Document 6R9OobZVGnwr53Dmj38advk71

> ----------------------------------------------------------------------> > 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. > > ----------------------------------------------------------------------> > 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, SH ELL-MCCLU RG-063126 > notify the contact person listed under FOR FURTHER INFORMATION CONTACT > by April 3, 2006. > > ADDRESSES: Submit your comments, identified by Docket 10 No. EPA-HQ> OAR-2005-0036, by one of the following methods: > http://www. regulations. gov: <http://frwebgate. access. gpo. gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=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, 72517th 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 10 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 > http://www. regulations. gov <http://frwebgate. access. gpo. gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov>, including any personal information provided, > > unless the comment includes information claimed to be Confidential > Business Information (CBI) or other information whose disclosure is > restricted by statute. Do not submit information that you consider to > be CBI or otherwise protected through http://www.regulations.gov <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov> or e-mail. > > The http://www. regulations. gov <http://frwebgate. access. gpo. gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://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 http://www.regulations.gov <http://frwebgate. access. gpo. gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov> > > your e-mail address will be automatically captured and included as part > of the comment that is placed in the public docket and made available > on the Internet. If you submit an electronic comment, EPA recommends > that you include your name and other contact information in the body of > your comment and with any disk or CD-ROM you submit. If EPA cannot read > your comment due to technical difficulties and cannot contact you for > clarification, EPA may not be able to consider your comment. Electronic > files should avoid the use of special characters, any form of > encryption, and be free of any defects or viruses. For additional > information about EPA's public docket visit the EPA Docket Center > homepage at http://www. epa. gov/epahome/dockets. htm <http://frwebgate. access. gpo. gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa.gov/epahome/dockets.htm>. For additional > > instructions on submitting comments, go to section XI, Public SH ELL-MCCLU RG-063127 > Participation, of the SUPPLEMENTARY INFORMATION section of this > document. > Docket: All documents in the docket are listed in the > http://www. regulations. gov <http://frwebgate. access. gpo. gov/cgi- binileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov> index. Although listed in the index, some> > > information is not publicly available, e.g., CBI or other information > whose disclosure is restricted by statute. Certain other material, such > as copyrighted material, will be publicly available only in hard copy. > Publicly available docket materials are available either electronically > in http://www. regulations. gov <http://frwebgate. access. gpo. gov/cgi- binileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov> or in hard copy at the Air Docket, EPA/DC, EPA > > West, Room B102, 1301 Constitution Ave., NW., Washington, DC. The > Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through > Friday, excluding legal holidays. The telephone number for the Public > Reading Room is (202) 566-1744, and the telephone number for the Air > Docket is (202) 566-1742. > 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: lieske.christopher@epa.gov <mailto:lieske.christopher@epa.gov>, or Assessment and > Standards Division > > [[Page 15805]] > > Hotline; telephone number: (734) 214-4636; e-mail address: > asdinfo@epa.gov <mailto:asdinfo@epa.gov>. > > > 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: > > ---------------------------------------------------------------------------------------------------------------- > NAICS SIC codes > Category codes \a\ \b\ Examples of potentially affected entities > ---------------------------------------------------------------------------------------------------------------- > Industry...................... 336111 3711 Motor vehicle manufacturers. > Industry...................... 335312 3621 Alternative fuel vehicle converters. > 424720 5172 SH ELL-MCCLU RG-063128 > 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 ..................................................... . > ---------------------------------------------------------------------------------------------------------------- > \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 http://www.regulations.gov <http://frwebgate. access. gpo. gov/cgi- binileaving.cgi?from=leavingFR.html&log=linklog&to=http://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 SH ELL-MCCLU RG-063129 > > 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(1) > b. Clean Air Act Section 183(e) > c. Energy Policy Act > 3. What Other Actions Has EPA Taken Under Clean Air Act Section > 202(1)? > 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? > > [[Page 15806]] > > B. What is the Distribution of Exposure and Risk? > 1. Distribution of National-Scale Estimates of Risk from Air SHELL-MCCLURG-063130 > 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 PM1 0 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 (VOG) > b. Toxics > c. PM2.5 > 2. Proposed Fuel Benzene Controls > 3. Proposed Gas Can Standards > a. VOC > b. Toxics SHELL-MCCLURG-063131 > 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 > (ICls) > VII. Proposed Gasoline Benzene Control Program SHELL-MCCLURG-063132 > 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? > SHELL-MCCLURG-063133 > [[Page 15807]] > > 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 SHELL-MCCLURG-063134 > 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? SHELL-MCCLURG-063135 > 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 SHELL-MCCLURG-063136 > > [[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 SHELL-MCCLURG-063137 > 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 vac. 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 SHELL-MCCLURG-063138 > 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(1) > Section 202(1)(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(1)(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(1), and we > committed in that rule to engage in further rulemaking to implement > section 202(1). 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 vac emissions from such products, contribute > at least 80 percent of the vac 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 SHELL-MCCLURG-063139 > 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(1)? > a. 2001 Mobile Source Air Toxics Rule > EPA published a final rule under Clean Air Act section 202(1) 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 SH ELL-MCCLU RG-063140 > 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(1).\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 1581 Oll > > 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 SH ELL-MCCLU RG-063141 > 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 11.A.4. > --------------------------------------------------------------------------> > \3\ Based on quantitative estimates of risk, which do not > include diesel particular matter and diesel exhaust organic gases. > ---------------------------------------------------------------------------> > > Sections 11.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/ttnlatw/nata <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa.gov/ttnlatw/nata> 1999. > SH ELL-MCCLU RG-063142 > \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 111.0 of this preamble for more information. > --------------------------------------------------------------------------> SH ELL-MCCLU RG-063143 > 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 200312.6% 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 <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.cenus.gov/hhes/www/housing/ahs/ahs03/ahs03 .html> > 1Table IA-6. > > --------------------------------------------------------------------------> > 4. Ozone and Particulate Matter > Many MSATs are part of a larger category of mobile source emissions > known as volatile organic compounds (VaG), 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 SH ELL-MCCLU RG-063144 > 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 > SH ELL-MCCLU RG-06314S > [[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 SH ELL-MCCLU RG-063146 > 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 vac more > generally. vac 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(1) 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 SH ELL-MCCLU RG-063147 > 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 (http://www.epa.gov/otaq/toxics.htm <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa.gov/otaq/toxics.htm>). Table 111.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. > 1,2-0ibromoethane........... Chlorine............ Methyl chloride. > 1,2-0ichlorobenzene......... Chlorobenzene....... Methyl ethyl ketone > (MEK). > 1,3-Butadiene............... Chloroform .......... Methyl isobutyl > ketone (MIBK). > 2,4-0initrophenol ........... Chromium III ........ Methyl tert-butyl > ether (MTBE). SH ELL-MCCLU RG-063148 > 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,hlanthracen 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[alanthracene........... Ethylene glycol Pyrene. > monobutyl ether. > Benzaldehyde................ Fluoranthene........ Selenium and > compounds. > Benzene..................... Fluorene............ Silver. > Benzo[alpyrene (BaP)........ Formaldehyde........ Strontium. > Benzo[blfluoranthene........ Furfural. ........... Styrene. > Benzo[klfluoranthene........ Hexachlorodibenzo-p- Tetrachloroethylene. > dioxin, mixture > (dioxinlfurans). > Benzoic acid................ n-Hexane............ Toluene. > Beryllium and compounds..... Hydrogen cyanide.... Trichlorofluorometha > ~. > Boron (Boron and Borates Hydrogen sulfide.... Vanadium. > only). > Bromomethane................ Indeno[1,2,3- Xylenes. > cdlpyrene. > 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 SH ELL-MCCLU RG-063149 > associated with the compounds.\9\ > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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/ttnlatw/nata1999 <http://frwebgate. access. gpo. govIcgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa.gov/ttnlatw/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 SHELL-MCCLURG-063150 > 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) SHELL-MCCLURG-063151 > ------------------------------------------------------------------------ >Be~e~................................. ~ ~ > 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[blfluoranthene, benz[alanthracene, indeno(1 ,2,3-c,d)pyrene, > benzo[klfluoranthene, chrysene, benzo[alpyrene, 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 111.0.2 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\ > --------------------------------------------------------------------------- > > \11 \ Chronic exposure is defined in the glossary of the > Integrated Risk Information (IRIS) database (http://www.epa.gov/iris <http://frwebgate.access.gpo.gov/cgi- binileaving.cgi?from=leavingFR.html&log=linklog&to=http://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/ttnlatw/nata1999 <http://frwebgate.access.gpo.gov/cgi- SHELL-MCCLURG-063152 binileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa.gov/ttnlatw/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. SHELL-MCCLURG-063153 > 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. > --------------------------------------------------------------------------> > \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 <http://frwebgate. access. gpo. govIcgibinileaving.cgi?from=leavingFR.html&log=linklog&to=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 SHELL-MCCLURG-063154 > 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 <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa> .gov/otaql > > regS/toxics Itox--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-97-001 F. http://www.epa.gov <http://frwebgate.access.gpo.gov/cgi-binileaving.cgi?from=1eavingFR.html&log=linklog&to=http://www.epa.gov> > Incepihom/Catalog IEPA600P97001 F.html. > > \21\ Irons, R.D., W.S. Stillman, D.B. Colagiovanni, and VA > Henry (1992) Synergistic action of the benzene metabolite > hydroquinone on myelopoietic stimulating activity of granulocytel > 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-97-001 F. http://www. epa. gov/ncepihom/Catalog/E PA600P97001 F. html <http://frwebgate. access. gpo. gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa.gov/ncepihom/Catalog/EPA600P97001 F.h tml> >. > > --------------------------------------------------------------------------> > 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-97-001 F. http://www. epa. gov/ncepihom/Catalog/E PA600P97001 F. html <http://frwebgate. access. gpo. gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa.gov/ncepihom/Catalog/EPA600P97001 F.h tml> >. SHELL-MCCLURG-063155 > > --------------------------------------------------------------------------> > 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-03/001 F. http://cfpub.epa.gov/ncea/raf/recordisplay.cfm?deid=116283 <http://frwebgate. access. gpo. govIcgibin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://cfpub.epa.gov/ncea/raf/recordisplay.cfm?deid=1162 83> >. > > \25\ U.S. EPA (1998) Carcinogenic Effects of Benzene: An Update. > EPA/600/P-97/001 F. > \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.; SHELL-MCCLURG-063156 > 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 Iymphohematopoietic 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, lA; et al. (1988) A > population-based case-control study of childhood leukemia in > Shanghai. Cancer 62:635-644. > \31\ McKinney, PA; Alexander, F.E.; Cartwright, RA; 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-02/001 F. http://www.epa.gov/iriS/toxreviewS/0276-tr <http://frwebgate. access. gpo. govIcgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa.gov/iriS/toxreviewS/0276-tr> > [1].pdf. > > \36\ Ford, AM; Pombo-de-Oliveira, MS; McCarthy, KP; Maclean, JM; SHELL-MCCLURG-063157 > 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 > --------------------------------------------------------------------------> > \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, leukemogenicityand > 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. SHELL-MCCLURG-063158 > \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 <http://frwebgate. access. gpo. govIcgibinileaving.cgi?from=leavingFR.html&log=linklog&to=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. > --------------------------------------------------------------------------> > \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, KW. and Mani, C. (2003). Benzene metabolism in > rodents at doses relevant to human exposure from Urban Air. Res Rep > Health Effect Inst 113. > --------------------------------------------------------------------------> > 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 3x1 0-5 > 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]gl > 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 SHELL-MCCLURG-063159 > 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. > --------------------------------------------------------------------------> > \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-98-001 F. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=54499 <http://frwebgate. access. gpo. govIcgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=5449 9> >. > > \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. > --------------------------------------------------------------------------> > 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]gl > m3. Confidence in the inhalation RfC is medium. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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 SH ELL-MCCLU RG-063160 > 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." > --------------------------------------------------------------------------> > \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 Iymphohematopoetic 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. > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \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. SHELL-MCCLURG-063161 > \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, 7/30104). > --------------------------------------------------------------------------> > 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 2.2x1 0-\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. > --------------------------------------------------------------------------> > \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 <http://frwebgate. access. gpo. govIcgibinileaving.cgi?from=leavingFR.html&log=linklog&to=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. > --------------------------------------------------------------------------> > 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\ > --------------------------------------------------------------------------> > \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 SH ELL-MCCLU RG-063162 <http://frwebgate. access. gpo. govIcgibinileaving.cgi?from=leavingFR.html&log=linklog&to=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. > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \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 <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa.gov/iris/subst/0364.htm>. > > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> SH ELL-MCCLU RG-063163 > 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 <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=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 > 3x1 0-\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. > --------------------------------------------------------------------------> > \69\ U.S. EPA. (2004) External Review Draft, IRIS Reassessment > of the Inhalation Carcinogenicity of Naphthalene. http://www.epa.gov/iris <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=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 <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://cfpub2.epa.gov/ncea/cfm/recordisplay.cfm?deid=860 19> > \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 <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.oehha.ca.gov/air/toxic_contaminants/draftnapht h.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 <http://frwebgate. access. gpo. govIcgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa.gov/iris/subst/0436.htm> >. > > --------------------------------------------------------------------------> > 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 SH ELL-MCCLU RG-063164 > 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. > --------------------------------------------------------------------------> > \74\ U.S. EPA (2002) Health Assessment Document for Diesel > Engine Exhaust. EPA/600/8-901057F Office of Research and > Development, Washington DC. This document is available> > electronically at http://cfpub. epa. gov/ncea/cfm/recordisplay. cfm?deid=29060 <http://frwebgate. access. gpo. govIcgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=2906 0> >. > > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \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 SH ELL-MCCLU RG-063165 > 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. > --------------------------------------------------------------------------> > 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). > --------------------------------------------------------------------------> > \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. SH ELL-MCCLU RG-063166 > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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 SH ELL-MCCLU RG-063167 > 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(1)(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 SH ELL-MCCLU RG-063168 > 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(1). > 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 SH ELL-MCCLU RG-063169 > 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(1). Emissions of hydrocarbons > containing chlorine (e.g., dioxinslfurans) 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. > --------------------------------------------------------------------------> > \84\ 65 FR 6697, February 10, 2000. > \85\ 66 FR 5001 , January 18, 2001 . > \86\ 69 FR 38958, June 29, 2004. > --------------------------------------------------------------------------> > 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\ > --------------------------------------------------------------------------> > \87\ http://www.epa.gov/ttnlatw/nata1999 <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa.gov/ttnlatw/nata1999>. > > --------------------------------------------------------------------------> > 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 adj ustments 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. SH ELL-MCCLU RG-063170 > --------------------------------------------------------------------------> > \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 <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=1162 83> >. > > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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 SHELL-MCCLURG-063171 > 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]] > SH ELL-MCCLU RG-063172 > [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]] > > > SH ELL-MCCLU RG-063173 > 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 2.1 x1 0-6 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............................. 1.1 x1 0-7 1.4x1 0-6 7. 6x1 0-6 1.Ox1 0-7 1.4x1 0-6 8.5x1 0-6 > ---------------------------------------------------------------------------------------------------------------- > > 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. > --------------------------------------------------------------------------- > > \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. > --------------------------------------------------------------------------- > > Air quality monitoring is another means of evaluating pollutant > concentrations at locations near sources such as roadways. It is also SH ELL-MCCLU RG-063174 > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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 SH ELL-MCCLU RG-06317S > > [[Page 15825]] > > associated with other fuel-related VOCs measured. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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/m> 3, > respectively. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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\). > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------- SH ELL-MCCLU RG-063176 > > Similar findings of elevated concentrations of pollutants have also > been found in studies done in diesel buses. 100 101 102 > --------------------------------------------------------------------------> > \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, SA; 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. > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \103\ Personal communication with FACES Investigators Fred > Lurmann, Paul Roberts, and Katharine Hammond. Data is currently > being prepared for publication. > --------------------------------------------------------------------------> > 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 PM1 0, PM2.5, black carbon, total > NOX, and N02 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) N02, due specifically to roads with SH ELL-MCCLU RG-063177 > heavy traffic within a relatively small geographic area. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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, > N02 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. > --------------------------------------------------------------------------> > The Toxic Exposure Assessment--ColumbialHarvard (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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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]] > SH ELL-MCCLU RG-063178 > 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\ > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > \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. http://www.cchrc.org <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://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, LA; Noseworthy, L.; Fugler, D.; O'Leary, K.; > Karman, D.; Grande, C. (2004) Contribution of vehicle emissions from SH ELL-MCCLU RG-063179 > an attached garage to residential indoor air pollution levels. J. > Air & Waste Manage. Assoc. 54: 563-584. > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \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." > --------------------------------------------------------------------------- SHELL-MCCLURG-063180 > > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \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 SHELL-MCCLURG-063181 > 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. > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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 SHELL-MCCLURG-063182 > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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. SHELL-MCCLURG-063183 > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \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 . > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > Increased rates of illness-related school absenteeism have been SHELL-MCCLURG-063184 > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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). > --------------------------------------------------------------------------> > \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, OW.; 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 SHELL-MCCLURG-063185 > 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. > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \136\ A map of the 8-hour ozone nonattainment areas is included > in the RIA for this proposed rule.> > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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 SHELL-MCCLURG-063186 > 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. > --------------------------------------------------------------------------> > \138\ The Los Angeles South Coast Air Basin 8-hour ozone > nonattainment area will have to attain before June 15, 2021. > --------------------------------------------------------------------------> > 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 > VaC-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 vacs 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 SHELL-MCCLURG-063187 > 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 PM1 O. Both > the PM2.5 and PM1 0 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 > PM1 0 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]gl > 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 PM1 0-2.5 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 PM1 0-2.5 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). > --------------------------------------------------------------------------> > \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_ _ _ _ _ _ _ _ _ _ _ _ _ _ __ <http://frwebgate. access. gpo. govIcgibin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa.gov/air/particlepollution/actions.html_ __ --------------->> > > > > 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. > --------------------------------------------------------------------------> > \140\ U.S.EPA (1996) Air Quality Criteria for Particulate > Matter, EPA 600-P-95-001 aF, EPA 600-P-95-001 bF. 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 SHELL-MCCLURG-063188 > 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. > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \143\ Laden, F.; Neas, L.M.; Dockery, OW.; 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 PM1 0 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, RW.; 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. > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> SHELL-MCCLURG-063189 > \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/ <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa.gov/pmdesignations/>. > > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \147\ The Clean Air Interstate Rule (CAIR) will reduce emissions > of S02 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. > --------------------------------------------------------------------------> > 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 PM1 0 Levels > Air quality monitoring data indicates that as of September 2005 > approximately 29 million people live in 55 designated PM1 0 > nonattainment areas, which include all or part of 54 counties. The RIA > for this proposed rule lists the PM1 0 nonattainment areas > and their populations. > Based on section 188 of the Act, we expect that most areas will > attain the PM1 0 NAAQS no later than December 31 , 2006, > depending on an area's classification and other factors, and then be > required to maintain the PM1 0 NAAQS thereafter. The expected > PM and VOC inventory reductions from the standards proposed in this > action could be useful to states in maintaining the PM1 0 > NAAQS.\149\ > --------------------------------------------------------------------------> > \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 SHELL-MCCLURG-063190 > particles described by that indicator. EPA also proposed to revoke > the current 24-hour PM1 0 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 > > PM1 0 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 PM1 0-2.5 (71 > FR 2620, Jan. 17, 2006). > --------------------------------------------------------------------------> > 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 > --------------------------------------------------------------------------> > \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/ <http://frwebgate. access. gpo. govIcgibinileaving.cgi?from=leavingFR.html&log=linklog&to=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. > --------------------------------------------------------------------------> > 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 SHELL-MCCLURG-063191 > 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\ > --------------------------------------------------------------------------> > \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 PM1 0-2.5. 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. > > --------------------------------------------------------------------------> > [[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. > --------------------------------------------------------------------------> > \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/ <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa.gov/pmdesignations/>. > > \156\ US EPA. Regional Haze Regulations, July 1, 1999. (64 FR > 35714, July 1, 1999). > --------------------------------------------------------------------------> > 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 SHELL-MCCLURG-063192 > 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. > --------------------------------------------------------------------------> > \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). > --------------------------------------------------------------------------> > 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. SHELL-MCCLURG-063193 > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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]] SHELL-MCCLURG-063194 > > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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-1 Contribution 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. SHELL-MCCLURG-063195 > > [[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 22 > 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 > ---------------------------------------------------------------------------------------------------------------- > > > > B. VOC Emissions From Mobile Sources [GRAPHIC] [TIFF OMITTED] TP29MR06.002 > > 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 SHELL-MCCLURG-063196 > 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 201 0 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. > --------------------------------------------------------------------------- > > \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 201 0 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 > ---------------------------------------------------------------------------------------------------------------- SHELL-MCCLURG-063197 > > 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 SHELL-MCCLURG-063198 > 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. > --------------------------------------------------------------------------> > \168\ See RFG rule for why evaporative emissions are not > included in the anti-dumping toxics determination. > \169\ Phase II. > --------------------------------------------------------------------------> > 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 1.0. 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. > --------------------------------------------------------------------------> > \170\ 40 CFR Part 80, Subpart D. > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \171 \ Except for those who comply with the anti-dumping > requirements for conventional gasoline on an aggregate basis, in SHELL-MCCLURG-063199 > which case the MSAT1 requirements for conventional gasoline must be > met on the same aggregate basis (40 GFR Part 80, Subpart E). > --------------------------------------------------------------------------> > 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, GG 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 anyone 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. > --------------------------------------------------------------------------> > \172\ 65 FR 6822 (February 10, 2000). > --------------------------------------------------------------------------> > 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 VOG 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. > --------------------------------------------------------------------------> > \173\ 66 FR 5002 (January 18,2001) http://www.epa.gov/otaq/diesel.html <http://frwebgate. access. gpo. govIcgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa.gov/otaq/diesel.html> >. > > \174\ 69 FR 38958 (June 29,2004). > --------------------------------------------------------------------------> > 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 SH ELL-MCCLU RG-063200 > 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, SHELL-MCCLURG-063201 > "all terrain" vehicles and snowmobiles). Chapter 2 of the RIA > provides more information about these programs. As with highway > vehicles, the vac standards we have established for nonroad engines > will also significantly reduce VaC-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. SH ELL-MCCLU RG-063202 > 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 vanpoolslcarpools, 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 (VOG) > 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 SH ELL-MCCLU RG-063203 > 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 SH ELL-MCCLU RG-063204 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 vacs, 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. vac > Table V.E-6 shows the reductions in vac emissions that we expect > from the proposed gas can standard. In 2015, vac 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 vac Emissions From Gas Cans, 2010 to 2030 > ---------------------------------------------------------------------------------------------------------------- > 1999 2010 2015 2020 2030 > ---------------------------------------------------------------------------------------------------------------- > vac Without Rule (tons)......... 318,596 279,374 296,927 318,384 362,715 SH ELL-MCCLU RG-063205 > vac With Proposed Gas Can N.A. 250,990 116,431 125,702 144,634 > Standard (tons) ................ > vac 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 SH ELL-MCCLU RG-063206 > 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-1 0 > 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-1 O.--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) > --------------------------------------------------------------------------------------------------------------------------------------------------- SH ELL-MCCLU RG-063207 > 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, 2015to > 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 > SH ELL-MCCLU RG-063208 > [[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.--lmpact 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 SH ELL-MCCLU RG-063209 > ---------------------------------------------------------------------------------------------------------------- > Without Proposal............................................... 2.57x10-6 3.64x10-6 1.96x10-6 > 0.62% Benzene Standard.......................................... 2.35x10-6 3.51 x1 0-6 1.72x1 0-6 > % 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 5.61 x1 0-6 1.35x10-5 5.75x10-6 1.41 x1 0-5 > Proposed Benzene Standard.............................. . 5.49x10-6 1.32x10-5 5.39x10-6 1.29x10-5 5.51 x1 0-6 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. SHELL-MCCLURG-063210 > > 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 (aBO) requirements > for heavy-duty vehicles over 14,000 pounds. In general, aBO 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 aBO. Since that > time, California has established their heavy-duty aBO 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 SHELL-MCCLURG-063211 > 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(1) 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(1). 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 SHELL-MCCLURG-063212 > 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 (E1 0) 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(1) deals with control of air toxics, and > not criteria pollutants like PM, this co-benefit of cold temperature > control is significant. SHELL-MCCLURG-063213 > 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. SHELL-MCCLURG-063214 > 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 SHELL-MCCLURG-063215 > 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 > (gmms/ > mile) > ------------------------------------------------------------------------ > < = 6000 Ibs: Light-duty vehicles (LDV) & Light light-duty 0.3 > trucks (LLDT) ............................................ . > > 6000 Ibs: Heavy light-duty trucks (HLDT) up to 8,500 Ibs 0.5 > & Medium-duty passenger vehicles (MDPV) up to 10,000 Ibs.. > ------------------------------------------------------------------------ > > 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 SHELL-MCCLURG-063216 > 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 Ibs GVWR, is what is technically feasible for > heavier vehicles. The proposed 0.5 g/mile standard would apply for > vehicles over 6000 Ibs GVWR, which includes both HLDTs (6000 Ibs to > 8500 Ibs) 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 SHELL-MCCLURG-063217 > 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 SHELL-MCCLURG-063218 > 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 Ibs 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 SHELL-MCCLURG-063219 > 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 SH ELL-MCCLU RG-063220 > 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 Ibs 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 Ibs 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(1) of the CAA. We are > proposing to begin implementing the standard in the 2010 model year > (MY) for LDVslLLDTs and 2012 MY for HLDTslMDPVs. 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 SHELL-MCCLURG-063221 > 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 Ibs (LDV/LLDT)............ 25% 50% 75% 100% .......... . > > 6000 Ibs 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 SH ELL-MCCLU RG-063222 > 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 LDVslLDTs and 2015 for HLDTslMDPVs). > 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*1 00=500). For example, the equation for LDVslLLDTs would be as > follows: > > (6xAPI2008) + (5xAPI 2009) + (4xAPI > 2010) + (3xAPI 2011) + (2xAPI 2012) + > (1 xAPI 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 LDVslLDTs > and HLDTslMDPVs 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 LDVslLDTs 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 LDVslLDTs are introduced in > the 2010 time frame (2012 for HLDTslMDPVs), manufacturers would not be SH ELL-MCCLU RG-063223 > 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]] > > LDVslLDTs. 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 HLDTslMDPVs). 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 SH ELL-MCCLU RG-063224 > 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 LDVslLLDTs to standards as early as > the 2008 model year (2010 for HLDTslMDPVs) 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 HLDTslMDPVs). > 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 LDVslLDTs, credits would be generated (below 0.5 > g/mi for HLDTslMDPVs). These credits could then be used in a future > model year when its average NMHC might exceed the 0.3 or the 0.5 SH ELL-MCCLU RG-06322S > 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 SH ELL-MCCLU RG-063226 > 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 > HLDTslMDPVs. 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 SH ELL-MCCLU RG-063227 > 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 SH ELL-MCCLU RG-063228 > 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 LDVslLDTs and HLDTsi > 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. > --------------------------------------------------------------------------> SH ELL-MCCLU RG-063229 > 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 LDVslLLDTs > ---------------------------------------------------------------------------------------------------------------- > 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 > 201 0 2011 2012 2013 2014 > 2011 2012 2013 > ---------------------------------------------------------------------------------------------------------------- > > > > [[Continued on page 15853]] > > > From the Federal Register Online via GPO Access [wais.access.gpo.gov] >] > > [[pp. 15853-15902]] Control of Hazardous Air Pollutants From Mobile Sources > > [[Continued from page 15852]] > > [[Page 15853]] > > > Table VI.B-4.--Schedule for In-Use Standards for HLDVslMDPVs > ---------------------------------------------------------------------------------------------------------------- > 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 SH ELL-MCCLU RG-063230 > 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 SC03 > 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 SH ELL-MCCLU RG-063231 > 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] > ------------------------------------------------------------------------ > > Vehicle class Supplemental 23-day diurnal day diurnal > plus hot soak plus hot soak > ------------------------------------------------------------------------ > LDVs.................................. > LLDTs................................. 0.50 0.65 0.65 0.85 > HLDTs................................. > MDPVs................................. 0.90 1.00 1.15 1.25 SH ELL-MCCLU RG-063232 > -----------------------------------------------------------------------> > 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 202203 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 (I) (2) that emission reductions of hazardous air > pollutants be the greatest achievable. Sierra Club v. EPA, 325 F. 3d > at 477. > --------------------------------------------------------------------------> > We believe this proposed action would be an important step to SH ELL-MCCLU RG-063233 > 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-Ievel 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 2. Evaporative Standards Timing > We are proposing to implement today's evaporative emission SH ELL-MCCLU RG-063234 > standards in model year 2009 for LDVslLLDTs and model year 2010 for > HLDTslMDPVs. 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 LDVslLLDTs. > For HLDTslMDPVs, 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 HLDTslMDPVs. 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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 LDVslLLDTs and 2013 for HLDTslMDPVs. The proposed > evaporative emission certification standards would be implemented in > 2009 for LDVslLLDTs and 2010 for HLDTslMDPVs 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. SH ELL-MCCLU RG-063235 > The provisions for in-use evaporative emission standards described > below in section VI.CA 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 LDVslLLDTs and 2013 for HLDTslMDPVs. > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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 adj ustments 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 SH ELL-MCCLU RG-063236 > 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 LDVslLLDTs and > model year 2010 for HLDTslMDPVs, these same certification > > [[Page 15856]] > > standards would apply in-use beginning in model year 2012 for LDVsI > LLDTs and model year 2013 for HLDTslMDPVs.\215\ > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \216\ Manufacturers are required to develop deterioration > factors using a fuel that contains the highest legal quantity of > ethanol available in the U.S. > --------------------------------------------------------------------------> > 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 SH ELL-MCCLU RG-063237 > 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\ > --------------------------------------------------------------------------- > > \218\ EPA may require comparative data from both federal and > California tests. > --------------------------------------------------------------------------- > > 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\ > --------------------------------------------------------------------------- > > \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). > --------------------------------------------------------------------------- > > As explained earlier, section 202(1)(2) requires EPA to adopt > regulations that contain standards which reflect the greatest degree of > emissions reductions achievable through the application of technology SH ELL-MCCLU RG-063238 > 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(1)(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 SH ELL-MCCLU RG-063239 > 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 mayor 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 (ICls),\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 ICls > and alternative fuel vehicle converters since they sell less than > 15,000 vehicles per year. > --------------------------------------------------------------------------> > \220\ ICls 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. > --------------------------------------------------------------------------> > About 34 out of 50 entities that certify vehicles are SVMs, and the> SH ELL-MCCLU RG-063240 > Panel identified 21 of these 34 SVMs that are small businesses as > defined by the Small Business Administration criteria (5 manufacturers, > 10 ICls, 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. > --------------------------------------------------------------------------> > \222\ For example, as described later in section VI.E.3, ICls > 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 ICls, 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. > --------------------------------------------------------------------------> > 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. SH ELL-MCCLU RG-063241 > 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 (ICls) > Although the SBAR panel did not specifically recommend it, we are > proposing to allow ICls 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 ICls > specifically bar ICls 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 > ICls 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 SH ELL-MCCLU RG-063242 > 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 ICls 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(1) 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. SH ELL-MCCLU RG-063243 > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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 vac 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 SH ELL-MCCLU RG-063244 > 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\ > --------------------------------------------------------------------------> > \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\ > --------------------------------------------------------------------------> SH ELL-MCCLU RG-06324S > \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. > --------------------------------------------------------------------------> > 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 SH ELL-MCCLU RG-063246 > changes in gasoline volatility and sulfur content on vac, and thus paM, > emissions from new Tier 2-compliant vehicles. In any event, because paM > is only a tiny fraction of vehicle vac emissions, we expect that > further changes in these fuel parameters would have only small effects > on paM. As a result, we are not proposing fuel controls to address paM > 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 vac > 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 vac 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 vac, Nax, > 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 vac emissions from gasoline vehicles. Reducing the > volatility of gasoline can reduce evaporative vac emissions as well as > exhaust emissions. Evaporative vac emissions include benzene. As a > result, in developing this proposal we have considered whether further SH ELL-MCCLU RG-063247 > 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 SH ELL-MCCLU RG-063248 > 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 SH ELL-MCCLU RG-063249 > 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 SH ELL-MCCLU RG-0632S0 > 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 > ---------------------------------------------------------------------------> > > \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 SHELL-MCCLURG-063251 > 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 SH ELL-MCCLU RG-0632S2 > 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. > --------------------------------------------------------------------------> > \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- SH ELL-MCCLU RG-0632S3 > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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.) Weare 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 SH ELL-MCCLU RG-0632S4 > 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 SH ELL-MCCLU RG-063255 > 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 > SH ELL-MCCLU RG-0632S6 > [[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 SH ELL-MCCLU RG-0632S7 > 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 SH ELL-MCCLU RG-0632S8 > > [[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 SH ELL-MCCLU RG-0632S9 > 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(1) 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(1). 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(1). > --------------------------------------------------------------------------> > \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 SH ELL-MCCLU RG-063260 > 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. SHELL-MCCLURG-063261 > 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(1)(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.--0ther 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 SH ELL-MCCLU RG-063262 > > [[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 > --------------------------------------------------------------------------------------------------------------------------------------------------- > level (vol%) * Number of refineries by gasoline benzene level (vol%) Benezene > > <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*** > --------------------------------------------------------------------------------------------------------------------------------------------------- >PADD1 .................................... 4 3 3 0 2 0 0.41 2.19 1.77 0.62 >PADD2.................................... 0 5 8 11 0.60 2.85 2.25 SH ELL-MCCLU RG-063263 1.32 o>PADD3................................... . 4 18 10 7 2 0.41 3.10 2.69 0.86 >PADD4................................... . o 4 6 3 2 0.60 3.56 2.96 1.60 o o> PADD 5 **** .............................. . 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 > --------------------------------------------------------------------------------------------------------------------------------------------------- >PADD1 ................................... . 4 5 2 o o 0.41 1.96 1.54 0.51 >PADD2................................... . 22 2 o o 0.49 1.95 1.46 0.73 o>PADD3................................... . 10 27 3 o 0.36 2.07 1.71 0.55 >PADD4................................... . o8 7 o o 0.53 1.94 1.40 0.95 o o o> PADD 5 *** .............................. .. 422 0.54 1.84 1.30 1.04 > > Total. ............................... . 15 66 14 7 o 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 SH ELL-MCCLU RG-063264 > 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. > --------------------------------------------------------------------------> > \244\ As explained in section VILC.5 below, CG provides a > limited safety valve for occasional batches of high-benzene RFG due > to the Anti-dumping provisions. > --------------------------------------------------------------------------> > 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. SH ELL-MCCLU RG-063265 > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \246\ This program comparison is discussed further in Chapter 9 > of the RIA (Table 9.6-7). > --------------------------------------------------------------------------> > 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 SH ELL-MCCLU RG-063266 > 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. > --------------------------------------------------------------------------> > \247\ Other gasoline fuel controls, such as sulfur, RVP or VOC > performance standards, indirectly control toxics performance by > > reducing overall emissions of VOCs. > --------------------------------------------------------------------------> > 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.O.1 above describes these > programs in more detail. > --------------------------------------------------------------------------> > \248\ 40 CFR 80 Subpart O. 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. > --------------------------------------------------------------------------> > The MSAT1 program, implemented in 2002, was overlaid on the RFG and > Anti-dumping programs.\251\ As explained in section V.O 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. > --------------------------------------------------------------------------> > \251\ 40 CFR 80 Subpart J. > \252\ Emissions determined using the Complex Model, as defined > in 40 CFR 80.45. SH ELL-MCCLU RG-063267 > --------------------------------------------------------------------------> > 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\ > --------------------------------------------------------------------------> > \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 SH ELL-MCCLU RG-063268 > 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 SH ELL-MCCLU RG-063269 > 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 > Regulatory scenario CG by PADD > Year II III 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 SH ELL-MCCLU RG-063270 > 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. > --------------------------------------------------------------------------> > \256\ See discussion of statutory authority in section I.C. of > this preamble. > ---------------------------------------------------------------------------> > > 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 SHELL-MCCLURG-063271 > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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 SH ELL-MCCLU RG-063272 > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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 SH ELL-MCCLU RG-063273 > 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 SH ELL-MCCLU RG-063274 > 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. > --------------------------------------------------------------------------> > \259\ Derivation of three-year early credit lag is found in > Chapter 6 of the RIA (section 6.5.3.1). > --------------------------------------------------------------------------> > 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 SH ELL-MCCLU RG-06327S > 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 SH ELL-MCCLU RG-063276 > 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. > --------------------------------------------------------------------------> > \260\ As discussed in section VII.I.1 below, foreign refiners > may generate early credits under the proposed 40 CFR 80.1420 > provisions. > --------------------------------------------------------------------------> > 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 SH ELL-MCCLU RG-063277 > own and operate one or more refineries, be treated as separate refining > entities for early credit generation purposes. > ---------------------------------------------------------------------------> > > \261 \ RFG, 40 CFR 80.75; Anti-dumping, 40 CFR 80.105. > --------------------------------------------------------------------------> > 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 SH ELL-MCCLU RG-063278 > 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. > --------------------------------------------------------------------------> > \262\ 40 CFR 80.305. > --------------------------------------------------------------------------> > 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 SH ELL-MCCLU RG-063279 > 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. > --------------------------------------------------------------------------> > --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. SH ELL-MCCLU RG-063280 > 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 SH ELL-MCCLU RG-063281 > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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 SH ELL-MCCLU RG-063282 > 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 SH ELL-MCCLU RG-063283 > 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. > SH ELL-MCCLU RG-063284 > 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\ > --------------------------------------------------------------------------> > \265\ 43 U.S.C. 1626. > --------------------------------------------------------------------------> > 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 > SH ELL-MCCLU RG-063285 > [[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, SH ELL-MCCLU RG-063286 > 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 SH ELL-MCCLU RG-063287 > 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. SH ELL-MCCLU RG-063288 > 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 SH ELL-MCCLU RG-063289 > 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 SH ELL-MCCLU RG-063290 > 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 SHELL-MCCLURG-063291 > 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 SH ELL-MCCLU RG-063292 > 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. SH ELL-MCCLU RG-063293 > ---------------------------------------------------------------------------------------------------------------> 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%. SH ELL-MCCLU RG-063294 > 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 SH ELL-MCCLU RG-063295 > 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. > --------------------------------------------------------------------------- > > \267\ The benzene reduction technologies are discussed here in > the context of the feasibility for reducing the benzene levels of SH ELL-MCCLU RG-063296 > 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, SH ELL-MCCLU RG-063297 > 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 SH ELL-MCCLU RG-063298 > 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 SH ELL-MCCLU RG-063299 > 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 SH ELL-MCCLU RG-063300 > 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 SHELL-MCCLURG-063301 > 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 SH ELL-MCCLU RG-063302 > 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. > --------------------------------------------------------------------------> > \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, SH ELL-MCCLU RG-063303 > 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 SH ELL-MCCLU RG-063304 > 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. > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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. SH ELL-MCCLU RG-063305 > 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 SH ELL-MCCLU RG-063306 > 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(1) 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 SH ELL-MCCLU RG-063307 > 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 SH ELL-MCCLU RG-063308 > 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 SH ELL-MCCLU RG-063309 > 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 80.1 O(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. > --------------------------------------------------------------------------> > 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. > --------------------------------------------------------------------------> > \272\ California Code of Regulations, Title 13 Section 2262.> > --------------------------------------------------------------------------> > 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 SHELL-MCCLURG-063310 > 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. > --------------------------------------------------------------------------> > \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, SHELL-MCCLURG-063311 > 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). > --------------------------------------------------------------------------> > \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 SH ELL-MCCLU RG-063312 > 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 SHELL-MCCLURG-063313 > 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 SH ELL-MCCLU RG-063314 > 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 SHELL-MCCLURG-063315 > 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 > (HOPE)). 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 VIIIA3., below. > > A. Why Are We Proposing an Emissions Control Program for Gas Cans? > > 1. vac Emissions > We are proposing standards to control vacs as an ozone precursor > and also to minimize exposure to VaC-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 vac emissions from gas cans are quite significant. We > estimate that containers currently emit about 315,000 tons of vac > annually nationwide, which is equal to about 5 percent of the > nationwide mobile source inventory (see section VA). Left > uncontrolled, a gas can's evaporative emissions are up to 60 times the> > vac 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 vac emissions in many areas of the country. SH ELL-MCCLU RG-063316 > 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). 8ased on criteria that we established > pursuant to section 183(e)(2)(8), 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\ > --------------------------------------------------------------------------> > \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. > --------------------------------------------------------------------------> > 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 SH ELL-MCCLU RG-063317 > 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 (HOPE) through an extruder with a > screw. The parison is then pinched in a mold and inflated with an inert > gas. The HOPE 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 HOPE 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 HOPE 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 HOPE 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 gO-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 HOPE 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 SHELL-MCCLURG-063318 > 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. > --------------------------------------------------------------------------> > \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. SHELL-MCCLURG-063319 > 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, SH ELL-MCCLU RG-063320 > 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. SHELL-MCCLURG-063321 > 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 SH ELL-MCCLU RG-063322 > 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 SH ELL-MCCLU RG-063323 > 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 E1 0 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 SH ELL-MCCLU RG-063324 > 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 E1 afuel and rocked for 1 million > cycles. The pressure-vacuum testing contains 10,000 cycles from -0.5 to SH ELL-MCCLU RG-06332S > 2.0 psi. The third durability test is intended to assess potential > impacts of ultraviolet (UV) sunlight (0.2 [mu]m-O.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. > ---------------------------------------------------------------------------> > > \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. > --------------------------------------------------------------------------> > 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 1O-percent ethanol blend in gasoline (E1 0), 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 SH ELL-MCCLU RG-063326 > 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 SH ELL-MCCLU RG-063327 > 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 vac 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" SH ELL-MCCLU RG-063328 > 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 vac 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 > SH ELL-MCCLU RG-063329 > [[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 VIILC through > VilLE. 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 SH ELL-MCCLU RG-063330 > 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 SH ELL-MCCLU RG-063331 > 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 SH ELL-MCCLU RG-063332 > 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 mayor 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 SH ELL-MCCLU RG-063333 > 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, > > > [[Continued on page 15903]] > > > From the Federal Register Online via GPO Access [wais.access.gpo.gov] >] > > [[pp. 15903-15952]] Control of Hazardous Air Pollutants From Mobile Sources > > [[Continued from page 15902]] > > [[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. SH ELL-MCCLU RG-063334 > > 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 > ---------------------------------------------------------------------------------------------------------------- > > 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. $212,606,000 SH ELL-MCCLU RG-063335 > 2 3 4 CAl > ---------------------------------------------------------------------------------------------------------------- > 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 > Max-Avg Std) ................................ . > Cost (c/gal).................................. 0.06 0.22 0.03 0.43 1.18 0.130 > ---------------------------------------------------------------------------------------------------------------- 0.62 > > 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)................................ > 0.65.................................................... 0.09 > 0.60.................................................... 0.15 0.13 > 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 SH ELL-MCCLU RG-063336 > 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 SH ELL-MCCLU RG-063337 > 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 > ----------------------------------------------------------------------------------------------------------------> > 201 0 2012 2014 2016 2018 2020 > ---------------------------------------------------------------------------------------------------------------- SH ELL-MCCLU RG-063338 > $11,119,000..................... $12,535,000 $13,406,000 $12,207,000 $10,682,000 > ---------------------------------------------------------------------------------------------------------------- > > 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 vac 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 > ------------------------------------------------------------------------ > ~~ > ------------------------------------------------------------------------ > 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 > ----------------------------------------------------------------------------------------------------------------> $0 SH ELL-MCCLU RG-063339 > 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 > ---------------------------------------------------------------------------------------------------------------> > O. 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 (I) 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 > VaC-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.0-1 using both a three percent and a seven percent social discount SH ELL-MCCLU RG-063340 > 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.--8enzene 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, SH ELL-MCCLU RG-063341 > 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 SH ELL-MCCLU RG-063342 > 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 VaG 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 VaG > 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/ttnlatw/sab/sabrev.html <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR. html&log=linklog&to=http://www. epa. gov/ttnlatw/sab/sabrev. html>. > > \291 \ The analytic blueprint for the Section 812 benzene case > study can be found at http://www.epa.gov/airlsect812/appendixi51203.pdf <http://frwebgate. access. gpo. govIcgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa.gov/airlsect812/appendixi51203.pdf> >. > > --------------------------------------------------------------------------> > We also do not estimate the monetized benefits of VaG controls in > this benefits analysis. Though VaGs 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 VaG 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 SH ELL-MCCLU RG-063343 > 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. SH ELL-MCCLU RG-063344 > 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]] SH ELL-MCCLU RG-06334S > > (proposed emission reductionsiCAND 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, > S02, 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 SH ELL-MCCLU RG-063346 > 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 > (age 18 years and younger) ........ . 360 630 > Acute bronchitis, (children, age 8- 790 1,400 > 12)............................... . > Lower respiratory symptoms > (children, age 7-14) .............. . 9,400 17,000 > 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 (COPO), 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, CA, III, R.T. Burnett, M.J. Thun, E.E. Calle, O. > Krewski, K. Ito, and G.O. 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 SH ELL-MCCLU RG-063347 > 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 $5.9 billion > in 2030 (3 percent and 7 percent discount rate, respectively). These > estimates account for growth in real gross domestic product (GOP) per > capita between the present and 2030. > Table IX.E-3 indicates with a "B" those additional health and > environmental benefits of the rule that we are unable to quantify or > monetize. These effects are additive to the estimate of total benefits, > and are related to the following sources: > There are many human health and welfare effects associated > with PM, ozone, and toxic air pollutant reductions that remain > unquantified because of current limitations in the methods or available > data. A listing of the benefit categories that could not be quantified > or monetized in our benefit estimates are provided in Table IX.E-1. > > [[Page 1591 Oll > > The PM benefits scaled transfer approach, derived from the > Clean Air Nonroad Diesel rule, does not account for vacs as precursors > to ambient PM2.5 formation. To the extent that vac emission > reductions associated with the proposed regulations contribute to > reductions in ambient PM2.5, this analysis does not capture > the related health and environmental benefits of those changes. > The PM air quality model only captures the benefits of air > quality improvements in the 48 states and DC; PM benefits for Alaska > and Hawaii are not reflected in the estimate of benefits. > > TABLE IX.E-3.--Estimated Annual Monetary Value of Reductions in Incidence of Health and Welfare Effects Related > to the Proposed Cold Temperature Vehicle Standard > [Millions of 2003$] 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. SH ELL-MCCLU RG-063348 > 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 > (MRADs). 36 > Monetized Total e: > Base estimate............. . > 3 percent discount rate PM2.5............. 3,400+ B 6,500+ B > 7 percent discount rate .................. 3,1 00+ 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 GOP 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. http://www.yosemite1.epa.gov/eelepa/eed/hsf/pages/Guideline.html <http://frwebgate. access. gpo. govIcgi- binileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.yosemite1.epa.gov/eelepa/eed/hsf/pages/Guid eline.html> >. > > Office of Management and Budget, The Executive Office of the > President, 2003. Circular A-4. http://www.whitehouse.gov/omb/circulars <http://frwebgate.access.gpo.gov/cgi- binileaving.cgi?from=leavingFR.html&log=linklog&to=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 SH ELL-MCCLU RG-063349 > 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 ec> onomic 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 SH ELL-MCCLU RG-063350 > 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 > (http://www.epa.gov/cair <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa.gov/cab) 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 <http://frwebgate. access. gpo. gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=1373 07> > \304\ For technical details about Clear Skies multi-pollutant > SHELL-MCCLURG-0633S1 > analysis, see http://www.epa.gov/airmarkets/mp/bmresultS/health_benefits_method.pdf_ _ _ _ _ _ _ _ _ _ _ __ _ _ _- <http://frwebgate. access. gpo. gov/cgi- binileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.epa.gov/airmarkets/mp/bmresultS/health_benefi ts_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 <http://frwebgate. access. gpo. gov/cgi- binileaving.cgi?from=leavingFR.html&log=linklog&to=http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=1145 23> > \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________________ <http://frwebgate. access. gpo. govIcgi- binileaving.cgi?from=leavingFR.html&log=linklog&to=http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=1373 07 -> > > > > 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 SH ELL-MCCLU RG-0633S2 > 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 SH ELL-MCCLU RG-063353 > > 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 (ElM) 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. http://www.yosemite1.epa.gov/eelepa/eed/hsf/pages/Guideline.html <http://frwebgate. access. gpo. govIcgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.yosemite1.epa.gov/eelepa/eed/hsf/pages/Guid SH ELL-MCCLU RG-0633S4 eline.html> >. > > Office of Management and Budget, The Executive Office of the > President, 2003. Circular A-4. http://www.whitehouse.gov/omb/circulars <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=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 ElM, 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/ <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://yosemite.epa.gov/ee/epa/> eed.nsf/webpages/ > SH ELL-MCCLU RG-063355 > Guidelines. html#download > --------------------------------------------------------------------------> > 2. What Is the Economic Impact Model? > The Economic Impact Model (ElM) 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 > ElM 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 ElM, 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 ElM 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 > smal1.31 0311 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 SH ELL-MCCLU RG-063356 > 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/aeoreUab. html <http://frwebgate. access. gpo. gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=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/spiliconiisor.pdf_ _ _ _ _ _ _ _ _ _ _ _ _ _ __ <http://frwebgate. access. gpo. govIcgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.arb.ca.gov/regact/spillconiisor.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 ElM 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 ElM, 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 ElM 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\ > --------------------------------------------------------------------------> SH ELL-MCCLU RG-0633S7 > \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 <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www>. epa.gov/ttnl ecas/ > > econdatai Rmanual2/ > --------------------------------------------------------------------------> > The ElM 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 ElM 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 SH ELL-MCCLU RG-063358 > 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 ElM are the behavioral parameters, SH ELL-MCCLU RG-063359 > compliance costs estimates, and market equilibrium quantities and > prices. > The ElM 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 ElM 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 ElM 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 SH ELL-MCCLU RG-063360 > 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 ElM. 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 ElM relies on the estimated compliance costs for the gas can > and gasoline fuel programs described elsewhere in this preamble. Thus, > the ElM 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 SHELL-MCCLURG-063361 > 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 > --------------------------------------------------------------------------------------------------------------------------------------------------- > > Market Change in price Change in quantity Engineeri ng 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................. - SH ELL-MCCLU RG-063362 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 $171.5 million, when the vehicle> > program compliance costs are terminated. > > Table IX.F-2.--Net Social Costs Estimates for the Proposed Program > [2009 to 2035--2003$, $millionj > ------------------------------------------------------------------------ > 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 SH ELL-MCCLU RG-063363 > NPVat 3%.............................................. . 2,937.3 > NPVat 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 $70 million by 2015 as compliant gas cans are phased > in. These savings accrue for the life of the gas cans.> > > Table IX.F-3.--Summary of Net Social Costs Estimates Associated With Primary Program > [2009, 2011, and 2015--2003$, $millionj > ---------------------------------------------------------------------------------------------------------------- > Change in consumer Change in producer > Market surplus surplus Total > ---------------------------------------------------------------------------------------------------------------- > 2009 > ---------------------------------------------------------------------------------------------------------------- > Gasoline U.S.: > PADD 1 & 3 > PADD 2 > PADD 4........................ .. > PADD 5 (w/out CA) .............. . N/A (gasoline fuel control program begins in 2011) > 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 ...................... . ...................... . SH ELL-MCCLU RG-063364 > 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. > SH ELL-MCCLU RG-063365 > 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 vac 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 SH ELL-MCCLU RG-063366 > 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 SH ELL-MCCLU RG-063367 > 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 SH ELL-MCCLU RG-063368 > 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 802 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 SH ELL-MCCLU RG-063369 > 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 SH ELL-MCCLU RG-063370 > 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(1) 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 SHELL-MCCLURG-063371 > 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, > http://www. regulations. gov <http://frwebgate. access. gpo. gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov>, or bye-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 10 EPA-HQ-OAR-2005-0036. > You may claim information that you submit to EPA as CBI by marking any SH ELL-MCCLU RG-063372 > 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. SH ELL-MCCLU RG-063373 > 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 SH ELL-MCCLU RG-063374 > 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 10 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. > SH ELL-MCCLU RG-06337S > 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 > ~~~ ~ > ------------------------------------------------------------------------ > 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 SH ELL-MCCLU RG-063376 > 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(1)(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 (ICls), 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 ICls. Of these, EPA believes 5 SVMs, 6 converters, > and all 10 ICls 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 SH ELL-MCCLU RG-063377 > 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. SH ELL-MCCLU RG-063378 > 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 SH ELL-MCCLU RG-063379 > 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 ICls 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 vac standards and evaporative emission standards: > For cold vac standards, the Panel recommended that SVMs simply SH ELL-MCCLU RG-063380 > 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 VaG 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 VaG 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 Gredits--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. SH ELL-MCCLU RG-063381 > 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 SH ELL-MCCLU RG-063382 > 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. SH ELL-MCCLU RG-063383 > 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 SH ELL-MCCLU RG-063384 > "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 ICls), 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 SH ELL-MCCLU RG-063385 > 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. SH ELL-MCCLU RG-063386 > 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.1 04-113, 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 SH ELL-MCCLU RG-063387 > 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 7511 b(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 SH ELL-MCCLU RG-063388 > CONSUMER AND COMMERCIAL PRODUCTS > > 1. The authority citation for part 59 continues to read as follows: > > Authority: 42 U.S.C. 7414 and 7511 b(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 > SH ELL-MCCLU RG-063389 > 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 SH ELL-MCCLU RG-063390 > 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. SHELL-MCCLURG-063391 > (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 SH ELL-MCCLU RG-063392 > 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 SH ELL-MCCLU RG-063393 > 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. SH ELL-MCCLU RG-063394 > (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 SH ELL-MCCLU RG-063395 > 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. > (I) 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. > (0) 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? > SH ELL-MCCLU RG-063396 > 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? > SH ELL-MCCLU RG-063397 > (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 SH ELL-MCCLU RG-063398 > 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 SH ELL-MCCLU RG-063399 > 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 SH ELL-MCCLU RG-063400 > 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 SHELL-MCCLURG-063401 > 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 W1m2 (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. > (0) 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: SH ELL-MCCLU RG-063402 > (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 SH ELL-MCCLU RG-063403 > 8 ...................................................... . 35.4 > 9 ...................................................... . 35.6 > 1 0 ..................................................... . 35.3 > 11 .................................................... .. 34.5 > 1 2 ..................................................... . 33.2 > 1 3 ..................................................... . 31.4 > 1 4 ..................................................... . 29.7 > 1 5 ..................................................... . 28.2 > 1 6 ..................................................... . 27.2 > 1 7 ..................................................... . 26.1 > 1 8 ..................................................... . 25.1 > 1 9 ..................................................... . 24.3 > 20...................................................... 23.7 > 21 ..................................................... . 23.3 > 22..................................................... . > 23...................................................... 22.9> 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 SH ELL-MCCLU RG-063404 > 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. SH ELL-MCCLU RG-063405 > (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 SH ELL-MCCLU RG-063406 > 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 <http://frwebgate.access.gpo.gov/cgibinileaving.cgi?from=leavingFR.html&log=linklog&to=http://www.fms.treas.gov/c570/c570.html>). > > (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: SH ELL-MCCLU RG-063407 > Act means the Clean Air Act, as amended, 42 U.S.C. 7401--7671 q. > 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. SH ELL-MCCLU RG-063408 > 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: > SH ELL-MCCLU RG-063409 > 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 mayor 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. SH ELL-MCCLU RG-06341 0 > (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 SHELL-MCCLURG-063411 > 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 SH ELL-MCCLU RG-063412 > 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? SH ELL-MCCLU RG-063413 > > 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] SH ELL-MCCLU RG-063414 > > 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? > SH ELL-MCCLU RG-06341S > (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. > SH ELL-MCCLU RG-063416 > > 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. > > SH ELL-MCCLU RG-063417 > 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 SH ELL-MCCLU RG-063418 > 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] TP29MR06.01 0 > > 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. SH ELL-MCCLU RG-063419 > (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. SH ELL-MCCLU RG-063420 > 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 SHELL-MCCLURG-063421 > 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 SH ELL-MCCLU RG-063422 > 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 maya 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 SH ELL-MCCLU RG-063423 > 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 SH ELL-MCCLU RG-063424 > 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 SH ELL-MCCLU RG-06342S > 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> SH ELL-MCCLU RG-063426 > 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. SH ELL-MCCLU RG-063427 > (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. > SH ELL-MCCLU RG-063428 > Sampling, Testing and Retention Requirements > > > Sec. 80.1347 What are the s > > > Janice V. Taylor > Tech. Admin. Assist. > Shell Chemical LP > One Shell Plaza, 91 0 Louisiana, Houston, TX 77002-4916 > > Tel: +1 713241 1417 Fax: 3325 > Email: janice.taylor@Shell.com > Internet: http://www.shell.com/chemicals > > -----Original Message----- > From: Hulse, Michael SCC-DCS/214 > Sent: Thursday, March 30, 2006 6:43 AM > To: Taylor, Janice V SCC-DCS/275 > Subject: RE: Federal Register Wednesday, March 29,2006 > > Janice, please send me the following under EPA: > > Air pollution control: > Benzene and other mobile source air toxics emissions reduction; gasoline, passenger vehicles, and portable gasoline containers controls, > 15804-15963 [06-2315] > > > -----Original Message----- > From: Taylor, Janice V SCC-DCS/275 > Sent: Wednesday, March 29,20065:46 AM > To: Flack, Danny C SCC-DCS/263; McClure, Jack JL SOPUS-HSE-OE; Callan, James P SCC- DMC/233; Lambert, Jay J SCC-DCC/3533; Hulse, Michael SCC-DCS/214; Clegg, Patsy M SCC-DCS/22; Armstrong, Randy R SHLOIL-CA; Hewitt, Richard W SCC-DCS/21; Donaldson, Scott M SCC-DMC/233; Keller, Shari M SCC-DMC/233; Hansen, Steven R SCC-DMC/233; Antrican, Susan 0 SCC-DCS/22; Mercer, Tom TF SCC-DCS/26A > Subject: Federal Register Wednesday, March 29,2006 > > > > Contents Federal Register > Vol. 71, No. 60 > Wednesday, March 29,2006 > > > > > Agency for Toxic Substances and Disease Registry> > > NOTICES > Hazardous substances releases and facilities: > Public health assessments and effects; list, > 15747-15748 [E6-4554] > > Centers for Disease Control and Prevention > > NOTICES SH ELL-MCCLU RG-063429 > Agency information collection activities; proposals, submissions, and approvals, > 15748-15749 [E6-4550] > 15749-15750 [E6-4551] > Quarantine, inspection, and licensing: > Birds and bird products; embargoes> Afghanistan, > 15750-15751 [E6-4514] > Israel, > 15750 [E6-4513] > > Children and Families Administration > > NOTICES > Agency information collection activities; proposals, submissions, and approvals, > 15751-15752 [06-2997] > > Coast Guard > > PROPOSED RULES > Ports and waterways safety; regulated navigation areas, safety zones, security zones, etc.: > Buzzards Bay, MA, > 15649-15656 [06-3014] > > Commerce Department > > See International Trade Administration > See National Oceanic and Atmospheric Administration > NOTICES > Agency information collection activities; proposals, submissions, and approvals, > 15696 [E6-4526] > > Environmental Protection Agency > > RULES > Air programs: > Stratospheric ozone protection> Ozone-depleting substances; acceptable substitutes; list, > 15589-15597 [06-3030] > Pesticides; tolerances in food, animal feeds, and raw agricultural commodities: > Fenhexamid, > 15612-15617 [06-2975] > Fenpropimorph, > 15608-15612 [06-3029] > Flonicamid, > 15604-15608 [06-2977] > Trifloxystrobin, > 15597-15604 [06-2978] > PROPOSED RULES > Air pollution control: > Benzene and other mobile source air toxics emissions reduction; gasoline, passenger vehicles, and portable gasoline containers controls, > 15804-15963 [06-2315] > Air quality implementation plans; approval and promulgation; various States: > California, > 15656-15658 [06-3028] > NOTICES > Agency information collection activities; proposals, submissions, and approvals, > 15715-15716 [E6-4564] SH ELL-MCCLU RG-063430 > 15716-15717 [E6-4566] > 15717-15718 [E6-4567] > Grants and cooperative agreements; availability, etc.: > Monitoring initiative funds to states, interstate agencies, and tribes, > 15718-15724 [E6-4585] > Meetings: > Endocrine Disruptor Methods Validation Advisory Committee, > 15724-15726 [E6-4570] > Pesticide; food, and feed additive petitions: > Interregional Research Project (No.4), > 15734-15735 [E6-4502] > Pesticide programs: > Risk assessments> Chloroacetanilide, > 15726-15728 [E6-4505] > Methyl bromide, > 15728-15730 [E6-4568] > Tolerance reassessment decisions> Acetochlor, > 15730-15731 [E6-4503] > Pesticide registration, cancellation, etc.: > Azinphos-methyl, > 15731-15732 [E6-4569] > Suterra, LLC, > 15732-15734 [E6-4549] > Toxic and hazardous substances control: > New chemicals; receipt and status information, > 15735-15738 [E6-4504] > > Federal Aviation Administration > > RULES > Airworthiness directives: > Grob-Werke; correction, > 15559 [06-2983] > Airworthiness standards: > Special conditions> Robinson Model R44 helicopters, > 15557-15559 [06-3013] > PROPOSED RULES > Airworthiness directives: > Dornier Luftfahrt GmbH, > 15647-15649 [E6-4556] > Airworthiness standards: > Special conditions> Airbus Model A380-800 airplane, > 15643-15645 [E6-4509] > 15645-15647 [E6-4511] > > Federal Railroad Administration > > NOTICES > Exemption petitions: > Kansas City Southern Railway Co., > 15798-15799 [E6-4499] > > Food and Drug Administration > SH ELL-MCCLU RG-063431