2002). This document is available in Docket EPA-
HQ-OAR-2005-0036.
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Aggravation of existing asthma resulting from short-term ambient
ozone exposure was reported prior to the 1997 NAAQS standard and has
been observed in studies published subsequently.123 124 In
addition, a relationship between long-term ambient ozone concentrations
and the incidence of new-onset asthma in adult males (but not in
females) was reported by McDonnell et al. (1999).\125\ Subsequently, an
additional study suggests that incidence of new diagnoses of asthma in
children is associated with heavy exercise in communities with high
concentrations (i.e., mean 8-hour concentration of 59.6 parts per
billion (ppb) or greater) of ozone.\126\ This relationship was
documented in children who played 3 or more sports and thus spent more
time outdoors. It was not documented in those children who played one
or two sports.
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\123\ Thurston, G.D.; Lippman, M.L.; Scott, M.B.; Fine, J.M.
(1997) Summertime Haze Air Pollution and Children with Asthma.
American Journal of Respiratory Critical Care Medicine 155: 654-660.
\124\ Ostro, B.; Lipsett, M.; Mann, J.; Braxton-Owens, H.;
White, M. (2001) Air pollution and exacerbation of asthma in
African-American children in Los Angeles. Epidemiology 12(2): 200-
208.
\125\ McDonnell, W.F.; Abbey, D.E.; Nishino, N.; Lebowitz, M.D.
(1999) ``Long-term ambient ozone concentration and the incidence of
asthma in nonsmoking adults: the AHSMOG study.'' Environmental
Research 80(2 Pt 1): 110-121.
\126\ McConnell, R.; Berhane, K.; Gilliland, F.; London, S.J.;
Islam, T.; Gauderman, W.J.; Avol, E.; Margolis, H.G.; Peters, J.M.
(2002) Asthma in exercising children exposed to ozone: a cohort
study. Lancet 359: 386-391.
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Previous studies have shown relationships between ozone and
hospital admissions in the general population. A study in Toronto
reported a significant relationship between 1-hour maximum ozone
concentrations and respiratory hospital admissions in children under
the age of two.\127\ Given the relative vulnerability of children in
this age category, there is particular concern about these findings.
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\127\ Burnett, R.T.; Smith-Doiron, M.; Stieb, D.; Raizenne,
M.E.; Brook, J.R.; Dales, R.E.; Leech, J.A.; Cakmak, S.; Krewski, D.
(2001) Association between ozone and hospitalization for acute
respiratory diseases in children less than 2 years of age. Am. J.
Epidemiol. 153: 444-452.
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Increased rates of illness-related school absenteeism have been
associated with 1-hour daily maximum and 8-hour average ozone
concentrations in studies conducted in Nevada \128\ in kindergarten to
6th grade and in Southern California in grades four through six.\129\
These studies suggest that higher ambient ozone levels may result in
increased school absenteeism.
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\128\ Chen, L.; Jennison, B.L.; Yang, W.; Omaye, S.T. (2000)
Elementary school absenteeism and air pollution. Inhalation Toxicol.
12: 997-1016.
\129\ Gilliland, F.D.; Berhane, K.; Rappaport, E.B.; Thomas,
D.C.; Avol, E.; Gauderman, W.J.; London, S.J.; Margolis, H.G.;
McConnell, R.; Islam, K.T.; Peters, J.M. (2001) The effects of
ambient air pollution on school absenteeism due to respiratory
illnesses. Epidemiology 12:43-54.
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The air pollutant most clearly associated with premature mortality
is PM, with many studies reporting such an association. However, recent
analyses provide evidence that short term ozone exposure is associated
with increased premature mortality. Bell et al. (2004) published new
analyses of the 95 cities in the National Morbidity, Mortality, and Air
Pollution Study (NMMAPS) data sets, showing associations between daily
mortality and the previous week's ozone concentrations which were
robust to adjustment for particulate matter, weather, seasonality, and
long-term trends.\130\ Although earlier analyses undertaken as part of
the NMMAPS did not report an effect of ozone on total mortality across
the full year, in those earlier studies the NMMAPS investigators did
observe an effect after limiting the analysis to summer, when ozone
levels are highest.131 132 Another recent study from 23
cities throughout Europe (APHEA2) also found an association between
ambient ozone and daily mortality.\133\ Similarly, other studies have
shown associations between ozone and mortality.134 135
Specifically, Toulomi et al. (1997) found that 1-hour maximum ozone
levels were associated with daily numbers of deaths in four cities
(London, Athens, Barcelona, and Paris), and a quantitatively similar
effect was found in a group of four additional cities (Amsterdam,
Basel, Geneva, and Zurich).
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\130\ Bell, M.L.; McDermott, A.; Zeger, S.L.; Samet, J.M.;
Dominici, F. Ozone and short-term mortality in 95 U.S. urban
communities, 1987-2000. JAMA 292(19): 2372-2378.
\131\ Samet, J.M.; Zeger, S.L.; Dominici, F.; Curriero, F.;
Coursac, I.; Dockery, D.W.; Schwartz, J.; Zanobetti, A. (2000) The
National Morbidity, Mortality and Air Pollution Study: Part II:
Morbidity, Mortality and Air Pollution in the United States.
Research Report No. 94, Part II. Health Effects Institute,
Cambridge, MA, June 2000. This document is available in Docket EPA-
HQ-OAR-2005-0036.
\132\ Samet, J.M.; Zeger, S.L.; Dominici, F.; Curriero, F.;
Coursac, I.; Zeger, S. (2000) Fine Particulate Air Pollution and
Mortality in 20 U.S. Cities, 1987-1994. The New England Journal of
Medicine 343(24): 1742-1749.
\133\ Gryparis, A.; Forsberg, B.; Katsouyanni, K.; Analitis, A.;
Touloumi, G.; Schwartz, J.; Samoli, E.; Medina, S.; Anderson, H.R.;
Niciu, E.M.; Wichmann, H.E.; Kriz, B.; Kosnik, M.; Skorkovsky, J.;
Vonk, J.M.; Dortbudak, Z. (2004) Acute effects of ozone on mortality
from the ``Air Pollution and Health: A European Approach'' project.
Am. J. Respir. Crit. Care Med. 170: 1080-1087.
\134\ Thurston, G.D.; Ito, K. (2001) Epidemiological studies of
acute ozone exposures and mortality. J. Exposure Anal. Environ.
Epidemiol. 11: 286-294.
\135\ Touloumi, G.; Katsouyanni, K.; Zmirou, D.; Schwartz, J.;
Spix, C.; Ponce de Leon, A.; Tobias, A.; Quennel, P.; Rabczenko, D.;
Bacharova, L.; Bisanti, L.; Vonk, J.M.; Ponka, A. (1997) Short-term
effects of ambient oxidant exposure on mortality: A combined
analysis within the APHEA project. Am. J. Epidemiol. 146: 177-185.
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In all, the new studies that have become available since the 8-hour
ozone standard was adopted in 1997 continue to demonstrate the harmful
effects of ozone on public health, and the need to attain and maintain
the ozone NAAQS.
3. Current and Projected 8-Hour Ozone Levels
Currently, ozone concentrations exceeding the level of the 8-hour
ozone NAAQS occur over wide geographic areas, including most of the
nation's major population centers.\136\ As of September 2005 there are
approximately 159 million people living in 126 areas designated as not
in attainment with the 8-hour ozone NAAQS. There are 474 full or
partial counties that make up the 8-hour ozone nonattainment areas.
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\136\ A map of the 8-hour ozone nonattainment areas is included
in the RIA for this proposed rule.
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EPA has already adopted many emission control programs that are
expected to reduce ambient ozone levels. These control programs include
the Clean Air Interstate Rule (70 FR 25162, May 12, 2005), as well as
many mobile source rules (many of which are described in section V.D).
As a result of these programs, the number of areas that fail to achieve
the 8-hour ozone NAAQS is expected to decrease.
Based on the recent ozone modeling performed for the CAIR analysis
\137\, barring additional local ozone precursor controls, we estimate
37 Eastern counties (where 24 million people are projected to live)
will exceed the 8-hour ozone NAAQS in 2010. An additional 148 Eastern
counties (where 61 million people are projected to live) are expected
to be within 10 percent of violating the 8-hour ozone NAAQS in 2010.
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\137\ Technical Support Document for the Final Clean Air
Interstate Rule Air Quality Modeling. This document is available in
Docket EPA-HQ-OAR-2005-0036.
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States with 8-hour ozone nonattainment areas will be required to
[[Page 15829]]
take action to bring those areas into compliance in the future. Based
on the final rule designating and classifying 8-hour ozone
nonattainment areas (69 FR 23951, April 30, 2004), most 8-hour ozone
nonattainment areas will be required to attain the 8-hour ozone NAAQS
in the 2007 to 2013 time frame and then be required to maintain the 8-
hour ozone NAAQS thereafter.\138\ We also expect many of the 8-hour
ozone nonattainment areas to adopt additional emission reduction
programs, but we are unable to quantify or rely upon future reductions
from additional state and local programs that have not yet been
adopted. The expected ozone inventory reductions from the standards
proposed in this action may be useful to states in attaining or
maintaining the 8-hour ozone NAAQS.
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\138\ The Los Angeles South Coast Air Basin 8-hour ozone
nonattainment area will have to attain before June 15, 2021.
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A metamodeling tool developed at EPA, the ozone response surface
metamodel, was used to estimate the effects of the proposed emission
reductions. The ozone response surface metamodel was created using
multiple runs of the Comprehensive Air Quality Model with Extensions
(CAMx). Base and proposed control CAMx metamodeling was completed for
two future years (2020, 2030) over a modeling domain that includes all
or part of 37 Eastern U.S. states. For more information on the response
surface metamodel, please see the RIA for this proposal or the Air
Quality Modeling Technical Support Document (TSD).
We have made estimates using the ozone response surface metamodel
to illustrate the types of change in future ozone levels that we would
expect to result from this proposed rule, as described in Chapter 3 of
the draft RIA. The proposed gas can controls are projected to result in
a very small net improvement in future ozone, after weighting for
population. Although the net future ozone improvement is small, some
VOC-limited areas in the Eastern U.S. are projected to have non-
negligible improvements in projected 8-hour ozone design values due to
the proposed gas can controls. As stated in Section VII.E.3, we view
these improvements as useful in meeting the 8-hour ozone NAAQS. These
net ozone improvements are in addition to reductions in levels of
benzene due to the proposed gas can controls.
D. Particulate Matter
The cold temperature vehicle controls proposed here will result in
reductions of primary PM being emitted by vehicles. In addition, both
the proposed vehicle controls and the proposed gas can controls will
reduce VOCs that react in the atmosphere to form secondary
PM2.5, namely organic carbonaceous PM2.5.
1. Background
Particulate matter (PM) represents a broad class of chemically and
physically diverse substances. It can be principally characterized as
discrete particles that exist in the condensed (liquid or solid) phase
spanning several orders of magnitude in size. PM is further described
by breaking it down into size fractions. PM10 refers to
particles with an aerodynamic diameter less than or equal to a nominal
10 micrometers ([mu]m). PM2.5 refers to fine particles,
those particles with an aerodynamic diameter less than or equal to a
nominal 2.5 [mu]m. Coarse fraction particles refer to those particles
with an aerodynamic diameter less than or equal to a nominal 10 [mu]m.
Inhalable (or ``thoracic'') coarse particles refer to those particles
with an aerodynamic diameter greater than 2.5 [mu]m but less than or
equal to 10 [mu]m. Ultrafine PM refers to particles with diameters of
less than 100 nanometers (0.1 [mu]m). Larger particles (>10 [mu]m) tend
to be removed by the respiratory clearance mechanisms, whereas smaller
particles are deposited deeper in the lungs. Ambient fine particles are
a complex mixture including sulfates, nitrates, chlorides, organic
carbonaceous material, elemental carbon, geological material, and
metals. Fine particles can remain in the atmosphere for days to weeks
and travel through the atmosphere hundreds to thousands of kilometers,
while coarse particles generally tend to deposit to the earth within
minutes to hours and within tens of kilometers from the emission
source.
EPA has NAAQS for both PM2.5 and PM10. Both
the PM2.5 and PM10 NAAQS consist of a short-term
(24-hour) and a long-term (annual) standard. The 24-hour
PM2.5 NAAQS is set at a level of 65 [mu]g/m\3\ based on the
98th percentile concentration averaged over three years. The annual
PM2.5 NAAQS specifies an expected annual arithmetic mean not
to exceed 15 [mu]g/m\3\ averaged over three years. The 24-hour
PM10 NAAQS is set at a level of 150 [mu]g/m\3\ not to be
exceeded more than once per year. The annual PM10 NAAQS
specifies an expected annual arithmetic mean not to exceed 50 [mu]g/
m\3\.
EPA has recently proposed to amend the PM NAAQS.\139\ The proposal
includes lowering the level of the primary 24-hour fine particle
standard from the current level of 65 micrograms per cubic meter
([mu]g/m\3\) to 35 [mu]g/m\3\, retaining the level of the annual fine
standard at 15 [mu]g/m\3\, and setting a new primary 24-hour standard
for certain inhalable coarse particles (the indicator is qualified so
as to include any ambient mix of PM10-2.5 that is dominated
by resuspended dust from high-density traffic on paved roads and PM
generated by industrial and construction sources, and excludes any
ambient mix of PM10-2.5 dominated by rural windblown dust
and soils and PM generated by agricultural and mining sources) at 70
[mu]g/m\3\. The Agency is also requesting comment on various other
standards for fine and inhalable coarse PM (71 FR 2620, Jan. 17, 2006).
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\139\ U.S. EPA, National Ambient Air Quality Standards for
Particulate Matter (71 FR 2620, Jan. 17, 2006). This document is
also available on the web at: http://www.epa.gov/air/particlepollution/actions.html
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2. Health Effects of PM
Scientific studies show ambient PM is associated with a series of
adverse health effects. These health effects are discussed in detail in
the 1997 PM criteria document, the recent 2004 EPA Criteria Document
for PM as well as the 2005 PM Staff Paper.140 141 142
Further discussion of health effects associated with PM can also be
found in the draft RIA for this proposal.
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\140\ U.S.EPA (1996) Air Quality Criteria for Particulate
Matter, EPA 600-P-95-001aF, EPA 600-P-95-001bF. This document is
available in Docket EPA-HQ-OAR-2005-0036.
\141\ U.S. EPA (2004) Air Quality Criteria for Particulate
Matter (Oct 2004), Volume I Document No. EPA600/P-99/002aF and
Volume II Document No. EPA600/P-99/002bF. This document is available
in Docket EPA-HQ-OAR-2005-0036.
\142\ U.S. EPA (2005) Review of the National Ambient Air Quality
Standard for Particulate Matter: Policy Assessment of Scientific and
Technical Information, OAQPS Staff Paper. EPA-452/R-05-005. This
document is available in Docket EPA-HQ-OAR-2005-0036.
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As described in the documents listed above, health effects
associated with short-term variation (e.g. hours to days) in ambient
PM2.5 include premature mortality, hospital admissions,
heart and lung diseases, increased cough, lower-respiratory symptoms,
decrements in lung function and changes in heart rate rhythm and other
cardiac effects. Studies examining populations exposed to different
levels of air pollution over a number of years, including the Harvard
Six Cities Study and the American Cancer Society Study, show
associations between long-term exposure to ambient PM2.5 and
premature mortality, including deaths attributed to cardiovascular
changes and lung cancer.
[[Page 15830]]
Recently, several studies have highlighted the adverse effects of
PM specifically from mobile sources.143 144 Studies have
also focused on health effects due to PM exposures on or near
roadways.\145\ Although these studies include all air pollution
sources, including both spark-ignition (gasoline) and diesel powered
vehicles, they indicate that exposure to PM emissions near roadways,
thus dominated by mobile sources, are associated with health effects.
The proposed vehicle controls may help to reduce exposures to mobile
source related PM2.5. Additional information on near roadway
health effects can be found in Section III of this preamble.
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\143\ Laden, F.; Neas, L.M.; Dockery, D.W.; Schwartz, J. (2000)
Association of Fine Particulate Matter from Different Sources with
Daily Mortality in Six U.S. Cities. Environmental Health
Perspectives 108: 941-947.
\144\ Janssen, N.A.H.; Schwartz, J.; Zanobetti, A.; Suh, H.H.
(2002) Air Conditioning and Source-Specific Particles as Modifiers
of the Effect of PM10 on Hospital Admissions for Heart
and Lung Disease. Environmental Health Perspectives 110: 43-49.
\145\ Riekider, M.; Cascio, W.E.; Griggs, T.R.; Herbst, M.C.;
Bromberg, P.A.; Neas, L.; Williams, R.W.; Devlin, R.B. (2003)
Particulate Matter Exposures in Cars is Associated with
Cardiovascular Effects in Healthy Young Men. Am. J. Respir. Crit.
Care Med. 169: 934-940.
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3. Current and Projected PM2.5 Levels
EPA has recently finalized PM2.5 nonattainment
designations (70 FR 943, Jan 5. 2005).\146\ As can be seen from the
designations, ambient PM2.5 levels exceeding the level of
the PM2.5 NAAQS are widespread throughout the country. There
are approximately 88 million people living in 39 areas (which include
all or part of 208 counties) designated as not in attainment with the
PM2.5 NAAQS.
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\146\ US EPA, Air Quality Designations and Classifications for
the Fine Particles (PM2.5) National Ambient Air Quality
Standards, December 17, 2004. (70 FR 943, Jan 5, 2005) This document
is also available on the web at: http://www.epa.gov/pmdesignations/.
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EPA has already adopted many emission control programs that are
expected to reduce ambient PM levels. These rules include the Clean Air
Interstate Rule (70 FR 25162, May 12, 2005), as well as many mobile
source rules. Section V.D details many of these mobile source
rules.\147\ As a result of these programs, the number of areas that
fail to achieve the 1997 PM2.5 NAAQS is expected to
decrease. Based on modeling performed for the CAIR analysis, we
estimate that 28 Eastern counties (where 19 million people are
projected to live) will exceed the PM2.5 standard in
2010.\148\ In addition, 56 Eastern counties (where 24 million people
are projected to live) are expected to be within 10 percent of
violating the PM2.5 in 2010.
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\147\ The Clean Air Interstate Rule (CAIR) will reduce emissions
of SO2 and NOX from power plants in the
Eastern 37 states, reducing interstate transport of nitrogen oxides
and sulfur dioxide and helping cities and states in the East meet
the ozone and PM NAAQS. (70 FR 25162) (May 12, 2005).
\148\ Technical Support Document for the Final Clean Air
Interstate Rule Air Quality Modeling. This document is available in
Docket EPA-HQ-OAR-2005-0036.
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While the final implementation process for bringing the nation's
air into attainment with the 1997 PM2.5 NAAQS is still being
completed in a separate rulemaking action, we expect that most areas
will need to attain the 1997 PM2.5 NAAQS in the 2009 to 2014
time frame, and then be required to maintain the NAAQS thereafter. The
expected PM and VOC inventory reductions from the standards proposed in
this action will be useful to states in attaining or maintaining the
PM2.5 NAAQS.
4. Current PM10 Levels
Air quality monitoring data indicates that as of September 2005
approximately 29 million people live in 55 designated PM10
nonattainment areas, which include all or part of 54 counties. The RIA
for this proposed rule lists the PM10 nonattainment areas
and their populations.
Based on section 188 of the Act, we expect that most areas will
attain the PM10 NAAQS no later than December 31, 2006,
depending on an area's classification and other factors, and then be
required to maintain the PM10 NAAQS thereafter. The expected
PM and VOC inventory reductions from the standards proposed in this
action could be useful to states in maintaining the PM10
NAAQS.\149\
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\149\ As mentioned above, the EPA has recently proposed to amend
the PM NAAQS, by establishing a new indicator for certain inhalable
coarse particles, and a new primary 24-hour standard for coarse
particles described by that indicator. EPA also proposed to revoke
the current 24-hour PM10 standard in all areas of the
country except in those areas with a population of at least 100,000
people and which contain at least one monitor violating the 24-hour
PM10 standard, based on the most recent 3 years of air
quality data. In addition, EPA proposed to revoke upon promulgation
of this rule the current annual PM10 standard if EPA
finalizes the proposed primary standard for PM10-2.5 (71
FR 2620, Jan. 17, 2006).
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E. Other Environmental Effects
1. Visibility
a. Background
Visibility can be defined as the degree to which the atmosphere is
transparent to visible light.\150\ Visibility is important because it
has direct significance to people's enjoyment of daily activities in
all parts of the country. Individuals value good visibility for the
well-being it provides them directly, where they live and work, and in
places where they enjoy recreational opportunities. Visibility is also
highly valued in significant natural areas such as national parks and
wilderness areas, because of the special emphasis given to protecting
these lands now and for future generations. For more information on
visibility see the recent 2004 EPA Criteria Document for PM as well as
the 2005 PM Staff Paper.151 152
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\150\ National Research Council, 1993. Protecting Visibility in
National Parks and Wilderness Areas. National Academy of Sciences
Committee on Haze in National Parks and Wilderness Areas. National
Academy Press, Washington, DC. This document is available in Docket
EPA-HQ-OAR-2005-0036. This book can be viewed on the National
Academy Press Website at http://www.nap.edu/books/0309048443/html/.
\151\ U.S. EPA (2004) Air Quality Criteria for Particulate
Matter (Oct 2004), Volume I Document No. EPA600/P-99/002aF and
Volume II Document No. EPA600/P-99/002bF. This document is available
in Docket EPA-HQ-OAR-2005-0036.
\152\ U.S. EPA (2005) Review of the National Ambient Air Quality
Standard for Particulate Matter: Policy Assessment of Scientific and
Technical Information, OAQPS Staff Paper. EPA-452/R-05-005. This
document is available in Docket EPA-HQ-OAR-2005-0036.
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To address the welfare effects of PM on visibility, EPA set
secondary PM2.5 standards in 1997 which would act in
conjunction with the establishment of a regional haze program. EPA
concluded that PM2.5 causes adverse effects on visibility in
various locations, depending on PM concentrations and factors such as
chemical composition and average relative humidity and the secondary
(welfare-based) PM2.5 NAAQS was established as equal to the
suite of primary (health-based) NAAQS (62 FR 38669, July 18, 1997).
Furthermore, Section 169 of the Act provides additional authorities to
remedy existing visibility impairment and prevent future visibility
impairment in the 156 national parks, forests and wilderness areas
categorized as mandatory Federal class I areas (62 FR 38680-81, July
18, 1997).\153\ In July 1999 the regional haze rule (64 FR 35714) was
put in place to protect the visibility in mandatory Federal class I
areas. Visibility can be said to be impaired in both PM2.5
nonattainment areas and mandatory Federal class I areas.\154\
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\153\ These areas are defined in section 162 of the Act as those
national parks exceeding 6,000 acres, wilderness areas and memorial
parks exceeding 5,000 acres, and all international parks which were
in existence on August 7, 1977.
\154\ As mentioned above, the EPA has recently proposed to amend
the PM NAAQS (71 FR 2620, Jan. 17, 2006). The proposal would set the
secondary NAAQS equal to the primary standards for both
PM2.5 and PM10-2.5. EPA also is taking comment
on whether to set a separate PM2.5 standard, designed to
address visibility (principally in urban areas), on potential levels
for that standard within a range of 20 to 30 [mu]g/m3,
and on averaging times for the standard within a range of four to
eight daylight hours.
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[[Page 15831]]
b. Current Visibility Impairment
Data showing PM2.5 nonattainment areas, and visibility
levels above background at the Mandatory Class I Federal Areas
demonstrate that unacceptable visibility impairment is experienced
throughout the U.S., in multi-state regions, urban areas, and remote
mandatory Federal class I areas.155 156 The mandatory
federal class I areas are listed in Chapter 3 of the draft RIA for this
action. The areas that have design values above the PM2.5
NAAQS are also listed in Chapter 3 of the draft RIA for this action.
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\155\ US EPA, Air Quality Designations and Classifications for
the Fine Particles (PM2.5) National Ambient Air Quality
Standards, December 17, 2004. (70 FR 943, Jan 5. 2005) This document
is also available on the web at: http://www.epa.gov/pmdesignations/.
\156\ US EPA. Regional Haze Regulations, July 1, 1999. (64 FR
35714, July 1, 1999).
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c. Future Visibility Impairment
Recent modeling for the Clean Air Interstate Rule (CAIR) was used
to project visibility conditions in mandatory Federal class I areas
across the country in 2015. The results for the mandatory Federal Class
I areas suggest that these areas are predicted to continue to have
annual average deciview levels above background in the future.\157\
Modeling done for the CAIR also projected PM2.5 levels in
the Eastern U.S. in 2010. These projections include all sources of
PM2.5, including the engines covered in this proposal, and
suggest that PM2.5 levels above the 1997 NAAQS will persist
into the future.\158\
The vehicles that would be subject to the proposed standards
contribute to visibility concerns in these areas through both their
primary PM emissions and their VOC emissions, which contribute to the
formation of secondary PM2.5. The gas cans that would be
subject to the proposed standards also contribute to visibility
concerns through their VOC emissions. Reductions in these direct PM and
VOC emissions will help to improve visibility across the nation,
including mandatory Federal class I areas.
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\157\ The deciview metric describes perceived visual changes in
a linear fashion over its entire range, analogous to the decibel
scale for sound. A deciview of 0 represents pristine conditions. The
higher the deciview value, the worse the visibility, and an
improvement in visibility is a decrease in deciview value.
\158\ EPA recently proposed to revise the current secondary PM
NAAQS standards by making them identical to the suite of proposed
primary standards for fine and coarse particles (71 FR 2620, Jan.
17, 2006).
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2. Plant Damage From Ozone
Ozone contributes to many environmental effects, with damage to
plants and ecosystems being of most concern. Plant damage affects crop
yields, forestry production, and ornamentals. The adverse effect of
ozone on forests and other natural vegetation can in turn cause damage
to associated ecosystems, with additional resulting economic losses.
Prolonged ozone concentrations of 100 ppb can be phytotoxic to a large
number of plant species, and can produce acute injury and reduced crop
yield and biomass production. Ozone concentrations within the range of
50 to 100 ppb have the potential over a longer duration to create
chronic stress on vegetation that can result in reduced plant growth
and yield, shifts in competitive advantages in mixed populations,
decreased vigor, and injury. Ozone effects on vegetation are presented
in more detail in the 1996 Criteria Document and the 2005 draft
Criteria Document.
3. Atmospheric Deposition
Wet and dry deposition of ambient particulate matter delivers a
complex mixture of metals (e.g., mercury, zinc, lead, nickel, aluminum,
cadmium), organic compounds (e.g., POM, dioxins, furans) and inorganic
compounds (e.g., nitrate, sulfate) to terrestrial and aquatic
ecosystems. EPA's Great Waters Program has identified 15 pollutants
whose deposition to water bodies has contributed to the overall
contamination loadings to these Great Waters. These 15 compounds
include several heavy metals and a group known as polycyclic organic
matter (POM). Within POM are the polycyclic aromatic hydrocarbons
(PAHs). PAHs in the environment may be present in the gas or particle
phase, although the bulk will be adsorbed onto airborne particulate
matter. In most cases, human-made sources of PAHs account for the
majority of PAHs released to the environment. The PAHs are usually the
POMs of concern as many PAHs are probable human carcinogens.\159\ For
some watersheds, atmospheric deposition represents a significant input
to the total surface water PAH burden.160 161 Emissions from
mobile sources have been found to account for a percentage of the
atmospheric deposition of PAHs. For instance, recent studies have
identified gasoline and diesel vehicles as the major contributors in
the atmospheric deposition of PAHs to Chesapeake Bay, Massachusetts Bay
and Casco Bay.162 163 The vehicle controls being proposed
may help to reduce deposition of heavy metals and POM.
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\159\ Deposition of Air Pollutants to the Great Waters-Third
Report to Congress, Office of Air Quality Planning and Standards,
June 2000, EPA453-R-00-005. This document is available in Docket
EPA-HQ-OAR-2005-0036.
\160\ Simcik, M.F.; Eisenrich, S.J.; Golden, K.A.; Liu, S.;
Lipiatou, E.; Swackhamer, D.L.; and Long, D.T. (1996) Atmospheric
Loading of Polycyclic Aromatic Hydrocarbons to Lake Michigan as
Recorded in the Sediments. Environ. Sci. Technol. 30:3039-3046.
\161\ Simcik, M.F.; Eisenrich, S.J.; and Lioy, P.J. (1999)
Source Apportionment and Source/Sink Relationships of PAHs in the
Coastal Atmosphere of Chicago and Lake Michigan. Atmospheric
Environment 33: 5071-5079.
\162\ Dickhut, R.M.; Canuel, E.A.; Gustafson, K.E.; Liu, K.;
Arzayus, K.M.; Walker, S.E.; Edgecombe, G.; Gaylor, M.O.; and
McDonald, E.H. (2000) Automotive Sources of Carcinogenic Polycyclic
Aromatic Hydrocarbons Associated with Particulate Matter in the
Chesapeake Bay Region. Environ. Sci. Technol. 34: 4635-4640.
\163\ Golomb, D.; Barry, E.; Fisher, G.; Varanusupakul, P.;
Koleda, M.; amd Rooney, T. (2001) Atmospheric Deposition of
Polycyclic Aromatic Hydrocarbons near New England Coastal Waters.
Atmospheric Environment 35: 6245-6258.
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4. Materials Damage and Soiling
The deposition of airborne particles can also reduce the aesthetic
appeal of buildings and culturally important articles through soiling,
and can contribute directly (or in conjunction with other pollutants)
to structural damage by means of corrosion or erosion.\164\ Particles
affect materials principally by promoting and accelerating the
corrosion of metals, by degrading paints, and by deteriorating building
materials such as concrete and limestone. Particles contribute to these
effects because of their electrolytic, hygroscopic, and acidic
properties, and their ability to sorb corrosive gases (principally
sulfur dioxide). The rate of metal corrosion depends on a number of
factors, including the deposition rate and nature of the pollutant; the
influence of the metal protective corrosion film; the amount of
moisture present; variability in the electrochemical reactions; the
presence and concentration of other surface electrolytes; and the
orientation of the metal surface.
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\164\ U.S. EPA (2005) Review of the National Ambient Air Quality
Standards for Particulate Matter: Policy Assessment of Scientific
and Technical Information, OAQPS Staff Paper. This document is
available in Docket EPA-HQ-OAR-2005-0036.
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V. What Are Mobile Source Emissions Over Time and How Would This
Proposal Reduce Emissions, Exposure and Associated Health Effects?
A. Mobile Source Contribution to Air Toxics Emissions
In 1999, based on the National Emissions Inventory (NEI), mobile
sources accounted for 44% of total
[[Page 15832]]
emissions of 188 hazardous air pollutants (on the Clean Air Act section
112(b) list of hazardous air pollutants). Diesel particulate matter
(PM) is not included in this list of 188 pollutants. Sixty-five percent
of the mobile source tons in this inventory were attributable to
highway mobile sources, and the remainder to nonroad sources.
Furthermore, over 90% of mobile source emissions of air toxics (not
including diesel PM) are attributable to gasoline vehicles and
equipment.
Recently, EPA projected trends in air toxic emissions (not
including diesel PM) to 2020, using the 1999 National Emissions
Inventory (NEI) as a baseline.\165\ Overall, air toxic emissions are
projected to decrease from 5,030,000 tons in 1999 to 4,010,000 tons in
2020, as a result of emission controls on major, area, and mobile
sources. In the absence of Clean Air Act emission controls currently in
place, EPA estimates air toxic emissions would total 11,590,000 tons in
2020.
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\165\ Strum, M., R. Cook, J. Thurman, D. Ensley, A. Pope, T.
Palma, R. Mason, H. Michaels, and S. Shedd. 2005. Projection of
Hazardous Air Pollutant Emissions to Future Years. Science of the
Total Environment, in press.
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Figure V.A-1 depicts the contributions of source categories to air
toxic emissions between 1990 and 2020.\166\ As indicated in Figure V.A-
1, mobile source air toxic emissions will be reduced 60% between 1999
and 2020, from 2.2 million to 880,000 tons. This reduction will occur
despite a projected 57% increase in vehicle miles traveled, and a
projected 63% increase in nonroad activity, based on units of work
called horsepower-hours. It should be noted, however, that EPA
anticipates mobile source air toxic emissions will begin to increase
after 2020, from about 880,000 tons in 2020 to 920,000 tons in 2030.
This is because, after 2020, reductions from control programs will be
outpaced by increases in activity.
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\166\ It should be noted that after 2010, stationary source
emissions are based only on economic growth, and do not account for
reductions from ongoing toxics programs such as the urban air toxics
program, residual risk standards and area source program, which are
expected to further reduce toxics.
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In 1999, 29% of air toxic emissions were from highway vehicles and
15% from nonroad equipment. Moreover, 54% of air toxic emissions from
highway vehicles were emitted by light-duty gasoline vehicles (LDGVs)
and 37% by light-duty trucks (LDGTs) (see Table V.A-1). EPA projects
that in 2020, only 27% of highway vehicle toxic emissions will be from
LDGVs and 63% will be from LDGTs. Air toxic emissions from nonroad
equipment are dominated by lawn and garden equipment, recreational
equipment, and pleasure craft, which collectively accounted for almost
80% of nonroad toxic emissions in 1999 and 2020 (see Table V.A-2).
Figure V.A-1Contribution of Source Categories to Air Toxic
Emissions, 1990 to 2020 (not including diesel particulate matter).
Note: Dashed line represents projected emissions without Clean Air Act
controls.
[[Page 15833]]
[GRAPHIC] [TIFF OMITTED] TP29MR06.001
If diesel PM emissions were added to the mobile source total,
mobile sources would account for 48% of a total 5,398,000 tons in 1999.
Figure V.A.-2 summarizes the trend in diesel PM between 1999 and 2020,
by source category. Diesel PM emissions will be reduced from 368,000
tons in 1999 to 114,000 tons in 2020, a decrease of 70%. As controls on
highway diesel engines and nonroad diesel engines phase in, diesel-
powered locomotives and commercial marine vessels increase from 11% of
the inventory in 1999 to 27% in 2020.
Subsequent to the development of these projected inventories for
mobile source air toxics, a number of inventory revisions have
occurred. Data EPA has collected indicate that the MOBILE6.2 emission
factor model is under predicting hydrocarbon emissions (including air
toxics) and PM emissions at lower temperatures, from light-duty
vehicles meeting National Low Emission Vehicle (NLEV) and Tier 2
tailpipe standards. The inventories presented in sections V.B, V.C.,
and V.E. reflect these enhancements.
Table V.A-1.--Percent Contribution of Vehicle Classes to Highway Vehicle Air Toxic Emissions, 1999 to 2020
[Not including diesel particulate matter]
----------------------------------------------------------------------------------------------------------------
Vehicle 1999 (%) 2007 (%) 2010 (%) 2015 (%) 2020 (%)
----------------------------------------------------------------------------------------------------------------
Light-Duty Gasoline Vehicles................... 54 41 37 31 27
Light-Duty Gasoline Trucks..................... 37 49 53 59 63
Heavy-Duty Gasoline Vehicles................... 6 5 4 4 3
Heavy-Duty Diesel Vehicles..................... 3 4 4 4 5
Other (motorcycles and light-duty diesel 1 1 1 2 2
vehicles and trucks)..........................
----------------------------------------------------------------------------------------------------------------
[[Page 15834]]
Table V.A-2.--Contribution of Equipment Types to Nonroad Air Toxic Emissions, 1999 to 2020
----------------------------------------------------------------------------------------------------------------
Equipment type 1999 (%) 2007 (%) 2010 (%) 2015 (%) 2020 (%)
----------------------------------------------------------------------------------------------------------------
Lawn and Garden................................ 26 18 17 21 25
Pleasure Craft................................. 34 27 25 25 25
Recreational................................... 19 38 40 35 29
All Others..................................... 21 17 18 19 21
----------------------------------------------------------------------------------------------------------------
[GRAPHIC] [TIFF OMITTED] TP29MR06.002
B. VOC Emissions From Mobile Sources
Table V.B-1 presents 48-State VOC emissions from key mobile source
sectors in 1999, 2010, 2015, and 2020, not including the effects of
this proposed rule. The 1999 inventory estimates for nonroad equipment
were obtained from the National Emissions Inventory, and the 2010 and
later year estimates were obtained from the inventories developed for
the Clean Air Interstate Air Quality Rule (CAIR). The table provides
emissions for nonroad equipment such as commercial marine vessels,
locomotives, aircraft, lawn and garden equipment, recreational vehicles
and boats, industrial equipment, and construction equipment. The
estimates for highway vehicle classes were developed for this rule. The
estimates for light-duty gasoline vehicles reflect revised estimates of
hydrocarbon emissions at low temperatures.
Table V.B-1.--48-State VOC Emissions (Tons) From Key Mobile Source Sectors in 1999, 2010, 2015, and 2020
[Without this proposed rule]
----------------------------------------------------------------------------------------------------------------
Category 1999 2010 2015 2020
----------------------------------------------------------------------------------------------------------------
Light Duty Gasoline Vehicles and Trucks......... 4,873,000 2,896,000 2,566,000 2,486,000
[[Page 15835]]
Heavy Duty and Other Highway Vehicles........... 672,000 255,000 212,000 200,000
Nonroad Equipment............................... 2,785,000 1,739,000 1,500,000 1,387,000
----------------------------------------------------------------------------------------------------------------
VOC emissions from highway vehicles are about twice those from
nonroad equipment in 1999. Emissions from both highway vehicles and
nonroad equipment decline substantially between 1999 and 2020 as a
result of EPA control programs that are already adopted. The VOC
emission reductions associated with this proposed rule are presented in
section V.E, below.
C. PM Emissions From Mobile Sources
Table V.C-1 presents 48-State PM2.5 \167\ emissions from
key mobile source sectors in 1999, 2010, 2015, and 2020, not including
the effects of this proposed rule. The estimates in Table V.C-1 come
from the same sources as the VOC estimates in section V.B. EPA is
considering revisions to estimates of the PM emissions inventory for
motor vehicles. Recent data suggest PM emissions are significantly
higher than currently estimated in the MOBILE6 emissions model. In
addition, testing done for this rule demonstrates that PM emissions are
elevated at cold temperatures. The estimates in Table V.C-1 do not
account for the effects of cold temperature.
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\167\ PM2.5 is particulate matter under 2.5 microns
in diameter. Over 85% of the mass of PM from mobile sources is
PM2.5.
Table V.C-1--48-State PM2.5 Emissions (Tons) from Key Mobile Source Sectors in 1999, 2010, 2015, and 2020
[Without this proposed rule]
----------------------------------------------------------------------------------------------------------------
Category 1999 2010 2015 2020
----------------------------------------------------------------------------------------------------------------
Light-Duty Gasoline Vehicles and Trucks......... 48,000 33,000 36,000 39,000
Heavy-Duty and Other Highway Vehicles........... 136,000 51,000 28,000 20,000
Nonroad Equipment............................... 332,000 232,000 201,000 178,000
----------------------------------------------------------------------------------------------------------------
Section V.E, below, presents estimates of PM emission reductions
associated with the proposed cold-temperature vehicle standards.
D. Description of Current Mobile Source Emissions Control Programs That
Reduce MSATs
As described in section V.A, existing mobile source control
programs will reduce MSAT emissions (not including diesel PM) by 60%
between 1999 and 2020. Diesel PM from mobile sources will be reduced by
70% between 1999 and 2020. The mobile source programs include controls
on fuels, highway vehicles, and nonroad equipment. These programs are
also reducing hydrocarbons and PM more generally, as well as oxides of
nitrogen. The sections immediately below provide general descriptions
of these programs, as well as voluntary programs to reduce mobile
source emissions, such as the National Clean Diesel Campaign and Best
Workplaces for Commuters. A more detailed description of mobile source
programs is provided in Chapter 2 of the RIA.
1. Fuels Programs
Several federal fuel programs reduce MSAT emissions. Some of these
programs directly control air toxics, such as the reformulated gasoline
(RFG) program's benzene content limit and required reduction in total
toxics emissions, and the anti-backsliding requirements of the anti-
dumping and current MSAT programs, which require that gasoline cannot
get dirtier with respect to toxics emissions. Others, such as the
gasoline sulfur program, control toxics indirectly by reducing
hydrocarbon and related toxics emissions.
a. RFG
The RFG program contains two direct toxics control requirements.
The first is a fuel benzene standard, requiring RFG to average no
greater than 0.95 volume percent benzene annually (on a refinery or
importer basis). The RFG benzene requirement includes a per-gallon cap
on fuel benzene level of 1.3 volume percent. In 1990, when the Clean
Air Act was amended to require reformulated gasoline, fuel benzene
averaged 1.60 volume percent. For a variety of reasons, including other
regulations, chemical product prices and refining efficiencies, most
refiners and importers have achieved significantly greater reductions
in benzene than required by the program. In 2003, RFG benzene content
averaged 0.62 percent. The RFG benzene requirement includes a per-
gallon cap on fuel benzene level of 1.3 volume percent.
The second RFG toxics control requires that RFG achieve a specific
level of toxics emissions reduction. The requirement has increased in
stringency since the RFG program began in 1995, when the requirement
was that RFG annually achieve a 16.5% reduction in total (exhaust plus
evaporative) air toxics emissions. Currently, a 21.5% reduction is
required. These reductions are determined using the Complex Model. As
mentioned above, for a variety of reasons most regulated parties have
overcomplied with the required toxics emissions reductions. During
1998-2000, RFG achieved, on average, a 27.5% reduction in toxics
emissions.
b. Anti-Dumping
The anti-dumping regulations were intended to prevent the dumping
of ``dirty'' gasoline components, which
[[Page 15836]]
were removed to produce RFG, into conventional gasoline (CG). Since the
dumping of ``dirty'' gasoline components, for example, benzene or
benzene-containing blending streams, would show up as increases in
toxics emissions, the anti-dumping regulations require that a refiner's
or importer's CG be no more polluting with respect to toxics emissions
than the refiner's or importer's 1990 gasoline. The anti-dumping
program considers only exhaust toxics emissions and does not include
evaporative emissions.\168\ Refiners and importers have either a unique
individual anti-dumping baseline or they have the statutory anti-
dumping baseline if they did not fulfill the minimum requirements for
developing a unique individual baseline. In 1990, average exhaust
toxics emissions (as estimated by the Complex Model) were 104.5 mg/
mile; \169\ in 2004, CG exhaust toxics emissions averaged 90.7 mg/mile.
Although CG has no benzene limit, benzene levels have declined
significantly from the 1990 level of 1.6 volume percent to 1.1 volume
percent for CG in 2004.
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\168\ See RFG rule for why evaporative emissions are not
included in the anti-dumping toxics determination.
\169\ Phase II.
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c. 2001 Mobile Source Air Toxics Rule (MSAT1)
As discussed above, both RFG and CG have, on average, exceeded
their respective toxics control requirements. In 2001, EPA issued a
mobile source air toxics rule (MSAT1, for the purposes of this second
proposal), as discussed in section I.D. The intent of MSAT1 is to
prevent refiners and importers from backsliding from the toxics
performance that was being achieved by RFG and CG. In order to lock in
superior levels of control, the rule requires that the annual average
toxics performance of gasoline must be at least as clean as the average
performance of the gasoline produced or imported during the three-year
period 1998-2000. The period 1998-2000 is called the baseline period.
Toxics performance is determined separately for RFG and CG, in the same
manner as the toxics determinations required by the RFG \170\ and anti-
dumping rules.
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\170\ 40 CFR Part 80, Subpart D.
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Like the anti-dumping provisions, MSAT1 utilizes an individual
baseline against which compliance is determined. The average 1998-2000
toxics performance level, or baseline, is determined separately for
each refinery and importer.\171\ To establish a unique individual MSAT1
baseline, EPA requires each refiner and importer to submit
documentation supporting the determination of the baseline. Most
refiners and many importers in business during the baseline period had
sufficient data to establish an individual baseline. An MSAT1 baseline
volume is associated with each unique individual baseline value. The
MSAT1 baseline volume reflects the average annual volume of such
gasoline produced or imported during the baseline period. Refiners and
importers who did not have sufficient refinery production or imports
during 1998-2000 to establish a unique individual MSAT1 baseline must
use the default baseline provided in the rule.
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\171\ Except for those who comply with the anti-dumping
requirements for conventional gasoline on an aggregate basis, in
which case the MSAT1 requirements for conventional gasoline must be
met on the same aggregate basis (40 CFR Part 80, Subpart E).
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The MSAT1 program began with the annual averaging period beginning
January 1, 2002. Since then, the toxics performance for RFG has
improved from a baseline period average of 27.5% reduction to 29.5%
reduction in 2003. Likewise, CG toxics emissions have decreased from an
average of 95 mg/mile during 1998-2000 to 90.7 mg/mile in 2003.
d. Gasoline Sulfur
EPA's gasoline sulfur program \172\ requires, beginning in 2006,
that sulfur levels in gasoline can be no higher in any one batch than
80 ppm, and must average 30 ppm annually. When fully effective,
gasoline will have 90 percent less sulfur than before the program.
Reduced sulfur levels are necessary to ensure that vehicle emission
control systems are not impaired. These systems effectively reduce non-
methane organic gas (NMOG) emissions, of which some are air toxics.
With lower sulfur levels, emission control technologies can work longer
and more efficiently. Both new and older vehicles benefit from reduced
gasoline sulfur levels.
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\172\ 65 FR 6822 (February 10, 2000).
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e. Gasoline Volatility
A fuel's volatility defines its evaporation characteristics. A
gasoline's volatility is commonly referred to as its Reid vapor
pressure, or RVP. Gasoline summertime RVP ranges from about 6-9 psi,
and wintertime RVP ranges from about 9-14 psi, when additional vapor is
required for starting in cold temperatures. Gasoline vapors contain a
subset of the liquid gasoline components, and thus can contain toxics
compounds such as benzene. EPA has controlled summertime gasoline RVP
since 1989 primarily as a VOC and ozone precursor control, which also
results in some toxics pollutant reductions.
f. Diesel Fuel
In early 2001, EPA issued rules requiring that diesel fuel for use
in highway vehicles contain no more than 15 ppm sulfur beginning June
1, 2006.\173\ This program contains averaging, banking and trading
provisions, as well as other compliance flexibilities. In June 2004,
EPA issued rules governing the sulfur content of diesel fuel used in
nonroad diesel engines.\174\ In the nonroad rule, sulfur levels are
limited to a maximum of 500 ppm sulfur beginning in 2007 (current
levels are approximately 3000 ppm). In 2010, nonroad diesel sulfur
levels must not exceed 15 ppm.
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\173\ 66 FR 5002 (January 18, 2001) http://www.epa.gov/otaq/diesel.html.
\174\ 69 FR 38958 (June 29, 2004).
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EPA's diesel fuel requirements are part of a comprehensive program
to combine engine and fuel controls to achieve the greatest emission
reductions. The diesel fuel provisions enable the use of advanced
emission-control technologies on diesel vehicles and engines. The
diesel fuel requirements will also provide immediate public health
benefits by reducing PM emissions from current diesel vehicles and
engines.
g. Phase-Out of Lead in Gasoline
One of the first programs to control toxic emissions from motor
vehicles was the removal of lead from gasoline. Beginning in the mid-
1970s, unleaded gasoline was phased in to replace leaded gasoline. The
phase-out of leaded gasoline was completed January 1, 1996, when lead
was banned from motor vehicle gasoline. The removal of lead from
gasoline has essentially eliminated on-highway mobile source emissions
of this highly toxic substance.
2. Highway Vehicle and Engine Programs
The 1990 Clean Air Act Amendments set specific emission standards
for hydrocarbons and for PM. Air toxics are present in both of these
pollutant categories. As vehicle manufacturers develop technologies to
comply with the hydrocarbon (HC) and particulate standards (e.g., more
efficient catalytic converters), air toxics are reduced as well. Since
1990, we have developed a number of programs to address exhaust and
evaporative hydrocarbon emissions and PM emissions.
Two of our recent initiatives to control emissions from motor
vehicles
[[Page 15837]]
and their fuels are the Tier 2 control program for light-duty vehicles
and the 2007 heavy-duty engine rule. Together these two initiatives
define a set of comprehensive standards for light-duty and heavy-duty
motor vehicles and their fuels. In both of these initiatives, we treat
vehicles and fuels as a system. The Tier 2 control program establishes
stringent tailpipe and evaporative emission standards for light-duty
vehicles and a reduction in sulfur levels in gasoline fuel beginning in
2004.\175\ The 2007 heavy-duty engine rule establishes stringent
exhaust emission standards for new heavy-duty engines and vehicles for
the 2007 model year as well as reductions in diesel fuel sulfur levels
starting in 2006.\176\ Both of these programs will provide substantial
emissions reductions through the application of advanced technologies.
We expect 90% reductions in PM from new diesel engines compared to
engines under current standards.
---------------------------------------------------------------------------
\175\ 65 FR 6697, February 10, 2000.
\176\ 66 FR 5001, January 18, 2001.
---------------------------------------------------------------------------
Some of the key earlier programs controlling highway vehicle and
engine emissions are the Tier 1 and NLEV standards for light-duty
vehicles and trucks; enhanced evaporative emissions standards; the
supplemental federal test procedures (SFTP); urban bus standards; and
heavy-duty diesel and gasoline standards for the 2004/2005 time frame.
3. Nonroad Engine Programs
There are various categories of nonroad engines, including land-
based diesel engines (e.g., farm and construction equipment), small
land-based spark-ignition (SI) engines (e.g., lawn and garden
equipment, string trimmers), large land-based SI engines (e.g.,
forklifts, airport ground service equipment), marine engines (including
diesel and SI, propulsion and auxiliary, commercial and recreational),
locomotives, aircraft, and recreational vehicles (off-road motorcycles,
``all terrain'' vehicles and snowmobiles). Chapter 2 of the RIA
provides more information about these programs. As with highway
vehicles, the VOC standards we have established for nonroad engines
will also significantly reduce VOC-based toxics from nonroad engines.
In addition, the standards for diesel engines (in combination with the
stringent sulfur controls on nonroad diesel fuel) will significantly
reduce diesel PM and exhaust organic gases, which are mobile source air
toxics.
In addition to the engine-based emission control programs described
below, fuel controls will also reduce emissions of air toxics from
nonroad engines. For example, restrictions on gasoline formulation (the
removal of lead, limits on gasoline volatility and RFG) are projected
to reduce nonroad MSAT emissions because most gasoline-fueled nonroad
vehicles are fueled with the same gasoline used in on-highway vehicles.
An exception to this is lead in aviation gasoline. Aviation gasoline,
used in general (as opposed to commercial) aviation, is a high octane
fuel used in a relatively small number of aircraft (those with piston
engines). Such aircraft are generally used for personal transportation,
sightseeing, crop dusting, and similar activities.
4. Voluntary Programs
In addition to the fuel and engine control programs described
above, we are actively promoting several voluntary programs to reduce
emissions from mobile sources, such as the National Clean Diesel
Campaign, anti-idling measures, and Best Workplaces for Commuters.
While the stringent emissions standards described above apply to new
highway and nonroad diesel engines, it is also important to reduce
emissions from the existing fleet of about 11 million diesel engines.
EPA has launched a comprehensive initiative called the National Clean
Diesel Campaign, one component of which is to promote the reduction of
emissions in the existing fleet of engines through a variety of cost-
effective and innovative strategies. The goal of the Campaign is to
reduce emissions from the 11 million existing engines by 2014. Emission
reduction strategies include switching to cleaner fuels, retrofitting
engines through the addition of emission control devices, and engine
replacement. For example, installing a diesel particulate filter
achieves diesel particulate matter reductions of approximately 90
percent (when combined with the use of ultra low sulfur diesel fuel).
The Energy Policy Act of 2005 includes grant authorizations and other
incentives to help facilitate voluntary clean diesel actions
nationwide.
The National Clean Diesel Campaign is focused on leveraging local,
state, and federal resources to retrofit or replace diesel engines,
adopt best practices, and track and report results. The Campaign
targets five key sectors: School buses, ports, construction, freight,
and agriculture.
Reducing vehicle idling provides important environmental benefits.
As a part of their daily routine, truck drivers often keep their
vehicles at idle during stops to provide power, heat and air
conditioning. EPA's SmartWay Transport Partnership is helping the
freight industry to adopt innovative idle reduction technologies and
take advantage of proven systems that provide drivers with basic
necessities without using the engine. To date, there are 50 stationary
anti-idling projects, and mobile technology has been installed on
nearly 20,000 trucks. The SmartWay Transport Partnership also works
with the freight industry to reduce fuel use (with a concomitant
reduction in emissions) by promoting a wide range of new technologies
such as advanced aerodynamics, single-wide tires, weight reduction
speed control and intermodal shipping.
Daily commuting represents another significant source of emissions
from motor vehicles. EPA's Best Workplaces for CommutersSM
program is working with employers across the country to reverse the
trend of longer, single-occupancy vehicle commuting. OTAQ has created a
national list of the Best Workplaces for Commuters to formally
recognize employers that offer superior commuter benefits such as free
transit passes, subsidized vanpools/carpools, and flexi-place, or work-
from-home, programs. More than 1,300 employers representing 2.8 million
U.S. workers have been designated Best Workplaces for Commuters.
Much of the growth in the Best Workplaces for Commuters program has
been through metro area-wide campaigns. Since 2002, EPA has worked with
coalitions in 14 major metropolitan areas to increase the penetration
of commuter benefits in the marketplace and the visibility of the
companies that have received the BWC designation. Another significant
path by which the program has grown is through Commuter Districts
including corporate and industrial business parks, shopping malls,
business improvement districts and downtown commercial areas. To date
EPA has granted the Best Workplaces for Commuters ``District''
designation to twenty locations across the country including downtown
Denver, Houston, Minneapolis and Tampa.
E. Emission Reductions From Proposed Controls
1. Proposed Vehicle Controls
We are proposing a hydrocarbon standard for gasoline passenger
vehicles at cold temperatures. This standard will reduce VOC at
temperatures below 75 [deg]F, including air toxics such as benzene,
1,3-butadiene, formaldehyde, acetaldehyde, acrolein and naphthalene,
and will also reduce emissions of direct and secondary PM. We are also
proposing new evaporative emissions standards for Tier 2 vehicles
starting in
[[Page 15838]]
2009. These new evaporative standards reflect the emissions levels
already being achieved by manufacturers.
a. Volatile Organic Compounds (VOC)
Table V.E-1 shows the VOC exhaust emission reductions from light-
duty gasoline vehicles and trucks that would result from our proposed
standards. The proposed standards would reduce VOC emissions in 2030 by
32%. Overall VOC exhaust emissions from these vehicles would be reduced
by 81% between 1999 and 2030 (including the effects of the proposed
standards as well as standards already in place, such as Tier 2).
Table V.E-1.--Estimated National Reductions in Exhaust VOC Emissions From Light-Duty Gasoline Vehicles and
Trucks, 1999 to 2030
----------------------------------------------------------------------------------------------------------------
1999 2015 2020 2030
----------------------------------------------------------------------------------------------------------------
VOC Without Rule (tons)......................... 4,899,891 2,625,076 2,556,751 2,899,269
VOC With Proposed Vehicle Standards (tons)...... N.A 2,305,202 2,020,267 1,985,830
VOC Reductions from Proposed Vehicle Standards N.A 319,874 536,484 913,439
(tons).........................................
Percentage Reduction............................ N.A 12 21 32
----------------------------------------------------------------------------------------------------------------
b. Toxics
In 2030, we estimate that the proposed vehicle standards would
result in a 38% reduction in benzene emissions and 37% reduction in
total emissions of the MSATs \177\ from light-duty vehicles and trucks
(see Tables V.E-2 and V.E-3).
---------------------------------------------------------------------------
\177\ Table IV.A-1 lists the MSATs included in this analysis.
Table V.E-2.--Estimated National Reductions in Benzene Exhaust Emissions From Light-Duty Gasoline Vehicles and
Trucks, 1999 to 2030
----------------------------------------------------------------------------------------------------------------
1999 2015 2020 2030
----------------------------------------------------------------------------------------------------------------
Benzene Without Rule (tons)..................... 171,154 101,355 106,071 124,897
Benzene With Proposed Vehicle Standards (tons).. N.A. 84,496 77,966 77,208
Benzene Reductions from Proposed Vehicle N.A. 16,859 28,105 47,689
Standards (tons)...............................
Percentage Reduction............................ N.A. 17 26 38
----------------------------------------------------------------------------------------------------------------
Table V.E-3.--Estimated National Reductions in Exhaust MSAT Emissions From Light-Duty Gasoline Vehicles and
Trucks, 1999 to 2030
----------------------------------------------------------------------------------------------------------------
1999 2015 2020 2030
----------------------------------------------------------------------------------------------------------------
MSATs Without Rule (tons)....................... 1,341,572 707,877 724,840 844,366
MSATs With Proposed Vehicle Standards (tons).... N.A. 599,492 543,332 535,479
MSAT Reductions from Proposed Vehicle Standards N.A. 108,385 181,509 308,887
(tons).........................................
Percentage Reduction............................ N.A. 15 25 37
----------------------------------------------------------------------------------------------------------------
c. PM2.5
EPA expects that the proposed cold-temperature vehicle standards
would reduce exhaust emissions of direct PM2.5 by over
20,000 tons in 2030 nationwide (see Table V.E-4 below). Our analysis of
the data from vehicles meeting Tier 2 emission standards indicate that
PM emissions follow a monotonic relationship with temperature, with
lower temperatures corresponding to higher vehicle emissions.
Additionally, the analysis shows the ratio of PM to total non-methane
hydrocarbons (NMHC) to be independent of temperature.\178\ Our testing
indicates that strategies which reduce NMHC start emissions at cold
temperatures also reduce direct PM emissions. Based on these findings,
direct PM emissions at cold temperatures were estimated using a
constant PM to NMHC ratio. PM emission reductions were estimated by
assuming that NMHC reductions will result in proportional reductions in
PM. This assumption is supported by test data. For more detail, see
Chapter 2.1 of the RIA.
---------------------------------------------------------------------------
\178\ U.S. EPA. 2005. Cold-temperature exhaust particulate
matter emissions. Memorandum from Chad Bailey to docket EPA-HQ-OAR-
2005-0036.
Table V.E-4.--Estimated National Reductions in Direct PM2.5 Exhaust Emissions From Light-Duty Gasoline Vehicles
and Trucks, 2015 to 2030
----------------------------------------------------------------------------------------------------------------
2015 2020 2030
----------------------------------------------------------------------------------------------------------------
PM2.5 Reductions from Proposed Vehicle Standards (tons)......... 7,037 11,803 20,096
----------------------------------------------------------------------------------------------------------------
2. Proposed Fuel Benzene Controls
The proposed fuel benzene controls would reduce benzene exhaust and
evaporative emissions from both on-road and nonroad mobile sources that
are fueled by gasoline. In addition, the proposed fuel benzene standard
would reduce evaporative emissions from gasoline distribution and gas
cans.
[[Page 15839]]
Impacts on 1,3-butadiene, formaldehyde, and acetaldehyde emissions are
not significant, but are presented in Chapter 2 of the RIA. We do not
expect the fuel benzene standard to have quantifiable impacts on any
other air toxics, total VOCs, or PM.
Table V.E-5 shows national estimates of total benzene emissions
from these source sectors with and without the proposed fuel benzene
standard. These estimates do not include effects of the proposed
vehicle or gas can standards (see section V.E.4 for the combined
effects of the controls). The proposed fuel benzene standard would
reduce total benzene emissions from on-road and nonroad gasoline mobile
sources, gas cans, and gasoline distribution by 12% in 2015.
Table V.E-5.--Estimated Reductions in Benzene Emissions From Proposed Gasoline Standard by Sector in 2015
----------------------------------------------------------------------------------------------------------------
Gasoline on- Gasoline
road mobile nonroad mobile Gas cans Gasoline Total
sources sources distribution
----------------------------------------------------------------------------------------------------------------
Benzene Without Rule (tons)..... 103,797 37,747 2,262 5,999 149,805
Benzene With Proposed Gasoline 92,513 33,247 1,359 4,054 131,173
Standard (tons)................
Benzene Reductions from Proposed 11,284 4,500 903 1,945 18,632
Gasoline Standard (tons).......
Percentage Reduction............ 11 12 40 32 12
----------------------------------------------------------------------------------------------------------------
3. Proposed Gas Can Standards
a. VOC
Table V.E-6 shows the reductions in VOC emissions that we expect
from the proposed gas can standard. In 2015, VOC emissions from gas
cans would be reduced by 60% because of reduced permeation, spillage,
and evaporative losses. These estimates do not include the effects of a
fuel benzene standard (see section V.E.4 for the combined effects of
the proposed controls).
Table V.E-6.--Estimated National Reductions in VOC Emissions From Gas Cans, 2010 to 2030
----------------------------------------------------------------------------------------------------------------
1999 2010 2015 2020 2030
----------------------------------------------------------------------------------------------------------------
VOC Without Rule (tons)......... 318,596 279,374 296,927 318,384 362,715
VOC With Proposed Gas Can N.A. 250,990 116,431 125,702 144,634
Standard (tons)................
VOC Reductions from Proposed Gas N.A. 28,384 180,496 192,683 218,080
Can Standard (tons)............
Percentage Reduction............ N.A. 10 61 61 60
----------------------------------------------------------------------------------------------------------------
b. Toxics
The proposed gas can standard would reduce emissions of benzene,
naphthalene, toluene, xylenes, ethylbenzene, n-hexane, 2,2,4-
trimethylpentane, and MTBE. We estimate that benzene emissions from gas
cans would be reduced by 65% (see Table V.E-7) and, more broadly, air
toxic emissions by 61% (see Table V.E-8) in year 2015. These reductions
do not include effects of the proposed fuel benzene standard (see
section V.E.4 for the combined effects of the proposed controls).
Chapter 2 of the RIA provides details on the emission reductions of the
other toxics.
Table V.E-7.--Estimated National Reductions in Benzene Emissions From Gas Cans, 2010 to 2030
----------------------------------------------------------------------------------------------------------------
1999 2010 2015 2020 2030
----------------------------------------------------------------------------------------------------------------
Benzene Without Rule (tons)..... 2,229 2,118 2,262 2,423 2,757
Benzene With Proposed Gas Can N.A. 1,885 794 856 985
Standard (tons)................
Benzene Reductions from Proposed N.A. 233 1,468 1,567 1,772
Gas Can Standard (tons)........
Percentage Reduction............ N.A. 11 65 65 64
----------------------------------------------------------------------------------------------------------------
Table V.E-8.--Estimated National Reductions in Total MSAT Emissions From Gas Cans, 2010 to 2030
----------------------------------------------------------------------------------------------------------------
1999 2010 2015 2020 2030
----------------------------------------------------------------------------------------------------------------
MSATs Without Rule (tons)....... 39,581 34,873 37,076 39,751 45,284
MSATs With Proposed Gas Can N.A. 31,312 14,445 15,593 17,942
Standard (tons)................
MSAT Reductions from Proposed N.A. 3,561 22,631 24,158 27,342
Gas Can Standard (tons)........
Percentage Reduction............ N.A. 10 61 61 60
----------------------------------------------------------------------------------------------------------------
Chapter 2 of the RIA describes how we estimated emissions from gas
cans, including the key assumptions used and uncertainties in the
analysis. We request comments on the emissions inventory methodology
used by EPA and we encourage commenters to provide relevant data where
possible.
4. Total Emission Reductions From Proposed Controls
Sections V.E.1 through V.E.3 present the emissions impacts of each
of the
[[Page 15840]]
proposed controls individually. This section presents the combined
emissions impacts of the proposed controls.
a. Toxics
Air toxic emissions from light-duty vehicles depend on both fuel
benzene content and vehicle hydrocarbon emission controls. Similarly,
the air toxic emissions from gas cans depend on both fuel benzene
content and the gas can emission controls. Tables V.E-9 and V.E-10
below summarize the expected reductions in benzene and MSAT emissions,
respectively, from our proposed vehicle, fuel, and gas can controls. In
2030, annual benzene emissions from gasoline on-road mobile sources
would be 44% lower as a result of this proposal (see Figure V.E-1).
Annual benzene emissions from gasoline light-duty vehicles would be 45%
lower in 2030 as a result of this proposal. Likewise, this proposal
would reduce annual emissions of benzene from gas cans by 78% in 2030
(see Figure V.E-2). For MSATs from on-road mobile sources, Figure V.E-3
below shows a 33% reduction in MSAT emissions in 2030.
Table V.E-9.--Estimated Reductions in Benzene Emissions From Proposed Control Measures by Sector, 2015 to 2030
--------------------------------------------------------------------------------------------------------------------------------------------------------
2015 2020 2030
-----------------------------------------------------------------------------------------------------------
Benzene 1999 Without Without Without
rule With rule Reductions rule With rule Reductions rule With rule Reductions
(tons) (tons) (tons) (tons) (tons) (tons) (tons) (tons) (tons)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gasoline On-road Mobile Sources. 178,465 103,798 77,155 26,643 108,256 71,326 36,930 127,058 70,682 56,376
Gasoline Nonroad Mobile Sources. 58,710 37,747 33,247 4,500 36,440 32,018 4,422 39,162 34,400 4,762
Gas Cans........................ 2,229 2,262 492 1,770 2,423 531 1,892 2,757 610 2,147
Gasoline Distribution........... 5,502 5,999 4,054 1,945 6,207 4,210 1,997 6,207 4,210 1,997
-----------------------------------------------------------------------------------------------------------------------
Total....................... 244,905 149,806 114,948 34,858 153,326 108,085 45,241 175,184 109,902 65,282
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 15841]]
[GRAPHIC] [TIFF OMITTED] TP29MR06.003
Table V.E-10.--Estimated Reductions in MSAT Emissions From Proposed Control Measures by Sector, 2015 to 2030
--------------------------------------------------------------------------------------------------------------------------------------------------------
2015 2020 2030
-----------------------------------------------------------------------------------------------------------
MSAT 1999 Without Without Without
rule With rule Reductions rule With rule Reductions rule With rule Reductions
(tons) (tons) (tons) (tons) (tons) (tons) (tons) (tons) (tons)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gasoline On-road Mobile Sources. 1,415,502 731,283 613,227 118,056 745,769 555,541 190,228 865,767 548,298 317,469
Gasoline Nonroad Mobile Sources. 673,922 432,953 428,506 4,447 390,468 386,095 4,373 405,119 400,408 4,711
Gas Cans........................ 39,581 37,076 14,143 22,933 39,751 15,268 24,483 45,284 17,567 27,717
Gasoline Distribution........... 50,625 62,804 60,859 1,945 64,933 62,936 1,997 64,933 62,936 1,997
-----------------------------------------------------------------------------------------------------------------------
Total....................... 2,179,630 1,264,116 1,116,735 147,381 1,240,921 1,019,840 221,081 1,381,103 1,029,209 351,894
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 15842]]
[GRAPHIC] [TIFF OMITTED] TP29MR06.004
b. VOC
VOC emissions would be reduced by the hydrocarbon emission
standards for both light-duty vehicles and gas cans. As seen in the
table and accompanying figure below, annual VOC emission reductions
from both of these sources would be 35% lower in 2030 because of
proposed control measures.
Table V.E-11.--Estimated Reductions in VOC Emissions from Light-Duty Gasoline Vehicles and Gas Cans, 2015 to
2030
----------------------------------------------------------------------------------------------------------------
2015 2020 2030
----------------------------------------------------------------------------------------------------------------
VOC Without Rule (tons)......................................... 2,922,003 2,875,135 3,261,984
VOC With Proposed Vehicle and Gas Can Standards (tons).......... 2,421,633 2,145,969 2,130,464
VOC Reduction (tons)............................................ 500,370 729,168 1,131,520
----------------------------------------------------------------------------------------------------------------
[GRAPHIC] [TIFF OMITTED] TP29MR06.005
c. PM2.5
We expect that only the proposed vehicle control would reduce
emissions of direct PM2.5. As shown in Table V.E-4, we
expect this control to reduce direct PM2.5 emissions by
about 20,000 tons in 2030. In addition, the VOC reductions from the
proposed vehicle and gas can standards would also reduce secondary
formation of PM2.5.
F. How Would This Proposal Reduce Exposure to Mobile Source Air Toxics
and Associated Health Effects?
The proposed benzene standard for gasoline would reduce both
evaporative and exhaust emissions from motor vehicles and nonroad
equipment. It would also reduce emissions from gas cans and stationary
source emissions associated with gasoline distribution. Therefore, it
would reduce exposure to benzene for the general population, and also
for people near roadways, in
[[Page 15843]]
vehicles, in homes with attached garages, operating nonroad equipment,
and living or working near sources of gasoline distribution emissions
(such as bulk terminals, bulk plants, tankers, marine vessels, and
service stations). Section IV.B.2 of this preamble provides more
details on these types of exposures.
We performed national-scale air quality, exposure, and risk
modeling in order to quantitatively assess the impacts of the proposed
fuel benzene standard. However, in addition to the limitations of the
national-scale modeling tools (discussed in section IV.A), this
modeling did not account for the elevated hydrocarbon emissions from
motor vehicles at cold temperatures, which we recently discovered and
are further described in section VI and the RIA. The modeling also
examined the gasoline benzene standard alone, without the proposed
vehicle or gas can standards. Nevertheless, the modeling is useful as a
preliminary assessment of the impacts of the fuel standard.
The fuel benzene standard being proposed in this rule would reduce
both the number of people above the 1 in 100,000 increased cancer risk
level, and the average population cancer risk, by reducing exposures to
benzene from mobile sources. The number of people above the 1 in
100,000 cancer risk level due to exposure to all mobile source air
toxics from all sources would decrease by over 3 million in 2020 and by
about 3.5 million in 2030, based on average census tract risks. The
number of people above the 1 in 100,000 increased cancer risk level
from exposure to benzene from all sources would decrease by over 4
million in 2020 and 5 million in 2030. It should be noted that if it
were possible to estimate impacts of the proposed standard on
``background'' concentrations, the estimated overall risk reductions
would be even larger. The proposed standard would have little impact on
the number of people above various respiratory hazard index levels,
since this potential non-cancer risk is dominated by exposure to
acrolein.
Table V.F-1 depicts the impact on the mobile source contribution to
nationwide average population cancer risk from benzene in 2020.
Nationwide, the cancer risk attributable to mobile source benzene would
be reduced by over 8%. Reductions in areas not subject to reformulated
gasoline controls are almost 13 percent relative to risks without the
proposed control; and in some states with high fuel benzene levels,
such as Minnesota and Washington, the risk reduction would exceed 17
percent. In Alaska, which has the highest fuel benzene levels in the
country, reductions would exceed 30%. Reductions for other modeled
years are similar. The methods and assumptions used to model the impact
of the proposed control are described in more detail in the Regulatory
Impact Analysis. Although not quantified in the risk analyses for this
rule, controls proposed for portable fuel containers will also reduce
exposures and risk from benzene, and cold temperature hydrocarbon
standards for exhaust emissions will reduce cancer and noncancer risks
for all gaseous mobile source air toxics. These reductions will vary
geographically since reductions from vehicle control are higher at
colder temperatures, and reductions from gas can controls are higher at
higher temperatures.
Table V.F-1.--Impact of Proposed Fuel Benzene Control on the Mobile Source Contribution to Nationwide Average
Population Cancer Risk in 2020
----------------------------------------------------------------------------------------------------------------
U.S. RFG areas Non-RFG areas
----------------------------------------------------------------------------------------------------------------
Without Proposal............................................... 2.57x10-6 3.64x10-6 1.96x10-6
0.62% Benzene Standard.......................................... 2.35x10-6 3.51x10-6 1.72x10-6
% Reduction.................................................... 8.6 3.6 12.2
----------------------------------------------------------------------------------------------------------------
Table V.F-2 summarizes the change in median and 95th percentile
benzene inhalation cancer risk from all outdoor sources in 2015, 2020,
and 2030, with the fuel benzene controls proposed in this rule. The
reductions in risk would be larger if the modeling fully accounted for
a number of factors, including: benzene emissions at cold temperature;
exposure to benzene emissions from vehicles, equipment, and gas cans in
attached garages; near-road exposures; and the impacts of the control
program on ``background'' levels attributable to transport.
Table V.F-2.--Change in Median and 95th Percentile Benzene Inhalation Cancer Risk From Outdoor Sources in 2015, 2020, and 2030 With the Fuel Benzene
Controls Proposed in this Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
2015 2020 2030
-----------------------------------------------------------------------------------------------
median 95th median 95th median 95th
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current Controls........................................ 5.73x10-6 1.38x10-5 5.61x10-6 1.35x10-5 5.75x10-6 1.41x10-5
Proposed Benzene Standard............................... 5.49x10-6 1.32x10-5 5.39x10-6 1.29x10-5 5.51x10-6 1.35x10-5
Percent Change.......................................... 4.2 4.3 3.9 4.4 4.2 4.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
We did not model the air quality, exposure, and risk impacts of the
proposed vehicle and gas can standards. However, the proposed vehicle
standards would reduce exposure to several MSATs, including benzene.
Like the proposed fuel standard, the vehicle standards would reduce the
general population's exposure to MSATs, as well as people near roadways
and in vehicles. Since motor vehicle emissions are ubiquitous across
the U.S. and widely dispersed, reductions in exposure and risk will be
approximately proportional to reductions in emissions.
The gas can standard will reduce evaporative emissions of several
MSATs, including benzene. We expect that these standards would
significantly reduce concentrations of benzene and other MSATs in
attached garages and inside homes with attached garages. Accordingly,
exposure to benzene and other MSATs would be significantly reduced. As
discussed in section IV.B.2, exposures to emissions occurring in
attached garages can be quite high.
[[Page 15844]]
The proposed vehicle and gas can standards would also reduce
precursors to ozone and PM. We have modeled the ozone impacts of the
proposed gas can standard and the PM health benefits that would be
associated with the direct PM reductions from the proposed vehicle
standards. These results are discussed in sections IV.D and IX,
respectively.
G. Additional Programs Under Development That Will Reduce MSATs
1. On-Board Diagnostics for Heavy-Duty Vehicles Over 14,000 Pounds
We are planning to propose on-board diagnostics (OBD) requirements
for heavy-duty vehicles over 14,000 pounds. In general, OBD systems
monitor the operation of key emissions controls to detect major
failures that would lead to emissions well above the standards during
the life of the vehicle. Given the nature of the heavy-duty trucking
industry, 50-state harmonization of emissions requirement is an
important consideration. In order to work towards this goal, the Agency
signed a Memorandum of Agreement in 2004 with the California Air
Resources Board which expresses both agencies' interest in working
towards a single, nationwide program for heavy-duty OBD. Since that
time, California has established their heavy-duty OBD program, which
will begin implementation in 2010. We expect the Agency's program will
also begin in the 2010 time frame. These requirements would help ensure
that the emission reductions we projected in the 2007 rulemaking for
heavy-duty engines occur in-use.
2. Standards for Small SI Engines
We are developing a proposal for Small SI engines (those typically
used in lawn and garden equipment) and recreational marine engines.
This proposal is being developed in response to Section 428 of the
Omnibus Appropriations Bill for 2004, which requires EPA to propose
regulations under Clean Air Act section 213 for new nonroad spark-
ignition engines under 50 horsepower. We plan to propose standards that
would further reduce the emissions for these nonroad categories, and we
anticipate that the new standards would provide significant further
reductions in HC (and VOC-based toxics) emissions.
3. Standards for Locomotive and Marine Engines
In addition, we are planning to propose more stringent standards
for large diesel engines used in locomotive and marine applications, as
discussed in a recent Advance Notice of Proposed Rulemaking.\179\ New
standards for marine diesel engines would apply to engines less than 30
liters per cylinder in displacement (all engine except for Category 3).
We are considering standards modeled after our Tier 4 nonroad diesel
engine program, which achieve substantial reductions in PM, HC, and
NOX emissions. These standards would be based on the use of
high efficiency catalyst aftertreatment and would also require fuel
sulfur control. As discussed in our recent ANPRM, we are considering
implementation as early as 2011.
---------------------------------------------------------------------------
\179\ 69 FR 39276, June 29, 2004.
---------------------------------------------------------------------------
VI. Proposed New Light-Duty Vehicle Standards
A. Why Are We Proposing New Standards?
1. The Clean Air Act and Air Quality
As described in section V of this preamble, the U.S. has made
significant progress in reducing emissions from passenger cars and
light trucks since the passage of the 1990 Clean Air Act Amendments.
Many emission control programs adopted to implement the 1990 Clean Air
Act Amendments are reducing and will continue to reduce air toxics from
light-duty vehicles. These include our reformulated gasoline (RFG)
program, our Supplemental Federal Test Procedure (SFTP) standards, our
national low emission vehicle program (NLEV), and, most recently, our
Tier 2 motor vehicle emissions standards and gasoline sulfur control
requirements.\180\ While these vehicle programs were put in place
primarily to reduce ambient concentrations of criteria pollutants and
their precursors (NOX, VOC, CO, and PM), they have reduced
and will continue to significantly reduce light-duty vehicle emissions
of air toxics. For example, there are numerous chemicals that make up
total VOC emissions, including several gaseous toxics (e.g., benzene,
formaldehyde, 1,3-butadiene, and acetaldehyde). These toxics are all
reduced by VOC emissions standards. It is the stringent control of
hydrocarbons in particular that results in stringent control of gaseous
toxics. There are no vehicle-based technologies of which we are aware
that reduce these air toxics individually.
---------------------------------------------------------------------------
\180\ Unless otherwise noted, we use ``light-duty vehicles'' or
``vehicles'' to generally refer to passenger vehicles, light-duty
trucks such as sport utility vehicles (SUVs) and pick-ups, and
medium-duty passenger vehicles (MDPVs) which includes larger SUVs
and passenger vans up to 10,000 pounds Gross Vehicle Weight Rating.
---------------------------------------------------------------------------
At the time of our 2001 MSAT rule, we had recently finalized the
Tier 2 emissions standards and gasoline sulfur control requirements
(described in more detail below in section V.D). As explained earlier,
we concluded then under section 202(l) that the Tier 2 standards
represented the greatest degree of emissions control achievable for
those vehicles. However, we also committed to continue to consider the
feasibility of additional vehicle-based MSAT controls in the future.
2. Technology Opportunities for Light-Duty Vehicles
Since the 2001 MSAT rule, we have identified potential situations
where further reductions of light-duty vehicle hydrocarbon emissions--
and, therefore, mobile source air toxics--are technically feasible,
cost-effective, and do not have adverse energy or safety implications.
First, recent research and analytical work shows that the Tier 2
exhaust emission standards for hydrocarbons (which are typically tested
at 75[deg] F) do not, in the case of many vehicles, result in robust
control of hydrocarbon emissions at lower temperatures. We believe that
cold temperature hydrocarbon control can be substantially improved
using the same technological approaches generally already in use in the
Tier 2 vehicle fleet to meet the stringent standards at 75[deg] F.
Second, we believe that harmonization of evaporative emission standards
with California would prevent backsliding by codifying current industry
practices. Sections VI.B.1 and VI.B.2, below, provide our rationale for
proposing new cold temperature and evaporative controls and describe
the detailed provisions of our proposal. We request comment on all
aspects of these proposals and encourage commenters to provide detailed
rationales and supporting data where possible.
Aside from these proposed standards, we continue to believe that
the remaining Tier 2 exhaust emission standards (i.e., those that apply
over the standard Federal Test Procedure at temperatures between
68[deg] F and 86[deg] F) represent the greatest emissions reductions
achievable as required under Clean Air Act section 202(l). We therefore
are not proposing further emission reductions from these vehicles.
(Please see section VI.D for further discussion.)
3. Cold Temperature Effects on Emission Levels
a. How Does Temperature Affect Emissions?
With the possible exception of high-load operation, Tier 2
gasoline-powered vehicles emit the overwhelming
[[Page 15845]]
majority of hydrocarbon emissions in the first few minutes of operation
following a cold start (i.e., starting the vehicles after the engine
has stabilized to the ambient temperatures, such as overnight). This is
true at all cold start temperatures, and the general trend is that
hydrocarbon emissions progressively increase as engine start
temperatures decrease. The level of hydrocarbon emissions produced by
the engine will vary with start temperature, engine hardware design and
most importantly, engine management control strategies. Furthermore,
due to the heavy dependence on the aftertreatment system to perform the
main emission reducing functions, any delayed or non-use of emission
controls (hardware or software) will further increase the amount of
hydrocarbon emissions emitted from the vehicle following the cold
start.
Elevated hydrocarbon levels at cold temperatures, specifically, the
non-methane hydrocarbons (NMHC) portion of total hydrocarbons (THC),
also indicate higher emissions of gaseous air toxics. A detailed
description of the relationship between NMHC and air toxics can be
found in Chapter 2 of the RIA. Recent EPA research studies \181\ on
Tier 2 gasoline vehicles, and past EPA studies \182\ on older
generation gasoline vehicles, demonstrate that many air toxics (e.g.,
benzene) are a relatively constant fraction of NMHC. This relationship
is observed regardless of vehicle type, NMHC emissions level, or
temperature. The relationship remains relatively constant for different
vehicles with different levels of NMHC emissions, and for the same
vehicle at colder temperatures. Therefore, it can be concluded that
reductions in NMHC will result in proportional reductions in gaseous
air toxics which are components of HC. These observations and findings
indicate that controlling NMHC is an effective approach to reducing
toxics which are a component of NMHC, including benzene emissions.
---------------------------------------------------------------------------
\181\ ``VOC/PM Cold Temperature Characterization and Interior
Climate Control Emissions/Fuel Economy Impact,'' Volume I and II,
October 2005.
\182\ ``Characterization of Emissions from Malfunctioning
Vehicles fueled with Oxygenated Gasoline-Ethanol (E10) Fuel,'' Part
I, II and III.
---------------------------------------------------------------------------
In addition to control of air toxics, another benefit of regulating
NMHC at cold temperatures is reductions in particulate matter (PM). PM
is a criteria pollutant and for gasoline-fueled vehicles is an emerging
area of interest on which we are continuing to collect data (see
sections III.E and IV.F for more details on PM). We have limited data
indicating that PM emissions can be significantly higher at cold
temperatures compared to emissions at the 68-86[deg] F testing
temperatures used in the FTP. Data also indicate that HC and direct PM
emissions correlate fairly well as temperature changes and that some
direct PM emissions reductions can be expected when VOCs are reduced.
Also, from a technological standpoint, we can expect reductions in PM
as manufacturers reduce over-fueling at cold temperatures for NMHC
control. Although section 202(l) deals with control of air toxics, and
not criteria pollutants like PM, this co-benefit of cold temperature
control is significant.
b. What Are the Current Emissions Control Requirements?
There are several requirements currently in place that have
resulted in significant NMHC reductions and provided experience with
control strategies that apply across a broad range of in-use driving
conditions, including cold temperatures. These requirements include the
Tier 2 standards, the Supplemental Federal Test Procedure (SFTP)
standards, the cold temperature carbon monoxide (CO) standard, and the
California 50[deg] F hydrocarbon standard.
The Tier 2 program (and, before that, the NLEV program) contains
stringent new standards for light-duty vehicles that have resulted in
significant hydrocarbon reductions. To meet these standards, vehicle
manufacturers have responded with emissions control hardware and
control strategies that have very effectively minimized emissions,
particularly immediately following the vehicle start-up. In addition,
the SFTP rule (effective beginning in model year 2001) significantly
expanded the area of operation where stringent emission control was
required, by adding a high load/speed cycle (US06) and an air
conditioning cycle (SC03). Vehicle manufacturers responded with
additional control strategies across a broader range of in-use driving
conditions to successfully meet SFTP requirements.
We also have cold temperature carbon monoxide (CO) standards which
began in model year 1994 for light-duty vehicles (LDVs) and light-duty
trucks (LDTs).\183\ This program requires manufacturers to comply with
a 20[deg] F CO standard. The 20[deg] F cold CO test replicates the
75[deg] F FTP drive cycle, but at the colder temperature. While the
recent Tier 2 program is primarily designed to reduce ozone, the cold
CO requirement was enacted to address exceedances of the national
ambient air quality standards (NAAQS) for CO, which were mostly
occurring during the cold weather months. While the cold CO standard
was considered challenging at its introduction, manufacturers quickly
developed emission control strategies and today comply with the
standard with generally large compliance margins. This indicates that
manufacturers do in fact have experience with emission control
strategies at colder temperatures.
---------------------------------------------------------------------------
\183\ 57 FR 31888 ``Control of Air Pollution from New Motor
Vehicles and New Motor Vehicle Engines: Cold Temperature Carbon
Monoxide Emissions from 1994 and Later Model Year Gasoline-Fueled
Light-Duty Vehicles and Light-Duty Trucks'', Final Rule, July 17,
1992.
---------------------------------------------------------------------------
Under the Low Emission Vehicle (LEV) programs, California
implemented stringent emissions standards for a 50[deg] F FTP test
condition in addition to stringent 75[deg] F standards. By creating a
unique 50[deg] F standard, California ensures that emission control
strategies successfully used at 75[deg] F are also utilized at the
slightly cooler temperatures that encompass a larger range of
California's expected climates. The 50[deg] F non-methane organic gases
(NMOG) standards are directly proportional to the 75[deg] F
certification standard; that is, they are two times the 75[deg] F
standard. These standards have resulted in proportional emissions
improvements at 50[deg] F for vehicles certified to the California
standards, as observed in the manufacturer certification data.
Manufacturers have met the standards and have successfully obtained
these proportional improvements at 50[deg] F by implementing the same
emission control strategies developed for 75[deg] F requirements.
c. Opportunities for Additional Control
As emissions standards have become more stringent from Tier 1 to
NLEV, and now to Tier 2, manufacturers have concentrated primarily on
emissions performance just after the start of the engine in order to
further reduce emissions. To comply with stringent hydrocarbon emission
standards at 75[deg] F, manufacturers developed new emission control
strategies and practices that resulted in significant emissions
reductions at that start temperature. For California, the LEV II
program contains a standard at 50[deg] F (as just explained), which
essentially requires proportional control of hydrocarbon emissions down
to that temperature. On the national level, even though there is no
explicit requirement, we expected that proportional reductions in
hydrocarbon emissions would occur at other colder start temperatures--
including the 20[deg] F Cold CO test point--as a result of the more
stringent NLEV and Tier 2 standards. We believe that there is no
[[Page 15846]]
engineering reason why proportional control should not be occurring on
a widespread basis.
However, reported annual manufacturer certification results
(discussed in the next paragraph) indicate that for many engine
families, very little improvement in hydrocarbon emissions was realized
at the colder 20[deg] F Cold CO test conditions, despite the improved
emission control systems designed for the vehicle under normal 75[deg]
F test conditions. Thus although all vehicle manufacturers have been
highly successful at reducing emissions at the required FTP start
temperature range, in general, they do not appear to be capitalizing on
NMHC emission control strategies and technologies at lower
temperatures.
Certification reports submitted by manufacturers for recent model
years of light duty vehicles in fact show a sharp rise in hydrocarbon
\184\ emissions at 20[deg] F when compared to the reported 75[deg] F
hydrocarbon emission levels. Any rise in hydrocarbon emissions,
specifically NMHC, will result in proportional rise in VOC-based air
toxics \185\. While some increase in NMHC emissions can be expected
simply due to combustion limitations of gasoline engines at colder
temperatures, the reported levels of hydrocarbon emissions seem to
indicate a significantly diminished use of hydrocarbon emissions
controls occurring at colder temperatures. For example, on recent Tier
2 certified vehicles, the reported 20[deg] F hydrocarbon levels on
average were 10 to 12 times higher than the equivalent vehicle's
measured 75[deg] F hydrocarbon levels. Some vehicles which were
certified to more stringent Tier 2 bins (bins 2, 3, and 4) demonstrated
20[deg] F hydrocarbon levels no different than less stringent Tier 2
bins (bins 5, 6, 7, and 8), likewise suggesting no discernable attempt
to use the 75[deg] F hydrocarbon controls at the 20[deg] F temperature.
On the other hand, in some select cases, individual vehicles did
demonstrate proportional improvements in hydrocarbon emission results
at 20[deg] F relative to their 75[deg] F results, confirming our belief
that proportional control is feasible and indeed is occasionally
practiced. One manufacturer's certification results reflected
proportional improvements across almost its entire vehicle lines
(including vehicles up to 5665 GVWR), further supporting that
proportional control is feasible.
---------------------------------------------------------------------------
\184\ Most certification 20[deg] F hydrocarbon levels are
reported as THC, but NMHC accounts for approximately 95% of THC as
seen in results with both THC and NMHC levels reported. This
relationship also is confirmed in EPA test programs supporting this
rule-making.
\185\ ``VOC/PM Cold Temperature Characterization and Interior
Climate Control Emissions/Fuel Economy Impact'', Volume I and II,
October 2005.
---------------------------------------------------------------------------
B. What Cold Temperature Requirements Are We Proposing?
1. NMHC Exhaust Emissions Standards
We are proposing a set of standards that will achieve proportional
NMHC control from the 75[deg] F Tier 2 standards to the 20[deg] F test
point. The proposed standard would achieve the greatest degree of
hydrocarbon emissions reductions feasible by fully utilizing the
substantial existing emission control hardware required to meet Tier 2
standards. We believe these standards would be achievable through
calibration and software control strategies on Tier 2 level vehicles
without use of additional hardware. The proposed standards are shown in
Table VI.B-1.
Table VI.B-1.--Proposed 20[deg] F FTP Exhaust Emission Standards
------------------------------------------------------------------------
NMHC sales-
weighted
fleet
Vehicle GVWR and category average
standard
(grams/
mile)
------------------------------------------------------------------------
<= 6000 lbs: Light-duty vehicles (LDV) & Light light-duty 0.3
trucks (LLDT).............................................
> 6000 lbs: Heavy light-duty trucks (HLDT) up to 8,500 lbs 0.5
& Medium-duty passenger vehicles (MDPV) up to 10,000 lbs..
------------------------------------------------------------------------
We are proposing two separate sales-weighted fleet average NMHC
levels: (1) 0.3 g/mile for vehicles at or below 6,000 pounds GVWR and
(2) 0.5 g/mile for vehicles over 6,000 pounds, including MDPVs.\186\
The new standard would not require additional certification testing
beyond what is required today with ``worst case'' model selection of a
durability test group.\187\ NMHC emissions would be measured during the
Cold CO test, which already requires hydrocarbon measurement.\188\
---------------------------------------------------------------------------
\186\ Tier 2 created the medium-duty passenger vehicle (MDPV)
category to include larger complete passenger vehicles, such as SUVs
and vans, with a GVWR of 8,501-10,000 pounds GVWR. Large pick-ups
above 8,500 pounds are not included in the MDPV category but are
included in the heavy-duty vehicle category.
\187\ The existing cold FTP test procedures are specified in 40
CFR Subpart C. In the proposed rule for fuel economy labeling,
recently signed on January 10, 2006 (71, FR 5426, February 1, 2006),
EPA is seeking comment on the issue of requiring manufacturers to
run the heater and/or defroster while conducting the cold FTP test.
As discussed in the fuel economy labeling proposed rule, we do not
believe this requirement would have a significant impact on
emissions.
\188\ 40 CFR Subpart C, Sec. 86.244-94 requires the measurement
of all pollutants measured over the FTP except NOX.
---------------------------------------------------------------------------
The separate fleet average standards are proposed to address
challenges related to vehicle weight. We examined the certification
data from interim non-Tier 2 vehicles (i.e., vehicles not yet phased in
to the final Tier 2 program, but meeting interim standards established
by Tier 2), and we determined that there was a general trend of
increasing hydrocarbon levels with heavier GVWR vehicles. Heavier
vehicles generally produce higher levels of emissions for several
reasons. First, added weight results in additional work required to
accelerate the vehicle mass. This generally results in higher
emissions, particularly early in the test right after engine start-up.
Second, the design of these vehicle emission control systems may
incorporate designs for heavy work (i.e., trailer towing) that may put
them at some disadvantage at 20[deg] F cold starts. For example, the
catalyst may be located further away from the engine so it is protected
from high exhaust temperatures. This catalyst placement may delay the
warm-up of the catalyst, especially at colder temperatures. Therefore,
we believe a standard that is higher than the 0.3 g/mile level proposed
for vehicles below 6,000 lbs GVWR, is what is technically feasible for
heavier vehicles. The proposed 0.5 g/mile standard would apply for
vehicles over 6000 lbs GVWR, which includes both HLDTs (6000 lbs to
8500 lbs) and MDPVs.
We are proposing the sales-weighted fleet average approach because
it achieves the greatest degree of emission control feasible for Tier 2
vehicles, while allowing manufacturers flexibility to certify different
vehicle groups to different levels and thus providing both lower cost
and feasible lead times. We believe this is an appropriate approach
because the base Tier 2 program is also based on emissions averaging,
and will result in a mix of emissions control strategies across the
fleet that would have varying cold temperature capabilities. These
capabilities won't be fully understood until manufacturers go through
the process of evaluating each Tier 2 package for cold temperature
emissions control potential. Also, Tier 2 is still being phased in and
some Tier 2 vehicle emissions control packages are still being
developed. A fleet average provides manufacturers with flexibility to
balance challenging vehicle families with ones that more easily achieve
the standards.
[[Page 15847]]
There are several ways fleet averaging can work. In Tier 2, we
established bins of standards to which individual vehicle families were
certified. Each bin contains a NOX standard, and these
NOX standards are then sales-weighted to demonstrate
compliance with the corporate average NOX standard. In other
emissions control programs, such as the highway motorcycle program and
the highway and nonroad heavy-duty engine programs, we have established
a Family Emissions Limit (FEL) structure. In this approach,
manufacturers establish individual FELs for each group of vehicles
certified. These FELs serve as the standard for each individual group,
and the FELs are averaged together on a sales-weighted basis to
demonstrate overall compliance with the standards. For the proposed new
cold temperature NMHC standards, we are proposing to use the FEL-based
approach. We believe the FEL approach adds flexibility and should lead
to cost-effective improvements in vehicle emissions performance. The
FEL approach is discussed further in Section VI.B.4 below.
We are proposing to apply the new cold temperature NMHC standards
to Tier 2 gasoline-fueled vehicles. We are not proposing to apply the
standards to diesel vehicles, alternative-fueled vehicles, or heavy-
duty vehicles, in general, due to a lack of data on which to base
standards. Section VI.B., below, provides a detailed discussion of
applicability.
As discussed above, we are expecting PM reductions at cold
temperatures as a result of the control strategies we expect
manufacturers to meet under the proposed cold temperature NMHC
standards. We may consider the need for a separate PM standard under
CAA section 202(a), as part of a future rulemaking, to further ensure
that PM reductions occur under cold temperature conditions. We also
request comments on what testing challenges exist for testing PM under
cold conditions. We request that comments be supported by data where
possible.
We request comments on the level of the new standards and the
averaging approach we are proposing, and we urge commenters to include
supporting information and data where possible.
2. Feasibility of the Proposed Standards
We believe the proposed standards are feasible, based on our
analysis of the stringency of the standard provided below and the lead
time and flexibilities described in section VI.B.3. We believe that the
proposed standards could be achieved using a number of the technologies
discussed in the following section, but that none of these potential
technologies performs markedly better than any other. Moreover, as
explained in section VI.D, we do not believe that additional reductions
would be feasible without significant changes in Tier 2 technology, and
we are not yet in a position to fully evaluate the achievability of
standards based on such technologies. We thus are not considering more
stringent cold temperature NMHC standards. We request comment on our
analysis of the feasibility of the proposed standards.
a. Currently Available Emission Control Technologies
We believe that the cold temperature NMHC standards being proposed
today for gasoline-fueled vehicles are challenging but within the reach
of Tier 2 level emission control technologies. Our proposed
determination of feasibility is based on the emission control hardware
and strategies that are already in use today on Tier 2 vehicles. These
emission control technologies are successfully used to meet the
stringent Tier 2 standards for HC at the FTP temperature range of
68[deg] F to 86[deg] F, but generally are not fully used or activated
at colder temperatures. As discussed in section VI.D, we are not
proposing standards that would force changes to Tier 2 technology at
this time. As discussed above, many current engine families are already
achieving emissions levels at or below the proposed emission standards
(see RIA Chapter 5), while other engine families are at levels greater
than twice the proposed standard. The only apparent reason for the
difference is the failure of some vehicles to use the Tier 2 control
technologies at cold temperatures. While manufacturers could always
choose to use additional hardware to facilitate compliance with the
proposed standard, many of the engine families already at levels below
the proposed standard do not necessarily contain any unique enabling
hardware. These vehicles appear to achieve their results through mainly
software and calibration control technologies. Thus, we believe our
proposed standards can be met by the application of calibration and
software approaches similar to those currently used at 50[deg] F and
75[deg] F, and we have estimated cost of control based on use of
calibration and software approaches. Estimated costs are provided in
section IX below, and in Chapter 8 of the RIA. As described in section
VI.B.2.c, our own feasibility testing of a vehicle over 6000 lbs GVWR
achieved NMHC reductions consistent with the proposed standard without
the use of new hardware.
In addition, a 20[deg] F cold hydrocarbon requirement has been in
place in Europe since approximately the 2002 model year.\189\ Many
manufacturers currently have common vehicle models offered in Europe
and the U.S. market. While the European standard is over a different
drive cycle, unique strategies have been developed to comply with this
standard. In fact, when the new European cold hydrocarbon standard was
implemented in conjunction with a new 75[deg] F standard (Euro4), many
manufacturers responded by implementing NLEV level hardware and
supplementing this hardware with advanced cold start emission control
strategies. Although we are proposing a sales-weighted fleet average
standard, the European standard is a fixed standard that cannot be
exceeded by any vehicle model. Like the standard we are proposing,
Europe also has made distinctions in the level of the standard
reflecting that heavier weight vehicles cannot achieve as stringent a
standard. Those manufacturers with European models shared with the U.S.
market have the opportunity to leverage their European models or
divisions in an attempt to transfer the emission control technologies
that are used today for 20[deg] F hydrocarbon control.
---------------------------------------------------------------------------
\189\ European Union (EU) Type VI Test (-7[deg] C) required for
new vehicle model certified as of 1/1/2002.
---------------------------------------------------------------------------
There are several different approaches or strategies used in the
vehicles that are achieving proportional improvements in NMHC emissions
at 20[deg] F FTP. Several European models sold in the U.S. market that
demonstrate excellent cold hydrocarbon performance are utilizing
secondary air systems at the 20[deg] F start temperature. These
secondary air systems, sometimes called air pumps, inject ambient air
into the exhaust immediately after the cold start. This performs
additional combustion of unburned hydrocarbons prior to the catalytic
converter and also accelerates the necessary heating of the catalytic
converter. In the past and even recently, these systems have been used
extensively to improve hydrocarbon performance at 75[deg] F starts. As
predicted in the Tier 2 Final Rule, a portion of the Tier 2 fleet is
being equipped with secondary air systems in order to comply with Tier
2 standards.
Some manufacturers that currently have these systems available on
their vehicles have indicated that they are simply not utilizing them
at temperatures below freezing due to past engineering issues. The
manufacturers that are using secondary air at 20[deg] F, mainly
European manufacturers, have indicated that these engineering
[[Page 15848]]
challenges have been addressed through design changes. The robustness
of these systems below freezing has also been confirmed with the
manufacturers and with the suppliers of the secondary air
components.\190\ While not necessarily producing 20[deg] F NMHC
emission results better than other available technologies, vehicles
equipped with this technology should be able to meet the proposed
20[deg] F standard by capitalizing on this hardware.
---------------------------------------------------------------------------
\190\ Memo to docket ``Discussions Regarding Secondary Air
System Usage at 20[deg] F with European Automotive Manufacturers and
Suppliers of Secondary Air Systems,'' December 2005.
---------------------------------------------------------------------------
Manufacturers have also used several other strategies to
successfully produce proportional improvements in hydrocarbon emissions
at 20[deg] F. These include lean limit fuel strategies, elevated idle
speeds, retarded spark timing, and accelerated closed loop times. Some
software design strategies include fuel injection strategies detailed
in past Society of Automotive Engineers (SAE) papers \191\ that
synchronize fuel injection timing with engine intake valve position to
provide optimal fuel preparation. Spark delivery strategies have also
been entertained that include higher energy levels and even redundant
spark delivery to possibly complete additional combustion of unburned
hydrocarbons. We expect that software and/or calibration changes, such
as previously described, will generally perform as well or better than
added hardware. This is because critical hardware such as the catalyst
may not be immediately usable directly following the cold start. See
RIA Chapter 5 for further discussion.
---------------------------------------------------------------------------
\191\ Meyer, Robert and John B. Heywood, ``Liquid Fuel Transport
Mechanisms into the Cylinder of a Firing Port-Injected SI Engine
During Start-up,'' SAE 970865, 1997.
---------------------------------------------------------------------------
b. Feasibility Considering Current Certification Levels, Deterioration
and Compliance Margin
Of the vehicles that were certified to Tier 2 and demonstrated
proportional improvements in hydrocarbon emissions, approximately 20%
of vehicles below 6,000 pounds GVWR had certification levels in the
range of two to three times the 75[deg] F Tier 2 bin 5 full useful life
standard (.18 g/mile to .27 g/mile). These reported hydrocarbon levels
are from Cold CO test results for certification test vehicles with
typically only 4,000 mile aged systems, without full useful life
deterioration applied. Due to rapid advances in emission control
hardware technology, deterioration factors used today by manufacturers
to demonstrate full useful life compliance are very low and typically
even indicate little or no deterioration over the life of the vehicle.
The deterioration factors generated today by manufacturers are common
across all required test cycles including cold temperature testing. The
standards we are proposing will have a full useful life of 120,000
miles, consistent with Tier 2 standards. Additionally, manufacturers
typically target certification emission levels that incorporate a 20%
to 30% compliance margin primarily to account for in-use issues that
may cause emissions variability. The 0.3 g/mile FEL standard would
leave adequate flexibility for compliance margins and any emissions
deterioration concerns. See RIA Chapter 5 for further discussion and
details regarding current certification levels.
Given enough lead time, we believe manufacturers would be able to
develop control strategies for each of their widely varying product
lines utilizing the approaches outlined above without fundamentally
changing the design of the vehicles.
c. Feasibility and Test Programs for Higher Weight Vehicles
While a few of the heavier vehicles achieved a standard similar to
the lighter weight class, there were limited certification results
available for Tier 2 compliant vehicles over 6000 lbs GVWR (due to the
later Tier 2 phase-in schedule for these vehicles). To further support
the feasibility of the standard for heavier vehicles, we conducted a
feasibility study for Tier 2 vehicles over 6000 lbs GVWR to assess
their capabilities with typical Tier 2 hardware. We were able to reduce
HC emissions for one vehicle with models above and below 6,000 pounds
GVWR by between 60-70 percent, depending on control strategy, from a
baseline level of about 1.0 g/mile. The results are well within the 0.5
g/mile standard including compliance margin, and we even achieved a 0.3
g/mile level on some tests. We achieved these reductions through
recalibration without the use of new hardware. The findings from the
study are provided in detail in the RIA.
We believe the proposed standards are feasible while at the same
time providing the greatest degree of emission reduction achievable
through the application of available technology. Our feasibility
assessment, provided above, is based on our analysis of the stringency
of the standard given current emission levels at certification
(considering deterioration, compliance margin, and vehicle weight);
available emission control techniques; and our own feasibility testing.
In addition, sections VI.B.3-6 describe the proposed lead time and
flexibility within the program structure, which also contribute to the
feasibility of the proposed standards. Chapter 8 of the RIA provides
our cost estimations per vehicle and on a nationwide basis, including
capital and development costs. We believe the estimated costs are
reasonable and the proposal is cost effective, as provided in section
IX, below. Given the emission control strategies we expect
manufacturers to utilize, we expect feasible implementation of
technologies without a significant impact on vehicle noise, energy
consumption, or safety factors. Although manufacturers would need to
employ new emissions control strategies at cold temperatures,
fundamental Tier 2 vehicle hardware and designs are not expected to
change. In addition, we are providing necessary lead time for
manufacturers to identify and resolve any related issues as part of
overall vehicle development. We request comment on our analysis of the
feasibility of the proposed standards.
3. Standards Timing and Phase-in
a. Phase-In Schedule
EPA must consider lead time in determining the greatest degree of
emission reduction achievable under section 202(l) of the CAA. We are
proposing to begin implementing the standard in the 2010 model year
(MY) for LDVs/LLDTs and 2012 MY for HLDTs/MDPVs. The proposed
implementation schedule, in Table VI.B-2, begins 3 model years after
Tier 2 phase-in is complete for both vehicle classes. Manufacturers
would demonstrate compliance with phase-in requirements through sales
projections, similar to Tier 2. The 3-year period between completion of
the Tier 2 phase-in and the start of the new cold NMHC standard should
provide vehicle manufacturers sufficient lead time to design their
compliance strategies and determine the product development plans
necessary to meet the new standards. We believe that this phase-in
schedule is needed to allow manufacturers to develop compliant vehicles
without significant disruptions in the product development cycles.
Also, for vehicles above 6,000 GVWR, section 202(a) of the Act requires
that four years of lead time be provided to manufacturers.
We recognize that the new cold temperature standards we are
proposing could represent a significant new challenge for manufacturers
and development time will be needed. The issue of NMHC control at cold
temperatures was not anticipated by
[[Page 15849]]
many entities, and research and development to address the issue is
consequently at a rudimentary stage. Lead time is therefore necessary
before compliance can be demonstrated. While certification will only
require one vehicle model of a durability group to be tested,
manufacturers must do development on all vehicle combinations to ensure
full compliance within the durability test group. We believe a phase-in
allows the program to begin sooner than would otherwise be feasible.
Table VI.B-2.--Proposed Phase-in Schedule for 20 [deg]F NMHC Standard by Model Year
----------------------------------------------------------------------------------------------------------------
Vehicle GVWR (category) 2010 2011 2012 2013 2014 2015
----------------------------------------------------------------------------------------------------------------
<= 6000 lbs (LDV/LLDT)............ 25% 50% 75% 100% ........... ...........
> 6000 lbs HLDT and MDPV.......... ........... ........... 25% 50% 75% 100%
----------------------------------------------------------------------------------------------------------------
In considering a phase-in period, manufacturers have raised
concerns that a rapid phase-in schedule would lead to a significant
increase in the demand for their cold testing facilities, which could
necessitate substantial capital investment in new cold test facilities
to meet development needs. This is because manufacturers would need to
use their cold testing facilities not only for certification but also
for vehicle development. If vehicle development is compressed into a
narrow time window, significant numbers of new facilities would be
needed. Manufacturers were further concerned that investment in new
test facilities would be stranded at the completion of the initial
development and phase-in period.
As stated earlier, durability test groups may be large and diverse
and therefore require significant development effort and cold test
facility usage for each model. Our proposed phase-in period
accommodates test facilities and work load concerns by distributing
these fleet phase-in percentage requirements over a 4-year period for
each vehicle weight category. The staggered start dates for the phase-
in schedule between the two weight categories should further alleviate
manufacturers' concerns with needing to construct new test facilities.
Some manufacturers may still determine that upgrades to their current
cold facility are needed to handle increased workload. Some
manufacturers have indicated that they would simply add additional
shifts to their facility work schedules that are not in place today.
Some manufacturers will already meet the first-year requirement based
on current certification reporting, essentially providing an additional
year for distributing the anticipated development test burden for the
remaining fleet. The 4-year phase-in period provides ample time for
vehicle manufacturers to develop a compliance schedule that is
coordinated with their future product plans and projected product sales
volumes of the different vehicle models.
We request comments on the proposed start date and duration of the
phase-in schedule. We also request comment on allowing a volume-based
offset during the phase-in period for cases where manufacturers
voluntarily certify heavy-duty vehicles above 8,500 pound GVWR to the
proposed cold temperature standards. This may provide incentive for
voluntary certification of these heavier vehicles.
b. Alternative Phase-In Schedules
Alternative phase-in schedules essentially credit the manufacturer
for its early or accelerated efforts and allow the manufacturer greater
flexibility in subsequent years during the phase-in. By introducing
vehicles earlier than required, manufacturers would earn the
flexibility to make offsetting adjustments, on a vehicle-year basis, to
the phase-in percentages in later years. Under these alternative
schedules, manufacturers would have to introduce vehicles that meet or
surpass the NHMC average standards before they are required to do so,
or else introduce vehicles that meet or surpass the standard in greater
quantities than required.
We are proposing that manufacturers may apply for an alternative
phase-in schedule that would still result in 100% phase-in by 2013 and
2015, respectively, for the lighter and heavier weight categories. As
with the primary phase-in, manufacturers would base an alternative
phase-in on their projected sales estimates. An alternate phase-in
schedule submitted by a manufacturer would be subject to EPA approval
and would need to provide the same emissions reductions as the primary
phase-in schedule. We propose that the alternative phase-in could not
be used to delay full implementation past the last year of the primary
phase-in schedule (2013 for LDVs/LDTs and 2015 for HLDTs/MDPVs).
An alternative phase-in schedule would be acceptable if it passes a
specific mathematical test. We have designed the test to provide
manufacturers a benefit from certifying to the standards early, while
ensuring that significant numbers of vehicles are introduced during
each year of the alternative phase-in schedule. Manufacturers would
multiply their percent phase-in by the number of years the vehicles are
phased in prior to the second full phase-in year. The sum of the
calculation would need to be greater than or equal to 500, which is the
sum from the primary phase-in schedule (4*25 + 3*50 + 2*75 +
1*100=500). For example, the equation for LDVs/LLDTs would be as
follows:
(6xAPI2008) + (5xAPI 2009) + (4xAPI
2010) + (3xAPI 2011) + (2xAPI 2012) +
(1xAPI 2013) >= 500%,
Where:
API is the anticipated phase-in percentage for the referenced model
year.
California used this approach to an alternative phase-in for the
LEVII program.\192\ It provides alternative phase-in credit for both
the number of vehicles phased in early and the number of years the
early phase-in occurs.
---------------------------------------------------------------------------
\192\ Title 13, California Code of Regulations, Section
1961(b)(2).
---------------------------------------------------------------------------
As described above, the final sum of percentages for both LDVs/LDTs
and HLDTs/MDPVs must equal or exceed 500--the sum that results from a
25/50/75/100 percent phase-in. For example, a 10/25/50/55/100 percent
phase-in for LDVs/LDTs that begins in 2009 will have a sum of 510
percent and is acceptable. A 10/20/40/70/100 percent phase-in that
begins the same year has a sum of 490 percent and is not acceptable.
To ensure that significant numbers of LDVs/LDTs are introduced in
the 2010 time frame (2012 for HLDTs/MDPVs), manufacturers would not be
permitted to use alternative phase-in schedules that delay the
implementation of the requirements, even if the sum of the phase-in
percentages ultimately meets or exceeds 500. Such a situation could
occur if a manufacturer delayed implementation of its compliant
production until 2011 and began an 80/85/100 percent phase-in that year
for
[[Page 15850]]
LDVs/LDTs. To protect against this possibility, we are proposing that
for any alternative phase-in schedule, a manufacturer's phase-in
percentages*years factor from the 2010 and earlier model years sum to
at least 100 (2012 and earlier for HLDTs/MDPVs). The early phase-in
also encourages the early introduction of vehicles meeting the new
standard or the introduction of such vehicles in greater quantity than
required. This would achieve early emissions reductions and provide an
opportunity to gain experience in meeting the standards.
Phase-in schedules, in general, add little flexibility for
manufacturers with limited product offerings because a manufacturer
with only one or two test groups cannot take full advantage of a 25/50/
75/100 percent or similar phase-in. Therefore, consistent with the
recommendations of the Small Advocacy Review Panel (SBAR Panel), which
we discuss in more detail later in section VI.E, manufacturers meeting
EPA's definition of ``small volume manufacturer'' would be exempt from
the phase-in schedules and would be required to simply comply with the
final 100% compliance requirement. This provision would only apply to
small volume manufacturers and not to small test groups of larger
manufacturers.
4. Certification Levels
Manufacturers typically certify groupings of vehicles called
durability groups and test groups, and they have some discretion on
what vehicle models are placed in each group. A durability group is the
basic classification used by manufacturers to group vehicles to
demonstrate durability and predict deterioration. A test group is a
basic classification within a durability group used to demonstrate
compliance with FTP 75[deg] F standards.\193\ For Cold CO,
manufacturers certify on a durability group basis, whereas for 75[deg]
F FTP testing, manufacturers certify on a test group basis. In keeping
with the current cold CO standards, we are proposing to require testing
on a durability group basis for the cold temperature NMHC standard. We
also propose to allow manufacturers the option of certifying on the
smaller test group basis, as is allowed under current cold CO
standards. Testing on a test group basis would require more tests to be
run by manufacturers but may provide them with more flexibility within
the averaging program. In either case, the worst case vehicle within
the group from an NMHC emissions standpoint would be tested for
certification.
---------------------------------------------------------------------------
\193\ 40 CFR 86.1803-01.
---------------------------------------------------------------------------
For the new standard, manufacturers would declare a family emission
limit (FEL) for each group either at, above, or below the fleet
averaging standard. The FEL would be based on the certification NMHC
level, including deterioration factor, plus the compliance margin
manufacturers feel is needed to ensure in-use compliance. The FEL
becomes the standard for each group, and each group could have a
different FEL so long as the projected sales-weighted average level met
the fleet average standard at time of certification. Like the standard,
the certification resolution for the FEL would be one decimal point.
This FEL approach would be similar to having bins in 0.1 g/mile
intervals, with no upper limit. Similar to a bin approach,
manufacturers would compute a sales-weighted average for the NMHC
emissions at the end of the model year and then determine credits
generated or needed based on how much the average is above or below the
standard.
5. Credit Program
As described above, we are proposing that manufacturers average the
NMHC emissions of their vehicles and comply with a corporate average
NMHC standard. In addition, we are proposing that when a manufacturer's
average NMHC emissions of vehicles certified and sold falls below the
corporate average standard, it could generate credits that it could
save for later use (banking) or sell to another manufacturer (trading).
Manufacturers would consume any credits if their corporate average NMHC
emissions were above the applicable standard for the weight class.
EPA views the proposed averaging, banking, and trading (ABT)
provisions as an important element in setting emission standards
reflecting the greatest degree of emission reduction achievable,
considering factors including cost and lead time. If there are vehicles
that will be particularly costly or have a particularly hard time
coming into compliance with the standard, a manufacturer can adjust the
compliance schedule accordingly, without special delays or exceptions
having to be written into the rule. This is an important flexibility
especially given the current uncertainty regarding optimal technology
strategies for any given vehicle line. In addition, ABT allows us to
consider a more stringent emission standard than might otherwise be
achievable under the CAA, since ABT reduces the cost and improves the
technological feasibility of achieving the standard. By enhancing the
technological feasibility and cost effectiveness of the proposed
standard, ABT allows the standard to be attainable earlier than might
otherwise be possible.
Credits may be generated prior to, during, and after the phase-in
period. Manufacturers could certify LDVs/LLDTs to standards as early as
the 2008 model year (2010 for HLDTs/MDPVs) and receive early NMHC
credits for their efforts. They could use credits generated under these
``early banking'' provisions after the phase-in begins in 2010 (2012
for HLDTs/MDPVs).
a. How Credits Are Calculated
The corporate average for each weight class would be calculated by
computing a sales-weighted average of the NMHC levels to which each FEL
was certified. As discussed above, manufacturers group vehicles into
durability groups or test groups and establish an FEL for each group.
This FEL becomes the standard for that group. Consistent with FEL
practices in other programs, manufacturers may opt to select an FEL
above the test level. The FEL would be used in calculating credits. The
number of credits or debits would then be determined using the
following equation:
Credits or Debits = (Standard - Sales weighted average of FELs to
nearest tenth) x Actual Sales
If a manufacturer's average was below the 0.3 g/mi corporate
average standard for LDVs/LDTs, credits would be generated (below 0.5
g/mi for HLDTs/MDPVs). These credits could then be used in a future
model year when its average NMHC might exceed the 0.3 or the 0.5
standard. Conversely, if the manufacturer's fleet average was above the
corporate average standard, banked credits could offset the difference,
or credits could be purchased from another manufacturer.
b. Credits Earned Prior to Primary Phase-in Schedule
We propose that manufacturers could earn early emissions credits if
they introduce vehicles that comply with the new standards early and
the corporate average of those vehicles is below the applicable
standard. Early credits could be earned starting in 2008 for vehicles
meeting the 0.3 g/mile standard and in 2010 for vehicles meeting the
0.5 g/mile standard. These emissions credits generated prior to the
start of the phase-in could be used both during and after the phase-in
period and have all the same properties as credits generated by
vehicles subject to the primary phase-in schedule. As previously
mentioned, we are also proposing that manufacturers
[[Page 15851]]
may apply for an alternative phase-in schedule for vehicles that are
introduced early. The alternative phase-in and early credits provisions
would operate independent of one another.
c. How Credits Can Be Used
A manufacturer could use credits in any future year when its
corporate average was above the standard, or it could trade (sell) the
credits to other manufacturers. Because of separate sets of standards
for the different weight categories, we are proposing that
manufacturers compute their corporate NMHC averages separately for LDV/
LLDTs and HLDTs/MDPVs. Credit exchanges between LDVs/LLDTs and HLDTs/
MDPVs would be allowed. This will provide added flexibility for fuller-
line manufacturers who may have the greatest challenge in meeting the
new standards due to their wide disparity of vehicle types/weights and
emissions levels.
d. Discounting and Unlimited Life
Credits would allow manufacturers a way to address unexpected
shifts in their sales mix. The NMHC emission standards in this proposed
program are quite stringent and do not present easy opportunities to
generate credits. Therefore, we are not proposing to discount unused
credits. Further, the degree to which manufacturers invest the
resources to achieve extra NMHC reductions provides true value to the
manufacturer and the environment. We do not want to take measures to
reduce the incentive for manufacturers to bank credits, nor do we want
to take measures to encourage unnecessary credit use. Consequently we
are not proposing that the NMHC credits would have a credit life limit.
However, we are proposing that they only be used to offset deficits
accrued with respect to the proposed 0.3/0.5 g/mile cold temperature
standards. We request comment on the need for discounting of credits or
credit life limits and what those discount rates or limits, if any,
should be.
e. Deficits Could Be Carried Forward
When a manufacturer has an NMHC deficit at the end of a model
year--that is, its corporate average NMHC level is above the required
corporate average NMHC standard--we are proposing that the manufacturer
be allowed to carry that deficit forward into the next model year. Such
a carry-forward could only occur after the manufacturer used any banked
credits. If the deficit still existed and the manufacturer chose not
to, or was unable to, purchase credits, the deficit could be carried
over. At the end of that next model year, the deficit would need to be
covered with an appropriate number of credits that the manufacturer
generated or purchased. Any remaining deficit would be subject to an
enforcement action.
To prevent deficits from being carried forward indefinitely, we
propose that manufacturers would not be permitted to run a deficit for
two years in a row. We believe that it is reasonable to provide this
flexibility to carry a deficit for one year given the uncertainties
that manufacturers face with changing market forces and consumer
preferences, especially during the introduction of new technologies.
These uncertainties can make it hard for manufacturers to accurately
predict sales trends of different vehicle models.
f. Voluntary Heavy-Duty Vehicle Credit Program
In addition to MDPV requirements in Tier 2, we also currently have
chassis-based emissions standards for other complete heavy-duty
vehicles (e.g., large pick-ups and cargo vans) above 8,500 pound GVWR.
However, these standards do not include cold temperature CO standards.
As noted below in section VI.B.6.a, we are not proposing to apply cold
temperature NMHC standards to heavy-duty gasoline vehicles due to a
current lack of emissions data on which to base such standards. We plan
to revisit the need for and feasibility of standards as data become
available.
During discussions with manufacturers, we discussed a voluntary
program for chassis-certified complete heavy-duty vehicles. We believe
that there may be opportunities within the framework of a cold
temperature NMHC program to allow for emissions credits from chassis-
certified heavy-duty vehicles above 8,500 pounds GVWR to be used to
meet the proposed standards. It is possible that some control
strategies developed for meeting cold NMHC emissions standards could
also be applied to these vehicles above 8,500 pounds GVWR.
One approach would be to allow manufacturers to certify heavy-duty
vehicles voluntarily to the 0.5 g/mile cold NMHC standards proposed for
HLDTs/MDPVs. To the extent that heavy-duty vehicles achieve FELs below
the 0.5 g/mile standard, manufacturers could earn credits which could
be applied to any vehicle subject to the proposed standard. It is
unclear, however, if this approach would provide a meaningful
opportunity for credit generation, given the stringency of the
standard. We would expect that most heavy-duty vehicles would have
emissions well above the 0.5 g/mile level, based on the additional
weight of the vehicle. We request comment on this approach, as well as
others for voluntary certification and credit generation.
It may be possible to establish a voluntary standard above 0.5 g/
mile for purposes of generating credits, but we would need data on
which to base this level of the standard. Suggestions on an appropriate
level of a voluntary standard are welcomed, as well as any data that
support such a recommendation. Comments on testing protocols, such as
use of the vehicle's adjusted loaded vehicle weight (ALVW) or loaded
vehicle weight (LVW), are also encouraged. We believe such a voluntary
program could provide significant data that would help us evaluate the
feasibility of a future standard for these vehicles.
6. Additional Vehicle Cold Temperature Standard Provisions
We request comments on all of the following proposed provisions.
a. Applicability
We are proposing to apply the new cold temperature standards to all
gasoline-fueled light-duty vehicles and MDPVs sold nationwide. While we
have significant amounts of data on which to base our proposals for
gasoline-fueled light-duty vehicles, we have very little data for
light-duty diesels. For 75[deg] F FTP standards, the same set of
standards apply, but in the 20[deg] F context we know very little about
diesel emissions due to a lack of data. Currently, diesel vehicles are
not subject to the cold CO standard, so there are no requirements to
test diesel vehicles at cold temperatures. There are sound engineering
reasons, however, to expect cold NMHC emissions for diesel vehicles to
be as low as or even lower than the proposed standards. This is because
diesel engines operate under leaner air-fuel mixtures compared to
gasoline engines, and therefore have fewer engine-out NMHC emissions
due to the abundance of oxygen and more complete combustion. A very
limited amount of confidential manufacturer-furnished information is
consistent with this engineering hypothesis. A comprehensive assessment
of appropriate standards for diesel vehicles would require a
significant amount of investigation and analysis of issues such as
feasibility and costs. This effort would be better suited to a future
rulemaking. Therefore, at this time, we are not proposing to apply the
cold NMHC standards to light-duty diesel vehicles. We will continue to
evaluate
[[Page 15852]]
data for these vehicles as they enter the fleet and will reconsider the
need for standards if data indicate that there may be instances of high
NMHC emissions from diesels at cold temperatures. We have proposed cold
temperature FTP testing for diesels as part of the Fuel Economy
Labeling rulemaking, including NMHC measurement.\194\ This testing data
would allow us to assess NMHC certification type data over time.
However, this wouldn't include development testing manufacturers would
need to do in order to meet a new diesel cold temperature standard.
---------------------------------------------------------------------------
\194\ ``Fuel Economy Labeling of Motor Vehicles; Revisions to
Improve Calculation of Fuel Economy Estimates,'' Proposed Rule, 71,
FR 5426, February 1, 2006.
---------------------------------------------------------------------------
In addition, there currently is no cold CO testing requirement for
alternative fuel vehicles. There are little data upon which to evaluate
NMHC emissions when operating on alternative fuels at cold
temperatures. For fuels such as ethanol, it is difficult to develop a
reasonable proposal due to a lack of fuel specifications, testing
protocols, and current test data. Other fuels such as methanol and
natural gas pose similar uncertainty. Therefore, we are not proposing a
cold NMHC testing requirement for alternative fuel vehicles. We will
continue to investigate these other technologies and request comment on
standards for vehicles operating on fuels other than gasoline.
We are proposing that flex-fuel vehicles would still require
certification to the applicable cold NMHC standard, though only when
operated on gasoline. For multi-fuel vehicles, manufacturers would need
to submit a statement at the time of certification that either confirms
the same control strategies used with gasoline would be used when
operating on ethanol, or that identifies any differences as an
Auxiliary Emission Control Device (AECD). Again, dedicated alternative-
fueled vehicles, including E-85 vehicles, would not be covered.
For heavy-duty gasoline-fueled vehicles, we have no data, but we
would expect a range of emissions performance similar to that of
lighter gasoline-fueled trucks. Due to the lack of test data on which
to base feasibility and cost analyses, we are not proposing cold
temperature NMHC standards for these vehicles at this time. We request
comments and data on these vehicles and plan to revisit this issue when
sufficient data is available.
b. Useful Life
The ``useful life'' of a vehicle means the period of use or time
during which an emission standard applies to light-duty vehicles and
light-duty trucks.\195\ Consistent with the current definition of
useful life in the Tier 2 regulations, for all LDVs/LDTs and HLDTs/
MDPVs, we are proposing new full useful life standards for cold
temperature NMHC standards. Given that we expect that manufacturers
will make calibration or software changes to existing Tier 2
technologies, it is reasonable for there to be the same useful life as
for the Tier 2 standards themselves. For LDV/LLDT, the full useful life
values would be 120,000 miles or 10 years, whichever comes first, and
for HLDT/MDPV, full useful life is 120,000 miles or 11 years, whichever
comes first.\196\
---------------------------------------------------------------------------
\195\ 40 CFR 86.1803-01.
\196\ 40 CFR 86.1805-04.
---------------------------------------------------------------------------
c. High Altitude
We do not expect emissions to be significantly different at high
altitude due to the use of common emissions control calibrations.
Limited data submitted by a manufacturer suggest that FTP emissions
performance at high altitude generally follows sea level performance.
Furthermore, there are very limited cold temperature testing facilities
at high altitudes. Therefore, under normal circumstances, manufacturers
would not be required to submit vehicle test data for high altitude.
Instead, manufacturers would be required to submit an engineering
evaluation indicating that common calibration approaches are utilized
at high altitude. Any deviation from sea level in emissions control
practices would be required to be included in the auxiliary emission
control device (AECD) descriptions submitted by manufacturers at
certification. Additionally, any AECD specific to high altitude would
require engineering emission data for EPA evaluation to quantify any
emission impact and validity of the AECD.
d. In-Use Standards for Vehicles Produced During Phase-In
As we have indicated, the standards we are proposing would be more
challenging for some vehicles than for others. With any new technology,
or even with new calibrations of existing technology, there are risks
of in-use compliance problems that may not appear in the certification
process. In-use compliance concerns may discourage manufacturers from
applying new calibrations or technologies. Thus, it may be appropriate
for the first few years, for those vehicles most likely to require the
greatest applications of effort, to provide assurance to the
manufacturers that they will not face recall if they exceed standards
in use by a specified amount. Therefore, similar to the approach used
in Tier 2, we are proposing an in-use standard that is 0.1 g/mile
higher than the certification FEL for any given test group for a
limited number of model years.\197\ For example, a test group with a
0.2 g/mile FEL would have an in-use standard of 0.3 g/mile. This would
not change the FEL or averaging approaches and would only apply in
cases where EPA tests vehicles in-use to ensure emissions compliance.
---------------------------------------------------------------------------
\197\ ``Control of Air Pollution from New Motor Vehicles: Tier 2
Motor Vehicle Emissions Standards and Gasoline Sulfur Control
Requirements'', Final Rule, 65 FR 6796, February 10, 2000.
---------------------------------------------------------------------------
We propose that the in-use standards be available for the first few
model years of sales after a test group meeting the new standards is
introduced, according to a schedule that provides more years for test
groups introduced earlier in the phase-in. This schedule provides
manufacturers with time to determine the in-use performance of vehicles
and learn from the earliest years of the program to help ensure that
vehicles introduced after the phase-in period meet the final standards
in-use. It also assumes that once a test group is certified to the new
standards, it will be carried over to future model years. The tables
below provide the proposed schedule for the availability of the in-use
standards.
Table VI.B-3.--Schedule for In-Use Standards for LDVs/LLDTs
----------------------------------------------------------------------------------------------------------------
Model year of introduction 2008 2009 2010 2011 2012 2013
----------------------------------------------------------------------------------------------------------------
Models years that the in-use standard is 2008 2009 2010 2011 2012 2013
available for carry-over test groups......... 2009 2010 2011 2012 2013 2014
2010 2011 2012 2013 2014
2011 2012 2013
----------------------------------------------------------------------------------------------------------------
[[Page 15853]]
Table VI.B-4.--Schedule for In-Use Standards for HLDVs/MDPVs
----------------------------------------------------------------------------------------------------------------
Model year of introduction 2010 2011 2012 2013 2014 2015
----------------------------------------------------------------------------------------------------------------
Models years that the in-use standard is 2010 2011 2012 2013 2014 2015
available for carry-over test groups......... 2011 2012 2013 2014 2015 2016
2012 2013 2014 2015 2016
2013 2014 2015
----------------------------------------------------------------------------------------------------------------
7. Monitoring and Enforcement
Under the proposed programs, manufacturers could either report that
they met the relevant corporate average standard in their annual
reports to the Agency, or they could show via the use of credits that
they have offset any exceedance of the corporate average standard.
Manufacturers would also report their credit balances or deficits. EPA
would monitor the program.
As in Tier 2, the averaging, banking and trading program would be
enforced through the certificate of conformity that manufacturers must
obtain in order to introduce any regulated vehicles into commerce.\198\
The certificate for each test group would require all vehicles to meet
the emissions level to which the vehicles were certified, and would be
conditioned upon the manufacturer meeting the corporate average
standard within the required time frame. If a manufacturer failed to
meet this condition, the vehicles causing the corporate average
exceedance would be considered to be not covered by the certificate of
conformity for that engine family. A manufacturer would be subject to
penalties on an individual vehicle basis for sale of vehicles not
covered by a certificate.
---------------------------------------------------------------------------
\198\ ``Control of Air Pollution from New Motor Vehicles: Tier 2
Motor Vehicle Emissions Standards and Gasoline Sulfur Control
Requirements'', Final Rule, 65 FR 6797, February 10, 2000.
---------------------------------------------------------------------------
EPA would review the manufacturer's sales to designate the vehicles
that caused the exceedance of the corporate average standard. We would
designate as nonconforming those vehicles in those test groups with the
highest certification emission values first, continuing until a number
of vehicles equal to the calculated number of noncomplying vehicles as
determined above is reached. In a test group where only a portion of
vehicles would be deemed nonconforming, we would determine the actual
nonconforming vehicles by counting backwards from the last vehicle
produced in that test group. Manufacturers would be liable for
penalties for each vehicle sold that is not covered by a certificate.
We are proposing to condition certificates to enforce the
requirements that manufacturers not sell credits that they have not
generated. A manufacturer that transferred credits it did not have
would create an equivalent number of debits that it would be required
to offset by the reporting deadline for the same model year. Failure to
cover these debits with credits by the reporting deadline would be a
violation of the conditions under which EPA issued the certificate of
conformity, and nonconforming vehicles would not be covered by the
certificate. EPA would identify the nonconforming vehicles in the same
manner described above.
In the case of a trade that resulted in a negative credit balance
that a manufacturer could not cover by the reporting deadline for the
model year in which the trade occurred, we propose to hold both the
buyer and the seller liable. We believe that holding both parties
liable will induce the buyer to exercise diligence in assuring that the
seller has or will be able to generate appropriate credits and will
help to ensure that inappropriate trades do not occur.
We are not proposing any new compliance monitoring activities or
programs for vehicles. These vehicles would be subject to the
certification testing provisions of the CAP2000 rule. We are not
proposing to require manufacturer in-use testing to verify compliance.
There is no cold CO manufacturer in-use testing requirement today
(similarly, we do not require manufacturer in-use testing for SCO3
standards under the SFTP program). As noted earlier, manufacturers have
limited cold temperature testing capabilities and we believe these
facilities will be needed for product development and certification
testing. However, we have the authority to conduct our own in-use
testing program for exhaust emissions to ensure that vehicles meet
standards over their full useful life. We will pursue remedial actions
when substantial numbers of properly maintained and used vehicles fail
any standard in-use. We also retain the right to conduct Selective
Enforcement Auditing of new vehicles at manufacturers' facilities.
The use of credits would not be permitted to address Selective
Enforcement Auditing or in-use testing failures. The enforcement of the
averaging standard would occur through the vehicle's certificate of
conformity. A manufacturer's certificate of conformity would be
conditioned upon compliance with the averaging provisions. The
certificate would be void ab initio if a manufacturer failed to meet
the corporate average standard and did not obtain appropriate credits
to cover their shortfalls in that model year or in the subsequent model
year (see proposed deficit carryforward provision in section
VI.B.5.e.). Manufacturers would need to track their certification
levels and sales unless they produced only vehicles certified to NMHC
levels below the standard and did not plan to bank credits.
We request comments on the above approach for compliance monitoring
and enforcement.
C. What Evaporative Emissions Standards Are We Proposing?
We are proposing to adopt a set of numerically more stringent
evaporative emission standards for all light-duty vehicles, light-
trucks, and medium-duty passenger vehicles. The proposed standards are
equivalent to California's LEV II standards, and these proposed
standards are shown in Table VI.C-1. The proposed standards would
represent about a 20 to 50 percent reduction (depending on vehicle
weight class and type of test) in diurnal plus hot soak standards from
the Tier 2 standards that will be in effect in the years immediately
preceding the implementation of today's proposed standards.\199\ As
with the current Tier 2 evaporative emission standards, the proposed
standards vary by vehicle weight class. The increasingly higher
standards for heavier weight class vehicles account for larger vehicle
sizes
[[Page 15854]]
and fuel tanks (non-fuel and fuel emissions).\200\
---------------------------------------------------------------------------
\199\ Diurnal emissions (or diurnal breathing losses) means
evaporative emissions as a result of daily temperature cycles or
fluctuations for successive days of parking in hot weather. Hot soak
emissions (or hot soak losses) are the evaporative emissions from a
parked vehicle immediately after turning off the hot engine. For the
evaporative emissions test procedure, diurnal and hot soak emissions
are measured in an enclosure commonly called the SHED (Sealed
Housing for Evaporative Determination).
\200\ Larger vehicles may have greater non-fuel evaporative
emissions, probably due to an increased amount of interior trim,
vehicle body surface area, and larger tires.
Table VI.C-1.--Proposed Evaporative Emission Standards
[Grams of hydrocarbons per test]
------------------------------------------------------------------------
Supplemental 2-
Vehicle class 3-day diurnal day diurnal
plus hot soak plus hot soak
------------------------------------------------------------------------
LDVs.................................. 0.50 0.65
LLDTs................................. 0.65 0.85
HLDTs................................. 0.90 1.15
MDPVs................................. 1.00 1.25
------------------------------------------------------------------------
1. Current Controls and Feasibility of the Proposed Standards
Evaporative emissions from light-duty vehicles and trucks will
represent about 35 percent of the light-duty VOC inventory and about 4
percent of the benzene inventory in 2020. As described earlier, we are
proposing to reduce the level of the evaporative emission standards
applicable to diurnal and hot soak emissions from these vehicles by
about 20 to 50 percent. These proposed standards are meant to be
effectively the same as the evaporative emission standards in the
California LEV II program. Although the California program contains
evaporative emissions standards that appear more stringent than EPA
Tier 2 standards if one looks only at the level of the standard, we
believe they are essentially equivalent because of differences in
testing requirements. For these same reasons, some manufacturers
likewise view the programs as similar in stringency. (See section
VI.C.5 below for further discussion of such test differences, e.g.,
test temperatures and fuel volatilities.) Thus, some manufacturers have
indicated that they will produce 50-state evaporative systems that meet
both sets of standards (manufacturers sent letters indicating this to
EPA in 2000).201 202 203 In addition, a review of recent
model year certification results indicates that essentially all
manufacturers certify 50-state systems, except for a few limited cases
where manufacturers have not yet needed to certify a LEVII vehicle in
California due to the phase-in schedule. Also, in recent discussions,
manufacturers have restated that they plan to continue producing 50-
state evaporative systems in the future. Based on this understanding,
we do not project additional VOC or air toxics reductions from the
evaporative standards we are proposing today.\204\ Also, we do not
expect additional costs since we expect that manufacturers will
continue to produce 50-state evaporative systems. Therefore,
harmonizing with California's LEV-II evaporative emission standards
would be an ``anti-backsliding'' measure--that is, it would prevent
potential future backsliding as manufacturers pursue cost
reductions.\205\ It would thus codify (i.e., lock in) the approach
manufacturers have already indicated they are taking for 50-state
evaporative systems.
---------------------------------------------------------------------------
\201\ DaimlerChrysler, Letter from Reginald R. Modlin to Margo
Oge of U.S. EPA, May 30, 2000. A copy of this letter can be found in
Docket No. EPA-HQ-OAR-2005-0036.
\202\ Ford, Letter from Kelly M. Brown to Margo Oge of U.S. EPA,
May 26, 2000. A copy of this letter can be found in Docket No. EPA-
HQ-OAR-2005-0036.
\203\ General Motors, Letter from Samuel A. Leonard to Margo Oge
of U.S. EPA, May 30, 2000. A copy of this letter can be found in
Docket No. EPA-HQ-OAR-2005-0036.
\204\ U.S. EPA, Office of Air and Radiation, Update to the
Accounting for the Tier 2 and Heavy-Duty 2005/2007 Requirements in
MOBILE6, EPA420-R-03-012, September 2003.
\205\ Anti-backsliding provisions can satisfy the requirement in
section 202 (l) (2) that emission reductions of hazardous air
pollutants be the greatest achievable. Sierra Club v. EPA, 325 F. 3d
at 477.
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We believe this proposed action would be an important step to
ensure that the federal standards reflect the lowest possible
evaporative emissions, and it also would provide states with certainty
that the emissions reductions we project to occur due to 50-state
compliance strategies will in fact occur. In addition, the proposed
standards will assure that manufacturers continue to capture the
abilities of available fuel system materials to minimize evaporative
emissions.
We also considered the possibility of whether it is feasible to
achieve further evaporative emission reductions from motor vehicles. In
this regard, it is important to note that California's LEV II program
includes partial zero-emission vehicle (ZEV) credits for vehicles that
achieve near zero emissions (e.g., LDV evaporative emission standards
for both the 2-day and 3-day diurnal plus hot soak tests are 0.35
grams/test, which are more stringent than proposed standards).\206\ The
credits would include full ZEV credit for a stored hydrogen fuel cell
vehicle and 0.2 credits for (among other categories for partial credit)
a partial zero emission vehicle (PZEV).\207\ Currently, only a fraction
of California's certified vehicles (gasoline powered, hybrid, and
compressed natural gas vehicles) meet California's optional PZEV
standards, but this number is expected to increase in coming
years.208 209 These limited PZEV vehicles require additional
evaporative emissions technology or hardware (e.g., modifications to
fuel tank and secondary canister) than we expect to be needed for
vehicles meeting the proposed standards. At this time, we need to
better understand the evaporative system modifications (i.e.,
technology, costs, lead time, etc.) potentially needed for other
vehicles in the fleet to meet PZEV-level standards before we can
rationally evaluate whether to adopt more stringent standards. For
example, at this point we cannot even determine whether the PZEV
technologies could be used fleetwide or on only a limited set of
vehicles. Thus, in the near term, we lack any of the information
necessary to determine if further reductions are feasible, and if they
could be achievable considering cost, energy and safety issues.
However, we intend to consider
[[Page 15855]]
more stringent evaporative emission standards in the future, and
revisiting this issue in a future rulemaking will allow us time to
obtain the important necessary additional information for such
standards.
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\206\ California Air Resources Board, Fact Sheet, LEV-II
Amendments to California's Low-Emission Vehicle Regulations,
February 1999
\207\ PZEV meets California super ultra low emission vehicle
exhaust emission standards and have near zero evaporative emissions.
California Air Resources Board, News Release, ARB Modifies Zero
Emission Vehicle Regulation, April 24, 2003.
\208\ California Air Resources Board, Fact Sheet, California
Vehicle Emissions, April 8, 2004.
\209\ California Air Resources Board, Consumer Information: 2006
California Certified Vehicles, November 7, 2005.
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2. Evaporative Standards Timing
We are proposing to implement today's evaporative emission
standards in model year 2009 for LDVs/LLDTs and model year 2010 for
HLDTs/MDPVs. Today's proposed rule is not expected to be finalized
until February 2007, at which time many manufacturers already will have
begun or completed model year 2008 certification. Thus, model year 2009
is the earliest practical start date of new standards for LDVs/LLDTs.
For HLDTs/MDPVs, the phase-in of the existing Tier 2 evaporative
emission standards ends in model year 2009. Thus, the model year 2010
is the earliest start date possible for HLDTs/MDPVs. Since the proposed
standards are an anti-backsliding measure and we believe that
manufacturers already meet these standards, there is no need for
additional lead time beyond the implementation dates proposed. We
request comment on this proposed schedule.
3. Timing for Multi-Fueled Vehicles
As discussed earlier in this section, manufacturers appear to view
the Tier 2 and LEV II evaporative emission programs as similar in
stringency, and thus, they have indicated that they will produce 50-
state evaporative systems that meet both sets of standards. For multi-
fueled vehicles capable of operating on alternative fuel (e.g., E85
vehicles--fuel is 85% ethanol and 15% gasoline) and conventional fuel
(e.g., gasoline),\210\ this commitment for 50-state systems would still
apply. However, a few multi-fueled vehicles were certified only on the
conventional fuel (gasoline) for the California LEV II program even
though they had 50-state evaporative emission systems. For such cases,
manufacturers did not intend to sell these vehicles for operation on
the alternative fuel (e.g. E85) in California (only for operation on
conventional fuel in California), but they did certify and plan to sell
these vehicles in the federal Tier 2 program for operation on the
alternative and conventional fuels.\211\ For these few types of multi-
fueled vehicles, manufacturers are potentially at risk of not complying
with the proposed new evaporative emission certification standards
(which are equivalent to California LEV II certification standards)
when operating on the alternative fuel.
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\210\ 40 CFR 86.1803-01 defines multi-fuel as capable of
operating on two or more different fuel types, either separately or
simultaneously.
\211\ For the Tier 2 program, multi-tier vehicles must meet the
same standards on conventional and alternative fuel.
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For such multi-fueled vehicles or evaporative emission systems,
manufacturers would need a few additional years of lead time to adjust
their evaporative systems to comply with the proposed evaporative
emission certification standards when operating on the alternative
fuel. Thus, to reduce the compliance risk for these types of multi-
fueled vehicles (or evaporative families) when they first certify to
the more stringent evaporative standards, the proposed evaporative
emission certification standards would apply to the non-gasoline
portion of multi-fueled vehicles beginning in the fourth year of the
program--2012 for LDVs/LLDTs and 2013 for HLDTs/MDPVs. The proposed
evaporative emission certification standards would be implemented in
2009 for LDVs/LLDTs and 2010 for HLDTs/MDPVs for the gasoline portion
of multi-fueled vehicles and vehicles that are not multi-fueled. We
believe this additional three years of lead time would provide
sufficient time for manufacturers to make adjustments to their new
evaporative systems for multi-fueled vehicles, which are limited
product lines.
The provisions for in-use evaporative emission standards described
below in section VI.C.4 would not change for multi-fueled vehicles. We
believe that three additional years to prepare vehicles (or evaporative
families) to meet the certification standards, and to simultaneously
make vehicle adjustments from the federal in-use experience of other
vehicles (other vehicles that are not multi-fueled) is sufficient to
resolve any issues for multi-fueled vehicles. Therefore, the proposed
evaporative emission standards would apply both for certification and
in-use beginning in 2012 for LDVs/LLDTs and 2013 for HLDTs/MDPVs.
4. In-Use Evaporative Emission Standards
As described earlier in this section, we are proposing to adopt
evaporative emission standards that are equivalent to California's LEV
II standards for all light duty vehicles, light trucks, and medium duty
passenger vehicles. Currently, the Tier 2 evaporative emission
standards are the same for certification and in-use vehicles. However,
the California LEV II program permits manufacturers to meet less
stringent standards in-use for a short time period in order to account
for potential variability in-use during the initial years of the
program when technical issues are most likely to arise.\212\ The LEV II
program specifies that in-use evaporative emission standards of 1.75
times the certification standards will apply for the first three model
years after an evaporative family is first certified to the LEV II
standards (only for vehicles introduced prior to model year 2007, the
year after 100 percent phase-in).213 214 An interim three-
year period was considered sufficient to accommodate any technical
issues that may arise.
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\212\ California Air Resources Board, ``LEV II'' and ``CAP
2000'' Amendments to the California Exhaust and Evaporative Emission
Standards and Test Procedures for Passenger Cars, Light-Duty Trucks
and Medium-Duty Vehicles, and to the Evaporative Emission
Requirements for Heavy-Duty Vehicles, Final Statement of Reasons,
September 1999.
\213\ 1.75 times the 3-day diurnal plus hot soak and 2-day
diurnal plus hot soak standards.
\214\ For example, evaporative families first certified to LEV
II standards in the 2005 model year shall meet in-use standards of
1.75 times the evaporative certification standards for 2005, 2006,
and 2007 model year vehicles.
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Federal in-use conditions may raise unique issues (e.g., salt/ice
exposure) for evaporative systems certified to the new proposed
standards (which are equivalent to the LEV II standards), and thus, we
propose to adopt a similar, interim in-use compliance provision for
federal vehicles. As with the LEV II program, this provision would
enable manufacturers to make adjustments for unforeseen problems that
may occur in-use during the first three years of a new evaporative
family. Like California, we believe that a three-year period is enough
time to resolve these problems, because it allows manufacturers to gain
real world experience and make adjustments to a vehicle within a
typical product cycle.
Depending on the vehicle weight class and type of test, the Tier 2
certification standards are 1.3 to 1.9 times the LEV II certification
standards. On average the Tier 2 standards are 1.51 times the LEV II
certification standards. Thus, to maintain the same level of stringency
for the in-use evaporative emission standards provided by the Tier 2
program, we propose to apply the Tier 2 standards in-use for only the
first three model years after an evaporative family is first certified
under today's proposed standards instead of the 1.75 multiplier
implemented in the California LEV II program. Since the proposed
evaporative emission certification standards (equivalent to LEV II
standards) would be implemented in model year 2009 for LDVs/LLDTs and
model year 2010 for HLDTs/MDPVs, these same certification
[[Page 15856]]
standards would apply in-use beginning in model year 2012 for LDVs/
LLDTs and model year 2013 for HLDTs/MDPVs.\215\
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\215\ For example, evaporative families first certified to the
proposed LDV/LLDT evaporative emission standards in the 2011 model
year would be required to meet the Tier 2 LDV/LLDT evaporative
emission standards in-use for 2011, 2012, and 2013 model year
vehicles (applying Tier 2 standards in-use would be limited to the
first three years after introduction of a vehicle), and 2014 and
later model year vehicles of such evaporative families would be
required to meet the proposed LDV/LLDT evaporative emission
standards in-use.
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5. Existing Differences Between California and Federal Evaporative
Emission Test Procedures
As described above, the California LEV II evaporative emission
standards are numerically more stringent than EPA's Tier 2 standards,
but due to differences in California and EPA evaporative test
requirements, EPA and most manufacturers view the programs as similar
in stringency. The Tier 2 evaporative program requires manufacturers to
certify the durability of their evaporative emission systems using a
fuel containing the maximum allowable concentration of alcohols
(highest alcohol level allowed by EPA in the fuel on which the vehicle
is intended to operate, i.e., a ``worst case'' test fuel). Under
current requirements, this fuel would be about 10 percent ethanol by
volume.\216\ (We are retaining these Tier 2 durability requirements for
the proposed evaporative emissions program.) California does not
require this provision. To compensate for the increased vulnerability
of system components to alcohol fuel, manufacturers have indicated that
they will produce a more durable evaporative emission system than the
Tier 2 numerical standards would imply, using the same low permeability
hoses and low loss connections and seals planned for California LEV II
vehicles.
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\216\ Manufacturers are required to develop deterioration
factors using a fuel that contains the highest legal quantity of
ethanol available in the U.S.
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As shown in Table VI.C-2, combined with the maximum alcohol fuel
content for durability testing, the other key differences between the
federal and California test requirements are fuel volatilities, diurnal
temperature cycles, and running loss test temperatures.\217\ The EPA
fuel volatility requirement is 2 psi greater than that of California.
The high end of EPA's diurnal temperature range, is 9[deg] F lower than
that of California. Also, EPA's running loss temperature is 10[deg] F
lower than California's.
---------------------------------------------------------------------------
\217\ Running loss emissions means evaporative emissions as a
result of sustained vehicle operation (average trip in an urban
area) on a hot day. The running loss test requirement is part of the
3-day diurnal plus hot soak test sequence.
Table VI.C-2.--Differences in Tier 2 and LEV II Evaporative Emission
Test Requirements
------------------------------------------------------------------------
Test requirement EPA tier 2 California LEV II
------------------------------------------------------------------------
Fuel volatility (Reid Vapor 9................... 7.
Pressure in psi).
Diurnal temperature cycle 72 to 96............ 65 to 105.
(degrees F).
Running loss test 95.................. 105.
temperature (degrees F).
------------------------------------------------------------------------
Currently, California accepts evaporative emission results
generated on the federal test procedure (using federal test fuel),
because available data indicates the federal procedure to be a ``worst
case'' procedure. In addition, manufacturers can obtain federal
evaporative certification based upon California results (meeting LEV II
standards under California fuels and test conditions), if they obtain
advance approval from EPA.\218\
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\218\ EPA may require comparative data from both federal and
California tests.
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D. Opportunities for Additional Exhaust Control Under Normal Conditions
In addition to the cold temperature NMHC and evaporative emission
standards we are proposing, we evaluated an additional option for
reducing hydrocarbons from light-duty vehicles. This option would
further align the federal light-duty exhaust emissions control program
with that of California. We are not proposing this option today for the
reasons described below. It is possible that a future evaluation could
result in EPA reconsidering the option of harmonizing the Tier 2
program with California's LEV-II program or otherwise seeking emission
reductions beyond those of the Tier 2 program and those being proposed
today.\219\
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\219\ See Sierra Club v. EPA, 325 F.3d at 480 (EPA can
reasonably determine that no further reductions in MSATs are
presently achievable due to uncertainties created by other recently
promulgated regulatory provisions applicable to the same vehicles).
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As explained earlier, section 202(l)(2) requires EPA to adopt
regulations that contain standards which reflect the greatest degree of
emissions reductions achievable through the application of technology
that will be available, taking into consideration existing motor
vehicle standards, the availability and costs of the technology, and
noise, energy and safety factors. The cold temperature NMHC program
proposed today is appropriate under section 202(l)(2) as a near-term
control: That is, a control that can be implemented relatively soon and
without disruption to other existing vehicle emissions control program.
We are not proposing long-term (i.e., controls that require longer lead
time to implement) at this time because we lack the information
necessary to assess appropriate long-term controls. We believe it will
be important to address the appropriateness of further MSAT controls in
the context of compliance with other significant vehicle emissions
regulations (discussed below).
In the late 1990's both the EPA and the California Air Resources
Board finalized new and technologically challenging light-duty vehicle/
truck emission control programs. The EPA program, known as Tier 2,
focused on reducing NOX emissions from the light-duty fleet.
The California program, which is the second generation of their low
emission vehicle (LEV) program and is known as LEV-II, focuses
primarily on reducing hydrocarbons by tightening the light-duty NMOG
standards. Both programs are expected to present the manufacturers with
significant challenges, and will require the use of hardware and
emission control strategies not used in the fleet under previously
existing programs. Both programs will achieve significant reductions in
emissions. Taken as a whole, the Tier 2 program presents the
manufacturers with significant challenges in the coming years. Bringing
essentially all passenger vehicles under the same emission control
program regardless of their size, weight, and application is a major
engineering challenge. The Tier 2 program represents a comprehensive,
integrated package of exhaust, evaporative, and fuel quality standards
which will achieve significant reductions in
[[Page 15857]]
NMHC, NOX, and PM emissions from all light-duty vehicles in
the program. These reductions will include significant reductions in
MSATs. Emission control in the Tier 2 program will be based on the
widespread implementation of advanced catalyst and related control
system technology. The standards are very stringent and will require
manufacturers to make full use of nearly all available emission control
technologies.
Today the Tier 2 program remains early in its phase-in. Cars and
lighter trucks will be fully phased into the program with the 2007
model year, and the heavier trucks won't be fully entered into the
program until the 2009 model year. Even though the lighter vehicles
will be fully phased in by 2007, we expect the characteristics of this
segment of the fleet to remain in a state of transition at least
through 2009, because manufacturers will be making adjustments to their
fleets as the larger trucks phase in. The Tier 2 program is designed to
enable vehicles certified to the LEV-II program to cross over to the
federal Tier 2 program. At this point in time, however, it is difficult
to predict the degree to which this will occur. The fleetwide NMOG
levels of the Tier 2 program will ultimately be affected by the manner
in which LEV-II vehicles are certified within the Tier 2 bin structure,
and vice versa. We intend to carefully assess these two programs as
they evolve and periodically evaluate the relative emission reductions
and the integration of the two programs.
Today's proposal addresses toxics emissions from vehicles operating
at cold temperatures. The technology to achieve this is already
available and we project that compliance will not be costly. However,
we do not believe that we could reasonably propose further controls at
this time. There is enough uncertainty regarding the interaction of the
Tier 2 and LEV-II programs to make it difficult to evaluate today what
might be achievable in the future. Depending on the assumptions one
makes, the LEV-II and Tier 2 programs may or may not achieve very
similar NMOG emission levels. Therefore, the eventual Tier 2 baseline
technologies and emissions upon which new standards would necessarily
be based are not known today. Additionally, we believe it is important
for manufacturers to focus in the near term on developing and
implementing robust technological responses to the Tier 2 program
without the distraction or disruption that could result from changing
the program in the midst of its phase-in. We believe that it may be
feasible in the longer term to seek additional emission reductions from
the base Tier 2 program, and the next several years will allow an
evaluation based on facts rather than assumptions. For these reasons,
we are deferring a decision on seeking additional NMOG reductions from
the base Tier 2 program.
E. Vehicle Provisions for Small Volume Manufacturers
Prior to issuing a proposal for this proposed rulemaking, we
analyzed the potential impacts of these regulations on small entities.
As a part of this analysis, we convened a Small Business Advocacy
Review Panel (SBAR Panel, or the Panel). During the Panel process, we
gathered information and recommendations from Small Entity
Representatives (SERs) on how to reduce the impact of the rule on small
entities, and those comments are detailed in the Final Panel Report
which is located in the public record for this rulemaking (Docket EPA-
HQ-OAR-2005-0036). Based upon these comments, we propose to include
lead time transition and hardship provisions that would be applicable
to small volume manufacturers as described below in section VI.E.1 and
VI.E.2. For further discussion of the Panel process, see section XII.C
of this proposed rule and/or the Final Panel Report.
As discussed in more detail in section XII.C in addition to the
major vehicle manufacturers, three distinct categories of businesses
relating to highway light-duty vehicles would be covered by the new
vehicle standards: Small volume manufacturers (SVMs), independent
commercial importers (ICIs),\220\ and alternative fuel vehicle
converters.\221\ We define small volume manufacturers as those with
total U.S. sales less than 15,000 vehicles per year, and this status
allows vehicle models to be certified under a slightly simpler
certification process. For certification purposes, SVMs include ICIs
and alternative fuel vehicle converters since they sell less than
15,000 vehicles per year.
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\220\ ICIs are companies that hold a Certificate (or
certificates) of Conformity permitting them to import nonconforming
vehicles and to modify these vehicles to meet U.S. emission
standards.
\221\ Alternative fuel vehicle converters are businesses that
convert gasoline or diesel vehicles to operate on alternative fuel
(e.g., compressed natural gas), and converters must seek a
certificate for all of their vehicle models.
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About 34 out of 50 entities that certify vehicles are SVMs, and the
Panel identified 21 of these 34 SVMs that are small businesses as
defined by the Small Business Administration criteria (5 manufacturers,
10 ICIs, and 6 converters). Since a majority of the SVMs are small
businesses and all SVMs have similar characteristics as described below
in section VI.E.1, the Panel recommended that we apply the lead time
transition and hardship provisions to all SVMs. These manufacturers
represent just a fraction of one percent of the light-duty vehicle and
light-duty truck sales. Our proposal today is consistent with the
Panel's recommendation.
1. Lead Time Transition Provisions
In these types of vehicle businesses, predicting sales is difficult
and it is often necessary to rely on other entities for technology (see
earlier discussions in section VI on technology needed to meet the
proposed standards).222 223 Moreover, percentage phase-in
requirements pose a dilemma for an entity such as a SVM that has a
limited product line. For example, it is challenging for a SVM to
address percentage phase-in requirements if the manufacturer makes
vehicles in only one or two test groups. Because of its very limited
product lines, a SVM could be required to certify all their vehicles to
the new standards in the first year of the phase-in period, whereas a
full-line manufacturer (or major manufacturer) could utilize all four
years of the phase-in. Thus, similar to the flexibility provisions
implemented in the Tier 2 rule, the Panel recommended that we allow
SVMs, manufacturers with sales less than 15,000 vehicles per year
(includes all vehicle small entities that would be affected by this
rule, which are the majority of SVMs) the following flexibility options
for meeting cold temperature NMHC standards and evaporative emission
standards as an element of determining appropriate lead time for these
entities to comply with the standards.
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\222\ For example, as described later in section VI.E.3, ICIs
may not be able to predict their sales because they are dependent
upon vehicles brought to them by individuals attempting to import
uncertified vehicles.
\223\ SMVs (those with sales less than 15,000 vehicles per year)
include ICIs, alternative fuel vehicle converters, companies that
produce specialty vehicles by modifying vehicles produced by others,
and companies that produce small quantities of their own vehicles,
but rely on major manufacturers for engines and other vital emission
related components.
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For cold NMHC standards, the Panel recommended that SVMs simply
comply with the standards with 100 percent of their vehicles during the
last year of the 4 year phase-in period. Since these entities could
need additional lead time flexibility and proposed standards for light-
duty vehicles and light light-duty trucks would begin in model year
2010 and would end in model year 2013 (25%, 50%, 75%, 100% phase-in
over 4
[[Page 15858]]
years), we propose that the SVM provision would be 100 percent in model
year 2013. Also, since the proposed standard for heavy light-duty
trucks and medium-duty passenger vehicles would start in 2012 (25%,
50%, 75%, 100% phase-in over 4 years), we propose that the SVM
provision would be 100 percent in model year 2015.
In regard to evaporative emission standards, the Panel recommended
that since the proposed evaporative emissions standards would not have
phase-in years, we allow SVMs to simply comply with standards during
the third year of the program (we have implemented similar provisions
in past rulemakings). Given the additional challenges that SVMs face,
as noted above, we believe that this recommendation is reasonable.
Therefore, for a 2009 model year start date for light-duty vehicles and
light light-duty trucks, we propose that SVMs meet the evaporative
emission standards in model year 2011. For a model year 2010
implementation date for heavy light-duty trucks and medium-duty
passenger vehicles, we propose that SVMs comply in model year 2012.
2. Hardship Provisions
In addition, the Panel recommended that hardship provisions be
extended to SVMs for the cold temperature NMHC and evaporative emission
standards as an aspect of determining the greatest emission reductions
feasible. These entities could, on a case-by-case basis, face hardship
more than major manufacturers (manufacturers with sales of 15,000
vehicles or more per year), and we are proposing this provision to
provide what could prove to be a needed safety valve for these
entities. SVMs would be allowed to apply for up to an additional 2
years to meet the 100 percent phase-in requirements for cold NMHC and
the delayed requirement for evaporative emissions. As with hardship
provisions for the Tier 2 rule, we propose that appeals for such
hardship relief must be made in writing, must be submitted before the
earliest date of noncompliance, must include evidence that the
noncompliance will occur despite the manufacturer's best efforts to
comply, and must include evidence that severe economic hardship will be
faced by the company if the relief is not granted.
We would work with the applicant to ensure that all other remedies
available under this rule are exhausted before granting additional
relief. To avoid the very existence of the hardship provision prompting
SVMs to delay development, acquisition and application of new
technology, we want to make clear that we would expect this provision
to be rarely used. Our proposed rule contains numerous flexibilities
for all manufacturers and it delays implementation dates for SVMs,
which effectively provides them more time. We would expect small volume
manufacturers to prepare for the applicable implementation dates in
today's proposed rule.
3. Special Provisions for Independent Commercial Importers (ICIs)
Although the SBAR panel did not specifically recommend it, we are
proposing to allow ICIs to participate in the averaging, banking, and
trading program for cold temperature NMHC fleet average standards (as
described in Table IV.B.-1), but with appropriate constraints to ensure
that fleet averages will be met. The existing regulations for ICIs
specifically bar ICIs from participating in emission related averaging,
banking, and trading programs unless specific exceptions are provided
(see 40 CFR 85.1515(d)). The concern is that they may not be able to
predict their sales and control their fleet average emissions because
they are dependent upon vehicles brought to them by individuals
attempting to import uncertified vehicles. However, an exception for
ICIs to participate in an averaging, banking, and trading program was
made for the Tier 2 NOX fleet average standards, and today
we propose to apply a similar exception for the cold temperature NMHC
fleet average standards.
If an ICI is able to purchase credits or to certify a test group to
a family emission level (FEL) below the applicable cold temperature
NMHC fleet average standard, we would permit the ICI to bank credits
for future use. Where an ICI desires to certify a test group to a FEL
above the applicable fleet average standard, we would permit them to do
so if they have adequate and appropriate credits. Where an ICI desires
to certify to an FEL above the fleet average standard and does not have
adequate or appropriate credits to offset the vehicles, we would permit
the manufacturer to obtain a certificate for vehicles using such a FEL,
but would condition the certificate such that the manufacturer can only
produce vehicles if it first obtains credits from other manufacturers
or from other vehicles certified to a FEL lower than the fleet average
standard during that model year.
Our experience over the years through certification indicates that
the nature of the ICI business is such that these companies cannot
predict or estimate their sales of various vehicles well. Therefore, we
do not have confidence in their ability to certify compliance under a
program that would allow them leeway to produce some vehicles to a
higher FEL now but sell vehicles with lower FELs later, such that they
were able to comply with the fleet average standard. We also cannot
reasonably assume that an ICI that certifies and produces vehicles one
year, would certify or even be in business the next. Consequently, we
propose that ICIs not be allowed to utilize the deficit carryforward
provisions of the proposed ABT program.
VII. Proposed Gasoline Benzene Control Program
A. Overview of Today's Proposed Fuel Control Program
As discussed in sections I, IV, and V above, people experience
elevated risk of cancer and other health effects as a result of
inhalation of air toxics. Mobile sources are responsible for a
significant portion of this risk. As required by section 202(l) of the
Clean Air Act, EPA has evaluated options to reduce MSAT emissions by
setting standards for motor vehicle fuel. We have determined that there
are fuel-related technologies available to feasibly reduce MSAT
emissions and that these reductions are achievable, considering cost,
energy, and other factors. These feasible reductions would be in
addition to those resulting from actions taken by the industry in
response to the earlier fuel-related MSAT programs described in section
V above. Accordingly, we believe a fuel control program is necessary
and appropriate to reduce air toxics emissions from motor vehicles to
the greatest extent achievable (in addition to the programs proposed
elsewhere in this notice to reduce MSAT emissions by changes to
gasoline-powered motor vehicles and gas cans). This section of the
preamble describes our proposed fuel control program.
The section begins with a detailed description of today's proposed
program. In summary, we propose that beginning January 1, 2011,
refiners would meet an average gasoline benzene content standard of
0.62% by volume on all their gasoline (reformulated and conventional)
nationwide.\224\ We also propose that refiners could generate benzene
credits and use or sell them as a part of a nationwide averaging,
banking, and trading (ABT) program.
[[Page 15859]]
We believe that the proposed benzene standard, combined with the
proposed ABT program, would result in the largest feasible overall
reductions in benzene emissions of any potential fuel-based MSAT
control program. Finally, as an aspect of achieving the greatest
emission reductions, we also propose special compliance flexibility for
approved small refiners.
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\224\ The State of California has a similar benzene standard and
gasoline sold there is not covered by this proposal. For more
information, see California Code of Regulations, Title 13 Section
2262.
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This section then describes in detail how we arrived at the
proposed program. We discuss a range of potential approaches to
reducing MSATs through changes in fuel, concluding that benzene
emissions would be significantly more responsive to fuel changes than
emissions of any other fuel-related MSAT. This is followed by
discussion of alternate methods of reducing benzene emissions,
resulting in the proposed approach of directly controlling benzene
content. We also discuss how we arrived at the proposed level of 0.62
volume percent (vol%) for the benzene standard. We discuss why we
believe that incorporating the proposed ABT program would be crucial
for the effectiveness of the overall benzene control program and
describe how the system would work. Finally, we review the
recommendations of the special panel that was convened to assess the
potential for disproportionate impacts of the proposed program on small
refiners, and present our reasoning for the special small refiner
provisions we are proposing today.
Today's proposed action would fulfill several statutory and
regulatory goals for gasoline-related MSAT emissions, which are
discussed in more detail in this section. The program would meet our
commitment in the MSAT1 program to consider further MSAT control. The
program would also allow EPA to streamline the regulatory provisions
for the air toxics performance requirements of the reformulated
gasoline (RFG) and Anti-dumping programs. The expected levels of
benzene control by individual refiners under this proposal, combined
with other gasoline controls such as sulfur, RVP, and VOC controls,
mean that compliance with these provisions is expected to lead to
compliance with the annual average requirements for benzene and toxics
performance for RFG and the annual average Anti-dumping toxics
performance for conventional gasoline. EPA is therefore proposing that
upon full implementation in 2011, the regulatory provisions for the
benzene control program would become the single regulatory mechanism
used to implement these RFG and Anti-dumping annual average toxics
requirements, replacing the current RFG and Anti-dumping annual average
provisions (although the 1.3 vol% benzene cap would still apply for
RFG). The proposed benzene control program would also replace the MSAT1
requirements. In addition, the program would satisfy certain fuel MSAT
conditions of the Energy Policy Act of 2005. By consciously designing
this proposed program to address these separate but related goals, we
would significantly consolidate and simplify the existing national
fuel-related MSAT regulatory program.
Finally, this section concludes with a detailed summary of our
assessment of the technological feasibility for different types of
refineries, and the refining industry as a whole, to meet the program
as proposed. We request general and specific comment on all aspects of
the proposed program, and we request that comments include supporting
data whenever possible.
B. Description of the Proposed Fuel Control Program
Today's proposed program has three main components, the development
of each of which is further described later in this section:
--A gasoline benzene content standard. We propose that an annual
average gasoline benzene standard of 0.62 vol% be implemented beginning
January 1, 2011. This single standard would apply to all gasoline, both
reformulated (RFG) and conventional (CG) nationwide (except for
gasoline sold in California, which is already covered by a similar
state program).
--An averaging, banking, and trading (ABT) program. From 2007-2010
refiners could generate benzene credits by taking early steps to reduce
gasoline benzene levels. Beginning in 2011 and continuing indefinitely,
refiners could generate credits by producing gasoline with benzene
levels below the 0.62% average standard. Refiners could apply the
credits towards company compliance, ``bank'' the credits for later use,
or transfer (``trade'') them to other refiners nationwide (outside of
California) under the proposed program. Under this program, refiners
could use credits to achieve compliance with the benzene content
standard, regardless of their actual gasoline benzene levels.\225\
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\225\ However, the per-gallon benzene cap (1.3 vol%) in the RFG
program would continue to apply separately.
---------------------------------------------------------------------------
--Hardship provisions. Refiners approved as ``small refiners'' would
have access to special temporary relief provisions. In addition, any
refiner facing extreme unforeseen circumstances or extreme hardship
circumstances could apply for similar temporary relief.
C. Development of the Proposed Gasoline Benzene Standard
EPA believes that benzene control is by far the most effective
fuel-based means of achieving MSAT emissions control, as described in
this section. There are other options that can target individual MSATs
or reduce overall VOCs and thereby reduce MSATs as well. We have
evaluated these other options, as discussed below, and our analysis
indicates that the potential MSAT reductions would be considerably
smaller and more expensive.
1. Why Are We Focusing on Controlling Benzene Emissions?
We considered controlling emissions of several MSATs through
changes to fuel parameters. There are only a limited number of MSATs
that are affected through fuel changes, each of which we discuss below.
For several reasons, we have concluded that the most effective and
appropriate means of reducing fuel-related MSATs is to reduce the
benzene emissions attributable to gasoline.
Benzene emissions can be reduced much more significantly through
fuel changes than can emissions of other MSATs. Relatively small
changes in gasoline can result in very significant reductions in
benzene emissions. This relative responsiveness of benzene emissions to
fuel controls (specifically to control of gasoline benzene content, as
discussed in the next section) is coupled with little negative impact
on other important characteristics of gasoline or refining processes. A
related and critical advantage of fuel control of benzene emissions, as
compared to fuel control of emissions of other MSATs as discussed
below, is that controlling benzene emissions does not significantly
increase emissions of other MSATs.\226\
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\226\ A key tool in evaluating the potential for fuel changes to
affect MSAT emissions is EPA's Complex Model. This model relates
changes in gasoline parameters with emissions of specific MSATs and
was developed for refiners and EPA to assess compliance with the
RFG, Anti-dumping, and MSAT1 programs. (See section V.D.1 above.)
Given a set of gasoline parameters, it estimates the emissions of an
average vehicle based on a large set of fuel effects data. We
further discuss the Complex Model, as well as other sources of
information the relationships between fuel changes and MSAT
emissions, in chapter 6 of the RIA.
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In determining an appropriate approach to fuel-related MSAT
control, a key consideration was octane value.
[[Page 15860]]
Among potential approaches to fuel-related MSAT emission reduction,
only benzene emission reduction can avoid major losses in octane value
and the negative cost and environmental consequences discussed below of
replacing that lost octane value. Finished gasoline must meet minimum
specifications for octane value; these specifications are tied to the
operational needs of motor vehicles. Thus, refiners must be keenly
aware of how any changes in gasoline production might reduce the octane
value of their fuel, what approaches to restore the octane value might
be available, and the costs in material and operational changes of any
selected approach.
There are a limited number of approaches refiners have at their
disposal to restore gasoline octane value lost through control of MSAT
emissions. These approaches vary in their economics and effectiveness,
and their availability may be limited by the specific configuration of
a given refinery. However, all methods of replacing octane value have
cost implications, and as shown in the next paragraph, air toxics
implications as well.
In the case of changes in gasoline production that are intended to
reduce MSAT emissions, it is also important to consider whether
restoring any lost octane might itself significantly increase other
MSAT emissions. Some methods of replacing octane value can increase
other MSATs. For example, increasing aromatics would increase benzene
emissions; adding MTBE would increase formaldehyde emissions; and
adding ethanol would increase acetaldehyde emissions. Given the very
large MSAT emission reduction associated with benzene control, these
impacts on other MSATs are relatively insignificant. However, in the
case of changes in other fuel qualities (e.g., aromatics control), the
relative impacts on other MSATs would be greater.
We encourage comment on our decision to propose a program that
directly controls gasoline benzene content, including comments on each
of the alternate approaches to MSAT control discussed in the following
paragraphs.
a. Other MSAT Emissions
As alternatives to the proposed program focusing on benzene
emission reductions, we considered other MSATs that are responsive to
fuel-based emission control. Each of these is discussed next.
Polycyclic Organic Matter, or POM, is composed of a number of
combustion products of gasoline. According to the Complex Model, POM
emissions are a function of exhaust VOC. Several fuel parameters
including volatility and sulfur content affect VOC emissions. As
discussed below, little data exists about the potential impacts of
changes in gasoline volatility and sulfur content on VOC, and thus POM,
emissions from new Tier 2-compliant vehicles. In any event, because POM
is only a tiny fraction of vehicle VOC emissions, we expect that
further changes in these fuel parameters would have only small effects
on POM. As a result, we are not proposing fuel controls to address POM
emissions in today's action.
Emissions of the compound 1,3-butadiene can be reduced by reducing
the olefin content of gasoline. However, olefin reduction yields
relatively small reductions in 1,3-butadiene and can increase VOC
emissions. In addition, olefin reduction significantly affects octane,
with the negative cost and MSAT emissions consequences of octane
replacement. We are thus not proposing to address 1,3-butadiene
emissions through fuel changes.
Emissions of the compound formaldehyde can only be effectively
reduced by reducing use of the octane enhancer methyl tertiary butyl
ether (MTBE). This is because formaldehyde increases significantly as a
combustion product when MTBE is added to gasoline. Formaldehyde also
increases to a lesser extent when ethanol is added to gasoline, as
described below. For a number of years, MTBE has been used as a cost-
effective way to meet mandated fuel oxygenate requirements and to boost
octane. In recent years, many states have banned the use of MTBE
because it has leaked from storage tanks and caused significant
groundwater contamination. More recently, in the wake of the removal of
the oxygenate requirement in the Energy Policy Act of 2005, many
refiners are taking action to remove MTBE from their gasoline as soon
as possible. As a result, MTBE use and the resulting formaldehyde
emissions are expected to continue to decline, and no additional
federal action appears warranted at this time.
The compound acetaldehyde is a combustion product of gasoline when
ethanol is added. Controlling acetaldehyde would require reductions in
the use of ethanol as a gasoline additive. However, the Energy Policy
Act of 2005 (section 1501) includes a renewable fuels program that will
increase use of ethanol in gasoline nationwide. That Act requires a
study of the Act's impacts on public health, air quality, and water
resources. We accordingly intend to defer further evaluation of
acetaldehyde emissions to the analyses associated with the Energy
Policy Act.
b. MSAT Emission Reductions Through Lowering Gasoline Volatility or
Sulfur Content
We also considered two approaches to fuel-related MSAT control that
would involve increasing the stringency of two existing emission
control programs. Both were originally promulgated primarily to address
ozone but also have the effect of reducing some MSAT emissions by
virtue of their control of VOC emissions. As explained in section V,
the Tier 2 program included the pairing of lower vehicle emissions
standards with large reductions in gasoline sulfur levels. The low
sulfur fuel helped enable development of more advanced catalytic
aftertreatment systems needed to meet the stringent tailpipe standards.
These actions will result in large reductions of VOC, NOX,
and air toxics emissions. In development of today's proposal, we
considered whether further reductions in fuel sulfur would bring
significant additional reductions in MSAT emissions.
The second program considered for additional stringency was the
gasoline volatility program, which was implemented in 1989 to address
evaporative VOC emissions from gasoline vehicles. Reducing the
volatility of gasoline can reduce evaporative VOC emissions as well as
exhaust emissions. Evaporative VOC emissions include benzene. As a
result, in developing this proposal we have considered whether further
reductions in gasoline volatility may be effective in further reducing
MSAT emissions.
In the cases of both further reductions in RVP and sulfur
reductions below the current 30 ppm standard, the available data is not
sufficient to conclude that additional control of either would be a
valuable MSAT emission reduction strategy. Historic data suggest that
reducing both RVP and sulfur content would reduce overall VOC emissions
from vehicles, in turn reducing both MSATs and ozone formation.
However, vehicles complying with the stringent new Tier 2 emission
standards have dramatically lower VOC emissions than earlier vehicles.
Furthermore, it is likely that VOC emissions for these vehicles would
react differently to RVP and sulfur control than older vehicles, as new
catalysts and control systems may have more or less sensitivity to
these variables. Since the dominant effect on MSAT emissions of
changing these fuel parameters is through their impact on total VOC
mass, it is not possible to
[[Page 15861]]
properly assess the impact of changes in these fuel parameters on MSAT
emissions without additional data. We have begun collecting data on
some of these new vehicles, but more work will be required before we
can draw conclusions about the effectiveness of these fuel controls in
reducing MSAT emissions. Therefore, we are not proposing additional
control of gasoline volatility or sulfur at this time, but will
continue to evaluate them for possible future action. We request
comments on these potential fuel controls as emission reduction
strategies, in particular for MSAT emissions, including any data that
does or does not support the effectiveness of such controls.
i. Gasoline Sulfur Content
In general, reducing gasoline sulfur levels increases the
effectiveness of the catalytic converter at destroying unburned fuel
and other VOCs in vehicle exhaust. Catalytic converters contain a
variety of physical and chemical structures that act as reaction sites
for conversion of raw exhaust gases into less harmful ones before they
are emitted into the atmosphere. Over time, sulfur compounds in the
exhaust gases interfere with these processes, making the catalyst less
effective under normal driving conditions.\227\ Since many air toxics
are part of the exhaust VOCs, reduction of fuel sulfur would be
expected to reduce air toxics emissions. As with the Tier 2 program,
however, desulfurizing gasoline further would reduce gasoline octane.
Most options for recovering this lost octane (e.g., increasing
aromatics) would result in some offsetting MSAT emissions increases.
---------------------------------------------------------------------------
\227\ For further discussion on sulfur effects on emissions, see
the Tier 2 Regulatory Impact Analysis, EPA 420-R-99-023.
---------------------------------------------------------------------------
EPA primarily uses two computer models for examining emissions
impacts when considering changes in fuel properties: the Complex Model
and the MOBILE model. The Complex Model (CM) was developed as a
compliance tool that refiners use to ensure their gasoline meets its
baseline requirements under the RFG, Anti-dumping, and MSAT1 programs.
Given a set of fuel parameters, it estimates the emissions of an
average vehicle using regression relationships drawn from a large set
of fuel effects data. The CM contains data on test fuels with sulfur
levels as low as 5 ppm, but is based on the Auto/Oil research programs
of the early 1990s, and reflects performance of vehicles on the road
during that time period. With a sulfur reduction from 30 ppm to 10 ppm
applied to average 2003 conventional gasoline, the CM projects a
decrease of approximately 1% for exhaust benzene, NOX and
CO.
MOBILE was developed to estimate aggregate emissions on a county,
state, or national scale. It uses a fuel effects dataset that includes
the CM dataset with some updates, along with driving data, to predict
emissions inventories of pollutants for a specified time period and
area of the country. MOBILE6.2 contains updates from a small number of
LEV and ULEV vehicles in addition to the CM dataset, but applies a
lower limit of 30 ppm to fuel sulfur content being modeled to avoid
extrapolation beyond the range of available emissions data.
Based primarily on the above models, the analyses done for the Tier
2 rulemaking suggested benzene emission reductions on the order of 9%
could be expected in 2020 as a result of the fuel sulfur reduction
expected from that program alone (the final Tier 2 program included low
sulfur gasoline as well as tightened vehicle standards).\228\ A recent
study done on vehicles meeting LEV, TLEV, and ULEV standards indicates
that sulfur reductions from 30 to 5 ppm may reduce NMHC by more than
10%, bringing similar reductions in air toxics.\229\ Additional
analyses done by EPA on sulfur reductions in this range suggest VOC
emission reductions on the order of 5% may be expected, with refining
costs estimated at about a half cent per gallon. Given these analyses
using available data, using sulfur reductions as air toxics control
alone would not be as cost-effective as other options in this proposal.
Further discussion of the feasibility and costs are available in
Chapters 6 and 9, respectively, of the RIA.
---------------------------------------------------------------------------
\228\ Tier 2 Regulatory Impact Analysis, EPA 420-R-99-023
\229\ AAM-Honda fuel effects study, 2000
---------------------------------------------------------------------------
Since our models do not reflect the significant improvements in
emissions control technology over the past decade, more fuel effects
studies are necessary on newest-technology vehicles before going
forward with sulfur control. A small cooperative test program is
currently underway between EPA and the Alliance of Automobile
Manufacturers to evaluate the effects of reducing sulfur below 10 ppm
on Tier 2 Bin 5 compliant vehicles.
In addition to potential air toxics reductions from adjustment of
gasoline sulfur to 10 ppm, reducing sulfur may also provide significant
VOC and NOX emission reductions. These emission reductions
may be important for states in complying with the National Ambient Air
Quality Standards (NAAQS) for ozone. Since the implementation of the
RFG program, several states and localities have made their own unique
fuel property requirements in an effort to further improve air
quality.\230\ As a result, by summer 2004 the gasoline distribution and
marketing system in the U.S. had to differentiate between more than 12
different fuel specifications, when storing and shipping fuels between
refineries, pipelines, terminals, and retail locations. These unique
fuels decrease nationwide fungibility of gasoline, which can lead to
local supply problems and amplify price
fluctuations.231, 232 In addition to the existing state fuel
programs, we are aware of a number of other states considering new
programs (although in the context of the recently enacted Energy Policy
Act it is unclear what will occur). While the timeline for state action
on new fuel formulations could be prior to any nationwide ultra-low
sulfur standard, implementation of such a standard could help diminish
issues related to small-market fuel programs in the long term.
---------------------------------------------------------------------------
\230\ These changes have focused almost exclusively on
additional RVP control, with just one program also controlling
sulfur to 30 ppm earlier than required by EPA.
\231\ EPA, Study of Unique Gasoline Fuel Blends (``Boutique
Fuels''), Effects on Fuel Supply and Distribution and Potential
Improvements, EPA420-P-01-004
\232\ GAO, Special Gasoline Blends Reduce Emissions and Improve
Air Quality, but Complicate Supply and Contribute to Higher Prices,
GAO-05-421
---------------------------------------------------------------------------
From the perspective of gasoline production, reducing sulfur to
ultra-low levels does not happen completely independently of other fuel
parameters. The emissions benefits of further sulfur reduction gained
in vehicle aftertreatment may be offset by unintended changes in other
gasoline properties. The refining process modifications required to
bring sulfur to ultra-low levels begin to have a stronger effect on
other components of gasoline, such as olefins (the effect of which is
discussed in the previous section). These impacts must be further
evaluated before moving forward with a proposal of additional sulfur
reductions for the purpose of air toxics reduction. These issues are
also discussed in more detail in Chapter 6 of the RIA.
Refiners with whom we have met have generally expressed disapproval
of further sulfur control. The Tier 2 gasoline sulfur program requires
refiners to meet an average standard of 30 ppm. In response many have
invested in and brought online desulfurization units, which would not
have the capacity to
[[Page 15862]]
reach a new, lower standard of 10 ppm in many cases. Modifications
would have to be made to units that have recently been installed to
comply with the current gasoline sulfur requirements. In some cases
these units might have to be replaced with new units. EPA requests
comments on the magnitude of the impact of a new, lower sulfur
standard, including the potential effect on refiners that have recently
installed desulfurization units.
On the automotive side, sulfur reduction may encourage further
development of lean-burn or direct-injection gasoline technology.
Leaner combustion of gasoline results in greater fuel economy and less
VOC and carbon dioxide emissions, but generally produces more engine-
out nitrogen oxides. Reducing fuel sulfur to 10 ppm would improve
feasibility and reduce cost of next-generation aftertreatment designed
to control these higher levels of nitrogen oxides. EPA will continue to
evaluate further gasoline sulfur reductions, and seeks comment on it,
especially with data supporting or opposing such action.
ii. Gasoline Vapor Pressure
According to the Complex Model and the MOBILE model, reducing fuel
vapor pressure reduces evaporative as well as exhaust VOC emissions.
Reducing VOC emissions in turn reduces MSAT emissions. A portion of
this MSAT emission decrease through VOC control would likely be offset
through an increase in the relative concentration of MSAT emissions. As
volatility is decreased, non-aromatic compounds are removed from the
gasoline, increasing the concentration of aromatics. Furthermore, these
non-aromatic compounds are higher in octane, which would have to be
offset--perhaps with still further increases in aromatics. Such
increases in aromatics would lead to an increase in the relative
concentration of benzene in VOC emissions. However, since changing
vapor pressure has an effect on evaporative emissions, reducing vapor
pressure can also reduce evaporative benzene from stationary sources
related to gasoline distribution and marketing. Moreover, reducing
overall VOC emissions reduces ground level ozone in urban areas, which
itself has a significant impact on health and welfare.
Currently, in reformulated gasoline (RFG) areas, fuel is limited to
roughly 7.0 psi Reid vapor pressure (RVP) in the summer season in order
to meet the VOC performance standard. Additional vapor pressure
controls considered for this proposal would regulate RVP levels to 7.0
or 7.8 in some conventional gasoline (CG) ozone nonattainment areas,
resulting in an impacted volume of gasoline equal to about 50% of that
of current federal RFG. Further details of these analyses are covered
in Chapter 6 of the RIA.
As with the sulfur analyses above, EPA also uses the Complex Model
and MOBILE to estimate emissions impacts of changes in gasoline vapor
pressure. In terms of the fuel parameter itself, this process is
somewhat simpler than modeling sulfur effects since the range of vapor
pressures useful in conventional vehicles has been well-defined for a
number of years and is not expected to change. However, parallel to the
arguments made above for sulfur, data on the effects of RVP changes on
air toxics in these models is dated and does not represent newest
technology. Since our models do not reflect improvements in emissions
control technology for the Tier 2 program, more fuel effects studies
must be carried out before making decisions on further gasoline vapor
pressure controls. The cooperative test program between EPA and the
Alliance of Automobile Manufacturers described above is also examining
some of the effects of changes in RVP.
Looking beyond emissions benefits, more stringent national vapor
pressure standards could also help avoid additional small market
(``boutique'') fuels. Several states and localities have adopted their
own seasonal requirements for vapor pressure in an effort to improve
air quality, contributing to constraints on gasoline supply and
potential for price volatility.233 234
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\233\ EPA, Study of Unique Gasoline Fuel Blends (``Boutique
Fuels''), Effects on Fuel Supply and Distribution and Potential
Improvement, EPA420-P-01-004.
\234\ GAO, Special Gasoline Blends Reduce Emissions and Improve
Air Quality, but Complicate Supply and Contribute to Higher Prices,
GAO-05-421.
---------------------------------------------------------------------------
Feedback from refiners on further volatility control has
highlighted concerns with the summer-winter butane balance and
resulting potentially adverse supply implications. Currently, refiners
who produce large quantities of RFG must remove a significant amount of
the light-end components from their fuel in the summer to meet the
vapor pressure specifications. These light components, primarily
butanes, are often stored and then blended back into gasoline in the
winter when higher fuel vapor pressures are needed for drivability
reasons. Several refiners have indicated that a new rule adding a
number of reduced RVP areas would cause the amount of butanes removed
in summer to exceed what is useable in winter, resulting in a net loss
of volume from the annual pool and a need to make up supply at
additional expense. EPA will continue to evaluate further gasoline
volatility reductions, and seeks comment on it, especially with data
supporting or opposing such action.
c. Toxics Performance Standard
While we are not proposing it, we considered and are seeking
comment on the merits of expressing the standard as an air toxics
performance standard rather than as a benzene content standard. Such a
standard would be analogous to the current MSAT1 standard, but more
stringent and with an ABT component. In theory, a toxics performance
standard could provide broader environmental benefits by addressing
other toxics in addition to benzene. However, because controlling
benzene is more cost-effective than controlling emissions of other
MSATs, refiners are unlikely to reduce emissions of other MSATs whether
or not the standard is in the form of a toxics performance standard or
a benzene content standard. Setting a toxics performance standard at an
appropriate level also requires us to predict future changes in fuel
properties in addition to benzene, and to be able to establish as
precisely as possible the effects of those fuel properties on emissions
of several MSATs. In addition, a toxics emission performance standard
is more complex to implement and enforce than a benzene content
standard. For all of these reasons, as discussed more fully below, we
believe a benzene content standard offers more certain environmental
results and less complexity. However, we seek comment on the overall
merits of an air toxics performance standard, including comments
specifically on the tradeoff between the complexity of complying with a
performance standard and the additional environmental benefits it could
provide.
Based on our analysis for this proposal, fuel benzene control is by
far the most effective and cost-effective means of achieving MSAT
emission reductions. This is consistent with our experience with the
MSAT1 and other air toxics control programs, which have shown that even
when refiners have the flexibility to choose among different fuel
changes to achieve MSAT control, reduction in benzene content is the
predominant choice. Only when other fuel changes that impact MSAT
emission performance are mandated (e.g., sulfur control, oxygenate use)
have refiners made fuel changes other than benzene content to control
MSAT
[[Page 15863]]
emissions. As a result, even if we were to express the proposed
standard as an air toxics performance standard rather than a benzene
content standard, we would expect the outcome to be the same--benzene
content control with corresponding benzene emission reductions and no
changes in other MSAT emissions. Our analysis of the feasibility and
cost of the program would be identical as well. If future fuel
parameters are significantly different than we have projected in this
analysis such that emissions of other MSATs decrease, then a toxic
performance standard would result in less benzene control than would be
achieved by the benzene content standard we propose today, with a
corresponding overall reduction in cost. If future fuel parameters are
significantly different such that emissions of other MSATs increase,
then refiners would need to reduce benzene content to levels that are
not feasible considering cost, but overall toxics performance would be
maintained.
If we were to set an air toxics performance standard, the accuracy
of the model used in estimating the real world effects of the many
different fuel parameters on MSAT emissions also becomes of critical
importance. To the extent fuel changes are projected to result in air
toxics emission reductions that are not in fact borne out in-use, then
the standard will have less benefit. There was a great deal of work
done in the early 1990's to develop the Complex Model for the
reformulated gasoline program. It estimates VOC, NOX, and
certain MSAT emissions (benzene, 1,3-butadiene, formaldehyde,
acetaldehyde, and POM) as a function of eight fuel properties (RVP,
oxygen, aromatics, benzene, olefins, sulfur, E200, and E300) for 1990
technology vehicles. However, a similar set of comprehensive data does
not yet exist for new Tier 2 vehicles. Some of the fuel effects that
were found to be statistically significant in the Complex Model may not
be significant for Tier 2 vehicles (e.g., distillation properties).
Others that impacted MSAT emissions primarily through their impact on
VOC emissions may be of much less importance, due to the much lower VOC
emissions of Tier 2 vehicles.\235\ To the extent that the Complex Model
gives air toxics credit for fuel changes that are later found to be
much smaller or not valid at all, a toxics performance standard could
result in less fuel benzene control and less in-use MSAT control. Of
all the fuel changes from past modeling, we would have the greatest
confidence that the benzene relationships are unlikely to change
significantly. This is due to the direct relationship between benzene
fuel content and benzene evaporative and exhaust emissions, and due to
the magnitude of these impacts. Thus, we would have the greatest
confidence that the MSAT emission reductions projected from a fuel
benzene content standard will be realized in-use.
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\235\ This is one reason why the Energy Policy Act of 2005
requires EPA to create an updated gasoline emissions model by 2009.
---------------------------------------------------------------------------
In addition, if we were to set an air toxics performance standard,
it would be important to have a clear understanding of the changes in
fuel properties anticipated in the future independent of today's
proposal. Significant changes in the composition of gasoline are
anticipated over the next several years as a result of the Energy
Policy Act of 2005 (EPAct). MTBE is being removed from gasoline,
ethanol use is increasing dramatically, and the oxygenate mandate for
RFG is being eliminated. To the extent that these changes would result
in reductions in modeled MSAT emission performance automatically, then
refiners could comply with an air toxics performance standard with less
benzene control than would be achieved under today's proposed benzene
standard, and with lower overall costs. Conversely, to the extent that
these changes would result in increases in modeled MSAT emission
performance, an air toxics performance standard would require refiners
to take additional measures to maintain overall MSAT performance, but
these measures may not be cost-effective.
Although a toxics performance standard could theoretically give
refiners more flexibility than a program focusing only on benzene
emissions, we do not believe that such flexibility would be meaningful
in actual practice. As discussed above, in order to comply with a new
total MSAT standard, we expect that refiners would rely almost
exclusively on benzene control. However, if their emission performance
for other MSATs changed in the future (due to such factors as changes
in oxygenate use, octane needs, or crude oil quality), refiners could
find themselves unable to maintain overall MSAT performance using cost-
effective controls.
For all these reasons, we are not proposing to address fuel-related
MSAT emissions with a toxics performance standard, but we seek comment
on this option.\236\ We also seek comment on the merits of applying an
air toxics performance standard in addition to a fuel benzene content
standard, and how such a dual standard could be implemented. From a
theoretical standpoint, this dual standard might serve as a backstop to
ensure overall toxics performance is maintained. However, it is not
clear how such an approach could be realistically implemented,
especially in the context of ABT programs that apply to both.
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\236\ As explained further in section VII.C.5 below, based on
the use of the currently available models, the proposed rule would
result in greater overall reduction of air toxics from all gasoline
than the current MSAT 1 program, and (consistent with section
1504(b)(2) of the EPact) greater overall reductions of air toxics
from reformulated gasoline than would be obtained under amended
section 211(k)(1)(B) as well.
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d. Diesel Fuel Changes
We are also not proposing today to reduce MSATs by changing diesel
fuel. The existing major diesel fuel sulfur programs being implemented
in the next few years for highway and nonroad diesel fuel will have a
very large impact on reducing MSAT emissions `` specifically diesel
particulate matter and exhaust organic gases. We have found in the on-
highway diesel engine rulemaking that these are the greatest reductions
achievable and reiterate that finding here. (See also section V.D.1.f
above.) We are not aware of other changes to diesel fuel that could
have a significant effect on emissions of any other MSATs. We welcome
comment on our decision to focus this proposed program exclusively on
changes to gasoline.
2. Why Are We Proposing To Control Benzene Emissions By Controlling
Gasoline Benzene Content?
In the previous section, we describe how we decided to focus
today's proposed fuel program on gasoline benzene emissions. This
section describes our decision to propose to reduce benzene emissions
through a gasoline benzene content standard. We also describe our
consideration of two other potential approaches to reducing benzene
emissions, both of which would indirectly reduce gasoline benzene
content: a standard to control the gasoline content of all aromatic
compounds; and a standard to control benzene emissions.
a. Benzene Content Standard
For several reasons we have decided that a benzene content standard
would be the most cost-effective and most certain way to reduce
gasoline benzene emissions (and thereby MSAT emissions in general).
First, a small change in gasoline benzene content results in large
reductions in benzene emissions `` benzene typically
[[Page 15864]]
represents around 1 percent of gasoline, but this contributes about 25
percent of benzene exhaust and evaporative emissions.\237\ Second, we
have high confidence in the benzene emission reductions that would
result from fuel benzene control. Historical data across a range of
vehicles and engine types continues to support the relationship between
fuel benzene content and benzene emissions. Even if Tier 2 vehicles
react differently, the relationship is unlikely to change
significantly. Third, because a relatively small change in gasoline
properties is needed to achieve the desired result, reducing benzene
content does not have a large impact on octane value. Benzene itself
does contribute to the octane value of gasoline, but the small loss of
octane from reducing benzene content is much less than the octane loss
from reducing other aromatics for the same benzene emission effect, as
discussed below, and the consequences of refiners having to replace
that octane value are also much less. (This is why, as noted earlier,
we anticipate that refiners would seek to comply with any toxics
standard by reducing benzene levels in any case.) Fourth, we believe
that a direct benzene content standard would best ensure real benzene
emission reductions, including both exhaust and evaporative benzene
emissions. We discuss this conclusion below, in the context of the
potential alternative of a benzene emission standard.
---------------------------------------------------------------------------
\237\ Based on the Complex Model.
---------------------------------------------------------------------------
b. Gasoline Aromatics Content Standard
Because benzene emissions are formed from benzene and other
aromatics that are present in gasoline, we considered a standard that
would limit the aromatics content of gasoline. However, we believe that
reducing benzene emissions through a more general reduction in gasoline
aromatics content would be much less cost-effective than direct benzene
reduction. Non-benzene aromatics account for on average about 30
percent of gasoline (typically ranging between about 20 percent and 40
percent), and this fraction contributes about 30 percent of benzene
emissions. In contrast, benzene only makes up about 1 percent of
gasoline but is responsible for about 25 percent of benzene emissions.
The remaining benzene emissions are formed from other compounds. Based
on the Complex Model, it would require about a 20 percent reduction in
non-benzene aromatics to achieve the same benzene emission reductions
as the proposed benzene content standard. As we discussed earlier, a
major consequence of removing a significant amount of the aromatics in
gasoline is the need to replace the large loss in octane value. As a
result, it is much more costly for refiners to reduce benzene emissions
through aromatics control than through benzene control. We have not
evaluated the cost of aromatics control recently, but when we did so
for the RFG rule in the early 1990s, the cost was about 5 times more to
achieve the same benzene reduction through aromatics control than
through benzene control.\238\ In recent years a variety of factors have
reduced the use of MTBE as an octane booster; we expect that this trend
will raise the relative cost of aromatics control even further.
---------------------------------------------------------------------------
\238\ Final Regulatory Impact Analysis for Reformulated
Gasoline, AEPA420-R-93-017, December 1993.
---------------------------------------------------------------------------
In addition, aromatics reductions would have to be offset with
other high-octane compounds, such as ethanol and ethers (e.g., ETBE and
MTBE). Increasing other high-octane compounds tends to significantly
increase other air toxics emissions (like acetaldehyde or
formaldehyde). Consequently, the benzene emission reductions would be
substantially offset by increases in other toxics. For these reasons,
aromatics control has historically only been cost-effective for
refiners when other requirements are placed on them, such as state or
federal oxygenate mandates that also serve to boost octane value. For
this same reason, we anticipate that further aromatics reductions will
occur as a result of the near doubling of the use of ethanol in
gasoline due to the renewable fuels standard contained in the EPAct.
Given a mandate for ethanol use and the cost associated with it,
refiners can reduce their refining costs by further reducing aromatics.
Aromatics control would also affect other recent fuel control
programs. For example, many refineries depend on the reforming process
that produces aromatics to also supply much or all of the hydrogen
needed for gasoline and diesel desulfurization processes. Reducing
aromatics thus would indirectly reduce hydrogen supply, which would
then likely require refiners to either purchase hydrogen or build
hydrogen production facilities.
At the same time, although it would not be constrained, we do not
believe that in the absence of aromatics control, refiners would be
likely to increase gasoline aromatics content in the future. Aromatics
are a relatively valuable gasoline component, and refiners are
generally careful not to make changes that would increase aromatics
content more than is needed for octane purposes. In addition, as
mentioned previously, the Renewable Fuel Standard that will be
promulgated under the new Energy Policy Act will, by boosting ethanol
use, increase the octane of the gasoline pool. We expect that this, in
turn, will prompt refiners to reduce their use of aromatics for octane
enhancement. Also, higher gasoline prices recently have reduced the
demand for premium grade gasoline, which generally has higher aromatics
levels. To the extent that this trend continues, we expect that it will
tend to further reduce the levels of aromatics in the overall gasoline
pool.
For all of these reasons, we believe that reducing benzene
emissions through a benzene content standard would be much superior to
doing so through an aromatics content standard. However, there may be
other benefits associated with aromatics control in addition to benzene
emissions. EPA is working to improve its understanding of the effect of
mobile source emissions on ambient PM, especially secondary PM. For
example, there is limited data that suggest that aromatic compounds
(toluene, xylene, and benzene) react photochemically in the atmosphere
to form secondary particulate matter (in the form of secondary organic
aerosol (SOA)), although our current modeling tools do not fully
reflect this. One caveat regarding this work is that a large number of
gaseous hydrocarbons emitted into the atmosphere having the potential
to form SOA have not yet been studied in this way. It is possible that
hydrocarbons which have not yet been studied produce some of the SOA
species which are being used as tracers for other gaseous hydrocarbons.
This means that the current interpretation of the available studies may
over-estimate the amount of SOA formation in the atmosphere. We seek
comment on the potential benefits, costs, and other implications of
aromatics control for consideration in the future.
c. Benzene Emission Standard
In addition to the benzene or aromatics fuel content standards
discussed above, we have considered reducing benzene emissions through
a benzene emission standard. The primary argument for such an approach
is that it would focus on the environmental outcome we are interested
in `` reduced benzene emissions `` while providing refiners some
flexibility in how that goal was met.
In order to fully discuss this option, it is useful to clarify how
such a
[[Page 15865]]
benzene emission standard would be implemented. Instead of directly
measuring gasoline content to determine compliance, as would be the
case with a benzene (or aromatics) content standard, compliance would
be determined using EPA's Complex Model or an updated version of it.
Several parameters of a refiner's gasoline (including benzene and
aromatics content) would be used as inputs into the model. Based on
these and other assumed properties of the gasoline, the model would
estimate the expected level of benzene emissions from that gasoline
formulation.
As compared to a program based on the direct measurement of benzene
content in gasoline, we believe that one relying on modeled estimates
of benzene emissions would be difficult to set today. As with the
toxics performance standard we considered above, gasoline parameters
and their effects on MSAT emissions will be changing in the future due
to the Energy Policy Act, changes in crude oil supplies, and perhaps
other unknown factors. In addition, the effects of fuel changes on MSAT
emissions from the new Tier 2 vehicles now entering the light-duty
fleet are poorly represented in our modeling. Thus, it would be
difficult to accurately predict future gasoline parameters and set an
appropriate benzene emission standard that ensured the greatest
emission reduction achievable, especially a standard that could remain
stable for a number of years. As benzene content has been and is sure
to remain by far the most important fuel parameter in estimating
benzene emissions, a benzene content standard provides greater
assurance of actual benzene emission reduction in-use.
Even if it were practical to set a long-term benzene emission
standard, such an approach would be problematic for other reasons. As
we have stated, the only significant option for reducing benzene
emissions other than reducing benzene content is reducing aromatics
content. Since we do not believe that requiring control of gasoline
aromatics is appropriate at this time, a benzene emission standard
would not result in appreciably different emission reductions than
would result from a benzene content standard. However, given that
aromatics control is a less effective means of reducing benzene
emissions and has a more disruptive effect on octane values (as just
discussed), requiring more aromatics control could dramatically
increase the cost of compliance. Finally, although a benzene emission
standard might be assumed to offer additional flexibility to refiners,
we do not believe that such flexibility would actually exist. Faced
with a dependence on aromatics to meet octane requirements, and in some
cases to provide hydrogen supply for desulfurization of gasoline and
diesel fuel, we believe that refiners would choose benzene content
reduction over aromatics reductions even when they theoretically had
the choice to do otherwise. Experience with the MSAT1 emissions
performance standard has confirmed this. However, as mentioned
previously, gasoline parameters do change, octane requirements can
decrease, ethanol will supply additional octane, and therefore aromatic
reductions may occur in the future regardless. Were this to occur, a
benzene emission standard set today could allow benzene content to
increase in the future. Given the additional complexity and uncertainty
associated with a benzene emission standard, we have therefore elected
to propose a benzene content standard exclusively. We request comment
on this approach and on a benzene emission standard.
3. How Did We Select the Level of the Proposed Gasoline Benzene Content
Standard?
a. Current Gasoline Benzene Levels
In selecting an appropriate level for the proposed benzene content
standard, we began by evaluating the current status of the industry
regarding gasoline benzene. Benzene content varies widely among
refineries, depending on such factors as refinery configuration and
proximity to benzene markets. The national average benzene level was
1.6 vol% in 1990. Due to the 0.95 vol% requirement of the 1995 RFG
program, the introduction of gasoline oxygenate requirements, and other
factors, benzene levels have since declined. By 2003, RFG averaged 0.62
vol% benzene. (See section V.D.1 above.)
Benzene levels have also declined for CG over the same period, to
an average of 1.14 vol%. This is in part because when faced with
investing in new processes to comply with the RFG benzene standard,
some refiners found it economical to install more benzene extraction
capacity than was needed to meet the standard. As a result, in many
cases, these refiners have also controlled benzene from CG.
b. The Need for an Average Benzene Standard
Even before considering the level of the benzene content standard,
we first needed to consider the standard's potential form. A standard
for this purpose could be expressed as a per-gallon benzene limit,
which would ensure that no gasoline exceeded a specified benzene level.
In contrast, a benzene content standard could be expressed as a
flexible average level, allowing some of the existing variability in
current benzene levels to remain while reducing overall benzene levels.
For several reasons, it became clear that an average standard was the
most appropriate for this program.
As mentioned above, there is a great diversity in the benzene
content of gasoline currently produced at refineries across the
country. In 2003, the annual average benzene content of refineries
ranged nationally from under 0.5 vol% to above 3.5 vol%. This variation
among refineries is also reflected in large regional differences in
average gasoline benzene content, as illustrated below (Tables VII.C-2
and VII.F-1).
In addition to average benzene levels varying widely across
refineries and regions, per-gallon benzene levels for individual
batches produced by a refinery also vary dramatically depending on the
crude oil supply and the refinery streams used to produce a particular
batch. This variation occurs as a result of a wide range of day-to-day
decisions necessary in producing marketable gasoline within a refinery
on a continuous basis. We reviewed actual batch data for a typical
refinery producing both RFG and CG with an average benzene content of
1.6 vol% for all its gasoline, and batch benzene levels ranged from
under 0.1 to 3.0 vol% for CG. The range for RFG is typically narrower
due to the existing 1.3 vol% per gallon cap, but still shows
significant batch to batch fluctuations. Batches that refiners produce
with benzene higher than 1.3 vol% are marketed as CG.
We considered controlling benzene emissions with a fixed, per-
gallon benzene content standard to be met at all refineries. By capping
gasoline benzene content in this way, the program would ensure that all
gasoline nationwide would have benzene levels below the selected upper
limit. However, as we developed the rule, it became clear that with the
large variation in benzene levels among refineries and regions
(reflecting the variation in the economics of reducing benzene), a per-
gallon standard would have to be so high (to account for maximum,
legitimate potential variability) as to leave most refineries with
little or no need to reduce benzene. Moreover, the burden of the
national control program would fall almost entirely on the refineries
where the challenges of control would be greatest, and where the most
lead time would be
[[Page 15866]]
required for compliance. With many refineries able to comply without
making any changes, we do not believe such a program would represent
the greatest reduction feasible, as the Clean Air Act requires.
The typical fluctuations in benzene content among batches at
individual refineries, as discussed above, also indicate the need for
refiners to have a degree of flexibility in producing gasoline, as
would be provided by an average benzene standard. Restrictions on day-
to-day fluctuations would not significantly affect average benzene
levels, but would certainly increase costs as refiners invested in
avoiding occasionally higher benzene batches. We believe that allowing
refiners to average batches with fluctuating benzene over a year's
time, as we propose, would result in a more cost-effective program.
Most importantly, it is clear that with the incorporation of a
carefully-designed benzene credit averaging, banking, and trading (ABT)
program, a more stringent benzene standard would be feasible, and
implementation could occur earlier. Thus, we are proposing a 0.62 vol%
annual average standard to begin in 2011. Under the proposed ABT
program, refiners could generate early credits by making early
reduction efforts prior to 2011. Refiners would have an incentive to do
so, because the credits generated could be used to postpone more
expensive final investments in benzene control technology. In this way,
the ABT program would allow the economic burden of the benzene standard
to be more efficiently distributed among refiners and over time. The
proposed ABT program would result in lower benzene levels in all areas
of the country compared to today's levels, as described in more detail
below in section VII.D.
c. Potential Levels for the Average Benzene Standard
We evaluated a range of potential standards on a national refinery
annual average basis from 0.52 to 0.95 vol% benzene.\239\ Our refinery-
by-refinery model incorporates data on individual refineries whenever
possible and estimates the likely technological approaches that
refiners would choose for each refinery to comply with each potential
standard at the least cost. The model chooses among several
technological options that are the most common and effective methods
available to refiners to reduce gasoline benzene content. (Section
VII.F below and Chapter 6 of the RIA have more detailed discussions of
benzene reduction technologies).
---------------------------------------------------------------------------
\239\ For this evaluation we used both refinery linear
programming (LP) models and a refinery-by-refinery model developed
specifically for this rule.
---------------------------------------------------------------------------
All of the methods that we considered focus on reducing benzene
content in the reformate stream, which is the product of the reformer
unit. The role of the reformer unit is to increase gasoline octane,
which it does by generating aromatic compounds from simpler
hydrocarbons. Benzene is one of the aromatic compounds produced by the
reformer. Reformate accounts for 30-40% of gasoline volume and can
contain as much as 12% benzene. As a result, reformate contributes the
majority of the total benzene content of gasoline. For these reasons,
treatment of reformate is usually the most effective and economical
means of reducing benzene content. Several proven and commercially
available technologies exist for reducing benzene creation in the
reformer and removing it from the reformate product.
The least stringent standard we evaluated, a national average of
0.95 vol% benzene, would not require any changes at most refineries.
For the refineries where action would be needed, we project that most
could be brought into compliance by reducing creation of benzene in the
reformer using the simplest and least costly of the technology options
evaluated. We do not believe that a standard at this level would meet
the statutory requirements of section 202(l) of the Clean Air Act to
achieve the greatest reductions achievable considering cost and other
factors since, as discussed below, greater reductions are feasible at
reasonable cost, and without adverse energy or safety implications.
As the most stringent case, we evaluated a national average benzene
content standard of 0.52 vol%. Our analysis indicates that a standard
at this level would require all refiners to invest in the most
effective technologies used today that remove the benzene from their
reformate product streams (benzene saturation and benzene extraction,
as discussed below). If the ABT program were fully utilized (all
credits generated were used), we believe all refiners might comply with
this average standard. Because of the almost universal need for
refineries to use the most expensive reformate-based benzene control
technologies, we believe a standard of 0.52 vol% would be very
challenging economically for many refineries, and we believe that such
a standard would not be achievable taking costs into consideration, as
we are required to do under section 202(l). In addition, if, as appears
likely, ``perfect'' credit trading did not occur, some refiners would
have to use additional, more extreme approaches that would be even more
costly and would require more difficult compromises in the operation of
the refineries. (We discuss these technological and operational
approaches to benzene reduction in more detail in section VII.F below
and in Chapter 6 of the RIA.)
In 2003, the average benzene level in RFG was 0.62 vol%.\240\ We
believe an annual average benzene standard of 0.62 vol% applied to all
gasoline (both CG and RFG) would be feasible considering cost and other
factors. Furthermore, implementing an average benzene standard of 0.62
vol% would achieve several other important program goals. At this
level, the same benzene standard could be applied to both RFG and CG
nationwide, and our analysis shows that the RFG benzene reductions
already achieved by the industry to date would not be lost. We expect
that refiners currently producing RFG with benzene levels below 0.62
vol% would continue to be committed to producing low-benzene gasoline
based on prior investment in benzene extraction equipment or ABT credit
incentives. Additionally, as discussed below in VII.C.5, a gasoline
benzene standard of 0.62 vol% would achieve sufficient mobile source
air toxic reductions allowing this program to supersede the additional
MSAT requirements under EPAct. Finally, an average benzene standard
applied to both CG and RFG, would allow for a uniform nationwide ABT
program providing additional flexibility and reduced compliance costs
to refiners, resulting in the greatest achievable reductions within the
meaning of section 202(l).
---------------------------------------------------------------------------
\240\ Volume-weighted average benzene level based on January 1,
2003 to December 31, 2004 RFG batch reports.
---------------------------------------------------------------------------
At a national average standard of 0.62 vol%, we estimate that a
number of refiners would produce gasoline with significantly lower fuel
benzene levels, creating enough benzene credits to allow refiners in
less economically favorable positions to purchase these credits on an
on-going basis and use them for compliance purposes. We project that
further reductions would occur not only in CG, but also in RFG, despite
the fact that RFG is already averaging 0.62 vol%. As discussed in
section IX below and in Chapter 9 of the RIA, as the stringency is
pushed below 0.62 vol%, the overall program costs would begin to rise
more steeply. This is because in meeting a lower average standard,
there would be fewer
[[Page 15867]]
refineries able to comply at low cost, resulting in fewer credits being
generated. This in turn would require more investment among refiners
with higher costs of compliance.
We also considered a program that would apply separate benzene
content standards to RFG and CG. In the context of any nationwide ABT
program that allowed trading across both RFG and CG, separate standards
for these two gasoline pools would not be fundamentally different from
the proposed unified standard. The only impact would be to somewhat
change which refiners generated credits and which used credits, and to
what degree. For separate RFG and CG standards to have a meaningful
impact in comparison to today's proposed program, separate trading
programs for each of the two gasoline pools would be required. Our
modeling shows that without the credits generated by RFG producers in a
nationwide trading program, it would not be possible to set as
stringent a standard for CG. The higher-benzene refineries that would
most need credits to meet a stringent average standard are a subset of
refineries that produce CG. As a result, in a program with separate RFG
and CG pools, we would expect to set a slightly more stringent standard
for RFG alone, but we would need to set a substantially relaxed
standard for CG. The net result would be, at best, the same nationwide
average benzene reductions in the RFG and CG pools that would be
expected under a unified standard. However, there would be a clear risk
that the reduced generation of credits by lower-cost refineries would
lead to either a significant increase in the cost of the program
(because higher-cost refineries would need to make refinery changes
earlier) or the potential for fewer reductions through the process of
setting the levels for the separate CG and RFG standards. Conversely,
with a unified standard and nationwide ABT, we believe that the program
would achieve the maximum economical reduction in all areas and greater
overall benzene reduction over the CG and RFG pools.
In addition, we considered a somewhat less stringent national
average standard than the proposed 0.62 vol% (e.g., 0.65 or 0.70 vol%).
Such standards would still achieve significant benzene emission
reductions. However, we are concerned that a less stringent standard
would not satisfy our statutory obligation for the most stringent
standard feasible considering cost and other factors. Furthermore, such
standards would not allow us to accomplish several important
programmatic objectives. Given that the average benzene content of RFG
in 2003 was already 0.62 vol%, such higher standards would not provide
the certainty that the air toxics performance of RFG would decline in
the future. This would then trigger the provisions in the 2005 EPAct to
adjust the MSAT1 baseline for RFG. The only way of avoiding this
situation would be to maintain separate standards for RFG and CG where
the RFG standard was still more stringent than 0.62 vol% and credits
could not be used from CG to comply. As discussed above, having
separate standards with separate ABT programs raises additional cost
and feasibility issues.
For all of the above reasons, we believe that a refinery annual
average benzene content standard of 0.62 vol% applying to all gasoline
nationwide (excluding California), in conjunction with an
appropriately-designed ABT system, would maximize benzene emission
reductions considering cost and other factors.
Section 202(l)(2) also requires that we consider lead time in
determining the greatest reductions achievable. We are proposing that
the standard of 0.62 vol% become effective on January 1, 2011. Because
the final rule will be completed in early 2007, this would allow about
4 years for refiners to plan and execute the necessary capital projects
and operational changes needed to meet the program requirements. We
discuss our assessment of necessary lead time in section VII.F below.
We believe that this proposed level for the standard, the proposed ABT
program, and the proposed implementation date together meet the
statutory requirement that the program results in the greatest emission
reduction achievable considering costs and other factors.
We encourage comment on our selection of this level for the
standard, especially with data and analysis that support the comments.
d. Comparison of Other Benzene Regulatory Programs
In addition to the benzene content standard of the RFG program,
California and several countries have regulatory limits on the benzene
content of gasoline. Table VII.C-1 shows the basic provisions of each
of these programs.
Canada has limits similar to those covering U.S. RFG. In Canada,
producers may either comply with a 1.0 vol% flat limit or an averaging
standard of 0.95 vol%, with a per-gallon cap of 1.5 vol%. The European
Union regulates fuel to the same level in all its member countries,
currently a per-gallon cap of 1.0 vol%. Japan has the same limit as the
E.U., while South Korea will be moving from a cap of 1.5 to 1.0 vol% in
2006.
California is the only state that has implemented a benzene
standard, and it is similar to the standard we are proposing today.
California's average standard is 0.7 vol%, with a per-gallon cap of 1.1
vol%. Together, these standards result in an average 0.62 vol% in-use
gasoline benzene level.
Table VII.C-1.--Other Gasoline Benzene Control Programs
--------------------------------------------------------------------------------------------------------------------------------------------------------
California
Federal RFG phase 3 RFG Canada South Korea Japan European Union
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average Std (vol%)...................................... 0.95 a 0.7 0.95 .............. .............. ..............
Per-gallon Cap (vol%)................................... 1.3 1.1 1.5 1.5 b 1.0 1.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Producers may also comply with a per-gallon cap of 1.0.
b Limit to be lowered to 1.0 in 2006.
4. How Do We Address Variations in Refinery Benzene Levels?
a. Overall Reduction in Benzene Level and Variation
As explained above, there is currently a wide variation in gasoline
benzene levels across the country. According to summer 2003 batch data
(proposed baseline \241\), average benzene content ranged from 0.41 to
3.81 vol%, including both RFG and CG. The current
[[Page 15868]]
variation in benzene levels is primarily attributable to differences in
crude oil quality, different refinery configurations, and differences
in refinery operations. Our analysis of the proposed program,
summarized below, concludes that average benzene levels would be
reduced in all areas of the country (PADDs \242\) and variation among
refineries would also be reduced. We believe that under the proposed
rule, virtually all refineries would reduce their benzene levels and
that no refineries would increase their benzene levels.
---------------------------------------------------------------------------
\241\ For the purpose of our analyses, we selected 2003 to
represent current (baseline) conditions because it reflected the
most recent batch data available. The refinery-by-refinery model
used to predict refinery behavior (discussed later in section IX) is
based on inputs from the linear programming (LP) model, which is set
up to only model the summer season. As a result, we have used summer
2003 as our baseline period.
\242\ The Department of Energy divides the United States into
five Petroleum Administration for Defense Districts, or PADDs. The
states included in each PADD are defined at 40 CFR 80.41.
---------------------------------------------------------------------------
Upon implementation of the proposed 0.62 vol% benzene standard in
2011, we believe that some refiners would reduce benzene levels to
below the standard while others would reduce benzene levels but would
need to rely partially or largely on credits generated and traded under
the proposed ABT program, as described below. Refiners' compliance
strategies would ultimately be driven by economics. For many it would
be economical to reduce gasoline benzene levels to 0.62 vol% or below.
For others it would be economical to make some reduction in gasoline
benzene levels and rely partially upon credits. For some refineries
already below the standard, no benzene reduction efforts would be
necessary. For the limited number of remaining technologically-
challenged refineries it would be most economical to rely wholly upon
credits. Regardless of the compliance strategies selected, under the
proposed program, benzene levels and variation would be reduced
nationwide.
Table VII.C-2.--Benzene Levels in Gasoline Produced Currently and Under the Proposed Program
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of refineries by gasoline benzene level (vol%) Benezene level (vol%) *
-------------------------------------------------------------------------------------------------------------
<0.5 0.5-<1.0 1.0-<1.5 1.5-<2.0 2.0-<2.5 >=2.5 Min Max Range ** Avg ***
--------------------------------------------------------------------------------------------------------------------------------------------------------
Starting Gasoline Benzene Levels***
--------------------------------------------------------------------------------------------------------------------------------------------------------
PADD 1.................................... 4 3 3 0 2 0 0.41 2.19 1.77 0.62
PADD 2.................................... 0 5 8 11 1 1 0.60 2.85 2.25 1.32
PADD 3.................................... 4 18 10 7 0 2 0.41 3.10 2.69 0.86
PADD 4.................................... 0 1 4 6 3 2 0.60 3.56 2.96 1.60
PADD 5 ****............................... 0 0 1 3 2 2 1.36 3.81 2.44 2.06
-------------------------------------------------------------------------------------------------------------
Total................................. 8 27 26 27 8 7 0.41 3.81 3.39 0.97
--------------------------------------------------------------------------------------------------------------------------------------------------------
Benzene Levels After Program Implementation
--------------------------------------------------------------------------------------------------------------------------------------------------------
PADD 1.................................... 4 5 1 2 0 0 0.41 1.96 1.54 0.51
PADD 2.................................... 1 22 1 2 0 0 0.49 1.95 1.46 0.73
PADD 3.................................... 10 27 3 0 1 0 0.36 2.07 1.71 0.55
PADD 4.................................... 0 8 7 1 0 0 0.53 1.94 1.40 0.95
PADD 5 ***................................ 0 4 2 2 0 0 0.54 1.84 1.30 1.04
-------------------------------------------------------------------------------------------------------------
Total................................. 15 66 14 7 1 0 0.36 2.07 1.71 0.62
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Starting benzene levels based on summer 2003 batch data.
** Range in benzene level (MIN-MAX).
*** Average volume-weighted benzene level.
**** PADD 5 excluding California.
As shown in Table VII.C-2, average benzene levels would be reduced
by 36%, from 0.97 vol% (baseline) to 0.62 vol% once the program is
fully implemented. Variation in benzene level, measured in terms of
range, would be reduced by 50% (from 3.39 vol% to 1.71 vol%). In
addition the areas with the highest starting benzene levels and
variation (PADDs 2, 3, 4 and 5) would experience the greatest
reductions.
In conclusion, we project that under the proposed program all areas
of the country would see reductions in average benzene level and
variation among refineries would also be reduced. Refiners would have
several motivations for making the benzene reductions projected by our
analysis. First, reducing actual benzene levels could be the most
economically-favorable compliance strategy. Secondly, reducing benzene
levels would help reduce or eliminate the uncertainty associated with
relying on credits. Finally, reducing benzene levels could generate
credits that would be valuable to the refining industry.
b. Consideration of an Upper Limit Standard
We believe that the proposed program would provide significant
benefits in all areas of the nation. Nevertheless, we recognize that
some commenters are likely to be concerned that under a flexible ABT
program it is possible that some refiners could maintain their current
benzene levels or even increase them and comply through the use of
credits. If such a refinery dominated a particular market, then even
though nationally there would be significant benzene reductions, they
might not occur in that market. While our analysis does not lead us to
believe that such an outcome would happen, we have nevertheless
considered whether an upper limit on benzene (in addition to the
average standard) would be valuable to prevent that outcome from
happening.\243\ We considered two different forms of an upper benzene
limit to complement the average standard: a per-gallon cap standard and
a maximum average standard.
---------------------------------------------------------------------------
\243\ Upper limits on benzene are a part of comparable programs
in California and in other countries.
---------------------------------------------------------------------------
i. Per-Gallon Cap Standard
A cap would require that each gallon (or batch) of gasoline
produced or imported not contain more than a specified concentration of
benzene. Such a standard would force those refineries with the highest
benzene levels to make physical changes to their gasoline instead of
having the option of relying exclusively on credits. In addition to
formally limiting the maximum benzene content sold anywhere in the
country, such a cap would also be straightforward to enforce
[[Page 15869]]
at any point in the distribution system. Note that we are proposing
that the existing per-gallon cap of 1.3 vol% benzene would remain in
effect for RFG under this rule. EPA invites comment on whether the RFG
benzene cap should be retained.
The primary disadvantage of adding a rigid cap is that it would not
allow for occasional, short-term fluctuations in benzene content.
Refiners are faced with a range of unexpected or planned circumstances
that could cause temporary spikes in benzene content, including
equipment malfunctions and periodic maintenance. Although the 1.3 vol%
cap would remain for RFG, to apply a cap in this range to CG would
eliminate a necessary market for higher benzene batches.\244\ With no
ability to market the gasoline, the refiner would be forced to suspend
gasoline production. This could in turn force the shutdown of the
entire refinery, sacrificing supply of all products. To attempt to
avoid this situation, refiners would need to invest more heavily in
benzene control than needed to meet the average standard, simply to
provide back-up control to protect against short-term fluctuations. For
some higher-benzene refineries, a cap could make complying with the
program prohibitively expensive.
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\244\ As explained in section VII.C.5 below, CG provides a
limited safety valve for occasional batches of high-benzene RFG due
to the Anti-dumping provisions.
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Consequently, we concluded that if we were to impose a per-gallon
cap, it would have to be high enough to allow most refineries to
continue to operate even in such upset situations (in order to account
for legitimate maximum potential daily variability), thereby providing
little overall benefit.\245\ Alternatively, we would have to allow
exceptions to the per-gallon cap for such upset situations, which would
be burdensome to implement and also result in little overall benefit.
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\245\ In California and other countries with benzene control
programs, the refining industry tends to be more homogeneous than in
the U.S. as a whole and face different market situations, resulting
in different considerations regarding upper limits.
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If refiners with higher-benzene refineries need to invest in
greater benzene control in order to protect against unpredictable
upsets, their costs would be even higher relative to those of lower-
benzene refineries. As in the case of a program with no ABT at all, the
statutory requirement to balance the degree of feasible emission
reduction with cost (and other factors) would have the
counterproductive effect of requiring a less stringent overall program.
At the same time, the per-gallon cap would appear to provide no
overall additional reduction in benzene levels. Despite the increased
costs, particularly for higher-benzene refiners, our analysis indicates
that little additional emission reduction would result (primarily
because the higher-benzene refineries represent a relatively small
fraction of nationwide gasoline production). Instead, as discussed
below, emission reductions are expected to simply shift from one region
of the country to another, with no change in the overall emission
reductions. Because of this, and due to the potential deleterious cost
impacts, we are not proposing a per-gallon cap benzene standard.
ii. Maximum Average Standard
Another means of ensuring some reduction by those refiners with the
highest benzene concentrations would be to impose a maximum average
standard. An annual maximum average standard for each refinery would
limit the average benzene content of its actual production over the
course of the year, regardless of the extent to which credits may have
been used for compliance. While slightly less restrictive than a per-
gallon cap standard in that some shorter-term fluctuations in benzene
levels could occur, a maximum average standard would still limit the
flexibility otherwise available through the ABT program. Our modeling
shows that a number of refiners would need to invest substantially more
to ensure compliance with both the average and maximum average
standards. With the addition of a maximum average standard, we expect
emission reductions to simply shift from one region of the country to
another with no net change in overall emission reductions. For example,
when analyzing a 1.3 vol% maximum average standard, benzene levels were
lowered in two PADDs and raised in three PADDs compared to our proposed
program yet the overall emission reductions remained the same.\246\
Since we believe that a maximum average standard would increase costs
but not achieve any greater emission reduction, we are not proposing
such a standard.
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\246\ This program comparison is discussed further in Chapter 9
of the RIA (Table 9.6-7).
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We believe that the proposed ABT program, in combination with the
proposed 0.62 vol% benzene standard without a cap or maximum average
limit, would result in the maximum feasible reduction in benzene
emissions, considering costs, energy, and safety issues. The proposed
ABT program would provide refiners with compliance flexibility while
ensuring that the national program achieves significant overall benzene
emission reductions.
We invite comment on our conclusions about having an upper limit in
addition to an average standard.
5. How Would the Proposed Program Meet or Exceed Related Statutory and
Regulatory Requirements?
Three fuels programs (RFG, Anti-dumping and MSAT1) currently
contain direct controls on the toxics performance of gasoline.\247\
Based on our analyses of the proposed program, including the proposed
ABT program, we expect that meeting the proposed fuel benzene content
standard combined with other fuel controls would also lead to
compliance with the toxics requirements of all these programs.
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\247\ Other gasoline fuel controls, such as sulfur, RVP or VOC
performance standards, indirectly control toxics performance by
reducing overall emissions of VOCs.
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The RFG program, implemented in 1995, contains a fuel benzene
standard that requires a refinery's or importer's RFG to average no
greater than 0.95 vol% benzene annually.\248\ In addition, RFG has a
per-gallon benzene cap of 1.3 vol%. Each refinery's or importer's RFG
must also achieve at least a 21.5% annual average reduction in total
toxics emissions compared to 1990 baseline gasoline.\249\ The Anti-
dumping regulations require that a refinery's or importer's CG produce
no more exhaust toxics emissions on an annual average basis than its
1990 gasoline.\250\ This program keeps refiners from shifting fuel
components responsible for elevated toxic emissions into CG as a way to
comply with the RFG standards. Section V.D.1 above describes these
programs in more detail.
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\248\ 40 CFR 80 Subpart D. Refiners also have the option of
meeting a per gallon limit of 1.0 vol%.
\249\ Emissions determined using the Complex Model, as defined
in 40 CFR 80.45.
\250\ CFR 80 Subpart E, emissions determined using the Complex
Model.
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The MSAT1 program, implemented in 2002, was overlaid on the RFG and
Anti-dumping programs.\251\ As explained in section V.D above, it was
not designed to further reduce MSAT emissions, but to lock in
overcompliance on toxics performance that was being achieved in RFG and
CG under the RFG and Anti-dumping programs. The MSAT1 rule requires the
annual average toxics performance of a refinery's or importer's
gasoline to be at least as clean as the average performance of its
gasoline during the three-year baseline period 1998-
[[Page 15870]]
2000.\252\ Compliance with MSAT1 is determined separately for each
refinery's or importer's RFG and CG.
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\251\ 40 CFR 80 Subpart J.
\252\ Emissions determined using the Complex Model, as defined
in 40 CFR 80.45.
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Today's proposed 0.62 vol% benzene content standard would apply to
all of a refinery's or importer's gasoline `` that is, the total of its
RFG and CG production or imports. This level of benzene control would
far surpass the RFG standard of 0.95 vol%, and would put in place a
benzene content standard for CG for the first time.\253\ As described
further in Chapter 6 of the RIA, we analyzed the expected overall
toxics performance under today's proposed program of benzene and
vehicle standards using currently-available models and compared it to
toxics performance under the pre-existing standards.\254\ When RFG and
CG toxics emissions are evaluated at this new level of benzene control,
it is clear that the benzene standard proposed today would result in
the MSAT1 toxics emissions performance requirements being surpassed
(i.e., bettered) not only on average nationwide, but for every
PADD.\255\
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\253\ Proposed program retains the 1.3 vol% maximum benzene cap
for RFG required by 40 CFR 80.41.
\254\ As discussed previously, the existing models contain
limited data on the impacts of fuel changes on 2004 and later
technology vehicles, making such projections difficult. However, we
do not believe the conclusions would change for these reasons: (1)
The fuel effect changes modeled here related to benzene, for which
we expect data for new technology vehicles to show similar trends as
those for older vehicles; (2) much of the projected change in future
emissions are due to changes in vehicles technology, not fuel
changes; and (3) for this analysis we need only look at the relative
changes, and given the magnitude of the projected effects we do not
expect that the direction of the result would change even if
significantly different values for absolute emissions were
submitted.
\255\ The analysis shows an even greater benefit in overall
toxics reductions when the combined effect of the benzene standard
and the vehicle standards are considered.
---------------------------------------------------------------------------
To address compliance with statutory requirements currently in
effect through the RFG and Anti-dumping programs, we carried out a
refinery-by-refinery analysis of toxics emissions performance using the
Complex Model (the same model used for determining compliance with
these programs). We used 2003 exhaust toxics performance for CG and
2003 total toxics performance for RFG as benchmarks, which are at least
as stringent as the relevant toxics performance baselines. We applied
changes to each refiner's fuel parameters for today's proposed
standards and the gasoline sulfur standard phased in this year (30 ppm
average, 80 ppm max). The results indicate that all refineries
maintained or reduced their emissions of toxics over 2003. We expect
large reductions in sulfur for almost all refineries under the gasoline
sulfur program, and large reductions in CG benzene levels along with
modest reductions in RFG benzene levels. We do not expect backsliding
in sulfur levels by the few refiners previously below 30 ppm because
they had been producing ultra-low sulfur gasoline for reasons related
to refinery configuration. Furthermore, because of its petrochemical
value and the credit market, we do not expect any refiners to increase
benzene content in their gasoline.
In addition, we expect significant changes in oxygenate blending
over the next several years, but these are very difficult predict on a
refinery-by-refinery basis. Regardless of how individual refineries
choose to blend oxygenates in the future, we believe their gasoline
will continue to comply with baseline requirements. This is because all
RFG is currently overcomplying with the statutory requirement of 21.5%
annual average toxics reductions by a significant margin. Similarly,
most CG is overcomplying with its 1990 baselines by a significant
margin. Furthermore, we believe most refiners currently blending
oxygenates will continue to do so at the same or greater level into the
future.
EPA is thus proposing that upon full implementation in 2011 the
regulatory provisions for the benzene control program would become the
single regulatory mechanism used to implement these RFG and Anti-
dumping annual average toxics requirements, replacing the current RFG
and Anti-dumping annual average provisions. However, the 1.3 vol%
maximum benzene cap would remain in place for RFG under 40 CFR 80.41;
we are requesting comment on the need to retain this requirement for
RFG. The proposed benzene control program would also replace the MSAT1
requirements.
Section 1504(b) of the Energy Policy Act of 2005 (EPAct) requires
that the MSAT1 toxics emissions baselines for RFG be adjusted to
reflect 2001-2002 fuel qualities, which would make them slightly more
stringent than the 1998-2000 baselines originally used in the MSAT1
program. However, as provided for in the Act, this action becomes
unnecessary and can be avoided if today's proposed program achieves
greater overall reductions of toxics emissions from RFG (i.e., PADDs 1
and 3) than would be achieved by this baseline year adjustment.
Therefore, in addition to comparing the proposed standard to the
current MSAT1 program, we also compared it to the program as the
standards would be modified by the EPAct.
We performed an analysis of aggregate toxics emissions for the
relevant baseline periods as well as for future years with and without
the proposed program. This analysis was carried out using MOBILE6.2
because that model accounts for changes in the vehicle fleet, which is
important when modeling future years. Results are shown in Table VII.C-
3. Since this modeling approach was intended to compare emissions from
different fuels and fleet year mixes, the emissions figures generated
here are different from those used for gasoline compliance
determination.
The first row shows mg/mi air toxics emissions in 2002 under the
MSAT1 refinery-specific baseline requirements. The second row shows how
these would change by updating the RFG baselines to 2001-02 as
specified in EPAct. Since significant changes are expected in the
gasoline pool between 2002 and the proposed implementation time of the
fuel standard, such as gasoline sulfur reductions and oxygenate
changes, we decided to model a ``future baseline'' to allow comparison
with the proposed standard at the time it would become effective in
2011. As a result, the third row shows the projected mg/mi emissions in
2011 under the EPAct baseline adjustments, but without today's proposed
program. The large reductions in air toxics emissions between the EPAct
baseline and this 2011 baseline are primarily due to nationwide
reduction in gasoline sulfur content to 30 ppm average and significant
phase-in of Tier 2 vehicles into the national fleet.
An important comparison is made between rows three and four, where
the estimated toxics emissions under the proposed fuel standard only
are compared to the projected emissions without the proposed standard.
The fourth row shows small reductions for RFG and more significant
reductions for CG with the introduction of the proposed benzene
standard in 2011. We also evaluated the effects of the vehicle standard
also proposed today on toxics emissions at two points in time, shown in
the last two rows of the table.
[[Page 15871]]
Table VII.C-3.--Estimated Annual Average Total Toxics Performance of Light Duty Vehicles in mg/mi Under Current and Proposed Programs a
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fleet RFG by PADD CG by PADD
Regulatory scenario --------------------------------------------------------------------------------------------------
Year I II III I II III IV V
--------------------------------------------------------------------------------------------------------------------------------------------------------
MSAT1 Baseline b (1998-2000)......................... 2002 108 124 89 104 135 96 137 152
EPAct Baseline b (RFG: 2001-2002).................... 2002 103 121 85 104 135 96 137 152
EPAct Baseline, 2011 c............................... 2011 67 79 51 62 79 54 77 96
Proposed program, 2011 c (Fuel standard only)........ 2011 66 78 50 59 74 51 71 85
Proposed program, 2011 c (Fuel + vehicle standards).. 2011 63 76 47 55 72 47 67 81
Proposed program, 2025 c (Fuel + vehicle standards).. 2025 39 46 30 35 44 31 42 50
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Total toxics performance for this analysis includes overall emissions of 1,3-butadiene, acetaldehyde, acrolein, benzene and formaldehyde as calculated
by MOBILE6.2. Although POM appears in the Complex Model, it is not included here. However, it contributes a small and relatively constant mass to the
total toxics figure (4%), and therefore doesn't make a significant difference in the comparisons.
b Baseline figures generated in this analysis were calculated differently from the regulatory baselines determined as part of the MSAT1 program, and are
only intended to be a point of comparison for future year cases.
c Future year scenarios include (in addition to the controls proposed today, where stated) effects of the Tier 2 vehicle and gasoline sulfur standards
and vehicle fleet turnover with time, as well as rough estimates of the renewable fuels standard and the phase-out of ether blending.
Based on these analyses, we believe the fuel program proposed in
this notice, as well as the combined fuel and vehicle program, would
also achieve greater overall toxics reductions than would be achieved
under the EPAct were the RFG baseline period updated to 2001-2002.
In summary, today's proposed action for fuels would fulfill several
statutory and regulatory goals related to control of gasoline mobile
source air toxics emissions. The proposed program (in conjunction with
the proposed vehicle standards) would meet our commitment in the MSAT1
rulemaking to consider further MSAT control. It would also result in
air toxics emission reductions greater than required under all pre-
existing gasoline toxics programs, as well as under the baseline
adjustments specified by the Energy Policy Act. By designing this
program to address these separate but related goals, we would be able
to achieve a benefit in addition to the emissions reductions: A
significant consolidation and simplification of regulation of gasoline
MSATs.
As part of today's action, in addition to the streamlining of
toxics requirements, we propose that the gasoline sulfur program become
the sole regulatory mechanism used to implement gasoline NOX
requirements. Gasoline producers are required to show reductions from
their RFG relative to the 1990 Clean Air Act baseline gasoline
NOX emissions, as determined using the Complex Model.
Conventional gasoline must comply with Anti-dumping individual
NOX baselines for each refinery, similar to the Anti-dumping
toxics standards. A refinery-by-refinery NOX analysis
parallel to that described above indicated that with the final
implementation of the gasoline sulfur program (January 1, 2006), all
gasoline will continue to meet or exceed the NOX
requirements of the RFG and Anti-dumping programs.
As discussed elsewhere in this preamble, we believe that today's
proposed nationwide program would achieve significant reductions in
gasoline-related benzene emissions. The program would also have the
effect of preempting states from regulating gasoline benzene content.
The program is proposed under Clean Air Act section 211(c), which
includes preemption of state fuel programs in section 211(c)(4).\256\
The existing RFG benzene program, also authorized under section
211(c)(1), preempts states in RFG areas from regulating benzene.
Today's nationwide program expands this preemption to all states except
California, which is exempt from this preemption.
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\256\ See discussion of statutory authority in section I.C. of
this preamble.
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D. Description of the Proposed Averaging, Banking, and Trading (ABT)
Program
1. Overview
As mentioned earlier, we are proposing a specially-designed ABT
program to allow EPA to set a more stringent nationwide gasoline
benzene standard than otherwise possible. The proposed ABT program
would allow refiners and importers to use benzene credits generated or
obtained under the provisions of the ABT program to comply with the
0.62 vol% refinery average standard in 2011 and indefinitely
thereafter. Benzene credits could be generated by refineries that make
qualifying early baseline reductions prior to 2011 and by refineries
and importers that overcomply with the 0.62 vol% standard in 2011 and
beyond. All credits generated could be used internally towards company
compliance (``averaged''), ``banked'' for future use, and/or
transferred (``traded'') to another refiner or importer.
The majority of the ABT credit provisions we are proposing are
similar to those offered in the gasoline sulfur program, with a few
exceptions. The major difference is that in the proposed program,
credit use would not be restricted by an upper limit (discussed in
VII.C.4.b above) and in fact would be encouraged by extended credit
life and nationwide credit trading provisions. We are able to propose a
flexible ABT program and a gradual phase-in of the 0.62 vol% benzene
because there is no corresponding vehicle standard being proposed that
is dependent on gasoline benzene content. A program with fewer
restrictions would help ensure that the overall proposed benzene
control program would result in the greatest achievable benzene
reductions, considering cost and other factors.
Because of the wide variation in current benzene levels among
refineries, we recognize that some refiners would be better situated
than others, technologically and financially, to respond to the
proposed benzene standard. As we discuss below, we believe that the
credit trading provisions of the ABT program would be well suited to
moderate the financial impacts that could otherwise occur with the
proposed benzene control program.
However, in other air quality programs, we have used other trading
[[Page 15872]]
mechanisms to address the varying impacts of such programs on different
regulated entities. For example, in EPA's Acid Rain program a limited
number of ``emissions allowances'' are allocated among entities, which
can then be banked and traded. We invite comment on this and other
alternative credit approaches that might be appropriate to gasoline
benzene control.
The following paragraphs provide more details on our proposed
benzene ABT program. We encourage comments on the design elements we
have proposed for the program. If you believe that alternative
approaches would make the program more effective, please share your
specific comments and recommendations with us.
2. Standard Credit Generation (2011 and Beyond)
We are proposing that standard benzene credits could be generated
by any refinery or importer that overcomplies with the 0.62 vol%
gasoline benzene standard on an annual volume-weighted basis in 2011
and beyond. For example, if in 2011 a refinery's annual average benzene
level was 0.52, its standard benzene credits would be determined based
on the margin of overcompliance with the standard (0.62-0.52 = 0.10
vol%) divided by 100 and multiplied by the gallons of gasoline produced
during the 2011 calendar year. The credits would be expressed as
gallons of benzene. Likewise, if in 2012 the same refinery produced the
same amount of gasoline with the same benzene content they would earn
the same amount of credits. The standard credit generation
opportunities for overcomplying with the standard would continue
indefinitely.
The refinery cost model discussed further in section IX.A, predicts
which refineries would reduce benzene levels in an order of precedence
based on cost until the 0.62 vol% refinery average standard is
achieved. The model also predicts which refineries would overcomply
with the standard in 2011 and beyond and in turn generate standard
credits.\257\ Credits would be generated by two main sources.
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\257\ The refinery cost model assumes that all credits generated
are used each year. To the extent that this does not occur, more
refiners would have to invest in technology to comply, increasing
the cost of the program.
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First, standard credits would be generated by refineries whose
current gasoline benzene levels are already below the 0.62 vol%
standard. According to the model, 19 refineries are predicted to
maintain current gasoline benzene levels and overcomply with the
standard without making any additional process improvements. These
refineries would generate approximately 42 million gallons of benzene
credits per year without making any investment in technology.
Additionally, the model predicts that 5 other refineries would reduce
gasoline benzene levels even further below 0.62 vol% resulting in
deeper overcompliance and an additional 6 million gallons of benzene
credits per year.
Second, standard credits would be generated by refineries whose
current gasoline benzene levels are above 0.62 vol% but are predicted
by the model to overcomply with the standard based on existing refinery
technology, access to capital markets, and/or proximity to the benzene
chemical market. The model predicts that 34 refineries with gasoline
benzene levels above 0.62 vol% would make process improvements to
reduce benzene levels below the standard and in turn generate
approximately 40 million gallons of benzene credits per year.
For the refineries which the model predicts to make process changes
to overcomply with the standard, the incremental cost to overcomply is
relatively small or even profitable in some cases of benzene
extraction.\258\ As expected, refineries with the lowest compliance
costs would have the greatest incentive to overcomply based on the
value of the credits to the refining industry.
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\258\ Despite the low costs of benzene extraction, without a
benzene control standard refiners are reluctant to invest in
capital-intensive processes such as extraction. This is because many
other projects involving capital investments that they may be
considering typically have a better or more certain payout (past
price volatility in the benzene chemical market can discourage
future investment). Thus, refiners tend to postpone capital projects
such as extraction even if they may appear to be profitable today.
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3. Credit Use
We are proposing that refiners and importers could use benzene
credits generated or obtained under the provisions of the ABT program
to comply with the 0.62 vol% gasoline benzene standard in 2011 and
indefinitely thereafter. Refineries and importers could use credits to
comply on a one-for-one basis, applying each benzene gallon credit to
offset the same volume of benzene produced in gasoline above the
standard. For example, if in 2011 a refinery's annual average benzene
level was 0.72, the number of benzene credits needed to comply would be
determined based on the margin of under-compliance with the standard
(0.72-0.62 = 0.10 vol%) divided by 100 and multiplied by the gallons of
gasoline produced during the 2011 calendar year. The credits needed
would be expressed in gallons of benzene.
We believe that individual refineries would rely differently upon
credits, depending on their unique refinery situations. As mentioned
earlier, the current range in gasoline refinery technologies and
starting benzene levels would make it significantly more expensive for
some refineries to comply with the standard based on actual reduced
benzene levels than others. As such, some technologically-challenged
refiners may choose to rely largely or entirely upon credits because it
would be much more economical than making process improvements to
reduce benzene levels. Other refiners may choose to make incremental
process improvements to reduce refinery benzene levels and then rely
partially on credits to fully comply. Still others may choose to reduce
benzene levels to at or around 0.62 vol% and maintain an ``emergency
supply'' of credits to address short-term spikes in benzene levels due
to refinery malfunctions. Overall, the proposed credit trading program
would encourage low-cost refineries to comply or overcomply with the
standard while allowing high-cost refineries to rely upon credits to
comply. This would reduce the total economic burden to the refining
industry.
a. Credit Trading Area
We are proposing a nationwide credit trading program with no
geographic restrictions on trading. In other words, a refiner or
importer could obtain benzene credits and use them towards compliance
regardless of where the credits were generated. We believe that
restricting credit trading could reduce refiners' incentive to generate
credits and hinder trading essential to this program. As explained in
Chapter 6 of the RIA, if PADD restrictions were placed on credit
trading, there would be an imbalance between the supply and demand of
credits.
In other fuel standard ABT programs (e.g., the highway diesel
sulfur program), credit trading restrictions were necessary to ensure
there was adequate low-sulfur fuel available in each geographic area to
meet the corresponding vehicle standard. Since there is no vehicle
emission standard being proposed that is dependent on gasoline benzene
content, we do not believe there is a need for geographic trading
restrictions. As mentioned above, we project that under the proposed
ABT program, all areas of the country (i.e., all PADDs) would
[[Page 15873]]
experience a large reduction in gasoline benzene levels as a result of
the standard.
As discussed earlier, California gasoline would not be subject to
the proposed benzene standards. However, California refiners that
produce gasoline that is used outside of California would be able to
generate credits on that gasoline (and use credits to achieve
compliance on their non-California gasoline if necessary). Likewise, as
proposed, refiners outside of California that produce gasoline that is
used in California would not be allowed to use that gasoline as the
basis for any credit generation, or compliance with the proposed
benzene standard. However, we request comment on whether and how
credits could be allowed to be generated on California gasoline benzene
reductions and applied to the benzene compliance for non-California
gasoline.
EPA seeks comment on the proposed nationwide trading provision, its
effect on incentives for refiners to generate credits, and
environmental impacts.
b. Credit Life
We are proposing limited credit life to enable proper enforcement
of the program and to encourage trading of credits. Since the proposed
standard is a refinery gate standard (i.e., enforced as the fuel leaves
the refinery) with no enforceable downstream standard, it is critical
that EPA be able to conduct enforcement at the refinery. A reasonable
limitation on credit life would allow EPA to verify the validity of
credits through record retention. Credit information must be
independently verifiable such that, in the event of violations
involving credits, the liable party is identifiable and accountable.
EPA enforcement activities are limited by the five-year statute of
limitations in the Clean Air Act. As a consequence, credit life greater
than five years creates potentially serious enforcement difficulties.
This is particularly important given the ongoing changes in business
relationships, ownership, and merger practices that are characteristic
of the refining industry. In addition, since credit trading plays an
essential role in moderating program costs, it is important that
refiners have an incentive to trade credits rather than hoard them.
Instituting a credit expiration date would promote trading because
refiners would be forced to ``use it or lose it.'' In summary, we
believe the proposed credit life provisions, described in more detail
below, are limited enough to satisfy enforcement and trading concerns
yet sufficiently long to provide program flexibility.
We are proposing that standard credits generated in 2011 and beyond
would have to be used within five years of the year in which they were
generated. For example, credits generated based on 2011 gasoline
production would have to be used towards compliance with the 2016
calendar year or earlier, otherwise they would expire. Standard credits
traded to another party would still have to be used during the same
five-year period because credit life is tied to the date of generation,
not the date of transfer.
We are proposing that early credits generated prior to 2011
(discussed in the paragraphs to follow) would have a three-year credit
life from the start of the program. In other words, early credits would
have to be applied to the 2011, 2012, and/or 2013 compliance years or
they would expire.
These proposed credit life provisions are similar to those
finalized in the gasoline sulfur program, except the early credit life
is three years instead of two. We are proposing a three-year early
credit life because it corresponds with the number of early credits
projected to be generated according to our refinery cost model.\259\
Additionally, we predict that three years would be more than sufficient
time for all early credits generated to be utilized. We believe that
this certainty that all credits could be utilized would strengthen
refiners' incentive to generate early credits and subsequently
establish a more reliable credit market for trading.
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\259\ Derivation of three-year early credit lag is found in
Chapter 6 of the RIA (section 6.5.3.1).
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In addition to the above-mentioned provisions, we are proposing
that credit life may be extended by two years for early credits and/or
standard credits generated by or traded to approved small refiners. We
are offering this provision as a mechanism to encourage more credit
trading to small refiners. Small refiners often face special
technological challenges, so they would tend to have more of a need to
rely on credits. At the same time, they often have fewer business
affiliations than other refiners, so they could have difficulty
obtaining credits. We believe this provision would be equally
beneficial to refiners generating credits. This additional credit life
for credits traded to small refiners would give refiners generating
credits a greater opportunity to fully utilize the credits before they
expire. For example, a refiner who was holding on to credits for
emergency purposes or other reasons later found to be unnecessary,
could trade these credits at the end of their life to small refiners
who could utilize them for two more years. However, EPA is concerned
that extending credit life beyond the five-year statute of limitations
in the Clean Air Act (net 7-year credit life for standard credits
generated by or traded to small refiners) could create significant
enforceability problems. Consequently, EPA seeks comment on provisions
that could be included in the regulations that would address this
enforceability concern regarding the extended credit life for small
refiner standard credits.
As discussed in Section X.A, we are also seeking comment on
different ways of structuring the program that may be able to allow for
unlimited credit life since, unlike in the gasoline sulfur program,
there is no vehicle standard being proposed that is dependent on fuel
quality. We considered that unlimited credit life could further promote
credit generation and allow refiners to maintain an ongoing supply of
credits in the event of an emergency. However, for several reasons we
have elected to propose a limited credit life based on the context of
the rest of the proposed program. If unlimited credit life were to
discourage trading of credits, this could force refineries with more
expensive benzene control technologies to comply and thus increase the
total cost of the program. In addition, unlimited credit life would
make it more difficult to verify compliance with the standard. One way
of addressing this concern would be to require refiners to retain
credit records indefinitely. Even then, given the fluid nature of
refiner and importer ownership in recent years, in many cases it would
still be difficult to verify the validity of historical credit
generation and use. Since the proposed benzene standard would be
enforced solely at the refinery, it is critical that such enforcement
be as simple and straightforward as possible. Nonetheless, as discussed
in Section X.A, it may be possible to design the overall program in
such a way to address these concerns and still allow for infinite
credit life.
In conclusion, we are proposing a reasonably limited credit life
for both early and standard benzene credits. We seek comment on
unlimited credit life. Please share with us any additional ideas you
may have on how unlimited credit life could be beneficial to this
program and/or how associated recordkeeping and enforcement issues
could be mitigated.
[[Page 15874]]
4. Early Credit Generation (2007-2010)
To encourage early application of and innovation in benzene control
technology, we are proposing that refiners could generate early benzene
credits from June 1, 2007 to December 31, 2010 by making qualifying
reductions from their pre-determined refinery baselines. A discussion
of how refinery baselines are established and what constitutes a
qualifying benzene reduction is found in the subsections to follow. The
early credits generated under this program would be interchangeable
with the standard credits generated in 2011 and beyond and would follow
the above-mentioned credit use provisions.
The early reductions we are projecting to occur would be the
initial steps of each refinery's ultimate benzene control strategy, but
completed earlier than required. We project that from mid-2007 to 2010,
refiners could implement operational changes and/or make small capital
investments to reduce gasoline benzene. These actions would create a
two-step phase down in gasoline benzene prior to 2011 as shown in
Figure VII.D-1.
BILLING CODE 6560-50-P
[GRAPHIC] [TIFF OMITTED] TP29MR06.006
BILLING CODE 6560-50-C
The credits generated under the early credit program could be used
to provide refiners with additional lead time to make their
investments. If properly implemented, we project that the delay could
be as much as three years as described in Chapter 6 of the RIA.
Accordingly, we are proposing a three-year early credit life, as
discussed earlier. The additional lead time would allow the refining
industry to spread out demand for design, engineering, construction and
other related services, reducing overall compliance costs.
Importers would not be permitted to generate early credits, for
several reasons.\260\ First, unlike refineries, importers would not
need additional lead time to comply with the standard, since they would
not be investing in benzene control technology. Additionally, because
importer operations are more variable than refinery operations,
importers could potentially redistribute the importation of foreign
gasoline based on benzene level to generate early credits without
making a net reduction in gasoline benzene. This type of scheme could
result in a large number of early credits being generated with no net
benzene emission reduction value. This is not expected to occur for
refineries because they are already operating at high capacity and do
not have the flexibility
[[Page 15875]]
to quickly increase, decrease, or shift production volumes.
Additionally, under the proposed program, refineries are prohibited
from moving benzene-rich blendstocks around to generate early credits
as described below.
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\260\ As discussed in section VII.I.1 below, foreign refiners
may generate early credits under the proposed 40 CFR 80.1420
provisions.
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We believe that refiners would have several motivations for making
early benzene reductions. For refiners who have a series of technology
improvements to make, early innovative improvements would help the
refiner get one step closer to compliance. Early reductions would also
generate credits which could be used to postpone subsequent
investments. For refiners capable of making early advancements to
reduce their benzene levels below 0.62 vol%, the early credits
generated would not be needed for their own future use. For these
refiners, trading early credits to other refiners may be a way to
offset the cost of their early capital investment(s).
a. Establishing Early Credit Baselines
We are proposing that any refiner planning on generating early
credits would have to obtain an individual refinery benzene baseline in
order to provide a starting point for calculating early credits.
Refinery benzene baselines would be defined as the annualized
volume-weighted benzene content of gasoline produced at a refinery from
January 1, 2004 to December 31, 2005. We are proposing a two-year
baseline period to account for normal operational fluctuations in
benzene level. We propose using the 2004 and 2005 calendar years
because we believe this would represent the most current batch gasoline
data available prior to today's proposal.
We would require refiners to submit individual baselines for each
refinery that is planning to generate early benzene credits. Refinery
benzene baselines would be calculated using the 2004-2005 batch data
submitted to us under the RFG and Anti-dumping requirements.\261\ We
propose that joint ventures, in which two or more refiners collectively
own and operate one or more refineries, be treated as separate refining
entities for early credit generation purposes.
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\261\ RFG, 40 CFR 80.75; Anti-dumping, 40 CFR 80.105.
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Refiners would be required to submit their refinery baselines in
writing to EPA. We propose that refiners could begin applying for 2004-
05 benzene baselines as early as March 1, 2007. There would be no
single cut-off date for applying for a baseline; however, a refiner
planning on generating early credits would need to submit a baseline
application at least 60 days prior to beginning credit generation. We
are proposing a shorter notification period for this rule (past rules
were 120 days) to accommodate our proposed early credit generation
start date of June 1, 2007. EPA would review all baseline applications
and notify the refiner of any discrepancies found with the data
submitted. If we did not respond within 60 days, the baseline would be
considered to be approved, subject to later review by EPA.
Under the proposed program, refiners would be prohibited from
moving gasoline and gasoline blendstock streams from one refinery to
another in order to generate early credits. This type of transaction
would result in artificial credits with no associated emission
reduction value. If traded and used towards compliance, these
artificial credits could negatively impact the benefits of the program.
We considered basing credit generation for multi-refinery refiners on
corporate benzene baselines instead of individual refinery baselines,
but determined that this could hinder credit generation. If a valid
reduction was made at one refinery and an unrelated expansion occurred
at another facility during this time, the credits earned based on a
corporate baseline could be reduced to zero. Instead, we propose to
validate early credits based on existing reporting requirements (e.g.,
batch reports and pre-compliance reporting data). We seek comment on
this approach.
b. Early Credit Reduction Criteria (Trigger Points)
We are proposing that to generate early credits, refiners would
first need to reduce gasoline benzene levels to 0.90 times their
refinery benzene baseline during a given averaging period. The purpose
of setting an early credit generation trigger point is to ensure that
changes in benzene level are representative of real process
improvements. Without a trigger point, refineries could generate
``windfall'' early credits based on normal year to year fluctuations in
benzene level associated with MSAT1. These artificial credits would
compromise the environmental benefits of an ABT program because they
would have no real associated benzene emission reduction value.
In designing the early credit generation program, we considered a
variety of different types of trigger points. We performed sensitivity
analyses around absolute level trigger points (refineries must reduce
gasoline benzene levels to a certain concentration), fixed reduction
trigger points (refineries must reduce gasoline benzene levels by a
certain concentration), and percent reduction trigger points
(refineries must reduce gasoline benzene by a percentage). Based on our
analysis found in Chapter 6 of the RIA, we found absolute level trigger
points to be too restrictive for high benzene level refineries that
could benefit from reductions the most. We also found fixed reduction
trigger points to be too restrictive to low benzene level refineries
which would be penalized for already being ``cleaner.'' Percent
reduction trigger points were found to be consistently limiting towards
all refineries, regardless of starting benzene level. As such, we
propose to conclude that a percent reduction trigger point would be the
most appropriate early credit validation tool to address the wide range
in starting benzene levels.
To determine an appropriate value for the percent reduction trigger
point, we considered a range of reductions from 5-40% and examined the
resulting early credit generation outcomes. We found that as the value
of the percent reduction trigger point increased, the potential for
windfall credit generation decreased, but unfortunately so did the
number of early credits generated from legitimate refinery
modifications. To address this competing relationship between windfall
and early credit generation, we are proposing a 10% reduction trigger
point. We believe that this trigger point is restrictive enough to
prevent most windfall credit generation, but not too restrictive to
discourage refineries from making early benzene reductions. The
proposed 10% reduction trigger point roughly coincides with the average
fluctuation in benzene level in 2004 as discussed in Chapter 6 of the
RIA. A 10% reduction trigger point for early credits was also finalized
in the gasoline sulfur rulemaking, which also affected the entire
gasoline pool and had to encompass a variety of unique refinery
situations.\262\ EPA requests comments on the proposed trigger point
and seeks alternate recommendations for validating early credits.
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\262\ 40 CFR 80.305.
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c. Calculating Early Credits
We are proposing that once the 10% reduction trigger point was met,
refineries could generate early credits based on the entire reduction.
In terms of benzene levels, a refinery would first have to reduce its
average benzene level to 0.90 times its original baseline benzene level
during a given averaging period in order to generate credits. For
[[Page 15876]]
example, if in 2008 a refinery reduced its annual benzene level from a
baseline of 2.00 vol% to 1.50 vol% (below the trigger of 0.90 x 2.00 =
1.80 vol%), its benzene credits would be determined based on the
difference in annual benzene content (2.00-1.50 = 0.50 vol%) divided by
100 and multiplied by the gallons of gasoline produced in 2008. The
credits would be expressed in gallons of benzene.
5. Additional Credit Provisions
a. Credit Trading
The potential exists for credits to be generated by one party,
subsequently transferred or used in good faith by another, and later
found to have been calculated or created improperly or otherwise
determined to be invalid. As in past programs, we propose that should
this occur both the seller and purchaser would have to adjust their
benzene calculations to reflect the proper credits and either party (or
both) could be determined to be in violation of the standards and other
requirements if the adjusted calculations demonstrate noncompliance
with the 0.62 vol% standard. This would allow the credit market to
properly allocate any such risk.
As with ABT programs in other rules, we are proposing that credits
should be transferred directly from the refiner or importer that
generated them to the party that would use them for compliance
purposes. This would ensure that the parties purchasing them would be
better able to assess the likelihood that the credits were valid, and
would aid in compliance monitoring. An exception would exist where a
credit generator transferred credits to a refiner or importer who could
not use all the credits, in which event that transferee could transfer
the credits to another refiner or importer. However, based on the
increased difficulty in assuring the validity of credits as the credits
change hands more than once, we are proposing that credits could only
be transferred a limited number of times. We are requesting comment on
the maximum number of allowable trades, in the range of 2 to 4 trades.
After the maximum number of trades, such credits would have be used or
terminated.
We propose no prohibitions against brokers facilitating the
transfer of credits from one party to another. Any person could act as
a credit broker, whether or not such person was a refiner or importer,
so long as the title to the credits was transferred directly from the
generator to the user. Further discussion of these credit trading
provisions and alternative options is found in section X.A below.
b. Pre-Compliance Reporting Requirements
In order to provide an early indication of the credit market for
refiners planning on relying upon benzene credits as a compliance
strategy in 2011 and beyond, we are requesting that refiners submit
pre-compliance reports to us in 2008, 2009, and 2010. EPA would then
summarize this information (in such a way as to protect confidential
business information) in a report available to the industry. This is
similar to the way pre-compliance reports are used for the ultra-low
sulfur diesel program. In addition, we are proposing that refiners
provide us with a final summary pre-compliance report in 2011, to allow
for a complete account of early credit generation.\263\ The reports
would be due annually by June 1st and would contain refiners' most up-
to-date implementation plans for complying with the 0.62 vol% benzene
standard. More specifically, we would require refiners to annually
submit to us engineering and construction plans and the following data:
\263\ Based on their proposed January 1, 2015 compliance date,
small refiners would be required to submit annual pre-compliance
reports to us in 2008 through 2014 with a final summary pre-
compliance report in 2015.
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--Actual/projected gasoline production volume and average benzene level
for the June 1, 2007 through December 31, 2007 annual averaging period,
and for the 2008-2015 annual averaging periods.
--Actual/projected early credits generated during the June 1, 2007
through December 31, 2007 annual averaging period, and for the 2008-
2010 annual averaging periods (June 1 through December 31, 2007 and
2008-2014 for small refiners).
--Standard credits projected to be generated during the 2011-2015
annual averaging periods (2015 for small refiners).
--Credits projected to be needed for compliance during 2011-2015 annual
averaging periods (2015 for small refiners).
Pre-compliance reporting has proven to be an indispensable
mechanism in implementing the gasoline and diesel sulfur programs, and
we expect this to be the case in today's proposed program. A detailed
understanding of how individual refiners and the industry at large are
progressing toward final implementation of the proposed standards would
help identify early concerns and allow timely action if necessary to
prevent the development of major problems.
6. Special ABT Provisions for Small Refiners
Approved small refiners would follow all the above-mentioned ABT
provisions with the exception of special credit generation provisions
which accommodate their 2015 compliance start date. Early credits could
be generated by small refiners from June 1, 2007 to December 31, 2014
for refineries that reduce their average gasoline benzene level to 0.90
times their original 2004-2005 baseline level. Standard credits could
also be generated by small refiners beginning January 1, 2015 and
continuing indefinitely for refineries that overcomply with the
standard by producing gasoline with an annual average benzene content
below 0.62 vol%. Additionally, all credits generated by or traded to
approved small refiners would have an additional two-year credit life
as described above in VII.D.3.b.
E. Regulatory Flexibility Provisions for Qualifying Refiners
1. Hardship Provisions for Qualifying Small Refiners
In developing our proposed MSAT program, we evaluated the need and
the ability of refiners to meet the proposed benzene standards as
expeditiously as possible. We believe it is feasible and necessary for
the vast majority of the program to be implemented in the proposed time
frame to achieve the air quality benefits as soon as possible. However,
based on information available from small refiners, we believe that
refineries owned by small businesses generally face unique hardship
circumstances, compared to larger refiners. Thus, we are proposing
several special provisions for refiners that qualify as ``small
refiners'' to reduce the disproportionate burden that the proposed
standards would have on these refiners. These provisions are discussed
in detail below.
a. Qualifying Small Refiners
EPA is proposing several special provisions that would be available
to companies that are approved as small refiners. Small refiners
generally lack the resources available to larger companies that help
large companies, including those large companies that own small-
capacity refineries, to raise capital for investing in benzene control
equipment. These resources include shifting internal funds, securing
financing, or selling assets. Small refiners are also likely to have
more
[[Page 15877]]
difficulty in competing for engineering resources and completing
construction of the needed benzene control equipment (and any necessary
octane recovery) equipment in time to meet the standards proposed
today. Therefore, we are proposing small refiner relief provisions in
today's action as an aspect of realizing the greatest emission
reductions achievable.
Since small refiners are more likely to face hardship circumstances
than larger refiners, we are proposing temporary provisions that would
provide additional time to meet the benzene standards for refineries
owned by small businesses. This approach would allow the overall
program to begin as early as possible, while still addressing the
ability of small refiners to comply.
i. Regulatory Flexibility for Small Refiners
As explained in the discussion of our compliance with the
Regulatory Flexibility Act below in section XII.C and in the Initial
Regulatory Flexibility Analysis in Chapter 14 of the RIA, we considered
the impacts of today's proposed regulations on small businesses. Most
of our analysis of small business impacts was performed as a part of
the work of the Small Business Advocacy Review (SBAR) Panel convened by
EPA, pursuant to the Regulatory Flexibility Act as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). The
final report of the Panel is available in the docket for this proposed
rule.
For the SBREFA process, EPA conducted outreach, fact-finding, and
analysis of the potential impacts of our regulations on small
businesses. Based on these discussions and analyses by all Panel
members, the Panel concluded that small refiners in general would
likely experience a significant and disproportionate financial hardship
in reaching the objectives of today's proposed program.
One indication of this disproportionate hardship for small refiners
is the higher per-gallon capital costs projected for the removal of
benzene from gasoline under the proposed program. Refinery modeling of
refineries owned by refiners likely to qualify as small refiners, and
of non-small refineries, indicates that small refiners could have
significantly higher costs to apply some technologies. For two of the
technologies that we believe that refiners would use to reduce their
benzene levels, routing the six carbon hydrocarbon compounds around the
reformer and isomerizing these compounds, we anticipate that small
refiners' costs would likely be similar to non-small refiners, as very
little capital investment would need to be made for these technologies.
However, for technologies such as benzene saturation and benzene
extraction, we anticipate that the costs to small refiners would be
higher. Due to the poorer economies of scale, benzene saturation is
expected to cost small refiners about 2.2 cents per gallon (while it is
projected that benzene saturation would cost a non-small refinery about
1.3 cents per gallon).\264\ Likewise, benzene extraction is estimated
to cost those refineries able to use this technology about 0.1 cents
per gallon; however, for small refiners benzene extraction is expected
to cost about 0.5 cents per gallon.
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\264\ Smaller refineries are less likely to be able to take
advantage of economies of scale. For example, a portion of the
capital costs invested for a benzene control unit is fixed (i.e.,
engineering design costs) resulting in similar costs for each
investment project. However, when amortized over the volume of fuel
processed by a small versus large unit, the per-gallon capital costs
are higher for the smaller unit, resulting in poorer economies of
scale.
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The Panel also noted that the burden imposed on the small refiners
by the proposed benzene standard could vary from refiner to refiner.
Thus, the Panel recommended that more than one type of burden reduction
be offered so that most, if not all, small refiners could benefit. We
have continued to consider the issues that were raised during the
SBREFA process and have decided to propose the provisions recommended
by the Panel.
ii. Rationale for Small Refiner Provisions
Generally, we structured these proposed provisions to reduce the
burden on small refiners while still achieving the air quality benefits
that this program would provide. We believe that the proposed
regulatory flexibility provisions for small refiners are a necessary
aspect of standards reflecting the greatest achievable emission
reductions considering costs and lead time, because they would
appropriately adjust potential costs and lead time for the dissimilarly
situated small refiner industry segment, and at the same time allow EPA
to propose a uniform benzene standard for all refineries.
First, the proposed compliance schedule for this program, combined
with flexibility for small refiners, would achieve the air quality
benefits of the program as soon as possible, while still ensuring that
small refiners that choose to comply by raising capital for benzene
reduction technologies would have adequate time to do so. As noted
above, most small refiners have limited additional sources of income or
capital beyond refinery earnings for financing and typically do not
have the financial backing that larger and generally more integrated
companies have. Therefore, they could benefit from additional time to
accumulate capital internally or to secure capital financing from
lenders.
Second, providing small refiners more time to comply would increase
the availability of engineering and construction resources to them.
Some refiners would need to install additional processing equipment to
meet the proposed benzene standard. We anticipate that there could be
increased competition for technology services, engineering resources,
and construction management and labor. In addition, vendors would be
more likely to contract with the larger refiners first, as their
projects would offer larger profits for the vendors. Temporarily
delaying compliance for small refiners would spread out the demand for
these resources and probably reduce any cost premiums caused by limited
supply.
Third, we are anticipating that many small refiners may choose to
comply with the proposed benzene standard by purchasing credits. Having
additional lead time (which could also result in additional time to
generate credits for some small refiners) could help to ensure that
there would be sufficient credits available and that there would be a
robust credit trading market. Furthermore, offering two years of
additional credit life for credits traded to small refiners, as
discussed in section VII.D.3.b, would improve credit availability.
Lastly, we recognize that while the proposed benzene standard may
be achieved using the four technologies suggested above, new
technologies may also be developed that may reduce the capital and/or
operational costs. Thus, we believe that allowing small refiners some
additional time for newer technologies to be proven out by other
refiners would have the added benefit of reducing the risks faced by
small refiners. The added time would likely allow for small refiners to
benefit from the lower costs of these technologies. This would help to
offset the potentially disproportionate financial burden facing small
refiners.
We discuss below the provisions that we are proposing to help
mitigate the effects on small refiners. Small refiners that chose to
make use of the small refiner delayed provision would also delay, to
some extent, the benzene emission reductions that would otherwise have
been achieved. However, the overall impact of these postponed
reductions would be
[[Page 15878]]
reasonable, for several reasons. Small refiners represent a relatively
small fraction of national gasoline production. Our current estimates
(of refiners that we expect would qualify as small refiners) indicate
that these refiners produce about 2.5 percent of the total gasoline
pool. In addition, these small refiners are generally dispersed
geographically across the country and the gasoline that they produce is
sometimes transported to other areas, so the limited loss in benzene
emissions reduction would also be dispersed. Finally, absent small
refiner flexibility, EPA would likely have to consider setting a less
stringent benzene standard or delaying the overall program (until the
burden of the program on many small refiners was diminished), which
would serve to reduce and delay the air quality benefits of the overall
program. By providing temporary relief to small refiners, we are able
to adopt a program that would reduce benzene emissions in a timely and
feasible manner for the industry as a whole.
The proposed small refiner provisions should be viewed as a subset
of the hardship provisions described in section VII.E.2.b. Rather than
dealing with many refineries on a case-by-case basis through the
general hardship provisions (described later), we limit the number by
proposing to provide predetermined types of relief to a subset of
refineries based on criteria designed to identify refineries most
likely to be in need of such automatic relief.
b. How Do We Propose To Define Small Refiners for the Purpose of the
Hardship Provisions?
The definition of small refiner for this proposed program is in
most ways the same as our small refiner definitions in the Gasoline
Sulfur and Highway and Nonroad Diesel rules. These definitions, in
turn, were based on the criteria use by the Small Business
Administration. However, we are proposing to clarify some ambiguities
about the definition that have existed in the past.
A small refiner would need to demonstrate that it met all of the
following criteria:
Produced gasoline from crude during calendar year 2005.
Small refiner provisions would be limited to refiners of gasoline
from crude because they would be the ones that bore the investment
burden and therefore the inherent economic hardship. Therefore,
blenders and importers would not be eligible, nor would be additive
component producers.
Small refiner status would be limited to refiners that owned and
operated the refinery during the period from January 1, 2005 through
December 31, 2005. New owners that purchased a refinery after that date
would do so with full knowledge of the proposed regulations, and should
have planned to comply along with their purchase decisions. As with the
earlier fuel rules, we are proposing that a refiner that restarts a
refinery in the future may be eligible for small refiner status. Thus,
a refiner restarting a refinery that was shut down or non-operational
between January 1, 2005 and January 1, 2006 could apply for small
refiner status. In such cases, we would judge eligibility under the
employment and crude oil capacity criteria based on the most recent 12
consecutive months prior to the application, unless we conclude from
data provided by the refiner that another period of time is more
appropriate. However, unlike past fuel rules, we propose to limit this
to a company that owned the refinery at the time that it was shut down.
New purchasers would not be eligible for small refiner status for the
same reasons described above. Companies with refineries built after
January 1, 2005 would also not be eligible for the small refiner
hardship provisions.
--Had no more than 1,500 employees, based on the average number of
employees for all pay periods from January 1, 2005 to January 1, 2006;
and,
--Had a crude oil capacity less than or equal to 155,000 barrels per
calendar day (bpcd) for 2005.
In determining its total number of employees and crude oil
capacity, a refiner would need to include the number of employees and
crude oil capacity of any subsidiary companies, any parent companies,
any subsidiaries of the parent companies, and any joint venture
partners. There has been some confusion in past rules regarding how
these provisions were interpreted, and as a result, we are proposing to
clarify (and, in some cases, modify) them here. For example, in
previous rules we defined a subsidiary to be a company in which the
refiner or its parent(s) has a 50 percent or greater interest. We
realize that it is possible for a parent to have controlling ownership
interest in a subsidiary despite having less than 50 percent ownership.
Similarly, we realize that it is also possible for multiple parents to
each have less than 50 percent ownership interest but still maintain a
controlling ownership interest. Therefore, in order to clarify our
rules, we are proposing to define a parent company as any company (or
companies) with controlling interest, and to define a subsidiary of a
company to mean any company in which the refiner or its parent(s) has a
controlling ownership interest. In many cases, there are likely to be
multiple layers of parent companies, with the ultimate parent being the
one for which no one else has controlling interest. The employees and
crude capacity of all parent companies, and all subsidiaries of all
parent companies, would thus be taken into consideration when
evaluating compliance with these criteria.
As with our earlier fuel sulfur regulations, we are also proposing
today that refiners owned and controlled by an Alaska Regional or
Village Corporation organized under the Alaska Native Claims Settlement
Act, would also be eligible for small refiner status, based only on the
refiner's employees and crude oil capacity.\265\
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\265\ 43 U.S.C. 1626.
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c. What Options Would Be Available For Small Refiners?
We are proposing several provisions today to help reduce the
burdens on small refiners, as discussed above. In addition, these
provisions would also allow for incentives for small refiners that make
reductions to their benzene levels.
i. Delay in Standards
We propose that small refiners be allowed to postpone compliance
with the proposed benzene standard until January 1, 2015, which is four
years after the general program would begin. While all refiners would
be allowed some lead time before the general proposed program began, we
believe that in general small refiners would still face
disproportionate challenges. The proposed four-year delay for small
refiners would help mitigate these challenges. Further, previous EPA
fuel programs have included two to four year delays in the start date
of the effective standards for small refiners, consistent with the lead
time we believe appropriate here.
Small refiners have indicated to us that an extension of available
lead time would allow them to more efficiently carry out necessary
capital projects with less direct competition with non-small refiners
for financing and for contractor to carry out capital improvements.
There appears to be merit in this position, and we propose that
approved small refiners have four years of additional lead time. This
would provide three years after the 2012 review of the program, which
we believe would be enough time for such
[[Page 15879]]
refiners to complete necessary capital projects if they chose to pursue
them.
ii. ABT Credit Generation Opportunities
While we have anticipated that many small refiners would likely
find it more economical to purchase credits for compliance, some have
indicated they would make reductions to their gasoline benzene levels
to meet the proposed benzene standard. Further, a few small refiners
indicated that they would likely do so earlier than would be required
by the January 1, 2015 proposed small refiner start date. Therefore, we
are proposing that early credit generation be allowed for small
refiners that take steps to meet the benzene requirement prior to their
effective date. Small refiner credit generation would be governed by
the same rules as the general program, described above in section
VII.D, the only difference being that small refiners would have an
extended early credit generation period of up to seven years. Early
credits could be generated by small refiners making qualifying
reductions from June 1, 2007 to December 31, 2014, after which credits
could be generated indefinitely for those that overcomplied with the
standard.
iii. Extended Credit Life
As discussed previously, in order to encourage the trading of
credits to small refiners, we are proposing that the useful life of
credits be extended by 2 years if they are generated by or traded to
small refiners. This is meant to directly address concerns expressed by
small refiners that they would be unable to rely on the credit market
to avoid large capital costs for benzene control.
iv. ABT Program Review
As previously stated, we are anticipating that it may be more
economically sound for some refiners to purchase and use credits.
During discussions with small refiners, all of the small refiners
voiced their concerns about reliance on a credit market for compliance
with the benzene standard. Specifically, small refiners feared that:
(1) there could be a shortage of credits, (2) that larger refiners
would not trade credits with smaller refiners, and (3) that the cost of
credits could be so high that the option to purchase credits for
compliance would not be a viable option. Due to these concerns it was
suggested that EPA perform a review of the ABT program (and thus, the
small refiner flexibility options) by 2012, one year after the general
program begins.
Such a review would take into account the number of early credits
generated, as well as the number of credits generated and transferred
during the first year of the overall benzene control program. Further,
requiring the submission of pre-compliance reports from all refiners,
similar to the highway and nonroad diesel programs, would aid in
assessing the ABT program prior to performing the review. A small
refiner delay option of four years after the compliance date for other
refiners, coupled with a review after the first year of the overall
program, would still provide small refiners with roughly three years
that we believe would be needed to obtain financing and perform
engineering and construction. We are proposing to perform a review
within the first year of the overall program (i.e., by 2012). To aid
the review, we are also proposing the requirement that all refiners
submit refinery pre-compliance reports annually beginning June 1, 2008.
Refiners' 2011 annual compliance reports will be similar to the pre-
compliance reports, but the annual compliance reports will also contain
information such as credits generated, credits used, credits banked,
credit balance, cost of credits purchased. EPA would aggregate the data
(to protect individual refiners' confidentiality) and make the results
available to the industry. When combined with the four-year delay
option, this would provide small refiners (and others) with the
knowledge of the credit trading market's status before they would need
to make a decision to either purchase credits or to obtain financing to
invest in capital equipment.
Further, we are requesting comment on elements to be included in
the ABT program review, and suggested actions that could be taken
following such a review. Such elements could include:
--Revisiting the small refiner provisions if it is found that the
credit trading market did not exist to a sufficient degree to allow
them to purchase credits, or that credits were only available at a
cost-prohibitive price.
--Options to either help the credit market, or help small refiners gain
access to credits.
With respect to the first element, the SBAR Panel recommended that
EPA consider establishing an additional hardship provision to assist
any small refiners that were unable to comply with the benzene standard
even with a viable credit market. Such a hardship provision would
address the case of a small refiner for which compliance would be
feasible only through the purchase of credits, but it was not
economically feasible for the refiner to do so. This hardship would be
provided to a small refiner on a case-by-case basis following the
review and based on a summary, by the refiner, of technical or
financial infeasibility (or some other type of similar situation that
would render its compliance with the standard difficult). This hardship
provision might include further delays and/or a slightly relaxed
standard on an individual refinery basis for up to two years. Following
the two-year relief, a small refiner would be allowed to request
multiple extensions of the hardship until the refinery's material
situation changed. We are proposing the inclusion of such a hardship
provision which could be applied for following, and based on the
results of, the ABT program review.
With respect to the second element, the Panel recommended that EPA
develop options to help the credit market if it is found (following the
review) that there is not an ample supply of credits or that small
refiners are having difficulty obtaining credits. These options could
include the ``creation'' of credits by EPA that would be introduced
into the credit market to ensure that there are additional credits
available for small refiners. Another option the Panel discussed to
assist the credit market was to impose additional requirements to
encourage trading with small refiners. These could include a
requirement that a percentage of all credits sold be set aside and only
made available for small refiners. Similarly, we could require that
credits sold, or a certain percentage of credits sold, be made
available to small refiners before they are allowed to be sold to any
other refiners. Options such as these would help to ensure that small
refiners were able to purchase credits. One such recommendation by the
Panel, to extend credit life for small refiners, is included in today's
proposal and described above.
We welcome comment on additional measures that could be taken
following the review if it was found that there was a shortage of
credits or that credits were not available to small refiners.
d. How Would Refiners Apply for Small Refiner Status?
A refiner applying for status as a small refiner would be required
to apply and provide EPA with several types of information by December
31, 2007. (The detailed application requirements are summarized below.)
All refiners seeking small refiner status under this program would need
to apply for small refiner status, regardless of whether or not the
refiner had been approved for small refiner status under another fuel
program. As with applications for relief under other rules,
applications for small refiner status under this proposed rule
[[Page 15880]]
that were later found to contain false or inaccurate information would
be void ab initio.
Requirements for small refiner status applications:
--The total crude oil capacity as reported to the Energy Information
Administration (EIA) of the U.S. Department of Energy (DOE) for the
most recent 12 months of operation. This would include the capacity of
all refineries controlled by a refiner and by all subsidiaries and
parent companies and their subsidiaries. We would presume that the
information submitted to EIA is correct. (In cases where a company
disagreed with this information, the company could petition EPA with
appropriate data to correct the record when the company submitted its
application for small refiner status. EPA could accept such alternate
data at its discretion.)
--The name and address of each location where employees worked during
the 12 months preceding January 1, 2006; and the average number of
employees at each location during this time period. This would include
the employees of the refiner and all subsidiaries and parent companies
and their subsidiaries.
--In the case of a refiner who reactivated a refinery that was shutdown
or non-operational between January 1, 2005, and January 1, 2006, the
name and address of each location where employees worked since the
refiner reactivated the refinery and the average number of employees at
each location for each calendar year since the refiner reactivated the
refinery.
--The type of business activities carried out at each location.
--An indication of the small refiner option(s) the refiner intends to
use (for each refinery).
--Contact information for a corporate contact person, including: name,
mailing address, phone and fax numbers, e-mail address.
--A letter signed by the president, chief operating officer, or chief
executive officer of the company (or a designee) stating that the
information contained in the application was true to the best of his/
her knowledge and that the company owned the refinery as of January 1,
2007.
e. The Effect of Financial and Other Transactions on Small Refiner
Status and Small Refiner Relief Provisions
In situations where a small refiner loses its small refiner status
due to merger with a non-small refiner, acquisition of another refiner,
or acquisition by another refiner, we are proposing provisions which
are similar to those finalized in the nonroad diesel final rule to
allow for an additional 30 months of lead time. A complete discussion
of this provision is located in the preamble to the final nonroad
diesel rule.
2. General Hardship Provisions
Unlike previous fuel programs, today's program includes inherent
flexibility because there is a nationwide credit trading program.
Refiners would have the ability to avoid or minimize capital
investments indefinitely by purchasing credits, and we expect that many
refiners would utilize this option. We also expect that refiners and
importers who normally would produce or import gasoline that met the
proposed standard would periodically rely on credits in order to
achieve compliance. As discussed in section VII.D, we expect that
sufficient credits would be available on an annual basis to accommodate
the needs of the regulated industry, and we expect that these credits
would be available at prices that are comparable to the alternative
cost of making the capital investment necessary to produce compliant
gasoline. We are proposing to require that refiners submit pre-
compliance reports beginning in 2008. These reports would indicate how
the refinery plans to achieve compliance with the 0.62 vol% standard as
well as the amount of credits expected to be generated or expected to
be needed. The information provided in these reports would enable an
assessment of the robustness of the credit market and the ability of
refiners to rely on credits as the program began.
Although we expect credits to be available at competitive prices to
those who need them, we are proposing hardship provisions to
accommodate an inability to comply with the proposed standard at the
start of the program, and to deal with unforeseen circumstances. These
provisions would be available to all refiners, small and non-small,
though relief would be granted on a case-by-case basis following a
showing of certain requirements, primarily that compliance through the
use of credits was not feasible. We are proposing that any hardship
waiver would not be a total waiver of compliance. Rather, such a waiver
would allow the refiner to have an extended period of deficit
carryover. Under regular circumstances, our proposed deficit carryover
provision would allow an entity to be in deficit with the proposed
benzene standard for one year, provided that they made up the deficit
and were in compliance the next year. The proposed hardship provisions
would allow a deficit to be carried over for an extended, but limited,
time period. EPA would determine an appropriate extended deficit
carryover time period based on the nature and degree of the hardship,
as presented by the refiner in their hardship application, and on our
assessment of the credit market. Note that any waivers granted under
this proposed rule would be separate and apart from EPA's authority
under the Energy Policy Act to issue temporary waivers for extreme and
unusual supply circumstances, under section 211(c)(4).
a. Temporary Waivers Based on Unforeseen Circumstances
We are proposing a provision which, at our discretion, would permit
any refiner to seek a temporary waiver from the MSAT benzene standard
under certain rare circumstances. This waiver provision is similar to
provisions in prior fuel regulations. It is intended to provide
refiners relief in unanticipated circumstances--such as a refinery fire
or a natural disaster--that cannot be reasonably foreseen now or in the
near future.
Under this provision, a refiner could seek permission to extend the
deficit carryover provisions of the proposal for more than the one year
already allowed if it could demonstrate that the magnitude of the
impact was so severe as to require such an extension. We are proposing
that the refiner would be required to show that: (1) The waiver would
be in the public interest; (2) the refiner was not able to avoid the
nonconformity; (3) it would meet the proposed benzene standard as
expeditiously as possible; (4) it would make up the air quality
detriment associated with the nonconforming gasoline, where
practicable; and (5) it would pay to the U.S. Treasury an amount equal
to the economic benefit of the nonconformity less the amount expended
to make up the air quality detriment. These conditions are similar to
those in the RFG, Tier 2 gasoline sulfur, and the highway and nonroad
diesel regulations, and are necessary and appropriate to ensure that
any waivers that were granted would be limited in scope.
As discussed, such a request would be based on the refiner's
inability to produce compliant gasoline at the affected facility due to
extreme and unusual circumstances outside the refiner's control that
could not have been avoided through the exercise of due diligence. The
hardship request would also need to show that other avenues for
mitigating the problem,
[[Page 15881]]
such as the purchase of credits toward compliance under the proposed
credit provisions, had been pursued and yet were insufficient or
unavailable. Especially in light of the credit flexibilities built into
the proposed overall program, we expect that the need for additional
relief would be rare.
b. Temporary Waivers Based on Extreme Hardship Circumstances
In addition to the provision for short-term relief in extreme
unforeseen circumstances, we are also proposing a hardship provision
where a refiner could receive an extension of the deficit carryover
provisions based on extreme hardship circumstances. Such hardship could
exist based on severe economic or physical lead time limitations of the
refinery to comply with the benzene standard at the start of the
program, and if they were unable to procure sufficient credits. A
refiner seeking such hardship relief under this proposed rule would
have to demonstrate that these criteria were met. In addition to
showing that unusual circumstances exist that impose extreme hardship
in meeting the proposed standard, the refiner would have to show (1)
best efforts to comply, including through the purchase of credits, (2)
the relief granted under this provision would be in the public
interest, (3) that the environmental impact would be acceptable, and
(4) that it has active plans to meet the requirements as expeditiously
as possible. Because such a demonstration could not be made prior to
the development of the credit market, EPA would not begin to consider
such hardship requests until August 1, 2010, that is, until after the
final pre-compliance reports are submitted. Consequently, requests for
such hardship relief would have to be received prior to January 1,
2011.
If hardship relief under these circumstances was approved, we would
expect to impose appropriate conditions to ensure that the refiner was
making best efforts to achieve compliance offsetting any loss of
emission control from the program through the deficit carryforward
provisions. We believe that providing short-term relief to those
refiners that need additional time due to hardship circumstances would
help to facilitate the adoption of the overall MSAT program for the
majority of the industry. However, we do not intend for hardship waiver
provisions to encourage refiners to delay planning and investments they
would otherwise make. Again, because of the flexibilities of the
proposed overall program, we expect that the need for additional relief
would be rare.
c. Early Compliance With the Proposed Benzene Standard
We are also requesting comment on a means for allowing refineries,
under certain conditions, to meet the proposed benzene standard early
in lieu of MSAT1. In order to meet the proposed benzene standard early,
refiners would need to meet several criteria similar to those used in
the past when EPA has adjusted refinery baselines under the MSAT1
program. Specifically, the eligibility for such provisions would be
limited to refiners that have historically had better than average
toxics performance, lower than average benzene and sulfur levels, and a
significant volume of gasoline impacted by the phase-out of MTBE as an
oxygenate. The result of not allowing such early compliance could be
less supply of their cleaner fuel and more supply of fuel with higher
toxics emissions, with a worsening of overall environmental performance
under MSAT1. A refiner opting into such provisions would not be allowed
to generate benzene credits on the affected fuel prior to 2011, since
an ability to reduce benzene further would presumably negate the need
for an early compliance option.
F. Technological Feasibility of Gasoline Benzene Reduction
This section summarizes our assessment of the feasibility for the
refining industry to reduce benzene levels in gasoline to an average of
0.62 vol% starting January 1, 2011. Based on this assessment, we
believe that it is technologically feasible for refiners to meet the
benzene standard by the start date using technologies that are
currently available.
We begin this section by describing where benzene comes from and
the current levels found in gasoline. Next we discuss the benzene
reduction technologies available to refiners today and how they are
expected to be used to meet the proposed benzene standard. Then we
provide our analysis of the lead time necessary for complying with the
benzene standard. All of these issues are discussed in more detail in
Chapters 6 and 9 of the Regulatory Impact Analysis.
1. Benzene Levels in Gasoline
EPA receives information on gasoline quality, including benzene
levels, from each refinery and importer in the U.S. under the reporting
requirements of the RFG and CG programs. As discussed earlier in this
section, benzene levels averaged 0.94 vol% for gasoline produced in and
imported into the U.S. in 2003, which is the most recent year for which
complete data is available. However, for individual refineries, daily
batch gasoline benzene levels and annual average levels can vary
significantly from the national average. As indicated earlier in
describing our decision-making process for the type and level of
gasoline benzene standard, it is very important to understand how
current benzene levels vary by individual refinery, by region, as well
as day-to-day by batch.
The variability in 2003 average annual gasoline benzene levels by
individual refinery is shown in Figure VII.F-1. This figure contains a
summary of annual average gasoline benzene levels by individual
refinery for CG and RFG versus the cumulative volume of gasoline
produced.
[[Page 15882]]
[GRAPHIC] [TIFF OMITTED] TP29MR06.007
Figure VII.F-1 shows that the annual average benzene levels of CG
as produced by individual refineries varies from 0.29 to 4.01 vol%.
Based on the data in the figure, the volume-weighted average benzene
content for U.S. CG is 1.10 vol%. As expected, the annual average
benzene levels of RFG as produced by individual refineries are lower,
ranging from 0.10 to 1.09 vol%. The volume-weighted average benzene
content for U.S. RFG (not including California) is 0.62 vol%.
The information presented for annual average gasoline benzene
levels does not illustrate the very large day-to-day variability in
gasoline batches produced by each refinery. We evaluated the batch-by-
batch gasoline benzene levels for several refineries that produce both
RFG and CG, using information submitted to EPA as part of the reporting
requirements for the RFG and CG Anti-dumping Programs. One refinery had
no particular trend for its CG benzene levels, with benzene levels that
varied from 0.1 to 3 vol%. That same refinery's RFG averaged around
0.95 vol% benzene, ranging from 0.05 to 1.1 vol%. The second refinery
had RFG benzene levels that averaged around 0.4 vol% ranging from 0.1
to 1.0 vol%. Its CG benzene levels averaged about 0.6 vol% with batches
that ranged from 0.1 to 1.2 vol%. The batches for both RFG and CG
varied on a day-to-day basis and, overall, by over an order of
magnitude. It is clear from our review of batch-by-batch data submitted
to EPA that benzene variability is typical of refineries nationwide.
There are several contributing factors to the variability in
refinery gasoline benzene levels across all the refineries. We will
review these factors and describe how each impacts batch-by-batch and
annual average gasoline benzene levels.
The first factor contributing to the variability in gasoline
benzene levels is crude oil quality. Each refinery processes a
particular crude oil slate, which tends to be fairly constant except
for seasonal changes that reflect changes in product demand. Crude oil
varies greatly in aromatics content. Since benzene is an aromatic
compound, its level tends to vary with the aromatics content of crude
oil. For example, Alaskan North Slope crude oil contains a high
percentage of aromatics. Refiners processing this crude oil in their
refineries shared with us that their straight run naphtha contains on
the order of 3 vol% benzene (the production of naphtha is discussed
further below). This is one reason why the gasoline in PADD 5 outside
of California is high in benzene. Conversely, refiners that process
very paraffinic crude oils (low in aromatics) usually have a low amount
of benzene in their straight run naphtha. Because crude oil supplies
tend to be constant over periods of months, crude oil quality is not a
major contributor to day-to-day variations in benzene among gasoline
batches. However, because crude oil supplies often vary from refinery
to refinery, differences in crude quality are an important factor in
the variability among refineries.
The second factor contributing to the variability in benzene levels
is differences in the types of processing units and gasoline
blendstocks among refineries. If a refinery is operated to rely on its
reformer for virtually all of
[[Page 15883]]
its octane needs--especially the type that operates at higher pressures
and temperatures and thus tends to produce more benzene--it will likely
have a high benzene level in its gasoline. Refineries with a reformer
and without a fluidized catalytic cracking (FCC) unit are particularly
prone to higher benzene levels, since they rely heavily on the product
of the reformer (reformate) to meet octane needs. However, refineries
that can rely on other means for boosting their gasoline octane can
usually rely less on the reformer and can run this unit at a lower
severity, resulting in less benzene in their gasoline pool. Examples of
such other octane-boosting refinery units include the alkylation unit,
the isomerization unit and units that produce oxygenates. Refiners may
have these units in their refineries, or in many cases, they can
purchase the gasoline blendstocks produced by these units from other
refineries or third-party producers. The blending of the products of
these processes--alkylate, isomerate, and oxygenates--into the gasoline
pool provides a significant octane contribution, which can allow
refiners to rely less on the octane from reformate. Since refiners make
individual decisions about producing or purchasing different
blendstocks for each refinery, this variation is another important
contributor to differences in gasoline benzene content among
refineries. In addition, the variation in gasoline blendstocks used to
produce different batches of gasoline is by far the most important
factor in the drastically differing benzene levels among batches of
gasoline at any given refinery.
This practice by refiners of producing or purchasing different
blendstocks and blending them in different ways to produce gasoline is
an integral and essential aspect of the refining business. Thus, in
designing an effective benzene control program, it is critical that
benzene levels be reduced while refiners retain the ability to change
blendstocks (and crude supplies) as needed from batch to batch and
refinery to refinery. We believe that the proposed program accomplishes
these goals.
A third important source of variability in existing benzene levels
in gasoline is the fact that many refiners are already operating their
refineries today to intentionally reduce benzene levels in their
gasoline, while others are not. For example, refiners that are
currently producing RFG must ensure their RFG averages 0.95 vol% or
less and is always under the 1.3 vol% cap (see discussion of the
current toxics program in section VII.C.5 above). Similarly, refiners
producing gasoline to comply the California RFG program need to produce
gasoline with reduced benzene. These refiners are generally using
benzene control technologies to actively produce gasoline with lower
benzene levels. If they are producing CG along with the RFG, their CG
is usually lower in benzene as well compared with the CG produced by
other refiners, since the benzene control technology often affects some
of the streams used to blend CG. In addition, some refiners add
specific refinery units such as benzene extraction to intentionally
produce chemical-grade benzene. Benzene commands a much higher price on
the chemical market compared to the price of gasoline. For these
refiners, the profit from the sale of benzene pays for the equipment
upgrades needed to greatly reduce the levels of benzene in their
gasoline. In most cases, refineries with extraction units are marketing
their low-benzene gasoline in the RFG areas.
The use of these benzene control technologies by some refiners
contributes to the variability in gasoline benzene levels among
refineries. The use of these technologies can also contribute to the
batch-to-batch variability in benzene levels. This is because, as with
different blendstocks, refiners need to be able to change the operating
characteristics of these technologies to meet varying needs in gasoline
quality. In addition, planned or unexpected shut-downs of benzene
control equipment may result in temporarily high batch benzene levels
relative to the normally low gasoline levels when the unit is
operating.
The variations in gasoline benzene levels among refineries also
lead to variations in benzene levels among regions of the country.
Table VII.F-1 shows the average gasoline benzene levels for all
gasoline produced in (and imported into) the U.S. by PADD for 2003. The
information is presented for both CG and RFG.
Table VII.F-1.--Benzene Levels by Gasoline Type Produced in or Imported Into Each PADD in 2003
----------------------------------------------------------------------------------------------------------------
PADD 1 PADD 2 PADD 3 PADD 4 PADD 5 CA U.S.
----------------------------------------------------------------------------------------------------------------
Conventional Gasoline............................ 0.84 1.39 0.94 1.54 1.79 0.63 1.11
Reformulated Gasoline............................ 0.60 0.82 0.56 n/a n/a 0.62 0.62
Gasoline Average................................. 0.70 1.28 0.87 1.54 1.79 0.62 0.94
----------------------------------------------------------------------------------------------------------------
Table VII.F-1 shows that benzene levels vary fairly widely across
different regions of the country. PADD 1 and 3 benzene levels are lower
because the refineries in these regions produce a high percentage of
RFG for both the Northeast and Gulf Coast. Also, a number of refineries
in these two regions are extracting benzene for sale into the chemicals
market, contributing to the much lower benzene level in these PADDs. It
is interesting to note that, in addition to RFG, CG benzene levels are
low in PADDs 1 and 3. There are two reasons for this. First, some RFG
produced by refineries ends up being sold as CG. Second, as mentioned
above, refiners that are reducing the benzene levels in their RFG
generally also impact the benzene levels in their CG. In contrast,
other parts of the U.S. with little to no RFG production and little
extraction have much higher benzene levels.
2. Technologies for Reducing Gasoline Benzene Levels
a. Why Is Benzene Found in Gasoline?
To discuss benzene reduction technologies, it is helpful to first
review some of the basics of refinery operations. Refineries process
crude oil into usable products such as gasoline, diesel fuel and jet
fuel. For a typical crude oil, about 50 percent of the crude oil falls
within the boiling range of gasoline, jet fuel and diesel fuel. The
rest of crude oil boils at too high a temperature to be blended
directly into these products and therefore must be cracked into lighter
compounds. Material that boils within the gasoline boiling range is
called naphtha. There are two principal sources of naphtha. The first
is ``straight run'' naphtha, which comes directly off of the crude oil
atmospheric distillation column. Another principle source of naphtha is
that generated from the cracking reactions. Each type of naphtha
contributes to benzene in gasoline.
Typically, little of the benzene in gasoline comes from benzene
naturally
[[Page 15884]]
occurring in crude oil. Straight run naphtha, which comes directly from
the distillation of crude oil, thus tends to have a low benzene
content, although it can contain anywhere from 0.3 to 3 vol% benzene.
While straight run naphtha is in the correct distillation range to be
usable as gasoline, its octane value is too low for blending directly
into gasoline. Thus, the octane value of this material must be
increased to enable it to be used as a gasoline blendstock.
The primary means for increasing the octane value of naphtha
(whether straight run or from cracking processes) is reforming.
Reforming reacts the heavier portion of straight run naphtha (six-
carbon material and heavier) over a precious metal catalyst at a high
temperature. The reforming process converts many of the naphtha
compounds to aromatic compounds, which raises the octane of this
reformate stream to over 90 octane numbers. (``Octane number'' is the
unit of octane value.) Since benzene is an aromatic compound, it is
produced along with toluene and xylene, the other primary aromatic
compounds found in gasoline. The reforming process increases the
benzene content of the straight run naphtha stream from 0.3 to 3 vol%
to 3 to 11 vol%.
There are two ways that benzene levels increase in the reformer
above the benzene levels occurring naturally in crude oil--the
conversion of non-aromatic six-carbon hydrocarbons into benzene, and
the cracking of heavier aromatic hydrocarbon compounds into
benzene.\266\ In the discussion below about how benzene in the
reformate stream can be reduced, we elaborate further about the
opportunities that refiners have to manage both of these benzene-
producing processes.
---------------------------------------------------------------------------
\266\ In the process of converting the straight run naphtha into
aromatics, a significant amount of hydrogen is produced that is
critical for the various hydrotreating operations in refineries. As
discussed later, the impact on hydrogen production is an important
consideration in reducing benzene levels.
---------------------------------------------------------------------------
Three factors contribute to the wide range in benzene levels in the
reformate stream, and these factors are important in the decisions
refiners would make in response to the proposed benzene control
program. First, different feedstocks contain different amounts of
benzene and different levels of benzene precursors that are more or
less capable of being converted to benzene by the reformer. Second, the
type of reformer being used affects how much benzene is produced during
the reforming process. For example, refineries with the older, higher
pressure reformers tend to form more benzene by cracking heavier
aromatics than refineries with newer, lower pressure units. Third, the
severity with which the reformer is being operated also affects benzene
levels in reformate. The greater the severity at which the reformer is
operated, the greater the conversion of feedstocks to aromatics (and
the more hydrogen is produced). However, more severe operation shortens
the time between the catalyst regeneration events that the reformer
must periodically undergo. Greater severity also lowers the gasoline
yield from this unit. Because refiners balance these operation and
production factors individually at each refinery in deciding on how
severely to operate the reformer, these decisions contribute to the
range of benzene levels found in reformate from refinery to refinery.
In addition to benzene occurring in the reformate stream, another
source of benzene in gasoline is naphtha produced from cracking
processes. There are three primary cracking processes in the refinery--
the FCC unit, the hydrocracker, and the coker. The naphthas produced by
these cracking processes contain anywhere from 0.5 to 5 vol% benzene.
The benzene in these streams is typically formed from the cracking of
heavier aromatic compounds into lighter compounds that can then be
blended into gasoline. The benzene content of cracked streams is
therefore largely a function of the aromatics content of the crude oil
feedstocks and the need of a particular refinery to produce gasoline
from heavier feedstocks. As we discuss later, we do not expect that
benzene reductions from these cracked naphthas would be a major avenue
for compliance with the proposed benzene control program for most
refiners.
Finally, there are other intermediate streams that contribute to
benzene in gasoline but that have such low benzene content or are found
in such low volumes in gasoline that they are of very limited
importance in reducing benzene levels. Examples of these are light
straight run naphtha and the oxygenates MTBE and ethanol.
Table VII.F-2 summarizes the typical ranges in benzene content and
average percentages of gasoline of the various intermediate streams
that are blended to produce gasoline.
Table VII.F-2.--Benzene Content and Typical Gasoline Fraction of Various
Gasoline Blendstocks
------------------------------------------------------------------------
Average volume
Process or blendstock name Typical benzene in gasoline
level (vol%) (percent)
------------------------------------------------------------------------
Reformate.......................... 3-11 30
FCC Naphtha........................ 0.5-2 36
Alkylate........................... 0 12
Isomerate.......................... 0 4
Hydrocrackate...................... 1-5 3
Butane............................. 0 4
Light Straight Run................. 0.3-3 4
MTBE/Ethanol...................... 0.05 3
Natural Gasoline................... 0.3-3 3
Coker Naphtha...................... 3 1
------------------------------------------------------------------------
Table VII.F-2 shows that the principal contributor of benzene to
gasoline is reformate. This is due both to its high benzene content and
the relatively large gasoline fraction that reformate comprises of the
gasoline pool. The product stream from the reformer, reformate,
accounts for between 15 and 50 percent of the content of gasoline,
[[Page 15885]]
depending on the refinery (typically about 35 percent.) For this reason
and as discussed below, reducing the benzene in reformate is the
primary focus of the various benzene reduction technologies available
to refiners. Control of benzene from the other streams quickly becomes
cost prohibitive due to either the low concentration of benzene in the
stream, the low volume of the stream, or both.
b. Benzene Control Technologies Related to the Reformer
There are several technologies that reduce gasoline benzene by
controlling the benzene in the feedstock to and the product stream from
the reformer.\267\ One approach is to route the intermediate refiner
streams that have the greatest tendency to form benzene in a way that
bypasses the reformer. This approach is very important in benzene
control, but it is limited in its effectiveness because it does not
address any of the naturally-occurring benzene and some of the benzene
formed in the reformer. For this reason, refiners often use a second
category of technologies that remove or destroy benzene, including both
the naturally occurring benzene as well as that formed in the reformer.
These technologies are isomerization, benzene saturation, and benzene
extraction. We discuss each of these approaches to benzene reduction
below. The effectiveness of these technologies in reducing the benzene
content of reformate varies from approximately 60% to 96%. The actual
impact on an individual refinery's finished gasoline benzene content,
however, will be a function of many different refinery-specific
factors, including the extent to which they are already utilizing one
of these technologies.
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\267\ The benzene reduction technologies are discussed here in
the context of the feasibility for reducing the benzene levels of
gasoline to meet a gasoline benzene content standard. However, this
discussion applies equally to the feasibility of a total air toxics
standard, since we believe that benzene control would be the only
means that refiners would choose in order to comply with such a
standard.
---------------------------------------------------------------------------
i. Routing Around the Reformer
The primary compounds that are converted to benzene by the
reforming unit are the six-carbon hydrocarbon compounds contained in
the straight run naphtha fed to the reformer. These compounds, along
with the naturally-occurring benzene in this straight run naphtha
stream, can be removed from the feedstock to the reforming unit using
the upstream distillation unit, bypassed around the reforming unit, and
then blended directly into gasoline. Routing these compounds around the
reformer prevents the formation of much of the benzene in the reformer,
though it does not reduce the naturally-occurring benzene.
For a typical refinery, the technology to route the six-carbon
material around the reformer would likely require only a small capital
investment. Compared with a scenario where all of this material goes to
the reformer, the combined rerouted and reformate streams would overall
have about 60 percent less benzene, and finished gasoline would have
about 31 percent less benzene. However, in most cases this would not be
sufficient to achieve a 0.62 vol% benzene standard, and some
combination of the technologies discussed next would also be needed.
ii. Routing to the Isomerization Unit
A variation of routing around the reformer involves the
isomerization of the re-routed benzene precursors. Rather than directly
blending the rerouted stream into gasoline, this stream can first be
processed in the isomerization unit. This has two main advantages.
First, it increases the effectiveness of benzene control, since the
isomerization process converts the naturally-occurring benzene in this
rerouted stream to another compound. Second, it recovers some of the
octane otherwise lost by the conversion of benzene.
The typical role of the isomerization unit is to convert five-
carbon hydrocarbons from straight-chain to branched-chain compounds,
thus increasing the octane value of this stream. If the isomerization
unit at a refinery has sufficient additional capacity to handle the
rerouted six-carbon hydrocarbons, that stream can also be sent to this
unit, where the benzene present in that stream would be saturated and
converted into another compound (cyclohexane). (This benzene saturation
process is similar to what occurs in a dedicated benzene saturation
unit, as described below.) Compared to a scenario where all this
material goes to the reformer, routing the six-carbon compounds to the
isomerization unit in this manner can reduce the benzene levels in the
combined rerouted and reformate streams by about 80 percent. The option
of isomerization is currently available to those refineries with
sufficient capacity in an existing isomerization unit to treat all of
the six-carbon material.
iii. Benzene Saturation
The function of a benzene saturation unit is to react hydrogen with
the benzene in the reformate (that is, to saturate the benzene) in a
dedicated reactor, converting the benzene to cyclohexane. Because
hydrogen is used in this process, refiners that choose this technology
need to ensure that they have a sufficient source of hydrogen. Refiners
cannot afford to saturate other aromatic compounds present in their
reformate as it would cause too great an octane loss. Thus, it is
necessary to separate a six-carbon stream, which contains the benzene,
from the rest of reformate, and only feed the six-carbon stream to the
benzene saturation unit. This separation is done with a distillation
unit called a reformate splitter placed just after the reformer.
There are two vendors that produce benzene saturation units. UOP
produces a technology named Bensat. There are at least six Bensat units
operating in the U.S. today and many more around the world. CDTech
licenses another, somewhat newer technology for this purpose called
CDHydro. There are six CDHydro units operating today, mostly outside of
the U.S. Benzene saturation can reduce benzene in the reformate by
about 96 percent.
iv. Benzene Extraction
Extraction is a technology that chemically removes benzene from
reformate. The removed benzene can be sold as a high-value product in
the chemicals market. To extract only benzene from the reformate, a
reformate splitter is installed just after the reformer to separate a
benzene-rich stream from the rest of the reformate. The benzene-rich
stream is sent to an extraction unit which separates the benzene from
the rest of the hydrocarbons. Since the benzene must be sufficiently
concentrated before it can be sold on the chemicals market, a very
thorough distillation step is incorporated with the extraction step to
concentrate the benzene to the necessary purity. Where it is economical
to use, benzene extraction can reduce benzene levels in the reformate
by 96 percent.
There are two important considerations refiners have with respect
to using benzene extraction. The first is the price of chemical grade
benzene. If the price of chemical grade benzene is sufficiently higher
than the price of gasoline, benzene extraction can realize an
attractive return on capital invested and is often chosen as a
technology for achieving benzene reduction. The difference in price
between benzene and gasoline has been significantly higher than its
historic levels during the last few years. While we expect that this
difference will return closer to the lower historic levels by the time
the proposed program
[[Page 15886]]
would be implemented, the difference in prices should still be
sufficient to make extraction a very cost-effective technology for
reducing gasoline benzene levels. A more detailed discussion about
benzene prices is contained later in this preamble (section IX) and in
Chapter 9 of the RIA.
The other consideration in using benzene extraction is the distance
that a refinery is from the markets where benzene is used as a chemical
feedstock. Transportation of chemical grade benzene requires special
hazardous-materials precautions, including protection against leaks.
Certain precautions are also necessary to preserve the purity of the
benzene during shipment. These special precautions are costly for
shipping benzene over long distances. Thus if a refinery were located
far from the chemical benzene markets, the economics for using
extraction would be much less attractive compared to that of refiners
located near benzene markets.
The result has been that chemical grade benzene production has been
limited to those refineries located near the benzene markets. This
includes refineries on the Gulf and on the East Coast and to a limited
extent, several refineries in the Midwest. This could change if the
very high benzene prices in 2004 and the beginning of 2005 were to
continue, instead of returning to lower historical levels. However,
even if benzene prices remain high by the time that a benzene control
standard would take effect, refineries located away from the benzene
markets may be concerned that the higher benzene prices may not be
certain enough for the long term to warrant investment in extraction.
Our analysis for today's proposal conservatively assumes that only
refineries on the Gulf and East coasts would choose to use benzene
extraction to lower their gasoline benzene levels. Despite some
existing extraction units in the Midwest, the benzene market there is
small and no additional benzene extraction is assumed to occur there.
c. Other Benzene Reduction Technologies
We are aware of other, less attractive technologies capable of
achieving benzene reductions in gasoline. These technologies tend to
have more serious impacts on other important refinery processes or on
fuel quality and are generally capable of only modest benzene
reductions. We do not currently have sufficient information about how
widely these approaches are or could be utilized or their potential
costs, and in our modeling we have not assumed that refiners would use
them. However, because they may be feasible in some unique situations,
we mention these potential gasoline benzene reduction approaches here.
One of these less attractive opportunities for additional benzene
reduction would be for refiners to capture more of the reformate
benzene in the reformate splitter and send this additional benzene to
the saturation unit. Refiners attempt to minimize both the capital and
operating costs when splitting a benzene-rich stream out of the
reformate stream for treating in a benzene saturation unit. To do this,
they optimize the distillation cut between benzene and toluene, thus
achieving a benzene reduction of about 96 percent in the reformate
while preserving all but about 1 percent of the high-octane toluene.
However, if a refiner were to be faced with a dire need for additional
benzene reductions, it could change its distillation cut to send the
last 4 percent of the benzene to the saturation unit. Since this cut
would also bring with it more toluene than the normal optimized
scenario, this toluene would also be saturated, resulting in a larger
loss in octane and greater hydrogen consumption.
Some refineries with hydrocracking units may have another means of
further reducing the gasoline benzene levels. They may be able to
reduce the benzene content of one of the products of the hydrocracker,
the light hydrocrackate stream. Today, light hydrocrackate is normally
blended directly into gasoline. Light hydrocrackate contains a moderate
level of benzene, although its contribution to the gasoline benzene
levels is significant only in those refineries with hydrocrackers.
Light hydrocrackate could be treated by routing this stream to an
isomerization unit, similar to how refiners isomerize the six-carbon
straight run naphtha as discussed above. Alternatively, refiners could
use additional distillation equipment to cut the light hydrocrackate
more finely. In this way, more of the benzene could be shifted to the
``medium'' hydrocrackate stream, which in most refineries is sent to
the reformer and thus would be treated along with the reformate.
Another way that we believe some refiners could further reduce
their benzene levels would be to treat the benzene in natural gasoline.
Many refiners, especially in PADDs 3 and 4, blend some light gasoline-
like material, which is a by-product of natural gas wells, into their
gasoline. In most cases, we believe that this material is blended
directly into gasoline. Because the benzene concentration in this
stream is not high, it would be costly to treat the stream to reduce
benzene. However, there could be other reasons that refiners might find
compelling for treating this stream. First, since its octane is fairly
low to begin with, it could be fed to the reformer and its benzene
would be treated in the reformate, along with the benefit of improving
the octane quality of this stream. Second, refiners producing low-
sulfur gasoline under the gasoline sulfur program may not be able to
easily tolerate the sulfur from this stream if it were blended directly
into gasoline. Thus, if they treat this stream in the reformer, it
would undergo the hydrotreating (desulfurization) that is necessary for
all streams fed to the reformer. Overall, we do not have sufficient
information to conclude whether treating natural gasoline might become
more attractive in the future.
Another approach to benzene reduction that we believe could be
attractive in certain unique circumstances relates to the benzene
content in naphtha from the fluidized catalytic cracker, or FCC unit.
As shown in Table VII.F-2, FCC naphtha contains less than 1 percent
benzene on average. Despite the very low concentration of benzene in
FCC naphtha, the large volumetric contribution of this stream to
gasoline results in this stream contributing a significant amount of
benzene to gasoline as well. There are no proven processes which treat
benzene in FCC naphtha. This is because its concentration is so low as
well as because FCC naphtha contains a high concentration of olefins.
Segregating a benzene-rich stream from FCC naphtha and sending it to a
benzene saturation unit would saturate the olefins in the same boiling
range, resulting in an unacceptable loss in octane value. Also, some
refiners operate their FCC units today more severely to improve octane,
an action that also increases benzene content. Conceivably, refiners
could redesign their FCC process (change the catalyst and operating
characteristics) to reduce the severity and produce slightly less
benzene. We do not have sufficient information to know whether many
refiners are already operating at high FCC severity and thus have the
potential to reduce benzene by reducing that severity.
We request comment on our assessment of benzene reduction
approaches, including data related to the current or potential usage
and potential effectiveness of each approach.
[[Page 15887]]
d. Impacts on Octane and Strategies for Recovering Octane Loss
All these benzene reduction technologies affect the octane of the
final gasoline. Regular grade gasoline must comply with a minimum 87
octane (R+M)/2 rating (or a sub-octane rating of 86 for driving in
altitude), while premium grade gasoline must comply with an octane
rating which ranges from 91 to 93 (R+M)/2. Gasoline must meet these
octane ratings to be sold as gasoline at retail. Routing the benzene
precursors around the reformer reduces the octane of the six-carbon
compound stream, which normally exits the reformer with the rest of the
reformate. Without these compounds in the reformate, a loss of octane
in the gasoline pool of about 0.14 octane numbers typically occurs. If
this rerouted stream can be sent to an isomerization unit, a portion of
this lost octane can be recovered, provided that sufficient capacity
remains in that unit to continue treating the five-carbon naphtha
compounds. Benzene saturation and benzene extraction both affect the
octane of reformate and therefore the gasoline pool. Benzene saturation
typically reduces the octane of gasoline by 0.24 octane numbers, and
benzene extraction typically reduces the octane by 0.14 octane numbers.
Refiners can recover the lost octane in a number of ways. First,
the reformer severity can be increased. However, if the refiner is
reducing benzene through precursor rerouting or saturation, this
strategy can be somewhat counterproductive. This is because increased
severity increases the amount of benzene in the reformate and thus
increases the cost of saturation and offsets some of the benzene
reduction of precursor rerouting. Increasing reformer severity would
also decrease the operating cycle life of the reformer, requiring more
frequent regeneration. However, where benzene extraction is used,
increased reformer severity can improve the economics of extraction
because not only is lost octane replaced but the amount of benzene
extracted is increased. Again, operating the reformer more severely
would have the negative impact of shortening the reformer's operating
cycle between regeneration events.
Lost octane can also be recovered by increasing the activity of
other octane-producing units at the refinery. As discussed above,
saturating benzene in the isomerization unit loses the octane value of
that benzene, but octane is increased by the simultaneous formation of
branch-chain compounds. Also, many refineries produce a high-octane
blendstock called alkylate. Alkylate is produced by reacting normal
butane and isobutane with isobutylene over an acid catalyst. Not only
is this stream high in octane, but it converts compounds that are too
volatile to be blended in large amounts into the gasoline pool into
heavier compounds that can be readily blended into gasoline. If the
refinery is short of feedstocks for alkylate, then the operations of
the FCC unit, which is the principal producer of these feedstocks, can
be adjusted to produce more of the feedstocks for the alkylate unit,
increasing the availability of this high octane blendstock.
Octane can also be increased by purchasing high-octane blendstocks
and blending them into the gasoline pool. For example, some refiners
with excess octane production capacity market high octane blendstocks
such as alkylate or aromatics such as toluene. Oxygenates, such as
ethanol, can also be blended into the gasoline pool. Other oxygenates
such as methyl tertiary butyl ether (MTBE), ethyl tertiary butyl ether
(ETBE), tertiary amyl methyl ether (TAME), and other ethers are
sometimes used. The availability and cost of oxygenates for octane
replacement vary according to material prices as well as state and
federal policies that either encourage or discourage their use. (For
example, the Energy Policy Act of 2005 requires an increase in the
volume of renewable fuels, including ethanol, which are blended into
gasoline).
e. Experience Using Benzene Control Technologies
All of the benzene reduction technologies and octane generating
technologies described above have been demonstrated in refineries in
the U.S. and abroad. All four of these technologies have been used for
compliance purposes for the federal RFG program, which has required
that benzene levels be reduced to an average of 0.95 vol% or lower
since 1995.
According to the Oil and Gas Journal's worldwide refining capacity
report for 2003, there were 27 refineries in the U.S. with extraction
units. Those refineries that chose extraction often reduced their
benzene to levels well below 0.95 vol% because of the value of benzene
as a chemical feedstock, as discussed above. Once a refiner invests in
extraction, they have a strong incentive to maximize benzene production
and thus the availability of benzene to sell to the chemical market,
often reducing gasoline benzene more than is required by regulation.
The RFG program also led to the installation of a small number of
benzene saturation units in the Midwest to produce RFG for the markets
there. California has its own RFG program which also put into place a
stringent benzene standard for the gasoline sold there. The Oil and Gas
Journal's Worldwide Refining Report shows that four California
refineries have benzene saturation units. If we assume that those RFG
and California refineries that do not have extraction or saturation
units are routing their precursors around their reformer, then there
are 28 refineries using benzene precursor rerouting as their means to
reduce benzene levels. Thus, these technologies have been demonstrated
in many refineries since the mid-1990s in the U.S. and are considered
by the refining community as commercially proven technologies.
Worldwide experience provides further evidence of the commercial
viability of these benzene control technologies. A vendor of benzene
control technology has shared with us how the refining companies in
other countries have controlled the benzene levels of their gasoline in
response to the benzene standards put in place there. In Europe,
benzene control is typically achieved by routing the benzene precursors
around the reformer and feeding that rerouted stream to an
isomerization unit. In Japan, much of the benzene is extracted from
gasoline and sold to the chemicals market. Finally, in Australia and
New Zealand, refiners tend to use benzene saturation to reduce the
benzene levels in their gasoline.
f. What Are the Potential Impacts of Benzene Control on Other Fuel
Properties?
With the complex nature of modern refinery operations, most changes
to fuel properties affect other fuel properties to some degree. In the
case of benzene control, the ``ripple effects'' on other fuel
properties tends to be limited. However, as discussed above, the
reduction in benzene content that we are proposing in this rule,
depending on how it is accomplished, would in most cases slightly
reduce the overall octane of the resulting gasoline. Refiners would
likely compensate by increasing the volume of reformate (other
aromatics) blended into the gasoline, requiring a small increase in
reformer severity and energy inputs. Some analysis of gasoline property
survey data suggests that as benzene is reduced in gasoline, other
aromatics may increase somewhat to help compensate.
Another option refiners might consider in response to the proposed
rule is match-blending ethanol to make up octane and increase supply
volume.
[[Page 15888]]
This has been done for several years with MTBE as an economical way to
meet toxics performance requirements and octane targets for RFG. Like
MTBE, ethanol has a relatively high blending octane, and is already
added in many markets to take advantage of tax benefits or to support
local suppliers. Since the use of ethanol is being encouraged in the
recently-enacted energy legislation, refiners will likely seek to
capture the octane benefits as part of their process, which could help
offset the octane loss some refiners will see as a result of benzene
reduction processes. Furthermore, to the extent that current MTBE
production is shifted to production of isooctene, isooctane, and
alkylate, these compounds would be available as high-octane, low-
benzene gasoline blendstocks.
Finally, refiners may blend in isomerate or alkylate, which are
very ``clean'' gasoline blendstocks, thereby reducing the levels of
``dirtier'' gasoline blendstocks, and reducing overall sulfur, olefins,
and aromatics. We do not anticipate major changes in other fuel
properties due to reductions in benzene. Our modeling of the emissions
impacts of the proposed benzene standard does account for the modest
changes in other fuel properties. As discussed in section V of this
preamble and Chapter 2 of the RIA, this emissions modeling indicates
that the proposed benzene standard has negligible impacts on the
emissions of other mobile source air toxics.
3. Feasible Level of Benzene Control
A key aspect of our selection of the level of the proposed average
benzene standard of 0.62 vol% was our evaluation of the benzene levels
achievable by individual refineries. Our modeling analyses, which
combine our understanding of technological and economic factors, is
summarized in section IX below and discussed in detail in Chapter 9 of
the RIA. Later in this section we summarize our conclusions about the
overall feasibility of the program in terms of the requirements of the
Clean Air Act.
We assessed the benzene levels achievable for each refinery,
assuming that each refinery pursued the most stringent form of
reformate benzene control available to it--installing either benzene
saturation or extraction units. Based on this assessment, we project
that the most stringent benzene level achievable on average for all
U.S. gasoline would be 0.52 vol% benzene.\268\ As discussed above,
however, a standard at this level would require significant investment
at essentially all refineries--that is, near-universal installation of
either benzene saturation or benzene extraction capability. As
discussed in section IX below, this would be a very expensive result--
costing about three times more than the proposed program--that we do
not believe would be reasonable when costs are taken into account.
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\268\ This analysis is within the constraints of our modeling
and the refinery-specific information available to us at the time of
this proposal.
---------------------------------------------------------------------------
Furthermore, the model projects that all refineries would use
optimal combinations of actual benzene reductions and/or credit
purchases and would meet the average standard without going beyond the
primary technologies of reformate benzene reduction discussed earlier
in this section. To reach this conclusion, our model assumes a fully
utilized credit trading program (that is, each refiner is assumed to
minimize its average costs and to freely trade credits among companies
so that all credits generated are used). Although the assumption of a
fully utilized credit trading program is appropriate for our modeling
purposes, it is very possible that this would not occur in practice.
For example, some refiners might choose to hold onto credits that they
generate, saving them for potential ``emergencies'' when unexpected
events would otherwise cause noncompliance with the benzene standard.
Given the high cost of control for some refineries and the
potential that credit trading would be less-than-fully utilized, we
have looked at standards less stringent than 0.52 vol% that might be
feasible, considering cost. Based on our modeling, we believe that with
the proposed ABT program all gasoline could be produced at the proposed
average level of 0.62 vol% without extreme economic consequences. We
believe that sufficient credits would be generated such that refineries
facing the highest costs of benzene control would have sufficient
access to credits and would not need to turn to cost prohibitive
technologies.
From a strict feasibility standpoint, we have also assessed whether
all refineries could meet the proposed benzene level in cases where
sufficient credits were not available to every refinery that might want
them. We found that, despite the application of maximum reformate
benzene control in the refinery model to all refineries, the analysis
concluded that 13 refineries would still have benzene levels that
exceeded a 0.62 benzene level, with one refinery as high as 0.77 vol%
benzene. We have evaluated how these 13 refineries might use the other,
less attractive benzene control technologies discussed above (assuming
that an ABT option is not available to them).
The approach of capturing more of the reformate benzene in the
reformate splitter and sending this additional benzene to the
saturation unit would allow 7 of the 13 challenged refineries to reach
the 0.62 vol% level. Then, those refineries with a hydrocracker or a
coker could reduce the benzene content of the light hydrocrackate or
coker stream. This step would allow 5 more refineries to reach the
target level. Finally, the treatment of benzene in natural gasoline
would bring the remaining 1 refinery to the 0.62 vol% level or below.
(Because of our lack of information about the potential for reducing
the severity of the FCC unit, and because we do not believe that
reducing the benzene level of FCC naphtha is feasible, we did not
consider FCC options in this analysis.) Again, we expect that at the
proposed standard level of 0.62 vol% in the context of the proposed ABT
program, all refineries would be able to comply. This analysis
demonstrates that there are options, although extreme and costly, for
challenged refineries even if the ABT program does not fully function
as projected.
4. Lead Time
Our proposal for the gasoline benzene standard to begin on January
1, 2011 would allow about four years after we expect the rulemaking to
be finalized for refiners to comply with the program's requirements. As
discussed below, we believe that four years of lead time would allow
refiners sufficient time to install the capital equipment they would
need to lower their benzene levels, and would also allow this program
to avoid significant conflict with other fuel programs being
implemented around the same time. In addition, the ABT program would
allow the industry to phase in the program, through the early credit
provisions, so that significant benzene reductions would occur earlier
than the program start date. The credits earned could allow the
investment in higher capital cost and less cost-effective technologies
to be delayed relative to the program start date.
In recent years, the implementation of the gasoline sulfur and
highway diesel sulfur programs has provided an opportunity to observe
the response of the refining industry to major fuel control
requirements. Many refiners have demonstrated their ability to make
very large, expensive sulfur control modifications to their refineries
in less than four years, and in some cases significantly less. It is
helpful to
[[Page 15889]]
compare this sulfur control experience with the types of technologies
refiners would use to reduce benzene.
Refiners could implement approaches to benzene control that require
very little or no capital equipment, including routing of benzene
precursors around the reformer and the use of an existing isomerization
unit, with very little lead time requirements. We believe that
approaches using moderately complex capital equipment, including
improving the effectiveness of precursor rerouting and expanding
existing extraction capacity, would generally require one to two years
of lead time. Projects that involve the installation of new equipment,
including benzene saturation and extraction units, require more time,
generally two to three years. This includes time for the equipment
installation as well as related offsite equipment and any necessary
capital equipment for production of hydrogen or high-octane
blendstocks. Of all the benzene control approaches, benzene extraction
is closest in scope and complexity to the technologies the industry is
using for fuel sulfur control. In addition to the time needed for
planning and installing the extraction unit and related equipment,
extraction also requires time to install additional facilities for
storing extracted benzene and for loading it for transport. Thus, as
with the earlier programs, we believe the refiners choosing to add a
benzene extraction unit could in some cases need as much as four years
to complete the project. Overall, we believe that four years of lead
time would ensure that all refiners would have sufficient time to
comply, regardless of the benzene control technology they select.
Another factor in selecting an appropriate date to begin the
program is the timing of the implementation of other large fuel control
programs, especially the Nonroad Diesel rule.\269\ The 15 ppm sulfur
standard mandated by the Nonroad Diesel Fuel program applies to nonroad
diesel fuel in 2010 and to locomotive and marine diesel fuel in 2012.
Refiners modifying their refineries to produce either ultra low sulfur
nonroad or locomotive and marine diesel fuel will do so during the
several years prior to 2010 and 2012. For each of those start dates,
there is a progression of actions which includes planning, design,
construction and start-up all during the four year run-up toward the
start date of the program. For example, the engineering and
construction (E&C) industry will be busy designing and constructing
each of the units that will be installed. Different portions of the E&C
industry will be engaged at specific periods of time leading up to the
time that the unit is started up. For this reason, staggering the start
year of this benzene fuel standard with the start years for the Nonroad
Diesel program would help to avoid excessive demand on specific parts
of the E&C industry. The staggering of today's proposed program's start
date with those of the Nonroad Diesel program may also help refiners
that might be seeking to acquire capital through banks or other lending
institutions by spreading out the requests.
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\269\ The months leading up to January 2010 will also be when
several small refiners and refiners that were granted hardship
relief will be implementing their gasoline sulfur programs. We
believe that any serious interference among implementation projects
that individual refiners might demonstrate during this time period
could be addressed under the small refiner or general hardship
provisions of the proposed rule.
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We believe that the proposed implementation date of January 1, 2011
would minimize overlap and possible interference with the
implementation of the Nonroad Diesel rule. Implementation of the
proposed benzene standard one year earlier or one year later would
overlap directly with one of the two Nonroad Diesel implementation
dates. We also believe that the additional year of lead time, compared
to a 2010 start date, would make the program more effective. Because we
expect that the proposed ABT program would encourage many refiners to
reduce benzene levels early whenever possible, we believe that
significant benzene reductions would occur prior to 2011. We discuss
this expected early benzene reduction further as a part of the
description of the proposed ABT program in section VII.D above.
For these reasons, we are proposing that the gasoline benzene
standard be implemented beginning January 1, 2011. We request comment
on the issue of lead time, including data supporting four years or a
different length of time.
5. Issues
a. Small Refiners
Small refiners are technically capable of realizing a similar
benzene reduction from their gasoline as large refiners. Because of
economies of scale, however, some of the benzene control technologies
which would be more affordable for larger refineries would be much more
challenging and more expensive for small refiners. This is due to the
poorer economies of scale that the small refiners are faced with
installing capital into their refineries. Two of the benzene control
technologies discussed above would be particularly attractive to small
refiners for implementing into their refineries. These are benzene
precursor rerouting, and, if the refinery has an isomerization unit,
routing the benzene precursors to the isomerization unit. These
technologies would be attractive to small refiners because they would
require little or no capital investments to implement for reducing
their gasoline benzene levels. Therefore, the per-gallon cost of these
two technologies is about the same as that for large refineries.
Smaller refineries tend to have fewer process units and blending
streams, which generally also means that they will have fewer options
for recovering lost octane. For example, these refineries are less
likely to have an alkylation unit. An alkylation unit gives refiners
short on octane the option to change the operations of their FCC unit
to make more olefins and then send the appropriate olefins to their
alkylation unit to produce more of that high octane blendstock. This is
not an option for several of the small refiners that do not have an
alkylation unit. Also, small refineries are more likely to have a
higher pressure reforming unit. The higher pressure reformer units tend
to produce more benzene from the cracking of heavier aromatic compounds
and will tend to do this more as their severity is increased. A higher
pressure reformer also has a more difficult regeneration cycle and
shorter cycle lengths as it is operated more severely. Thus, while
other refiners with lower pressure units may be able to increase the
severity of their reformers to make more octane without producing much
more benzene and greatly reducing the cycle lengths of their reformers,
many of the small refiners may not have as much flexibility in this
area. In any event, these greater technological challenges can be
offset somewhat where it is economical to purchase high octane
blendstocks or oxygenates from other refiners or from the petrochemical
industry.
b. Imported Gasoline
Although the majority of petroleum products in the U.S. are made
from imported crude oil, only about five percent of the gasoline
consumed in this country was imported as finished gasoline in 2003.
This imported fuel is approximately half RFG and half CG, and had an
average benzene content of 0.8% volume in 2003. No batches of imported
gasoline had a benzene level above 2.4%. Over 90% of the imported
gasoline was delivered into the East Coast and Florida, with about 5%
arriving on the West Coast, and the
[[Page 15890]]
remainder being brought into other regions of the country. The origin
of the majority of this gasoline was Canada (40%), Western Europe
(31%), and South America (17%).
Since imported finished gasoline is not processed in a domestic
refinery, where refiners would be taking steps to meet the proposed
benzene standard, importers would be affected in other ways. Importers
would most likely either begin to purchase gasoline that is low enough
in benzene to meet the standard, or they would continue to import
gasoline with benzene at current levels but purchase credits to cover
the fuel being above the standard. As shown above, over 70 percent of
imported gasoline comes from countries that have already set benzene
limits on their gasoline. As a result, we believe that gasoline with
some degree of benzene control will be easily available for importers
to market. In some cases, we also expect that some foreign refiners may
produce for export some fraction of their gasoline to meet our proposed
0.62 vol% average standard benzene. This would provide importers
further options in the U.S. gasoline market.
G. How Does the Proposed Fuel Control Program Satisfy the Statutory
Requirements?
As discussed earlier in this section, we have concluded that the
most effective and appropriate program for MSAT emission reduction from
gasoline is a benzene control program. Today's action proposes such a
program, with an average benzene content standard of 0.62 vol% and a
specially-designed averaging, banking, and trading program. In section
VII.F above, we summarize our evaluation of the feasibility of the
proposed program, and in section IX.A we summarize our evaluation of
the costs of the program. The analyses supporting our conclusions in
these sections are discussed in detail in Chapters 6 and 9 of the RIA.
Taking all of this information into account, we believe that a
program more stringent than the proposed program would not be feasible,
taking into consideration cost. As we have discussed, making the
standard more stringent would require more refiners to install the more
expensive benzene control equipment, with very little improvement in
benzene emissions. Also, we have shown that related costs increase very
rapidly as the level of the standard is made more stringent.
Conversely, while it would provide significant benzene emission
reductions, we are concerned that a somewhat less stringent national
average standard than the proposed 0.62 vol% (e.g., 0.65 or 0.70 vol%)
would not satisfy our statutory obligation for the most stringent
standard feasible considering cost and other factors. Furthermore, such
standards would not accomplish several important programmatic
objectives as discussed in section VII.C.
We have also considered energy implications of the proposed
program, as well as noise and safety, and we believe the proposed
program would have very little impact on any of these factors. Analyses
supporting these conclusions are also found in Chapter 9 of the RIA. We
carefully considered lead time in establishing the stringency and
timing of the proposed program (see section VII.F above).
Consequently, we believe that the proposed program would meet the
requirements of section 202(l) of the Clean Air Act, reflecting ``the
greatest degree of emission reduction achievable through the
application of technology which is available, taking into consideration
* * * the availability and costs of the technology, and noise, energy,
and safety factors, and lead time.''
H. Effect on Energy Supply, Distribution, or Use
This rule is not a ``significant energy action'' as defined in
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355
(May 22, 2001)) because it is not likely to have a significant adverse
effect on the supply, distribution, or use of energy. If promulgated,
the gasoline benzene provisions of the proposed rule would shift about
22,000 barrels per day of benzene from the gasoline market to the
petrochemical market. This volume represents about 0.2 percent of
nationwide gasoline production. The actual impact of the rule on the
gasoline market, however, is likely to be less due to offsetting
changes in the production of petrochemicals, as well as expected growth
in the petrochemical market absent this rule. The major sources of
benzene for the petrochemical market other than reformate from gasoline
production are also derived from gasoline components or gasoline
feedstocks. Consequently, the expected shift toward more benzene
production from reformate due to this proposed rule would be offset by
less benzene produced from other gasoline feedstocks.
The rule would require refiners to use a small additional amount of
energy in processing gasoline to reduce benzene levels, primarily due
to the increased energy used for benzene extraction. Our modeling of
increased energy use indicates that the process energy used by refiners
to produce gasoline would increase by about one percent. Overall, we
believe that the proposed rule would result in no significant adverse
energy impacts.
The proposed gasoline benzene provisions would not affect the
current gasoline distribution practices.
We discuss our analysis of the energy and supply effects of the
proposed gasoline benzene standard further in section IX of this
preamble and in Chapter 9 of the Regulatory Impact Analysis.
The fuel supply and energy effects described above would be offset
substantially by the positive effects on gasoline supply and energy use
of the proposed gas can standards also proposed in today's action.
These proposed provisions would greatly reduce the gasoline lost to
evaporation from gas cans. This would in turn reduce the demand for
gasoline, increasing the gasoline supply and reducing the energy used
in producing gasoline.
I. How Would the Proposed Gasoline Benzene Standard Be Implemented?
This section discusses the details associated with meeting the
proposed 0.62 vol% benzene standard.
1. General Provisions
a. What Are the Implementation Dates for the Proposed Program?
We are proposing that refiners and importers would achieve
compliance with the requirements of the proposed benzene program
beginning with the annual averaging period beginning January 1, 2011.
Refineries with approved benzene baselines could generate early credits
from June 1, 2007, through December 31, 2010. Refineries and importers
could generate standard credits beginning with the annual averaging
period beginning January 1, 2011, provided that the average benzene
content of the gasoline they produce or import during the year was less
than 0.62 vol% benzene.
Approved small refiners would be allowed to delay compliance with
the 0.62 vol% standard until the annual averaging period beginning
January 1, 2015. They could, however, generate early credits beginning
June 1, 2007 through December 31, 2014, provided that they had an
approved benzene baseline. They would be able to generate standard
credits beginning January 1, 2015.
[[Page 15891]]
b. Which Regulated Parties Would Be Subject to the Proposed Benzene
Standards?
Domestic refiners and importers would be subject to the proposed
standards. We are proposing that each refinery of a refiner must meet
the standard, and all associated requirements, individually. Refinery
grouping, or aggregation, as allowed in the Anti-dumping and MSAT1
program for CG, would not be permitted for purposes of complying with
the proposed benzene standard (although the ABT provisions provide
similar flexibility, and the credit generation and transfer provisions
would perform basically the same functions). For an importer, we are
proposing that the requirements apply to the entire volume imported
during the averaging period regardless of import locations or sources.
In addition, where a company has both refinery and import operations,
each operation would have to achieve its own compliance with the 0.62
vol% benzene standard. We are proposing that those who only added
oxygenate or butane to gasoline or gasoline blending stock would not be
subject to the proposed standards for that gasoline unless they also
added other blending components to the blend. This would be similar to
the current treatment of these entities and their gasoline under the
RFG, Anti-dumping and MSAT1 programs, where specialized accounting and
calculation procedures are specified. In these cases, the refinery (or
importer) that produces gasoline or gasoline blendstock includes the
oxygenate in its own compliance determination. We are proposing that
this practice would continue under today's program. Transmix processors
would not be subject to the proposed requirements for gasoline produced
from transmix, but gasoline produced from transmix to which other
blendstocks were added would be subject to the proposed benzene
standard.
We are proposing that all gasoline produced by foreign refineries
for use in the United States would be included in the compliance and
credit calculation of the importer of record. Under the Anti-dumping
and MSAT1 rules, as well as the gasoline sulfur requirements,
additional requirements applicable to foreign refiners who chose to
comply with those regulations separately from any importer were
included to ensure that enforcement of the regulation at the foreign
refinery would not be compromised. We are proposing similar provisions
here. Specifically, we are proposing to allow foreign refiners to
generate early credits and to apply for temporary hardship relief and
small refiner status. See proposed 40 CFR 80.1420. However, under the
earlier rules, few foreign refiners have chosen to undertake these
additional requirements, and almost all gasoline produced at foreign
refineries is included in an importer's compliance determination for
the current EPA gasoline programs.\270\ We invite comment on the value
of extending these provisions to this proposed benzene program.
---------------------------------------------------------------------------
\270\ Often, the importer of record is the foreign reiner. In
these instances, the importer/foreign refiner has simply opted to
achieve compliance via the applicable importer provisions.
---------------------------------------------------------------------------
As mentioned, we are proposing to extend the small refiner
provisions to foreign refiners. Our experience in past rules is that
they are not taken advantage of for various reasons. Most foreign
refineries are state-owned or owned by large multinational companies,
and would exceed the employee-count criterion. Others have typically
not been interested in fulfilling the enforcement-related requirements
that apply to foreign refineries. We request comment on extending the
small refiner provisions to foreign refiners.
c. What Gasoline Would Be Subject to the Proposed Benzene Standards?
All finished gasoline produced by a refinery or imported by an
importer would be subject to the proposed benzene content standard. In
addition, gasoline blending stock which becomes finished gasoline
solely upon the addition of oxygenate would also be subject to the
proposed standard.\271\ Other gasoline blendstocks which are shifted
among refiners prior to turning them into finished gasoline would not
be subject to the benzene standard. They would be included at the point
they are converted or blended to produce finished gasoline.
---------------------------------------------------------------------------
\271\ As stated earlier, both blending stock and oxygenate would
be included in the refinery's or importer's compliance
determination. Conventional gasoline refiners are required to have
agreements with downstream oxygenate blenders to ensure that the
appropriate type and amount of oxygenate is added to the gasoline
blending stock, per 40 CFR 80.10(d). Absent such agreements, the
refinery may only include the gasoline blending stock in its
compliance determination and the oxygenate is not included in any
compliance determination.
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We are proposing to exclude gasoline produced or imported for use
in California from this benzene requirement. Although California's
benzene averaging standard is greater than 0.62 vol%, California in-use
benzene levels are currently below the level of the proposed
standard.\272\ We expect this situation will continue. There would be
no additional benefit to consumers of California gasoline or to the
implementation and benefits of the proposed program by the inclusion of
gasoline used in California.
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\272\ California Code of Regulations, Title 13 Section 2262.
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This proposal also would exclude those specialized gasoline
applications that have been exempted from other EPA gasoline rules,
such as gasoline used to fuel aircraft, or for sanctioned racing
events, gasoline that is exported for sale and use outside of the U.S.,
and gasoline used for research, development or testing purposes, under
certain circumstances.
d. How Would Compliance With the Benzene Standard Be Determined?
Compliance with the proposed benzene standard would be on an
annual, calendar year basis, similar to almost all other current
gasoline controls. A refiner's or importer's compliance (or Compliance
Benzene Value, as used in the proposed regulation) would be determined
from the annual average benzene content of its gasoline (produced or
imported), any credits used for compliance purposes, and any deficit
carried over from the previous year, and would have to be 0.62 vol% or
lower, on a benzene volume basis. The Compliance Benzene Value would
differ from the refiner's or importer's actual annual average benzene
concentration because the latter would be solely a volume weighted
average of the benzene concentrations of the refinery's or importer's
actual gasoline batches.
Credits, in any amount, could be used to achieve compliance. As
mentioned, we are also proposing to allow a deficit to be carried
forward for one year. Under these circumstances, in the next compliance
period, the refinery or importer would have to be in compliance, that
is, the refinery or importer would have to, through production or
import practices, and/or the use of credits, make up the deficit from
the previous year and be in compliance with the proposed benzene
standard. This provision could be especially helpful to refiners in the
first year of the program, until the availability and need for credits
was established.
In the RFG and Anti-dumping programs, and MSAT1, by extension,
refiners and importers generally include oxygenate added downstream
from the refinery or the import facility in their compliance
calculations.\273\ Refiners
[[Page 15892]]
and importers of RBOB are required to account for the oxygenate in
their own compliance. As mentioned earlier, refiners and importers of
conventional gasoline can include the oxygenate if they have met the
Anti-dumping requirements for ensuring that the amount and type of
oxygenate was indeed added. We are not proposing any changes to these
provisions for the purposes of compliance with the proposed benzene
program. However, average pool benzene levels are expected to decrease
as a result of increased ethanol use due to requirements of the Energy
Policy Act of 2005, and this would affect both early and standard
credit generation, as will be discussed below. However, we request
comment on how, if at all, additional oxygenate use should be
considered, and perhaps limited, in compliance determinations for the
proposed program.
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\273\ As a result, oxygenate blenders would not be subject to
the RFG, Anti-dumping or MSAT1 regulations except for gasoline to
which they add other blendstocks in addition to the oxygenate.
---------------------------------------------------------------------------
2. Averaging, Banking and Trading Program
a. Early Credit Generation
As discussed, early credit generation could occur as early as the
averaging period beginning June 1, 2007, through the averaging period
ending December 31, 2010, or ending December 31, 2014, for small
refiners. In order to generate early benzene credits, a refinery would
first establish a benzene baseline which is its average benzene
concentration over the period January 1, 2004, through December 31,
2005. A refinery would be eligible to generate early credits when it
reduced its annual average benzene concentration by at least 10%
compared to its benzene baseline. Credits would then be calculated
based on the entire reduction in benzene below the baseline. Generation
of early credits for the first averaging period, June 1, 2007 through
December 31, 2007, which is less than a calendar year, would be based
on the average benzene level of the gasoline produced only during this
period. Gasoline produced before June 1, 2007, would not be included in
the credit generation determination.
We are proposing to allow only refiners (and not importers) to
generate early benzene credits because it is at the refinery, or
production level, where real changes in the production of gasoline can
be made. Importers would simply seek out blending streams or gasoline
with lower benzene, but would not have to invest or take other action
involving the production of the lower benzene gasoline. Furthermore,
many importer operations grow in volume, shrink in volume, come into
existence and go out of existence on a continual basis, making it
difficult to assess the appropriateness of both the baseline and any
early credits. Thus, even though an importer may have had regular,
consistent import activity during the 2004-2005 baseline period, we are
proposing that only refiners would be allowed to apply for a benzene
baseline, and if approved, to generate early benzene credits based on
reductions in future averaging period gasoline benzene levels.
As discussed above, one of the purposes of allowing the early
generation of benzene credits would be to promote reductions in benzene
through refinery processing changes. We are concerned that benzene
reductions due to increased oxygenate use would result in reduced
benzene concentrations. Oxygenate use (in the form of ethanol) in CG is
expected to increase as a result of the Energy Policy Act
requirements.\274\ This additional oxygenate will dilute gasoline
benzene levels as well as extend the gasoline pool. As a result,
refinery average benzene levels would be likely to be lower during the
early credit generation period than during the benzene baseline period
(2004-2005) if there is an increase in the amount of CG refiners send
for downstream blending with ethanol (CBOB). We are concerned that
reductions in fuel benzene levels due to oxygenate addition
significantly beyond the average levels of recent years could result in
windfall early credit generation for some refineries. We request
comment on the likelihood of windfall early credit generation, and if
such a situation were to occur, whether it would warrant limiting early
benzene credits by consideration of the average oxygenate use during
the baseline period compared to the early credit generation period or
by adjusting the early credit trigger point. We believe this would be
less of an issue during the standard credit generation period beginning
in 2011 (2015 for small refiners) because of the more stringent
requirements for generating standard credits (getting below the 0.62
vol% standard) compared to the early credit generation requirements
(achieving a minimum 10% reduction in baseline benzene levels).
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\274\ Even though the Energy Policy Act of 2005 eliminated the
oxygen mandate for RFG, oxygenate use (in the form of ethanol) in
RFG is expected to continue.
---------------------------------------------------------------------------
b. How Would Refinery Benzene Baselines Be Determined?
As mentioned above, a refiner would submit a benzene baseline
application to EPA for any of its refineries which planned to generate
early credits. The benzene baseline would be the volume-weighted
average of the benzene levels of the gasoline produced by the refinery
during 2004-2005. Note that the gasoline would be the combination of
the refinery's RFG and CG, if applicable, and would exclude California
gasoline and other fuels exempted from the proposed standard. The
benzene values used in the benzene baseline calculation should be the
same as used in the RFG, Anti-dumping and MSAT1 compliance
determinations. We are not proposing provisions for adjusting these
benzene baselines based on circumstances during the baseline years or
otherwise.
Though we expect that most refineries that apply for a benzene
baseline would have data for both 2004 and 2005, if a refinery was shut
down for part of the 2004-2005 period, it could still be able to
establish a benzene baseline. Under these circumstances, the refiner
would have to provide and justify, using refinery and engineering
analyses, an appropriate adjusted value that reflects the likely
average benzene concentration for the refinery, had it been fully
operational. A refinery that was non-operational for the entire period
January 1, 2004 through December 31, 2005 would not be able to
establish a benzene baseline and therefore not allowed to generate
early credits.
c. Credit Generation Beginning in 2011
Credits could be generated in any annual averaging period beginning
January 1, 2011, or for small refiners, beginning January 1, 2015.
These credits, also called standard benzene credits, could be generated
by a refinery or importer when the refinery's or importer's annual
average benzene concentration was less than the proposed standard of
0.62 vol%.
While the proposed benzene standard is a 49-state standard due to
the fact that California would maintain its existing benzene standard,
we request comment on the appropriateness of allowing California
refineries to generate credits that could be used to demonstrate
compliance outside of California.
d. How Would Credits Be Used?
We are proposing that all gasoline benzene credits that are
properly created may be used equally and interchangeably. That is, once
generated, there would be no difference
[[Page 15893]]
between early credits and standard credits, except for their credit
life, as discussed below. Under this proposal, credits could be
transferred to another refiner or importer, or they could be banked by
the refinery or importer that created them for use or transfer in a
later compliance period.
As in past credit programs, we are proposing some limits on credit
use. First, we are proposing to limit the number of times a credit
could be transferred. At the end of the allowable number of transfers,
the credit would have to be used by the last transferee before its
expiration date. Second, we are proposing that credits would have a
finite life whether or not transferred. We are proposing that early
credits, those generated prior to 2011, would have a three-year credit
life from the start of the program in 2011. These credits would have to
be used to achieve compliance with the proposed benzene standard in
2011, 2012, and/or 2013, or they would expire. In addition, we are
proposing that credits generated in 2011 and beyond (or early credits
generated by small refiners during this period) would have to be used
within five years of the year in which they were generated. We had
considered requiring credits be used in order of their generation date,
that is, credits generated earlier would have to be used before credits
generated later. However, the finite credit life is likely to ensure
this usage, and thus we are not proposing to regulate credit use in
this manner. We are also proposing that credit life could be extended
by two years for any credits that are generated by or traded to
approved small refiners.
Under the proposed regulations, a refiner or importer would have to
use all benzene credits in its possession before being allowed to have
deficit carryover, and would have to meet its own compliance
requirement before transferring any gasoline benzene credits. In the
case of invalid credits, or credits improperly created, all parties
would have to adjust their credit records, reports, and compliance
calculations to reflect proper credit use. The transferor would first
correct its own records and ensure its own compliance, and then apply
any remaining properly created credits to the transferee before trading
or banking those credits. See section X.A below for more discussion of
these issues.
3. Hardship and Small Refiner Provisions
a. Hardship
The hardship provisions and requirements are extensively discussed
in section VII.E.2, and thus are only briefly addressed here. We are
proposing that a refiner for any of its refineries could seek temporary
relief from meeting the proposed benzene standard due to unusual
circumstances, including those situations, such as a natural disaster,
which would clearly be outside the control of the refiner. A refiner
would have to apply to EPA for this temporary relief, and EPA could
deny the application or approve it for an appropriate period of time.
However, given the existence of a flexible ABT program, EPA expects
that, prior to requesting hardship relief, the refiner would have made
best efforts to obtain credits in order to comply with the proposed
benzene standard. In past rulemakings, for example the gasoline sulfur
rule, the hurdle for receiving a hardship was very high, with very few
granted. While we are proposing these provisions again here, the
expectation is that the hurdle would be even higher. Given the
existence and flexibility afforded by the ABT program and the more
limited cost of the benzene standard, it is our expectation that as
long as a viable credit market existed, it would be difficult to
justify granting a hardship. Furthermore, the form of any relief we are
proposing is in the form of additional time to demonstrate compliance
via credits as opposed to any waiver of the standards.
b. Small Refiners
As discussed earlier, we are proposing to allow small refiners to
meet the proposed benzene standard beginning with the 2015 averaging
period, which is four years later than non-small refiners and
importers. Small refiners could also generate both early and standard
credits if they can meet the requirements of those programs. A refiner
would have to apply to EPA by December 31, 2007 in order to be
considered a small refiner under this proposed rule even if the entity
was or had been considered a small refiner under other EPA rules. The
requirements for small refiners under this rule are detailed in section
VII.E.
4. Administrative and Enforcement Related Provisions
a. Sampling/Testing
As under the Tier 2 program where a sulfur concentration must be
determined for every batch of gasoline, we are proposing that a benzene
concentration value also be determined for every batch of gasoline
produced or imported. Thus, as gasoline samples are taken for sulfur
measurement, they would also be taken for benzene measurement. The RFG
program, which has both a toxics emissions requirement and a per-gallon
benzene cap, already requires a benzene value to be determined for
every batch of gasoline. The Anti-dumping program, which has only a
toxics emissions requirement, allows benzene values to be determined
from composite samples. See 40 CFR 80.101(i). Thus, the proposed
sampling requirement would be a change from the current sampling
methodology allowed under the Anti-dumping provisions but makes it
consistent with the ongoing Tier 2 sulfur program. However, unlike the
gasoline sulfur requirements, this every batch testing requirement for
conventional gasoline benzene would not have to occur prior to the
batch leaving the refinery. Additionally, the batch numbering system
would be the same as that used for conventional gasoline sulfur.
We are not proposing any changes to the benzene test methodology.
See 40 CFR 80.46(e). We are proposing sample retention requirements
similar to those in the gasoline sulfur provisions. See 40 CFR 80.335.
b. Recordkeeping/Reporting
We are proposing to require that records be kept for each averaging
period in order to accommodate the proposed benzene standard and the
accompanying credit trading program. These records would include: the
benzene baseline calculation, if applicable; the number of early
credits generated, if applicable; the actual average benzene
concentration of gasoline produced or imported; the compliance benzene
value; any deficit; the number of credits generated; and records of any
credit transfers to or from the refinery or importer, including price
of the credits and dates of transactions. All of this information, and
any other information that EPA may require, such as information similar
to that proposed below for inclusion in the pre-compliance reports,
would be submitted in a refiner's or importer's annual report to the
Agency. Since we are proposing that the regulatory provisions for the
benzene control program would become the single regulatory mechanism
covering RFG and Anti-dumping annual average toxics requirements once
the benzene standard is in effect, and would replace the MSAT1
requirements, we expect to be able to streamline several of the current
reporting forms once the proposed program is fully implemented in 2015.
As mentioned, we are also proposing to require that refiners and
importers submit pre-compliance reports in order to provide information
as to the likely number of benzene credits needed and
[[Page 15894]]
available, and how the refiner or importer plans to achieve compliance
with the proposed benzene requirements. These reports would be required
annually each June 1 from 2001 through 2011 (or through 2015 for small
refiners). In addition to information regarding gasoline production and
the number of credits expected to be used or produced, the pre-
compliance reports would include information regarding the benzene
reduction technology expected to be used, any capital commitments, and
information on the progress of the installation of the technology. We
are also proposing that these reports include price and quantity
information for any credits bought or sold. The reports would include
updates from the previous year's estimates, and comparison of previous
year actual production to the projected values.
c. Attest Engagements, Violations, Penalties
We are proposing to require attest engagements for generation of
both early and other credits, credit use, and compliance with the
proposed program, using the usual procedures for attest engagements.
The violation and penalty provisions applicable to this proposed
benzene program would be very similar to the provisions currently in
effect in other gasoline programs. We request comment on the need for
additional attest engagement, violation or penalty provisions specific
to the proposed benzene program.
5. How Would Compliance With the Provisions of the Proposed Benzene
Program Affect Compliance With Other Gasoline Toxics Programs?
As discussed above, we expect that virtually all refineries will
reduce benzene from their current levels, and no refineries will
increase it. This impact on benzene levels, combined with the pre-
existing gasoline controls in sulfur, RVP, and VOC performance, means
that compliance with the benzene content provisions is also expected to
lead to compliance with the annual average requirements on benzene and
toxics performance for reformulated gasoline and the annual average
Anti-dumping toxics performance for conventional gasoline. EPA is
therefore proposing that upon full implementation in 2011 the
regulatory provisions for the benzene control program would become the
single regulatory mechanism used to implement these RFG and Anti-
dumping annual average toxics requirements, replacing the current RFG
and Anti-dumping annual average toxics standards as unnecessary. The
proposed benzene control program would also replace the MSAT1
requirements. However, we propose the RFG per gallon benzene cap of 1.3
vol% remain in effect; we are requesting comment on the need to retain
this requirement for RFG. Note that compliance with the proposed
benzene standard would ensure compliance with the aforementioned RFG,
Anti-dumping and MSAT1 requirements beginning with the 2011 averaging
period, or the 2015 averaging period for small refiners. Thus, during
the early credit generation period, 2007 through 2010, all entities
would still be required to comply with their applicable RFG, Anti-
dumping and MSAT1 requirements. In addition, from 2011 through 2014,
small refiners would have to continue to meet their applicable RFG,
Anti-dumping and MSAT1 requirements. As discussed earlier in section
VII.E.2, we are also requesting comment on the option of allowing some
refineries to meet the proposed benzene standard early, thus replacing
the current RFG and Anti-dumping annual average toxics provisions and
replacing MSAT1 requirements for these refineries.
VIII. Gas Cans
Gas cans are consumer products people use to refuel a wide variety
of gasoline-powered equipment. Their most frequent use is for refueling
lawn and garden equipment such as lawn mowers, trimmers, and chainsaws.
They are also routinely used for recreational equipment such as all-
terrain vehicles and snowmobiles, and for passenger vehicles which have
run out of gas. The gas cans are red, per ASTM specifications, and
about 95 percent of them are made of plastic (high density polyethelene
(HDPE)). There are approximately 20 million gas cans sold annually and
about 80 million cans are in use nationwide. The average lifetime of a
gas can is about 5 years.
California has established an emissions control program for gas
cans which began in 2001. Since then, some other states have adopted
the California requirements. Last year, California adopted a revised
program which is very similar to the one we are proposing in this
rulemaking. Manufacturers are required to meet the new requirements in
California by July 1, 2007 at the latest. State programs are discussed
further in section VIII.A.3., below.
A. Why Are We Proposing an Emissions Control Program for Gas Cans?
1. VOC Emissions
We are proposing standards to control VOCs as an ozone precursor
and also to minimize exposure to VOC-based toxics such as benzene and
toluene. Gasoline is highly volatile and evaporates easily from
containers that are not sealed or closed properly. Although an
individual gas can is a relatively modest emission source, the
cumulative VOC emissions from gas cans are quite significant. We
estimate that containers currently emit about 315,000 tons of VOC
annually nationwide, which is equal to about 5 percent of the
nationwide mobile source inventory (see section V.A.). Left
uncontrolled, a gas can's evaporative emissions are up to 60 times the
VOC of a new Tier 2 vehicle evaporative control system. Gas can
emissions are primarily of three types: evaporative emissions from
unsealed or open containers; permeation emissions from gasoline passing
through the walls of the plastic containers; and evaporative emissions
from gasoline spillage during use.
As discussed in section IV. above, ozone continues to be a
significant air quality concern, and gas cans are currently an
uncontrolled source of VOC emissions in many areas of the country.
Section 183(e) of the Clean Air Act directs EPA to study, list, and
regulate consumer and commercial products that are significant sources
of VOC emissions. In 1995, after conducting a study and submitting a
Report to Congress on VOC emissions from consumer and commercial
products, EPA published an initial list of product categories to be
regulated under section 183(e). Based on criteria that we established
pursuant to section 183(e)(2)(B), we listed for regulation those
consumer and commercial products that we considered at the time to be
significant contributors to the ozone nonattainment problem, but we did
not include gas can emissions.\275\ After analyzing the emissions
inventory impacts of gas cans, EPA plans to publish a Federal Register
notice that would add portable gasoline containers to the list of
consumer products to be regulated and explain the rationale for this
action in detail. EPA will afford interested persons the opportunity to
comment on the data underlying the listing before taking final action
on today's proposal. In today's notice, EPA is proposing that the
standards for
[[Page 15895]]
portable gasoline containers represent ``best available controls'' as
required by section 183(e)(3)(A). Determination of the ``best available
controls'' requires EPA to determine the degree of reduction achievable
through use of the most effective control measures (which includes
chemical reformulation, and other measures) after considering
technological and economic feasibility, as well as health, energy, and
environmental impacts.\276\
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\275\ 60 FR 15264 ``Consumer and Commercial Products: Schedule
for Regulation,'' March 23, 1995.
\276\ See section 183(e)(1); see also section 183(e)(4)
providing broad authority to include ``systems of regulation'' in
controlling VOC emissions from consumer products.
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2. Technological Opportunities to Reduce Emissions From Gas Cans
Gas can manufacturers have already developed and applied emissions
controls in response to California requirements. Traditional gas cans
typically have a spout for pouring fuel and a vent at the rear of the
can to allow air to flow into the cans when in use. About 70 percent of
emissions from gas cans are due to evaporative losses from caps being
left off one or both of these openings. The primary way to reduce these
emissions is to design cans that are not easily left open. To
accomplish this, gas can manufacturers have developed spouts that
incorporate a spring mechanism to close cans automatically when not in
use. Many spout designs are opened by consumers pushing the spout
against the equipment fuel tank. Some designs incorporate a button or
trigger mechanism that the consumer pushes to start fuel flow and then
releases when done refueling. Also, some cans are made without rear
vents, incorporating venting into the spouts and thus eliminating one
potential emission point. The consumer still must remove the spout to
refill the cans but would replace the spout once the can is full in
order to prevent spillage during transport.
The auto-closing spouts reduce spillage by giving consumers greater
control over the fuel flow. The spouts allow consumers to place the can
in position before activating or opening the cans. Once the receiving
fuel tank is full, consumers can easily release the mechanism to stop
the fuel flow. This reduces spillage during the positioning and removal
of the can and reduces overall spillage by about half. Consumers
generally appreciate the greater control over the refueling event.
Blow-molding is used to manufacture gas cans. Typically, blow-
molding is performed by creating a hollow tube, known as a parison, by
pushing high-density polyethylene (HDPE) through an extruder with a
screw. The parison is then pinched in a mold and inflated with an inert
gas. The HDPE plastics used for gas cans allow gasoline molecules to
permeate (i.e., pass through) the walls of the container. This
contributes to overall emission losses from the containers. There are
several effective permeation barriers that can be incorporated into the
can walls. Gas can manufacturers have used several of these methods to
meet California program requirements. The technologies were initially
developed to meet automotive evaporative emissions standards and are
now also being used for other types of fuel tanks. The barriers are
either incorporated as part of the manufacturing process of the can
(either as a layer or by mixing the barrier materials with the
plastics) or are applied to the cans after they are manufactured. These
barriers typically achieve reductions of 85 percent or better compared
to untreated cans.
Some gas can manufacturers have produced non-permeable plastic gas
cans by blow molding a layer of ethylene vinyl alcohol (EVOH) or nylon
between two layers of polyethylene. This process is called coextrusion
and requires at least five layers: The barrier layer, adhesive layers
on either side of the barrier layer, and HDPE as the outside layers
which make up most of the thickness of the gas can walls. However, this
blow-molding process requires two additional extruder screws, which
significantly increases its cost.
An alternative to coextrusion is to blend a low-permeability resin
with the HDPE and extrude it with a single screw to create barrier
platelets. The trade name typically used for this permeation control
strategy is Selar. The low-permeability resin, typically EVOH or nylon,
creates non-continuous platelets in the HDPE gas can which reduce
permeation by creating long, tortuous pathways that the hydrocarbon
molecules must navigate to pass through the gas can walls. Although the
barrier is not continuous, this strategy can still achieve greater than
a 90-percent reduction in permeation of gasoline. EVOH has much higher
permeation resistance to alcohol than nylon; therefore, it would be the
preferred material to use for meeting our proposed standard (described
at Section B., below), which is based on testing with a 10-percent
ethanol fuel.
Another type of low permeation technology for HDPE gas cans is
treating the surfaces of plastic gas cans with a barrier layer. Two
ways of achieving this are known as fluorination and sulfonation. The
fluorination process causes a chemical reaction where exposed hydrogen
atoms are replaced by larger fluorine atoms, creating a barrier on the
surface of the gas can. In this process, a batch of gas cans is
generally processed post production by stacking them in a steel
container. The container is then voided of air and flooded with
fluorine gas. By pulling a vacuum in the container, the fluorine gas is
forced into every crevice in the gas can. As a result of this process,
both the inside and outside surfaces of the gas can would be treated.
As an alternative, gas cans can be fluorinated on the manufacturing
line by exposing the inside surface of the gas can to fluorine during
the blow molding process. However, this method may not prove as
effective as off-line fluorination, which treats the inside and outside
surfaces.
Sulfonation is another surface treatment technology. In this
process, sulfur trioxide reacts with the exposed polyethylene to form
sulfonic acid groups on the surface. Current practices for sulfonation
are to place a gas can on a small assembly line and expose the inner
surfaces to sulfur trioxide, then rinse with a neutralizing agent.
However, sulfonation can also be performed using a batch method. Either
of these processes can be used to reduce gasoline permeation by more
than 95 percent.
3. State Experiences Regulating Gas Cans
California established an emissions control program for gas cans
that began in 2001.\277\ Twelve other states and the District of
Columbia have adopted the California program in recent years. These
states include Delaware, Maine, Maryland, Pennsylvania, New York,
Connecticut, Massachusetts, New Jersey, Rhode Island, Vermont,
Virginia, Washington, DC, and Texas.
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\277\ Portable Fuel Container Spillage Control Regulations,
Final Statement of Reasons, State of California Environmental
Protection Agency Air Resources Board, June 2000.
---------------------------------------------------------------------------
Last year, California adopted a revised program that is very
similar to the one we are proposing in this rulemaking.\278\
California's new program goes into effect on July 1, 2007. California
addressed several deficiencies they observed in their first program by
adding new enhanced diurnal standards, new testing requirements, and
new certification requirements, and by removing automatic shut-off
requirements that lead to designs that do not work well in the field.
[[Page 15896]]
California's original program contained several design specifications
which limited manufacturer flexibility and resulted, in many cases, in
products that were difficult for consumers to use. California has
removed most of these design specifications from their revised program.
---------------------------------------------------------------------------
\278\ Public Hearing to Consider Amendments to the Regulations
for Portable Fuel Containers, Final Statement of Reasons, California
Air Resources Board, October 2005.
---------------------------------------------------------------------------
California's original program included an automatic shut-off
requirement intended to reduce spillage caused by overfilling the
receiving fuel tank. The spouts were required to be designed to stop
fuel flow when the fuel reached the tip of the spout, similar to how
gas pumps shut off when refueling a vehicle. California specified a
test fixture, the height of the fuel in the receiving tank at which
point the fuel flow must stop, and the minimum fuel flow rate. The gas
cans were designed by manufacturers to work well with the test fixture,
but the automatic shut-off failed in use a significant amount of the
time. California found that the design of the equipment fuel tank had a
big impact on the performance of the automatic shut-off. Due to the
wide variety of fuel tank designs, the automatic shut-off worked on a
relatively small percentage of equipment. In addition, many of the
spout designs were not compatible with passenger vehicles. This is
especially critical because the cans are customarily used by consumers
when their vehicles run out of gas.
These problems led to many consumer complaints to both the
manufacturers and to the California Air Resources Board. It also led to
increased spillage in many cases. It was also found that many consumers
did not understand how the spouts were supposed to operate. Even in
cases where the spouts would have stopped the flow of fuel in time,
consumers did not use the cans properly. Consumers are used to actively
controlling the flow of fuel. For these reasons, California removed the
automatic shut-off requirements from their program for all cans.
B. What Emissions Standard Is EPA Proposing, and Why?
1. Description of Emissions Standard
We are proposing a performance-based standard of 0.3 grams per
gallon per day (g/gal/day) of HC to control evaporative and permeation
losses. The standard would be measured based on the emissions from the
can over a diurnal test cycle. The cans would be tested as a system
with their spouts attached. Manufacturers would test the cans by
placing them in an environmental chamber which simulates summertime
ambient temperature conditions and cycling the cans through the 24-hour
temperature profile (72-96[deg] F), as discussed below. The test
procedures, which are described in more detail below, would ensure that
gas cans meet the emission standard over a range of in-use conditions
such as different temperatures, different fuels, and taking into
consideration factors affecting durability.
2. Determination of Best Available Control
The 0.3 g/gal/day emissions standard and associated test procedures
reflect the performance of the best available control technologies
discussed above, including durable permeation barriers, auto-closing
spouts, and a can that is well-sealed to reduce evaporative losses. The
standard is both economically and technologically feasible. As
discussed above, to comply with California's program, gas can
manufacturers have developed gas cans with low VOC emissions at a
reasonable cost (see section IX. for costs). Testing of cans designed
to meet CARB standards has shown the proposed standards to be
technologically feasible. When tested over cycles very similar to those
we are proposing, emissions from these cans have been in the range of
0.2-0.3 g/gal/day.\279\ These cans have been produced with permeation
barriers representing a high level of control (over 90 percent
reductions) and with auto-closing spouts, which are technologies that
represent best available controls for gas cans. Establishing the
standard at 0.3 g/gal/day would require the use of best available
technologies. We are proposing a level at the upper end of the tested
performance range to account for product performance variability. In
addition, we believe that any of the current best designs can achieve
these levels, so we do not believe that the proposed standard
forecloses use of any of the existing performing product designs. Our
detailed feasibility analysis is provided in the Regulatory Impact
Analysis. We request comment on the level of the standard and on its
feasibility. We request that commenters provide detail and data where
possible.
---------------------------------------------------------------------------
\279\ ``Quantification of Permeation and Evaporative Emissions
From Portable Fuel Container'', California Air Resources Board, June
2004.
---------------------------------------------------------------------------
In addition to considering technological and economic feasibility,
section 183(e)(1)(A) requires us to consider ``health, environmental,
and energy impacts'' in assessing best available controls.
Environmental and health impacts are discussed in section IV. Moreover,
control of spillage from gas cans may reduce fire hazards as well
because cans would stay tightly closed if tipped over. We expect the
energy impacts of gas can control to be positive, because the standards
will reduce evaporative fuel losses.
3. Emissions Performance vs. Design Standard
We are proposing an emissions performance standard rather than
mandating that gas cans be of any specified design. Rather than
proposing to require that gas cans only have one opening, or other
design-based requirements, we believe that it is sufficient to require
gas cans to meet an emissions performance standard. A performance
standard allows flexibility in can design while ensuring the overall
emissions performance of the cans. We are reluctant to specify design
standards for consumer products in order not to limit manufacturer (and
ultimately consumer) choice. The market will encourage manufacturers to
offer products that work well for consumers, and design-based
requirements could unnecessarily limit manufacturer design flexibility.
4. Automatic Shut-Off
We are not requiring automatic shut-off as a design-based standard,
or considering it to be a ``best available control.'' As described in
section VIII.A.3. above, the automatic shut-off has been shown to be
problematic for consumers for several reasons, and we believe that
including requirements for automatic shut-off would be
counterproductive. Automatic shut-off is supposed to stop the flow of
fuel when the fuel reaches the top of the receiving tank in order to
prevent over-filling. However, due to a wide variety of receiving fuel
tank designs, the auto shut off spouts do not work well with a variety
of equipment types. In California, this problem led to spillage and
consumer dissatisfaction. We want to avoid cases where spills occur
even when consumers are using the products properly due to a mismatch
between the spout design and the design of the receiving fuel tank
being filled. Excessive consumer difficulties in using new cans would
likely lead to some consumers defeating the low emissions features of
the cans by removing the spouts and using other means such as funnels
to refuel equipment. Any additional emissions reductions provided by
automatic shut-off in cases where it worked properly would likely be
largely or completely offset by increased spillage due to cases where
[[Page 15897]]
consumers defeated the designs or the designs failed to work properly.
We believe that the automatic closing cans, even without automatic
shut-off requirements, will lead to reduced spillage. As discussed
above, automatic closure keeps the cans closed when they are not in use
and provides more control to the consumer during use.
Some additional reduction in spillage is likely possible in some
cases with automatic shut-off, but may not be feasible across the wide
array of gas can usage. It is possible to design a spout that works
well on some equipment but not for all equipment. It might also be
possible to cover more uses by having multiple spouts, but we believe
that having multiple spouts would lead to confusion and would also
require consumers to have multiple cans depending on the types of
equipment that they refuel. We request comment on automatic shut-off
requirements and on ways to establish an automatic shut-off requirement
that would reduce spillage, be feasible for manufacturers, and be
practical for consumers.
5. Consideration of Retrofits of Existing Gas Cans
Clean Air Act section 183(e) provides authority to consider
retrofitting gasoline containers as an approach for controlling
emissions. We do not believe, however, that requiring the retrofit of
existing gas cans would be a feasible approach for controlling gas can
emissions, either technically or economically. This would likely entail
manufacturers first developing retrofit systems (including spouts for
various previous gas can designs), testing them for emissions
performance, and certifying them with EPA. Manufacturers would need
time to develop and certify systems and also to develop an
implementation strategy, considering that there are millions of cans in
use. Manufacturers would then likely need to collect gas cans from
consumers, recondition the cans, permanently close vents, incorporate
permeation barriers, and incorporate new spouts. We believe that this
process would lead to costs that far exceed the cost of newly
manufactured gas cans. In addition, emissions reductions would depend
on consumer participation, which would be highly uncertain given that
gas cans are relatively low-cost consumer products. In fact, we believe
that consumers who are concerned about emissions would be more likely
to discard old gas cans and purchase new cans meeting emissions
standards. For all these reasons, we do not believe that a retrofitting
approach makes sense for gas cans.
6. Consideration of Diesel, Kerosene and Utility Containers
We are requesting comment on but not proposing applying emissions
control requirements to diesel, kerosene, and utility containers. Due
to the low volatility of diesel and kerosene, the evaporative losses
from diesel and kerosene cans would be minimal when used with the
designated fuels. California has included diesel and kerosene cans in
their regulations largely due to the concern that they would be
purchased as substitutes for gasoline containers. California also
included utility containers in their portable fuel container program
due to concerns that these containers would be used for gasoline. We
believe that manufacturers can minimize this incentive by designing
gasoline cans and spouts that are easy to use and beneficial to the
consumer. However, storing gasoline in diesel, kerosene, and utility
containers would result in a loss of emissions reductions and therefore
we are requesting comment on including them in the program. The costs
for these containers would be similar to the costs estimated for
gasoline containers. We request comment on the potential for diesel,
kerosene, and utility containers to be used as a substitute for
regulated gas cans, and the cost and other implications of including
them in the program.
C. Timing of Standard
As an aspect of considering the proposed standard's technological
feasibility, we are proposing to require manufacturers to meet the
standard beginning January 1, 2009. Manufacturers have developed the
primary technologies to reduce emissions from gas cans but will need a
few years of lead time to certify products and ramp up production to a
national scale. The certification process would take at least six
months due to the required durability demonstrations described below,
and manufacturers would need time to procure and install the tooling
needed to produce gas cans with permeation barriers for nationwide
sales.
The standards would apply to gas cans manufactured on or after the
start date of the program and would not affect cans produced before the
start date. We propose that as of July 1, 2009, manufacturers and
importers must not enter into U.S. commerce any products not meeting
the emissions standards. This provides manufacturers with a 6-month
period to clear any stocks of gas cans manufactured prior to the
January 1, 2009 start of the program, allowing the normal sell through
of these cans to the retail level. Retailers would be able to sell
their stocks of gas cans through the course of normal business without
restriction. Gas cans are currently stamped with their production date,
which would allow EPA to determine which cans are required to meet the
new standards.
We believe that the 2009 time frame is feasible, but recognize that
it could be a challenge for manufacturers with high volume sales to
ramp up production. We request comment on the economic feasibility of
the proposed timing and also on whether or not a phase-in of the
standards would ease the transition to a national program. We encourage
commenters to provide detailed rationale and data where possible to
support their comments.
D. What Test Procedures Would Be Used?
As part of the proposed system of regulations for gas cans, we are
proposing test conditions designed to assure that the intended emission
reductions occur over a range of in-use conditions such as operating at
different temperatures, with different fuels, and considering factors
affecting durability. These proposed test procedures implement section
183(e)(4), which authorizes EPA to develop appropriate standards
relating to product use. Emission testing on all gas cans that
manufacturers produce is not feasible due to the high volumes of gas
cans produced every year and the cost and time involved with emissions
testing. Instead, we are proposing that before the gas cans are
introduced into commerce, EPA would need to certify gas cans to the
emissions standards based on manufacturers' applications for
certification. Manufacturers would submit test data on a sample of gas
cans that are prototypes of the products manufacturers intend to
produce. Manufacturers would also need to certify that their production
cans would not deviate in materials or design from the prototype gas
cans that are tested. Manufacturers would need to obtain approval of
their certification from EPA prior to introducing their products into
commerce. The proposed test procedures and certification requirements
are described in detail below.
We are proposing that manufacturers would test cans in their most
likely storage configuration. The key to reducing evaporative losses
from gas cans is to ensure that there are no openings on the cans that
could be left open by the consumer. Traditional cans
[[Page 15898]]
have vent caps and spout caps that are easily lost or left off cans,
which leads to very high evaporative emissions. We expect manufacturers
to meet the evaporative standards by using automatic closing spouts and
by removing other openings that consumers could leave open. However, if
manufacturers choose to design cans with an opening that does not close
automatically, we are proposing to require that containers be tested in
their open condition. If the gas cans have any openings that consumers
could leave open (for example, vents with caps), these openings thus
would need to be left open during testing. This would apply to any
opening other than where the spout attaches to the can. We believe it
is important to take this approach because these openings could be a
significant source of in-use emissions and there is a realistic
possibility that these openings would be inadvertently left open in
use.
We propose that spouts would be in place during testing because
this would be the most likely storage configuration for the emissions
compliant cans. Spouts would still be removable so that consumers would
be able to refill the cans, but we would expect the containers to be
resealed by consumers after being refilled in order to prevent spillage
during transport. We do not believe that consumers would routinely
leave spouts off cans because spouts are integral to the cans' use and
it is obvious that they need to be sealed.
1. Diurnal Test
We are proposing a test procedure for diurnal emissions testing
where manufacturers (or others conducting the testing) place gas cans
in an environmental chamber or a Sealed Housing for Evaporative
Determination (SHED), vary the temperature over a prescribed
temperature and time profile, and measure the hydrocarbons escaping
from the gas can. We are proposing that gas cans would be tested over
the same 72-96 [deg]F (22.2-35.6 [deg]C) temperature profile used for
automotive applications. This temperature profile represents a hot
summer day when ground level ozone emissions (formed from hydrocarbons
and oxides of nitrogen) would be highest. We propose that three
containers would be tested, each over a three-day test. We are
proposing that three cans would be tested for certification in order to
address variability in products or test measurements. All three cans
would have to individually meet the proposed standard. As noted above,
gas cans would be tested in their most likely storage configuration.
The final result would be reported in grams per gallon, where the
grams are the mass of hydrocarbons escaping from the gas can over 24
hours and the gallons are the nominal gas can capacity. The daily
emissions would then be averaged for each can to demonstrate compliance
with the standard. This test would capture hydrocarbons lost through
permeation and any other evaporative losses from the gas can as a
whole. We are proposing that the grams of hydrocarbons lost would be
determined by either weighing the gas can before and after the diurnal
test cycle or measuring emissions directly using the SHED
instrumentation.
Consistent with the automotive test procedures, we are proposing
that the testing take place using 9 pounds per square inch (psi) Reid
Vapor Pressure (RVP) certification gasoline, which is the same fuel
required by EPA to be used in its other evaporative test programs. We
are proposing for this testing to use E10 fuel (10% ethanol blended
with the gasoline described above) in this testing to help ensure in-
use emission reductions on ethanol-gasoline blends, which tend to have
increased evaporative emissions with certain permeation barrier
materials. We believe including ethanol in the test fuel will lead to
the selection of materials by manufacturers that are consistent with
``best available control'' requirements for all likely contained
gasolines, and is clearly appropriate given the expected increase over
time of the use of ethanol blends of gasoline under the renewable fuel
provisions of the Energy Policy Act of 2005. Diurnal emissions are not
only a function of temperature and fuel volatility, but of the size of
the vapor space in the container as well. We are proposing that the
fill level at the start of the test be 50% of the nominal capacity of
the gas can. This would likely be the average fuel level of the gas can
in-use. Nominal capacity of the gas cans would be defined as the volume
of fuel, specified by the manufacturer, to which the gas can could be
filled when sitting on level ground. The vapor space that normally
occurs in a gas can, even when ``full,'' would not be considered in the
nominal capacity of the gas can. All of these test requirements are
proposed to represent typical in-use storage conditions for gas cans,
on which EPA can base its emissions standards. These provisions are
proposed as a way to implement the standards effectively, which will
lead to the use of best available technology at a reasonable cost.
Before testing for certification, the gas cans would be run through
the durability tests described below. Within 8 hours of the end of the
soak period contained in the durability cycle, the gas cans would be
drained and refilled to 50 percent nominal capacity with fresh fuel,
and then the spouts re-attached. When the gas can is drained, it would
have to be immediately refilled to prevent it from drying out. The
timing of these steps is needed to ensure that the stabilized
permeation emissions levels are retained. The can will then be weighed
and placed in the environmental chamber for the diurnal test. After
each diurnal, the can would be re-weighed. In lieu of weighing the gas
cans, we propose that manufacturers could opt to measure emissions from
the SHED directly. For any in-use testing of gas cans, the durability
procedures would not be run prior to testing.
California's test procedures are very similar to those described
above. However, the California procedure contains a more severe
temperature profile of 65-105 [deg]F. We propose to allow manufacturers
to use this temperature profile to test gas cans as long as other parts
of the EPA test procedures are followed, including the durability
provisions below. We request comment on these test procedures,
including ways the procedures may be further streamlined without
impacting the overall emissions measurements and performance of the gas
cans.
2. Preconditioning To Ensure Durable In-Use Control
a. Durability Cycles
To determine permeation emission deterioration rates, we are
specifying three durability aging cycles: Slosh, pressure-vacuum
cycling, and ultraviolet exposure. They represent conditions that are
likely to occur in-use for gas cans, especially for those cans used for
commercial purposes and carried on truck beds or trailers. The purpose
of these deterioration cycles is to help ensure that the technology
chosen by manufacturers is durable in-use, representing best available
control, and the measured emissions are representative of in-use
permeation rates. Fuel slosh, pressure cycling, and ultraviolet (UV)
exposure each impact the durability of certain permeation barriers, and
we believe these cycles are needed to ensure long-term emissions
control. Without these durability cycles, manufacturers could choose to
use materials that meet the certification standard but have degraded
performance in-use, leading to higher emissions. We do not expect these
procedures to adversely impact the feasibility of the standards,
because
[[Page 15899]]
there are permeation barriers available at a reasonable cost that do
not deteriorate significantly under these conditions (which permeation
barriers are examples of best available controls). As described above,
we believe including these cycles as part of the certification test is
preferable to a design-based requirement.
For slosh and pressure cycling, we are proposing to use durability
tests that are based on draft recommended SAE practice for evaluating
permeation barriers.\280\ For slosh testing, the gas can would be
filled to 40 percent capacity with E10 fuel and rocked for 1 million
cycles. The pressure-vacuum testing contains 10,000 cycles from -0.5 to
2.0 psi. The third durability test is intended to assess potential
impacts of ultraviolet (UV) sunlight (0.2 [mu]m-0.4 [mu]m) on the
durability of a surface treatment. In this test, the gas cans must be
exposed to a UV light of at least 0.40 Watt-hour/meter\2\ /minute on
the gas can surface for 15 hours per day for 30 days. Alternatively,
gas cans could be exposed to direct natural sunlight for an equivalent
period of time. We have also established these same durability
requirements as part of our program to control permeation emissions
from recreational vehicle fuel tanks.\281\ While there are obvious
differences in the use of gas cans compared to the use of recreational
vehicle fuel tanks, we believe the test procedures offer assurance that
permeation controls used by manufacturers will be robust and will
continue to perform as intended when in use. We request comments on the
use of these procedures for gas cans to help ensure permeation control
in-use.
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\280\ Draft SAE Information Report J1769, ``Test Protocol for
Evaluation of Long Term Permeation Barrier Durability on Non-
Metallic Fuel Tanks,'' (Docket A-2000-01, document IV-A-24).
\281\ Final Rule, ``Control of Emissions from Nonroad Large
Spark-ignition engines, and Recreational Engines (Marine and Land-
based)'', 67 FR 68287, November 8, 2002.
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We also propose to allow manufacturers to do an engineering
evaluation, based on data from testing on their permeation barrier, to
demonstrate that one or more of these factors (slosh, UV exposure, and
pressure cycle) do not impact the permeation rates of their gas cans
and therefore that the durability cycles are not needed. Manufacturers
would use data collected previously on gas cans or other similar
containers made with the same materials and processes to demonstrate
that the emissions performance of the materials does not degrade when
exposed to slosh, UV, and/or pressure cycling. The test data would have
to be collected under equivalent or more severe conditions as those
noted above.
b. Preconditioning Fuel Soak
It takes time for fuel to permeate through the walls of containers.
Permeation emissions will increase over time as fuel slowly permeates
through the container wall, until the permeation finally stabilizes
when the saturation point is reached. We want to evaluate emissions
performance once permeation emissions have stabilized, to ensure that
the emissions standard is met in-use. Therefore, we are proposing that
prior to testing the gas cans, the cans would need to be preconditioned
by allowing the cans to sit with fuel in them until the hydrocarbon
permeation rate has stabilized. Under this step, the gas can would be
filled with a 10-percent ethanol blend in gasoline (E10), sealed, and
soaked for 20 weeks at a temperature of 28 5[deg] C. As an
alternative, we are proposing that the fuel soak could be performed for
10 weeks at 43 5[deg]C to shorten the test time. During
this fuel soak, the gas cans would be sealed with the spout attached.
This is representative of how the gas cans would be stored in-use. We
have established these soak temperatures and durations based on
protocols EPA has established to measure permeation from fuel tanks
made of HDPE.\282\ These soak times should be sufficient to achieve
stabilized permeation emission rates. However, if a longer time period
is necessary to achieve a stabilized rate for a given gas can, we would
expect the manufacturer to use a longer soak period (and/or higher
temperature) consistent with good engineering judgment.
---------------------------------------------------------------------------
\282\ Final Rule, ``Control of Emissions from Nonroad Large
Spark-ignition engines, and Recreational Engines (Marine and Land-
based)'', 67 FR 68287, November 8, 2002.
---------------------------------------------------------------------------
Durability testing that is performed with fuel in the gas can may
be considered part of the fuel soak provided that the gas can
continuously has fuel in it. This approach would shorten the total test
time. For example, the length of the UV and slosh tests could be
considered as part of the fuel soak provided that the gas can is not
drained between these tests and the beginning of the fuel soak.
c. Spout Actuation
In its recently revised program for gas cans, California included a
durability demonstration for spouts. We are proposing a durability
demonstration consistent with California's procedures. Automatically
closing spouts are a key part of the emissions controls expected to be
used to meet the proposed standards. If these spouts stick or
deteriorate, in-use emissions could remain very high (essentially
uncontrolled). We are interested in ways to ensure during the
certification procedures that the spouts also remain effective in use.
California requires manufacturers to actuate the spouts 200 times prior
to the soak period and 200 times near the conclusion of the soak period
to simulate spout use. The spouts' internal components would be
required to be exposed to fuel by tipping the can between each cycle.
Spouts that stick open or leak during these cycles would be considered
failed. The total of 400 spout actuations represents about 1.5
actuations per week on average over the average container life of 5
years. In the absence of data, we believe this number of actuations
appears to reasonably replicate the number that can occur in-use for
high end usage and will help ensure quality spout designs that do not
fail in-use. We also believe that proposing requirements consistent
with California will help manufacturers to avoid duplicate testing. We
request comment on the above approach for demonstrating spout
durability.
E. What Certification and In-Use Compliance Provisions Is EPA
Proposing?
1. Certification
Section 183(e)(4) authorizes EPA to adopt appropriate systems of
regulations to implement the program, including requirements ranging
from registration and self-monitoring of products, to prohibitions,
limitations, economic incentives and restrictions on product use. We
are proposing a certification mechanism pursuant to these authorities.
Manufacturers would be required to go through the certification process
specified in the proposed regulations before entering their containers
into commerce. To certify products, manufacturers would first define
their emission families. This is generally based on selecting groups of
products that have similar emissions. For example, co-extruded gas cans
of various geometries could be grouped together. The manufacturer would
select a worst-case configuration for testing, such as the thinnest-
walled gas can. These determinations may be made using good engineering
judgment and would be subject to EPA review. Testing with those
products, as specified above, would need to show compliance with
emission standards. The manufacturers would then send us an application
for certification. We propose to define the
[[Page 15900]]
manufacturer as the entity that is in day-to-day control of the
manufacturing process (either directly or through contracts with
component suppliers) and responsible for ensuring that components meet
emissions-related specifications. Importers would not be considered a
manufacturer and thus would not be certifying entities; the
manufacturers of the cans they import would have to certify the cans.
Importers would only be able to import gas cans that are certified.
After reviewing the information in the application, we would issue
a certificate of conformity allowing manufacturers to introduce into
commerce the gas cans from the certified emission family. EPA review
would typically take about 90 days or less, but could be longer if we
have questions regarding the application. The certificate of conformity
would be for a production period of up to five years. Manufacturers
could carry over certification test data if no changes are made to
their products that would affect emissions performance. Changes to the
certified products that would affect emissions would require
reapplication for certification. Manufacturers wanting to make changes
without doing testing would be required to present an engineering
evaluation demonstrating that emissions are not affected by the change.
The certifying manufacturer accepts the responsibility for meeting
applicable emission standards. While we are proposing no requirement
for manufacturers to conduct production-line testing, we may pursue EPA
in-use testing of certified products to evaluate compliance with
emission standards. If we find that gas cans do not meet emissions
standards in use, we would consider the new information during future
product certification. Also, we may require certification prior to the
end of the five-year production period otherwise allowed between
certifications. The details of the proposed certification process are
provided in the proposed regulatory text. We request comments on the
certification process we are proposing.
2. Emissions Warranty and In-Use Compliance
We are proposing a warranty period of one year to be provided by
the manufacturer of the gas can to the consumer. The warranty would
cover emissions-related materials defects and breakage under normal
use. For example, the warranty would cover failures related to the
proper operation of the auto-closing spout or defects with the
permeation barriers. We are also proposing to require that
manufacturers submit a warranty and defect report documenting
successful warranty claims and the reason for the claim to EPA annually
so that EPA may monitor the program. Unsuccessful claims would not need
to be submitted. We believe that this warranty will encourage designs
that work well for consumer and are durable. Although it does not fully
cover the average life of the product, it is not typical for very long
warranties to be offered with products and therefore we believe a one
year warranty is reasonable. Also, the warranty period is more similar
to the expected life of gas cans when used in commercial operations,
which would need to be considered by the manufacturers in their
designs. We request comment on the warranty period.
EPA views this aspect of the proposal as another part of the
``system of regulation'' it is proposing to control VOC emissions from
gas cans, which system may include ``requirements for registration and
labeling * * * use, or consumption * * * of the product'' pursuant to
section 183(e)(4) the Act. A warranty will promote the objective of the
proposed rule by assuring that manufacturers will ``stand behind''
their product, thus improving product design and performance.
Similarly, the proposed defect reporting requirement will promote
product integrity by allowing EPA to readily monitor in-use performance
by tracking successful warranty claims.
Gas cans have a typical life of about five years on average before
they are scrapped. We are proposing durability provisions as part of
certification testing to help ensure containers perform well in use (a
system of regulation for ``use'' of the product, pursuant to section
183(e)(4)). Under the proposal, we could test gas cans within their
five-year useful life period to monitor in-use performance and take
steps to correct in-use failures, including denying certification, for
container designs that are consistently failing to meet emissions
standards. (This proposed provision thus would work in tandem with the
warranty claim reporting provision proposed in the preceding
paragraph.)
We are not proposing any recall provisions for gas cans.
Manufacturers do not have registration programs for gas cans and
implementing such a program for a low-cost consumer product may be
overly burdensome, and have a very low participation rate. Also, we
would not expect a high participation rate from consumers in a recall,
in any event, due to the nature of gas cans as a consumer product. We
believe, however, that by having the authority to test products in use,
along with the possible repercussions of in-use noncompliance, will
encourage manufacturers to develop robust designs.
3. Labeling
Since the requirements will be effective based on the date of
manufacture of the gas can, we propose that the date of manufacture
must be indelibly marked on the can. This is consistent with current
industry practices. This is needed so that we and others can recognize
whether a unit is regulated or not. In addition, we propose to require
a label providing the manufacturer name and contact information, a
statement that the can is EPA certified, citation of EPA regulations,
and a statement that it is warranted for one year from the date of
purchase. The manufacturer name and contact information is necessary to
verify certification. Indicating that a 1 year warranty applies will
ensure that consumers have knowledge of the warranty and a way to
contact the manufacturer. Enforcement of the warranty is critical to
the defect reporting system. In proposing this labeling requirement, we
further believe, pursuant to section 183(e)(8), that these labeling
requirements would be useful in meeting the NAAQS for ozone. They
provide necessary means of implementing the various measures described
above which help ensure that VOC emission reductions from the proposed
standard will in fact occur in use.
F. How Would State Programs Be Affected by EPA Standards?
As described in section VIII.A.3. above, several states have
adopted emissions control programs for gas cans. California implemented
an emissions control program for gas cans in 2001. Thirteen other
states, mostly in the northeast, have adopted the California program in
recent years.\283\ Last year, California adopted a revised program,
which will go into effect on July 1, 2007. The revised California
program is very similar to the program we are proposing. We believe
that although a few aspects of the program we are proposing are
different, manufacturers will be able to meet both EPA and CARB
requirements with the same gas can designs and therefore sell a single
product in all 50
[[Page 15901]]
states. In most cases, we believe manufacturers will take this
approach. By closely aligning with California where possible, we will
allow manufacturers to minimize research and development (R&D) and
emissions testing, while potentially achieving better economies of
scale. It may also reduce administrative burdens and market logistics
from having to track the sale of multiple can designs. We consider
these to be important factor under CAA section 183(e) which requires us
to consider economic feasibility of controls.
---------------------------------------------------------------------------
\283\ Delaware, Maine, Maryland, Pennsylvania, New York,
Connecticut, Massachusetts, New Jersey, Rhode Island, Vermont,
Virginia, Washington DC, and Texas.
---------------------------------------------------------------------------
States that have adopted the original California program will
likely choose to either adopt the new California program or eliminate
their state program in favor of the federal program. Because the
programs are similar, we expect that most states will eventually choose
the EPA program rather than continue their own program. We expect very
little difference in the emissions reductions provided by the EPA and
California programs in the long term. In addition, if EPA's program
starts in 2009, as discussed above, this would be the same timing
states would likely target in their program revisions.
G. Provisions for Small Gas Can Manufacturers
As discussed in previous sections, prior to issuing a proposal for
this proposed rulemaking, we analyzed the potential impacts of these
regulations on small entities. As a part of this analysis, we convened
a Small Business Advocacy Review Panel (SBAR Panel, or ``the Panel'').
During the Panel process, we gathered information and recommendations
from Small Entity Representatives (SERs) on how to reduce the impact of
the rule on small entities, and those comments are detailed in the
Final Panel Report which is located in the public record for this
rulemaking (Docket EPA-HQ-OAR-2005-0036). Based upon these comments, we
propose to include flexibility and hardship provisions for gas can
manufacturers. Since nearly all gas can manufacturers (3 of 5
manufacturers as defined by SBA) are small entities and they account
for about 60 percent of sales, the Panel recommended to extend the
flexibility options and hardship provisions to all gas can
manufacturers. (Our proposal today is consistent with that
recommendation.) Moreover, implementation of the program would be much
simpler by doing so. The flexibility provisions are incorporated into
the program requirements described earlier in sections VIII.C through
VIII.E. The hardship provisions are described below. For further
discussion of the Panel process, see section XII.C of this proposed
rule and/or the Final Panel Report.
The Panel recommended that two types of hardship provisions be
extended to gas can manufacturers. These entities could, on a case-by-
case basis, face hardship, and we are proposing these provisions to
provide what could prove to be needed safety valves for these entities.
Thus, the propose hardship provisions are as follows:
1. First Type of Hardship Provision
Gas can manufacturers would be able to petition EPA for limited
additional lead-time to comply with the standards. A manufacturer would
have to demonstrate that it has taken all possible business, technical,
and economic steps to comply but the burden of compliance costs or
would have a significant adverse effect on the company's solvency.
Hardship relief could include requirements for interim emission
reductions.
2. Second Type of Hardship Provision
Gas can manufacturers would be permitted to apply for hardship
relief if circumstances outside their control cause the failure to
comply (i.e. supply contract broken by parts supplier), and if failure
to sell the subject containers would have a major impact on the
company's solvency. The terms and timeframe of the relief would depend
on the specific circumstances of the company and the situation
involved.
For both types of hardship provisions, the length of the hardship
relief would be established during the initial review for not more than
one year and would be reviewed annually thereafter as needed. As part
of its application, a company would be required to provide a compliance
plan detailing when and how it would achieve compliance with the
standards.
IX. What Are the Estimated Impacts of the Proposal?
A. Refinery Costs of Gasoline Benzene Reduction
The proposed 0.62 volume percent benzene standard would generally
result in many refiners investing in benzene control hardware and
changing the operations in their refineries to reduce their gasoline
benzene levels. The proposed ABT program would allow refiners to
optimize their investments, which we believe would maximize the benzene
reductions at the lowest possible cost. We have estimated that the
capital and operating costs that we believe would result from the
proposed program would average 0.13 cents per gallon of gasoline.
In this section we summarize the methodology used to estimate the
costs of benzene control, the scenarios we evaluated, and our estimated
costs for the program. We also summarize the results of our analyses of
other potential MSAT control programs. A detailed discussion of all of
these analyses is found in Chapter 9 of the RIA.
1. Tools and Methodology
a. Linear Programming Cost Model
We considered performing our cost assessments for this proposed
program using a linear programming (LP) cost model. LP cost models are
based on a set of complex mathematical representations of refineries
which, for national analyses, are usually conducted on a regional
basis. This type of refining cost model has been used by the government
and the refining industry for many years for estimating the cost and
other implications of changes to fuel quality.
The design of LP models lends itself to modeling situations where
every refinery in a region is expected to use the same control strategy
and/or has the same process capabilities. As we began to develop a
gasoline benzene control program with an ABT program, it became clear
that LP modeling was not well suited for evaluating such a program.
Because refiners would be choosing a variety of technologies for
controlling benzene, and because the program would be national and
would include an ABT program, we initiated development of a more
appropriate cost model, as described below. However, the LP model
remained important for providing many of the inputs into the new model,
and for performing analyses of other potential programs.
b. Refiner-by-Refinery Cost Model
In contrast to LP models, refinery-by-refinery cost models are
useful when individual refineries would respond to program requirements
in different ways and/or have significantly different process
capabilities. Thus, in the case of today's proposed gasoline benzene
control program, we needed a model that would accurately simulate the
variety of decisions refiners would make at different refineries,
especially in the context of a nationwide ABT program. For this and
other related reasons, we developed a refinery-by-refinery cost model
specifically to evaluate the proposed benzene control program.
Our benzene cost model incorporates the capacities of all the major
units in
[[Page 15902]]
each refinery in the country, as reported by the Energy Information
Administration and in the Oil and Gas Journal. Regarding operational
information, we know less about how the various units are used to
produce gasoline and such factors as octane and hydrogen costs for
individual refineries. We used the LP model to estimate these factors
on a regional basis, and we applied the average regional result to each
refinery in that region (PADD). We calibrated the model for each
individual refinery based on 2003 gasoline volumes and benzene levels,
which was the most recent year for which data was available, and found
that the model simulated the actual situation well. We also compared
cost estimates of similar benzene control cases from both the refinery-
by-refinery model and the LP model, and the results were in close
agreement.
Refinery-by-refinery cost models have been used in the past by both
EPA and the oil industry for such programs as the highway and nonroad
diesel fuel sulfur standards, and they are a proven means for
estimating the cost of compliance for fuel control programs. For the
specific benzene cost model, we have initiated a peer review process,
and have received some comments on the design of our model. Although we
did not receive these comments in time to respond to them in this
proposal, we plan to address all peer review comments in the
development of the final rule. (Based on our initial assessment of
these comments, we do not believe that the changes suggested would
significantly affect the projected costs of the program. See Chapter 9
of the RIA for our initial responses to these peer-review comments.)
Based on our understanding of the primary benzene control
technologies (see section VII.F above), the cost model assumes that
four technologies would be used, as appropriate, for reducing benzene
levels. All of these technologies focus on addressing benzene in the
reformate stream. They are (1) routing the benzene precursors around
the reformer; (2) routing benzene precursors to an existing
isomerization unit, if available; (3) benzene extraction (extractive
distillation); and (4) benzene saturation. There are several
restrictions on the use of these various technologies (such as the
assumption that benzene extraction would only be expanded in areas with
strong benzene chemical markets) and these are incorporated into the
model.
For the proposed benzene control program, the associated nationwide
ABT program is intended to optimize benzene reduction by allowing each
refinery to individually choose the most cost-effective means of
complying with the program. To model this phenomenon, we first
establish an estimated cost for the set of technologies required for
each refinery to meet the standard. We then rank the refineries in
order from lowest to highest control cost per gallon of gasoline. The
model then follows this ranking, starting with the lowest-cost
refineries, and adds refineries and their associated control
technologies one by one until the projected national average benzene
level reaches 0.62 volume percent. This establishes which refineries we
expect to apply control technologies to comply, as well as those that
would generate credits and those that would use credits in lieu of
investing in control. The sum of the costs of the refineries expected
to invest in control provides the projected overall cost of the
program.
c. Price of Chemical Grade Benzene
The price of chemical grade benzene is critical to the proposed
program because it defines the opportunity cost for benzene removed
using benzene extraction and sold into the chemicals market. According
to 2004 World Benzene Analysis produced by Chemical Market Associates
Incorporated (CMAI), during the consecutive five year period ending
with 2004, the price of benzene averaged 24 dollars per barrel higher
than regular grade gasoline. During the three consecutive year period
ending with 2004, the price of benzene averaged 28 dollars per barrel
higher than regular grade gasoline. However, during the first part of
2004, the price of benzene relative to gasoline rose steeply, primarily
because of high energy prices adding to the cost of extracting benzene.
The projected benzene price for 2004 indicated that the benzene price
averaged 38 dollars per barrel higher than regular grade gasoline.
For the future, CMAI projects that the price of benzene relative to
gasoline will return to more historic levels or lower, in the range of
$20 per barrel higher than regular grade gasoline. We have based our
modeling on this value. However, we have also examined the sensitivity
of the projected overall program costs for a case where the cost of
benzene control remains at $38 higher than gasoline into the future.
d. Applying the Cost Model to Special Cases
For the comparative cases we modeled that involve a maximum-average
(max-avg) standard in addition to an average benzene standard, modeling
the costs requires a different modeling methodology. Refineries that
the model estimates would have benzene levels above the max-avg
standard are assumed to apply the most cost-effective benzene reduction
technologies that the model shows would reduce benzene levels to below
the max-avg standard. The benzene reductions associated with meeting
the max-avg standard may or may not be sufficient for also meeting the
average standard, depending on how stringent the max-avg standard is
relative to the average standard. If the model indicates that
additional benzene reduction would be necessary, these additional
benzene reductions are modeled in the same way as the case of an
average standard only, as described above.
We also evaluated a limited number of cases that did not include an
ABT program. In such cases, the model assumes that all the refineries
with benzene levels below the standard would maintain the same benzene
level, while each refinery with benzene levels above the standard would
take all the necessary steps to reduce their benzene levels down to the
standard. If the model shows that capital investments are needed to
achieve the necessary benzene reduction, we assume that the refiner
installs a full sized unit to treat the entire stream and then operates
the unit only to the extent necessary to meet the standard.
2. Summary of Costs
a. Nationwide Costs of the Proposed Program
We have used the refinery-by-refinery cost model to estimate the
costs of the proposed program, with an average gasoline benzene content
standard of 0.62 volume percent and the proposed ABT program. In
general, the cost model indicates that among the four primary
reformate-based technologies, benzene extraction would be the most cost
effective. The next most cost effective technologies are benzene
precursor rerouting, and rerouting coupled with isomerization. The
model indicates that benzene saturation would be the least cost-
effective, but only marginally so in the larger refineries.
Our refinery-by-refinery model estimates that 92 refineries of the
total 115 gasoline-producing refineries in the U.S. would have to put
in new capital equipment or change their refining operations to reduce
the benzene levels in their gasoline. Of these refineries 25 would use
benzene precursor removal, 32 refineries would use benzene precursor
removal coupled with isomerization, 24 would use extraction,
[[Page 15903]]
and 11 would use benzene saturation. The analysis projects that 43
refineries would reduce their benzene levels to the proposed benzene
standard or lower, while 49 refineries would reduce their benzene
levels but still would need to purchase credits to comply with the
average benzene standard. Including the refineries with benzene levels
currently below 0.62, we project that there would be a total of 62
refineries producing gasoline with benzene levels at 0.62 or lower. The
model assumes that those with benzene levels lower than 0.62 volume
percent would generate credits for sale to other refineries. Finally,
the model projects that there would be 6 refineries that would take no
benzene reduction action and comply with the proposed program solely
through the use of benzene credits.
The refinery model estimates that the proposed benzene standard
would cost 0.13 cents per gallon, averaged over the entire U.S.
gasoline pool. (When averaged only over those refineries which are
assumed to take steps to reduce their benzene levels, the average cost
would be 0.19 cents per gallon.) This per-gallon cost would result from
an industry-wide investment in capital equipment of $500 million to
reduce gasoline benzene levels. This would amount to an average of $5
million in capital investment in each refinery that adds such
equipment.\284\
---------------------------------------------------------------------------
\284\ The modeling does not separate out capital costs for the
recovery of lost octane and supplying additional hydrogen, but
rather includes these in the operating cost estimates. Therefore,
actual capital costs maybe somewhat greater.
---------------------------------------------------------------------------
We also estimated annual aggregate costs associated with the
proposed new fuel standard. As shown in Table IX.A-1, these costs are
projected to begin at $186 million in 2011 and increase over time as
fuel demand increases.
Table IX.A-1.--Annual Aggregate Fuel Costs
----------------------------------------------------------------------------------------------------------------
2011 2013 2015 2017 2019 2020
----------------------------------------------------------------------------------------------------------------
$185,533,000.................... $191,873,000 $198,283,000 $204,212,000 $209,875,000 $212,606,000
----------------------------------------------------------------------------------------------------------------
Several observations can be made from these results from our
nationwide analysis. First, significantly reducing gasoline benzene
levels to low levels, coupled with the flexibility of an ABT program,
will incur fairly modest costs. This is primarily because we expect
that refiners would optimize their benzene control strategies,
resulting in large benzene reductions at a low overall program cost.
With high benzene prices relative to those of gasoline projected to
continue (even if they drop from the recent very high levels),
extraction would be a very low cost technology--the primary reason why
the cost of the overall program is very low. Also, precursor rerouting,
either with or without isomerization in an existing unit, is a low-cost
technology requiring little or no capital to realize. The model
concludes that even the higher-cost benzene saturation technology would
be fairly cost-effective overall because larger refineries that install
this technology would take advantage of their economies of scale.
b. Regional Distribution of Costs
The benzene reductions estimated by the cost model and associated
costs vary significantly by region. Table IX.A-2 summarizes the initial
benzene levels and the projected benzene levels after refiners take
anticipated steps to reduce the benzene in their gasoline and the
estimated per-gallon costs for complying with the proposed benzene
standard.
Table IX.A-2 shows that under the proposed program the largest
benzene reductions occur in the areas with the highest benzene levels.
This is expected as many of these refineries are not doing anything to
reduce their gasoline benzene levels today and simple, low-cost
technologies can be employed to realize large reductions in their
benzene levels. In PADDs 1 and 3, which have significant benzene
control today to meet the RFG requirements, a more modest benzene
reduction would occur. Many of the refineries producing fuel for sale
in PADDs 1 and 3 cannot reduce their benzene levels further because
they are already extracting all the benzene that they can. Extraction
is the technology most used in PADDs 1 and 3, resulting in a much lower
average cost for reducing benzene in these regions.
For comparison, we also modeled a program where the 0.62 vol%
average standard was supplemented by a maximum average benzene cap
standard, as described in section VII above. We did not propose such a
maximum average standard because the main effect would simply be to
shift emission reductions from one region of the country to another
with no change in overall emission reductions. Table IX.A-2 shows that
a maximum average standard would increase costs slightly nationwide,
but that PADD 2 benzene levels, already above the standard, would rise
while other areas improved.
Table IX.A-2.--Current and Projected Benzene Levels and Costs by PADD
[$2002, 7% ROI before taxes]
----------------------------------------------------------------------------------------------------------------
PADD
-------------------------------------------------------
5 (w/o U.S.
1 2 3 4 CA)
----------------------------------------------------------------------------------------------------------------
Current Benzene Level (vol%).................. 0.66 1.32 0.86 1.54 1.87 0.97
Projected Benzene Level (vol%)................ 0.51 0.73 0.55 0.95 1.04 0.62
Cost (c/gal).................................. 0.05 0.25 0.05 0.40 0.72 0.125
Projected Benzene Level (vol%) (With 1.3 vol% 0.50 0.75 0.56 0.90 0.88 0.62
Max-Avg Std).................................
Cost (c/gal).................................. 0.06 0.22 0.03 0.43 1.18 0.130
----------------------------------------------------------------------------------------------------------------
c. Cost Effects of Different Standards
We also estimated the benzene reduction costs for other benzene
reduction levels, as summarized in Table IX.A-3. The cost model
estimates that a 0.52 volume percent benzene
[[Page 15904]]
standard with an ABT program \285\ is the maximum benzene reduction
possible when each refinery employs the maximum appropriate reformate
benzene control (that is, benzene extraction whenever possible, and
benzene saturation otherwise).
---------------------------------------------------------------------------
\285\ The cost model projects that this standard would require
an ABT program because many of the refineries modeled would not be
able to achieve this standard. These refineries would have to rely
on the purchase of credits from other refineries which are already
below this benzene level, or other refineries which could install
benzene control technology to get their benzene levels below this
standard. This scenario assumes a fully utilized credit program.
Table IX.A-3.--Costs of Various Potential Benzene Control Standards
[$2002, 7% ROI before taxes]
------------------------------------------------------------------------
Cost (cents/
Average standard (vol%) gallon)
------------------------------------------------------------------------
0.62 (Proposed Standard)................................ 0.13
0.65.................................................... 0.09
0.60.................................................... 0.15
0.52.................................................... 0.36
------------------------------------------------------------------------
The results in Table IX.A-3 indicate that the cost for reducing
benzene levels is not very sensitive to the benzene standard in the
range from 0.60 to 0.65 volume percent benzene. This is because we
project that standards in this range would not require many of the
smaller or otherwise higher-cost refineries to employ benzene
saturation, which is the highest cost technology. Also, in this range
of potential standards, the ABT program would allow the refining
industry to optimize the benzene control technologies they apply. The
need for all refineries to use either benzene saturation or benzene
extraction to comply with a 0.52 vol% standard explains the much higher
cost for a program with a standard that range.
We also examined the effect of the ABT program on cost. Without
ABT, we assume that the standard would be met by all refineries. To
achieve a national average level of 0.62 vol% benzene without an ABT
program would require an absolute standard of 0.73 vol%. We estimate
that such a program would result in a nationwide average cost of 0.25
cents per gallon, about double the cost of the program with ABT.
d. Effect on Cost Estimates of Higher Benzene Prices
As described above, we also performed a sensitivity analysis to
estimate the costs of the proposed program if the recent very high
prices for chemical grade benzene continue into the future. We estimate
that at an average benzene price of $38 dollars above that for
gasoline, the program would cost 0.08 cents per gallon less on average
nationwide.
3. Economic Impacts of MSAT Control Through Gasoline Sulfur and RVP
Control and a Total Toxics Standard
As discussed above in section VII, we have considered two
approaches to fuel-related MSAT control that would involve increasing
the stringency of two existing emission control programs, the gasoline
sulfur program and the gasoline volatility program. We estimated the
cost of programs that would further reduce the sulfur content and Reid
vapor pressure (RVP) of gasoline. For these costs estimates, the LP
refinery model was used to estimate the costs for the year 2010,
including the fuel economy impacts. We summarize these costs here and
provide detailed analyses in Chapter 9 of the RIA.
For sulfur control, we estimated the costs of reducing U.S.
gasoline sulfur levels down to 10 ppm from the 30 ppm sulfur level
required for Tier 2 sulfur control. The costs are based on revamping
current hydrotreaters installed to meet the 30 ppm sulfur standard. We
estimate that reducing gasoline sulfur down to 10 ppm would cost 0.51
cents per gallon, taking into account the fuel economy effects. The
analysis also estimates that U.S. refiners would invest $1.3 billion in
new capital to achieve this sulfur reduction.
We also estimated costs for lowering summertime gasoline RVP down
to a maximum of 7.8 or 7.0 RVP from the current average for non-RVP
controlled gasoline of 9.0 RVP. The estimated volume of gasoline
required to meet an additional low RVP requirement was assumed to be
equivalent to half of the volume of the reformulated gasoline sold
within the PADD, applied to the conventional gasoline sold within the
PADD. This simple means of estimating the volume of gasoline affected
by future additional RVP control programs was used because the analysis
of possible new low RVP programs established for complying with the 8
hour ozone National Ambient Air Quality Standards (NAAQS) was not
completed when the cost analysis was initiated. The per-gallon cost is
not expected to vary much by the size of the program. The cost analysis
estimates that reducing RVP down to 7.8 RVP would cost 0.23 cents per
gallon. The analysis also estimates that U.S. refiners would invest
$121 million in new capital to achieve this level of RVP control. The
cost analysis estimates that reducing RVP down to 7.0 RVP would cost
0.40 cents per gallon. Meeting a 7.0 RVP standard is projected to cause
U.S. refiners to invest $184 million in new capital to achieve this
level of RVP control.
We have also evaluated the costs of programs that would control
total air toxics. These programs, the analyses of which are also found
in Chapter 9 of the RIA, would all be more costly than the proposed
program.
B. What Are the Vehicle Cost Impacts?
In assessing the economic impact of setting cold temperature
emission standards, we have made a best estimate of the necessary
vehicle modifications and their associated costs. In making our
estimates we have relied on our own technology assessment, which
includes information supplied by individual manufacturers and our own
in-house testing. Estimated costs typically include variable costs (for
hardware and assembly time) and fixed costs (for research and
development, retooling, and certification). All costs are presented in
2003 dollars. Full details of our cost analysis can be found in Chapter
8 of the draft RIA.
As described in section VI, we are not expecting hardware changes
to Tier 2 vehicles in response to new cold temperature standards. Tier
2 vehicles are already being equipped with very sophisticated emissions
control systems. We expect manufacturers to use these systems to
minimize emissions at cold temperatures. We were able to demonstrate
significant emissions reductions from a Tier 2 vehicle through
recalibration alone. In addition, a standard based on averaging allows
some vehicles to be above the numeric standard as long as those excess
emissions are offset by vehicles below the standard. Averaging would
help manufacturers in cases where they are not able to achieve the
numeric standard for a particular vehicle group, thus helping
manufacturers avoid costly hardware changes. The phase-in of standards
and emissions credits provisions also help manufacturers avoid
situations where expensive vehicle modifications would be needed to
meet a new cold temperature NMHC standard. Therefore, we are not
projecting hardware costs or additional assembly costs associated with
meeting new cold temperature NMHC emissions standards.
Manufacturers would incur research and development (R&D) costs
associated with a new cold temperature standard, and some likely would
need to upgrade testing facilities to handle an increased number of
cold tests during vehicle development. We have estimated the
[[Page 15905]]
fixed costs associated with R&D and test facilities. We project that
manufacturers would recover R&D costs over a five-year period and their
facilities costs over a ten-year period. Long-term impacts on engine
costs are expected to decrease as manufacturers fully amortize their
fixed costs. Because manufacturers recoup fixed costs over a large
volume of vehicles, average per vehicle costs due to the new cold
temperature NMHC standards are expected to be low. We project that the
average incremental costs associated with the new cold temperature
standards would be less than $1 per vehicle.
We are not anticipating additional costs for the proposed new
evaporative emissions standard. As discussed in section VI, we expect
that manufacturers will continue to produce 50-state evaporative
systems that meet LEV II standards. Therefore, harmonizing with
California's LEV-II evaporative emission standards would streamline
certification and be an ``anti-backsliding'' measure. It also would
codify the approach manufacturers have already indicated they are
taking for 50-state evaporative systems.
We also estimated annual aggregate costs associated with the new
cold temperature emissions standards. These costs are projected to
increase with the phase-in of standards and peak in 2014 at about $13.4
million per year, then decrease as the fixed costs are fully amortized.
The projected aggregate costs are summarized below, with annual
estimates provided in Chapter 8 of the RIA.
Table IX.B-1.--Annual Aggregate Costs
----------------------------------------------------------------------------------------------------------------
2010 2012 2014 2016 2018 2020
----------------------------------------------------------------------------------------------------------------
$11,119,000..................... $12,535,000 $13,406,000 $12,207,000 $10,682,000 $0
----------------------------------------------------------------------------------------------------------------
C. What Are the Gas Can Cost Impacts?
For gas cans, we have made a best estimate of the necessary
technologies and their associated costs. Estimated costs include
variable costs (for hardware and assembly time) and fixed costs (for
research and development, retooling, and certification). The analysis
also considers fuels savings associated with low emissions gas cans.
Cost estimates based on the projected technologies represent an
expected change in the cost of gas cans as they begin to comply with
new emission standards. All costs are presented in 2003 dollars. Full
details of our cost analysis, including fuel savings, can be found in
Chapter 10 of the Draft RIA.
Table IX.C-1 summarizes the projected near-term and long-term per
unit average costs to meet the new emission standards. Long-term
impacts on gas cans are expected to decrease as manufacturers fully
amortize their fixed costs. We project that manufacturers will
generally recover their fixed costs over a five-year period, so these
costs disappear from the analysis after the fifth year of production.
These estimates are based on the manufacturing cost rather than
predicted price increases.\286\ The table also shows our projections of
average fuel savings over the life of the gas can. Fuel savings can be
estimated based on the VOC emissions reductions due to gas can
controls.
---------------------------------------------------------------------------
\286\ These cost numbers may not necessarily reflect actual
price increases as manufacturer production costs, perceived product
enhancements, and other market impacts will affect actual prices to
consumers.
Table IX.C-1.--Estimated Average Gas Can Costs and Lifetime Fuel Savings
------------------------------------------------------------------------
Cost
------------------------------------------------------------------------
Near-Term Costs................................................ $2.69
Long-Term Costs................................................ 1.52
Fuel Savings (NPV)............................................. 4.24
------------------------------------------------------------------------
With current and projected estimates of gas can sales, we translate
these costs into projected direct costs to the nation for the new
emission standards in any year. A summary of the annual aggregate costs
to manufacturers is presented in Table IX.C-2. The annual cost savings
due to fuel savings start slowly, then increase as greater numbers of
compliant gas cans enter the market. Table IX.C-2 also presents a
summary of the estimated annual fuel savings. Aggregate costs are
projected to peak in 2013 at about $51 million and then drop to about
$29 million once fixed costs are recovered. The change in numbers
beyond 2015 occurs due to projected growth in gas can sales and
population.
Table IX.C-2.--Total Annualized Costs and Fuel Savings
----------------------------------------------------------------------------------------------------------------
2009 2013 2015 2020
----------------------------------------------------------------------------------------------------------------
Costs........................................... $49,112,000 $51,228,000 $28,772,000 $31,767,000
Fuel Saving..................................... 14,381,000 76,037,000 92,686,000 98,861,000
----------------------------------------------------------------------------------------------------------------
D. Cost Per Ton of Emissions Reduced
We have calculated the cost per ton of HC, benzene, total MSATs,
and PM emissions reductions associated with the proposed fuel, vehicle,
and gas can programs using the costs described above and the emissions
reductions described in section V. More detail on the costs, emissions
reductions, and cost per ton estimates can be found in the draft RIA.
We have calculated the costs per ton using the net present value of the
annualized costs of the program, including gas can fuel savings, from
2009 through 2030 and the net present value of the annual emission
reductions through 2030. We have also calculated the cost per ton of
emissions reduced in the year 2030 using the annual costs and emissions
reductions in that year alone. This number represents the long-term
cost per ton of emissions reduced. For fuels, the cost per ton
estimates include costs and emission reductions that will occur from
all motor vehicles and nonroad engines fueled with gasoline.\287\
---------------------------------------------------------------------------
\287\ The proposed standards do not apply to nonroad engines,
since section 202 (l) authorizes controls only for ``motor
vehicles,'' which does not include nonroad vehicles. CAA section 216
(2). However, we are reducing benzene in all gasoline, including
that used in nonroad equipment. Therefore, we are including both the
costs and the benzene emissions reductions associated with the fuel
used in nonroad equipment.
---------------------------------------------------------------------------
[[Page 15906]]
For vehicles and gas cans, we are proposing to establish NMHC and
HC standards, respectively, which would also reduce benzene and other
VOC-based toxics. For vehicles, we are also expecting direct PM
reductions due to the proposed NMHC standard.\288\ Section V provides
an overview of how we are estimating benzene and PM reductions
resulting from the NMHC standards for vehicles and benzene reductions
resulting from the HC standard for gas cans. We have not attempted to
apportion costs across these various pollutants for purposes of the
cost per ton calculations since there is no distinction in the
technologies, or associated costs, used to control the pollutants.
Instead, we have calculated costs per ton by assigning all costs to
each individual pollutant. If we apportioned costs among the
pollutants, the costs per ton presented here would be proportionally
lowered depending on what portion of costs were assigned to the various
pollutants.
---------------------------------------------------------------------------
\288\ Again, although gasoline PM is not a mobile source air
toxic, the rule will result in emission reductions of gasoline PM
which reductions are accounted for in our analysis.
---------------------------------------------------------------------------
The results for HC for vehicles and gas cans are provided in Table
IX.D-1 using both a three percent and a seven percent social discount
rate. Again, this analysis assumes that all costs are assigned to HC
control. The discounted cost per ton of HC reduced for the proposal as
a whole would be $0 because the fuel savings from gas cans offsets the
costs of gas can and vehicle controls. The table presents these as $0
per ton, rather than calculating a negative value that has no clear
meaning. For vehicles in 2030, the cost per ton is $0 because by 2030
all fixed costs have been recovered and there are no variable costs
estimated for the proposed vehicle program.\289\
---------------------------------------------------------------------------
\289\ We note that in determining whether the proposed vehicle
controls represent the greatest emissions reductions achievable
considering costs, we have considered the proposed cold-start
standards separately from any other proposed control program.
Similarly, in considering whether the proposed controls for gas cans
represent the best available control considering economic
feasibility, we considered the proposed gas can standards separately
from any other proposed control program.
---------------------------------------------------------------------------
The cost per ton estimates for each individual program are
presented separately in the tables below, and are part of the
justification for each of the programs. For informational purposes, we
also present the cost per ton for the three programs combined.
Table IX.D-1.--HC Aggregate Cost Per Ton and Long-Term Annual Cost Per Ton
[$2003]
----------------------------------------------------------------------------------------------------------------
Discounted Discounted Long-term cost
lifetime cost lifetime cost per ton in
per ton at 3% per ton at 7% 2030
----------------------------------------------------------------------------------------------------------------
Vehicles........................................................ $14 $18 $0
Gas Cans (without fuel savings)................................. 230 250 180
Gas Cans (with fuel savings).................................... 0 0 0
Combined (with fuel savings).................................... 0 0 0
----------------------------------------------------------------------------------------------------------------
The cost per ton of benzene reductions for fuels, vehicles, and gas
cans are shown in Table IX.D-2 using the same methodology as noted
above for HC. The results are calculated by assigning all costs to
benzene control.
Table IX.D-2.--Benzene Aggregate Cost Per Ton and Long-Term Annual Cost Per Ton
[$2003]
----------------------------------------------------------------------------------------------------------------
Discounted Discounted Long-term cost
lifetime cost lifetime cost per ton in
per ton at 3% per ton at 7% 2030
----------------------------------------------------------------------------------------------------------------
Fuels........................................................... $10,900 11,100 11,400
Vehicles........................................................ 260 340 0
Gas Cans (without fuels savings)................................ 27,800 30,900 21,600
Gas Cans (with fuel savings).................................... 0 0 0
Combined (with fuel savings).................................... 3,400 3,600 2,400
----------------------------------------------------------------------------------------------------------------
The cost per ton of overall MSAT reductions for fuels, vehicles,
and gas cans are shown in Table IX.D-3 using the same methodology as
noted above for HC and benzene. The results are calculated by assigning
all costs to MSAT control.
Table IX.D-3.--MSAT Aggregate Cost Per Ton and Long-Term Annual Cost Per Ton
[$2003]
----------------------------------------------------------------------------------------------------------------
Discounted Discounted Long-term cost
lifetime cost lifetime cost per ton in
per ton at 3% per ton at 7% 2030
----------------------------------------------------------------------------------------------------------------
Fuels........................................................... $10,900 $11,100 $11,400
Vehicles........................................................ 40 53 0
Gas Cans (without fuel savings)................................. 1,800 2,000 1,400
Gas Cans (with fuel savings).................................... 0 0 0
Combined (with fuel savings).................................... 710 780 450
----------------------------------------------------------------------------------------------------------------
[[Page 15907]]
We have also calculated a cost per ton for direct PM reductions for
vehicles. Again, this analysis assigns all related costs to direct PM
reductions.
Table IX.D-4.--Direct PM Aggregate Cost Per Ton and Long-Term Annual Cost Per Ton
($2003)
----------------------------------------------------------------------------------------------------------------
Discounted Discounted Long-term cost
lifetime cost lifetime cost per ton in
per ton at 3% per ton at 7% 2030
----------------------------------------------------------------------------------------------------------------
Vehicles........................................................ $620 $820 $0
----------------------------------------------------------------------------------------------------------------
E. Benefits
This section presents our analysis of the health and environmental
benefits that can be expected to occur as a result of the proposed
standards throughout the period from initial implementation through
2030. In terms of emission benefits, we expect to see significant
reductions in mobile source air toxics (MSATs) from the proposed
vehicle, fuel and gas can standards, reductions in VOCs (an ozone
precursor) from the proposed cold temperature vehicle and gas can
standards, and reductions in direct PM2.5 from the proposed
cold temperature vehicle standards. When translating emission benefits
to health effects and monetized values, however, we only quantify the
PM-related benefits associated with the proposed cold temperature
vehicle standards.
The reductions in PM from the proposed cold temperature vehicle
standards would result in significant reductions in premature deaths
and other serious human health effects, as well as other important
public health and welfare effects. We estimate that in 2030, the
benefits we are able to monetize are expected to be approximately $6.5
billion using a 3 percent discount rate and $5.9 billion using a 7
percent discount rate. Total social costs of the entire proposal for
the same year (2030) are $205 million. Details on the costs of each of
the proposed controls are in section IX.F. These estimates, and all
monetized benefits presented in this section, are in year 2003 dollars.
We demonstrate that the proposed standards would reduce cancer and
noncancer risk from reduced exposure to MSATs (as described in Section
IV of this preamble). However, we do not translate this risk reduction
into benefits. We also do not quantify the benefits related to ambient
reductions in ozone due to the VOC emission reductions expected to
occur as a result of the proposed standards. The following section
describes in more detail why these benefits are not quantified.
1. Unquantified Health and Environmental Benefits
This benefit analysis estimates improvements in health and human
welfare that can be expected as a result of the proposed standards, and
monetizes those benefits. The benefits would come from reductions in
emissions of air toxics (including benzene, 1,3-butadiene,
formaldehyde, acetaldehyde, acrolein, naphthalene, and other air toxic
pollutants discussed in Section III), ambient ozone (as a result of VOC
controls), and direct PM2.5 emissions.
While there will be benefits associated with air toxic pollutant
reductions, notably with regard to reductions in exposure and risk (see
Section IV, above), we do not attempt to monetize those benefits. This
is primarily because available tools and methods to assess air toxics
risk from mobile sources at the national scale are not adequate for
extrapolation to incidence estimations or benefits assessment. The best
suite of tools and methods currently available for assessment at the
national scale are those used in the National Scale Air Toxics
Assessment (NATA; these tools are discussed in Section IV.A). The EPA
Science Advisory Board specifically commented in their review of the
1996 National Air Toxics Assessment (NATA) that these tools were not
yet ready for use in a national-scale benefits analysis, because they
did not consider the full distribution of exposure and risk, or address
sub-chronic health effects.\290\ While EPA has since improved the
tools, there remain critical limitations for estimating incidence and
assessing benefits of reducing mobile source air toxics. We continue to
work to address these limitations, and we are exploring the feasibility
of a quantitative benefits assessment for air toxics as part of a case
study being done for benzene as part of the ongoing update to the
Section 812 retrospective and prospective studies.\291\
---------------------------------------------------------------------------
\290\ Science Advisory Board. 2001. NATA-Evaluating the
National-Scale Air Toxics Assessment for 1996--an SAB Advisory.
http://www.epa.gov/ttn/atw/sab/sabrev.html.
\291\ The analytic blueprint for the Section 812 benzene case
study can be found at http://www.epa.gov/air/sect812/appendixi51203.pdf.
---------------------------------------------------------------------------
We also do not estimate the monetized benefits of VOC controls in
this benefits analysis. Though VOCs would be demonstrably reduced as a
result of the cold temperature vehicle standards, we assume that these
emissions would not have a measurable impact on ozone formation since
the standards seek to reduce VOC emissions at cold ambient temperatures
and ozone formation is primarily a warm ambient temperature issue. The
gas can controls would likely result in ozone benefits, though we do
not attempt to monetize those benefits. This is primarily due to the
magnitude of, and uncertainty associated with, the estimated changes in
ambient ozone associated with the proposed standards. In Section IV.C.,
we discuss that the ozone modeling conducted for the proposed gas can
standards results in a net reduction in the population weighted ozone
design value metric measured within the modeled domain (37 Eastern
states and the District of Columbia). The net improvement is very
small, however, and would likely lead to negligible monetized benefits.
Instead, we acknowledge that this analysis may underestimate the
benefits associated with reductions in ozone precursor emissions
achieved by the various proposed standards. We discuss these benefits
qualitatively within the Regulatory Impact Analysis.
Table IX.E-1 lists each of the MSAT and ozone health and welfare
effects that remain unquantified because of current limitations in the
methods or available data. This table also includes the PM-related
health and welfare effects that also remain unquantified due to current
method and data limitations. Chapter 12 of the Regulatory Impact
Analysis for the proposed standards provides a qualitative description
of the health and welfare effects not quantified in this analysis.
[[Page 15908]]
Table IX.E-1.--Unquantified and Non-Monetized Effects
--------------------------------------------------------------------------------------------------------------------------------------------------------
Pollutant/effects Effects not included in primary estimates--changes in:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ozone Health \a\......................... Premature mortality: short term exposures \b\.
Hospital admissions: respiratory.
Emergency room visits for asthma.
Minor restricted-activity days.
School loss days.
Asthma attacks.
Cardiovascular emergency room visits.
Acute respiratory symptoms.
Chronic respiratory damage.
Premature aging of the lungs.
Non-asthma respiratory emergency room visits.
Exposure to UVb (+/-) \e\.
Ozone Welfare............................ Decreased outdoor worker productivity.
Agricultural yields for
--commercial forests.
--some fruits and vegetables.
--non-commercial crops.
Damage to urban ornamental plants.
Impacts on recreational demand from damaged forest aesthetics.
Ecosystem functions.
Exposure to UVb (+/-) \e\.
PM Health \c\............................ Premature mortality--short term exposures \d\.
Low birth weight.
Pulmonary function.
Chronic respiratory diseases other than chronic bronchitis.
Non-asthma respiratory emergency room visits.
Exposure to UVb (+/-) \e\.
PM Welfare............................... Visibility in many Class I areas.
Residential and recreational visibility in non-Class I areas.
Soiling and materials damage.
Damage to ecosystem functions.
Exposure to UVb (+/-) \e\.
MSAT Health.............................. Cancer (benzene, 1,3-butadiene, formaldehyde, acetaldehyde, naphthalene).
Anemia (benzene).
Disruption of production of blood components (benzene).
Reduction in the number of blood platelets (benzene).
Excessive bone marrow formation (benzene).
Depression of lymphocyte counts (benzene).
Reproductive and developmental effects (1,3-butadiene).
Irritation of eyes and mucus membranes (formaldehyde).
Respiratory irritation (formaldehyde).
Asthma attacks in asthmatics (formaldehyde).
Asthma-like symptoms in non-asthmatics (formaldehyde).
Irritation of the eyes, skin, and respiratory tract (acetaldehyde).
Upper respiratory tract irritation and congestion (acrolein).
MSAT Welfare............................. Direct toxic effects to animals.
Bioaccumulation in the food chain.
Damage to ecosystem function.
Odor.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ In addition to primary economic endpoints, there are a number of biological responses that have been associated with ozone health effects including
increased airway responsiveness to stimuli, inflammation in the lung, acute inflammation and respiratory cell damage, and increased susceptibility to
respiratory infection.
\b\ EPA sponsored a series of meta-analyses of the ozone mortality epidemiology literature, published in the July 2005 volume of the journal
Epidemiology, which found that short-term exposures to ozone may have a significant effect on daily mortality rates, independent of exposure to PM.
EPA is currently considering how to include an estimate of ozone mortality in its primary benefits analyses.
\c\ In addition to primary economic endpoints, there are a number of biological responses that have been associated with PM health effects including
morphological changes and altered host defense mechanisms. The public health impact of these biological responses may be partly represented by our
quantified endpoints.
\d\ While some of the effects of short term exposures are likely to be captured in the estimates, there may be premature mortality due to short term
exposure to PM not captured in the cohort study upon which the primary analysis is based.
\e\ May result in benefits or disbenefits.
2. Quantified Human Health and Environmental Effects of the Proposed
Cold Temperature Vehicle Standard
In this section we discuss the PM2.5 benefits of the
proposed cold temperature vehicle standard. To estimate
PM2.5 benefits, we rely on a benefits transfer technique.
The benefits transfer approach uses as its foundation the relationship
between emission reductions and ambient PM2.5 concentrations
modeled across the contiguous 48 states (and DC) for the Clean Air
Nonroad Diesel (CAND) proposal.\292\ For a given future year, we first
calculate the ratio between CAND direct PM2.5 emission
reductions and direct PM2.5 emission reductions associated
with the proposed cold temperature vehicle control standard
[[Page 15909]]
(proposed emission reductions/CAND emission reductions). We multiply
this ratio by the percent that direct PM2.5 contributes
towards population-weighted reductions in total PM2.5 due to
the CAND standards. This calculation results in a ``benefits
apportionment factor'' for the relationship between direct PM emissions
and primary PM2.5, which is then applied to the BenMAP-based
incidence and monetized benefits from the CAND proposal. In this way,
we apportion the results of the proposed CAND analysis to its
underlying direct PM emission reductions and scale the apportioned
benefits to reflect differences in emission reductions between the
modeled CAND control option and the proposed standards.\293\ This
benefits transfer method is consistent with the approach used in other
recent mobile and stationary source rules.\294\
---------------------------------------------------------------------------
\292\ See 68 FR 28327, May 23, 2003.
\293\ Note that while the proposed regulations also control
VOCs, which contribute to PM formation, the benefits transfer
scaling approach only scales benefits based on NOX,
SO2, and direct PM emission reductions. PM benefits will
likely be underestimated as a result, though we are unable to
estimate the magnitude of the underestimation.
\294\ See: Clean Air Nonroad Diesel final rule (69 FR 38958,
June 29, 2004); Nonroad Large Spark-Ignition Engines and
Recreational Engines standards (67 FR 68241, November 8, 2002);
Final Industrial Boilers and Process Heaters NESHAP (69 FR 55217,
September 13, 2004); Final Reciprocating Internal Combustion Engines
NESHAP (69 FR 33473, June 15, 2004); Final Clean Air Visibility Rule
(EPA-452/R-05-004, June 15, 2005); Ozone Implementation Rule
(documentation forthcoming).
---------------------------------------------------------------------------
Table IX.E-2 presents the primary estimates of reduced incidence of
PM-related health effects for the years 2020 and 2030 for the proposed
cold temperature vehicle control strategies.\295\ In 2030, we estimate
that PM-related annual benefits would result in approximately 910 fewer
premature fatalities, 590 fewer cases of chronic bronchitis, 1,600
fewer non-fatal heart attacks, and 940 fewer hospitalizations (for
respiratory and cardiovascular disease combined). In addition, we
estimate that the emission controls would reduce days of restricted
activity due to respiratory illness by about 620,000 days and reduce
work-loss days by about 110,000 days. We also estimate substantial
health improvements for children from reduced upper and lower
respiratory illness, acute bronchitis, and asthma attacks.
---------------------------------------------------------------------------
\295\ The ``primary estimate'' refers to the estimate of
benefits that reflects the suite of endpoints and assumptions that
EPA believes yields the expected value of air quality improvements
related to the proposed standards. The impact that alternative
endpoints and assumptions have on the benefit estimates are explored
in appendixes to the RIA.
TABLE IX.E-2.--Estimated Annual Reductions in Incidence of Health
Effects Related to the Proposed Cold Temperature Vehicle Standard a
------------------------------------------------------------------------
2020 Annual 2030 Annual
Health effect incidence incidence
reduction reduction
------------------------------------------------------------------------
PM-Related Endpoints:
Premature Mortality b
Adult, age 30+ and Infant, age <1 480 910
year...............................
Chronic bronchitis (adult, age 26 330 590
and over)..........................
Non-fatal myocardial infarction 820 1,600
(adult, age 18 and over)...........
Hospital admissions--respiratory 260 540
(all ages) c.......................
Hospital admissions--cardiovascular 220 400
(adults, age >18) d................
Emergency room visits for asthma 360 630
(age 18 years and younger).........
Acute bronchitis, (children, age 8- 790 1,400
12)................................
Lower respiratory symptoms 9,400 17,000
(children, age 7-14)...............
Upper respiratory symptoms 7,100 13,000
(asthmatic children, age 9-18).....
Asthma exacerbation (asthmatic 12,000 21,000
children, age 6-18)................
Work Loss Days...................... 63,000 110,000
Minor restricted activity days 370,000 620,000
(adults age 18-65).................
------------------------------------------------------------------------
a Incidence is rounded to two significant digits. Estimates represent
benefits from the proposed rule nationwide, excluding Alaska and
Hawaii.
b PM-related adult mortality based upon studies by Pope, et al 2002.296
PM-related infant mortality based upon studies by Woodruff, Grillo,
and Schoendorf,1997.297
c Respiratory hospital admissions for PM include admissions for chronic
obstructive pulmonary disease (COPD), pneumonia and asthma.
d Cardiovascular hospital admissions for PM include total cardiovascular
and subcategories for ischemic heart disease, dysrhythmias, and heart
failure.
PM also has numerous documented effects on environmental quality
that affect human welfare. These welfare effects include direct damages
to property, either through impacts on material structures or by
soiling of surfaces, and indirect economic damages through the loss in
value of recreational visibility or the existence value of important
resources. Additional information about these welfare effects can be
found in Chapter 12 of the Regulatory Impact Analysis prepared for this
proposal.
---------------------------------------------------------------------------
\296\ Pope, C.A., III, R.T. Burnett, M.J. Thun, E.E. Calle, D.
Krewski, K. Ito, and G.D. Thurston. 2002. ``Lung Cancer,
Cardiopulmonary Mortality, and Long-term Exposure to Fine
Particulate Air Pollution.'' Journal of American Medical Association
287:1132-1141.
\297\ Woodruff, T.J., J. Grillo, and K.C. Schoendorf. 1997.
``The Relationship Between Selected Causes of Postneonatal Infant
Mortality and Particulate Infant Mortality and Particulate Air
Pollution in the United States.'' Environmental Health Perspectives
105(6):608-612.
---------------------------------------------------------------------------
3. Monetized Benefits
Table IX.E-3 presents the estimated monetary value of reductions in
the incidence of those health effects we are able to monetize for the
proposed cold temperature vehicle standard. Total annual PM-related
health benefits are estimated to be approximately $6.5 or $5.9 billion
in 2030 (3 percent and 7 percent discount rate, respectively). These
estimates account for growth in real gross domestic product (GDP) per
capita between the present and 2030.
Table IX.E-3 indicates with a ``B'' those additional health and
environmental benefits of the rule that we are unable to quantify or
monetize. These effects are additive to the estimate of total benefits,
and are related to the following sources:
There are many human health and welfare effects associated
with PM, ozone, and toxic air pollutant reductions that remain
unquantified because of current limitations in the methods or available
data. A listing of the benefit categories that could not be quantified
or monetized in our benefit estimates are provided in Table IX.E-1.
[[Page 15910]]
The PM benefits scaled transfer approach, derived from the
Clean Air Nonroad Diesel rule, does not account for VOCs as precursors
to ambient PM2.5 formation. To the extent that VOC emission
reductions associated with the proposed regulations contribute to
reductions in ambient PM2.5, this analysis does not capture
the related health and environmental benefits of those changes.
The PM air quality model only captures the benefits of air
quality improvements in the 48 states and DC; PM benefits for Alaska
and Hawaii are not reflected in the estimate of benefits.
TABLE IX.E-3.--Estimated Annual Monetary Value of Reductions in Incidence of Health and Welfare Effects Related
to the Proposed Cold Temperature Vehicle Standard
[Millions of 2003$] a b
----------------------------------------------------------------------------------------------------------------
2030 Estimated Estimated Estimated
Health effect Pollutant 2020 Estimated value of value of value of
value of reductions reductions reductions reductions
-------------------------------------------------------------------------------------------- ------------------------
PM-Related Premature mortality
c, d:
Adult, 30+ years and
Infant, <1 year.
3 percent discount rate PM2.5............. $3,100 $6,000
7 percent discount rate .................. 2,800 5,400
Chronic bronchitis (adults, 26 PM2.5............. 150 270
and over).
Non-fatal acute myocardial
infarctions:
3 percent discount rate .................. 80 150
7 percent discount rate PM2.5............. 77 150
Hospital admissions for PM2.5............. 4.8 10
respiratory causes.
Hospital admissions for PM2.5............. 5.1 9.4
cardiovascular causes.
Emergency room visits for PM2.5............. 0.12 0.21
asthma.
Acute bronchitis (children, age PM2.5............. 0.32 0.58
8-12).
Lower respiratory symptoms PM2.5............. 0.17 0.30
(children, age 7-14).
Upper respiratory symptoms PM2.5............. 0.20 0.37
(asthma, age 9-11).
Asthma exacerbations........... PM2.5............. 0.57 1.0
Work loss days................. PM2.5............. 9.2 14
Minor restricted activity days PM2.5............. 21 36
(MRADs).
Monetized Total e:
Base estimate..............
3 percent discount rate PM2.5............. 3,400+ B 6,500+ B
7 percent discount rate .................. 3,100+ B 5,900+ B
----------------------------------------------------------------------------------------------------------------
\a\ Dollars are rounded to two significant digits. The PM estimates represent benefits from the proposed rule
across the contiguous United States.
\b\ Monetary benefits adjusted to account for growth in real GDP per capita between 1990 and the analysis year
(2020 or 2030).
\c\ Valuation of premature mortality based on long-term PM exposure assumes discounting over the SAB recommended
20 year segmented lag structure described in the Regulatory Impact Analysis for the Final Clean Air Interstate
Rule (March 2005). Results show 3 percent and 7 percent discount rates consistent with EPA and OMB guidelines
for preparing economic analyses (US EPA, 2000 and OMB, 2003).\298\
\d\ Adult mortality based upon studies by Pope et al. 2002. Infant mortality based upon studies by Woodruff,
Grillo, and Schoendorf, 1997.
\e\ B represents the monetary value of health and welfare benefits not monetized. A detailed listing is provided
in Table IX.E-1.
4. What Are the Significant Limitations of the Benefit Analysis?
---------------------------------------------------------------------------
\298\ U.S. Environmental Protection Agency, 2000. Guidelines for
Preparing Economic Analyses. www.yosemite1.epa.gov/ee/epa/eed/hsf/pages/Guideline.html.
Office of Management and Budget, The Executive Office of the
President, 2003. Circular A-4. http://www.whitehouse.gov/omb/circulars.
---------------------------------------------------------------------------
Perhaps the most significant limitation of this analysis is our
inability to quantify a number of potentially significant benefit
categories associated with improvements in air quality that would
result from the proposed standards. Most notably, we are unable to
estimate the benefits from reduced air toxics exposures because the
available tools and methods to assess mobile source air toxics risk at
the national scale are not adequate for extrapolation to incidence
estimations or benefits assessment. We also do not quantify ozone
benefits due to the magnitude of, and uncertainty associated with, the
modeled changes in ambient ozone associated with the proposed gas can
standards, despite net benefits, when population weighted, in the ozone
design value metric observed across the modeled domain (see Section
IV.C).
More generally, every benefit-cost analysis examining the potential
effects of a change in environmental protection requirements is limited
to some extent by data gaps, limitations in model capabilities (such as
geographic coverage), and uncertainties in the underlying scientific
and economic studies used to configure the benefit and cost models.
Deficiencies in the scientific literature often result in the inability
to estimate quantitative changes in health and environmental effects,
such as potential increases in premature mortality associated with
increased exposure to carbon monoxide. Deficiencies in the economics
literature often result in the inability to assign economic values even
to those health and environmental outcomes which can be quantified.
These general uncertainties in the underlying scientific and economics
literature, which can cause the valuations to be higher or lower, are
discussed in detail in the RIA and its supporting references. Key
uncertainties that have a bearing on the results of the benefit-cost
analysis of the proposed standards include the following:
The exclusion of potentially significant and unquantified
benefit categories (such as health, odor, and ecological benefits of
reduction in air toxics, ozone, and PM);
Errors in measurement and projection for variables such as
population growth;
Uncertainties in the estimation of future year emissions
inventories and air quality;
Uncertainties associated with the scaling of the PM
results of the modeled
[[Page 15911]]
benefits analysis to the proposed standards, especially regarding the
assumption of similarity in geographic distribution between emissions
and human populations and years of analysis;
Uncertainty in the estimated relationships of health and
welfare effects to changes in pollutant concentrations including the
shape of the C-R function, the size of the effect estimates, and the
relative toxicity of the many components of the PM mixture;
Uncertainties in exposure estimation; and
Uncertainties associated with the effect of potential
future actions to limit emissions.
Despite these uncertainties, we believe this benefit-cost analysis
provides a conservative estimate of the expected economic benefits of
the proposed standards for cold temperature vehicle control in future
years because of the exclusion of potentially significant benefit
categories. Acknowledging benefits omissions and uncertainties, we
present a best estimate of the total benefits based on our
interpretation of the best available scientific literature and methods
supported by EPA's technical peer review panel, the Science Advisory
Board's Health Effects Subcommittee (SAB-HES). EPA has also worked to
address many of the comments made by the National Academy of Sciences
(NAS) in a September 26, 2002 report on its review of the Agency's
methodology for analyzing the health benefits of measures taken to
reduce air pollution. EPA addressed many of these comments in the
analysis of the final CAIR rule.\299\ The analysis of the proposed rule
incorporates this most recent work.
---------------------------------------------------------------------------
\299\ See Chapter 4 of the Final Clean Air Interstate Rule RIA
(www.epa.gov/cair) for a discussion of EPA's ongoing efforts to
address the NAS recommendations in its regulatory analyses.
---------------------------------------------------------------------------
There is one category where new studies suggest the possibility of
significant additional economic benefits. Over the past several years,
EPA's SAB has expressed the view that there were not sufficient data to
show a separate ozone mortality effect, in essence saying that any
ozone benefits are captured in the PM-related mortality benefit
estimates. However, in their most recent advice, the SAB recommended
that EPA reconsider the evidence on ozone-related mortality based on
the publication of several recent analyses that found statistically
significant associations between ozone and mortality. Based on these
studies and the recommendations from the SAB, EPA sponsored three
independent meta-analyses of the ozone-mortality epidemiology
literature to inform a determination on including this important health
endpoint. The studies were peer-reviewed and printed in the journal
Epidemiology in July 2005.300 301 302
---------------------------------------------------------------------------
\300\ Levy, J.I, Chemerynski, S.M., Sarnat, J.A. 2005. Ozone
Exposure and Mortality: An Empirical Bayes Meta-Regression Analysis.
Epidemiology. 16:458-468.
\301\ Bell, M.L., Dominici, F., Samet, J.M. 2005. A Meta-
Analysis of Time-Series Studies of Ozone and Mortality with
Comparison to the National Morbidity, Mortality, and Air Pollution
Study. Epidemiology. 16:436-445.
\302\ Ito, K., DeLeon, S.F., Lippmann, M. 2005. Associations
Between Ozone and Daily Mortality: Analysis and Meta-Analysis.
Epidemiology. 16:446-457.
---------------------------------------------------------------------------
EPA is reviewing the body of literature available on the
association of ozone exposure and premature mortality. EPA's second
external review draft of the Criteria Document for ozone has concluded
that there is strong evidence that exposure to ozone has been
associated with premature mortality.\303\ We are exploring ways of
appropriately characterizing the premature mortality benefits of
reducing ozone and included an estimate in recent analyses of the Clear
Skies legislation.\304\ We plan to include a quantification of ozone
mortality benefits in future air pollution rulemakings.
---------------------------------------------------------------------------
\303\ EPA, 2005. Air Quality Criteria for Ozone and Related
Photochemical Oxidants (Second External Review Draft). August.
http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=137307
\304\ For technical details about Clear Skies multi-pollutant
analysis, see http://www.epa.gov/airmarkets/mp/bmresults/health_benefits_method.pdf
---------------------------------------------------------------------------
In contrast to the additional benefits of the proposed standards
discussed above, it is also possible that this rule will result in
disbenefits in some areas of the United States. The effects of ozone
and PM on radiative transfer in the atmosphere can lead to effects of
uncertain magnitude and direction on the penetration of ultraviolet
light and climate. Ground level ozone makes up a small percentage of
total atmospheric ozone (including the stratospheric layer) that
attenuates penetration of ultraviolet-b (UVb) radiation to the ground.
EPA's past evaluation of the information indicates that potential
disbenefits would be small, variable, and with too many uncertainties
to attempt quantification of relatively small changes in average ozone
levels over the course of a year.\305\ EPA's most recent provisional
assessment of the currently available information indicates that
potential but unquantifiable benefits may also arise from ozone-related
attenuation of UVb radiation.\306\ EPA believes that we are unable to
quantify any net climate-related disbenefit or benefit associated with
the combined ozone and PM reductions in this rule.
---------------------------------------------------------------------------
\305\ EPA, 2005. Air Quality Criteria for Ozone and Related
Photochemical Oxidants (First External Review Draft). January.
http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=114523
\306\ EPA, 2005. Air Quality Criteria for Ozone and Related
Photochemical Oxidants (Second External Review Draft). August.
http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=137307
---------------------------------------------------------------------------
5. How Do the Benefits Compare to the Costs of the Proposed Standards?
This proposed rule provides three separate provisions that reduce
air toxics emissions from mobile sources: cold temperature vehicle
controls, an emissions control program for gas cans, and a control
program limiting benzene in gasoline. A full appreciation of the
overall economic consequences of these provisions requires
consideration of the benefits and costs expected to result from each
standard, not just those that could be expressed here in dollar terms.
As noted above, due to limitations in data availability and analytical
methods, our benefits analysis only monetizes the PM2.5-
related benefits from direct PM emission reductions associated with the
cold temperature standards. There are a number of health and
environmental effects associated with the proposed standards that we
were unable to quantify or monetize (see Table IX.E-1).
Table IX.E-4 contains the estimates of monetized benefits of the
proposed cold temperature vehicle standards and estimated social
welfare costs for each of the proposed control programs.\307\ The
annual social welfare costs of all provisions of this proposed rule are
described more fully in Section IX.F. It should be noted that the
estimated social welfare costs for the vehicle program contained in
this table are for 2019. The 2019 vehicle program costs are included
for comparison purposes only and are therefore not included in the
total 2020 social costs. There are no compliance costs associated with
the vehicle program after 2019; as explained elsewhere in this
preamble, the vehicle compliance costs are primarily R&D and facilities
costs that are expected to be recovered by manufacturers over the first
ten years of the program.
---------------------------------------------------------------------------
\307\ Social costs represent the welfare costs of the rule to
society. These social costs do not consider transfer payments (such
as taxes) that are simply redistributions of wealth.
---------------------------------------------------------------------------
The results in Table IX.E-4 suggest that the 2020 monetized
benefits of the cold temperature vehicle standards are greater than the
expected social welfare costs of that program in 2019. Specifically,
the annual benefits of the
[[Page 15912]]
program would be approximately $3,400 + B million or $3,100 + B million
annually in 2020 (using a 3 percent and 7 percent discount rate in the
benefits analysis, respectively), compared to estimated social welfare
costs of approximately $11 million in the last year of the program
(2019). These benefits are expected to increase to $6,500 + B million
or $5,900 + B million annually in 2030 (using a 3 percent and 7 percent
discount rate in the benefits analysis, respectively), even as the
social welfare costs of that program fall to zero. Table IX.E-4 also
presents the costs of the other proposed rule provisions: an emissions
control program for gas cans and a control program limiting benzene in
gasoline. Though we are unable to present the benefits associated with
these two programs, we note for informational purposes that the
benefits associated with the proposed cold temperature vehicle
standards alone exceed the costs of all three proposed rule provisions
combined.
Table IX.E-4.--Summary of Annual Benefits of the Proposed Cold
Temperature Vehicle Standards and Costs of All Provisions of the
Proposed Standards a
[Millions of 2003 dollars]
------------------------------------------------------------------------
Description 2020 2030
------------------------------------------------------------------------
Estimated Social Welfare Costs
\b\:
Proposed Cold Temperature $11 \c\............ $0
Vehicle Standards.
Proposed Gasoline Container 32................. 39
Standards.
Proposed Fuel Standards \d\ 210................ 250
----------------------------------------
Total.................. 240................ 290
Fuel Savings............... -73................ -82
----------------------------------------
Total Social Welfare 170................ 205
Costs.
Total PM2.5-Related Health
Benefits of the Proposed Cold
Temperature Vehicle Standards
\e\:
3 percent discount rate.... 3,400 + B \f\...... 6,500 + B \f\
7 percent discount rate.... 3,100 + B \f\...... 5,900 + B \f\
------------------------------------------------------------------------
\a\ All estimates are rounded to two significant digits and represent
annualized benefits and costs anticipated for the years 2020 and 2030,
except where noted. Totals may not sum due to rounding.
\b\ Note that costs are the annual total costs of reducing all
pollutants associated with each provision of the proposed MSAT control
package. Also note that while the cost analysis only utilizes a 7
percent discount rate to calculate annual costs, the benefits analysis
uses both a 3 percent and 7 percent discount rate to calculate annual
benefits. Benefits reflect only direct PM reductions associated with
the cold temperature vehicle standards.
\c\ These costs are for 2019; the vehicle program compliance costs
terminate after 2019 and are included for illustrative purposes. They
are not included in the total social welfare cost sum for 2020.
\d\ Our modeling for the total costs of the proposed gasoline benzene
program included California gasoline, since it was completed before we
decided to propose that California gasoline not be covered by the
program. California refineries comprise approximately 1 percent of
these 2projected costs. For the final rule, we expect to exclude
California refineries from the analysis.
\e\ Valuation of premature mortality based on long-term PM exposure
assumes discounting over the SAB recommended 20 year segmented lag
structure described in the Regulatory Impact Analysis for the Final
Clean Air Interstate Rule (March 2005). Annual benefits analysis
results reflect the use of a 3 percent and 7 percent discount rate in
the valuation of premature mortality and nonfatal myocardial
infarctions, consistent with EPA and OMB guidelines for preparing
economic analyses (US EPA, 2000 and OMB, 2003).\308\
\f\ Not all possible benefits or disbenefits are quantified and
monetized in this analysis. B is the sum of all unquantified benefits
and disbenefits. Potential benefit categories that have not been
quantified and monetized are listed in Table IX.E-1.
F. Economic Impact Analysis
We prepared a draft Economic Impact Analysis (EIA) to estimate the
economic impacts of the proposed emission control program on the gas
can, gasoline fuel, and light-duty vehicle markets. In this section we
briefly describe the Economic Impact Model (EIM) we developed to
estimate both the market-level changes in price and outputs for
affected markets and the social costs of the program and their
distribution across affected economic sectors. We also present the
results of our analysis.
---------------------------------------------------------------------------
\308\ U.S. Environmental Protection Agency, 2000. Guidelines for
Preparing Economic Analyses. www.yosemite1.epa.gov/ee/epa/eed/hsf/pages/Guideline.html.
Office of Management and Budget, The Executive Office of the
President, 2003. Circular A-4. http://www.whitehouse.gov/omb/circulars.
---------------------------------------------------------------------------
We estimate the net social costs of the proposed program to be
about $171.5 million in 2020. This estimate reflects the estimated
costs associated with the gasoline, gas can, and vehicle controls and
the expected fuel savings from better evaporative controls on gas cans.
The results of the economic impact modeling performed for the gasoline
fuel and gas can control programs suggest that the social costs of
those two programs are expected to be about $244.3 million in 2020 with
consumers of these products expected to bear about 60 percent of these
costs. We estimate fuel savings of about $72.8 million in 2020 that
will accrue to consumers. There are no social costs associated with the
vehicle program in 2020. These estimates, and all costs presented in
this section, are in year 2003 dollars.
With regard to market level impacts in 2020, the maximum price
increase for gasoline fuel is expected to be about 0.1 percent (0.2
cents per gallon) for PADD 5. The price of gas cans is expected to
increase by about 1.8 percent ($0.20 per can) in areas that already
have gas can requirements and about 32.5 percent ($1.52 per can) in
areas that do not.
Detailed descriptions of the EIM, the model inputs, modeling
results, and several sensitivity analyses can be found in Chapter 13 of
the Regulatory Impact Analysis prepared for this proposal.
1. What Is an Economic Impact Analysis?
An Economic Impact Analysis (EIA) is prepared to inform decision
makers about the potential economic consequences of a regulatory
action. The analysis consists of estimating the social costs of a
regulatory program and the distribution of these costs across
stakeholders. These estimated social costs can then be compared with
estimated social benefits (as presented in Section IX.E). As defined in
EPA's Guidelines for Preparing Economic Analyses, social costs are the
value of the goods and services lost by society resulting from (a) the
use of resources to comply with and implement a regulation and (b)
reductions in
[[Page 15913]]
output.\309\ In this analysis, social costs are explored in two steps.
In the market analysis, we estimate how prices and quantities of goods
affected by the proposed emission control program can be expected to
change once the program goes into effect. In the economic welfare
analysis, we look at the total social costs associated with the program
and their distribution across stakeholders.
---------------------------------------------------------------------------
\309\ EPA Guidelines for Preparing Economic Analyses, EPA 240-R-
00-003, September 2000, p 113. A copy of this document can be found
at http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/Guidelines.html#download
---------------------------------------------------------------------------
2. What Is the Economic Impact Model?
The Economic Impact Model (EIM) is a behavioral model developed for
this proposal to estimate price and quantity changes and total social
costs associated with the emission controls under consideration. The
EIM simulates how producers and consumers of affected products can be
expected to respond to an increase in production costs as a result of
the proposed emission control program. In this EIM, compliance costs
are directly borne by producers of affected goods. Depending on the
producers' and consumers' sensitivity to price changes, producers may
be able to pass some or all of these compliance costs on to the
consumers of these goods in the form of higher prices. Consumers adjust
their consumption of affected goods in response to these price changes.
This information is passed back to the producers in the form of
purchasing decisions. The EIM takes these behavioral responses into
account to estimate new market equilibrium quantities and prices for
all modeled sectors and the resulting distribution of social costs
across these stakeholders (producers and consumers).
3. What Economic Sectors Are Included in This Economic Impact Analysis?
There are three economic sectors affected by the control programs
described in this proposal: gas cans, gasoline fuel, and light-duty
vehicles. In this Economic Impact Analysis we model only the impacts on
the gas can and gasoline fuel markets. We did not model the impacts on
the light-duty vehicle market. This is because the compliance costs for
the proposed vehicle program are expected to be very small, less than
$1 per vehicle and, even if passed on entirely, are unlikely to affect
producer or consumer behavior. Therefore, we do not expect these
proposed controls to affect the quantity of vehicles produced or their
prices. At the same time, however, the light-duty vehicle compliance
costs are a cost to society and should be included in the economic
welfare analysis. We do this by adding the vehicle program engineering
compliance cost estimates to the estimated social costs of the gasoline
and gas can programs.
With regard to the gasoline fuel and gas can markets, we consider
only the impacts on residential users of these products. This means
that we focus the analysis on the use of these products for personal
transportation (gasoline fuel) or residential lawns and garden care or
recreational uses (gas cans) and do not consider how the costs of
complying with the proposed programs may affect the production of goods
and services that use gasoline fuel or gas cans as production inputs.
We believe this approach is reasonable because the commercial share of
the end-user markets for both gasoline fuel and gas cans is relatively
small.310 311 In addition, for most commercial users the
share of the cost of these products to total production costs is also
small (e.g., the cost of a gas can is only a very small part of the
total production costs for an agricultural or construction firm).
Therefore, a price increase of the magnitude anticipated for this
control program is not expected to have a noticeable impact on prices
or quantities of goods produced using these inputs (e.g., agricultural
product or buildings).
---------------------------------------------------------------------------
\310\ The U.S Department of Energy estimates that about 92
percent of gasoline used in the United States for transportation is
used in light-duty vehicles. About 6 percent is used for commercial
or industrial transportation, and the remaining 2 percent is used in
recreational marine vessels. See U.S Department of Energy, Energy
Information Administration, 2004. ``Annual Energy Outlook 2004 with
projections to 2025.'' Last updated June 2, 2004. Table A-2 and
Supplemental Table 34. http://www.eia.doe.gov/oiaf/aeoref_tab.html.
\311\ A recent study by CARB (1999) found that 94 percent of
portable fuel containers in California were used by residential
households California Environmental Protection Agency, Air Resources
Board (CARB) 1999. See ``Hearing Notice and Staff Report, Initial
Statement of Reasons for Proposed Rule Making Public Hearing to
Consider the Adoption of Portable Fuel Container Spillage Control
Regulation.'' Sacrament, CA: California Environmental Protection
Agency, Air Resources Board (CARB). A copy of this document is
available at http://www.arb.ca.gov/regact/spillcon/isor.pdf
---------------------------------------------------------------------------
With regard to the gasoline fuel analysis, it should be noted that
this Economic Impact Analysis does not include California fuels in the
market analysis. California fuels are only included, as a separate line
item, in the economic welfare analysis. California currently has state-
level controls that address air toxics from gasoline. Any actions that
refiners may take to comply with the federal program are expected to be
small and not affect market prices or quantities in that state.
However, because the estimated fuel program compliance costs include a
small compliance cost for California, and this cost would be a cost to
society, it is necessary to include those costs in the total economic
welfare costs of the proposal. This is done by including the estimated
engineering compliance costs as a separate line item. Also, consistent
with the cost analysis, the economic impact analysis does not
distinguish between reformulated and conventional gasoline fuels.
The EIM models the economic impacts on two gas can markets (states
that currently have requirements for gas cans and those that do not),
and four gasoline fuel markets (PADDs 1+3, PADD 2, PADD 4, PADD 5). The
markets included in this EIA are described in more detail in Chapter 13
of the RIA for this proposal.
In the EIM, the gasoline fuel and gas can markets are not linked
(there is no feedback mechanism between the gas can and gasoline fuel
model segments). This is because these two sectors represent different
aspects of fuel consumption (fuel storage and fuel production) and
production and consumption of one product is not affected by the other.
In other words, an increase in the price of gas cans is not expected to
have an impact on the production and supply of gasoline, and vice
versa. Production and consumption of each of these products are the
result of other factors that have little cross-over impacts (the need
for fuel storage; the need for personal transportation).
4. What Are the Key Features of the Economic Impact Model?
A detailed description of the features of the EIM and the data used
in the analysis is provided in Chapter 13 of the RIA prepared for this
rule. The model methodology is firmly rooted in applied microeconomic
theory and was developed following the methodology set out in the
OAQPS's Economic Analysis Resource Document.\312\
---------------------------------------------------------------------------
\312\ U.S. Environmental Protection Agency, Office of Air
Quality Planning and Standards, Innovative Strategies and Economics
Group, OAQPS Economic Analysis Resource Document, April 1999. A copy
of this document can be found at http://www.epa.gov/ttn/ecas/econdata/Rmanual2/ Rmanual2/
---------------------------------------------------------------------------
The EIM is a computer model comprised of a series of spreadsheet
modules that simulate the supply and demand characteristics of the
markets under consideration. The initial market equilibrium conditions
are shocked by applying the compliance costs for the control program to
the supply side of the markets (this is done by shifting the relevant
supply curves by the amount of the compliance costs). The model
equations can be analytically solved for
[[Page 15914]]
equilibrium prices and quantities for the markets with the regulatory
program and these new prices and quantities are used to estimate the
social costs of the model and how those costs are shared among affected
markets.
The EIM is a partial equilibrium, intermediate-run model that
assumes perfect competition in the relevant markets. As explained in
EPA's Guidelines for Preparing Economic Analyses, ``partial
equilibrium'' means that the model considers markets in isolation and
that conditions in other markets are assumed either to be unaffected by
a policy or unimportant for social cost estimation.\313\ The use of the
intermediate run means that some factors of production are fixed and
some are variable. In very short analyses, all factors of production
would be assumed to be fixed, leaving the producers with no means to
respond to the increased production costs associated with the
regulation (e.g., they cannot adjust labor or capital inputs). Under
this time horizon, the costs of the regulation fall entirely on the
producer. In the long run, all factors of production are variable and
producers can adjust production in response to cost changes imposed by
the regulation (e.g., using a different labor/capital mix). In the
intermediate run there is some resource immobility which may cause
producers to suffer producer surplus losses, but they can also pass
some of the compliance costs to consumers.
---------------------------------------------------------------------------
\313\ EPA Guidelines for Preparing Economic Analyses, EPA 240-R-
00-003, September 2000, p. 125-6.
---------------------------------------------------------------------------
The perfect competition assumption is widely accepted economic
practice for this type of analysis, and only in rare cases are other
approaches used.\314\ It should be noted that the perfect competition
assumption is not primarily about the number of firms in a market. It
is about how the market operates: the nature of the competition among
firms. Indicators that allow us to assume perfect competition include
absence of barriers to entry, absence of strategic behavior among firms
in the market, and product differentiation.
---------------------------------------------------------------------------
\314\ See, for example, EPA Guidelines for Preparing Economic
Analyses, EPA 240-R-00-003, September 2000, p 126.
---------------------------------------------------------------------------
With regard to the gasoline fuel market, the Federal Trade
Commission (FTC) has developed an approach to ensure competitiveness in
gasoline fuel markets. It reviews oil company mergers and frequently
requires divestiture of refineries, terminals, and gas stations to
maintain a minimum level of competition. This is discussed in more
detail in the industry profile prepared for this proposal.\315\
---------------------------------------------------------------------------
\315\ Section 3 Industry Organization, ``Characterizing Gasoline
Markets: a Profile,'' Final Report, prepared for EPA by RTI, August
2005.
---------------------------------------------------------------------------
With regard to the gas can market, the small number of firms in the
market is offset by several features of this market. Because gas cans
are compact and lightweight, they are easy to transport far from their
place of manufacture. This means that production is not limited to
local producers. Although they vary by size and material, consumers are
likely to view all gas cans as good substitutes for one another.
Because the products are similar enough to be considered homogeneous
(e.g., perfectly substitutable), consumers can shift their purchases
from one manufacturer to another. There are only minimal technical
barriers to entry that would prevent new firms from freely entering the
market, since manufacturing is based on well-known plastic processing
methods. In addition, there is significant excess capacity, enabling
competitors to respond quickly to changes in price. Excess production
capacity in the general container manufacturing market also means that
manufacturers could potentially switch their product lines to compete
in this segment of the market, often without a significant investment.
In addition, there is no evidence of high levels of strategic behavior
in the price and quantity decisions of the firms. Finally, it should be
noted that contestable market theory asserts that oligopolies and even
monopolies will behave very much like firms in a competitive market if
manufacturers have extra production capacity and this capacity could
allow them to enter the market costlessly (i.e., there are no sunk
costs associated with this kind of market entry or exit).\316\ As a
result of these conditions, producers and consumers in the gas can
market take the market price as given when making their production and
consumption choices. For all these reasons, the market can be modeled
as a competitive market even though the number of producers is small.
---------------------------------------------------------------------------
\316\ A monopoly or firms in oligopoly may not behave as
neoclassical economic theories of the firm predict because they may
be concerned about new entrants to the market. If super-normal
profits are earned, potential competitors may enter the market. To
respond to this treat, existing firm(s) in the market will keep
prices and output at a level where only normal profits are made,
setting price and output levels at or close to the competitive price
and output. See Chapter 13 of the RIA for more information, Section
13.2.3.
---------------------------------------------------------------------------
5. What Are the Key Model Inputs?
Key model inputs for the EIM are the behavioral parameters,
compliance costs estimates, and market equilibrium quantities and
prices.
The EIM is a behavioral model. The estimated social costs of this
emission control program are a function of the ways in which producers
and consumers of the gas cans and gasoline fuel affected by the
standards change their behavior in response to the costs incurred in
complying with the standards. These behavioral responses are
incorporated in the EIM through the price elasticity of supply and
demand (reflected in the slope of the supply and demand curves), which
measure the price sensitivity of consumers and producers. The price
elasticites used in this analysis are described in Chapter 13 of the
RIA. The gasoline elasticites were obtained from the literature and are
-0.2 for demand and 0.2 for supply. This means that both the quantity
supplied and demanded are expected to be fairly insensitive to price
changes and that increases in prices are not expected to cause sales to
fall or production to increase by very much. Because we were unable to
find published supply and demand elasticities for the gas can market,
we estimated these parameters using the procedures described in Chapter
13 of the RIA. This approach yielded a demand elasticity of -0.01 and a
supply elasticity of 1.5. The estimated demand elasticity is nearly
perfectly inelastic (equal to zero), which means that changes in price
are expected to have very little effect on the quantity of gas cans
demanded. However, supply is fairly elastic, meaning producers are
expected to respond to a change in price. Therefore, consumers are
expected to bear more of the burden of gas can regulatory control costs
than producers.
Initial market equilibrium conditions are simulated using the same
current year sales quantities and growth rates used in the engineering
cost analysis. The initial equilibrium prices for gas can and gasoline
fuel were obtained from industry sources and published government data.
The initial equilibrium market conditions are shocked by applying the
engineering compliance cost estimates described in earlier in this
section. Although both the gas can and gasoline fuel markets are
competitive markets, the model is shocked by applying the sum of
variable and fixed costs. Two sets of compliance costs are used in the
gas can market analysis, reflecting states with existing controls and
states without existing controls. The compliance costs used to shock
the gasoline fuel market are based on an average total cost (variable +
fixed) analysis. An explanation for this
[[Page 15915]]
approach can be found in Section 13.2.4.1 of the RIA prepared for this
proposal. These gasoline fuel compliance costs differ across PADDs but
are the same across years. Because California already has existing
gasoline fuel controls, fuel volumes for that state are not included in
the market analysis. However, because it may be necessary for refiners
to adjust their production to comply with the new federal standards,
California fuel controls are included in the economic welfare analysis.
Additional costs that need to be considered in the EIM are the
savings associated with the gas can controls and the costs of the
light-duty vehicle controls. The proposed gas can controls are expected
to reduce evaporative emissions from fuel storage, leading to fuel
savings for users of these containers. These fuel savings are not
included in the market analysis for this economic impact analysis
because these savings are not expected to affect consumer decisions
with respect to the purchase of new containers. Fuel savings are
included in the social cost analysis, however, because they are a
savings that accrues to society. The estimated fuel savings are added
to the estimated social costs as a separate line item. As noted above,
the economic impacts of the light-duty vehicle controls are not modeled
in the EIM. Instead, the estimated engineering compliance costs are
used as a proxy, and are also added into the estimated social costs as
a separate line item.
The EIM relies on the estimated compliance costs for the gas can
and gasoline fuel programs described elsewhere in this preamble. Thus,
the EIM reflects cost savings associated with ABT or other flexibility
programs to the extent they are included in the estimated compliance
costs.
6. What Are the Results of the Economic Impact Modeling?
Using the model and data described above, we estimated the economic
impacts of the proposed emission control program. The results of our
analysis are summarized in this section. Detailed results for all years
are included in the appendices to Chapter 13 of the RIA. Also included
as an appendix to that chapter are sensitivity analyses for several key
inputs.
Market Impact Analysis. Market impacts are the estimated changes in
the quantity of affected goods produced and their prices. As explained
above, we estimated market impacts for only gasoline fuel and gas cans,
and California fuel is not included in the market analysis for PADD 5.
The estimated market impacts are presented in Table IX.F-1. In this
table the market results for gasoline are presented for only 2015
because the compliance costs for the gasoline fuel program are constant
for all years and therefore the results of the market analysis are the
same for all years.\317\ The market results for gas cans are presented
for 2009 and 2015, reflecting the changes in estimated compliance costs
due to amortization of fixed costs over the first five years of the
program. After 2013 the compliance costs remain constant for all future
years.\318\
---------------------------------------------------------------------------
\317\ The number of gallons of gasoline fuel produced is
expected to decrease in future years, but the percent decrease is
expected to remain the same; this is due to the growth in fuel
consumption generally.
\318\ The number of gas cans produced is expected to decrease in
future years, but the percent decrease is expected to remain the
same; this is due to the growth in gas can production generally.
---------------------------------------------------------------------------
With regard to the gasoline fuel program, the market impacts are
expected to be small, on average. The price of gasoline fuel is
expected to increase by about 0.15 percent or less, depending on PADD.
The expected reduction in quantity of fuel produced is expected to be
less than 0.03 percent. The market impacts for the gas can program are
expected to be more significant. In 2009, the first year of the gas can
program, the model predicts a price increase of about 7 percent for gas
cans in states that are currently have regulations for gas cans and
about 57 percent for those that do not. Even with these larger price
increases, however, the quantity produced is not expected to decrease
by very much, less than 0.6 percent. These percent price increases and
quantity decreases much smaller after the first five years. In 2015,
the estimated gas can price increase is expected to be less than 2
percent for states that currently regulate gas cans and about 32.5
percent for states without such regulations. The quantity produced is
expected to decrease by less than 0.4 percent. These changes are
expected to remain constant for future years, even though the absolute
quantities produced are expected to increase somewhat.
Table IX.F-1.--Summary of Market Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in price Change in quantity
Market Engineering cost per ---------------------------------------------------------------------------------------------
unit Absolute Percent Absolute Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gasoline Fuel:
PADD 1 & 3....................
PADD 2........................ N/A (gasoline fuel control program begins in 2011)
PADD 4........................
PADD 5 (w/out CA).............
--------------------------------------------------------------------------------------------------------------------------------------------------------
$/can
Thousand Cans
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gas Cans:
States with existing programs. $0.77................. $0.76................. 6.9%.................. -6.8................. -0.07%
States without existing $2.70................. $2.68................. 57.4%................. -88.5................ -0.57%
programs.
--------------------------------------------------------------------------------------------------------------------------------------------------------
2015
--------------------------------------------------------------------------------------------------------------------------------------------------------
[cent]/gallon
Million Gallons
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gasoline Fuel:
PADD 1 & 3.................... 0.049[cent]........... 0.03[cent]............ 0.02%................. -3.1................. -0.004%
PADD 2........................ 0.202[cent]........... 0.11[cent]............ 0.07%................. -6.9................. -0.015%
[[Page 15916]]
PADD 4........................ 0.358[cent]........... 0.19[cent]............ 0.12%................. -1.4................. -0.025%
PADD 5 (w/out CA)............. 0.391[cent]........... 0.21[cent]............ 0.13%................. -2.5................. -0.026%
--------------------------------------------------------------------------------------------------------------------------------------------------------
$/can
Thousand Cans
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gas Cans:
States with existing programs. $0.21................. $0.20................. 1.9%.................. -2.1................. -0.02%
States without existing $1.53................. $1.52................. 32.5%................. -56.4................ -0.32%
programs.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Economic Welfare Analysis. In the economic welfare analysis we look
at the costs to society of the proposed program in terms of losses to
consumer and producer surplus. These surplus losses are combined with
the estimated vehicle compliance costs, fuel savings, and government
revenue losses to estimate the net economic welfare impacts of the
proposed program. Estimated annual net social costs for selected years
are presented in Table IX-F-2. Initially, the estimated social costs of
the program are relatively small and are attributable to the gas can
program, which begins in 2009, and the vehicle program, which begins in
2010. For 2009 and 2010 the estimated social costs are less than $40
million. In 2011 the estimated social costs increase to $215 million,
reflecting the beginning of the gasoline fuel program. In subsequent
years, estimated social costs increase due to growth. However, they
decrease in 2014, to $169 million, when the gas can fixed costs are
fully recovered and in 2020, to $171.5 million, when the vehicle
program compliance costs are terminated.
Table IX.F-2.--Net Social Costs Estimates for the Proposed Program
[2009 to 2035--2003$, $million]
------------------------------------------------------------------------
Total social
costs
Year (includes fuel
savings)
------------------------------------------------------------------------
2009.................................................... $38.4
2010.................................................... 39.2
2011.................................................... 215.0
2012.................................................... 208.6
2013.................................................... 202.2
2014.................................................... 169.3
2015.................................................... 171.6
2016.................................................... 173.6
2017.................................................... 175.5
2018.................................................... 177.3
2019.................................................... 179.7
2020.................................................... 171.5
2021.................................................... 174.2
2022.................................................... 176.9
2023.................................................... 179.9
2024.................................................... 183.3
2025.................................................... 186.8
2026.................................................... 190.3
2027.................................................... 193.9
2028.................................................... 197.6
2029.................................................... 201.3
2030.................................................... 205.2
2031.................................................... 209.1
2032.................................................... 213.1
2033.................................................... 217.2
2034.................................................... 221.4
2035.................................................... 225.7
NPV at 3%............................................... 2,937.3
NPV at 7%............................................... 1,633.0
------------------------------------------------------------------------
Table IX.F-3 contains more detailed estimated social costs for
2009, when the gas can program begins, 2011, when the gasoline fuel
program begins, and 2015, when the gas can fixed costs are fully
recovered. The vehicle program applies from 2010 through 2019.
According to these results, consumers are expected to bear
approximately 99 percent of the cost of the gas can program. This
reflects the inelastic price elasticity on the demand side of the
market and the elastic price elasticity on the supply side. The burden
of the gasoline fuel program is expected to be shared more evenly, with
54.5 percent expected to be borne by consumers and 45.5 percent
expected to be borne by producers. In all years, the estimated loss to
consumer welfare will be offset somewhat by the fuel savings associated
with gas cans. Beginning at about $11 million per year, these savings
increase to about $70 million by 2015 as compliant gas cans are phased
in. These savings accrue for the life of the gas cans.
Table IX.F-3.--Summary of Net Social Costs Estimates Associated With Primary Program
[2009, 2011, and 2015--2003$, $million]
----------------------------------------------------------------------------------------------------------------
Change in consumer Change in producer
Market surplus surplus Total
----------------------------------------------------------------------------------------------------------------
2009
----------------------------------------------------------------------------------------------------------------
Gasoline U.S.:
PADD 1 & 3
PADD 2 N/A (gasoline fuel control program begins in 2011)
PADD 4..........................
PADD 5 (w/out CA)...............
Gas Cans U.S........................ -$48.7.................. -$0.3.................. -$49.0
(99.3%)................. (0.7%)
States with existing programs....... -$7.5................... -$0.1..................
[[Page 15917]]
States without existing programs.... -$41.2.................. -$0.3..................
---------------------------------------------------------------------------
Subtotal.................... -48.7................... -0.3................... -$49.0
(99.3%)................. (1%)...................
----------------------------------------------------------------------------------------------------------------
Fuel Savings........................ ........................ ....................... $10.6
Vehicle Program..................... ........................ ....................... $0
California fuel \a\................. ........................ ....................... $0
---------------------------------------------------------------------------
Total................... ........................ ....................... -$38.4
----------------------------------------------------------------------------------------------------------------
2011
----------------------------------------------------------------------------------------------------------------
Gasoline U.S........................ -$100.3................. -$83.6................. -$183.9
PADD 1 & 3.......................... -$21.6.................. -$18.0 .......................
PADD 2.............................. -$49.1.................. -$40.9 .......................
PADD 4.............................. -$10.2.................. -$8.5 .......................
PADD 5 9w/out CA)................... -$19.4.................. -$16.2 .......................
Gas Cans U.S........................ -$50.7.................. -$0.3.................. -$51.0
(99.4%)................. (0.7%)
States with existing programs....... -$7.8................... -$0.1 .......................
States without existing programs.... -$42.9.................. -$0.3..................
---------------------------------------------------------------------------
Subtotal.................... -$150.9................. -$83.9................. -$234.8
(64.3%)................. (35.7%)................
----------------------------------------------------------------------------------------------------------------
Fuel Savings........................ ........................ ....................... $33.3
Vehicle Program..................... ........................ ....................... -$11.8
California fuel \a\................. ........................ ....................... -$1.7
Total................... ........................ ....................... $215.0
----------------------------------------------------------------------------------------------------------------
2015
----------------------------------------------------------------------------------------------------------------
Gasoline U.S........................ -$107.1................. -$89.4................. -$196.5
(54.5%)................. (45.5%)
PADD 1 & 3.......................... -$23.1.................. -$19.3 .......................
PADD 2.............................. -$52.4.................. -$43.7 .......................
PADD 4.............................. -$10.9.................. -$9.1 .......................
PADD 5 (w/out CA)................... -$20.7.................. -$17.3 .......................
Gas Cans U.S........................ -$28.5.................. -$0.2.................. -$28.7
(99.3%)................. (0.7%)
States with existing programs....... -$2.3................... $0.0 .......................
States without existing programs.... -$26.3.................. -$0.2 .......................
Subtotal.................... -$135.7................. -$89.5................. -$225.2
(60.3%)................. (39.7%)
Fuel Savings........................ ........................ ....................... $68.3
Vehicle Program..................... ........................ ....................... $12.9
California fuel \a\................. ........................ ....................... -$1.8
Total................... ........................ ....................... $171.6
----------------------------------------------------------------------------------------------------------------
\a\ California fuel costs are considered separately. See Section 13.1.3 of the RIA.
The present value of net social costs (discounted back to 2005) of
the proposed standards through 2035, contained in Table IX-F-2, is
estimated to be $2.9 billion (2003$). This present value is calculated
using a social discount rate of 3 percent and the stream of economic
welfare costs from 2009 through 2035. We also performed an analysis
using a 7 percent social discount rate.\319\ Using that discount rate,
the present value of the net social costs through 2035 is estimated to
be $1.6 billion (2003$).
---------------------------------------------------------------------------
\319\ EPA has historically presented the present value of cost
and benefits estimates using both a 3 percent and a 7 percent social
discount. The 3 percent rate represents a demand-side approach and
reflects the time preference of consumption (the rate at which
society is willing to trade current consumption for future
consumption). The 7 percent rate is a cost-side approach and
reflects the shadow price of capital.
---------------------------------------------------------------------------
X. Alternative Program Options
We considered several options for fuels, vehicles, and gas cans in
developing this proposal.
A. Fuels
We considered a wide range of control strategies for gasoline to
reduce toxic emissions. Among the options considered are a toxics
performance standard, varying levels of benzene control, approaches for
controlling other MSATs in addition to benzene, and lower sulfur and
RVP for VOC control. The discussion of these options is provided in
section VII.
In addition, we request comment on the following specific concepts
relating
[[Page 15918]]
to the proposed ABT and compliance assurance provisions.
1. Alternative Compliance Assurance Provisions
The design of the proposed ABT program is based on other recent
fuel programs (primarily gasoline and diesel sulfur), but with fewer
restrictions. The proposed program includes nationwide trading, does
not include an upper limit on benzene, and combines all fuel into a
single pool for credit accounting purposes. The compliance assurance
mechanisms for the proposed ABT program are also based on previous
recent fuel programs (including reformulated gasoline and gasoline and
diesel sulfur) which in turn were developed based on the experiences in
enforcing past fuel programs. At the same time there are other programs
with different ABT and corresponding compliance assurance provisions
that could serve as models for this benzene proposal, such as the Acid
Rain Program.
An overarching concern that today's proposal attempts to address,
and that any alternative program also would have to address, is that
EPA does not have the resources to audit a substantial number of
refineries each year, and certainly not every refinery. Thus, we must
devise a credit program whose enforcement integrity does not depend on
EPA conducting annual audits of many or most refiners to determine the
validity of credits generated, transferred, banked and used.
The program as proposed would provide a great deal of flexibility
to refiners in complying with the standards, but balances this
flexibility with provisions to ensure the standard's enforceability.
This program would also provide incentives for refiners and importers
to ensure the validity of any credits they obtain, through the
provisions that hold the buyer of invalid credits liable for any
resulting violation of the standard. We summarize the most important of
these provisions here:
Credit life would be limited to 5 years. This is intended
to provide reasonable assurance that EPA will have the opportunity to
review the appropriate records to verify compliance, regardless of
personnel changes, whether existing refiners and importers are bought,
sold, merged, or go out of business, and whether new refiners and
importers are created;
Records would be required to be retained for the life of
the credits to allow for EPA to enforce the benzene content standard
through random audits;
We propose that credits be limited in the number of trades
that would be allowed and are requesting comment on the range from 2 to
4 trades. (We will establish an appropriate number of permissible
trades in the final rule.) Such a limitation would be intended to allow
EPA to have a reasonable chance of verifying the validity of credits
that are traded;
Both the buyer and seller of the credits would be
potentially liable should credits be found to be invalid, in order to
allow EPA to maintain the environmental benefits of the program should
the credit seller no longer be in business; and
Purchasers of credits would need to be potential credit
users, and so would be refiners or importers. Our experiences during
the gasoline lead phase-down program in the 1980s, where brokers and
others were allowed to take title to lead credits, raised enforcement
problems severe enough to call the program's validity into question.
These problems have not arisen for more recent programs, where credit
purchasers must be credit users.
We request comment on these provisions as a whole and individually.
In addition, we note that the proposed benzene program is different
from the other recent fuel programs in several key respects that may
provide opportunities to design the ABT program and corresponding
compliance assurance mechanisms differently. For example, the proposed
program would not have an upper limit on the per-gallon benzene
concentration that would otherwise force all refiners to ultimately
comply with the standard through actual physical refinery changes.
Since this proposed program would allow some degree of variation in
benzene levels to continue indefinitely, additional flexibility in how
credits are handled may be desirable. Thus, we specifically request
comment on the following alternate ABT program elements.
As mentioned above, EPA could not, with its limited resources,
conduct annual audits of all refiners (and possibly other parties, as
discussed below). With regard to any potential alternative ABT program
elements, including those discussed below, we request detailed ideas
about a potential auditing process that would be sufficiently robust to
assure the validity of credits generated, used, banked or traded,
including how such audits might be self-funded.
Credit Life
EPA notes that a system that limits credit life may, under certain
circumstances, depress the market price of credits and create less
incentive for benzene reductions early in the program. EPA therefore
requests comment on whether the credit life should be limited or
whether unlimited banking should be encouraged through having credits
with unlimited life or longer life. We also seek comment on how a
program with unlimited credit life could be successfully enforced. For
example, EPA audits for refinery compliance with fuel standard and
credit requirements normally include review of refinery production,
testing and business records. EPA seeks comment on whether these audits
could be effectively conducted to review the validity of credits that
were generated more than five years previously and whether audits could
be effectively concluded during the first five years of a credit's
life.
EPA also seeks comment on the appropriate consequences if EPA was
unable to verify credit validity, the criteria for identifying credits
as being invalid, and whether EPA should have the burden of proving
credits were invalid or whether the credit generator (or the credit
user) should have the burden of proving that credits were valid. See
Hazardous Waste Treatment Council v. EPA, 886 F. 2d 355, 367-68 (D.C.
Cir. 1990) ( relating to circumstances when the burden of proof may
permissibly shift to a regulated entity). EPA also seeks comment on
mechanisms that would allow companies to verify the validity of credits
they generate without the need for EPA audits. Thus, EPA seeks comment
on whether audits conducted by independent auditors could be a reliable
indicator of credit validity, and if so, the necessary qualifications
of the auditor, the criteria for auditor independence, how these
qualifications and independence should be established, whether the
audit should review records of all company fuels activities related to
credit creation or only a random portion of these records, the
appropriate timing requirements for these audits, and the nature and
timing of reports. EPA seeks comment on the enforcement implications of
the Clean Air Act's five-year statute of limitations if credits with a
life longer than five years were allowed.
Record Retention
We also seek comment on whether a program with unlimited credit
life would need to require that the associated records be retained
indefinitely until a credit was used. (The use of credits for which no
records exist could result in their being declared
[[Page 15919]]
null and void since credit validity could not be established.) We seek
comment as to whether record-keeping and EPA audits involving
activities occurring more than five years in the past could create any
issues regarding statutes of limitations. Also, in general, we request
comment on provisions that could address the fact that the farther back
in time an event occurred, the more difficult it becomes for EPA to
conduct an effective audit (due to factors such as mergers,
acquisitions, and turnover of personnel). EPA seeks comment on whether
the Clean Air Act's five-year statute of limitations would adversely
impact EPA's ability to enforce a requirement to keep records longer
than five years.
Number of Times Credits May Be Traded
As described earlier in this preamble, EPA is requesting comment on
allowing credits to be traded between 2 and 4 times. In particular, EPA
seeks comment on any specific benefits to regulated parties or to the
credit market generally if a number of trades in this range were
allowed; on requirements that should be included to ensure the validity
of credits that have been transferred multiple times; on procedures for
identifying which credits have been transferred if the credit
transferor is found to have had in its possession both valid and
invalid credits; and on appropriate consequences to the generator and/
or transferor of invalid credits. In addition, EPA seeks comment on
mechanisms that would allow companies to establish the validity of
credits they have purchased without the need for EPA audits. Thus, EPA
requests comment on whether companies that obtain credits that have
previously been purchased should be required to establish their
validity through reports of independent audits of the credit-creation
activities of the company that created the credits and of the credit
activities of any intermediary entities to which the credits had been
transferred.
Case-By-Case Relaxation of Compliance Restrictions
In addition to seeking comment on general modifications discussed
above to the proposed provisions, we also request comment on allowing
regulated entities to petition for case-by-case relaxation of specific
provisions in special cases. For example, such a provision might allow
a refiner to petition EPA to allow a specific group of credits to be
traded one or more additional times than the final rule ultimately
allows. Petitioners might also be allowed to request an extension of
the five year limit on credit life. EPA seeks comment on whether and
how such an extension might affect the ability to enforce the benzene
content standard, including impacts from the statute of limitations.
Such an exception might have important implications for enforcement,
record-keeping, and emissions, which would have to be adequately
addressed. EPA seeks comment on the nature of documentation that would
be required in such a petition and criteria that might be used to make
a determination regarding approval of such a petition. EPA also seeks
comment on the extent to which any such ABT flexibility provisions
would be used, and what the benzene content, enforcement, liquidity,
and other implications might be.
Ownership of Benzene Credits
The potential modifications of the proposed program on which we
request comment may be able to be accomplished relatively easily within
the bounds of the proposed program. Another concept, allowing traders
and other entities to take title to credits, might best be accomplished
by moving to an entirely different type of credit program, since it
might require a set of other related changes in order to function
effectively. For example, it may be possible to design the benzene
trading program and related compliance assurance provisions in a manner
that would allow benzene credits to be traded on the open market like
many other commodities and not unlike the way SO2 credits
are traded under the Acid Rain Program, or how carbon credits are
traded through the voluntary trading program established by the Chicago
Climate Exchange. We next discuss such an alternate credit program.
The proposed restriction of benzene credit use to refiners and
importers does not provide an opportunity for other entities to
participate in this credit market by taking title to credits.\320\ The
inability of traders to take actual title to credits may reduce the
ability of the market to function in certain ways including, for
example, to hedge against risk effectively or to aggregate small
holdings into larger blocks for sale. This might be avoided if the
program provided for benzene credits to be owned, and for entities
other than refiners and importers to obtain, hold, and transfer them.
---------------------------------------------------------------------------
\320\ In the proposed program non-refiners would be allowed to
facilitate, or broker, credit transactions between refiners or
importers. Thus, a refiner (or importer) that needed to purchase
credits could contract with a broker to identify refiners or
importers that have credits to sell.
---------------------------------------------------------------------------
EPA requests comment on any specific benefits to regulated parties
or to the credit market generally if non-refiners were allowed to take
title to credits. EPA also requests comments on any situations that
occurred under other motor vehicle fuels credit programs where the
absence of non-refiner credit owners created difficulties or problems
in regulated parties being able to transfer or obtain credits. EPA
seeks comment on how the benzene credit program could be reliably
enforced if non-refiners were allowed to own credits. Thus, EPA seeks
comment on the qualifications that should be required for a company to
be a non-refiner credit owner, and how these qualifications should be
established; on any registration, record keeping, reporting,
independent audit and independent attestation requirements that should
be imposed on non-refiner owners of credits; and on the nature of
liability that should attach to non-refiner owners of credits that were
found to have transferred invalid credits.
We expect that such a program would require that all refiners and
importers have their credits (and therefore compliance) verified each
year. Given the resource needs for EPA to undertake such verifications,
we would expect to require refiners to utilize independent auditors,
sufficient for the auditor to make a verified audit finding that the
company's assertions regarding credit creation are correct. We believe
that verification of credits in this manner would require a complete
audit of the gasoline production and testing records related to the
benzene content and volume of gasoline produced or imported, including
reviews and reconciliation of all batch information. The audit also
would also have to include sufficient review of records of product
sales to verify the completeness of the gasoline production records.
The independent auditor performing such an audit would have to be
qualified to understand and review the records of gasoline production
and testing generated at a refinery, or the importation and testing
records associated with imported gasoline. To the extent that gasoline
testing was conducted by independent laboratories, the credit audit
would have to include the activities of the independent laboratory to
make an audit finding of the validity of the laboratory test results.
EPA would then continue to have the ability to perform spot audits.
EPA seeks comment on whether the regulations should require that
these
[[Page 15920]]
independent audits must be conducted by an independent audit
organization that is funded by an industry consortium, rather than by
audit firms individually retained by refiners/importers. The industry
consortium would submit to EPA for approval: the consortium
organization; the qualifications of the individual auditors; the
general audit plans, and any audit plans that are specific to an
individual company. The audit organization would submit audit reports
to EPA and to the companies that were the subject of their audits.
The refiners and importers would then assign a unique serial number
to each credit containing key information including the entity's
registration number, the year, and the credit number. These entities
would then report this information to EPA as a part of their annual
compliance report. Credits properly generated under such a program
could then be traded freely until they were used. If an audit
determined that some credits were improperly generated, a mechanism
would be required to decide which credits were considered to be valid
and which invalid.
Given EPA's resource constraints, EPA seeks comment on a mechanism
that would allow refiners and importers, and non-refiner owners of
credits (if allowed) to conduct this detailed tracking of individual
credits, with reconciliation of the reports of all parties
transferring, obtaining, or holding credits. Thus, EPA seeks comment on
whether the regulations should include an option whereby companies that
wish to sell, purchase or hold verified credits would fund an
independent organization that would function as the clearinghouse of
benzene credits. EPA also seeks comment on how such an independent
organization option should be structured: What would be the
qualifications of the organization and how would they be established;
how would the method of operations of the organization be established
and approved by EPA; what reporting by companies to the organization
would be required, and what reporting to EPA by the organization would
be required; and how would the organization establish the validity of
credits that are the subject of reports from companies.
In addition, as in past programs, if credits were later found to be
improperly created, the party that generated the invalid credits and
the party that used the invalid credits would be subject to EPA
enforcement. The party using the invalid credits would be required to
remove the invalid credits from its compliance calculations. If this
recalculation resulted in a violation of the benzene standard, the
party would be subject to an enforcement action for this violation,
regardless of whether the invalid credits were purchased in good faith
(although the party may be permitted to remedy such violations through
the subsequent purchase of valid credits). This is intended to maintain
the environmental benefits of the program and to encourage self-
policing by the industry of the validity of the credits they use for
compliance. However, in this situation EPA would look first to the
generator of the invalid credits to remedy the shortfall. If this
generator could make up any credit deficit, EPA normally would defer
enforcement against the user or intermediary transferor of invalid
credits.
2. Alternative ABT Options
EPA seeks comment on whether the regulations should create two
options for benzene credits: one that is based on the credit
enforcement provisions contained in the proposed fuels program,
resulting in credits with more limited credit life that must be
transferred from the credit generator to the credit user; and
``verified'' benzene credits that have a longer credit life and that
can be owned by companies other than refiners/importers. Under this
approach, benzene credits could be ``verified'' if certain conditions
are met. First, the credit generator would need to participate in an
audit consortium (as described above) and the credits would need to be
verified through an audit conducted by this organization. Second, the
credit generator and any other company that took title to or used these
credits would need to participate in a benzene credit clearing house
(as described above). In this way, companies that wished to generate
benzene credits with longer life and broader ownership options could do
so, but also would bear at least part of the expense associated with
establishing the validity and tracking the movements of this class of
credits. At the same time, companies that wished to generate and
transfer credits in the traditional manner, would not bear these extra
expenses.
EPA also seeks comment on an approach that would allow refiners and
importers, and non-refiner owners of credits (if allowed), to establish
a private clearing house to conduct the detailed tracking of individual
credits, with reconciliation of the reports of all parties
transferring, obtaining, or holding credits. The Chicago Climate
Exchange provides an example of a privately established trading
program. The Chicago Climate Exchange provides a trading platform with
a registry for credits and clearing facility. The NASD provides market
surveillance and verification of emission credits. EPA seeks comment on
how such an independent organization could be established; what
requirements should EPA establish for the organization; what reporting
would be required by companies to the organization; and what reporting
would be required by the organization to EPA.
We request comment on the appropriateness of such an alternative
ABT program for the proposed benzene control program and how it might
work and be enforced.
B. Vehicles
For vehicles, we considered normal temperature standards more
stringent than Tier 2 standards, which would likely entail hardware
changes to Tier 2 vehicles. This option is discussed in section VI. We
did not consider a less stringent standard for cold temperature NMHC
control because CAA sections 202(a) and 202(l) require us to establish
the most stringent standards achievable considering cost and other
factors. We believe that the proposed cold NMHC standards and phase-in
for Tier 2 vehicles satisfy these CAA requirements, and a less
stringent standard would not.
C. Gas Cans
For gas cans, as discussed in section VIII, we are proposing an
emissions performance standard we believe reflects the performance of
the best available control technologies. We considered but are not
proposing options for design-based requirements, including requirements
for automatic shut-off spouts. We also considered but are not proposing
retrofit requirements for gas cans. These options are discussed in
sections VIII.B.3-VIII.B.5.
XI. Public Participation
We request comment on all aspects of this proposal. This section
describes how you can participate in this process.
A. How Do I Submit Comments?
We are opening a formal comment period by publishing this document.
We will accept comments during the period indicated under DATES above.
If you have an interest in the proposed emission control program
described in this document, we encourage you to comment on any aspect
of this rulemaking. We also request comment on specific topics
identified throughout this proposal.
[[Page 15921]]
Your comments will be most useful if you include appropriate and
detailed supporting rationale, data, and analysis. Commenters are
especially encouraged to provide specific suggestions for any changes
to any aspect of the regulations that they believe need to be modified
or improved. You should send all comments, except those containing
proprietary information, to our Air Docket (see ADDRESSES) before the
end of the comment period.
You may submit comments electronically, by mail, or through hand
delivery/courier. To ensure proper receipt by EPA, identify the
appropriate docket identification number in the subject line on the
first page of your comment. Please ensure that your comments are
submitted within the specified comment period. Comments received after
the close of the comment period will be marked ``late.'' EPA is not
required to consider these late comments. If you wish to submit CBI or
information that is otherwise protected by statute, please follow the
instructions in section XI.B.
B. How Should I Submit CBI to the Agency?
Do not submit information that you consider to be CBI
electronically through the electronic public docket,
www.regulations.gov, or by e-mail. Send or deliver information
identified as CBI only to the following address: U.S. Environmental
Protection Agency, Assessment and Standards Division, 2000 Traverwood
Drive, Ann Arbor, MI 48105, Attention Docket ID EPA-HQ-OAR-2005-0036.
You may claim information that you submit to EPA as CBI by marking any
part or all of that information as CBI (if you submit CBI on disk or CD
ROM, mark the outside of the disk or CD ROM as CBI and then identify
electronically within the disk or CD ROM the specific information that
is CBI). Information so marked will not be disclosed except in
accordance with procedures set forth in 40 CFR part 2.
In addition to one complete version of the comment that includes
any information claimed as CBI, a copy of the comment that does not
contain the information claimed as CBI must be submitted for inclusion
in the public docket. If you submit the copy that does not contain CBI
on disk or CD ROM, mark the outside of the disk or CD ROM clearly that
it does not contain CBI. Information not marked as CBI will be included
in the public docket without prior notice. If you have any questions
about CBI or the procedures for claiming CBI, please consult the person
identified in the FOR FURTHER INFORMATION CONTACT section.
C. Will There Be a Public Hearing?
We will hold a public hearing on April 12, 2006 at the Sheraton
Crystal City Hotel, 1800 Jefferson Davis Highway, Arlington, Virginia
22202, Telephone: (703) 486-1111. The hearing will start at 10 a.m.
local time and continue until everyone has had a chance to speak.
If you would like to present testimony at the public hearing, we
ask that you notify the contact person listed under FOR FURTHER
INFORMATION CONTACT at least ten days before the hearing. You should
estimate the time you will need for your presentation and identify any
needed audio/visual equipment. We suggest that you bring copies of your
statement or other material for the EPA panel and the audience. It
would also be helpful if you send us a copy of your statement or other
materials before the hearing.
We will make a tentative schedule for the order of testimony based
on the notifications we receive. This schedule will be available on the
morning of the hearing. In addition, we will reserve a block of time
for anyone else in the audience who wants to give testimony.
We will conduct the hearing informally, and technical rules of
evidence won't apply. We will arrange for a written transcript of the
hearing and keep the official record of the hearing open for 30 days to
allow you to submit supplementary information. You may make
arrangements for copies of the transcript directly with the court
reporter.
D. Comment Period
The comment period for this rule will end on May 30, 2006.
E. What Should I Consider as I Prepare My Comments for EPA?
You may find the following suggestions helpful for preparing your
comments:
Explain your views as clearly as possible.
Describe any assumptions that you used.
Provide any technical information and/or data you used
that support your views.
If you estimate potential burden or costs, explain how you
arrived at your estimate.
Provide specific examples to illustrate your concerns.
Offer alternatives.
Make sure to submit your comments by the comment period
deadline identified.
To ensure proper receipt by EPA, identify the appropriate
docket identification number in the subject line on the first page of
your response. It would also be helpful if you provided the name, date,
and Federal Register citation related to your comments.
XII. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
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 Executive Order
defines a ``significant regulatory action'' as one that is likely to
result in a rule that may:
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;
Create a serious inconsistency or otherwise interfere with
an action taken or planned by another agency;
Materially alter the budgetary impact of entitlements,
grants, user fees, or loan programs, or the rights and obligations of
recipients thereof; or
Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
Pursuant to the terms of Executive Order 12866, it has been
determined that this rule is a ``significant regulatory action''
because estimated annual costs of this rulemaking are estimated to be
over $100 million per year and it raises novel legal or policy issues.
A draft Regulatory Impact Analysis has been prepared and is available
in the docket for this rulemaking and at the docket internet address
listed under ADDRESSES above. This action was submitted to the Office
of Management and Budget for review under Executive Order 12866.
Written comments from OMB and responses from EPA to OMB comments are in
the public docket for this rulemaking.
B. Paperwork Reduction Act
The information collection requirements in this proposed rule have
been submitted for approval to the Office of Management and Budget
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The
Agency proposes to collect information to ensure compliance with the
provisions in this rule. This includes a variety of
[[Page 15922]]
requirements, both for vehicle manufacturers, fuel producers, and
portable gasoline container manufacturers. Information-collection
requirements related to vehicle manufacturers are in EPA ICR
0783.50 (OMB Control Number 2060-0104); requirements related
to fuel producers are in EPA ICR 1591.20 (OMB Control Number
2060-0277); requirements related to portable gasoline container
manufacturers are in EPA ICR 2213.01. For vehicle and fuel
standards, section 208(a) of the Clean Air Act requires that
manufacturers provide information the Administrator may reasonably
require to determine compliance with the regulations; submission of the
information is therefore mandatory. We will consider confidential all
information meeting the requirements of section 208(c) of the Clean Air
Act. For portable gasoline container standards, recordkeeping and
reporting requirements for manufacturers would be pursuant to the
authority of sections 183(e) and 111 of the Clean Air Act.
As shown in Table XII.B-1, the total annual burden associated with
this proposal is about 24,696 hours and $2,771,309, based on a
projection of 225 respondents. The estimated burden for vehicle
manufacturers and fuel producers is a total estimate for both new and
existing reporting requirements. The portable gasoline container
requirements represent our first regulation of gas cans, so those
burden estimates reflect only new reporting requirements. 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.
Table XII.B-1.--Estimated Burden for Reporting and Recordkeeping Requirements
----------------------------------------------------------------------------------------------------------------
Number of Annual burden
Industry sector respondents hours Annual costs
----------------------------------------------------------------------------------------------------------------
Vehicles........................................................ 35 770 $80,900
Fuels........................................................... 185 23,710 2,677,410
Gas Cans........................................................ 5 216 12,999
-----------------------------------------------
Total....................................................... 225 24,696 2,771,309
----------------------------------------------------------------------------------------------------------------
An agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.
To comment on the Agency's need for this information, the accuracy
of the provided burden estimates, and any suggested methods for
minimizing respondent burden, including the use of automated collection
techniques, EPA has established a public docket for this rule, which
includes this ICR, under Docket ID number EPA-HQ-OAR-2005-0036. Submit
any comments related to the ICR for this proposed rule to EPA and OMB.
See ADDRESSES section at the beginning of this notice for where to
submit comments to EPA. Send comments to OMB at the Office of
Information and Regulatory Affairs, Office of Management and Budget,
725 17th Street, NW., Washington, DC 20503, ``Attention: Desk Office
for EPA.'' Include the ICR number in any correspondence. Since OMB is
required to make a decision concerning the ICR between 30 and 60 days
after March 29, 2006, a comment to OMB is best assured of having its
full effect if OMB receives it by April 28, 2006. The final rule will
respond to any OMB or public comments on the information collection
requirements contained in this proposal.
C. Regulatory Flexibility Act (RFA), as Amended by the Small Business
Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et
seq.
1. Overview
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 (see table below); (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. The
following table provides an overview of the primary SBA small business
categories potentially affected by this regulation:
------------------------------------------------------------------------
Defined as small entity
Industry by SBA if less than or NAICS codes
equal to \a\
------------------------------------------------------------------------
Light-duty vehicles:
--Vehicle manufacturers 1,000 employees........ 336111
(including small volume
manufacturers).
--Independent commercial $6 million annual sales 811111,
importers. 811112, 811198
--Alternative fuel vehicle 100 employees.......... 424720
converters.
1,000 employees........ 335312
$6 million annual sales 811198
Gasoline fuel refiners......... 1500 employees \b\..... 324110
[[Page 15923]]
Portable fuel container
manufacturers:
--Plastic container 500 employees.......... 326199
manufacturers.
--Metal gas can 1,000 employees........ 332431
manufacturers.
------------------------------------------------------------------------
Notes:
\a\ North American Industrial Classification System.
\b\ EPA has included in past fuels rulemakings a provision that, in
order to qualify for EPA's small refiner flexibilities, a refiner must
also produce no greater than 155,000 bpcd crude capacity.
2. Background
Mobile sources emit air toxics that can cause cancer and other
serious health effects (Section III of this preamble and Chapter 1 of
the Regulatory Impact Analysis (RIA) for this rule describe these
compounds and their health effects). Mobile sources contribute
significantly to the nationwide risk from breathing outdoor sources of
air toxics. In today's action we are proposing: standards to limit the
exhaust hydrocarbons from passenger vehicles during cold temperature
operation; evaporative hydrocarbon emissions standards for passenger
vehicles; limiting the average annual benzene content of gasoline; and
hydrocarbon emissions standards for gas cans that would reduce
evaporation, permeation, and spillage from these containers. (Detailed
discussion of each of these programs is in sections VI, VII, and VIII
of the preamble and Chapters 5, 6, and 7 of the RIA). We are proposing
the standards for vehicles and gasoline under section 202(l)(2) of the
Clean Air Act (CAA), which directs EPA to establish requirements to
control emissions of mobile source air toxics (MSATs) from new motor
vehicles and fuels. Controls for gas cans are being pursued under CAA
section 183(e), the provisions applying to consumer and commercial
products.
Pursuant to section 603 of the RFA, EPA prepared an initial
regulatory flexibility analysis (IRFA) that examines the impact of the
proposed rule on small entities along with regulatory alternatives that
could reduce that impact. The IRFA, as summarized below, is available
for review in the docket and Chapter 14 of the RIA.
As required by section 609(b) of the RFA, as amended by SBREFA, EPA
also conducted outreach to small entities and convened a Small Business
Advocacy Review Panel to obtain advice and recommendations of
representatives of the small entities that potentially would be subject
to the rule's requirements.
Consistent with the RFA/SBREFA requirements, the Panel evaluated
the assembled materials and small-entity comments on issues related to
elements of the IRFA. A copy of the Panel report is included in the
docket for this proposed rule, and a summary of the Panel process, and
subsequent Panel recommendations, is summarized below.
3. Summary of Regulated Small Entities
The following section discusses the small entities directly
regulated by this proposed rule.
a. Highway Light-Duty Vehicles
In addition to the major vehicle manufacturers, three distinct
categories of businesses relating to highway light-duty vehicles would
be covered by the new vehicle standards: small volume manufacturers
(SVMs), independent commercial importers (ICIs), and alternative fuel
vehicle converters. SVMs are companies that sell less than 15,000
vehicles per year, as defined in past EPA regulations, and this status
allows vehicle models to be certified under a slightly simpler
certification process. Independent commercial importers are companies
that hold a Certificate (or certificates) of Conformity permitting them
to alter imported vehicles to meet U.S emission standards. Alternative
fuel vehicle converters are businesses that convert gasoline or diesel
vehicles to operate on alternative fuel, and converters must seek a
certificate for all of their vehicle models. Based on a preliminary
assessment, EPA identified about 14 SVMs, 10 alternative fuel vehicle
converters, and 10 ICIs. Of these, EPA believes 5 SVMs, 6 converters,
and all 10 ICIs would meet the small-entity criteria as defined by SBA
(no major vehicle manufacturers meet the small-entity criteria). EPA
estimates that these small entities comprise about 0.02 percent of the
total light-duty vehicle sales in the U.S. for the year 2004.
b. Gasoline Refiners
EPA's current assessment is that 15 refiners meet SBA's criterion
of having 1,500 employees or less. It should be noted that because of
the dynamics in the refining industry (i.e., mergers and acquisitions)
and decisions by some refiners to enter or leave the gasoline market,
the actual number of refiners that ultimately qualify for small refiner
status under an MSAT program could be much different than these initial
estimates. Current data further indicates that these refiners produce
about 2.5 percent of the total gasoline pool.
c. Portable Gasoline Container Manufacturers
EPA conducted a preliminary industry profile to identify the
manufacturers of portable gasoline containers (gas cans)--98 percent
are plastic containers and 2 percent are metal gas cans. Using this
industry profile, EPA identified 4 domestic manufacturers and 1 foreign
manufacturer. Of these 4 U.S. manufacturers, 3 meet the SBA definition
of a small entity. One small business accounted for over 50 percent of
the U.S. sales in 2002, and the other small entities comprised about 10
percent of U.S. sales.
4. Potential Reporting, Record Keeping, and Compliance
For highway light-duty vehicles, EPA is proposing to continue the
reporting, recordkeeping, and compliance requirements prescribed for
this category in 40 CFR 86. Key among these requirements are
certification requirements and provisions related to reporting of
production, emissions information, flexibility use, etc.
For any fuel control program, EPA must have assurance that fuel
produced by refiners meets the applicable standard, and that the fuel
continues to meet the standard as it passes downstream through the
distribution system to the ultimate end user. EPA expects that
recordkeeping, reporting and compliance provisions of the proposed rule
will be fairly consistent with those in place today for other fuel
programs. For example, reporting would likely involve requiring that
refiners submit pre-compliance reports updating EPA on their plans to
meet the MSAT standards.
For gas cans, there currently are not federal emission control
requirements, and thus, EPA is proposing new reporting and record
keeping requirements for gas can manufacturers that would be subject to
the proposed standards. EPA is proposing
[[Page 15924]]
requirements that would be similar to those in the California program,
such as submitting emissions testing information, reporting of
certification families, and use of transition provisions.
5. Relevant Federal Rules
We are aware of a few other current or proposed Federal rules that
are related to the upcoming proposed rule. The primary federal rules
that are related to the proposed MSAT rule under consideration are the
first MSAT rule (Federal Register Vol. 66, p. 17230, March 29, 2001),
the Tier 2 Vehicle/Gasoline Sulfur rulemaking (Federal Register Vol.
65, p. 6698, February 10, 2000), the fuel sulfur rules for highway
diesel (Federal Register Vol. 66, p. 5002, January 18, 2001) and
nonroad diesel (Federal Register Vol. 69, p. 38958, June 29, 2004), and
the Cold Temperature Carbon Monoxide Rulemaking (Federal Register Vol.
57, p. 31888, July 17, 1992).
In addition, the Evaporative Emissions Streamlining Direct Final
Rulemaking was issued on December 8, 2005 (Federal Register Vol. 70, p.
72917). For gas cans, OSHA has safety regulations for gasoline
containers used in workplace settings. Cans meeting OSHA requirements,
commonly called safety cans, are exempt from the California program,
and we are planning to exempt them from the EPA program.
Section 1501 of the Energy Policy Act of 2005 requires the Agency
to implement a Renewable Fuels Standard (RFS) program. Beginning in
2006, this program will require increasing volumes of renewable fuel to
be used in gasoline, until a total of 7.5 billion gallons is required
in 2012. The most prevalent renewable fuel is expected to be ethanol.
There are a wide variety of potential impacts of ethanol blending on
MSAT emissions that will be evaluated as part of the RFS rulemaking
process. In general, as ethanol use increases, other sources of octane
in gasoline can decrease. Depending on these changes, the impact on
benzene emissions will vary. The specific effects of ethanol on benzene
will be addressed in the Regulatory Impact Analysis (RIA) to this rule
and in future rulemakings, such as the RFS rule.
6. Summary of SBREFA Panel Process and Panel Outreach
a. Significant Panel Findings
The Small Business Advocacy Review Panel (SBAR Panel, or the Panel)
considered many regulatory options and flexibilities that would help
mitigate potential adverse effects on small businesses as a result of
this rule. During the SBREFA Panel process, the Panel sought out and
received comments on the regulatory options and flexibilities that were
presented to SERs and Panel members. The major flexibilities and
hardship relief provisions that were recommended by the Panel are
described below and are also located in Section 9 of the SBREFA Final
Panel Report which is available in the public docket.
b. Panel Process
As required by section 609(b) of the RFA, as amended by SBREFA, we
also conducted outreach to small entities and convened an SBAR Panel to
obtain advice and recommendations of representatives of the small
entities that potentially would be subject to the rule's requirements.
On September 7, 2005, EPA's Small Business Advocacy Chairperson
convened a Panel under Section 609(b) of the RFA. In addition to the
Chair, the Panel consisted of the Division Director of the Assessment
and Standards Division of EPA's Office of Transportation and Air
Quality, the Chief Counsel for Advocacy of the Small Business
Administration, and the Administrator of the Office of Information and
Regulatory Affairs within the Office of Management and Budget. As part
of the SBAR Panel process, we conducted outreach with representatives
from the various small entities that would be affected by the proposed
rulemaking. We met with these Small Entity Representatives (SERs) to
discuss the potential rulemaking approaches and potential options to
decrease the impact of the rulemaking on their industries. We
distributed outreach materials to the SERs; these materials included
background on the rulemaking, possible regulatory approaches, and
possible rulemaking alternatives. The Panel met with SERs from the
industries that will be directly affected by the MSAT rule on September
27, 2005 (gasoline refiners) and September 29, 2005 (light-duty
vehicles and portable gasoline containers) to discuss the outreach
materials and receive feedback on the approaches and alternatives
detailed in the outreach packet (the Panel also met with SERs on July
19, 2005 for an initial outreach meeting). The Panel received written
comments from the SERs following the meeting in response to discussions
had at the meeting and the questions posed to the SERs by the Agency.
The SERs were specifically asked to provide comment on regulatory
alternatives that could help to minimize the rule's impact on small
businesses.
In general, SERs representing the gas can manufacturers industry
raised concerns on how the MSAT rule's requirements would be
coordinated with the California program and other requirements, and
that there should be adequate opportunity for sell through at the start
of the program. The small volume manufacturer, ICI, and vehicle
converter SERs that participated had questions about the form of the
new standards for light-duty vehicles, specifically testing and
certification requirements. The gasoline refiner SERs generally stated
that they believed that small refiners would face challenges in meeting
a new standard. More specifically, they raised the concern that the
rule could be very costly and dependence on credits may not be a
comfortable situation; they were also concerned about the timing of the
standards for this rule, given other upcoming fuel standards.
The Panel's findings and discussions were based on the information
that was available during the term of the Panel and issues that were
raised by the SERs during the outreach meetings and in their comments.
It was agreed that EPA should consider the issues raised by the SERs
(and discussions had by the Panel itself) and that EPA should consider
comments on flexibility alternatives that would help to mitigate any
negative impacts on small businesses. Alternatives discussed throughout
the Panel process included those offered in previous or current EPA
rulemakings, as well as alternatives suggested by SERs and Panel
members, and the Panel recommended that all be considered in the
development of the rule. Though some of the flexibilities suggested may
be appropriate to apply to all entities affected by the rulemaking, the
Panel's discussions and recommendations were focused mainly on the
impacts, and ways to mitigate adverse impacts, on small businesses. A
summary of these recommendations is detailed below, and a full
discussion of the regulatory alternatives and hardship provisions
discussed and recommended by the Panel can be found in the SBREFA Final
Panel Report. A complete discussion of the transition and hardship
provisions that we are proposing in today's action can be found in
Sections VI.E, VII.E, and VIII (vehicle, fuels, and gas can sections)
of this preamble. Also, the Panel Report includes all comments received
from SERs (Appendices D and E of the Report) and summaries of the two
outreach meetings that were held with the SERs (Appendices B and C). In
accordance with the RFA/SBREFA requirements, the Panel evaluated the
[[Page 15925]]
aforementioned materials and SER comments on issues related to the
Initial Regulatory Flexibility Analysis (IRFA). The following sections
describe the Panel recommendations from the SBAR Panel Report.
c. Small Business Flexibilities
The Panel recommended that EPA consider and seek comment on a wide
range of regulatory alternatives to mitigate the impacts of the
rulemaking on small businesses, including those flexibility options
described below. As previously stated, the following discussion is a
summary of the SBAR Panel recommendations; our proposals regarding
these recommendations are located in earlier sections of this rule
preamble.
i. Highway Light-Duty Vehicles
(a) Highway Light-Duty Vehicle Flexibilities
For certification purposes (and for the sake of simplicity for
Panel discussions regarding flexibility options), SVMs include ICIs and
alternative fuel vehicle converters since they sell less than 15,000
vehicles per year. Similar to the flexibility provisions implemented in
the Tier 2 rule, the Panel recommended that we allow SVMs (includes all
vehicle small entities that would be affected by this rule, which are
the majority of SVMs) the following flexibility options for meeting
cold temperature VOC standards and evaporative emission standards:
For cold VOC standards, the Panel recommended that SVMs simply
comply with the standards with 100 percent of their vehicles during the
last year of the 4 year phase-in period. For example, if the standard
for light-duty vehicles and light light-duty trucks (0 to 6,000 pounds
GVWR) were to begin in 2010 and end in 2013 (25%, 50%, 75%, 100% phase-
in over 4 years), the SVM provision would be 100 percent in 2013. If
the standard for heavy light-duty trucks and medium-duty passenger
vehicles (greater than 6,000 pounds GVWR) were to start in 2012 (25%,
50%, 75%, 100% phase-in over 4 years), the SVM provision would be 100
percent in 2015.
In regard to evaporative emission standards, the Panel recommended
that since the evaporative emissions standards will not have phase-in
years, we allow SVMs to simply comply with standards during the third
year of the program (we have implemented similar provisions in past
rulemakings). For a 2009 start date for light-duty vehicles and light
light-duty trucks, SVMs would need to meet the evaporative emission
standards in 2011. For a 2010 implementation date for heavy light-duty
trucks and medium-duty passenger vehicles, SVMs would need to comply in
2012.
(b) Highway Light-Duty Vehicle Hardships
In addition, the Panel recommended that hardship flexibility
provisions be extended to SVMs for the cold temperature VOC and
evaporative emission standards. The provisions that the Panel
recommended are:
SVMs would be allowed to apply (EPA would need to review and
approve application) for up to an additional 2 years to meet the 100
percent phase-in requirements for cold VOC and the delayed requirement
for evaporative emissions. Appeals for such hardship relief must be
made in writing, must be submitted before the earliest date of
noncompliance, must include evidence that the noncompliance will occur
despite the manufacturer's best efforts to comply, and must include
evidence that severe economic hardship will be faced by the company if
the relief is not granted.
ii. Gasoline Refiners
(a) Gasoline Refiner Flexibilities
The Panel recommended that EPA propose certain provisions to
encourage early compliance with lower benzene standards. The Panel
recommended that EPA propose that small refiners be afforded the
following flexibility options to help mitigate the impacts on small
refiners:
Delay in Standards--The Panel recommended that a four-year delay
period be proposed for small refiners. A four-year delay would be
needed in order to allow for a review of the ABT program, as discussed
below, to occur one year after implementation but still three years
prior to the small refiner compliance deadline. It was noted by the
small refiners that three years are generally needed for small refiners
to obtain financing and perform engineering and construction. The Panel
was also in support of allowing for refinery expansion within the delay
option, and recommended that refinery expansion be provided for in the
rule.
Early ABT Credits--The Panel recommended that early credit
generation be afforded to small refiners that take some steps to meet
the benzene requirement prior to the effective date of the standard.
Depending on the start date of the program, and coupled with the four-
year delay option, a small refiner could have a total credit generation
period of five to seven years. The Panel was also in support of
allowing refiners (small, as well as non-small, refiners) to generate
credits for reductions to their benzene emissions levels, rather than
credits only for meeting the benzene standard that is set by the rule.
The Panel recommended a review of the credit trading program and
small refiner flexibility options one year after the general program
starts. Such a review could take into account the number of early
credits generated, as well as the number of credits generated and sold
during the first year of the program. Further, a review after the first
year of the program would still provide small refiners with the three
years that it was suggested would be needed for these refiners to
obtain financing and perform engineering and construction for benzene
reduction equipment. Should the review conclude that changes to either
the program or the small refiner provisions are necessary, the Panel
recommended that EPA also consider some of the suggestions provided by
the small refiners (their comments are located in Appendix E of the
Final Panel Report), such as:
The general MSAT program should require pre-compliance
reporting (similar to EPA's highway and nonroad diesel rules);
Following the review, EPA should revisit the small refiner
provisions if it is found that the credit trading market does not
exist, or if credits are only available at a cost that would not allow
small refiners to purchase credits for compliance;
The review should offer ways either to help the credit
market, or help small refiners gain access to credits (e.g., EPA could
``create'' credits to introduce to the market, EPA could impose
additional requirements to encourage trading with small refiners,
etc.).
In addition, the Panel recommended that EPA consider in this
rulemaking establishing an additional hardship provision to assist
those small refiners that cannot comply with the MSAT with a viable
credit market. (This suggested hardship provision was also suggested by
the small refiners in their comments, located in Appendix E of the
Final Panel Report). This hardship provision could address concerns
that, for some small refineries, compliance may be technically feasible
only through the purchase of credits and it may not be economically
feasible to purchase those credits. This flexibility could be provided
to a small refiner on a case-by-case basis following the review and
based on a summary, by the refiner, of technical or financial
infeasibility (or some other type of similar situation that
[[Page 15926]]
would render its compliance with the standard difficult). This hardship
provision might include further delays and/or a slightly relaxed
standard on an individual refinery basis for a duration of two years;
in addition, provision might allow the refinery to request, and EPA
grant, multiple extensions of the flexibility until the refinery's
material situation changes. The Panel also stated that it understood
that EPA may need to modify or rescind this provision, should it be
implemented, based on the results of the program review.
(b) Gasoline Refiner Hardships
During the Panel process, we stated that we intended to propose the
extreme unforeseen circumstances hardship and extreme hardship
provisions (for all gasoline refiners and importers), similar to those
in prior fuels programs. A hardship based on extreme unforeseen
circumstances is intended to provide short term relief due to
unanticipated circumstances beyond the control of the refiner, such as
a natural disaster or a refinery fire; an extreme hardship is intended
to provide short-term relief based on extreme circumstances (e.g.,
extreme financial problems, extreme operational or technical problems,
etc.) that impose extreme hardship and thus significantly affect a
refiner's ability to comply with the program requirements by the
applicable dates. The Panel agreed with the proposal of such provisions
and recommended that we include them in the MSAT rulemaking.
iii. Portable Gasoline Containers
(a) Portable Gasoline Container Flexibilities
Since nearly all gas can manufacturers are small entities and they
account for about 60 percent of sales, the Panel planned to extend the
flexibility options to all gas can manufacturers. Moreover,
implementation of the program would be much simpler by doing so. The
recommended flexibilities are the following:
Design Certification--The Panel recommended that we propose to
permit gas can manufacturers to use design certification in lieu of
running any or all of the durability aging cycles. Manufacturers could
demonstrate the durability of their gas cans based in part on emissions
test data from designs using the same permeation barriers and
materials. Under a design-based certification program a manufacturer
would provide evidence in the application for certification that their
container would meet the applicable standards based on its design
(e.g., use of a particular permeation barrier). The manufacturer would
submit adequate engineering and other information about its individual
design such that EPA could determine that the emissions performance of
their individual design would not be negatively impacted by slosh, UV
exposure, and/or pressure cycling (whichever tests the manufacturer is
proposing to not run prior to emissions testing).
Broaden Certification Families--This approach would relax the
criteria used to determine what constitutes a certification family. It
would allow small businesses to limit their certification families (and
therefore their certification testing burden), rather than testing all
of the various size containers in a manufacturer's product line. Some
small entities may be able to put all of their various size containers
into a single certification family. Manufacturers would then certify
their containers using the ``worst case'' configuration within the
family. To be grouped together, containers would need to be
manufactured using the same materials and processes even though they
are of different sizes.
Additional Lead-time--Since it may take additional time for the gas
can SERs to gather information to fully evaluate whether or not
additional lead-time is needed beyond the 2009 start date, the Panel
recommended that we discuss lead-time in the proposal and request
comments on the need for additional lead-time to allow manufacturers to
ramp up to a nationwide program.
Product Sell-through--As with past rulemakings for other source
sectors, the Panel recommended that EPA propose to allow normal sell
through of gas cans as long as manufacturers do not create stockpiles
of noncomplying gas cans prior to the start of the program.
(b) Portable Gasoline Container Hardships
The Panel recommended that EPA propose two types of hardship
programs for small gas can manufacturers. These provisions are:
Allow small manufacturers to petition EPA for limited additional
lead-time to comply with the standards. A manufacturer would have to
make the case that it has taken all possible business, technical, and
economic steps to comply but the burden of compliance costs would have
a significant adverse effect on the company's solvency. Hardship relief
could include requirements for interim emission reductions. The length
of the hardship relief would be established during the initial review
and would likely need to be reviewed annually thereafter.
Permit small manufacturers to apply for hardship relief if
circumstances outside their control cause the failure to comply (i.e.
supply contract broken by parts supplier) and if failure to sell the
subject containers would have a major impact on the company's solvency.
The terms and timeframe of the relief would depend on the specific
circumstances of the company and the situation involved. As part of its
application, a company would be required to provide a compliance plan
detailing when and how it would achieve compliance with the standards
under both types of hardship relief.
We invite comments on all aspects of the proposal and its impacts
on small entities.
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 of why that
alternative was not adopted.
Before EPA establishes any regulatory requirements that may
significantly or uniquely affect small governments, including tribal
governments, it must have developed under section 203 of the UMRA a
small government agency plan. The plan must provide for notifying
potentially affected small governments, enabling officials of affected
small governments to have meaningful and timely input in the
development of EPA regulatory proposals with significant federal
intergovernmental mandates, and informing, educating, and advising
[[Page 15927]]
small governments on compliance with the regulatory requirements.
This rule contains no federal mandates for state, local, or tribal
governments as defined by the provisions of Title II of the UMRA. The
rule imposes no enforceable duties on any of these governmental
entities. Nothing in the rule would significantly or uniquely affect
small governments. EPA has determined that this rule contains federal
mandates that may result in expenditures of more than $100 million to
the private sector in any single year. EPA believes that the proposal
represents the least costly, most cost-effective approach to achieve
the statutory requirements of the rule. The costs and benefits
associated with the proposal are discussed above and in the Draft
Regulatory Impact Analysis, as required by the UMRA.
E. Executive Order 13132: Federalism
Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.''
``Policies that have federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
This proposed rule does not have federalism implications. It 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.
Although section 6 of Executive Order 13132 does not apply to this
rule, EPA did consult with representatives of various State and local
governments in developing this rule. EPA has also consulted
representatives from STAPPA/ALAPCO, which represents state and local
air pollution officials.
In the spirit of Executive Order 13132, and consistent with EPA
policy to promote communications between EPA and State and local
governments, EPA specifically solicits comment on this proposed rule
from State and local officials.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.''
This proposed rule does not have tribal implications as specified
in Executive Order 13175. This rule will be implemented at the Federal
level and impose compliance costs only on vehicle manufacturers
(includes alternative fuel vehicle converters and ICIs), fuel
producers, and portable gasoline container manufacturers. Tribal
governments will be affected only to the extent they purchase and use
regulated vehicles, fuels, and portable gasoline containers. Thus,
Executive Order 13175 does not apply to this rule. EPA specifically
solicits additional comment on this proposed rule from tribal
officials.
G. Executive Order 13045: Protection of Children From Environmental
Health and Safety Risks
Executive Order 13045, ``Protection of Children from Environmental
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies
to any rule that (1) is determined to be ``economically significant''
as defined under Executive Order 12866, and (2) concerns an
environmental health or safety risk that EPA has reason to believe may
have a disproportionate effect on children. If the regulatory action
meets both criteria, section 5-501 of the Order directs the Agency to
evaluate the environmental health or safety effects of the planned rule
on children, and explain why the planned regulation is preferable to
other potentially effective and reasonably feasible alternatives
considered by the Agency.
This proposed rule is subject to the Executive Order because it is
an economically significant regulatory action as defined by Executive
Order 12866, and we believe that by addressing the environmental health
or safety risk, this action may have a disproportionate beneficial
effect on children. Accordingly, we have evaluated the potential
environmental health or safety effects of VOC and toxics emissions from
gasoline-fueled mobile sources and gas cans on children. The results of
this evaluation are described below and contained in section IV.
Exposure to a number of the compounds addressed in this rule may
have a disproportionate effect on children. First, exposure to
carcinogens that cause cancer through a mutagenic mode of action during
childhood development may have an incrementally disproportionate
impact. Because of their small size, increased activity, and increased
ventilation rates compared to adults, children may have greater
exposure to these compounds in the ambient air, on a unit body weight
basis. Moreover, for PM, because children's breathing rates are higher,
their exposures may be higher and because their respiratory systems are
still developing, children may be more susceptible to problems from
exposure to respiratory irritants. The public is invited to submit or
identify peer-reviewed studies and data, of which EPA may not be aware,
that assessed results of early life exposure to the pollutants
addressed by this rule.
H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
This rule is not a ``significant energy action'' as defined in
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355
(May 22, 2001)) because it is not likely to have a significant adverse
effect on the supply, distribution, or use of energy. If promulgated,
the gasoline benzene provisions of the proposed rule would shift about
22,000 barrels per day of benzene from the gasoline market to the
petrochemical market. This volume represents about 0.2 percent of
nationwide gasoline production. The actual impact of the rule on the
gasoline market, however, is likely to be less due to offsetting
changes in the production of petrochemicals, as well as expected growth
in the petrochemical market absent this rule. The major sources of
benzene for the petrochemical market other than reformate from gasoline
production are also derived from gasoline components or gasoline
feedstocks. Consequently, the expected shift toward more benzene
production from reformate due to this proposed rule would be offset by
less benzene produced from other gasoline feedstocks.
The rule would require refiners to use a small additional amount of
energy in processing gasoline to reduce benzene levels, primarily due
to the increased energy used for benzene extraction. Our modeling of
increased energy use indicates that the process energy used by refiners
to produce gasoline would increase by about one percent. Overall,
[[Page 15928]]
we believe that the proposed rule would result in no significant
adverse energy impacts.
The proposed gasoline benzene provisions would not affect the
current gasoline distribution practices.
We discuss our analysis of the energy and supply effects of the
proposed gasoline benzene standard further in section IX of this
preamble and in Chapter 9 of the Regulatory Impact Analysis.
The fuel supply and energy effects described above would be offset
substantially by the positive effects on gasoline supply and energy use
of the proposed gas can standards also proposed in today's action.
These proposed provisions would greatly reduce the gasoline lost to
evaporation from gas cans. This would in turn reduce the demand for
gasoline, increasing the gasoline supply and reducing the energy used
in producing gasoline.
I. National Technology Transfer Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law No. 104-113, 12(d) (15 U.S.C. 272
note) directs EPA to use voluntary consensus standards in its
regulatory activities unless to do so would be inconsistent with
applicable law or otherwise impractical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures, and business practices) that are developed or
adopted by voluntary consensus standards bodies. The NTTAA directs EPA
to provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards.
The proposed rulemaking involves technical standards. Therefore,
the Agency conducted a search to identify potentially applicable
voluntary consensus standards. However, we identified no such
standards. Therefore, for the cold temperature NMHC standards, EPA
proposes to use the existing EPA cold temperature CO test procedures
(manufacturers currently measure hydrocarbon emissions with current
cold CO test procedures), which were adopted in a previous EPA
rulemaking (1992). The fuel standards referenced in today's proposed
rule involve the measurement of gasoline fuel parameters. The
measurement standards for gasoline fuel parameters referenced in
today's proposal are government-unique standards that were developed by
the Agency through previous rulemakings. Both the cold temperature CO
test procedures and the measurement standards for gasoline fuel
parameters have served the Agency's emissions control goals well since
their implementation and have been well accepted by industry. For gas
cans, EPA is proposing new procedures for measuring hydrocarbon
emissions.
EPA welcomes comments on this aspect of the proposed rulemaking
and, specifically, invites the public to identify potentially-
applicable voluntary consensus standards and to explain why such
standards should be used in this regulation.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
Executive Order 12898 directs Federal agencies to ``determine
whether their programs, policies, and activities have
disproportionately high adverse human health or environmental effects
on minority populations' (sections 3-301 and 3-302). In developing this
proposed rule, EPA assessed environmental justice issues that may be
relevant to this proposal (see section IV of this proposed rule and
chapter 3 of the Draft Regulatory Impact Analysis).
The proposed rule would reduce VOC and toxics emissions from
gasoline-fueled mobile sources (particularly highway light-duty
vehicles) and gas cans, and thus, it would decrease the amount of air
pollution to which the entire population is exposed. EPA evaluated the
population residing close to high traffic density (near roadways), and
we found that this population has demographic differences from the
general population, including a greater fraction of lower income and
minority residents. Since the proposed rule would reduce emissions from
roadways, those living nearby (more likely to be lower income and
minority residents) are likely to have a disproportionate benefit from
the proposed rule. Thus, this proposed rule does not have a
disproportionately high adverse human health or environmental effect on
minority populations.
XIII. Statutory Provisions and Legal Authority
Statutory authority for the fuels controls proposed in today's
document can be found in sections 202 and 211(c) of the Clean Air Act
(CAA), as amended, 42 U.S.C. sections 7521 and 7545(c). Additional
support for the procedural and enforcement-related aspects of the fuel
controls in today's proposal, including the proposed recordkeeping
requirements, come from sections 114(a) and 301(a) of the CAA, 42
U.S.C. sections 7414(a) and 7601(a).
Statutory authority for the vehicle controls proposed in this
document can be found in sections 202, 206, 207, 208, and 301 of the
CAA, 42 U.S.C. sections 7521, 7525, 7541, 7542 and 7601.
Statutory authority for the portable gasoline container controls
proposed in today's document can be found in sections 183(e) and 111,
42 U.S.C. sections 7511b(e) and 7411.
List of Subjects
40 CFR Part 59
Environmental protection, Administrative practice and procedure,
Confidential business information, Incorporation by reference,
Labeling, Consumer or Commercial Products pollution, Penalties,
Reporting and recordkeeping requirements.
40 CFR Part 80
Environmental protection, Air pollution control, Fuel additives,
Gasoline, Imports, Incorporation by reference, Labeling, Motor vehicle
pollution, Penalties, Reporting and recordkeeping requirements.
40 CFR Part 85
Environmental protection, Administrative practice and procedure,
Confidential business information, Imports, Labeling, Motor vehicle
pollution, Penalties, Reporting and recordkeeping requirements,
Research, Warranties.
40 CFR Part 86
Environmental protection, Administrative practice and procedure,
Confidential business information, Incorporation by reference,
Labeling, Motor vehicle pollution, Penalties, Reporting and
recordkeeping requirements.
Dated: February 28, 2006.
Stephen L. Johnson,
Administrator.
For the reasons set forth in the preamble, parts 59, 80, 85 and 86
of title 40 of the Code of Federal Regulations are proposed to be
amended as follows:
PART 59--NATIONAL VOLATILE ORGANIC COMPOUND EMISSION STANDARDS FOR
CONSUMER AND COMMERCIAL PRODUCTS
1. The authority citation for part 59 continues to read as follows:
Authority: 42 U.S.C. 7414 and 7511b(e).
2. Subpart F is added to part 59 to read as follows:
[[Page 15929]]
Subpart F--Control of Evaporative Emissions From New and In-Use
Portable Gasoline Containers
Sec.
Overview and Applicability
59.600 Does this subpart apply for my products?
59.601 Do the requirements of this subpart apply to me?
59.602 What are the general prohibitions and requirements of this
subpart?
59.603 How must manufacturers apply good engineering judgment?
59.605 What portable gasoline containers are excluded from this
subpart's requirements?
59.607 Submission of information.
Emission Standards and Related Requirements
59.611 What evaporative emission requirements apply under this
subpart?
59.612 What emission-related warranty requirements apply to me?
59.613 What operation and maintenance instructions must I give to
buyers?
59.615 How must I label and identify the portable gasoline
containers I produce?
Certifying Emission Families
59.621 Who may apply for a certificate of conformity?
59.622 What are the general requirements for obtaining a certificate
of conformity and producing portable gasoline containers under it?
59.623 What must I include in my application?
59.624 How do I amend my application for certification?
59.625 How do I select emission families?
59.626 What emission testing must I perform for my application for a
certificate of conformity?
59.627 How do I demonstrate that my emission family complies with
evaporative emission standards?
59.628 What records must I keep and what reports must I send to EPA?
59.629 What decisions may EPA make regarding my certificate of
conformity?
59.630 EPA testing.
59.650 General testing provisions.
59.652 Other procedures.
59.653 How do I test portable gasoline containers?
Special Compliance Provisions
59.660 Exemption from the standards.
59.662 What temporary provisions address hardship due to unusual
circumstances?
59.663 What are the provisions for extending compliance deadlines
for manufacturers under hardship?
59.664 What are the requirements for importing portable gasoline
containers into the United States?
Definitions and Other Reference Information
59.680 What definitions apply to this subpart?
59.685 What symbols, acronyms, and abbreviations does this subpart
use?
59.695 What provisions apply to confidential information?
59.697 State actions.
59.698 May EPA enter my facilities for inspections?
59.699 How do I request a hearing?
Subpart F--Control of Evaporative Emissions From New and In-Use
Portable Gasoline Containers
Overview and Applicability
Sec. 59.600 Does this subpart apply for my products?
(a) Except as provided in Sec. 59.605 and paragraph (b) and (c) of
this section, the regulations in this subpart F apply for all portable
gasoline containers (defined in Sec. 59.680) beginning January 1,
2009.
(b) See Sec. 59.602(a) and (b) to determine how to apply the
provisions of this subpart for containers that were manufactured before
January 1, 2009.
Sec. 59.601 Do the requirements of this subpart apply to me?
(a) Unless specified otherwise in this subpart, the requirements
and prohibitions of this subpart apply to all manufacturers and
importers of portable gasoline containers. Certain prohibitions in
Sec. 59.602 apply to all other persons.
(b) New portable gasoline containers that are subject to the
emissions standards of this part must be covered by a certificate of
conformity that is issued to the manufacturer of the container. If more
than one person meets the definition of manufacturer for a portable
gasoline container, see Sec. 59.621 to determine if you are the
manufacturer who may apply for and receive a certificate of conformity.
(c) Unless specifically noted otherwise, the term ``you'' means
manufacturers, as defined in Sec. 59.680.
Sec. 59.602 What are the general prohibitions and requirements of
this subpart?
(a) General prohibition for manufacturers and importers. No
manufacturer or importer may sell, offer for sale, introduce or deliver
for introduction into commerce in the United States, or import any new
portable gasoline container that is subject to the emissions standards
of this subpart and is manufactured after December 31, 2008 unless it
is covered by a valid certificate of conformity, it is labeled as
required, and it complies with all of the applicable requirements of
this subpart, including complies with the emissions standards for its
useful life. After June 30, 2009, no manufacturer or importer may sell,
offer for sale, introduce into commerce in the United States, or import
any new portable gasoline container that was manufactured prior to
January 1, 2009.
(b) General prohibition for wholesale distributors. No wholesale
distributor may sell, offer for sale, or distribute any portable
gasoline container that is subject to the emissions standards of this
subpart and is manufactured after December 31, 2008 unless it is
covered by a valid certificate of conformity and is labeled as
required. After December 31, 2009, no wholesale distributor may sell,
offer for sale, or distribute any portable gasoline container that was
manufactured prior to January 1, 2009. After December 31, 2009, all new
portable gasoline containers shall be deemed to be manufactured after
December 31, 2008 unless they are in retail inventory.
(c) Reporting and recordkeeping. (1) You must keep the records and
submit the reports specified in Sec. 59.628. Records must be retained
for at least 5 years from the date of manufacture or importation and
must be supplied to EPA upon request.
(2) No person may alter, destroy, or falsify any record or report
required by this subpart.
(d) Testing and access to facilities. You may not keep us from
entering your facility to test inspect if we are authorized to do so.
Also, you must perform the tests we require (or have the tests done for
you). Failure to perform this testing is prohibited.
(e) Warranty. You may not fail to offer, provide notice of, or
honor the emissions warranty required under this subpart.
(f) Replacement components. No person may sell, offer for sale,
introduce or deliver for introduction into commerce in the United
States, import, or install any replacement component for portable
gasoline containers subject to the standards of this subpart where the
component has the effect of disabling, bypassing, or rendering
inoperative the emissions controls of the containers.
(g) Violations. If a person violates any prohibition or requirement
of this subpart or the Act concerning portable gasoline containers, it
shall be considered a separate violation for each portable gasoline
container.
(h) Assessment of penalties and injunctions. We may assess
administrative penalties, bring a civil action to assess and recover
civil penalties, bring a civil action to enjoin and restrain
violations, or bring criminal action as provided by the Clean Air Act.
Sec. 59.603 How must manufacturers apply good engineering judgment?
(a) In addition to other requirements and prohibitions set forth in
this subpart, you must use good engineering judgment for decisions
related to any requirements under this subpart. This
[[Page 15930]]
includes your applications for certification, any testing you do to
show that your portable gasoline containers comply with requirements
that apply to them, and how you select, categorize, determine, and
apply these requirements.
(b) Upon request, you must provide EPA a written description of the
engineering judgment in question. Such information must be provided
within 15 working days unless EPA specifies a different period of time
to respond.
(c) We may reject your decision if it is not based on good
engineering judgment or is otherwise inconsistent with the requirements
that apply, and we may:
(1) Suspend, revoke, or void a certificate of conformity if we
determine you used incorrect or incomplete information or failed to
consider relevant information, or that your decision was not based on
good engineering judgment; or
(2) Notify you that we believe any aspect of your application or
other information submission may be incorrect or invalid due to lack of
good engineering judgment or other cause. Unless a different period of
time is specified, you will have 30 days to respond to our notice and
specifically address our concerns. After considering your information,
we will notify regarding our finding, which may include the actions
provided in paragraph (c)(1) of this section.
(d) If you disagree with our conclusions under paragraph (c) of
this section, you may file a request for a hearing with the Designated
Compliance Officer as described in Sec. 59.699. In your request, you
must specifically state your objections, and include relevant data or
supporting analysis. The request must be signed by your authorized
representative. If we agree that your request raises a substantial
factual issue, we will hold the hearing according to Sec. 59.699.
Sec. 59.605 What portable gasoline containers are excluded from this
subpart's requirements?
This section describes exclusions that apply to certain portable
gasoline containers. The prohibitions and requirements of this subpart
do not apply for containers excluded under this section. Exclusions
under this section are based on inherent characteristics of the
containers. See Sec. 59.660 for exemptions that apply based on special
circumstances.
(a) Containers approved as safety cans consistent with the
requirements of Title 29, part 1926, subpart F, of the Code of Federal
Regulations (29 CFR 1926.150 through 1926.152) are excluded. Such cans
generally have a flash-arresting screens, spring-closing lids and spout
covers and have been approved by a nationally recognized testing
laboratory such as Factory Mutual Engineering Corp., Underwriters'
Laboratories, Inc., or Federal agencies such as Bureau of Mines, or
U.S. Coast Guard.
(b) Containers with a nominal capacity of less than 0.25 gallons or
more than 10.0 gallons are excluded.
(c) Containers designed and marketed solely to deliver fuel
directly to nonroad engines during engine operation, such as containers
with a connection for a fuel line and a reserve fuel area, are
considered to be nonroad fuel tanks, and are thus excluded.
Sec. 59.607 Submission of information.
(a) You are responsible for all statements you make to us related
to this subpart F, including information not required during
certification. You are required to provide truthful and complete
information. This subpart describes the consequences of failing to meet
this obligation. The consequences also may include prosecution under 18
U.S.C. 1001 and 42 U.S.C. 7431(c)(2).
(b) We may require an officer or authorized representative of your
company with knowledge of the other information contained in the
submittal to approve and sign any submission of information to us, and
to certify that all of the information submitted is accurate and
complete.
Emission Standards and Related Requirements
Sec. 59.611 What evaporative emission requirements apply under this
subpart?
(a) Emissions from portable gasoline containers may not exceed 0.30
grams per gallon per day when measured with the test procedures in
Sec. Sec. 59.650 through 59.653. This procedure measures diurnal
venting emissions and permeation emissions.
(b) For the purpose of this section, portable gasoline containers
include spouts, caps, gaskets, and other parts provided with the
container.
(c) The following general requirements also apply for all portable
gasoline containers subject to the standards of this subpart:
(1) Prohibited controls. You may not design your emission-control
systems so that they cause or contribute to an unreasonable risk to
public health, welfare, or safety while operating. You may not design
your portable gasoline containers to have adjustable parameters unless
the containers will meet all the requirements of this subpart when
adjusted anywhere within the physically adjustable range. You may not
equip your portable gasoline containers with a defeat device, or
intentionally produce your containers to enable the use of a defeat
device. A defeat device is an element of design (either original or
replacement) that is not approved in advance by EPA and that reduces
the effectiveness of emission controls under conditions that the
portable gasoline containers may reasonably be expected to encounter
during normal use.
(2) Leaks. You must design and manufacture your containers to be
free of leaks. This requirement applies when your container is upright,
partially inverted, or completely inverted.
(3) Refueling. You are required to design your portable gasoline
containers to minimize spillage during refueling to the extent
practical. This requires that you use good engineering judgment to
avoid designs that will make it difficult to refuel typical vehicle and
equipment designs without spillage.
(d) Portable gasoline containers must meet the standards and
requirements specified in this subpart throughout the useful life of
the container. The useful life of the container is five years beginning
on the date of sale to the ultimate purchaser.
Sec. 59.612 What emission-related warranty requirements apply to me?
(a) General requirements. You must warrant to the ultimate
purchaser that the new portable gasoline container, including all parts
of its evaporative emission-control system, is:
(1) Designed, built, and equipped so it conforms at the time of
sale to the ultimate purchaser with the requirements of this subpart.
(2) Is free from defects in materials and workmanship that may keep
it from meeting these requirements.
(b) Warranty notice and period. Your emission-related warranty must
be valid for a minimum of one year from the date of sale to the
ultimate purchaser.
(c) Notice. You must provide a warranty notice with each container.
Sec. 59.613 What operation and maintenance instructions must I give
to buyers?
You must provide the ultimate purchaser of the new portable
gasoline container written instructions for properly maintaining and
using the emission-control system.
Sec. 59.615 How must I label and identify the portable gasoline
containers I produce?
This section describes how you must label your portable gasoline
containers.
[[Page 15931]]
(a) At the time of manufacture, indelibly mark the month and year
of manufacture on each container.
(b) Mold into or affix a legible label identifying each portable
gasoline container. The label must be:
(1) Attached so it is not easily removable.
(2) Secured to a part of the container that can be easily viewed
when the can is in use, not on the bottom of the container.
(3) Written in English.
(c) The label must include:
(1) The heading ``EMISSION CONTROL INFORMATION''.
(2) Your full corporate name and trademark.
(3) A standardized identifier such as EPA's standardized
designation for the emission families, the model number, or the part
number.
(4) This statement: ``THIS CONTAINER COMPLIES WITH U.S. EPA
EMISSION REGULATIONS FOR PORTABLE GASOLINE CONTAINERS.''.
(d) You may add information to the emission control information
label to identify other emission standards that the container meets or
does not meet (such as California standards). You may also add other
information to ensure that the portable gasoline container will be
properly maintained and used.
(e) You may request EPA to approve modified labeling requirements
in this subpart F if you show that it is necessary or appropriate. We
will approve your request if your alternate label is consistent with
the requirements of this subpart.
(f) You may identify the name and trademark of another company
instead of their own on your emission control information label,
subject to the following provisions:
(1) You must have a contractual agreement with the other company
that obligates that company to take the following steps:
(i) Meet the emission warranty requirements that apply under Sec.
59.612. This may involve a separate agreement involving reimbursement
of warranty-related expenses.
(ii) Report all warranty-related information to the certificate
holder.
(2) In your application for certification, identify the company
whose trademark you will use and describe the arrangements you have
made to meet your requirements under this section.
(3) You remain responsible for meeting all the requirements of this
subpart.
Certifying Emission Families
Sec. 59.621 Who may apply for a certificate of conformity?
A certificate of conformity may only be issued to the manufacturer
that completes the construction of the portable gasoline container. In
unusual circumstances, upon a petition by a manufacturer, we may allow
another manufacturer of the container to hold the certificate of
conformity. However, in order to hold the certificate, the manufacturer
must demonstrate day-to-day ability to ensure that containers produced
under the certificate will comply with the requirements of this
subpart.
Sec. 59.622 What are the general requirements for obtaining a
certificate of conformity and producing portable gasoline containers
under it?
(a) You must send us a separate application for a certificate of
conformity for each emission family. A certificate of conformity for
containers is valid from the indicated effective date until the end of
the production period for which it is issued. EPA may require new
certification prior to the end of the production period if EPA finds
that containers are not meeting the standards in use during their
useful life.
(b) The application must be written in English and contain all the
information required by this subpart and must not include false or
incomplete statements or information (see Sec. 59.629).
(c) We may ask you to include less information than we specify in
this subpart, as long as you maintain all the information required by
Sec. 59.628.
(d) You must use good engineering judgment for all decisions
related to your application (see Sec. 59.603).
(e) An authorized representative of your company must approve and
sign the application.
(f) See Sec. 59.629 for provisions describing how we will process
your application.
(g) You may ask us to modify specific provisions for demonstrating
compliance with the requirements of this subpart if they cannot be met
for your portable gasoline container. We may approve your request if we
determine that such a change is consistent with the intent of this
subpart. We will not approve your request if it might lead to less
effective emission control or prevent us from ensuring compliance with
the requirements of this subpart. To make a request, describe in
writing which provision you are unable to meet, why you are unable to
meet it, and how the provision should be modified to address your
concern.
(h) If we approve your application, we will issue a certificate
that will allow you to produce the containers that you described in
your application for a specified production period. Certificates do not
allow you to produce containers that were not described in your
application, unless we approve the additional containers under Sec.
59.624.
Sec. 59.623 What must I include in my application?
This section specifies the information that must be in your
application, unless we ask you to include less information under Sec.
59.622(c). We may require you to provide additional information to
evaluate your application.
(a) Describe the emission family's specifications and other basic
parameters of the emission controls. List each distinguishable
configuration in the emission family. Include descriptions and part
numbers for all detachable components such as spouts and caps.
(b) Describe and explain the method of emission control.
(c) Describe the products you selected for testing and the reasons
for selecting them.
(d) Describe the test equipment and procedures that you used,
including any special or alternate test procedures you used (see Sec.
59.650).
(e) List the specifications of the test fuel to show that it falls
within the required ranges specified in Sec. 59.650 of this subpart.
(f) Include the maintenance and use instructions and warranty
information you will give to the ultimate purchaser of each new
portable gasoline container (see Sec. 59.613).
(g) Describe your emission control information label (see Sec.
59.615).
(h) State that your product was tested as described in the
application (including the test procedures, test parameters, and test
fuels) to show you meet the requirements of this subpart.
(i) Present emission data to show your products meet the applicable
emission standards. Where applicable, Sec. Sec. 59.626 and 59.627 may
allow you to submit an application in certain cases without new
emission data.
(j) Report all test results, including those from invalid tests or
from any other tests, whether or not they were conducted according to
the test procedures of Sec. Sec. 59.650 through 59.653. We may ask you
to send other information to confirm that your tests were valid under
the requirements of this subpart.
(k) Unconditionally certify that all the products in the emission
family comply with the requirements of this subpart,
[[Page 15932]]
other referenced parts of the CFR, and the Clean Air Act.
(l) Include estimates of U.S.-directed production volumes.
(m) Include the information required by other sections of this
subpart.
(n) Include other relevant information, including any additional
information requested by EPA.
(o) Name an agent for service of process located in the United
States. Service on this agent constitutes service on you or any of your
officers or employees for any action by EPA or otherwise by the United
States related to the requirements of this subpart.
Sec. 59.624 How do I amend my application for certification?
Before we issue you a certificate of conformity, you may amend your
application to include new or modified configurations, subject to the
provisions of this section. After we have issued your certificate of
conformity, you may send us an amended application requesting that we
include new or modified configurations within the scope of the
certificate, subject to the provisions of this section. You must amend
your application if any changes occur with respect to any information
included in your application.
(a) You must amend your application before you take either of the
following actions:
(1) Add a configuration to an emission family. In this case, the
configuration added must be consistent with other configurations in the
emission family with respect to the criteria listed in Sec. 59.625.
(2) Change a configuration already included in an emission family
in a way that may affect emissions, or change any of the components you
described in your application for certification. This includes
production and design changes that may affect emissions any time during
the portable gasoline containers' lifetime.
(b) To amend your application for certification, send the
Designated Compliance Officer the following information:
(1) Describe in detail the addition or change in the configuration
you intend to make.
(2) Include engineering evaluations or data showing that the
amended emission family complies with all applicable requirements. You
may do this by showing that the original emission data are still
appropriate with respect to showing compliance of the amended family
with all applicable requirements.
(3) If the original emission data for the emission family are not
appropriate to show compliance for the new or modified configuration,
include new test data showing that the new or modified configuration
meets the requirements of this subpart.
(c) We may ask for more test data or engineering evaluations. You
must give us these within 30 days after we request them.
(d) For emission families already covered by a certificate of
conformity, we will determine whether the existing certificate of
conformity covers your new or modified configuration. You may ask for a
hearing if we deny your request (see Sec. 59.699).
(e) For emission families already covered by a certificate of
conformity and you send us a request to amend your application, you may
sell and distribute the new or modified configuration before we make a
decision under paragraph (d) of this section, subject to the provisions
of this paragraph. If we determine that the affected configurations do
not meet applicable requirements, we will notify you to cease
production of the configurations and any containers from the new or
modified configuration will not be considered covered by the
certificate. In addition, we may require you to recall any affected
containers that you have already distributed, including those sold to
the ultimate purchasers. Choosing to produce containers under this
paragraph (e) is deemed to be consent to recall all containers that we
determine do not meet applicable emission standards or other
requirements and to remedy the nonconformity at no expense to the
owner. If you do not provide information required under paragraph (c)
of this section within 30 days, you must stop producing the new or
modified containers.
Sec. 59.625 How do I select emission families?
(a) Divide your product line into families of portable gasoline
containers that are expected to have similar emission characteristics
throughout the useful life.
(b) Group containers in the same emission family if they are the
same in all the following aspects:
(1) Type of material (including pigments, plasticizers, UV
inhibitors, or other additives).
(2) Production method.
(3) Spout design.
(4) Gasket material/design.
(5) Emission control strategy.
(c) You may subdivide a group of containers that is identical under
paragraph (b) of this section into different emission families if you
show the expected emission characteristics are different.
(d) You may group containers that are not identical with respect to
the things listed in paragraph (b) of this section in the same emission
family if you show that their emission characteristics will be similar
throughout their useful life.
Sec. 59.626 What emission testing must I perform for my application
for a certificate of conformity?
This section describes the emission testing you must perform to
show compliance with the emission standards in Sec. 59.611.
(a) Test your products using the procedures and equipment specified
in Sec. Sec. 59.650 through 59.653.
(b) Select an emission-data unit from each emission family for
testing. You must test a production sample or a preproduction product
that will represent actual production. Select the configuration that is
most likely to exceed (or have emissions nearest to) the applicable
emission standard. For example, for a family of multilayer portable
gasoline containers, test the container with the thinnest barrier
layer. Test 3 identical containers.
(c) We may measure emissions from any of your products from the
emission family. You must supply your products to us if we choose to
perform confirmatory testing.
(d) You may ask to use emission data from a previous production
period (carryover) instead of doing new tests, but only if the
emission-data from the previous production period remains the
appropriate emission-data unit under paragraph (b) of this section. For
example, you may not carryover emission data for your family of
containers if you have added a thinner-walled container than was tested
previously.
(e) We may require you to test a second unit of the same or
different configuration in addition to the unit tested under paragraph
(b) of this section.
(f) If you use an alternate test procedure under Sec. 59.652 and
later testing shows that such testing does not produce results that are
equivalent to the procedures specified in this subpart, we may reject
data you generated using the alternate procedure and base our
compliance determination on the later testing.
Sec. 59.627 How do I demonstrate that my emission family complies
with evaporative emission standards?
(a) For purposes of certification, your emission family is
considered in compliance with an evaporative
[[Page 15933]]
emission standard in Sec. 59.611(a) if the test results from all
portable gasoline containers in the family that have been tested show
measured emissions levels that are at or below the applicable standard.
(b) Your emissions family is deemed not to comply if any container
representing that family has test results showing an official emission
level above the standard.
(c) Round the measured emission level to the same number of decimal
places as the emission standard. Compare the rounded emission levels to
the emission standard.
Sec. 59.628 What records must I keep and what reports must I send to
EPA?
(a) Organize and maintain the following records:
(1) A copy of all applications and any summary information you send
us.
(2) Any of the information we specify in Sec. 59.623 that you were
not required to include in your application.
(3) A detailed history of each emission-data unit. For each
emission data unit, include all of the following:
(i) The emission-data unit's construction, including its origin and
buildup, steps you took to ensure that it represents production
containers, any components you built specially for it, and all the
components you include in your application for certification.
(ii) All your emission tests, including documentation on routine
and standard tests, as specified in Sec. Sec. 59.650 through 59.653,
and the date and purpose of each test.
(iii) All tests to diagnose emission-control performance, giving
the date and time of each and the reasons for the test.
(iv) Any other relevant events or information.
(4) Production figures for each emission family divided by assembly
plant.
(5) If you identify your portable gasoline containers by lot number
or other identification numbers, keep a record of these numbers for all
the containers you produce under each certificate of conformity.
(b) Keep data from routine emission tests (such as test cell
temperatures and relative humidity readings) for one year after we
issue the associated certificate of conformity. Keep all other
information specified in paragraph (a) of this section for five years
after we issue your certificate.
(c) Store these records in any format and on any media, as long as
you can promptly send us organized, written records in English if we
ask for them. You must keep these records readily available. We may
review them at any time.
(d) Send us copies of any maintenance instructions or explanations
if we ask for them.
(e) Send us an annual warranty report summarizing by emissions
family successful warranty claims under Sec. 59.612, including the
reason for the claim. You must submit the report by July 1 for the
preceding calendar year.
Sec. 59.629 What decisions may EPA make regarding my certificate of
conformity?
(a) If we determine your application is complete and shows that the
emission family meets all the requirements of this subpart and the Act,
we will issue a certificate of conformity for your emission family for
the specified production period. We may make the approval subject to
additional conditions.
(b) We may deny your application for certification if we determine
that your emission family fails to comply with emission standards or
other requirements of this subpart or the Act. Our decision may be
based on a review of all information available to us. If we deny your
application, we will explain why in writing.
(c) In addition, we may deny your application or suspend, revoke,
or void your certificate if you do any of the following:
(1) Refuse to comply with any testing or reporting requirements.
(2) Submit false or incomplete information.
(3) Render inaccurate any test data.
(4) Deny us from completing authorized activities despite our
presenting a warrant or court order (see Sec. 59.698). This includes a
failure to provide reasonable assistance.
(5) Produce portable gasoline containers for importation into the
United States at a location where local law prohibits us from carrying
out authorized activities.
(6) Fail to supply requested information or amend your application
to include all portable gasoline containers being produced.
(7) Take any action that otherwise circumvents the intent of the
Act or this subpart.
(d) If we deny your application or suspend, revoke, or void your
certificate, you may ask for a hearing (see Sec. 59.699).
Sec. 59.630 EPA testing.
We may test any portable gasoline container subject to the
standards of this subpart.
(a) Certification and production sample testing. Upon our request,
a manufacturer must supply a prototype container or a reasonable number
of production samples to us for verification testing. These samples
will generally be tested using the full test procedure of Sec. 59.653.
(b) In-use testing. We may test in-use containers using the test
procedure of Sec. 59.653 without preconditioning.
Sec. 59.650 General testing provisions.
(a) The test procedures of this subpart are addressed to you as a
manufacturer, but they apply equally to anyone who does testing for
you.
(b) Unless we specify otherwise, the terms ``procedures'' and
``test procedures'' in this subpart include all aspects of testing,
including the equipment specifications, calibrations, calculations, and
other protocols and procedural specifications needed to measure
emissions.
(c) The specification for gasoline to be used for testing is given
in 40 CFR 1065.210. Use the grade of gasoline specified for general
testing. Blend this grade of gasoline with reagent grade ethanol in a
volumetric ratio of 90.0 percent gasoline to 10.0 percent ethanol. You
may use ethanol that is less pure if you can demonstrate that it will
not affect your ability to demonstrate compliance with the applicable
emission standards.
(d) Accuracy and precision of all temperature measurements must be
2.2 [deg]C or better.
(e) Accuracy and precision of mass balances must be sufficient to
ensure accuracy and precision of two percent or better for emission
measurements for products at the maximum level allowed by the standard.
The readability of the display may not be coarser than half of the
required accuracy and precision.
Sec. 59.652 Other procedures.
(a) Your testing. The procedures in this subpart apply for all
testing you do to show compliance with emission standards, with certain
exceptions listed in this section.
(b) Our testing. These procedures generally apply for testing that
we do to determine if your portable gasoline containers complies with
applicable emission standards. We may perform other testing as allowed
by the Act.
(c) Exceptions. We may allow or require you to use procedures other
than those specified in this subpart in the following cases.
(1) You may request to use special procedures if your portable
gasoline containers cannot be tested using the specified procedures. We
will approve your request if we determine that it would produce
emission measurements that represent in-use operation and we determine
that it can be used to show
[[Page 15934]]
compliance with the requirements of the standard-setting section.
(2) You may ask to use emission data collected using other
procedures, such as those of the California Air Resources Board. We
will approve this only if you show us that using these other procedures
do not affect your ability to show compliance with the applicable
emission standards. This generally requires emission levels to be far
enough below the applicable emission standards so that any test
differences do not affect your ability to state unconditionally that
your containers will meet all applicable emission standards when tested
using the specified test procedures.
(3) You may request to use alternate procedures that are equivalent
to allowed procedures, or more accurate or more precise than allowed
procedures.
(d) You may not use other procedures under paragraph (c) of this
section until we approve your request.
Sec. 59.653 How do I test portable gasoline containers?
You must test the portable gasoline container as described in your
application, with the applicable spout and cap attached. Tighten
fittings in a manner representative of how they would be tightened by a
typical user.
(a) Preconditioning for durability. Complete the following steps at
the start of testing, unless we determine that omission of one or more
of these durability steps will not affect the emissions from your
container.
(1) Pressure cycling. Perform a pressure test by sealing the
container and cycling it between +13.8 and -1.7 kPa (+2.0 and -0.5
psig) and back to +13.8 kPa for 10,000 cycles at a rate of 60 seconds
per cycle.
(2) UV exposure. Perform a sunlight-exposure test by exposing the
container to an ultraviolet light of at least 24 W/m2 (0.40
W-hr/m2/min) on the container surface for at least 450
hours. Alternatively, the container may be exposed to direct natural
sunlight for an equivalent period of time, as long as you ensure that
the container is exposed to at least 450 daylight hours.
(3) Slosh testing. Perform a slosh test by filling the portable
gasoline container to 40 percent of its capacity with the fuel
specified in paragraph (e) of this section and rocking it at a rate of
15 cycles per minute until you reach one million total cycles. Use an
angle deviation of +15[deg] to -15[deg] from level. This test must be
performed at a temperature of 28 [deg]C 5[deg]C.
(4) Spout actuation. Perform the following spout actuation and
inversion steps at the end on the slosh testing, and at the end of the
preconditioning soak.
(i) Perform one complete actuation/inversion cycle per day for ten
days.
(ii) One actuation/inversion cycle consists of the following steps:
(A) Remove and replace the spout to simulate filling the container.
(B) Slowly invert the container and keep it inverted for at least 5
seconds to ensure that the spout and mechanisms become saturated with
fuel. Any fuel leaking from any part of the container will denote a
leak and will be reported as part of certification. Once completed,
place the container on a flat surface in the upright position.
(C) Actuate the spout by fully opening and closing without
dispensing fuel. The spout must return to the closed position without
the aid of the operator (e.g., pushing or pulling the spout closed).
Repeat for a total of 10 actuations. If at any point the spout fails to
return to the closed position, the container fails the test.
(D) Repeat the step contained in paragraph (a)(4)(ii)(B) of this
section (i.e., the inversion step).
(E) Repeat the steps contained in paragraph (a)(4)(ii)(C) of this
section (i.e., ten actuations).
(b) Preconditioning fuel soak. Complete the following steps before
a diurnal emission test: (1) Fill the portable gasoline container with
the specified fuel to its nominal capacity, seal it using the spout,
and allow it to soak at 28 5 [deg]C for at least 20 weeks.
You are not required to soak the container for more than 20 weeks
unless it has been determined that a longer soak period is needed to
achieve a stabilized emissions rate. Alternatively, the container may
be soaked for a shorter period of time at a higher temperature if you
can show that the hydrocarbon permeation rate has stabilized. You may
count the time of the slosh testing as part of the 20 weeks.
(2) Pour the fuel out of the container and immediately refill to 50
percent of nominal capacity. Be careful to not spill any fuel on the
container. Wipe the outside of the container as needed to remove any
liquid fuel that may have spilled on it.
(3) Seal the container using the spout and cap assemblies that will
used to seal the openings in a production container. Leave other
openings on the container (such as vents) open unless they are
automatically closing and unlikely for the user to leave open during
typical storage.
(c) Reference container. A reference tank is required to correct
for buoyancy effects that may occur during testing. Prepare the
reference tank as follows:
(1) Obtain a second tank that is identical to the test tank. You
may not use a tank that has previously contained fuel or any other
contents that might affect the stability of its mass.
(2) Fill the reference tank with enough dry sand (or other inert
material) so that the mass of the reference tank is approximately the
same as the test tank when filled with fuel. Use good engineering
judgment to determine how similar the mass of the reference tank needs
to be to the mass of the test tank considering the performance
characteristics of your balance.
(3) Ensure that the sand (or other inert material) is dry. This may
require heating the tank or applying a vacuum to it.
(4) Seal the tank.
(d) Diurnal test run. To run the test, take the steps specified in
this paragraph (d) for a portable gasoline container that was
preconditioned as specified in paragraph (a) of this section.
(1) Stabilize the fuel temperature within the portable gasoline
container at 22.2 [deg]C. Vent the container at this point to relieve
any positive or negative pressure that may have developed during
stabilization.
(2) Weigh the sealed reference container and record the weight.
Place the reference on the balance and tare it so that it reads zero.
Place the sealed test portable gasoline container on the balance and
record the difference between the test container and the reference
container. This value is Minitial Take this measurement
within 8 hours of filling the test container with fuel as specified in
paragraph (b)(2) of this section.
(2) Immediately place the portable gasoline container within a well
ventilated, temperature-controlled room or enclosure. Do not spill or
add any fuel.
(3) Close the room or enclosure.
(4) Follow the temperature profile in the following table for all
portable gasoline containers. Use good engineering judgment to follow
this profile as closely as possible. You may use linearly interpolated
temperatures or a spline fit for temperatures between the hourly
setpoints.
[[Page 15935]]
Table 1 of Sec. 59.653.--Diurnal Temperature Profile for Portable
Gasoline Containers
------------------------------------------------------------------------
Ambient
Temperature
(C) Profile
Time (hours) for Portable
Gasoline
Containers
------------------------------------------------------------------------
0....................................................... 22.2
1....................................................... 22.5
2....................................................... 24.2
3....................................................... 26.8
4....................................................... 29.6
5....................................................... 31.9
6....................................................... 33.9
7....................................................... 35.1
8....................................................... 35.4
9....................................................... 35.6
10...................................................... 35.3
11...................................................... 34.5
12...................................................... 33.2
13...................................................... 31.4
14...................................................... 29.7
15...................................................... 28.2
16...................................................... 27.2
17...................................................... 26.1
18...................................................... 25.1
19...................................................... 24.3
20...................................................... 23.7
21...................................................... 23.3
22...................................................... 22.9
23...................................................... 22.6
24...................................................... 22.2
------------------------------------------------------------------------
(5) At the end of the diurnal period, retare the balance using the
reference container and weigh the portable gasoline container. Record
the difference in mass between the reference container and the test.
This value is Mfinal
(6) Subtract Mfinal from Minitial; and divide
the difference by the nominal capacity of the container (using at least
three significant figures) to calculate the g/gallon/day emission rate:
Emission rate = (Minitial-Mfinal)/(nominal
capacity)/(one day)
(7) Round your result to the same number of decimal places as the
emission standard.
(8) Instead of determining emissions by weighing the container
before and after the diurnal temperature cycle, you may place the
container in a SHED meeting the specifications of 40 CFR 86.107-
96(a)(1) and measure emissions directly. Immediately following the
stabilization in paragraph (d)(1) of this section, purge the SHED and
follow the temperature profile from paragraph (d)(4) of this section.
Start measuring emissions when you start the temperature profile.
(e) For metal containers, you may demonstrate for certification
that your portable gasoline containers comply with the evaporative
emission standards without performing the pre-soak or container
durability cycles (i.e., the pressure cycling, UV exposure, and slosh
testing) specified in this section. For other containers, you may
demonstrate compliance without performing the durability cycles
specified in this section only if we approve it after you have
presented data clearly demonstrating that the cycle or cycles do not
negatively impact the permeation rate of the materials used in the
containers.
Special Compliance Provisions
Sec. 59.660 Exemption from the standards.
In certain circumstances, we may exempt portable gasoline
containers from the evaporative emission standards and requirements of
Sec. 59.611 and the prohibitions and requirements of Sec. 59.602. You
do not need an exemption for any containers that you own but do not
sell, offer for sale, introduce or deliver for introduction into U.S.
commerce, or import into the United States. Submit your request for an
exemption to the Designated Compliance Officer.
(a) Portable gasoline containers that are intended for export only
and are in fact exported are exempt provided they are clearly labeled
as being for export only. Keep records for five years of all portable
gasoline containers that you manufacture for export. Any introduction
into U.S. commerce for any purpose other than export is considered to
be a violation of Sec. 59.602 by the manufacturer. You do not need to
request this exemption.
(b) You may ask us to exempt portable gasoline containers that you
will purchase, sell, or distribute for the sole purpose of testing
them.
(c) You may ask us to exempt portable gasoline containers for the
purpose of national security, as long as your request is endorsed by an
agency of the federal government responsible for national defense. In
your request, explain why you need the exemption.
(d) You may ask us to exempt containers that are designed and
marketed solely for rapidly refueling racing applications which are
designed to create a leak proof seal with the target tank or are
designed to connect with a receiver installed on the target tank. This
exemption is generally intended for containers used to rapidly refuel a
race car during a pit stop and similar containers. In your request,
explain how why these containers are unlikely to be used for nonracing
applications. We may limit these exemptions to those applications that
are allowed to use gasoline exempted under 40 CFR 80.200.
(e) EPA may impose reasonable conditions on any exemption,
including a limit on the number of containers that are covered by an
exemption.
Sec. 59.662 What temporary provisions address hardship due to unusual
circumstances?
(a) After considering the circumstances, we may permit you to
introduce into commerce exempt you from the evaporative emission
standards and requirements of Sec. 59.611 of this subpart and the
prohibitions and requirements of Sec. 59.602 for specified portable
gasoline containers that do not comply with emission standards if all
the following conditions apply:
(1) Unusual circumstances that are clearly outside your control and
that could not have been avoided with reasonable discretion prevent you
from meeting requirements from this subpart.
(2) You exercised prudent planning and were not able to avoid the
violation; you have taken all reasonable steps to minimize the extent
of the nonconformity.
(3) Not having the exemption will jeopardize the solvency of your
company.
(4) No other allowances are available under the regulations in this
chapter to avoid the impending violation.
(b) To apply for an exemption, you must send the Designated Officer
a written request as soon as possible before you are in violation. In
your request, show that you meet all the conditions and requirements in
paragraph (a) of this section.
(c) Include in your request a plan showing how you will meet all
the applicable requirements as quickly as possible.
(d) You must give us other relevant information if we ask for it.
(e) We may include reasonable additional conditions on an approval
granted under this section, including provisions to recover or
otherwise address the lost environmental benefit or paying fees to
offset any economic gain resulting from the exemption.
(f) We may approve extensions of up to one year. We may review and
revise an extension as reasonable under the circumstances.
(g) Add a legible label, written in block letters in English, to a
readily visible part of each container exempted under this section.
This label must prominently include at least the following items:
(1) Your corporate name and trademark.
(2) The statement ``EXEMPT UNDER 40 CFR 59.662.''.
[[Page 15936]]
Sec. 59.663 What are the provisions for extending compliance
deadlines for manufacturers under hardship?
(a) After considering the circumstances, we may extend the
compliance deadline for you to meet new emission standards, as long as
you meet all the conditions and requirements in this section.
(b) To apply for an extension, you must send the Designated
Compliance Officer a written request. In your request, show that all
the following conditions and requirements apply:
(1) You have taken all possible business, technical, and economic
steps to comply.
(2) Show that the burden of compliance costs prevents you from
meeting the requirements of this subpart by the required compliance
date.
(3) Not having the exemption will jeopardize the solvency of your
company.
(4) No other allowances are available under the regulations in this
subpart to avoid the impending violation.
(c) In describing the steps you have taken to comply under
paragraph (b)(1) of this section, include at least the following
information:
(1) Describe your business plan, showing the range of projects
active or under consideration.
(2) Describe your current and projected financial standing, with
and without the burden of complying in full with the applicable
regulations in this subpart by the required compliance date.
(3) Describe your efforts to raise capital to comply with
regulations in this subpart.
(4) Identify the engineering and technical steps you have taken or
plan to take to comply with regulations in this subpart.
(5) Identify the level of compliance you can achieve. For example,
you may be able to produce containers that meet a somewhat less
stringent emission standard than the regulations in this subpart
require.
(d) Include in your request a plan showing how you will meet all
the applicable requirements as quickly as possible.
(e) You must give us other relevant information if we ask for it.
(f) An authorized representative of your company must sign the
request and include the statement: ``All the information in this
request is true and accurate, to the best of my knowledge.''.
(g) Send your request for this extension at least nine months
before the relevant deadline.
(h) We may include reasonable requirements on an approval granted
under this section, including provisions to recover or otherwise
address the lost environmental benefit. For example, we may require
that you meet a less stringent emission standard.
(i) We may approve extensions of up to one year. We may review and
revise an extension as reasonable under the circumstances.
(j) Add a permanent, legible label, written in block letters in
English, to a readily visible part of each container exempted under
this section. This label must prominently include at least the
following items:
(1) Your corporate name and trademark.
(2) The statement ``EXEMPT UNDER 40 CFR 59.663.''.
Sec. 59.664 What are the requirements for importing portable gasoline
containers into the United States?
As specified in this section, we may require you to post a bond if
you import into the U.S. containers that are subject to the standards
of this subpart. See paragraph (f) of this section for the requirements
related to importing containers that have been certified by someone
else.
(a) Prior to importing containers into the U.S., we may require you
to post a bond to cover any potential enforcement actions under the
Clean Air Act if you cannot demonstrate to us that you have assets of
an appropriate liquidity readily available in the United States with a
value equal to the retail value of the containers that you will import
during the calendar year.
(b) We may set the value of the bond up to five dollars per
container.
(c) You may meet the bond requirements of this section by obtaining
a bond from a third-party surety that is cited in the U.S. Department
of Treasury Circular 570, ``Companies Holding Certificates of Authority
as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring
Companies'' (http://www.fms.treas.gov/c570/c570.html#certified).
(d) If you forfeit some or all of your bond in an enforcement
action, you must post any appropriate bond for continuing importation
within 90 days after you forfeit the bond amount.
(e) You will forfeit the proceeds of the bond posted under this
section if you need to satisfy any United States administrative final
order or judicial judgment against you arising from your conduct in
violation of this subpart.
(f) This paragraph (f) applies if you import for resale containers
that have been certified by someone else. You and the certificate
holder are each responsible for compliance with the requirements of
this subpart and the Clean Air Act. No bond is required under this
section if either you or the certificate holder meet the conditions in
paragraph (a) of this section. Otherwise, the importer must comply with
the bond requirements of this section.
Definitions and Other Reference Information
Sec. 59.680 What definitions apply to this subpart?
The following definitions apply to this subpart. The definitions
apply to all subparts unless we note otherwise. All undefined terms
have the meaning the Act gives to them. The definitions follow:
Act means the Clean Air Act, as amended, 42 U.S.C. 7401--7671q.
Adjustable parameter means any device, system, or element of design
that someone can adjust and that, if adjusted, may affect emissions.
You may ask us to exclude a parameter if you show us that it will not
be adjusted in use in a way that affects emissions.
Certification means the process of obtaining a certificate of
conformity for an emission family that complies with the emission
standards and requirements in this subpart.
Certified emission level means the highest official emission level
in an emission family.
Configuration means a unique combination of hardware (material,
geometry, and size) and calibration within an emission family. Units
within a single configuration differ only with respect to normal
production variability.
Container means portable gasoline container.
Designated Compliance Officer means the Manager, Engine Programs
Group (6405-J), U.S. Environmental Protection Agency, 1200 Pennsylvania
Ave., NW., Washington, DC 20460.
Designated Enforcement Officer means the Director, Air Enforcement
Division (2242A), U.S. Environmental Protection Agency, 1200
Pennsylvania Ave., NW.,Washington, DC 20460.
Emission-control system means any device, system, or element of
design that controls or reduces the regulated evaporative emissions
from.
Emission-data unit means a portable gasoline container that is
tested for certification. This includes components tested by EPA.
Emission-related maintenance means maintenance that substantially
affects emissions or is likely to substantially affect emission
deterioration.
Emission family has the meaning given in Sec. 59.625.
[[Page 15937]]
Evaporative means relating to fuel emissions that result from
permeation of fuel through the portable gasoline container materials
and from ventilation of the container.
Good engineering judgment means judgments made consistent with
generally accepted scientific and engineering principles and all
available relevant information. See Sec. 59.603 for the administrative
process we use to evaluate good engineering judgment.
Hydrocarbon (HC) means total hydrocarbon (THC).
Manufacture means the physical and engineering process of designing
and/or constructing a portable gasoline container.
Manufacturer means any person who manufactures a portable gasoline
container for sale in the United States.
Nominal capacity means the expected volumetric working capacity of
a container.
Official emission result means the measured emission rate for an
emission-data unit.
Portable gasoline container means any reusable container designed
and marketed (or otherwise intended) for use by consumers for
receiving, transporting, storing, and dispensing gasoline. For the
purpose of this subpart, all portable fuel containers that are red in
color are deemed to be portable gasoline containers, regardless of how
they are labeled or marketed. Portable fuel containers that are not red
in color and are clearly and permanently labeled for diesel fuel or
kerosene only and not for use with gasoline are not portable gasoline
containers.
Production period means the period in which a portable gasoline
container will be produced under a certificate of conformity. The
maximum production period is five years.
Revoke means to terminate the certificate or an exemption for an
emission family. If we revoke a certificate or exemption, you must
apply for a new certificate or exemption before continuing to introduce
the affected containers into commerce. This does not apply to
containers you no longer possess.
Round has the meaning given in 40 CFR 1065.1001.
Sealed means lacking openings that would allow liquid or vapor to
escape to the atmosphere under normal operating pressures.
Suspend means to temporarily discontinue the certificate or an
exemption for an emission family. If we suspend a certificate, you may
not introduce into commerce portable gasoline containers from that
emission family unless we reinstate the certificate or approve a new
one. If we suspend an exemption, you may not introduce into commerce
containers that were previously covered by the exemption unless we
reinstate the exemption.
Test sample means the collection of portable gasoline containers
selected from the population of an emission family for emission
testing. This may include testing for certification, production-line
testing, or in-use testing.
Test unit means a portable gasoline container in a test sample.
Total hydrocarbon means the combined mass of organic compounds
measured by the specified procedure for measuring total hydrocarbon,
expressed as a hydrocarbon with a hydrogen-to-carbon mass ratio of
1.85:1.
Ultimate purchaser means, with respect to any portable gasoline
container, the first person who in good faith purchases such a
container for purposes other than resale.
Ultraviolet light means electromagnetic radiation with a wavelength
between 300 and 400 nanometers.
United States means the States, the District of Columbia, the
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana
Islands, Guam, American Samoa, and the U.S. Virgin Islands.
U.S.-directed production volume means the amount of portable
gasoline containers, subject to the requirements of this subpart,
produced by a manufacturer for which the manufacturer has a reasonable
assurance that sale was or will be made to ultimate purchasers in the
United States.
Useful life means the period during which a portable gasoline
container is required to comply with all applicable emission standards.
See Sec. 59.611.
Void means to invalidate a certificate or an exemption ab initio
(i.e. retroactively). Portable gasoline containers introduced into U.S.
commerce under the voided certificate or exemption is a violation of
this subpart, whether or not they were introduced before the
certificate or exemption was voided.
We (us, our) means the Administrator of the Environmental
Protection Agency and any authorized representatives.
Sec. 59.685 What symbols, acronyms, and abbreviations does this
subpart use?
The following symbols, acronyms, and abbreviations apply to this
subpart:
CFR Code of Federal Regulations.
EPA Environmental Protection Agency.
HC hydrocarbon.
NIST National Institute of Standards and Technology.
THC total hydrocarbon.
U.S.C. United States Code.
Sec. 59.695 What provisions apply to confidential information?
(a) Clearly show what you consider confidential by marking,
circling, bracketing, stamping, or some other method.
(b) We will store your confidential information as described in 40
CFR part 2. Also, we will disclose it only as specified in 40 CFR part
2. This applies both to any information you send us and to any
information we collect from inspections, audits, or other site visits.
(c) If you send us a second copy without the confidential
information, we will assume it contains nothing confidential whenever
we need to release information from it.
(d) If you send us information without claiming it is confidential,
we may make it available to the public without further notice to you,
as described in 40 CFR 2.204.
Sec. 59.697 State actions.
The provisions in this subpart do not preclude any State or any
political subdivision of a State from:
(a) Adopting and enforcing any emission standard or limitation
applicable to anyone subject to the provisions of this part; or
(b) Requiring the regulated entity to obtain permits, licenses, or
approvals prior to initiating construction, modification, or operation
of a facility for manufacturing a consumer product.
Sec. 59.698 May EPA enter my facilities for inspections?
(a) We may inspect your portable gasoline containers, testing,
manufacturing processes, storage facilities (including port facilities
for imported containers or other relevant facilities), or records, as
authorized by the Act, to enforce the provisions of this subpart.
Inspectors will have authorizing credentials and will limit inspections
to reasonable times--usually, normal operating hours.
(b) If we come to inspect, we may or may not have a warrant or
court order.
(1) If we do not have a warrant or court order, you may deny us
entry.
(2) If we have a warrant or court order, you must allow us to enter
the facility and carry out the activities it describes.
(c) We may seek a warrant or court order authorizing an inspection
described in this section, whether or not we first tried to get your
permission to inspect.
[[Page 15938]]
(d) We may select any facility to do any of the following:
(1) Inspect and monitor any aspect of portable gasoline container
manufacturing, assembly, storage, or other procedures, and any
facilities where you do them.
(2) Inspect and monitor any aspect of test procedures or test-
related activities, including test container selection, preparation,
durability cycles, and maintenance and verification of your test
equipment's calibration.
(3) Inspect and copy records or documents related to assembling,
storing, selecting, and testing a container.
(4) Inspect and photograph any part or aspect of containers or
components use for assembly.
(e) You must give us reasonable help without charge during an
inspection authorized by the Act. For example, you may need to help us
arrange an inspection with the facility's managers, including clerical
support, copying, and translation. You may also need to show us how the
facility operates and answer other questions. If we ask in writing to
see a particular employee at the inspection, you must ensure that he or
she is present (legal counsel may accompany the employee).
(f) If you have facilities in other countries, we expect you to
locate them in places where local law does not keep us from inspecting
as described in this section. We will not try to inspect if we learn
that local law prohibits it, but we may suspend your certificate if we
are not allowed to inspect.
Sec. 59.699 How do I request a hearing?
(a) You may request a hearing under certain circumstances, as
described elsewhere in this subpart. To do this, you must file a
written request with the Designated Compliance Officer, including a
description of your objection and any supporting data, within 30 days
after we make a decision.
(b) For a hearing you request under the provisions of this subpart,
we will approve your request if we find that your request raises a
substantial factual issue.
(c) If we agree to hold a hearing, we will use the procedures
specified in 40 CFR part 1068, subpart G.
PART 80--REGULATION OF FUELS AND FUEL ADDITIVES
3. The authority citation for part 80 is revised to read as
follows:
Authority: 42 U.S.C. 7414, 7521(1), 7545 and 7601(a).
Subpart D--[Amended]
4. Section 80.41 is amended by redesignating paragraph (e) as
paragraph (e)(1), redesignating paragraph (f) as paragraph (f)(1), and
adding paragraphs (e)(2) and (f)(2) to read as follows:
Sec. 80.41 Standards and requirements for compliance.
* * * * *
(e) * * *
(2) Beginning January 1, 2011, or January 1, 2015 for approved
small refiners under Sec. 80.1340, the toxic air pollutants emissions
performance reduction and benzene content specified in paragraph (e)(1)
of this section shall apply only to reformulated gasoline that is not
subject to the benzene standard of Sec. 80.1230, pursuant to the
provisions of Sec. 80.1235. Beginning January 1, 2007, or January 1,
2008 for approved small refiners under Sec. 80.235, the NOX
emissions performance reduction specified in paragraph (e)(1) of this
section shall no longer apply.
(f) * * *
(2) Beginning January 1, 2011, or January 1, 2015 for approved
small refiners under Sec. 80.1340, the toxic air pollutants emissions
performance reduction and benzene content specified in paragraph (f)(1)
of this section shall apply only to reformulated gasoline that is not
subject to the benzene standard of Sec. 80.1230, pursuant to the
provisions of Sec. 80.1235. Beginning January 1, 2007, or January 1,
2008 for approved small refiners under Sec. 80.235, the NOX
emissions performance reduction specified in paragraph (f)(1) of this
section shall no longer apply.
* * * * *
Subpart E--[Amended]
5. Section 80.101 is amended by revising paragraph (c)(2) to read
as follows:
Sec. 80.101 Standards applicable to refiners and importers.
* * * * *
(c) * * *
(2) Beginning January 1, 1998, each refiner and importer shall be
subject to the Complex Model standards for each averaging period.
However beginning January 1, 2011, or January 1, 2015 for approved
small refiners under Sec. 80.1340, such annual average exhaust toxics
standard shall apply only to conventional gasoline that is not subject
to the benzene standard of Sec. 80.1230, pursuant to the provisions of
Sec. 80.1235. Beginning January 1, 2007, or January 1, 2008 for
approved small refiners under Sec. 80.235, the annual average
NOX emissions standard section shall no longer apply.
* * * * *
Subpart F--[Amended]
6. Section 80.128 is amended by revising paragraph (a) to read as
follows:
Sec. 80.128 Agreed upon procedures for refiners and importers.
* * * * *
(a) Read the refiner's or importer's reports filed with EPA for the
previous year as required by Sec. Sec. 80.75, 80.83(g), 80.105, 80.990
and 80.1354.
* * * * *
Subpart J--[Amended]
7. Section 80.815 is amended by redesignating paragraph (d)(1) as
paragraph (d)(1)(i) and adding paragraph (d)(1)(ii) to read as follows:
Sec. 80.815 What are the gasoline toxics performance requirements for
refiners and importers?
* * * * *
(d) * * *
(1) * * *
(ii) Beginning January 1, 2011, or January 1, 2015 for approved
small refiners under Sec. 80.1340, the gasoline toxics performance
requirements of this subpart shall apply only to gasoline that is not
subject to the benzene standard of Sec. 80.1230, pursuant to the
provisions of Sec. 80.1235.
* * * * *
8. Section 80.1035 is amended by adding paragraph (h) to read as
follows:
Sec. 80.1035 What are the attest engagement requirements for gasoline
toxics compliance applicable to refiners and importers?
* * * * *
(h) Beginning January 1, 2011, or January 1, 2015 for approved
small refiners per Sec. 80.1340, the requirements of this section
shall apply only to gasoline that is not subject to the benzene
standard of Sec. 80.1230, pursuant to the provisions of Sec. 80.1235.
9. Subpart L is added to read as follows:
Subpart L--Gasoline Benzene
Sec.
80.1200--80.1219 [Reserved]
General Information
80.1220 What are the implementation dates for the gasoline benzene
program?
80.1225 Who must register with EPA under the gasoline benzene
program?
Gasoline Benzene Requirements
80.1230 What are the gasoline benzene requirements for refiners and
importers?
80.1235 What gasoline is subject to the benzene requirements of this
subpart?
[[Page 15939]]
80.1236 What requirements apply to California gasoline?
80.1238 How is a refinery's or importer's annual average benzene
concentration determined?
80.1240 How is a refinery's or importer's compliance with the
gasoline benzene requirements of this subpart determined?
Averaging, Banking and Trading (ABT) Program
80.1270 Who may generate benzene credits under the ABT program?
80.1275 How are early benzene credits generated?
80.1280 How are refinery benzene baselines calculated?
80.1285 How does a refiner apply for a benzene baseline?
80.1290 How are benzene credits generated in 2011 and beyond?
80.1295 How are gasoline benzene credits used?
Hardship Provisions
80.1335 Can a refiner seek temporary relief from the requirements of
this subpart?
80.1336 What if a refiner or importer cannot produce gasoline
conforming to the requirements of this subpart?
Small Refiner Provisions
80.1338 What is the definition of a small refiner for the purpose of
the gasoline benzene requirements of this subpart?
80.1339 Who is not eligible for the provisions for small refiners?
80.1340 How does a refiner obtain approval as a small refiner?
80.1342 What compliance options are available to small refiners
under this subpart?
80.1344 What provisions are available to a large refiner that
acquires one or more of a small refiner's refineries?
Sampling, Testing and Retention Requirements
80.1347 What are the sampling and testing requirements for refiners
and importers?
80.1348 What gasoline sample retention requirements apply to
refiners and importers?
Recordkeeping and Reporting Requirements
80.1350 What records must be kept?
80.1352 What are the pre-compliance reporting requirements for the
gasoline benzene program?
80.1354 What are the reporting requirements for the gasoline benzene
program?
Attest Engagements
80.1375 What are the attest engagement requirements for gasoline
benzene compliance?
Violations and Penalties
80.1400 What acts are prohibited under the gasoline benzene program?
80.1405 What evidence may be used to determine compliance with the
prohibitions and requirements of this subpart and liability for
violations of this subpart?
80.1410 Who is liable for violations under the gasoline benzene
program?
80.1415 What penalties apply under the gasoline benzene program?
Foreign Refiners
80.1420 What are the additional requirements under this subpart for
gasoline produced at foreign refineries?
Subpart L--Gasoline Benzene
Sec. Sec. 80.1200-80.1219 [Reserved]
General Information
Sec. 80.1220 What are the implementation dates for the gasoline
benzene program?
(a) Benzene standard. (1) Effective with the annual averaging
period beginning January 1, 2011, gasoline produced by a refiner at
each refinery, or imported into an import facility, must meet the
benzene standard specified in Sec. 80.1230, except as otherwise
specifically provided for in this subpart.
(2) Approved small refiners under Sec. 80.1340 may defer meeting
the benzene standard specified in Sec. 80.1230 until January 1, 2015
as described in Sec. 80.1342.
(b) Early credit generation. (1) Beginning June 1, 2007, each
refinery which has an approved benzene baseline per Sec. 80.1285 may
generate early benzene credits in accordance with the provisions of
Sec. 80.1275.
(2) Early benzene credits may be generated through the end of the
averaging period ending December 31, 2010.
(3) Early benzene credits may be generated through the end of the
averaging period ending December 31, 2014 for approved small refiners
under Sec. 80.1340.
(c) Standard credit generation. (1) Effective with the annual
averaging period beginning January 1, 2011, a refiner for any of its
refineries or an importer for its imported gasoline, may generate
benzene credits in accordance with the provisions of Sec. 80.1290.
(2) Effective with the annual averaging period beginning January 1,
2015, an approved small refiner under Sec. 80.1340, for any of its
refineries, may generate benzene credits in accordance with the
provisions of Sec. 80.1290.
Sec. 80.1225 Who must register with EPA under the gasoline benzene
program?
(a) Refiners and importers that are registered by EPA under Sec.
80.76, Sec. 80.103, Sec. 80.190, or Sec. 80.810 are deemed to be
registered for purposes of this subpart.
(b) Refiners and importers subject to the requirements in Sec.
80.1230 that are not registered by EPA under Sec. 80.76, Sec. 80.103,
Sec. 80.190 or Sec. 80.810 shall provide to EPA the information
required in Sec. 80.76 by September 30, 2010, or not later than three
months in advance of the first date that such person produces or
imports gasoline, whichever is later.
(c) Refiners that plan to generate early credits under Sec.
80.1275 and that are not registered by EPA under Sec. 80.76, Sec.
80.103, Sec. 80.190, or Sec. 80.810 must provide to EPA the
information required in Sec. 80.76 not later than 60 days prior to the
end of the first year of credit generation.
Gasoline Benzene Requirements
Sec. 80.1230 What are the gasoline benzene requirements for refiners
and importers?
(a)(1) Except as specified in paragraph (b) of this section, a
refinery's or importer's average gasoline benzene concentration in any
averaging period shall not exceed 0.62 percent by volume using
conventional rounding methodology.
(2) Compliance with the standard specified in paragraph (a)(1) of
this section, or creation of a deficit in accordance with paragraph (b)
of this section, is determined in accordance with Sec. 80.1240.
(3) The averaging period for achieving compliance with the
requirement of paragraph (a)(1) of this section is January 1 through
December 31 of each calendar year, beginning January 1, 2011, or
beginning January 1, 2015 for approved small refiners under Sec.
80.1340.
(4) Refinery grouping per Sec. 80.101(h) does not apply to
compliance with the gasoline benzene requirement specified in this
paragraph (a).
(5) Gasoline produced at foreign refineries that is subject to the
gasoline benzene requirements per Sec. 80.1235 shall be included in
the importer's compliance determination, except as provided in Sec.
80.1420.
(b) Deficit carry-forward. (1) A refinery or importer creates a
benzene deficit for a given averaging period when its compliance
benzene value, per Sec. 80.1240, is greater than the benzene standard
specified in paragraph (a) of this section.
(2) A refinery or importer may carry the benzene deficit forward to
the calendar year following the year the benzene deficit is created but
only if no deficit had been previously carried forward a deficit to the
year the deficit is created. If a refinery or importer carries forward,
the following provisions apply in the second year:
(i) The refinery or importer must achieve compliance with the
benzene standard specified in paragraph (a) of this section.
(ii) The refinery or importer must achieve further reductions in
its
[[Page 15940]]
gasoline benzene concentrations sufficient to offset the benzene
deficit of the previous year.
(iii) Benzene credits may be used, per Sec. 80.1295, to meet the
requirements of paragraphs (b)(2)(i) and (ii) of this section.
(3) In the case of an approved hardship under Sec. 80.1335 or
Sec. 80.1336, EPA may allow a briefly extended period of deficit
carry-forward.
(c) Oxygenate blenders, butane blenders and refiners that produce
gasoline from transmix. (1)(i) Refiners and oxygenate blenders that
only blend butane or oxygenate into gasoline downstream of the refinery
that produced the gasoline or the import facility where the gasoline
was imported, are not subject to the requirements of Sec. 80.1230 for
such gasoline.
(ii) Refiners that produce gasoline by separating gasoline from
transmix are not subject to the requirements of Sec. 80.1230 for this
gasoline.
(2) Any refiner under paragraph (c)(1) of this section that adds
any blendstock or feedstock other than, or in addition to, oxygenate
and/or butane into gasoline downstream of the refinery that produced
the gasoline or the import facility where the gasoline was imported, or
into transmix, or into gasoline produced from transmix, is subject to
the requirements of Sec. 80.1230 for this blendstock or feedstock.
Sec. 80.1235 What gasoline is subject to the benzene requirements of
this subpart?
For the purposes of determining compliance with the requirements of
Sec. 80.1230, all reformulated gasoline, RBOB, and conventional
gasoline or gasoline blending stock per Sec. 80.101(d) are
collectively ``gasoline.'' Unless otherwise specified, all of a
refinery's or importer's gasoline is subject to the standards and
requirements of Sec. 80.1230, with the following exceptions:
(a) Gasoline that is used to fuel aircraft, racing vehicles or
racing boats that are used only in sanctioned racing events, provided
that:
(1) Product transfer documents associated with such gasoline, and
any pump stand from which such gasoline is dispensed, identify the
gasoline either as gasoline that is restricted for use in aircraft, or
as gasoline that is restricted for use in racing motor vehicles or
racing boats that are used only in sanctioned events;
(2) The gasoline is completely segregated from all other gasoline
throughout production, distribution and sale to the ultimate consumer;
and
(3) The gasoline is not made available for use as motor vehicle
gasoline, or dispensed for use in motor vehicles, except for motor
vehicles used only in sanctioned racing events.
(b) California gasoline, as defined in Sec. 80.1236.
(c) Gasoline that is exported for sale outside the U.S.
(d) Gasoline used for research, development or testing purposes if
it is exempted for these purposes under the reformulated gasoline and
anti-dumping programs, as applicable.
(e) Gasoline produced pursuant to Sec. 80.1230(c)(1).
Sec. 80.1236 What requirements apply to California gasoline?
(a) Definition. For purposes of this subpart, California gasoline
means any gasoline designated by the refiner or importer as for use
only in California and that is actually used in California.
(b) California gasoline exemption. California gasoline that
complies with all the requirements of this section is exempt from the
requirements in Sec. 80.1230.
(c) Requirements for California gasoline. The following
requirements apply to California gasoline:
(1) Each batch of California gasoline must be designated as such by
its refiner or importer.
(2) Designated California gasoline must be kept segregated from
gasoline that is not California gasoline at all points in the
distribution system.
(3) Designated California gasoline must ultimately be used in the
State of California and not used elsewhere in the United States.
(4) In the case of California gasoline produced outside the State
of California, the transferors and transferees must meet the product
transfer document requirements under Sec. 80.81(g).
(5) Gasoline that is ultimately used in any part of the United
States outside of the State of California must comply with the
requirements specified in Sec. 80.1230, regardless of any designation
as California gasoline.
Sec. 80.1238 How is a refinery's or importer's annual average benzene
concentration determined?
(a) The annual average benzene concentration of gasoline produced
at a refinery or imported by an importer for the applicable averaging
period is calculated according to the following equation:
[GRAPHIC] [TIFF OMITTED] TP29MR06.008
Where:
Bavg = Annual average benzene concentration (volume percent
benzene).
i = Individual batch of gasoline produced at the refinery or imported.
n = Total number of batches of gasoline produced at the refinery or
imported during the applicable annual averaging period.
Vi = Volume of gasoline in batch i (gallons).
Bi = Benzene concentration of batch i (volume percent
benzene), per Sec. 80.46(e).
(b) All input batch benzene concentration values used in paragraph
(a) of this section shall be expressed to two decimal places.
(c) Annual average benzene concentration values calculated under
paragraph (a) of this section shall be expressed to two decimal places
using conventional rounding methodology.
(d) A refiner or importer may include the volume of oxygenate added
downstream from the refinery or import facility in the calculation
specified in paragraph (a) of this section, provided the following
requirements are met:
(1) For oxygenate added to conventional gasoline, the refiner or
importer must comply with the requirements of Sec. 80.101(d)(4)(ii)
and (g)(3).
(2) For oxygenate added to RBOB, the refiner or importer must
comply with the requirements of Sec. 80.69(a).
(e) Refiners and importers must exclude from the calculation
specified in paragraph (a) of this section all of the following:
(1) Gasoline that was not produced at the refinery or imported by
the importer.
(2) Except as provided in paragraph (c) of this section, any
blendstocks or unfinished gasoline transferred to others.
(3) Gasoline that has been included in the compliance calculations
for another refinery or importer.
(4) Gasoline exempted from the standards under Sec. 80.1235.
Sec. 80.1240 How is a refinery's or importer's compliance with the
gasoline benzene requirements of this subpart determined?
(a)(1) The compliance benzene value for a refinery or importer is:
[[Page 15941]]
[GRAPHIC] [TIFF OMITTED] TP29MR06.009
Where:
CBVy = Compliance benzene value (gallons benzene) for year
y.
Vy = Gasoline volume produced or imported in year y
(gallons).
Bavg = Annual average benzene concentration (volume percent
benzene), per Sec. 80.1238.
Dy-1 = Benzene deficit from the previous reporting period,
per Sec. 80.1230(b) (gallons benzene).
BC = Banked benzene credits used to show compliance (gallons benzene).
RC = Benzene credits received by the refinery or importer, per Sec.
80.1295(c), used to show compliance (gallons benzene).
(2) If CBVy <= Vy x (0.62)/100, then
compliance is achieved for calendar year y.
(b)(1) A deficit is created when CBVy > Vy x
(0.62)/100.
(2) The deficit value to be included in the following year's
compliance calculation per paragraph (a) of this section, is calculated
as follows:
[GRAPHIC] [TIFF OMITTED] TP29MR06.010
Averaging, Banking and Trading (ABT) Program
Sec. 80.1270 Who may generate benzene credits under the ABT program?
(a) Early credits. (1) Early credits may be generated under Sec.
80.1275 by a refiner for a refinery with an approved benzene baseline
under Sec. 80.1285.
(2) Early credits may be generated under Sec. 80.1275 only by
refiners that produce gasoline by processing crude oil through refinery
processing units.
(3)(i) A refinery that was shut down during the entire 2004-2005
benzene baseline period is not eligible to generate early credits under
Sec. 80.1275.
(ii) A refinery not in full production, excluding normal refinery
downtime, or not showing consistent or regular gasoline production
activity during 2004-2005 may be eligible to generate early benzene
credits under Sec. 80.1275 upon petition to and approval by EPA, under
Sec. 80.1285.
(b) Standard Credits. (1) Standard credits may be generated under
Sec. 80.1290 by refineries and importers for gasoline produced or
imported for use in the U.S., excluding gasoline exempt from the
benzene standard under the provisions of Sec. 80.1235.
(2) Oxygenate blenders, butane blenders, and transmix producers are
not eligible to generate standard credits under Sec. 80.1290.
Sec. 80.1275 How are early benzene credits generated?
(a) Early benzene credits may be generated only if a refinery's
annual average gasoline benzene concentration is at least 10% lower
than the refinery's approved baseline benzene concentration per Sec.
80.1280.
(b) [Reserved]
(c) The early credit annual averaging periods are as follows:
(1) For 2007, the seven-month period from June 1, 2007, through
December 31, 2007, inclusive.
(2) For 2008, 2009 and 2010, the 12-month calendar year.
(3) For 2011, 2012, 2013, and 2014, which apply only to approved
small refiners per Sec. 80.1340, the 12-month calendar year.
(d) The number of early benzene credits shall be calculated
annually for each applicable averaging period as follows:
(1) Proceed to paragraph (d)(2) of this section under the following
condition. Bavg <= BBase x 0.90
Where:
Bavg = Annual average benzene concentration (volume percent
benzene) of gasoline produced at the refinery, per Sec. 80.1238.
BBase = Baseline benzene concentration (volume percent
benzene) of the refinery, per Sec. 80.1280(b).
(2) Calculate the number of early credits generated by the refinery
for the averaging period as follows:
[GRAPHIC] [TIFF OMITTED] TP29MR06.011
Where:
ECy = Early credits generated in year y (gallons benzene).
Bavg = Annual average benzene concentration (volume percent
benzene) of gasoline produced at the refinery, per Sec. 80.1238 that
satisfies the condition of paragraph (d)(1) of this section.
Ve = Total volume of gasoline (gallons) produced during the
annual averaging period at the refinery.
(e) All input benzene concentration values used in paragraph (d) of
this section shall be expressed to two decimal places.
(f) Early benzene credits calculated under paragraph (d) of this
section shall be expressed to the nearest gallon using conventional
rounding methodology.
(g)(1) Early benzene credits shall be calculated separately for
each refinery.
(2) Refiners shall not move gasoline or gasoline blending stocks
from one refinery to another for the purpose of generating early
credits.
(h) An importer may not generate early credits.
(i) A foreign refiner with an approved baseline may generate early
credits subject to the provisions of Sec. 80.1420.
Sec. 80.1280 How are refinery benzene baselines calculated?
(a) A refinery's benzene baseline is based on the refinery's 2004-
2005 average gasoline benzene concentration, calculated according to
the following equation:
[GRAPHIC] [TIFF OMITTED] TP29MR06.012
Where:
BBase = Benzene baseline concentration (volume percent
benzene).
i = Individual batch of gasoline produced at the refinery from January
1, 2004 through December 31, 2005.
n = Total number of batches of gasoline produced at the refinery from
January 1, 2004 through December 31, 2005 (or the total number of
batches of gasoline pursuant to Sec. 80.1285(d)).
Vi = Volume of gasoline in batch i (gallons).
Bi = Benzene content of batch i (volume percent benzene).
(b) All input batch benzene concentration values used in paragraph
(a) of this section shall be expressed to two decimal places.
(c) Baseline benzene concentration values calculated under
paragraph (a) of this section shall be expressed to two decimal places
using conventional rounding methodology.
(d) Any refiner that, under Sec. 80.69 or Sec. 80.101(d)(4),
included oxygenate blended downstream in compliance calculations for
RFG or conventional gasoline for calendar years 2004 or 2005 for a
refinery must include the volume and benzene concentration of this
oxygenate in the baseline calculations for gasoline benzene content for
that refinery under paragraph (a) of this section.
Sec. 80.1285 How does a refiner apply for a benzene baseline?
(a) A refiner must submit an application to EPA which includes the
information specified in paragraph (c) of this section at least 60 days
before the refinery plans to begin generating early credits.
[[Page 15942]]
(b) The benzene baseline application shall be sent to: U.S. EPA,
Attn: Early Gasoline Benzene Credits (6406J), 1200 Pennsylvania Ave.,
NW., Washington, DC 20460. For commercial delivery: U.S. EPA Attn:
Early Gasoline Benzene Credits (6406J), 501 3rd Street, NW.,
Washington, DC 20001.
(c) A benzene baseline application must be submitted for each
refinery that plans to generate early credits under Sec. 80.1275 and
must include the following information:
(1) A listing of the names and addresses of all refineries owned by
the company.
(2) The benzene baseline for gasoline produced in 2004-2005 at the
refinery, calculated in accordance with Sec. 80.1280(b).
(3) Copies of the annual reports required under Sec. 80.75 for RFG
and Sec. 80.105 for conventional gasoline.
(4) A letter signed by the president, chief operating officer, or
chief executive officer, of the company, or his/her designee, stating
that the information contained in the benzene baseline determination is
true to the best of his/her knowledge.
(5) Name, address, phone number, facsimile number and e-mail
address of a corporate contact person.
(d) A refiner, for a refinery that qualifies for generating early
credits under Sec. 80.1270(a)(3)(ii) may submit to EPA a benzene
baseline application per the requirements of this section. The refiner
must also submit information regarding the nature and cause of the
inconsistent production, how it affects the baseline and benzene
concentration, and whether an alternative calculation to the
calculation specified in Sec. 80.1280 produces a more representative
benzene baseline value. EPA, upon consideration of the submitted
information, may approve a benzene baseline for such a refinery.
(e) Within 60 days of receipt of an application under this section,
except for applications submitted in accordance with paragraph (d) of
this section, EPA will notify the refiner of approval of the refinery's
baseline or any deficiencies in the application.
(f) If at any time the baseline submitted in accordance with the
requirements of this section is determined to be incorrect, EPA will
notify the refiner of the corrected baseline.
Sec. 80.1290 How are benzene credits generated in 2011 and beyond?
(a) Gasoline benzene standard credits may be generated by the
following parties during any applicable averaging period specified in
paragraph (b) of this section:
(1) A refiner, at any of its refineries that produce gasoline for
use in the U.S. (excluding gasoline under Sec. 80.1235 that is exempt
from the requirements of this subpart). Credits are generated
separately by each refinery;
(2) Importers, for all of their imported gasoline (excluding
gasoline under Sec. 80.1235 that is exempt from the requirements of
this subpart);
(b) The standard credit averaging periods are the calendar years
beginning with 2011, or beginning with 2015 for approved small
refiners.
(c) [Reserved]
(d)(1) The number of standard credits generated by a refinery or
importer shall be calculated annually according to the following
equation:
[GRAPHIC] [TIFF OMITTED] TP29MR06.013
Where:
SCy = Standard credits generated in year y (gallons
benzene).
Bavg = Annual average benzene concentration for year y
(volume percent benzene), per Sec. 80.1238.
Vy = Total volume of gasoline produced or imported in year y
(gallons).
(2) No credits shall be generated unless the value SCy is positive.
(e) All input benzene concentration values used in paragraph (d) of
this section shall be expressed to two decimal places.
(f) Standard benzene credits calculated under paragraph (d) of this
section shall be expressed to the nearest gallon using conventional
rounding methodology.
(g) Foreign refiners may not generate credits under this section.
Sec. 80.1295 How are gasoline benzene credits used?
(a) Credit use. (1) Gasoline benzene credits generated under
Sec. Sec. 80.1275 and 80.1290 may be used to comply with the gasoline
benzene content requirement of Sec. 80.1230 provided that:
(i) The gasoline benzene credits were generated and reported
according to the requirements of this subpart; and
(ii) The conditions of this section Sec. 80.1295 are met.
(2) Gasoline benzene credits generated under Sec. Sec. 80.1275 and
80.1290 may be used by a refiner or importer to comply with the
gasoline benzene content standard of Sec. 80.1230, may be banked by a
refiner or importer for future use or transfer, may be transferred to
another refinery or importer within a company (intracompany), or may be
transferred to another refinery or importer outside of the company.
(b) Credit banking. Gasoline benzene credits generated by a
refinery or importer may be banked for use in a later compliance
period, or may be transferred to another refiner, refinery, or importer
for use as provided in paragraph (c) of this section.
(c) Credit transfers. (1) Gasoline benzene credits obtained from
another refinery or importer may be used to comply with the gasoline
benzene content requirement of Sec. 80.1230 provided the following
conditions are met:
(i) The credits are generated and reported according to the
requirements of this subpart, and the transferred credit has not
expired, per paragraph (d) of this section.
(ii) Any credit transfer takes place no later than the last day of
February following the calendar year averaging period when the credits
are used.
(iii) The credit has not been transferred more than twice. The
first transfer by the refinery or importer that generated the credit
may only be made to a refiner or importer that intends to use the
credit; if the transferee cannot use the credit, it may make the
second, and final, transfer only to a refinery or importer that intends
to use or terminate the credit. In no case may a credit be transferred
more than twice before being used or terminated.
(iv) The credit transferor has applied any gasoline benzene credits
necessary to meet its own annual compliance requirements (and any
deficit carry-forward, if applicable) before transferring any gasoline
benzene credits to any other refiner or importer.
(v) The credit transferor would not create a deficit as a result of
a credit transfer.
(vi) The transferor supplies to the transferee records indicating
the year the gasoline benzene credits were generated, the identity of
the refiner (and refinery) or importer that generated the gasoline
benzene credits and the identity of the transferring entity if not the
same entity that generated the gasoline benzene credits.
(2) In the case of gasoline benzene credits that have been
calculated or created improperly, or have otherwise been determined to
be invalid, the following provisions apply:
(i) Invalid gasoline benzene credits cannot be used to achieve
compliance with the gasoline benzene content requirement of Sec.
80.1230 regardless of the transferee's good faith belief that the
gasoline benzene credits were valid.
(ii) The refiner or importer that used the gasoline benzene credits
and any
[[Page 15943]]
transferor of the gasoline benzene credits must adjust their credit
records, reports, and compliance calculations as necessary to reflect
the proper gasoline benzene credits.
(iii) Any properly created gasoline benzene credits existing in the
transferor's credit balance following the corrections and adjustments
specified in paragraph (c)(2)(ii) of this section and after the
transferor applies gasoline benzene credits as needed to meet its own
compliance requirements at the end of the compliance period, must first
be applied to correct the invalid transfers to the transferee, before
the transferor uses, trades or banks the gasoline benzene credits.
(d) Credit life. (1) Early credits, per Sec. 80.1275, may be used
for compliance purposes under Sec. 80.1240 for any calendar year
averaging period prior to the 2014 averaging period.
(2) Standard credits, per Sec. 80.1290, shall have a credit life
of 5 calendar year averaging periods after the year in which they were
generated. Example: Standard credits generated during 2014 may be used
to achieve compliance under Sec. 80.1240 for any calendar year
averaging period prior to the 2020 averaging period.
(3) Notwithstanding paragraphs (d)(1) and (d)(2) of this section,
credits traded to or used by approved small refiners per Sec. 80.1340,
have an additional credit life of two calendar year averaging periods.
(e) General limitations on credit use. A refiner or importer
possessing gasoline benzene credits must use all gasoline benzene
credits in its possession prior to applying the credit deficit
provisions of Sec. 80.1230(b).
Hardship Provisions
Sec. 80.1335 Can a refiner seek temporary relief from the
requirements of this subpart?
(a) EPA may permit a refinery to have an extended period of deficit
carry-forward, for the shortest period practicable, per Sec.
80.1230(b), if the refiner demonstrates that:
(1) Unusual circumstances exist that impose extreme hardship and
significantly affect the ability to comply by the applicable date; and
(2) It has made best efforts to comply with the requirements of
this subpart, including making all possible efforts to obtain
sufficient credits to meet the standard.
(b) Applications must be submitted to EPA by September 1, 2009.
(1) Approval of a hardship under this section shall be in the form
an extended period of deficit carry-forward, per Sec. 80.1230(b), for
such period of time as EPA determines is appropriate, but shall not
extend beyond December 31, 2014.
(2) EPA reserves the right to deny applications for appropriate
reasons, including unacceptable environmental impact.
(c)(1) Applications must include a plan demonstrating how the
refiner will comply with the requirements of this subpart as
expeditiously as possible. The plan shall include a showing that
contracts are or will be in place for engineering and construction of
benzene reduction technology, a plan for applying for and obtaining any
permits necessary for construction, a description of plans to obtain
necessary capital, and a detailed estimate of when the requirements of
this subpart will be met.
(2) Applications must include a detailed description of the
refinery configuration and operations including, at minimum, the
following information:
(i) The refinery's total reformer unit throughput capacity;
(ii) The refinery's total crude capacity;
(iii) Total crude capacity of any other refineries owned by the
same entity;
(iv) Total volume of gasoline production at the refinery;
(v) Total volume of other refinery products; and
(vi) Geographic location(s) where the refinery's gasoline will be
sold.
(3) Applications must include, at a minimum, the following
information:
(i) Detailed descriptions of efforts to obtain capital for refinery
investments;
(ii) Detailed descriptions of efforts to obtain credits;
(iii) Bond rating of entity that owns the refinery; and
(iv) Estimated capital investment needed to comply with the
requirements of this subpart
(4) Applicants must also provide any other relevant information
requested by EPA.
(d) EPA may impose any reasonable conditions on waivers granted
under this section, including the condition that if more credits are
available than was anticipated at the time of the hardship approval,
the extended period of deficit carry-forward may be shortened.
Sec. 80.1336 What if a refiner or importer cannot produce gasoline
conforming to the requirements of this subpart?
In extreme and unusual circumstances (e.g., natural disaster or Act
of God) which are clearly outside the control of the refiner or
importer and which could not have been avoided by the exercise of
prudence, diligence, and due care, EPA may permit a refinery or
importer to extend the deadline for meeting the deficit carry-forward
requirements under Sec. 80.1230(b) for a brief period (e.g., where
appropriate, EPA may allow one or more additional weeks after the last
day of February to purchase credits), provided the refinery or importer
meets all the criteria, requirements and conditions contained in Sec.
80.73(a) through (e).
Small Refiner Provisions
Sec. 80.1338 What is the definition of a small refiner for the
purpose of the gasoline benzene requirements of this subpart?
(a) A small refiner is defined as any person, as defined by 42
U.S.C. 7602(e), that--
(1) Produced gasoline at a refinery by processing crude oil through
refinery processing units from January 1, 2005, through December 31,
2005; and
(2) Employed an average of no more than 1,500 people, based on the
average number of employees for all pay periods from January 1, 2005
through December 31, 2005; and
(3) Had a corporate average crude oil capacity less than or equal
to 155,000 barrels per calendar day (bpcd) for 2005; or
(4) Has been approved by EPA as a small refiner under Sec.
80.1340.
(b) For the purpose of determining the number of employees and the
crude oil capacity under paragraph (a) of this section, the following
determinations shall be observed:
(1) The refiner shall include the employees and crude oil capacity
of any subsidiary companies, any parent company and subsidiaries of the
parent company in which the parent has a controlling interest, and any
joint venture partners.
(2) For any refiner owned by a governmental entity, the number of
employees and total crude oil capacity as specified in paragraph (a) of
this section shall include all employees and crude oil production of
the government to which the governmental entity is a part.
(3) Any refiner owned and controlled by an Alaska Regional or
Village Corporation organized pursuant to the Alaska Native Claims
Settlement Act (43 U.S.C. 1601) is not considered an affiliate of such
entity, or with other concerns owned by such entity, solely because of
their common ownership.
(c) Notwithstanding the provisions of paragraph (a) of this
section, a refiner that reactivates a refinery, which it previously
operated, and that was shut down or non-operational for the entire
period between January 1, 2005, and December 31, 2005, may apply for
small refiner status in accordance with the provisions of Sec.
80.1340.
[[Page 15944]]
Sec. 80.1339 Who is not eligible for the provisions for small
refiners?
(a) The following are not eligible for the hardship provisions for
small refiners:
(1) Refiners with refineries built after December 31, 2005;
(2) Refiners that exceed the employee or crude oil capacity
criteria under Sec. 80.1338 but that meet these criteria after
December 31, 2005, regardless of whether the reduction in employees or
crude capacity is due to operational changes at the refinery or a
company sale or reorganization.
(3) Importers.
(4) Refiners that produce gasoline other than by processing crude
oil through refinery processing units.
(b)(1)(i) Refiners that qualify as small under Sec. 80.1338 and
subsequently cease production of gasoline from processing crude oil
through refinery processing units, employ more than 1,500 people or
exceed the 155,000 bpcd crude oil capacity limit after December 31,
2005, as a result of merger with or acquisition of or by another
entity, are disqualified as small refiners, except this shall not apply
in the case of a merger between two previously approved small refiners.
If disqualification occurs, the refiner shall notify EPA in writing no
later than 20 days following this disqualifying event.
(ii) Except as provided under paragraph (b)(1)(iii) of this
section, any refiner whose status changes under this paragraph (b)
shall meet the applicable standards of Sec. 80.1230 within a period of
up to 30 months of the disqualifying event for all of its refineries.
However, such period shall not extend beyond December 31, 2014.
(iii) A refiner may apply to EPA for an additional six months to
comply with the standards of Sec. 80.1230 if more than 30 months will
be required for the necessary engineering, permitting, construction,
and start-up work to be completed. Such applications must include
detailed technical information supporting the need for additional time.
EPA will base its decision to approve additional time on the
information provided by the refiner and on other relevant information.
In no case will EPA extend the compliance date beyond December 31,
2014.
(iv) During the period of time of up to 30 months provided under
paragraph (b)(1)(ii) of this section, and any extension provided under
paragraph (b)(1)(iii) of this section, the refiner may not generate
gasoline benzene credits under Sec. 80.1275 or Sec. 80.1290.
(2) An approved small refiner per Sec. 80.1340 may elect to meet
the requirements of Sec. 80.1230 applicable to non-small refiners by
notifying EPA in writing no later than November 15 prior to the year
that the change will occur. Any refiner whose status changes under this
paragraph (b)(2) shall meet the requirements for non-small refiners
under Sec. 80.1230 beginning with the first averaging period
subsequent to the status change.
Sec. 80.1340 How does a refiner obtain approval as a small refiner?
(a) Applications for small refiner status must be submitted to EPA
by December 31, 2007.
(b) Applications for small refiner status must be sent to: U.S.
EPA, Attn: MSAT2 Benzene (6406J), 1200 Pennsylvania Ave., NW.,
Washington, DC 20460. For commercial delivery: U.S. EPA Attn: MSAT2
Benzene (6406J), 501 3rd Street, NW., Washington, DC 20001.
(c) The small refiner status application must contain the following
information for the company seeking small refiner status, and for all
subsidiary companies, all parent companies, all subsidiaries of the
parent companies, and all joint venture partners:
(1) Employees. (i) A listing of the names and addresses of each
location where any employee worked during the 12 months preceding
January 1, 2006;
(ii) The average number of employees at each location based upon
the number of employees for each pay period for the 12 months preceding
January 1, 2006; and
(iii) The type of business activities carried out at each location.
(iv) In the case of a refiner that reactivates a refinery that it
previously owned and operated and that was shut down or non-operational
between January 1, 2005, and January 1, 2006, include the following:
(A) A listing of the name and address of each location where any
employee of the refiner worked since the refiner acquired or
reactivated the refinery;
(B) The average number of employees at any such reactivated
refinery during each calendar year since the refiner reactivated the
refinery; and
(C) The type of business activities carried out at each location.
(vi) For joint ventures, the total number of employees includes the
combined employee count of all corporate entities in the venture.
(vii) For government-owned refiners, the total employee count
includes all government employees.
(2) Crude oil capacity. (i) The total corporate crude oil capacity
of each refinery as reported to the Energy Information Administration
(EIA) of the U.S. Department of Energy (DOE), for the period January 1,
2005, through December 31, 2005.
(ii) The information submitted to EIA is presumed to be correct. In
cases where a company disagrees with this information, the company may
petition EPA with appropriate data to correct the record when the
company submits its application for small refiner status.
(3) The type of business activity carried out at each location.
(4) For each refinery, an indication of the small refiner option(s)
intended to be utilized at the refinery.
(5) A letter signed by the president, chief operating or chief
executive officer of the company, or his/her designee, stating that the
information contained in the application is true to the best of his/her
knowledge, and that the company owned the refinery as of January 1,
2006.
(6) Name, address, phone number, facsimile number, and E-mail
address of a corporate contact person.
(d) Approval of a small refiner status application will be based on
all information submitted under paragraph (c) of this section and any
other relevant information.
(e) EPA will notify a refiner of approval or disapproval of small
refiner status by letter.
(1) If approved, all refineries of the refiner may defer meeting
the standard specified in Sec. 80.1230 until the annual averaging
period beginning January 1, 2015.
(2) If disapproved, all refineries of the refiner must meet the
standard specified in Sec. 80.1230 beginning with the annual averaging
period beginning January 1, 2011.
(f) If EPA finds that a refiner provided false or inaccurate
information on its application for small refiner status, upon notice
from EPA, the refiner's small refiner status will be void ab initio.
(g) Prior to January 1, 2014, and upon notification to EPA, an
approved small refiner per this section may withdraw its status as a
small refiner. Effective on January 1 of the year following such
notification, the small refiner will become subject to the standards at
Sec. 80.1230.
Sec. 80.1342 What compliance options are available to small refiners
under this subpart?
(a) A refiner that has been approved as a small refiner under Sec.
80.1340 may--
(1) Defer meeting the standard specified in section Sec. 80.1230
until the annual averaging period January 1, 2015; or
(2) Meet the standard specified in Sec. 80.1230 beginning January
1 of any of
[[Page 15945]]
the following annual averaging periods: 2007, 2008, 2009, 2010, 2011,
2012, 2013, and 2014.
(b) The provisions of paragraph (a) of this section shall apply
separately for each of an approved small refiner's refineries.
Sec. 80.1344 What provisions are available to a large refiner that
acquires one or more of a small refiner's refineries?
(a) In the case of a refiner without approved small refiner status
that acquires a refinery from an approved small refiner per Sec.
80.1340, the small refiner provisions of the gasoline benzene program
of this subpart may continue to apply to the acquired refinery for a
period of up to 30 months from the date of acquisition of the refinery.
In no case shall this period extend beyond December 31, 2014.
(b) A refiner may apply to EPA for up to an additional six months
to comply with the standards of Sec. 80.1230 for the acquired refinery
if more than 30 months would be required for the necessary engineering,
permitting, construction, and start-up work to be completed. Such
applications must include detailed technical information supporting the
need for additional time. EPA will base a decision to approve
additional time on information provided by the refiner and on other
relevant information. In no case shall this period extend beyond
December 31, 2014.
(c) A refiner that acquires a refinery from an approved small
refiner per Sec. 80.1340 shall notify EPA in writing no later than 20
days following the acquisition.
Sampling, Testing and Retention Requirements
Sec. 80.1347 What are the sampling and testing requirements for
refiners and importers?
(a) Sample and test each batch of gasoline. Refiners and importers
shall collect a representative sample from each batch of gasoline
produced or imported. Each sample shall be tested in accordance the
methodology specified at Sec. 80.46(e) to determine its benzene
concentration for compliance with the requirements of this subpart.
(b) Batch numbering. The batch numbering convention of Sec.
80.365(b)(2) shall apply to batches of conventional gasoline.
(c) The requirements of this section apply to any refiner or
importer subject to the requirements of this subpart, including those
generating early credits per Sec. 80.1275, all non-small refiners and
importers beginning January 1, 2011, and small refiners beginning
January 1, 2015.
Sec. 80.1348 What gasoline sample retention requirements apply to
refiners and importers?
The gasoline sample retention requirements specified in subpart H
of this part for the gasoline sulfur provisions apply for the purpose
of complying with the requirements of this subpart, except that in
addition to including the sulfur test result as provided by Sec.
80.335(a)(4)(ii), the refiner, importer, or independent laboratory
shall also include with the retained sample the test result for benzene
as conducted pursuant to Sec. 80.46(e).
Recordkeeping and Reporting Requirements
Sec. 80.1350 What records must be kept?
(a) General requirements. The recordkeeping requirements specified
in Sec. 80.74 and Sec. 80.104, as applicable, apply for the purpose
of complying with the requirements of this subpart, however, duplicate
records are not required.
(b) Additional records that refiners and importers shall keep.
Beginning January 1, 2007, any refiner for each of its refineries, and
any importer for the gasoline it imports, shall keep records that
include the following information (including any supporting
calculations as applicable):
(1) Its compliance benzene value per Sec. 80.1240, and the
calculations used to obtain that value.
(2) Its benzene baseline value, per Sec. 80.1280, if the refinery
or importer submitted a benzene baseline application to EPA per Sec.
80.1285;
(3) The number of early benzene credits generated under Sec.
80.1275, separately by year of generation;
(4) The number of early benzene credits obtained, separately by
generating refinery and year of generation;
(5) The number of valid credits in possession of the refinery or
importer at the beginning of each averaging period, separately by
generating facility and year of generation;
(6) The number of standard credits generated by the refinery or
importer under Sec. 80.1290, separately by transferor (if applicable),
and by year of generation;
(7) The number of credits used, separately by generating facility
and year of generation;
(8) If any credits were obtained from, or transferred to, other
parties, for each other party, its name, its EPA refinery or importer
registration number, and the number of credits obtained from, or
transferred to, the other party;
(9) The number of credits that expired at the end of the averaging
period, separately by generating facility and year of generation;
(10) The number of credits that will be carried over into the
subsequent averaging period, separately by generating facility and year
of generation;
(11) Contracts or other commercial documents that establish each
transfer of credits from the transferor to the transferee; and
(12) A copy of all reports submitted to EPA under Sec. Sec.
80.1352 and 80.1354, however, duplicate records are not required.
(c) Length of time records shall be kept. The records required by
this section shall be kept for five years from the end of the annual
averaging period during which they were created, or seven years for
records pertaining to credits traded to a small refiner in accordance
with Sec. 80.1295(d)(3), except where longer record retention is
required elsewhere in this subpart.
(d) Make records available to EPA. On request by EPA, the records
specified in this section shall be provided to the Administrator. For
records that are electronically generated or maintained, the equipment
and software necessary to read the records shall be made available, or
upon approval by EPA, electronic records shall be converted to paper
documents which shall be provided to the Administrator.
Sec. 80.1352 What are the pre-compliance reporting requirements for
the gasoline benzene program?
(a) Except as provided in paragraph (c) of this section, a refiner
for each of its refineries shall submit the following information to
EPA beginning June 1, 2008, and annually thereafter through June 1,
2011, or through June 1, 2015, for small refiners:
(1) Changes to the information submitted in the company's
registration;
(2) Changes to the information submitted for any refinery or import
facility registration;
(3) Gasoline production. (i) An estimate of the average daily
volume (in gallons) of gasoline produced at each refinery. This
estimate shall include RFG, RBOB, conventional gasoline and
conventional gasoline blendstock that becomes finished gasoline solely
upon the addition of oxygenate but shall exclude gasoline exempted
pursuant to Sec. 80.1235;
(ii) These volume estimates must be provided for the periods of
June 1, 2007, through December 31, 2007, and calendar years 2008, 2009
and 2010.
(4) Benzene concentration. An estimate of the average gasoline
benzene
[[Page 15946]]
concentration corresponding to the time periods specified in paragraph
(a)(3) of this section.
(5) ABT Participation. If the refinery is expecting to participate
in the credit trading program under Sec. 80.1275 and/or Sec. 80.1290,
the actual or estimated, as applicable, numbers of early credits and
standard credits expected to be generated and/or used each year through
2015.
(6) Information on any project schedule by quarter of known or
projected completion date by the stage of the project, for example,
following the five project phases described in EPA's June 2002 Highway
Diesel Progress Review report (EPA420-R-02-016, http://www.epa.gov/otaq/regs/hd2007/420r02016.pdf): Strategic planning, Planning and
front-end engineering, Detailed engineering and permitting, Procurement
and Construction, and Commissioning and startup;
(7) Basic information regarding the selected technology pathway for
compliance (e.g., precursor re-routing or other technologies, revamp
vs. grassroots, etc.);
(8) Whether capital commitments have been made or are projected to
be made.
(b) The pre-compliance reports due in 2008 and succeeding years
must provide an update of the progress in each of these areas and
actual values where available.
(c) The pre-compliance reporting requirements of this section do
not apply to refineries exempted under the provisions of Sec.
80.1230(c)(1).
Sec. 80.1354 What are the reporting requirements for the gasoline
benzene program?
(a) Beginning with the 2011 annual averaging period, or the 2015
annual averaging period for small refiners, and continuing for each
averaging period thereafter, every refiner, for each of its refineries,
and every importer shall submit to EPA the information required in this
section, and such other information as EPA may require.
(b) Beginning with the 2007 annual averaging period for refiners
generating early credits pursuant to Sec. 80.1275 or Sec. 80.1290(b)
for approved small refiners, every refiner for each of its refineries
shall submit to EPA the information required in this section, and such
other information as EPA may require.
(c) Refiner and importer annual reports. Any refiner, for each of
its refineries, and any importer for the gasoline it imports, shall
submit a Gasoline Benzene Report containing the following information:
(1) Benzene volume percent and volume of any RFG, RBOB, and
conventional gasoline, separately by batch, produced by the refinery or
imported, and the sum of the volumes and the volume-weighted benzene
concentration, in volume percent;
(2) The annual average benzene concentration, per Sec. 80.1240,
Sec. 80.1275 or Sec. 80.1290, as applicable;
(3) Any benzene deficit from the previous reporting period, per
Sec. 80.1230(b);
(4) The number of banked benzene credits from the previous
reporting period;
(5) The number of benzene credits generated under Sec. 80.1275, if
applicable;
(6) The number of benzene credits generated under Sec. 80.1290, if
applicable;
(7) The number of benzene credits transferred to the refinery or
importer, per Sec. 80.1295(c), and the cost of the credits, if
applicable;
(8) The number of benzene credits transferred from the refinery or
importer, per Sec. 80.1295(c), and the price of the credits, if
applicable;
(9) The number of benzene credits terminated or expired;
(10) The compliance benzene value specified in Sec. 80.1240;
(11) The number of banked benzene credits;
(12) Projected credit generation through compliance year 2015; and
(13) Projected credit use through compliance year 2015.
(d) EPA may require submission of additional information to verify
compliance with the requirements of this subpart.
(e) The report required by paragraph (a) of this section shall be:
(1) Submitted on forms and following procedures specified by the
Administrator of EPA;
(2) Submitted to EPA by the last day of February each year for the
prior calendar year averaging period; and
(3) Signed and certified as correct by the owner or a responsible
corporate officer of the refiner or importer.
Attest Engagements
Sec. 80.1375 What are the attest engagement requirements for gasoline
benzene compliance?
In addition to the requirements for attest engagements that apply
to refiners and importers under Sec. Sec. 80.125 through 80.130,
80.410, and 80.1030, the attest engagements for refiners and importers
must include the following procedures and requirements each year.
(a) EPA early credit generation baseline years' reports.
(1) Obtain and read a copy of the refinery's or importer's annual
reports and batch reports filed with EPA for 2004 and 2005 which
contain gasoline benzene and gasoline volume information.
(2) Agree the yearly volumes of gasoline and benzene concentration,
in volume percent and benzene gallons, reported to EPA in the reports
specified in paragraph (a)(1) of this section with the inventory
reconciliation analysis under Sec. 80.128.
(3) Verify that the information in the refinery's or importer's
batch reports filed with EPA under Sec. Sec. 80.75 and 80.105, and any
laboratory test results, agree with the information contained in the
reports specified in paragraph (a)(1) of this section.
(4) Calculate the average benzene concentration for all of the
refinery's or importer's gasoline volume over 2004 and 2005 and verify
that those values agree with the values reported to EPA per Sec.
80.1285.
(b) Baseline for early credit generation. For the first attest
reporting period following approval of a benzene baseline:
(1) Obtain the EPA benzene baseline approval letter for the
refinery to determine the refinery's applicable benzene baseline under
Sec. 80.1285.
(2) Obtain a written representation from the company representative
stating the benzene value used as the refinery's baseline and agree
that number to paragraph (b)(1) of this section and to the reports to
EPA.
(c) Early credit generation. The following procedures shall be
completed for a refinery or importer that generates early benzene
credits per Sec. 80.1275:
(1) Obtain the baseline benzene concentration and gasoline volume
from paragraph (a)(4) of this section.
(2) Obtain the annual benzene report per Sec. 80.1354.
(3) If the benzene value under paragraph (c)(2) of this section is
at least 10 percent less than value in paragraph (c)(1) of this
section, compute and report as a finding the difference according to
Sec. 80.1275.
(4) Compute and report as a finding the total number of benzene
credits generated by multiplying the value calculated in paragraph
(c)(3) of this section by the volume of gasoline listed in the report
specified in paragraph (c)(2) of this section, and agree this number
with the number reported to EPA.
(d) Standard credit generation. The following procedures shall be
completed for a refinery or importer that generates benzene credits per
Sec. 80.1290:
[[Page 15947]]
(1) Obtain the annual average benzene value from the annual benzene
report per Sec. 80.1285.
(2) If the annual average benzene value under paragraph (d)(1) of
this section is less than 0.62 percent by volume, compute and report as
a finding the difference according to Sec. 80.1290.
(3) Compute and report as a finding the total number of benzene
credits generated by multiplying the value calculated in paragraph
(d)(2) of this section by the volume of gasoline listed in the report
specified in paragraph (d)(1) of this section, and agree this number
with the number reported to EPA.
(e) Credits required. The following attest procedures shall be
completed for refineries and importers:
(1) Obtain the annual average benzene concentration and volume from
the annual benzene report per Sec. 80.1285.
(2) If the value in paragraph (e)(1) of this section is greater
than 0.62 percent by volume, compute and report as a finding the
difference between 0.62 percent by volume and the value in paragraph
(e)(1) of this section.
(3) Compute and report as a finding the total benzene credits
required by multiplying the value in paragraph (e)(2) of this section
times the volume of gasoline in paragraph (e)(1) of this section, and
agree with the report to EPA.
(4) Obtain the refiner's or importer's representation as to the
portion of the deficit under paragraph (e)(3) of this section that was
resolved with credits, or that was carried forward as a deficit under
Sec. 80.1230(b), and agree with the report to EPA.
(f) Credit purchases and sales. The following attest procedures
shall be completed for a refinery or importer that is a transferor or
transferee of credits during an averaging period:
(1) Obtain contracts or other documents for all credits transferred
to another refinery or importer during the year being reviewed; compute
and report as a finding the number and year of creation of credits
represented in these documents as being transferred; and agree with the
report to EPA.
(2) Obtain contracts or other documents for all credits received
during the year being reviewed; compute and report as a finding the
number and year of creation of credits represented in these documents
as being received; and agree with the report to EPA.
(g) Credit reconciliation. The following attest procedures shall be
completed each year credits were in the refiner's or importer's
possession at any time during the year:
(1) Obtain the credits remaining or the credit deficit from the
previous year from the refiner's or importer's report to EPA for the
previous year.
(2) Compute and report as a finding the net credits remaining at
the conclusion of the year being reviewed by totaling:
(i) Credits remaining from the previous year; plus
(ii) Credits generated under paragraphs (c) and (d) of this
section; plus
(iii) Credits purchased under paragraph (f) of this section; minus
(iv) Credits sold under paragraph (f) of this section; minus
(v) Credits used under paragraphs (e) of this section; minus
(vi) Credits expired; minus
(vii) Credit deficit from the previous year.
(3) Agree the credits remaining or the credit deficit at the
conclusion of the year being reviewed with the report to EPA.
(4) If the refinery or importer had a credit deficit for both the
previous year and the year being reviewed, report this fact as a
finding.
Violations and Penalties
Sec. 80.1400 What acts are prohibited under the gasoline benzene
program?
No person shall:
(a) Averaging violation. Produce or import gasoline subject to this
subpart that does not comply with the applicable benzene average
standard requirement under Sec. 80.1230.
(b) Causing an averaging violation. Cause another person to commit
an act in violation of paragraph (a) of this section.
(c) Fail to meet the recordkeeping and reporting requirements, or
any other requirements of this subpart.
Sec. 80.1405 What evidence may be used to determine compliance with
the prohibitions and requirements of this subpart and liability for
violations of this subpart?
(a) Compliance with the benzene standard of this subpart shall be
determined based on the benzene concentration of the gasoline, measured
using the methodologies specified in Sec. 80.46(e). Any evidence or
information, including the exclusive use of such evidence or
information, may be used to establish the benzene concentration of the
gasoline if the evidence or information is relevant to whether the
benzene concentration of the gasoline would have been in compliance
with the standard if the appropriate sampling and testing methodologies
had been correctly performed. Such evidence may be obtained from any
source or location and may include, but is not limited to, test results
using methods other than those specified in Sec. 80.46(e), business
records and commercial documents.
(b) Determinations of compliance with the requirements of this
subpart other than the benzene standard, and determinations of
liability for any violation of this subpart, may be based on
information from any source or location. Such information may include,
but is not limited to, business records and commercial documents.
Sec. 80.1410 Who is liable for violations under the gasoline benzene
program?
(a) Persons liable for violations of prohibited acts.
(1) Averaging violation. Any refiner or importer that violates
Sec. 80.1400(a) is liable for a violation of Sec. 80.1400(a).
(2) Causing an averaging violation. Any person that causes another
party to violate Sec. 80.1400(a) is liable for a violation of Sec.
80.1400(b).
(3) Parent corporation liability. Any parent corporation is liable
for any violations of this subpart that are committed by any of its
wholly-owned subsidiaries.
(4) Joint venture and joint owner liability. Each partner to a
joint venture, or each owner of a facility owned by two or more owners,
is jointly and severally liable for any violation of this subpart that
occurs at the joint venture facility or facility that is owned by the
joint owners, or that is committed by the joint venture operation or
any of the joint owners of the facility.
(b) Persons liable for failure to meet other provisions of this
subpart.
(1) Any person that fails to meet a provision of this subpart not
addressed in paragraph (a) of this section is liable for a violation of
that provision.
(2) Any person that caused another person to fail to meet a
requirement of this subpart not addressed in paragraph (a) of this
section, is liable for causing a violation of that provision.
Sec. 80.1415 What penalties apply under the gasoline benzene program?
(a) Any person liable for a violation under Sec. 80.1410 is
subject to civil penalties as specified in sections 205 and 211(d) of
the Clean Air Act for every day of each such violation and the amount
of economic benefit or savings resulting from each violation.
(b) Any person liable under Sec. 80.1400(a) for a violation of the
applicable benzene average standard or causing another person to
violate the requirement during any averaging period, is subject to a
separate day of violation for each and every day in the averaging
period. Any person liable
[[Page 15948]]
under Sec. 80.1410(b) for a failure to fulfill any requirement of
credit generation, transfer, use, banking, or deficit carry-forward
correction is subject to a separate violation for each and every day in
the averaging period in which invalid credits are generated, banked,
transferred or used.
(c) Any person liable under Sec. 80.1410(b) for failure to meet,
or causing a failure to meet, a provision of this subpart is liable for
a separate day of violation for each and every day such provision
remains unfulfilled.
Foreign Refiners
Sec. 80.1420 What are the additional requirements under this subpart
for gasoline produced at foreign refineries?
(a) Definitions. (1) A foreign refinery is a refinery that is
located outside the United States, the Commonwealth of Puerto Rico, the
Virgin Islands, Guam, American Samoa, and the Commonwealth of the
Northern Mariana Islands (collectively referred to in this section as
``the United States'').
(2) A foreign refiner is a person that meets the definition of
refiner under Sec. 80.2(i) for a foreign refinery.
(3) Benzene-FRGAS means gasoline produced at a foreign refinery
that has been assigned an individual refinery benzene baseline under
Sec. 80.1285, has been approved as a small refiner under Sec.
80.1340, or has been granted temporary relief under Sec. 80.1335, and
that is imported into the United States.
(4) Non-Benzene-FRGAS means
(i) Gasoline meeting any of the conditions specified in paragraph
(a)(3) of this section that is not imported into the United States.
(ii) Gasoline meeting any of the conditions specified in paragraph
(a)(3) of this section during a year when the foreign refiner has opted
to not participate in the Benzene-FRGAS program under paragraph (c)(3)
of this section.
(iii) Gasoline produced at a foreign refinery that has not been
assigned an individual refinery benzene baseline under Sec. 80.1285,
or that has not been approved as a small refiner under Sec. 80.1340,
or that has not been granted temporary relief under Sec. 80.1335.
(5) Certified Benzene-FRGAS means Benzene-FRGAS the foreign refiner
intends to include in the foreign refinery's benzene compliance
calculations under Sec. 80.1240 or credit calculations under Sec.
80.1275 and does include in these calculations when reported to EPA.
(7) Non-Certified Benzene-FRGAS means Benzene-FRGAS that is not
Certified Benzene-FRGAS.
(b) Baseline for early credits. For any foreign refiner to obtain
approval under the benzene foreign refiner program of this subpart for
any refinery in order to generate early credits under Sec. 80.1275, it
must apply for approval under the applicable provisions of this
subpart.
(1) The refiner shall follow the procedures, applicable to volume
baselines in Sec. Sec. 80.91 through 80.93 to establish the volume of
gasoline that was produced at the refinery and imported into the United
States during the applicable years for purposes of establishing a
baseline under Sec. 80.1280 for applicable fuels produced for use in
the United States.
(2) In making determinations for foreign refinery baselines EPA
will consider all information supplied by a foreign refiner, and in
addition may rely on any and all appropriate assumptions necessary to
make such determinations.
(3) Where a foreign refiner submits a petition that is incomplete
or inadequate to establish an accurate baseline, and the refiner fails
to correct this deficiency after a request for more information, EPA
will not assign an individual refinery baseline.
(c) General requirements for Benzene-FRGAS foreign refiners. A
foreign refiner of a refinery that is approved under the benzene
foreign refiner program of this subpart must designate each batch of
gasoline produced at the foreign refinery that is exported to the
United States as either Certified Benzene-FRGAS or as Non-Certified
Benzene-FRGAS, except as provided in paragraph (c)(3) of this section.
(1) In the case of Certified Benzene-FRGAS, the foreign refiner
must meet all requirements that apply to refiners under this subpart.
(2) In the case of Non-Certified Benzene-FRGAS, the foreign refiner
shall meet all the following requirements:
(i) The designation requirements in this section;
(ii) The recordkeeping requirements in this section and in Sec.
80.1350;
(iii) The reporting requirements in this section and in Sec. Sec.
80.1352 and 80.1354;
(iv) The product transfer document requirements in this section;
(v) The prohibitions in this section and in Sec. 80.1400; and
(vi) The independent audit requirements in this section and in
Sec. 80.1375.
(3)(i) Any foreign refiner that generates early benzene credits
under Sec. 80.1275 shall designate all Benzene-FRGAS as Certified
Benzene-FRGAS for any year that such credits are generated.
(ii) Any foreign refiner that has been approved to produce gasoline
subject to the benzene foreign refiner program for a foreign refinery
under this subpart may elect to classify no gasoline imported into the
United States as Benzene-FRGAS provided the foreign refiner notifies
EPA of the election no later than November 1 preceding the beginning of
the next compliance period.
(iii) An election under paragraph (c)(3)(ii) of this section shall
be for a 12 month compliance period and apply to all gasoline that is
produced by the foreign refinery that is imported into the United
States, and shall remain in effect for each succeeding year unless and
until the foreign refiner notifies EPA of the termination of the
election. The change in election shall take effect at the beginning of
the next annual compliance period.
(d) Designation, product transfer documents, and foreign refiner
certification. (1) Any foreign refiner of a foreign refinery that has
been approved by EPA to produce gasoline subject to the benzene foreign
refiner program must designate each batch of Benzene-FRGAS as such at
the time the gasoline is produced, unless the refiner has elected to
classify no gasoline exported to the United States as Benzene-FRGAS
under paragraph (c)(3) of this section.
(2) On each occasion when any person transfers custody or title to
any Benzene-FRGAS prior to its being imported into the United States,
it must include the following information as part of the product
transfer document information:
(i) Designation of the gasoline as Certified Benzene-FRGAS or as
Non-Certified Benzene-FRGAS; and
(ii) The name and EPA refinery registration number of the refinery
where the Benzene-FRGAS was produced.
(3) On each occasion when Benzene-FRGAS is loaded onto a vessel or
other transportation mode for transport to the United States, the
foreign refiner shall prepare a certification for each batch of the
Benzene-FRGAS that meets the following requirements.
(i) The certification shall include the report of the independent
third party under paragraph (f) of this section, and the following
additional information:
(A) The name and EPA registration number of the refinery that
produced the Benzene-FRGAS;
(B) The identification of the gasoline as Certified Benzene-FRGAS
or Non-Certified Benzene-FRGAS;
(C) The volume of Benzene-FRGAS being transported, in gallons;
[[Page 15949]]
(D) In the case of Certified Benzene-FRGAS:
(1) The benzene content as determined under paragraph (f) of this
section, and the applicable designations stated in paragraph (d)(2)(i)
of this section; and
(2) A declaration that the Benzene-FRGAS is being included in the
applicable compliance calculations required by EPA under this subpart.
(ii) The certification shall be made part of the product transfer
documents for the Benzene-FRGAS.
(e) Transfers of Benzene-FRGAS to non-United States markets. The
foreign refiner is responsible to ensure that all gasoline classified
as Benzene-FRGAS is imported into the United States. A foreign refiner
may remove the Benzene-FRGAS classification, and the gasoline need not
be imported into the United States, but only if:
(1) The foreign refiner excludes:
(i) The volume of gasoline from the refinery's compliance report
under Sec. 80.1354; and
(ii) In the case of Certified Benzene-FRGAS, the volume of the
gasoline from the compliance report under Sec. 80.1354.
(2) The foreign refiner obtains sufficient evidence in the form of
documentation that the gasoline was not imported into the United
States.
(f) Load port independent sampling, testing and refinery
identification. (1) On each occasion that Benzene-FRGAS is loaded onto
a vessel for transport to the United States a foreign refiner shall
have an independent third party:
(i) Inspect the vessel prior to loading and determine the volume of
any tank bottoms;
(ii) Determine the volume of Benzene-FRGAS loaded onto the vessel
(exclusive of any tank bottoms before loading);
(iii) Obtain the EPA-assigned registration number of the foreign
refinery;
(iv) Determine the name and country of registration of the vessel
used to transport the Benzene-FRGAS to the United States; and
(v) Determine the date and time the vessel departs the port serving
the foreign refinery.
(2) On each occasion that Certified Benzene-FRGAS is loaded onto a
vessel for transport to the United States a foreign refiner shall have
an independent third party:
(i) Collect a representative sample of the Certified Benzene-FRGAS
from each vessel compartment subsequent to loading on the vessel and
prior to departure of the vessel from the port serving the foreign
refinery;
(ii) Determine the benzene content value for each compartment using
the methodology as specified in Sec. 80.46(e) by one of the following:
(A) The third party analyzing each sample; or
(B) The third party observing the foreign refiner analyze the
sample;
(iii) Review original documents that reflect movement and storage
of the Certified Benzene-FRGAS from the refinery to the load port, and
from this review determine:
(A) The refinery at which the Benzene-FRGAS was produced; and
(B) That the Benzene-FRGAS remained segregated from:
(1) Non-Benzene-FRGAS and Non-Certified Benzene-FRGAS; and
(2) Other Certified Benzene-FRGAS produced at a different refinery.
(3) The independent third party shall submit a report:
(i) To the foreign refiner containing the information required
under paragraphs (f)(1) and (f)(2) of this section, to accompany the
product transfer documents for the vessel; and
(ii) To the Administrator containing the information required under
paragraphs (f)(1) and (f)(2) of this section, within thirty days
following the date of the independent third party's inspection. This
report shall include a description of the method used to determine the
identity of the refinery at which the gasoline was produced, assurance
that the gasoline remained segregated as specified in paragraph (n)(1)
of this section, and a description of the gasoline's movement and
storage between production at the source refinery and vessel loading.
(4) The independent third party must:
(i) Be approved in advance by EPA, based on a demonstration of
ability to perform the procedures required in this paragraph (f);
(ii) Be independent under the criteria specified in Sec.
80.65(e)(2)(iii); and
(iii) Sign a commitment that contains the provisions specified in
paragraph (i) of this section with regard to activities, facilities and
documents relevant to compliance with the requirements of this
paragraph (f).
(g) Comparison of load port and port of entry testing. (1)(i) Any
foreign refiner and any United States importer of Certified Benzene-
FRGAS shall compare the results from the load port testing under
paragraph (f) of this section, with the port of entry testing as
reported under paragraph (o) of this section, for the volume of
gasoline and the benzene content value; except as specified in
paragraph (g)(1)(ii) of this section.
(ii) Where a vessel transporting Certified Benzene-FRGAS off loads
this gasoline at more than one United States port of entry, and the
conditions of paragraph (g)(2)(i) of this section are met at the first
United States port of entry, the requirements of paragraph (g)(2) of
this section do not apply at subsequent ports of entry if the United
States importer obtains a certification from the vessel owner that
meets the requirements of paragraph(s) of this section, that the vessel
has not loaded any gasoline or blendstock between the first United
States port of entry and the subsequent port of entry.
(2)(i) The requirements of this paragraph (g)(2) apply if--
(A) The temperature-corrected volumes determined at the port of
entry and at the load port differ by more than one percent; or
(B) The benzene content value determined at the port of entry is
higher than the benzene content value determined at the load port, and
the amount of this difference is greater than the reproducibility
amount specified for the port of entry test result by the American
Society of Testing and Materials (ASTM) for the test method specified
at Sec. 80.46(e).
(ii) The United States importer and the foreign refiner shall treat
the gasoline as Non-Certified Benzene-FRGAS, and the foreign refiner
shall exclude the gasoline volume from its gasoline volumes
calculations and benzene standard designations under this subpart.
(h) Attest requirements. Refiners, for each annual compliance
period, must arrange to have an attest engagement performed of the
underlying documentation that forms the basis of any report required
under this subpart. The attest engagement must comply with the
procedures and requirements that apply to refiners under Sec. Sec.
80.125 through 80.130, or other applicable attest engagement
provisions, and must be submitted to the Administrator of EPA by August
31 of each year for the prior annual compliance period. The following
additional procedures shall be carried out for any foreign refiner of
Benzene-FRGAS.
(1) The inventory reconciliation analysis under Sec. 80.128(b) and
the tender analysis under Sec. 80.128(c) shall include Non-Benzene-
FRGAS.
(2) Obtain separate listings of all tenders of Certified Benzene-
FRGAS and of Non-Certified Benzene-FRGAS, and obtain separate listings
of Certified Benzene-FRGAS based on whether it is small refiner
gasoline, gasoline produced through the use of credits, or other
applicable designation under this subpart. Agree the total volume of
tenders from the listings to the gasoline inventory reconciliation
analysis in Sec. 80.128(b), and to the volumes
[[Page 15950]]
determined by the third party under paragraph (f)(1) of this section.
(3) For each tender under paragraph (h)(2) of this section, where
the gasoline is loaded onto a marine vessel, report as a finding the
name and country of registration of each vessel, and the volumes of
Benzene-FRGAS loaded onto each vessel.
(4) Select a sample from the list of vessels identified in
paragraph (h)(3) of this section used to transport Certified Benzene-
FRGAS, in accordance with the guidelines in Sec. 80.127, and for each
vessel selected perform the following:
(i) Obtain the report of the independent third party, under
paragraph (f) of this section, and of the United States importer under
paragraph (o) of this section.
(A) Agree the information in these reports with regard to vessel
identification, gasoline volumes and benzene content test results.
(B) Identify, and report as a finding, each occasion the load port
and port of entry benzene content and volume results differ by more
than the amounts allowed in paragraph (g) of this section, and
determine whether the foreign refiner adjusted its refinery
calculations as required in paragraph (g) of this section.
(ii) Obtain the documents used by the independent third party to
determine transportation and storage of the Certified Benzene-FRGAS
from the refinery to the load port, under paragraph (f) of this
section. Obtain tank activity records for any storage tank where the
Certified Benzene-FRGAS is stored, and pipeline activity records for
any pipeline used to transport the Certified Benzene-FRGAS, prior to
being loaded onto the vessel. Use these records to determine whether
the Certified Benzene-FRGAS was produced at the refinery that is the
subject of the attest engagement, and whether the Certified Benzene-
FRGAS was mixed with any Non-Certified Benzene-FRGAS, Non-Benzene-
FRGAS, or any Certified Benzene-FRGAS produced at a different refinery.
(5) Select a sample from the list of vessels identified in
paragraph (h)(3) of this section used to transport Certified and Non-
Certified Benzene-FRGAS, in accordance with the guidelines in Sec.
80.127, and for each vessel selected perform the following:
(i) Obtain a commercial document of general circulation that lists
vessel arrivals and departures, and that includes the port and date of
departure of the vessel, and the port of entry and date of arrival of
the vessel.
(ii) Agree the vessel's departure and arrival locations and dates
from the independent third party and United States importer reports to
the information contained in the commercial document.
(6) Obtain separate listings of all tenders of Non-Benzene-FRGAS,
and perform the following:
(i) Agree the total volume and benzene content of tenders from the
listings to the gasoline inventory reconciliation analysis in Sec.
80.128(b).
(ii) Obtain a separate listing of the tenders under this paragraph
(h)(6) where the gasoline is loaded onto a marine vessel. Select a
sample from this listing in accordance with the guidelines in Sec.
80.127, and obtain a commercial document of general circulation that
lists vessel arrivals and departures, and that includes the port and
date of departure and the ports and dates where the gasoline was off
loaded for the selected vessels. Determine and report as a finding the
country where the gasoline was off loaded for each vessel selected.
(7) In order to complete the requirements of this paragraph (h) an
auditor shall:
(i) Be independent of the foreign refiner;
(ii) Be licensed as a Certified Public Accountant in the United
States and a citizen of the United States, or be approved in advance by
EPA based on a demonstration of ability to perform the procedures
required in Sec. Sec. 80.125 through 80.130 and this paragraph (h);
and
(iii) Sign a commitment that contains the provisions specified in
paragraph (i) of this section with regard to activities and documents
relevant to compliance with the requirements of Sec. Sec. 80.125
through 80.130 and this paragraph (h).
(i) Foreign refiner commitments. Any foreign refiner shall commit
to and comply with the provisions contained in this paragraph (i) as a
condition to being approved for as a foreign refiner under this
subpart.
(1) Any United States Environmental Protection Agency inspector or
auditor must be given full, complete and immediate access to conduct
inspections and audits of the foreign refinery.
(i) Inspections and audits may be either announced in advance by
EPA, or unannounced.
(ii) Access will be provided to any location where:
(A) Gasoline is produced;
(B) Documents related to refinery operations are kept;
(C) Gasoline or blendstock samples are tested or stored; and
(D) Benzene-FRGAS is stored or transported between the foreign
refinery and the United States, including storage tanks, vessels and
pipelines.
(iii) Inspections and audits may be by EPA employees or contractors
to EPA.
(iv) Any documents requested that are related to matters covered by
inspections and audits must be provided to an EPA inspector or auditor
on request.
(v) Inspections and audits by EPA may include review and copying of
any documents related to:
(A) Refinery baseline establishment, if applicable, including the
volume and benzene content of gasoline; transfers of title or custody
of any gasoline or blendstocks whether Benzene-FRGAS or Non-Benzene-
FRGAS, produced at the foreign refinery during the period January 1,
2004 through December 31, 2005, and any work papers related to refinery
baseline establishment;
(B) The volume and benzene content of Benzene-FRGAS;
(C) The proper classification of gasoline as being Benzene-FRGAS or
as not being Benzene-FRGAS, or as Certified Benzene-FRGAS or as Non-
Certified Benzene-FRGAS, and all other relevant designations under this
subpart;
(D) Transfers of title or custody to Benzene-FRGAS;
(E) Sampling and testing of Benzene-FRGAS;
(F) Work performed and reports prepared by independent third
parties and by independent auditors under the requirements of this
section, including work papers; and
(G) Reports prepared for submission to EPA, and any work papers
related to such reports.
(vi) Inspections and audits by EPA may include taking samples of
gasoline, gasoline additives or blendstock, and interviewing employees.
(vii) Any employee of the foreign refiner must be made available
for interview by the EPA inspector or auditor, on request, within a
reasonable time period.
(viii) English language translations of any documents must be
provided to an EPA inspector or auditor, on request, within 10 working
days.
(ix) English language interpreters must be provided to accompany
EPA inspectors and auditors, on request.
(2) An agent for service of process located in the District of
Columbia shall be named, and service on this agent constitutes service
on the foreign refiner or any employee of the foreign refiner for any
action by EPA or otherwise by the United States related to the
requirements of this subpart.
(3) The forum for any civil or criminal enforcement action related
to the
[[Page 15951]]
provisions of this section for violations of the Clean Air Act or
regulations promulgated thereunder shall be governed by the Clean Air
Act, including the EPA administrative forum where allowed under the
Clean Air Act.
(4) United States substantive and procedural laws shall apply to
any civil or criminal enforcement action against the foreign refiner or
any employee of the foreign refiner related to the provisions of this
section.
(5) Submitting a petition for participation in the benzene foreign
refiner program or producing and exporting gasoline under any such
program, and all other actions to comply with the requirements of this
subpart relating to participation in any benzene foreign refiner
program, or to establish an individual refinery gasoline benzene
baseline under this subpart constitute actions or activities covered by
and within the meaning of the provisions of 28 U.S.C. 1605(a)(2), but
solely with respect to actions instituted against the foreign refiner,
its agents and employees in any court or other tribunal in the United
States for conduct that violates the requirements applicable to the
foreign refiner under this subpart, including conduct that violates the
False Statements Accountability Act of 1996 (18 U.S.C. 1001) and
section 113(c)(2) of the Clean Air Act (42 U.S.C. 7413).
(6) The foreign refiner, or its agents or employees, will not seek
to detain or to impose civil or criminal remedies against EPA
inspectors or auditors, whether EPA employees or EPA contractors, for
actions performed within the scope of EPA employment related to the
provisions of this section.
(7) The commitment required by this paragraph (i) shall be signed
by the owner or president of the foreign refiner business.
(8) In any case where Benzene-FRGAS produced at a foreign refinery
is stored or transported by another company between the refinery and
the vessel that transports the Benzene-FRGAS to the United States, the
foreign refiner shall obtain from each such other company a commitment
that meets the requirements specified in paragraphs (i)(1) through (7)
of this section, and these commitments shall be included in the foreign
refiner's petition to participate in any benzene foreign refiner
program.
(j) Sovereign immunity. By submitting a petition for participation
in any benzene foreign refiner program under this subpart (and
baseline, if applicable) under this section, or by producing and
exporting gasoline to the United States under any such program, the
foreign refiner, and its agents and employees, without exception,
become subject to the full operation of the administrative and judicial
enforcement powers and provisions of the United States without
limitation based on sovereign immunity, with respect to actions
instituted against the foreign refiner, its agents and employees in any
court or other tribunal in the United States for conduct that violates
the requirements applicable to the foreign refiner under this subpart,
including conduct that violates the False Statements Accountability Act
of 1996 (18 U.S.C. 1001) and section 113(c)(2) of the Clean Air Act (42
U.S.C. 7413).
(k) Bond posting. Any foreign refiner shall meet the requirements
of this paragraph (k) as a condition to approval as benzene foreign
refiner under this subpart.
(1) The foreign refiner shall post a bond of the amount calculated
using the following equation:
Bond = G x $ 0.01
Where:
Bond = amount of the bond in U.S. dollars
G = the largest volume of gasoline produced at the foreign refinery and
exported to the United States, in gallons, during a single calendar
year among the most recent of the following calendar years, up to a
maximum of five calendar years: the calendar year immediately preceding
the date the refinery's baseline petition is submitted, the calendar
year the baseline petition is submitted, and each succeeding calendar
year.
(2) Bonds shall be posted by:
(i) Paying the amount of the bond to the Treasurer of the United
States;
(ii) Obtaining a bond in the proper amount from a third party
surety agent that is payable to satisfy United States administrative or
judicial judgments against the foreign refiner, provided EPA agrees in
advance as to the third party and the nature of the surety agreement;
or
(iii) An alternative commitment that results in assets of an
appropriate liquidity and value being readily available to the United
States, provided EPA agrees in advance as to the alternative
commitment.
(3) Bonds posted under this paragraph (k) shall--
(i) Be used to satisfy any judicial judgment that results from an
administrative or judicial enforcement action for conduct in violation
of this subpart, including where such conduct violates the False
Statements Accountability Act of 1996 (18 U.S.C. 1001) and section
113(c)(2) of the Clean Air Act (42 U.S.C. 7413);
(ii) Be provided by a corporate surety that is listed in the United
States Department of Treasury Circular 570 ``Companies Holding
Certificates of Authority as Acceptable Sureties on Federal Bonds'';
and
(iii) Include a commitment that the bond will remain in effect for
at least five years following the end of latest annual reporting period
that the foreign refiner produces gasoline pursuant to the requirements
of this subpart.
(4) On any occasion a foreign refiner bond is used to satisfy any
judgment, the foreign refiner shall increase the bond to cover the
amount used within 90 days of the date the bond is used.
(5) If the bond amount for a foreign refiner increases, the foreign
refiner shall increase the bond to cover the shortfall within 90 days
of the date the bond amount changes. If the bond amount decreases, the
foreign refiner may reduce the amount of the bond beginning 90 days
after the date the bond amount changes.
(l) [Reserved]
(m) English language reports. Any report or other document
submitted to EPA by a foreign refiner shall be in English language, or
shall include an English language translation.
(n) Prohibitions. (1) No person may combine Certified Benzene-FRGAS
with any Non-Certified Benzene-FRGAS or Non-Benzene-FRGAS, and no
person may combine Certified Benzene-FRGAS with any Certified Benzene-
FRGAS produced at a different refinery, until the importer has met all
the requirements of paragraph (o) of this section, except as provided
in paragraph (e) of this section.
(2) No foreign refiner or other person may cause another person to
commit an action prohibited in paragraph (n)(1) of this section, or
that otherwise violates the requirements of this section.
(o) United States importer requirements. Any United States importer
shall meet the following requirements:
(1) Each batch of imported gasoline shall be classified by the
importer as being Benzene-FRGAS or as Non-Benzene-FRGAS, and each batch
classified as Benzene-FRGAS shall be further classified as Certified
Benzene-FRGAS or as Non-Certified Benzene-FRGAS.
(2) Gasoline shall be classified as Certified Benzene-FRGAS or as
Non-Certified Benzene-FRGAS according to the designation by the foreign
refiner if this designation is supported by product transfer documents
prepared by the foreign refiner as required in paragraph
[[Page 15952]]
(d) of this section, unless the gasoline is classified as Non-Certified
Benzene-FRGAS under paragraph (g) of this section. Additionally, the
importer shall comply with all requirements of this subpart applicable
to importers.
(3) For each gasoline batch classified as Benzene-FRGAS, any United
States importer shall perform the following procedures.
(i) In the case of both Certified and Non-Certified Benzene-FRGAS,
have an independent third party:
(A) Determine the volume of gasoline in the vessel;
(B) Use the foreign refiner's Benzene-FRGAS certification to
determine the name and EPA-assigned registration number of the foreign
refinery that produced the Benzene-FRGAS;
(C) Determine the name and country of registration of the vessel
used to transport the Benzene-FRGAS to the United States; and
(D) Determine the date and time the vessel arrives at the United
States port of entry.
(ii) In the case of Certified Benzene-FRGAS, have an independent
third party:
(A) Collect a representative sample from each vessel compartment
subsequent to the vessel's arrival at the United States port of entry
and prior to off loading any gasoline from the vessel;
(B) Obtain the compartment samples; and
(C) Determine the benzene content value of each compartment sample
using the methodology specified at 80.46(e) by the third party
analyzing the sample or by the third party observing the importer
analyze the sample.
(4) Any importer shall submit reports within 30 days following the
date any vessel transporting Benzene-FRGAS arrives at the United States
port of entry:
(i) To the Administrator containing the information determined
under paragraph (o)(3) of this section; and
(ii) To the foreign refiner containing the information determined
under paragraph (o)(3)(ii) of this section, and including
identification of the port at which the product was offloaded.
(5) Any United States importer shall meet all other requirements of
this subpart, for any imported gasoline that is not classified as
Certified Benzene-FRGAS under paragraph (o)(2) of this section.
(p) Truck imports of Certified Benzene-FRGAS produced at a foreign
refinery. (1) Any refiner whose Certified Benzene-FRGAS is transported
into the United States by truck may petition EPA to use alternative
procedures to meet the following requirements:
(i) Certification under paragraph (d)(5) of this section;
(ii) Load port and port of entry sampling and testing under
paragraphs (f) and (g) of this section;
(iii) Attest under paragraph (h) of this section; and
(iv) Importer testing under paragraph (o)(3) of this section.
(2) These alternative procedures must ensure Certified Benzene-
FRGAS remains segregated from Non-Certified Benzene-FRGAS and from Non-
Benzene-FRGAS until it is imported into the United States. The petition
will be evaluated based on whether it adequately addresses the
following:
(i) Provisions for monitoring pipeline shipments, if applicable,
from the refinery, that ensure segregation of Certified Benzene-FRGAS
from that refinery from all other gasoline;
(ii) Contracts with any terminals and/or pipelines that receive
and/or transport Certified Benzene-FRGAS, that prohibit the commingling
of Certified Benzene-FRGAS with any of the following:
(A) Other Certified Benzene-FRGAS from other refineries.
(B) All Non-Certified Benzene-FRGAS.
(C) All Non-Benzene-FRGAS;
(iii) Procedures for obtaining and reviewing truck loading records
and United States import documents for Certified Benzene-FRGAS to
ensure that such gasoline is only loaded into trucks making deliveries
to the United States;
(iv) Attest procedures to be conducted annually by an independent
third party that review loading records and import documents based on
volume reconciliation, or other criteria, to confirm that all Certified
Benzene-FRGAS remains segregated throughout the distribution system and
is only loaded into trucks for import into the United States.
(3) The petition required by this section must be submitted to EPA
along with the application for temporary refiner relief individual
refinery benzene standard under this subpart.
(q) Withdrawal or suspension of foreign refiner status. EPA may
withdraw or suspend a foreign refiner's benzene baseline or standard
approval for a foreign refinery where--
(1) A foreign refiner fails to meet any requirement of this
section;
(2) A foreign government fails to allow EPA inspections as provided
in paragraph (i)(1) of this section;
(3) A foreign refiner asserts a claim of, or a right to claim,
sovereign immunity in an action to enforce the requirements in this
subpart; or
(4) A foreign refiner fails to pay a civil or criminal penalty that
is not satisfied using the foreign refiner bond specified in paragraph
(k) of this section.
(r) Early use of a foreign refiner benzene baseline. (1) A foreign
refiner may begin using an individual refinery benzene baseline under
this subpart before EPA has approved the baseline, provided that:
(i) A baseline petition has been submitted as required in paragraph
(b) of this section;
(ii) EPA has made a provisional finding that the baseline petition
is complete;
(iii) The foreign refiner has made the commitments required in
paragraph (i) of this section;
(iv) The persons that will meet the independent third party and
independent attest requirements for the foreign refinery have made the
commitments required in paragraphs (f)(3)(iii) and (h)(7)(iii) of this
section; and
(v) The foreign refiner has met the bond requirements of paragraph
(k) of this section.
(2) In any case where a foreign refiner uses an individual refinery
baseline before final approval under paragraph (r)(1) of this section,
and the foreign refinery baseline values that ultimately are approved
by EPA are more stringent than the early baseline values used by the
foreign refiner, the foreign refiner shall recalculate its compliance,
ab initio, using the baseline values approved by the EPA, and the
foreign refiner shall be liable for any resulting violation of the
requirements of this subpart.
(s) Additional requirements for petitions, reports and
certificates. Any petition for approval to produce gasoline subject to
the benzene foreign refiner program, any alternative procedures under
paragraph (p) of this section, any report or other submission required
by paragraph (c), (f)(2), or (i) of this section, and any certification
under paragraph (d)(3) of this section shall be--
(1) Submitted in accordance with procedures specified by the
Administrator, including use of any forms that may be specified by the
Administrator.
(2) Be signed by the president or owner of the foreign refiner
company, or by that person's immediate designee, and shall contain the
following declaration:
I hereby certify: (1) That I have actual authority to sign on
behalf of and to bind [insert name of foreign refiner] with regard
to all statements contained herein; (2) that I am aware that the
information contained herein is being Certified, or submitted to the
United States Environmental Protection Agency, under the
requirements of 40 CFR part 80, subpart L, and that the information
is
[[Page 15953]]
material for determining compliance under these regulations; and (3)
that I have read and understand the information being Certified or
submitted, and this information is true, complete and correct to the
best of my knowledge and belief after I have taken reasonable and
appropriate steps to verify the accuracy thereof. I affirm that I
have read and understand the provisions of 40 CFR part 80, subpart
L, including 40 CFR 80.1420 apply to [insert name of foreign
refiner]. Pursuant to Clean Air Act section 113(c) and 18 U.S.C.
1001, the penalty for furnishing false, incomplete or misleading
information in this certification or submission is a fine of up to
$10,000 U.S., and/or imprisonment for up to five years.
PART 85--CONTROL OF AIR POLLUTION FROM MOBILE SOURCES
10. The authority citation for part 85 continues to read as
follows:
Authority: 42 U.S.C. 7401-7671q.
Subpart P--[Amended]
11. Section 85.1515 is amended by adding paragraphs (c)(2)(vii),
(c)(2)(viii), and (c)(8) to read as follows.
Sec. 85.1515 Emission standards and test procedures applicable to
imported nonconforming motor vehicles and motor vehicle engines.
* * * * *
(c) * * *
(2) * * *
(vii) Nonconforming LDV/LLDTs originally manufactured in OP years
2009 and later must meet the evaporative emission standards in Table
S09-1 in 40 CFR 86.1811-09(e). However, LDV/LLDTs originally
manufactured in OP years 2009 and 2010 and imported by ICIs who qualify
as small volume manufacturers as defined in 40 CFR 86.1838-01 are
exempt from the LDV/LLDT evaporative emission standards in Table S09-1
in 40 CFR 86.1811-09(e), but must comply with the Tier 2 evaporative
emission standards in Table S04-3 in 40 CFR 86.1811-04(e).
(viii) Nonconforming HLDTs and MDPVs originally manufactured in OP
years 2010 and later must meet the evaporative emission standards in
Table S09-1 in 40 CFR 86.1811-09(e). However, HLDTs and MDPVs
originally manufactured in OP years 2010 and 2011 and imported by ICIs,
who qualify as small volume manufacturers as defined in 40 CFR 86.1838-
01, are exempt from the HLDTs and MDPVs evaporative emission standards
in Table S09-1 in 40 CFR 86.1811-09(e), but must comply with the Tier 2
evaporative emission standards in Table S04-3 in 40 CFR 86.1811-04(e).
* * * * *
(8)(i) Nonconforming LDV/LLDTs originally manufactured in OP years
2010 and later must meet the cold temperature NHMC emission standards
in Table S10-1 in 40 CFR 86.1811-10(g).
(ii) Nonconforming HLDTs and MDPVs originally manufactured in OP
years 2012 and later must meet the cold temperature NHMC emission
standards in Table S10-1 in 40 CFR 86.1811-10(g).
(iii) ICIs, which qualify as small volume manufacturers, are exempt
from the cold temperature NMHC phase-in intermediate percentage
requirements described in 40 CFR 86.1811-10(g)(3). See 40 CFR 86.1811-
04(k)(5)(vi) and (vii).
(iv) As an alternative to the requirements of paragraphs (c)(8)(i)
and (ii) of this section, ICIs may elect to meet a cold temperature
NMHC family emission level below the cold temperature NMHC fleet
average standards specified in Table S10-1 of 40 CFR 86.1811-10 and
bank or sell credits as permitted in 40 CFR 86.1864-10. An ICI may not
meet a higher cold temperature NMHC family emission level than the
fleet average standards in Table S10-1 of 40 CFR 86.1811-10 as
specified in paragraphs (c)(8)(i) and (ii) of this section, unless it
demonstrates to the Administrator at the time of certification that it
has obtained appropriate and sufficient NMHC credits from another
manufacturer, or has generated them in a previous model year or in the
current model year and not traded them to another manufacturer or used
them to address other vehicles as permitted in 40 CFR 86.1864-10.
(v) Where an ICI desires to obtain a certificate of conformity
using a higher cold temperature NMHC family emission level than
specified in paragraphs (c)(8)(i) and (ii) of this section, but does
not have sufficient credits to cover vehicles imported under such
certificate, the Administrator may issue such certificate if the ICI
has also obtained a certificate of conformity for vehicles certified
using a cold temperature NMHC family emission level lower than that
required under paragraphs (c)(8)(i) and (ii) of this section. The ICI
may then import vehicles to the higher cold temperature NMHC family
emission level only to the extent that it has generated sufficient
credits from vehicles certified to a family emission level lower than
the cold temperature NMHC fleet average standard during the same model
year.
(vi) ICIs using cold temperature NMHC family emission levels higher
than the cold temperature NMHC fleet average standards specified in
paragraphs (c)(8)(i) and (ii) of this section must monitor their
imports so that they do not import more vehicles certified to such
family emission levels than their available credits can cover. ICIs
must not have a credit deficit at the end of a model year and are not
permitted to use the deficit carryforward provisions provided in 40 CFR
86.1864-10.
(vii) The Administrator may condition the certificates of
conformity issued to ICIs as necessary to ensure that vehicles subject
to this paragraph (c)(8) comply with the applicable cold temperature
NMHC fleet average standard for each model year.
* * * * *
PART 86--CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES
AND ENGINES
12. The authority citation for part 86 continues to read as
follows:
Authority: 42 U.S.C. 7401-7671q.
Subpart H--[Amended]
13. Section 86.701-94 is amended by revising paragraph (a) to read
as follows:
Sec. 86.701-94 General applicability.
(a) The provisions of this subpart apply to: 1994 through 2003
model year Otto-cycle and diesel light-duty vehicles; 1994 through 2003
model year Otto-cycle and diesel light-duty trucks; and 1994 and later
model year Otto-cycle and diesel heavy-duty engines; and 2001 and later
model year Otto-cycle heavy-duty vehicles and engines certified under
the provisions of subpart S of this part. The provisions of subpart B
of this part apply to this subpart. The provisions of Sec. 86.1811-
04(a)(5) and (p) apply to 2004 and later model year light-duty
vehicles, light-duty trucks, and medium duty passenger vehicles.
* * * * *
Subpart S--[Amended]
14. Section 86.1803-01 is amended by revising the definition of
``Banking'' and adding the definition for ``Fleet average cold
temperature NMHC standard'' to read as follows:
Sec. 86.1803-01 Definitions.
* * * * *
Banking means one of the following:
(1) The retention of NOX emission credits for complete
heavy-duty vehicles by the manufacturer generating the emission
credits, for use in future model year certification programs as
permitted by regulation.
[[Page 15954]]
(2) The retention of cold temperature non-methane hydrocarbon
(NMHC) emission credits for light-duty vehicles, light-duty trucks, and
medium-duty passenger vehicles by the manufacturer generating the
emission credits, for use in future model year certification programs
as permitted by regulation.
* * * * *
Fleet average cold temperature NMHC standard means, for light-duty
vehicles, light-duty trucks and medium-duty passenger vehicles, an NMHC
cold temperature standard imposed over an individual manufacturer's
total 50-State U.S. sales (or a fraction of total U.S. sales during
phase-in years), as ``U.S. sales'' is defined to include all national
sales, including points-of-first sale in California, of a given model
year. Manufacturers determine their compliance with such a standard by
averaging, on a sales-weighted basis, the individual NMHC ``Family
Emission Limits'' (FEL--as defined in this subpart) to which light-duty
vehicles, light-duty trucks and medium-duty passenger vehicles were
certified and sold for that model year.
* * * * *
15. Section 86.1805-04 is amended by adding paragraph (g) to read
as follows:
Sec. 86.1805-04 Useful life.
* * * * *
(g) Where cold temperature NMHC standards are applicable, the
useful life requirement for compliance with the cold temperature NMHC
standard only is as follows:
(1) For LDV/LLDTs, 10 years or 120,000 miles, whichever occurs
first.
(2) For HLDT/MDPVs, 11 years or 120,000 miles, whichever occurs
first.
16. A new Sec. 86.1809-10 is added to Subpart S to read as
follows:
Sec. 86.1809-10 Prohibition of defeat devices.
(a) No new light-duty vehicle, light-duty truck, medium-duty
passenger vehicle, or complete heavy-duty vehicle shall be equipped
with a defeat device.
(b) The Administrator may test or require testing on any vehicle at
a designated location, using driving cycles and conditions which may
reasonably be expected to be encountered in normal operation and use,
for the purposes of investigating a potential defeat device.
(c) For cold temperature CO and cold temperature NMHC emission
control, the Administrator will use a guideline to determine the
appropriateness of the CO and NMHC emission control at ambient
temperatures between 25 [deg]F (4 [deg]C) (the upper bound of the cold
test range) and 68 [deg]F (20 [deg]C) (the lower bound of the FTP
range). The guideline for CO emission congruity across the intermediate
temperature range is the linear interpolation between the CO standard
applicable at 25 [deg]F (4 [deg]C) and the CO standard applicable at 68
[deg]F (20 [deg]C). The guideline for NMHC emission congruity across
the intermediate temperature range is the linear interpolation between
the NMHC FEL applicable at 25 [deg]F (4 [deg]C) and the Tier 2 NMOG
standard to which the vehicle was certified at 68 [deg]F (20 [deg]C),
where the intermediate temperature NMHC level is rounded to the nearest
hundredth for comparison to the interpolated line. For vehicles that
exceed this CO emissions guideline or this NMHC emissions guideline
upon intermediate temperature cold testing:
(1) If the CO emission level is greater than the 20 [deg]F (7
[deg]C) emission standard, the vehicle will automatically be considered
to be equipped with a defeat device without further investigation. If
the intermediate temperature NMHC emission level, rounded to the
nearest hundredth, is greater than the 20 [deg]F (7 [deg]C) FEL, the
vehicle will automatically be considered to be equipped with a defeat
device without further investigation.
(2) If the CO emission level does not exceed the 20 [deg]F emission
standard, the Administrator may investigate the vehicle design for the
presence of a defeat device under paragraph (d) of this section. If the
intermediate temperature NMHC emission level, rounded to the nearest
hundredth, does not exceed the 20 [deg]F FEL, the Administrator may
investigate the vehicle design for the presence of a defeat device
under paragraph (d) of this section.
(d) For vehicle designs designated by the Administrator to be
investigated for possible defeat devices:
(1) The manufacturer must show to the satisfaction of the
Administrator that the vehicle design does not incorporate strategies
that unnecessarily reduce emission control effectiveness exhibited
during the Federal or Supplemental Federal emissions test procedures
(FTP or SFTP) when the vehicle is operated under conditions which may
reasonably be expected to be encountered in normal operation and use.
(2) The following information requirements apply:
(i) Upon request by the Administrator, the manufacturer will
provide an explanation containing detailed information regarding test
programs, engineering evaluations, design specifications, calibrations,
on-board computer algorithms, and design strategies incorporated for
operation both during and outside of the Federal emission test
procedure.
(ii) For purposes of investigations of possible cold temperature CO
or cold temperature NMHC defeat devices under this paragraph (d), the
manufacturer shall provide an explanation which must show, to the
satisfaction of the Administrator, that CO emissions and NMHC emissions
are reasonably controlled in reference to the linear guideline across
the intermediate temperature range.
(e) For each test group of Tier 2 LDV/LLDTs and HLDT/MDPVs and
interim non-Tier 2 LDV/LLDTs and HLDT/MDPVs the manufacturer must
submit, with the Part II certification application, an engineering
evaluation demonstrating to the satisfaction of the Administrator that
a discontinuity in emissions of non-methane organic gases, carbon
monoxide, oxides of nitrogen and formaldehyde measured on the Federal
Test Procedure (subpart B of this part) does not occur in the
temperature range of 20 to 86 degrees F. For diesel vehicles, the
engineering evaluation must also include particulate emissions.
17. A new Sec. 86.1810-09 is added to Subpart S to read as
follows:
Sec. 86.1810-09 General standards; increase in emissions; unsafe
condition; waivers.
Section 86.1810-09 includes text that specifies requirements that
differ from Sec. 86.1810-01. Where a paragraph in Sec. 86.1810-01 is
identical and applicable to Sec. 86.1810-09, this may be indicated by
specifying the corresponding paragraph and the statement ``[Reserved].
For guidance see Sec. 86.1810-01.'' Where a corresponding paragraph of
Sec. 86.1810-01 is not applicable, this is indicated by the statement
``[Reserved].'' This section applies to model year 2009 and later
light-duty vehicles and light-duty trucks fueled by gasoline, diesel,
methanol, ethanol, natural gas and liquefied petroleum gas fuels. This
section also applies to MDPVs and complete heavy-duty vehicles
certified according to the provisions of this subpart. Multi-fueled
vehicles (including dual-fueled and flexible-fueled vehicles) shall
comply with all requirements established for each consumed fuel (or
blend of fuels in the case of flexible fueled vehicles). The standards
of this subpart apply to both certification and in-use vehicles unless
otherwise indicated. This section also applies to hybrid electric
vehicles and zero emission vehicles. Unless otherwise specified,
requirements and provisions of this subpart applicable to methanol
fueled vehicles are also applicable to Tier 2 and interim non-Tier 2
ethanol fueled vehicles.
[[Page 15955]]
(a) through (e) [Reserved]. For guidance see Sec. 86.1810-01.
(f) Altitude requirements. (1) All emission standards apply at low
altitude conditions and at high altitude conditions, except for
supplemental exhaust emission standards, cold temperature NMHC emission
standards, and the evaporative emission standards as described in Sec.
86.1811-09(e). Supplemental exhaust emission standards, as described in
Sec. 86.1811-04(f), apply only at low altitude conditions. Cold
temperature NMHC emission standards, as described in Sec. 86.1811-
10(g), apply only at low altitude conditions. Tier 2 evaporative
emission standards apply at high altitude conditions as specified in
Sec. 86.1810-01(f) and (j), and Sec. 86.1811-04(e).
(2) For vehicles that comply with the cold temperature NMHC
standards, manufacturers shall submit an engineering evaluation
indicating that common calibration approaches are utilized at high
altitudes. Any deviation from low altitude emission control practices
shall be included in the auxiliary emission control device (AECD)
descriptions submitted at certification. Any AECD specific to high
altitude shall require engineering emission data for EPA evaluation to
quantify any emission impact and validity of the AECD.
(g) through (p) [Reserved]. For guidance see Sec. 86.1810-01.
18. Section 86.1811-04 is amended by adding paragraphs (k)(5)(iv)
through (vii) and (q)(1)(vi) through (ix) to read as follows:
Sec. 86.1811-04 Emission standards for light-duty vehicles, light-
duty trucks and medium-duty passenger vehicles.
* * * * *
(k) * * *
(5) * * *
(iv) Vehicles produced by small volume manufacturers, as defined in
Sec. 86.1838-01, are exempt from the LDV/LLDT evaporative emissions
standards in Table S09-1 of Sec. 86.1811-09(e) for model years 2009
and 2010, but must comply with the Tier 2 evaporative emission
standards in Table S04-3 in paragraph (e)(1) of this section for model
years 2009 and 2010.
(v) Vehicles produced by small volume manufacturers, as defined in
Sec. 86.1838-01, are exempt from the HLDT/MDPV evaporative emissions
standards in Table S09-1 of Sec. 86.1811-09(e) for model years 2010
and 2011, but must comply with the Tier 2 evaporative emission
standards in Table S04-3 in paragraph (e)(1) of this section for model
years 2010 and 2011.
(vi) Small volume manufacturers, as defined in Sec. 86.1838-01,
are exempt from the LDV/LLDT cold temperature NMHC phase-in
requirements in Table S10-1 of Sec. 86.1811-10(g) for model years
2010, 2011, and 2012, but must comply with the 100% requirement for
2013 and later model years for cold temperature NMHC standards
(vii) Small volume manufacturers, as defined in Sec. 86.1838-01,
are exempt from the HLDT/MDPV cold temperature NMHC phase-in
requirements in Table S10-1 of Sec. 86.1811-10(g) for model years
2012, 2013, and 2014, but must comply with the 100% requirement for
2015 and later model years for cold temperature NMHC standards.
* * * * *
(q) * * *
(1) * * *
(vi) Defer compliance with the LDV/LLDT evaporative emissions
standards in Table S09-1 of Sec. 86.1811-09(e) until 2013, and defer
compliance with the LDV/LLDT evaporative emissions standards in Table
S09-2 of Sec. 86.1811-09(e) until 2014. (The hardship relief may be
extended one additional model year--2 model years total.)
(vii) Defer compliance with the HLDT/MDPV evaporative emissions
standards in Table S09-1 of Sec. 86.1811-09(e) until 2014, and defer
compliance with the HLDT/MDPV evaporative emissions standards in Table
S09-2 of Sec. 86.1811-09(e) until 2015. (The hardship relief may be
extended one additional model year--2 model years total.)
(viii) Defer 100% compliance with the LDV/LLDT cold temperature
NMHC standards in Table S10-X of Sec. 86.1811-10(g) until 2015. (The
hardship relief may be extended one additional model year--2 model
years total.)
(ix) Defer 100% compliance with the HLDT/MDPV cold temperature NMHC
standards in Table S10-X of Sec. 86.1811-10(g) until 2017. (The
hardship relief may be extended one additional model year--2 model
years total.)
* * * * *
19. A new Sec. 86.1811-09 is added to Subpart S to read as
follows:
Sec. 86.1811-09 Emission standards for light-duty vehicles, light-
duty trucks and medium-duty passenger vehicles.
Section 86.1811-09 includes text that specifies requirements that
differ from Sec. 86.1811-04. Where a paragraph in Sec. 86.1811-04 is
identical and applicable to Sec. 86.1811-09, this may be indicated by
specifying the corresponding paragraph and the statement ``[Reserved].
For guidance see Sec. 86.1811-04.'' Where a corresponding paragraph of
Sec. 86.1811-04 is not applicable, this is indicated by the statement
``[Reserved].''
(a) Applicability. (1) This section contains regulations
implementing emission standards for all LDVs, LDTs and MDPVs. This
section applies to 2009 and later model year LDVs, LDTs and MDPVs
fueled by gasoline, diesel, methanol, ethanol, natural gas and
liquefied petroleum gas fuels, except as noted. Additionally, this
section applies to hybrid electric vehicles (HEVs) and zero emission
vehicles (ZEVs). Unless otherwise specified, multi-fueled vehicles must
comply with all requirements established for each consumed fuel.
(2) through (4) [Reserved]. For guidance see Sec. 86.1811-04.
(5) The exhaust emission standards and evaporative emission
standards of this section apply equally to certification and in-use
LDVs, LDTs and MDPVs, unless otherwise specified. See paragraph (t) of
this section for interim evaporative emission in-use standards that are
different than the certification evaporative emission standards
specified in paragraph (e) of this section.
(b) through (d) [Reserved]. For guidance see Sec. 86.1811-04.
(e) Evaporative emission standards. Evaporative emissions from
gasoline-fueled, natural gas-fueled, liquefied petroleum gas-fueled,
ethanol-fueled and methanol-fueled vehicles must not exceed the
standards in this paragraph (e). The standards apply equally to
certification and in-use vehicles.
(1) Diurnal-plus-hot soak evaporative hydrocarbon standards. (i)
Hydrocarbons for LDV/LLDTs, HLDTs and MDPVs that are gasoline-fueled,
dedicated natural gas-fueled, dedicated liquefied petroleum gas-fueled,
dedicated ethanol-fueled, dedicated methanol-fueled and multi-fueled
vehicles when operating on gasoline must not exceed the diurnal plus
hot soak standards shown in Table S09-1 for the full three diurnal test
sequence and for the supplemental two diurnal test sequence. The
standards apply equally to certification and in-use vehicles, except as
otherwise specified in paragraph (t) of this section. Table S09-1
follows:
[[Page 15956]]
Table S09-1.--Light-Duty Diurnal Plus Hot Soak Evaporative Emission Standards
[Grams per test]
----------------------------------------------------------------------------------------------------------------
Supplemental 2
3 day day
Vehicle category Model year diurnal+hot diurnal+hot
soak soak
----------------------------------------------------------------------------------------------------------------
LDVs............................................................ 2009 0.50 0.65
LLDTs........................................................... 2009 0.65 0.85
HLDTs........................................................... 2010 0.90 1.15
MDPVs........................................................... 2010 1.00 1.25
----------------------------------------------------------------------------------------------------------------
(ii) Hydrocarbons for LDV/LLDTs, HLDTs and MDPVs that are multi-
fueled vehicles operating on non-gasoline fuel must not exceed the
diurnal plus hot soak standards shown in Table S09-2 for the full three
diurnal test sequence and for the supplemental two diurnal test
sequence. The standards apply equally to certification and in-use
vehicles except as otherwise specified in paragraph (t) of this
section. Table S09-2 follows:
Table S09-2.--Light-Duty Diurnal Plus Hot Soak Evaporative Emission Standards: Non-Gasoline Portion of Multi-
Fueled Vehicles
[Grams per test]
----------------------------------------------------------------------------------------------------------------
Supplemental 2
3 day day
Vehicle category Model year diurnal+hot diurnal+hot
soak soak
----------------------------------------------------------------------------------------------------------------
LDVs............................................................ 2012 0.50 0.65
LLDTs........................................................... 2012 0.65 0.85
HLDTs........................................................... 2013 0.90 1.15
MDPVs........................................................... 2013 1.00 1.25
----------------------------------------------------------------------------------------------------------------
(2) through (6) [Reserved]. For guidance see Sec. 86.1811-04.
(f) through (s) [Reserved]. For guidance see Sec. 86.1811-04.
(t) Evaporative emission in-use standards. (1) For LDVs and LLDTs
certified prior to the 2012 model year, the Tier 2 LDV/LLDT evaporative
emissions standards in Table S04-3 of Sec. 86.1811-04(e) shall apply
to in-use vehicles for only the first three model years after an
evaporative family is first certified to the LDV/LLDT evaporative
emission standards in Table S09-1 of paragraph (e) of this section. For
example, evaporative families first certified to the LDV/LLDT standards
in Table S09-1 in the 2011 model year shall meet the Tier 2 LDV/LLDT
evaporative emission standards (Table S04-3) in-use for 2011, 2012, and
2013 model year vehicles (applying Tier 2 standards in-use is limited
to the first three years after introduction of a vehicle).
(2) For HLDTs and MDPVs certified prior to the 2013 model year, the
Tier 2 HLDT/MDPV evaporative emissions standards in Table S04-3 of
Sec. 86.1811-04(e) shall apply to in-use vehicles for only the first
three model years after an evaporative family is first certified to the
HLDT/MDPV evaporative emission standards in Table S09-1 of paragraph
(e) of this section. For example, evaporative families first certified
to the HLDT/MDPV standards in Table S09-1 in the 2012 model year shall
meet the Tier 2 HLDT/MDPV evaporative emission standards (Table S04-3)
in-use for 2012, 2013, and 2014 model year vehicles (applying Tier 2
standards in-use is limited to the first three years after introduction
of a vehicle).
20. A new Sec. 86.1811-10 is added to Subpart S to read as
follows:
Sec. 86.1811-10 Emission standards for light-duty vehicles, light-
duty trucks and medium-duty passenger vehicles.
Section 86.1811-10 includes text that specifies requirements that
differ from Sec. 86.1811-04 and Sec. 86.1811-09. Where a paragraph in
Sec. 86.1811-04 or Sec. 86.1811-09 is identical and applicable to
Sec. 86.1811-10, this may be indicated by specifying the corresponding
paragraph and the statement ``[Reserved]. For guidance see Sec.
86.1811-04'' or ``[Reserved]. For guidance see Sec. 86.1811-09.''
Where a corresponding paragraph of Sec. 86.1811-04 or Sec. 86.1811-09
is not applicable, this is indicated by the statement ``[Reserved].''
(a) [Reserved]. For guidance see Sec. 86.1811-09.
(b) through (d) [Reserved]. For guidance see Sec. 86.1811-04.
(e) [Reserved]. For guidance see Sec. 86.1811-09.
(f) [Reserved]. For guidance see Sec. 86.1811-04.
(g) Cold temperature exhaust emission standards. (1) Cold
temperature CO standards. These cold temperature CO standards are
applicable only to gasoline fueled LDV/Ts and MDPVs. For the following
cold temperature CO exhaust emission standards, a useful life of 50,000
miles or 5 years (whichever occurs first) applies:
(i) For LDVs and LDT1s, the standard is 10.0 grams per mile CO.
(ii) For LDT2s, LDT3s and LDT4s, and MDPVs the standard is 12.5
grams per mile CO.
(iii) These standards do not apply to interim non-Tier 2 MDPVs.
(2) Cold temperature NMHC standards. Full useful life fleet average
cold temperature NMHC standards are applicable only to gasoline fueled
LDV/LLDTs and HLDT/MDPVs, and apply equally to certification and in-use
except as otherwise specified in paragraph (u) of this section for in-
use standards for applicable phase-in models. Testing with other fuels
such as E85, or testing on diesel vehicles, is not required. Multi-
fuel, bi-fuel or dual-fuel vehicles must comply with requirements using
gasoline only. For LDV/LLDTs, the useful life is 120,000 miles or 10
years, whichever comes first. For HLDT/MDPVs, the useful life is
120,000 miles or 11 years, whichever comes first. There is not an
intermediate
[[Page 15957]]
useful life standard for cold temperature NMHC standards.
(i) The standards are shown in Table S10-1, which follows:
Table S10-1.--Fleet Average Cold Temperature NMHC Full Useful Life
Exhaust Emission Standards
------------------------------------------------------------------------
Cold temperature
NMHC sales-
Vehicle weight category weighted fleet
average standard
(grams/mile)
------------------------------------------------------------------------
LDVs & LLDTs (<= 6,000 lbs GVWR)...................... 0.3
HLDTs (>6,000-8,500 lbs GVWR) &....................... 0.5
MDPVs (>8,500 10,000 lbs GVWR)........................ ................
------------------------------------------------------------------------
(ii) The manufacturer must calculate its fleet average cold
temperature NMHC emission level(s) as described in Sec. 86.1864-10(m).
(iii) During a phase-in year, the manufacturer must comply with the
fleet average standards for the required phase-in percentage for that
year as specified in paragraph (g)(3) of this section, or for the
alternate phase-in percentage as permitted under paragraph (g)(4) of
this section.
(iv) For model years prior to 2010 (LDV/LLDTs) and 2012 (HLDT/
MDPVs), where the manufacturer desires to bank early NMHC credits as
permitted under Sec. 86.1864-10(o)(5), the manufacturer must achieve a
fleet average standard below 0.3 grams per mile for LDV/LLDTs and below
0.5 grams per mile for HLDT/MDPVs. Manufacturers must determine
compliance with the cold temperature NMHC fleet average standard
according to Sec. 86.1864-10(o).
(3) Phase-in of the cold temperature NMHC standards. Except as
permitted in Sec. 86.1811-04(k)(5)(vi) and (vii) regarding small
volume manufacturers, manufacturers must comply with the phase-in
requirements in Tables S10-2 and S10-3 of this paragraph. Separate
phase-in schedules are provided for LDV/LLDTs and for HLDT/MDPVs. These
requirements specify the minimum percentage of the manufacturer's LDV/
LLDT and HLDT/MDPV 50-State sales, by model year, that must meet the
fleet average cold temperature NMHC standard for their full useful
lives. LDVs and LLDTs must be grouped together to determine compliance
with these phase-in requirements, and HLDTs and MDPVs must also be
grouped together to determine compliance with these phase-in
requirements. Tables S10-2 and S10-3 follow:
Table S10-2.--Phase-in Percentages for LDV/LLDT Cold Temperature NMHC
Requirements
------------------------------------------------------------------------
Percentage of
LDV/LLDTs that
Model year must meet
requirement
------------------------------------------------------------------------
2010.................................................. 25
2011.................................................. 50
2012.................................................. 75
2013 and subsequent................................... 100
------------------------------------------------------------------------
Table S10-3.--Phase-in Percentages for HLDT/MDPV Cold Temperature NMHC
Requirements
------------------------------------------------------------------------
Percentage of
HLDT/MDPVs
Model year that must meet
requirement
------------------------------------------------------------------------
2012.................................................... 25
2013.................................................... 50
2014.................................................... 75
2015 and subsequent..................................... 100
------------------------------------------------------------------------
(4) Alternate phase-in schedules for cold temperature NMHC
standards. (i) Manufacturers may apply for alternative phase-in
schedules that would still result in 100% phase-in by 2013 and 2015,
respectively, for LDV/LLDTs and HLDT/MDPVs. An alternate phase-in
schedule submitted by a manufacturer is subject to EPA approval. The
alternative phase-in will not be used to delay full implementation past
the last year of the primary phase-in schedule (2013 for LDV/LLDTs,
2015 for HLDT/MDPVs). An alternative phase-in schedule will be
acceptable if it satisfies the following equations:
LDV/LLDTs:
(6xAPI2008) + (5xAPI2009) +
(4xAPI2010) + (3xAPI2011) +
(2xAPI2012) + (1xAPI2013) >=500%
HLDT/MDPVs:
(6xAPI2010) + (5xAPI2011) +
(4xAPI2012) + (3xAPI2013) +
(2xAPI2014) + (1xAPI2015) >=500%
Where:
API = anticipated phase-in percentage for the referenced model year
(ii) If the sum of products is greater than or equal to 500%, which
is the sum of products from the primary phase-in schedule (4 x 25% + 3
x 50% + 2 x 75% + 1 x 100% = 500%), then the alternative phase-in
schedule is acceptable, except as prohibited in paragraphs (g)(4)(i)
and (iii) of this section. In addition, manufacturers electing to use
an alternate phase-in schedule for compliance with the cold temperature
NMHC exhaust emission standards must ensure that the sum of products is
at least 100% for model years 2010 and earlier for LDV/LLDTs, and 2012
and earlier for HLDT/MDPVs. For example, a phase-in schedule for LDV/
LLDTs of 5/10/10/45/80/100 that begins in 2008 would calculate as (6 x
5%) + (5 x 10%) + (4 x 10%) = 120% and would be acceptable for 2008-
2010. The full phase-in would calculate as (6 x 5%) + (5 x 10%) + (4 x
10%) + (3 x 45%) + (2 x 80%) + (1 x 100%) = 515% and would be
acceptable for 2008-2013.
(iii) Under an alternate phase-in schedule, the projected phase-in
percentage is not binding for a given model year, provided the sums of
the actual phase-in percentages that occur meet the appropriate total
sums as required in the equations of paragraph (g)(4)(i) of this
section, and provided that 100% actual compliance is reached for the
appropriate model year, either 2013 for LDV/LLDTs or 2015 for HLDT/
MDPVs.
(5) Manufacturers must determine compliance with required phase-in
schedules as follows:
(i) Manufacturers must submit information showing compliance with
all phase-in requirements of this section with their Part I
applications as required by Sec. 86.1844(d)(13).
(ii) A manufacturer electing to use any alternate phase-in schedule
permitted under this section must provide in its Application for
Certification for the first year in which it intends to use such a
schedule, and in each succeeding year during the phase-in, the intended
phase-in percentages for that model year and the remaining phase-in
years along with the intended final sum of those percentages as
described in paragraph (g)(4)(i) of this section. This information may
be included with the information required under Sec. 86.1844-
01(d)(13). In its year end annual reports, as required under Sec.
86.1844-01(e)(4), the manufacturer must include sufficient information
so that the Administrator can verify compliance with the alternative
phase-in schedule established under paragraph (g)(4)(i) of this
section.
(6)(i) Sales percentages for the purpose of determining compliance
with the phase-in of the cold temperature NMHC requirements must be
based upon projected 50-State sales of LDV/LLDTs and HLDT/MDPVs of the
applicable model year by the manufacturer to the point of first sale.
Such sales percentages must be rounded to the nearest one tenth of a
percent.
(ii) Alternatively, the manufacturer may petition the Administrator
to allow actual volume produced for U.S. sales to be used in lieu of
projected U.S. sales for purposes of determining compliance
[[Page 15958]]
with the phase-in percentage requirements under this section. The
manufacturer must submit its petition within 30 days of the end of the
model year to the Compliance and Innovative Strategies Division. For
EPA to approve the use of actual volume produced for U.S. sales, the
manufacturer must establish to the satisfaction of the Administrator,
that actual production volume is functionally equivalent to actual
sales volume of LDV/LLDTs and HLDT/MDPVs sold in all 50 U.S. States.
(f) through (s) [Reserved]. For guidance see Sec. 86.1811-04.
(t) [Reserved]. For guidance see Sec. 86.1811-09.
(u) Cold temperature NMHC exhaust emission in-use standards for
applicable phase-in models. An interim full useful life in-use
compliance standard is calculated by adding 0.1 g/mi to the FEL to
which each test group is newly certified, and applies to that test
group only for the model years shown in Tables S10-4 and S10-5.
Otherwise, the in-use standard is the certification standard from
paragraph (g)(2) of this section. The standards apply for purposes of
in-use testing only and does not apply to certification or Selective
Enforcement Auditing. Tables S10-4 and S10-5 follow:
Table S10-4.--In-Use Standard For Applicable Phase-In LDV/LLDTs
----------------------------------------------------------------------------------------------------------------
Model year of introduction 2008 2009 2010 2011 2012 2013
----------------------------------------------------------------------------------------------------------------
Models years that the interim in-use standard is available 2008 2009 2010 2011 2012 2013
2009 2010 2011 2012 2013 2014
2010 2011 2012 2013 2014
2011 2012 2013
----------------------------------------------------------------------------------------------------------------
Table S10-5.--In-Use Standards For Applicable Phase-In HLDT/MDPVs
----------------------------------------------------------------------------------------------------------------
Model year of introduction 2010 2011 2012 2013 2014 2015
----------------------------------------------------------------------------------------------------------------
Models years that the interim in-use standard is available 2010 2011 2012 2013 2014 2015
2011 2012 2013 2014 2015 2016
2012 2013 2014 2015 2016
2013 2014 2015
----------------------------------------------------------------------------------------------------------------
21. Section 86.1823-01 is amended by revising paragraph
(a)(3)(i)(C) to read as follows:
Sec. 86.1823-01 Durability demonstration procedures for exhaust
emissions.
* * * * *
(a) * * *
(3) * * *
(i) * * *
(C) The DF calculated by these procedures will be used for
determining compliance with FTP exhaust emission standards, SFTP
exhaust emission standards, cold temperature NMHC emission standards,
and cold CO emission standards. At the manufacturer's option and using
procedures approved by the Administrator, a separate DF may be
calculated exclusively using cold CO test data to determine compliance
with cold CO emission standards. Similarly, at the manufacturer's
option and using procedures approved by the Administrator, a separate
DF may be calculated exclusively using cold temperature NMHC test data
to determine compliance with cold temperature NMHC emission standards.
For determining compliance with full useful life cold NMHC emission
standards, the 68-86 degree F 120,000 mile full useful life NMOG DF may
be used. Also at the manufacturer's option and using procedures
approved by the Administrator, a separate DF may be calculated
exclusively using US06 and/or air conditioning (SC03) test data to
determine compliance with the SFTP emission standards.
* * * * *
22. Section 86.1827-01 is amended by revising paragraph (a)(5) to
read as follows:
Sec. 86.1827-01 Test group determination.
* * * * *
(a) * * *
(5) Subject to the same emission standards (or FEL in the case of
cold temperature NMHC standards), except that a manufacturer may
request to group vehicles into the same test group as vehicles subject
to more stringent standards, so long as all the vehicles within the
test group are certified to the most stringent standards applicable to
any vehicle within that test group. Light-duty trucks which are subject
to the same emission standards as light-duty vehicles with the
exception of the light-duty truck idle CO standard and/or total HC
standard may be included in the same test group.
* * * * *
23. A new Sec. 86.1828-10 is added to Subpart S to read as
follows:
Sec. 86.1828-10 Emission data vehicle selection.
Section 86.1828-10 includes text that specifies requirements that
differ from Sec. 86.1828-01. Where a paragraph in Sec. 86.1828-01 is
identical and applicable to Sec. 86.1828-10, this may be indicated by
specifying the corresponding paragraph and the statement ``[Reserved].
For guidance see Sec. 86.1828-01.'' Where a corresponding paragraph of
Sec. 86.1828-01 is not applicable, this is indicated by the statement
``[Reserved].''
(a) through (f) [Reserved]. For guidance see Sec. 86.1828-01.
(g) Cold temperature NMHC testing. For cold temperature NMHC
exhaust emission compliance for each durability group, the vehicle
expected to emit the highest NMHC emissions at 20 degrees F on
candidate in-use vehicles shall be selected from the test vehicles
specified in Sec. 86.1828-01(a). When the expected worst-case cold
temperature NMHC vehicle is also the expected worst-case cold CO
vehicle as selected in paragraph (c) of this section, then cold testing
is required only for that vehicle; otherwise, testing is required for
both the worst-case cold CO vehicle and the worst-case cold temperature
NMHC vehicle.
24. Section 86.1829-01 is amended by revising paragraph (b)(3) to
read as follows:
Sec. 86.1829-01 Durability and emission testing requirements;
waivers.
* * * * *
(b) * * *
(3) Cold temperature CO and cold temperature NMHC Testing. One EDV
in each durability group shall be tested for cold temperature CO and
cold
[[Page 15959]]
temperature NMHC exhaust emission compliance in accordance with the
test procedures in subpart C of this part or with alternative
procedures requested by the manufacturer and approved in advance by the
Administrator. The selection of which EDV and test group within the
durability group will be tested for cold temperature CO and cold
temperature NMHC compliance will be determined under the provisions of
Sec. 86.1828-10(c) and (g).
* * * * *
25. Section 86.1844-01 is amended by revising paragraph (d)(11) to
read as follows:
Sec. 86.1844-01 Information requirements: Application for
certification and submittal of information upon request.
* * * * *
(d) * * *
(11) A list of all auxiliary emission control devices (AECD)
installed on any applicable vehicles, including a justification for
each AECD, the parameters they sense and control, a detailed
justification of each AECD which results in a reduction in
effectiveness of the emission control system, and rationale for why the
AECD is not a defeat device as defined under Sec. Sec. 86.1809-01 and
86.1809-10. For any AECD uniquely used at high altitudes, EPA may
request engineering emission data to quantify any emission impact and
validity of the AECD. For any AECD uniquely used on multi-fuel vehicles
when operated on fuels other than gasoline, EPA may request engineering
emission data to quantify any emission impact and validity of the AECD.
* * * * *
26. A new Sec. 86.1848-10 is added to Subpart S to read as
follows:
Sec. 86.1848-10 Certification.
Section 86.1848-10 includes text that specifies requirements that
differ from Sec. 86.1848-01. Where a paragraph in Sec. 86.1848-01 is
identical and applicable to Sec. 86.1848-10, this may be indicated by
specifying the corresponding paragraph and the statement ``[Reserved].
For guidance see Sec. 86.1848-01.'' Where a corresponding paragraph of
Sec. 86.1848-01 is not applicable, this is indicated by the statement
``[Reserved].''
(a) through (b) [Reserved]. For guidance see Sec. 86.1848-01.
(c) All certificates are conditional upon the following conditions
being met:
(1) The manufacturer must supply all required information according
to the provisions of Sec. Sec. 86.1843-01 and 86.1844-01.
(2) The manufacturer must comply with all certification and in-use
emission standards contained in subparts S and H of this part both
during and after model year production.
(3) The manufacturer must comply with all implementation schedules
sales percentages as required in Sec. 86.1810 or elsewhere in this
part. Failure to meet a required implementation schedule sales
percentage will be considered to be a failure to satisfy a condition
upon which the certificate was issued and any vehicles or trucks sold
in violation of the implementation schedule shall not be covered by the
certificate.
(4) For incomplete light-duty trucks and incomplete heavy-duty
vehicles, a certificate covers only those new motor vehicles which,
when completed by having the primary load-carrying device or container
attached, conform to the maximum curb weight and frontal area
limitations described in the application for certification as required
in Sec. 86.1844-01.
(5) The manufacturer must meet the in-use testing and reporting
requirements contained in Sec. Sec. 86.1845-01, 86.1846-01, and
86.1847-01, as applicable. Failure to meet the in-use testing or
reporting requirements shall be considered a failure to satisfy a
condition upon which the certificate was issued. A vehicle or truck
will be considered to be covered by the certificate only if the
manufacturer fulfills this condition upon which the certificate was
issued.
(6) Vehicles are covered by a certificate of conformity only if
they are in all material respects as described in the manufacturer's
application for certification (Part I and Part II).
(7) For Tier 2 and interim non-Tier 2 vehicles, all certificates of
conformity issued are conditional upon compliance with all provisions
of Sec. Sec. 86.1811-04, 86.1860-04, 86.1861-04 and 86.1862-04 both
during and after model year production.
(i) Failure to meet the fleet average NOX requirements
of 0.07g/mi, 0.30 g/mi or 0.20 g/mi, as applicable, will be considered
to be a failure to satisfy the terms and conditions upon which the
certificate(s) was (were) issued and the vehicles sold in violation of
the fleet average NOX standard will not be covered by the
certificate(s).
(ii) Failure to comply fully with the prohibition against selling
credits that it has not generated or that are not available, as
specified in Sec. 86.1861-04, will be considered to be a failure to
satisfy the terms and conditions upon which the certificate(s) was
(were) issued and the vehicles sold in violation of this prohibition
will not be covered by the certificate(s).
(iii) Failure to comply fully with the phase-in requirements of
Sec. 86.1811-04, will be considered to be a failure to satisfy the
terms and conditions upon which the certificate(s) was (were) issued
and the vehicles sold which do not comply with Tier 2 or interim non-
Tier 2 requirements, up to the number needed to comply, will not be
covered by the certificate(s).
(iv) For paragraphs (c)(7)(i) through (iii) of this section:
(A) The manufacturer must bear the burden of establishing to the
satisfaction of the Administrator that the terms and conditions upon
which the certificate(s) was (were) issued were satisfied.
(B) For recall and warranty purposes, vehicles not covered by a
certificate of conformity will continue to be held to the standards
stated or referenced in the certificate that otherwise would have
applied to the vehicles.
(8) For LDV/LLDTs and HLDT/MDPVs, all certificates of conformity
issued are conditional upon compliance with all provisions of
Sec. Sec. 86.1811-10 and 86.1864-10 both during and after model year
production.
(i) Failure to meet the fleet average cold temperature NMHC
requirements will be considered a failure to satisfy the terms and
conditions upon which the certificate(s) was (were) issued and the
vehicles sold in violation of the fleet average NMHC standard will not
be covered by the certificate(s).
(ii) Failure to comply fully with the prohibition against selling
credits that are not generated or that are not available, as specified
in Sec. 86.1864-10, will be considered a failure to satisfy the terms
and conditions upon which the certificate(s) was (were) issued and the
vehicles sold in violation of this prohibition will not be covered by
the certificate(s).
(iii) Failure to comply fully with the phase-in requirements of
Sec. 86.1811-10 will be considered a failure to satisfy the terms and
conditions upon which the certificate(s) was (were) issued and the
vehicles sold that do not comply with cold temperature NMHC
requirements, up to the number needed to comply, will not be covered by
the certificate(s).
(iv) For paragraphs (c)(8)(i) through (iii) of this section:
(A) The manufacturer bears the burden of establishing to the
satisfaction of the Administrator that the terms and conditions upon
which the certificate(s) was (were) issued were satisfied.
(B) For recall and warranty purposes, vehicles not covered by a
certificate of conformity will continue to be held to the standards
stated or referenced in the
[[Page 15960]]
certificate that otherwise would have applied to the vehicles.
(d) through (i) [Reserved]. For guidance see Sec. 86.1848-01.
27. A new Sec. 86.1864-10 is added to Subpart S to read as
follows:
Sec. 86.1864-10 How to comply with the fleet average cold
temperature NMHC standards.
(a) Applicability. Cold temperature NMHC exhaust emission standards
apply to the following vehicles, subject to the phase-in requirements
in Sec. 86.1811-10(g)(3) and (4):
(1) 2010 and later model year LDV/LLDTs.
(2) 2012 and later model year HLDT/MDPVs.
(3) Aftermarket conversion systems as defined in 40 CFR 85.502,
including conversion of MDPVs.
(4) Vehicles imported by ICIs as defined in 40 CFR 85.1502.
(b) Useful life requirements. Full useful life requirements for
cold temperature NMHC standards are defined in Sec. 86.1805-04(g).
There is not an intermediate useful life standard for cold temperature
NMHC standards.
(c) Altitude. Altitude requirements for cold temperature NMHC
standards are provided in Sec. 86.1810-09(f).
(d) Small volume manufacturer certification procedures.
Certification procedures for small volume manufacturers are provided in
Sec. 86.1838-01.
(e) Cold temperature NMHC standards. Fleet average cold temperature
NMHC standards are provided in Sec. 86.1811-10(g)(2).
(f) Phase-in. Phase-in of the cold temperature NMHC standards are
provided in Sec. 86.1811-10(g)(3) and (4).
(g) Phase-in flexibilities for small volume manufacturers. Phase-in
flexibilities for small volume manufacturer compliance with the cold
temperature NMHC standards are provided in Sec. 86.1811-04(k)(5).
(h) Hardship provisions for small volume manufacturers. Hardship
provisions for small volume manufacturers related to the cold
temperature NMHC standards are provided in Sec. 86.1811-04(q)(1).
(i) In-use standards for applicable phase-in models. In-use cold
temperature NMHC standards for applicable phase-in models are provided
in Sec. 86.1811-10(u).
(j) Durability procedures and method of determining deterioration
factors (DFs). The durability data vehicle selection procedures of
Sec. 86.1822-01 and the durability demonstration procedures of Sec.
86.1823-06 apply for cold NMHC standards. For determining compliance
with full useful life cold temperature NMHC emission standards, the 68-
86 degree F, 120,000 mile full useful life NMOG DF may be used.
(k) Vehicle test procedure. (1) The test procedure for
demonstrating compliance with cold temperature NMHC standards is
contained in subpart C of this part. With prior EPA approval,
alternative testing procedures may be used, as specified in Sec.
86.106-96(a), provided cold temperature NMHC emissions do not decrease
as a result of an alternative testing procedure.
(2) Testing of all LDVs, LDTs and MDPVs to determine compliance
with cold temperature NMHC exhaust emission standards set forth in this
section must be on a loaded vehicle weight (LVW) basis, as defined in
Sec. 86.1803-01.
(3) Testing for the purpose of providing certification data is
required only at low altitude conditions and only for vehicles that can
operate on gasoline, except as requested in Sec. Sec. 86.1810-09(f)
and 86.1844-01(d)(11). If hardware and software emission control
strategies used during low altitude condition testing are not used
similarly in-use across all altitudes, the manufacturer will include a
statement in the application for certification, in accordance with
Sec. Sec. 86.1844-01(d)(11) and Sec. 86.1810-09(f), stating what the
different strategies are and why they are used. If hardware and
software emission control strategies used during testing with gasoline
are not used similarly with all fuels that can be used in multi-fuel
vehicles, the manufacturer will include a statement in the application
for certification, in accordance with Sec. Sec. 86.1844-01(d)(11) and
86.1810-09(f), stating what the different strategies are and why they
are used. For example, unless a manufacturer states otherwise, air
pumps used to control emissions on dedicated gasoline vehicles or
multi-fuel vehicles during low altitude conditions must also be used to
control emissions at high altitude conditions, and software used to
control emissions or closed loop operation must also operate similarly
at low and high altitude conditions and similarly when multi-fueled
vehicles are operated on gasoline and alternate fuels. These examples
are for illustrative purposes only; similar strategies would apply to
other currently used emission control technologies and/or emerging or
future technologies.
(l) Emission data vehicle (EDV) selection. Provisions for selecting
the appropriate EDV for the cold temperature NMHC standards are
provided in Sec. Sec. 86.1828-10(g) and 86.1829-01(b)(3).
(m) Calculating the fleet average cold temperature NMHC standard.
Manufacturers will compute separate sales-weighted fleet average cold
temperature NMHC emissions at the end of the model year for LDV/LLDTs
and HLDT/MDPVs, using actual sales, and certifying test groups to FELs,
as defined in Sec. 86.1803-01. The FEL becomes the standard for each
test group, and every test group can have a different FEL. The
certification resolution for the FEL will be one decimal point. LDVs
and LLDTs must be grouped together when calculating the fleet average,
and HLDTs and MDPVs must also be grouped together to determine the
fleet average. Manufacturers must compute the sales-weighted cold
temperature NMHC fleet averages using the following equation, rounded
to the nearest tenth:
Fleet average cold temperature NMHC exhaust emissions =
[Sigma](N x FEL) / Total number of vehicles sold of the applicable
weight category (i.e., either LDV + LLDTs, or HLDT + MDPVs)
Where:
N = The number of LDVs and LLDTs, or HLDTs and MDPVs, sold within the
applicable FEL, based on vehicles counted to the point of first sale.
FEL = Family Emission Limit.
(n) Certification compliance and enforcement requirements for cold
temperature NMHC standards. (1) In addition to the compliance and
enforcement requirements provided throughout Sec. 86.1864-10,
additional conditions are included in the provisions of Sec. 86.1848-
10(c)(8).
(2) The certificate issued for each test group requires all
vehicles within that test group to meet the emission standard or FEL to
which the vehicles were certified.
(3) Each manufacturer must comply with the applicable cold
temperature NMHC fleet average standard on a sales-weighted average
basis, at the end of each model year, using the procedure described in
paragraph (m) of this section.
(4) During a phase-in year, the manufacturer must comply with the
applicable cold temperature NMHC fleet average standard for the
required phase-in percentage for that year as specified in Sec.
86.1811-10(g)(3) or (4).
(5) Manufacturers must compute separate cold temperature NMHC fleet
averages for LDV/LLDTs and HLDT/MDPVs. The sales-weighted cold
temperature NMHC fleet averages must be compared with the applicable
fleet average standard.
[[Page 15961]]
(6) Each manufacturer must comply on an annual basis with the fleet
average standards as follows:
(i) Manufacturers must report in their annual reports to the Agency
that they met the relevant corporate average standard by showing that
their sales-weighted average cold temperature NMHC emissions of LDV/
LLDTs and HLDT/MDPVs, as applicable, are at or below the applicable
fleet average standard;
(ii) If the sales-weighted average is above the applicable fleet
average standard, manufacturers must obtain and apply sufficient NMHC
credits, as appropriate, and as permitted under paragraph (o)(8) of
this section. A manufacturer must show via the use of credits that they
have offset any exceedence of the corporate average standard.
Manufacturers shall also report their credit balances or deficits.
(iii) If a manufacturer fails to meet the corporate average cold
temperature NMHC standard for two consecutive years, as required in
paragraph (o)(8) of this section, the vehicles causing the corporate
average exceedence will be considered not covered by the certificate of
conformity. A manufacturer will be subject to penalties on an
individual-vehicle basis for sale of vehicles not covered by a
certificate.
(iv) EPA will review each manufacturer's sales to designate the
vehicles that caused the exceedence of the corporate average standard.
EPA will designate as nonconforming those vehicles in test groups with
the highest certification emission values first, continuing until a
number of vehicles equal to the calculated number of noncomplying
vehicles as determined above is reached. In a group where only a
portion of vehicles would be deemed nonconforming, EPA will determine
the actual nonconforming vehicles by counting backwards from the last
vehicle produced in that test group. Manufacturers will be liable for
penalties for each vehicle sold that is not covered by a certificate.
(o) How does the cold temperature NMHC averaging, banking and
trading (ABT) program work? (1) Manufacturers shall average the cold
temperature NMHC emissions of their vehicles and comply with the cold
temperature NMHC fleet average corporate standard. Credits may be
generated during and after the phase-in period. Credits may also be
generated prior to the phase-in periods as described in paragraph (5)
of this section. A manufacturer whose cold temperature NMHC fleet
average emissions exceed the 0.3 g/mile standard for LDV/LLDTs, or 0.5
g/mi for HLDT/MDPVs, must complete the calculation in paragraph (o)(4)
of this section to determine the size of its NMHC credit deficit. A
manufacturer whose cold temperature NMHC fleet average emissions are
less than the 0.3 g/mile standard for LDV/LLDTs, or less than 0.5 g/mi
for HLDT/MDPVs, must complete the calculation in paragraph (o)(4) of
this section if it desires to generate NMHC credits.
(2) There are no property rights associated with NMHC credits
generated under this subpart. Credits are a limited authorization to
emit the designated amount of emissions. Nothing in this part or any
other provision of law should be construed to limit EPA's authority to
terminate or limit this authorization through a rulemaking.
(3) Each manufacturer must comply with the reporting and
recordkeeping requirements of paragraph (p) of this section for NMHC
credits, including early credits. The averaging, banking and trading
program shall be enforced through the certificate of conformity that
allows the manufacturer to introduce any regulated vehicles into
commerce.
(4) Credits are earned on the last day of the model year.
Manufacturers must calculate, for a given model year, the number of
credits or debits it has generated according to the following equation,
rounded to the nearest tenth:
NMHC Credits or Debits = (Cold Temperature NMHC Standard-Manufacturer's
Sales-Weighted Fleet Average Cold Temperature NMHC Emissions) x (Total
Number of Vehicles Sold)
Where:
Cold Temperature NMHC Standard = 0.3 g/mi for LDV/LLDTs or 0.5 g/mi for
HLDT/MDPV, per Sec. 86.1811-10(g)(2).
Manufacturer's Sales-Weighted Fleet Average Cold Temperature NMHC
Emissions = average calculated according to paragraph (m) of this
section.
Total Number of Vehicles Sold = Total 50-State sales based on the point
of first sale.
(5) The following provisions apply for early banking:
(i) Manufacturers may certify LDV/LLDTs to the cold temperature
NMHC exhaust standards in Sec. 86.1811-10(g)(2) for model years 2008-
2009 in order to bank credits for use in the 2010 and later model
years. Manufacturers may certify HLDT/MDPVs to the cold temperature
NMHC exhaust standards in Sec. 86.1811-10(g)(2) for model years 2010-
2011 in order to bank credits for use in the 2012 and later model
years.
(ii) This process is referred to as ``early banking'' and the
resultant credits are referred to as ``early credits.'' In order to
bank early credits, a manufacturer must comply with all exhaust
emission standards and requirements applicable to LDV/LLDTs and/or
HLDT/MDPVs. To generate early credits, a manufacturer must separately
compute the sales-weighted cold temperature NMHC average of the LDV/
LLDTs and HLDT/MDPVs it certifies to the exhaust requirements and
separately compute credits using the calculations in paragraph (o)(4)
of this section. Early HLDT/MDPV credits may not be applied to LDV/
LLDTs before the 2010 model year. Early LDV/LLDT credits may not be
applied to HLDT/ MDPV before the 2012 model year.
(6) NMHC credits are not subject to any discount or expiration date
except as required under the deficit carryforward provisions of
paragraph (o)(8) of this section. There shall be no discounting of
unused credits. NMHC credits shall have unlimited lives, subject to the
limitations of paragraph (o)(2) of this section.
(7) Credits may be used as follows:
(i) Credits generated and calculated according to the method in
paragraph (o)(4) of this section may only be used to offset deficits
accrued with respect to the standard in Sec. 86.1811-10(g)(2). Credits
may be banked and used in a future model year in which a manufacturer's
average cold temperature NMHC level exceeds the 0.3 or 0.5 g/mi
standard for LDV/LLDTs and HLDT/MDPVs, respectively. Credits may be
exchanged between the LDT/LLDT and HLDT/MDPV fleets of a given
manufacturer. Credits may also be traded to another manufacturer
according to the provisions in paragraph (o)(9) of this section. Before
trading or carrying over credits to the next model year, a manufacturer
must apply available credits to offset any credit deficit, where the
deadline to offset that credit deficit has not yet passed.
(ii) The use of credits shall not be permitted to address Selective
Enforcement Auditing or in-use testing failures. The enforcement of the
averaging standard shall occur through the vehicle's certificate of
conformity. A manufacturer's certificate of conformity shall be
conditioned upon compliance with the averaging provisions. The
certificate shall be void ab initio if a manufacturer fails to meet the
corporate average standard and does not obtain appropriate credits to
cover its shortfalls in that model year or in the subsequent model year
(see deficit carryforward provision in paragraph (o)(8) of this
section). Manufacturers shall track their
[[Page 15962]]
certification levels and sales unless they produce only vehicles
certified to cold temperature NMHC levels below the standard and do not
plan to bank credits.
(8) The following provisions apply if debits are accrued:
(i) If a manufacturer calculates that it has negative credits (also
called ``debits'' or a ``credit deficit'') for a given model year, it
shall be allowed to carry that deficit forward into the next model
year. Such a carry-forward may only occur after the manufacturer
exhausts any supply of banked credits. At the end of that next model
year, the deficit must be covered with an appropriate number of credits
that the manufacturer generates or purchases. Any remaining deficit
shall be subject to an enforcement action, as described in this
paragraph (o)(8). Manufacturers are not permitted to run a deficit for
two consecutive years.
(ii) If debits are not offset within the specified time period, the
number of vehicles not meeting the fleet average cold temperature NMHC
standards and not covered by the certificate must be calculated by
dividing the total amount of debits for the model year by the fleet
average cold temperature NMHC standard applicable for the model year in
which the debits were first incurred.
(iii) EPA will determine the number of vehicles for which the
condition on the certificate was not satisfied by designating vehicles
in those test groups with the highest certification cold temperature
NMHC emission values first and continuing until a number of vehicles
equal to the calculated number of noncomplying vehicles as determined
above is reached. If this calculation determines that only a portion of
vehicles in a test group contribute to the debit situation, then EPA
will designate actual vehicles in that test group as not covered by the
certificate, starting with the last vehicle produced and counting
backwards.
(iv)(A) If a manufacturer ceases production of LDV/LLDTs and HLDT/
MDPVs, the manufacturer continues to be responsible for offsetting any
debits outstanding within the required time period. Any failure to
offset the debits will be considered a violation of paragraph (o)(8)(i)
of this section and may subject the manufacturer to an enforcement
action for sale of vehicles not covered by a certificate, pursuant to
paragraphs (o)(8)(ii) and (iii) of this section.
(B) If a manufacturer is purchased by, merges with, or otherwise
combines with another manufacturer, the controlling entity is
responsible for offsetting any debits outstanding within the required
time period. Any failure to offset the debits will be considered a
violation of paragraph (o)(8)(i) of this section and may subject the
manufacturer to an enforcement action for sale of vehicles not covered
by a certificate, pursuant to paragraphs (o)(8)(ii) and (iii) of this
section.
(v) For purposes of calculating the statute of limitations, a
violation of the requirements of paragraph (o)(8)(i) of this section, a
failure to satisfy the conditions upon which a certificate(s) was
issued and hence a sale of vehicles not covered by the certificate, all
occur upon the expiration of the deadline for offsetting debits
specified in paragraph (o)(8)(i) of this section.
(9) The following provisions apply to NMHC credit trading:
(i) EPA may reject NMHC credit trades if the involved manufacturers
fail to submit the credit trade notification in the annual report. A
manufacturer may not sell credits that are not available for sale
pursuant to the provisions in paragraphs (o)(7)(i) of this section.
(ii) In the event of a negative credit balance resulting from a
transaction that a manufacturer could not cover by the reporting
deadline for the model year in which the trade occurred, both the buyer
and seller are liable, except in cases involving fraud. EPA may void ab
initio the certificates of conformity of all engine families
participating in such a trade.
(iii) A manufacturer may only trade credits that it has generated
pursuant to paragraph (o)(4) of this section or acquired from another
party.
(p) Maintenance of records and submittal of information relevant to
compliance with fleet average cold temperature NMHC standards--(1)
Maintenance of records. (i) Manufacturers producing any light-duty
vehicles, light-duty trucks, or medium-duty passenger vehicles subject
to the provisions in this subpart must establish, maintain, and retain
all the following information in adequately organized and indexed
records for each model year:
(A) Model year.
(B) Applicable fleet average cold temperature NMHC standard: 0.3g/
mi for LDV/LLDTs; 0.5 g/mi for HLDT/MDPVs.
(C) Fleet average cold temperature NMHC value achieved.
(D) All values used in calculating the fleet average cold
temperature NMHC value achieved.
(ii) Manufacturers producing any light-duty vehicles, light-duty
trucks, or medium-duty passenger vehicles subject to the provisions in
this subpart must establish, maintain, and retain all the following
information in adequately organized and indexed records for each LDV/T
or MDPV subject to this subpart:
(A) Model year.
(B) Applicable fleet average cold temperature NMHC standard.
(C) EPA test group.
(D) Assembly plant.
(E) Vehicle identification number.
(F) Cold temperature NMHC FEL to which the LDV/T or MDPV is
certified.
(G) Information on the point of first sale, including the
purchaser, city, and state.
(iii) Manufacturers must retain all records required to be
maintained under this section for a period of eight years from the due
date for the annual report. Records may be stored in any format and on
any media, as long as manufacturers can promptly send EPA organized,
written records in English if we ask for them. Manufacturers must keep
records readily available as EPA may review them at any time.
(iv) Nothing in this section limits the Administrator's discretion
to require the manufacturer to retain additional records or submit
information not specifically required by this section.
(v) Pursuant to a request made by the Administrator, the
manufacturer must submit to the Administrator the information that the
manufacturer is required to retain.
(vi) EPA may void ab initio a certificate of conformity for
vehicles certified to emission standards as set forth or otherwise
referenced in this subpart for which the manufacturer fails to retain
the records required in this section or to provide such information to
the Administrator upon request.
(2) Reporting. (i) Each covered manufacturer must submit an annual
report. The annual report must contain for each applicable cold
temperature NMHC standard, the fleet average cold temperature NMHC
value achieved, all values required to calculate the cold temperature
NMHC emissions value, the number of credits generated or debits
incurred, all the values required to calculate the credits or debits,
the resulting balance of credits or debits, and sufficient information
to show compliance with all phase-in or alternative phase-in
requirements.
(ii) For each applicable fleet average cold temperature NMHC
standard, the annual report must also include documentation on all
credit transactions the manufacturer has engaged in since those
included in the last report. Information for each transaction must
include all of the following:
(A) Name of credit provider.
(B) Name of credit recipient.
(C) Date the trade occurred.
[[Page 15963]]
(D) Quantity of credits traded.
(E) Model year in which the credits were earned.
(iii) Unless a manufacturer reports the data required by this
section in the annual production report required under Sec. 86.1844-
01(e), a manufacturer must submit an annual report for each model year
after production ends for all affected vehicles produced by the
manufacturer subject to the provisions of this subpart and no later
than May 1 of the calendar year following the given model year. Annual
reports must be submitted to: Director, Compliance and Innovative
Strategies Division, U.S. Environmental Protection Agency, 2000
Traverwood, Ann Arbor, Michigan 48105.
(iv) Failure by a manufacturer to submit the annual report in the
specified time period for all vehicles subject to the provisions in
this section is a violation of section 203(a)(1) of the Clean Air Act
(42 U.S.C. 7522) for each applicable vehicle produced by that
manufacturer.
(v) If EPA or the manufacturer determines that a reporting error
occurred on an annual report previously submitted to EPA, the
manufacturer's credit or debit calculations will be recalculated. EPA
may void erroneous credits, unless traded, and must adjust erroneous
debits. In the case of traded erroneous credits, EPA must adjust the
selling manufacturer's credit or debit balance to reflect the sale of
such credits and any resulting generation of debits.
(3) Notice of opportunity for hearing. Any voiding of the
certificate under paragraph (p)(1)(vi) of this section will be made
only after EPA has offered the affected manufacturer an opportunity for
a hearing conducted in accordance with Sec. 86.614-84 for light-duty
vehicles or Sec. 86.1014-84 for light-duty trucks and, if a
manufacturer requests such a hearing, will be made only after an
initial decision by the Presiding Officer.
[FR Doc. 06-2315 Filed 3-28-06; 8:45 am]
BILLING CODE 6560-50-P