Regulation of Fuels and Fuel Additives: Modification of Anti-Dumping Baselines for Gasoline Produced or Imported for Use in Hawaii, Alaska and U.S. Territories, 646-660 [05-43]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 70, Number 2 (Tuesday, January 4, 2005)]
[Proposed Rules]
[Pages 646-660]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-43]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[OAR-2003-0010; FRL-7857-1]
RIN 2060-AK02


Regulation of Fuels and Fuel Additives: Modification of Anti-
Dumping Baselines for Gasoline Produced or Imported for Use in Hawaii, 
Alaska and U.S. Territories

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: Today's action proposes to allow refiners and importers who 
produce or import conventional gasoline for use in Alaska, Hawaii, the 
Commonwealth of Puerto Rico and the Virgin Islands to change the way 
that they calculate emissions from such gasoline for purposes of 
calculating their conventional gasoline anti-dumping baselines and 
evaluating annual average emissions. Specifically, for gasoline sold in 
these areas, refiners and importers could elect to modify their 
baselines to replace the anti-dumping statutory baseline with the 
single seasonal statutory baseline that is most appropriate to the 
regional climate, and to use the seasonal component of the Complex 
Model that is most appropriate to the regional climate to calculate 
individual baselines and annual average emissions. This action would 
allow refiners and importers to petition EPA to use the summer 
statutory baseline and the summer Complex Model for all anti-dumping 
baseline and compliance calculations for conventional gasoline produced 
or imported for use in Hawaii, Puerto Rico and the Virgin Islands and 
would allow refiners and importers to petition EPA to use the winter 
statutory baseline and the winter Complex Model for all anti-dumping 
baseline and compliance calculations for conventional gasoline produced 
or imported for use in Alaska. We are proposing these actions to 
address certain inconsistencies in the RFG program's anti-dumping 
provisions which may have significant unintended negative impacts on 
refiners and importers who produce or import gasoline for these areas. 
Today's action would also extend similar seasonal baseline and 
compliance modifications to the provisions applicable to conventional 
gasoline under Gasoline Toxics, also known as the Mobile Source Air 
Toxics rule, or MSAT.

DATES: Comments must be received on or before February 3, 2005.

ADDRESSES: Submit your comments, identified by Docket ID No. OAR-2003-
0010 by one of the following methods:
    1. Federal eRulemaking Portal: https://www.regulations.gov. Follow 
the on-line instructions for submitting comments.
    2. Agency Web site: https://www.epa.gov/edocket. EDOCKET, EPA's 
electronic public docket and comment system, is EPA's preferred method 
for receiving comments. Follow the on-line instructions for submitting 
comments.
    3. E-mail: https://www.epa.gov/edocket, Attention Docket ID No. OAR-
2003-0010.
    4. Mail: Air and Radiation Docket, Environmental Protection Agency, 
Mailcode: 6406J, 1200 Pennsylvania Ave., NW., Washington, DC 20460. 
Please include a total of two copies. In addition, please mail a copy 
of your comments on the information collection provisions to the Office 
of Information and Regulatory Affairs, Office of Management and Budget 
(OMB), Attn: Desk Officer for EPA, 725 17th St., NW., Washington, DC 
20503.
    5. Hand Delivery: EPA Docket Center, Environmental Protection 
Agency, 1301 Constitution Avenue, NW., Room B102, Mail Code 6102T, 
Washington, DC 20460. Such deliveries are only accepted during the 
Docket's normal hours of operation, and special arrangements should be 
made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. OAR-2003-0010. 
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.epa.gov/edocket, including any personal information provided, 
unless the comment includes information claimed to be Confidential 
Business Information

[[Page 647]]

(CBI) or other information whose disclosure is restricted by statute. 
Do not submit information that you consider to be CBI or otherwise 
protected through EDOCKET, regulations.gov, or e-mail. The EPA EDOCKET 
and the Federal regulations.gov Web sites are ``anonymous access'' 
systems, 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 EDOCKET or 
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 EDOCKET on-line 
or see the Federal Register of May 31, 2002 (67 FR 38102).
    Docket: All documents in the docket are listed in the EDOCKET index 
at https://www.epa.gov/edocket. Although listed in the index, some 
information is not publicly available, i.e., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, is not placed on the Internet and will be 
publicly available only in hard copy form. Publicly available docket 
materials are available either electronically in EDOCKET or in hard 
copy at the Air and Radiation 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 and Radiation Docket is 
(202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Marilyn Bennett, Transportation and 
Regional Programs Division, Office of Transportation and Air Quality 
(6406J), Environmental Protection Agency, 1200 Pennsylvania Avenue, 
NW., Washington, DC 20460; telephone number: (202) 343-9624; fax 
number: (202) 343-2803; e-mail address: mbennett@epa.gov.

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does This Action Apply to Me?

    Entities potentially affected by this action include those involved 
with the production and importation of conventional gasoline motor 
fuel. Regulated categories and entities affected by this action 
include:

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                                     NAICS codes
             Category                    \a\        SIC codes \b\    Examples of potentially regulated parties
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Industry.........................          324110            2911  Petroleum Refiners, Importers.
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\a\ North American Industry Classification System (NAICS).
\b\ Standard Industrial Classification (SIC) system code.

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that EPA is now aware 
could be potentially regulated by this action. Other types of entities 
not listed in the table could also be regulated. To determine whether 
your entity is regulated by this action, you should carefully examine 
the applicability criteria of Part 80, subparts D, E and F of title 40 
of the Code of Federal Regulations. If you have any question regarding 
applicability of this action to a particular entity, consult the person 
in the preceding FOR FURTHER INFORMATION CONTACT section above.

B. What Should I Consider as I Prepare My Comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through 
EDOCKET, regulations.gov or e-mail. Clearly mark the part or all of the 
information that you claim to be 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:
    1. Identify the rulemaking by docket number and other identifying 
information (subject heading, Federal Register date and page number).
    2. Follow directions--The agency may ask you to respond to specific 
questions or organize comments by referencing a Code of Federal 
Regulations (CFR) part or section number.
    3. Explain why you agree or disagree; suggest alternatives and 
substitute language for your requested changes.
    4. Describe any assumptions and provide any technical information 
and/or data that you used.
    5. If you estimate potential costs or burdens, explain how you 
arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
    6. Provide specific examples to illustrate your concerns, and 
suggest alternatives.
    7. Explain your views as clearly as possible, avoiding the use of 
profanity or personal threats.
    8. Make sure to submit your comments by the comment period deadline 
identified.
    3. Docket Copying Costs. You may be charged a reasonable fee for 
photocopying docket materials, as provided in 40 CFR Part 2.

D. Outline of This Preamble

I. General Information
II. Background
III. Anti-dumping Compliance for Gasoline Produced or Imported for 
Use in Alaska, Hawaii, Puerto Rico and the Virgin Islands
IV. Mobile Source Air Toxics Rule (MSAT)
V. Public Participation
VI. Statutory and Executive Order Reviews
VII. Statutory Provisions and Legal Authority

II. Background

A. The Anti-Dumping Requirements

    Section 211(k) of the Clean Air Act (``CAA'' or ``Act'') requires 
EPA to establish standards for reformulated gasoline (RFG) to be used 
in specified ozone nonattainment areas. The Act also requires non-
reformulated, or conventional, gasoline used in the rest of the country 
to be as clean as the gasoline produced or imported in 1990.

[[Page 648]]

CAA Section 211(k)(8). The requirements for conventional gasoline are 
called the anti-dumping requirements. The anti-dumping requirements 
prevent refiners from dumping into conventional gasoline the dirty 
gasoline components that are removed when RFG is produced. To be in 
compliance with the anti-dumping requirements, the exhaust toxics and 
nitrogen oxides (NOX) emissions performance of a refinery's 
or importer's conventional gasoline must be no dirtier than the 
refinery's or importer's 1990 exhaust toxics and NOX 
emissions performance, on an annual average basis.
    EPA requires refiners to calculate the exhaust toxics and 
NOX emissions performance of gasoline using the Complex 
Model. The Complex Model is a predictive model used to determine 
emissions based on several fuel parameters, such as sulfur, benzene and 
Reid vapor pressure (RVP). See 40 CFR 80.45. The Complex Model has both 
a summer version and a winter version.\1\ The summer Complex Model is 
based on data reflecting the performance of gasoline sold in the 
summer; i.e., gasoline with lower RVP to comply with volatility 
requirements at 40 CFR 80.27 and which is typical of summer climatic 
conditions. The winter Complex Model is a modified version of the 
summer model which sets the RVP at 8.7 psi and adjusts for winter 
climate conditions. Both models are based on MOBILE model outputs.\2\ 
MOBILE model outputs for the summer model assume ambient temperatures 
of 69 deg. F to 94 deg. F. MOBILE model outputs for the winter model 
assume ambient temperatures of 39 deg. F to 57 deg. F. MOBILE model 
outputs show significantly greater ``winter'' emissions due to longer 
engine and catalyst warm-up times. As a result, for identical fuel 
compositions (based on those fuel parameters evaluated in the Complex 
Model), the winter Complex Model results in significantly higher 
emissions of exhaust toxics and NOX than the summer Complex 
Model, on a mg/mile basis.
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    \1\ A detailed discussion of the development of the summer and 
winter versions of the Complex Model is included in the Final 
Regulatory Impact Analysis for Reformulated Gasoline (December 13, 
1993). Public Docket No. A-92-12.
    \2\ For a discussion of the MOBILE Model, see the Regulatory 
Impact Analysis for the final RFG rule, December 13, 1993.
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B. Compliance With the Anti-Dumping Requirements

    The anti-dumping regulations require refineries and importers of 
conventional gasoline to comply with an established baseline for 
exhaust toxics and NOX. The baseline will be either an 
``individual baseline'' or the ``anti-dumping statutory baseline.'' An 
individual baseline is based on the average performance of the gasoline 
that the individual refinery or importer produced or imported during 
the calendar year 1990. The anti-dumping statutory baseline is based on 
the average quality of gasoline sold throughout the United States 
during 1990. The anti-dumping statutory baseline applies to refineries 
and importers that are unable to calculate an individual baseline based 
on 1990 gasoline performance. If a refinery or importer has an 
individual baseline, gasoline production during a given annual 
averaging period, up to the refinery's or importer's 1990 production or 
import volume, must be no ``dirtier'' than the refinery's or importer's 
individual 1990 baseline for exhaust toxics and NOX. 
Gasoline produced or imported during the annual averaging period in 
excess of the refinery's or importer's 1990 gasoline production or 
import volume must be no dirtier than the anti-dumping statutory 
baseline for exhaust toxics and NOX. For refineries and 
importers that are subject to the anti-dumping statutory baseline, all 
gasoline produced or imported during the annual averaging period must 
meet the anti-dumping statutory baseline for exhaust toxics and 
NOX.
    Requiring compliance with the anti-dumping statutory baseline for 
gasoline production in excess of the refinery's or importer's 1990 
gasoline production volume is intended to prevent the overall 
degradation of the conventional gasoline pool as a result of increased 
production by refineries with individual baselines that are dirtier 
than the 1990 national average, and/or decreased production by 
refineries with individual baselines that are cleaner than the 1990 
national average. See 57 FR 13487-88 (April 16, 1992). Requiring 
compliance with the anti-dumping statutory baseline for gasoline 
produced by refineries and importers who are unable to establish an 
individual baseline is intended to ensure that such gasoline will not 
degrade the conventional gasoline pool compared to the 1990 average.
    To comply with the anti-dumping requirements, each refinery and 
importer must evaluate the overall quality of the conventional gasoline 
that it produces or imports during each annual averaging period. The 
refinery or importer must then compare the quality of its conventional 
gasoline to the refinery's or importer's baseline (individual 1990 
baseline or anti-dumping statutory baseline, as appropriate). So long 
as the conventional gasoline produced or imported has overall 
emissions, as calculated by the Complex Model, that are no worse than 
the performance reflected in the refinery's or importer's baseline, the 
refinery or importer is in compliance with EPA's anti-dumping 
requirements.
    The anti-dumping statutory baseline includes both summertime and 
wintertime seasonal components. The Act provides the specifications for 
the summertime component of the statutory baseline gasoline, and 
indicates that such specifications apply to ``gasoline sold during the 
high ozone period (as determined by the Administrator).''\3\ CAA 
Section 211(k)(10)(B)(i). EPA determined wintertime baseline gasoline 
specifications based on an estimate of the average quality of 
wintertime gasoline in 1990, as required under the Act. CAA Section 
211(k)(10)(B)(ii). The wintertime baseline gasoline specifications were 
derived from survey data collected in representative cities in the 
continental U.S.\4\ Baseline summertime and wintertime gasolines have 
different average fuel parameter values because of the different 
weather conditions in summer and winter and the effect of the 
volatility controls on summertime gasoline. The anti-dumping statutory 
baseline, which approximates the average emissions of gasoline sold in 
the U.S. in 1990, is the volume-weighted average of the summertime and 
wintertime baseline gasoline emissions, as calculated using the 
appropriate seasonal version of the Complex Model. See 59 FR 7793 
(February 16, 1994).
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    \3\ EPA's volatility regulations at 40 CFR 80.27 define ``high 
ozone season'' as ``the period from June 1 to September 15 of any 
calendar year.'' In the preamble to the RFG final rule, EPA also 
defined ``high ozone season'' as June 1 through September 15 for 
purposes of compliance with the RFG and anti-dumping requirements. 
EPA chose this period because it covers the vast majority of days 
during which the national ambient air quality standard for ozone is 
exceeded nationwide and is consistent with the period covered by 
EPA's gasoline volatility control requirements. See 59 FR 7722 
(February 16, 1994). The Act specifies that the volatility controls 
apply only to the 48 contiguous states and the District of Columbia. 
CAA Section 211(h)(5).
    \4\ Winter statutory gasoline parameter values were derived by 
combining data from survey samples collected in 23 continental U.S. 
cities by the Southwest Research Institute (SWRI) and in 53 
continental U.S. cities by the Motor Vehicle Manufacturer's 
Association (MVMA). Winter baseline emissions were determined on a 
nationwide basis based on this survey data. For further discussion 
of the methodology used in determining the winter statutory 
baseline, see 56 FR 31179 (July 9, 1991).

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[[Page 649]]

C. Calculating Individual Baselines and Annual Average Emissions

    A refinery's or importer's individual 1990 baseline is calculated 
using the summer version of the Complex Model to assess the performance 
of the refinery's or importer's 1990 summer gasoline and the winter 
version of the Complex Model to assess the performance of the 
refinery's or importer's 1990 winter gasoline. For purposes of these 
calculations, the regulations consider summer gasoline to be gasoline 
that is subject to EPA's volatility requirements, and winter gasoline 
to be gasoline that is not subject to EPA's volatility requirements. 40 
CFR 80.91(e)(2)(ii)(A). Gasoline sold in the territories of Puerto Rico 
and the Virgin Islands, and in Alaska and Hawaii, is not subject to the 
volatility requirements.\5\ See CAA Section 211(h)(5). Thus, for 
purposes of calculating a refinery's or importer's individual 1990 
baseline emissions, none of the gasoline produced or imported for use 
in these areas is considered summer gasoline under the current 
regulations. As a result, all of the gasoline produced or imported for 
use in these areas was evaluated using the winter Complex Model for 
purposes of calculating individual 1990 baseline emissions.\6\
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    \5\ The U.S. territories of Guam, the Commonwealth of the 
Northern Mariana Islands and American Samoa also are not subject to 
the volatility requirements pursuant to CAA section 211(h)(5); 
however, these territories have received exemptions from the anti-
dumping requirements, and, as a result, are not affected by today's 
rule. See 61 FR 53854 (October 16, 1996)(Guam); 62 FR 63853 
(December 3, 1997)(Northern Mariana Islands); 65 FR 71067 (November 
29, 2000)(American Samoa).
    \6\ Pursuant to a rulemaking on June 9, 1999 (64 FR 30904), 
refiners and importers who have Puerto Rico gasoline, or Puerto Rico 
and Virgin Islands gasoline, in their individual baseline and that 
sell a volume of Puerto Rican gasoline greater than their 1990 
baseline volume of Puerto Rican gasoline, are allowed to petition 
EPA to replace the winter Complex Model with the summer Complex 
Model for anti-dumping baseline and compliance calculations. See 40 
CFR 80.93(d) and 80.101(f)(4)(iii) and (g)(1)(ii)(B).
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    Similarly, to determine annual average emissions for compliance 
purposes, each year refineries and importers calculate emissions from 
their summer gasoline using the summer Complex Model and emissions from 
their winter gasoline using the winter Complex Model. For purposes of 
calculating annual average emissions, the regulations specify that 
summer gasoline is gasoline that meets the volatility requirements and 
winter gasoline is gasoline that does not meet the volatility 
requirements. 40 CFR 80.101(g)(5) and (g)(6). Because gasoline produced 
or imported for use in Alaska, Hawaii, Puerto Rico and the Virgin 
Islands is not subject to the volatility requirements, refineries and 
importers currently are required to evaluate all of their gasoline 
produced or imported for use in these areas during the annual averaging 
period using the winter Complex Model.
    As discussed above, refiners and importers must provide gasoline 
that complies with their individual anti-dumping baseline up to their 
1990 baseline volume, after which any excess volumes must comply with 
the anti-dumping statutory baseline.\7\ Refiners and importers without 
an individual baseline must comply with the anti-dumping statutory 
baseline for all of the conventional gasoline they produce or import 
during each annual averaging period.\8\ This general approach to 
compliance applies to both refiners and importers of gasoline sold in 
the continental U.S. and refiners and importers of gasoline produced or 
imported for use in Alaska, Hawaii, Puerto Rico and the Virgin Islands.
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    \7\ For refineries and importers with individual 1990 baselines 
who produce gasoline volumes in excess of their 1990 volume during 
an averaging period, the regulations require the use of a specified 
``compliance baseline'' equation. 40 CFR 80.101(f). In general, this 
equation adjusts the refinery's or importer's individual baseline to 
reflect the parameter values of the statutory baseline for that 
volume of the refinery's or importer's total annual gasoline 
production which is in excess of the refinery's or importer's 1990 
baseline volume. This adjusted compliance baseline then is the 
refinery's or importer's anti-dumping standard for that annual 
averaging period, and the annual average emissions from all 
conventional gasoline produced by that refinery or importer during 
the annual averaging period must meet that standard.
    \8\ Since most importers are unable to establish an individual 
1990 baseline, importers generally are required to comply with the 
anti-dumping statutory baseline.
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III. Anti-Dumping Compliance for Gasoline Produced or Imported for Use 
in Alaska, Hawaii, Puerto Rico and the Virgin Islands

A. Need for Action

    As discussed above, under the anti-dumping regulations, gasoline 
produced or imported in excess of a refinery's or importer's 1990 
baseline volume during the annual averaging period must comply with the 
anti-dumping statutory baseline. All gasoline produced or imported 
during each annual averaging period by refineries and importers who are 
unable to establish an individual baseline also must comply with the 
anti-dumping statutory baseline. In most circumstances, use of the 
anti-dumping statutory baseline is an appropriate and necessary tool to 
ensure that conventional gasoline quality does not degrade in 
comparison to the average quality of gasoline sold in 1990. However, 
the current use of the anti-dumping statutory baseline may result in 
unintended and unnecessary adverse impacts on refiners and importers 
who produce or import gasoline for use in Alaska, Hawaii, Puerto Rico 
and the Virgin Islands that is subject to the anti-dumping statutory 
baseline. For such gasoline, the current anti-dumping requirements may 
result in an inconsistent application of EPA's seasonal Complex Models.
    As discussed above, the anti-dumping statutory baseline is an 
estimate of the average quality of 1990 gasoline. This estimate was 
calculated using the summer Complex Model to evaluate gasoline sold 
during the volatility control period and the winter Complex Model for 
all other gasoline. For compliance purposes, conventional gasoline sold 
in the continental United States is evaluated using the summer Complex 
Model if it is gasoline that meets the summer volatility requirements, 
and the winter Complex Model if it is gasoline that does not meet the 
summer volatility requirements. Thus, for conventional gasoline sold in 
the continental U.S. that is required to comply with the anti-dumping 
statutory baseline, we expect there to be general agreement between the 
seasonal models used to develop the baseline and the seasonal models 
used to evaluate annual compliance. Accordingly, application of the 
anti-dumping statutory baseline for such gasoline provides reasonable 
assurance that the quality of the conventional gasoline will not 
degrade relative to the average quality of gasoline in 1990.
    Gasoline produced or imported for use in Alaska, Hawaii, Puerto 
Rico and the Virgin Islands in excess of the refinery's or importer's 
1990 baseline volume of gasoline produced or imported for use in these 
areas, and all gasoline produced or imported for use in these areas by 
a refiner or importer who does not have an individual baseline, also 
must comply with the anti-dumping statutory baseline. As discussed 
above, the anti-dumping statutory baseline was developed using both the 
summer and winter seasonal models. Since the annual emissions 
performance of gasoline produced or imported for use in these areas 
must be evaluated using only the winter Complex Model, for these areas, 
there is not an agreement between the seasonal model reflected in the 
baseline and the seasonal model used for calculating

[[Page 650]]

annual compliance.\9\ Because the winter Complex Model predicts higher 
emissions than the summer Complex Model, in these situations, the 
refinery or importer is required to comply with a standard that, in 
effect, is more stringent than intended. That is, the refiner or 
importer must produce or import gasoline that is actually cleaner than 
the average gasoline produced or imported for use in 1990.\10\ This 
unintended result can have a significant adverse economic effect on 
those refineries and importers whose baselines include gasoline 
produced or imported for use in Alaska, Hawaii, Puerto Rico and the 
Virgin Islands and who have increased the volume of gasoline that they 
produce or import for these areas above their 1990 baseline volumes of 
gasoline produced or imported for these areas, and those refineries and 
importers who are subject to the anti-dumping statutory baseline for 
all of their gasoline.
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    \9\ Gasoline produced or imported for Hawaii, Alaska, Puerto 
Rico and the Virgin Islands was evaluated using only the winter 
Complex Model for purposes of calculating a refinery's or importer's 
individual 1990 baseline. Since annual production or imports for 
these areas is also evaluated using the winter Complex Model, there 
is a general agreement between the seasonal model used to develop 
the baseline and the seasonal model used to calculate annual 
emissions for gasoline production or imports up to the refinery's or 
importer's 1990 baseline volume of gasoline produced or imported for 
these areas.
    \10\ Because the winter Complex Model predicts higher emissions 
for exhaust toxics and NOX than the summer Complex Model, 
the average emissions of gasoline produced or imported for use in 
Alaska, Hawaii, Puerto Rico and the Virgin Islands during an annual 
averaging period, which is evaluated using only the winter Complex 
Model, will appear to have higher emissions than that same gasoline 
would appear to have if evaluated using the summer Complex Model for 
some of the volume of gasoline. If, for example, gasoline produced 
or imported for use in these areas has properties identical to the 
properties of anti-dumping baseline gasoline, that gasoline (as 
evaluated using only the winter Complex Model) will appear to have 
higher emissions than anti-dumping baseline gasoline, and would be 
deemed out of compliance with the anti-dumping statutory baseline 
emissions standard.
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B. Proposed Action

1. What Change to the Baselines Is EPA Proposing?
    We believe that the performance of the gasoline produced or 
imported for use in Alaska, Hawaii, Puerto Rico and the Virgin Islands 
should be compared to a baseline that is seasonally consistent with the 
compliance model that is used for purposes of compliance evaluation. To 
address this, we considered allowing refiners and importers in these 
areas to use the winter Complex Model for all baseline and compliance 
calculations, and to replace the anti-dumping statutory baseline with 
only the winter statutory baseline for compliance purposes. However, 
since the seasonal Complex Models were developed taking climatic 
conditions into account, we believe that selection of the seasonal 
model should generally reflect the climate of the region. As a result, 
we are proposing the following changes for refiners and importers who 
produce or import conventional gasoline for use in Alaska, Hawaii, 
Puerto Rico and the Virgin Islands.
    First, we are proposing to allow refineries and importers to 
petition EPA to modify their baselines so that all gasoline produced or 
imported for use in these areas that is currently subject to the anti-
dumping statutory baseline will be subject to a single seasonal 
statutory baseline. Thus, those volumes of gasoline produced or 
imported for use in these areas in excess of the refinery's or 
importer's 1990 individual baseline volume of gasoline produced or 
imported for use in these areas, and those volumes of gasoline produced 
or imported by a refinery or importer without an individual baseline, 
would no longer be subject to both seasonal components of the anti-
dumping statutory baseline. Instead, such gasoline would be subject to 
the appropriate single seasonal component of the anti-dumping statutory 
baseline. This approach would alleviate the current inconsistency (as 
described above) by more accurately approximating the performance of 
average 1990 gasoline. This approach would allow refineries and 
importers to calculate their baseline emissions for gasoline produced 
or imported for use in these areas using a seasonal version of the 
Complex Model that agrees with the seasonal version of the Complex 
Model that they must use to calculate annual emissions performance.
    Second, we are proposing that any refinery or importer that elects 
to change its baseline must use the single seasonal statutory baseline 
that is most appropriate to the regional climate, and the seasonal 
component of the Complex Model that is most appropriate to the regional 
climate, for calculating both individual baseline emissions and annual 
average emissions. Thus, for the reasons discussed below, refineries 
and importers of gasoline produced or imported for use in Hawaii, 
Puerto Rico and the Virgin Islands that elect to change their baselines 
in accordance with today's proposal would need to use the summer 
statutory baseline and the summer Complex Model for all calculations. 
Refineries and importers of gasoline produced or imported for use in 
Alaska that elect to change their baselines in accordance with today's 
proposal would need to use the winter statutory baseline and the winter 
Complex Model for all calculations.
    We believe that it is generally appropriate to treat Alaska, 
Hawaii, Puerto Rico and the Virgin Islands essentially as isolated 
subcomponents of the overall U.S. gasoline pool.\11\ Unlike areas 
within the continental U.S., these areas are geographically isolated, 
and, therefore, do not typically receive gasoline from the fungible 
system that supplies most of the U.S. These areas also have potentially 
unique automobile fleets and ambient airshed characteristics. Most 
importantly, these areas are climatically isolated from the continental 
U.S. and have relative constant and uniform temperatures.\12\
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    \11\ Certain provisions of the Clean Air Act also treat Alaska, 
Hawaii, Puerto Rico, the Virgin Islands and the other U.S. 
territories differently than areas within the continental U.S. 
Recognizing that these areas may have unique local factors that 
render compliance with fuels requirements infeasible or 
unreasonable, the Act specifically provides that these areas may 
petition EPA for an exemption from the fuels requirements. See CAA 
Section 325. The Act extends this provision to Alaska and Hawaii for 
purposes of compliance with the diesel sulfur requirements. See CAA 
Section 211(i)(4). In addition, as discussed above, the Act exempts 
Alaska, Hawaii and the U.S. Territories from the volatility 
requirements for conventional gasoline. See CAA Section 211(h)(5). 
Thus, we believe that today's proposal is consistent with the Act's 
recognition that, because of their unique geographical and climatic 
circumstances, it may be appropriate under certain circumstances to 
treat these areas in a different manner than areas within the 
continental U.S.
    \12\ Similar distinctions within the continental U.S. would be 
difficult to make because of the fungibility of the gasoline 
distribution system, the interconnectedness of regional airsheds, 
the mobility of the automobile fleet, and the lack of distinctly 
isolated climatic regions.
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    The relatively constant warm year-round ambient temperatures in 
Hawaii, Puerto Rico and the Virgin Islands are generally consistent 
with conditions typical of a high ozone season and with the conditions 
under which EPA intended the summer Complex Model to apply. Thus, for 
purposes of anti-dumping compliance, we believe that the high ozone 
season essentially applies in these areas year round. Therefore, 
today's proposal would allow refineries and importers to petition EPA 
to modify their individual 1990 baselines for gasoline produced or 
imported for use in these areas using only the summer Complex Model. We 
would then require gasoline produced or imported for use in these areas 
to comply with this new individual baseline for gasoline up to the 
refinery's or importer's 1990 baseline volume of gasoline to these 
areas. Gasoline production or imports in excess of the refinery's or 
importer's 1990 baseline

[[Page 651]]

volume of gasoline to these areas would be subject to only the summer 
statutory baseline. The proposal would allow refineries and importers 
that are currently subject to the anti-dumping statutory baseline to 
petition EPA to change their baseline to only the summer statutory 
baseline for gasoline produced or imported for these areas. Refineries 
and importers would use only the summer Complex Model for all 
compliance calculations for all gasoline produced or imported for use 
in these areas. In the case of refineries and importers with an 
individual 1990 baseline which does not include any gasoline produced 
or imported for use in these areas, any gasoline produced or imported 
for use in these areas during the annual averaging period would be 
subject to the refinery's or importer's individual summer 1990 
baseline, and the summer Complex Model would be used for all compliance 
calculations.
    We also believe that the relatively constant colder year-round 
ambient temperatures in Alaska are generally consistent with the 
conditions outside of the high ozone season and with the conditions 
under which EPA intended the winter Complex Model to apply. Thus, 
today's proposal would allow refineries and importers to petition EPA 
to establish an individual 1990 baseline for gasoline produced or 
imported for use in Alaska using only the winter Complex Model. We then 
would require gasoline produced or imported for use in Alaska to comply 
with this new individual baseline up to the refinery's or importer's 
1990 baseline volume of Alaska gasoline. Gasoline produced or imported 
for use in Alaska in excess of the refinery's or importer's 1990 
baseline volume of Alaska gasoline would be subject to only the winter 
statutory baseline. The proposal would allow refineries and importers 
currently required to comply with the anti-dumping statutory baseline 
to petition EPA to change their baseline to only the winter statutory 
baseline for Alaska gasoline. Refineries and importers would continue 
to use the winter Complex Model for all compliance calculations for 
Alaska gasoline. In the case of refineries and importers with an 
individual 1990 baseline that does not include any gasoline produced or 
imported for use in Alaska, any gasoline produced or imported for use 
in Alaska during the annual averaging period would be subject to the 
refinery's or importer's individual winter 1990 baseline, and the 
winter Complex Model would be used for all compliance calculations.
    We considered, as an alternative approach, continuing the 
application of the anti-dumping statutory baseline in these areas and 
requiring annual production or imports in these areas to be evaluated 
using both seasonal components of the Complex Model rather than a 
single seasonal Complex Model. However, we believe it is more 
appropriate to use a single seasonal statutory baseline and a single 
seasonal version of the Complex Model to evaluate compliance in these 
areas. Requiring application of the anti-dumping statutory baseline, 
with its two seasonal components, and use of both seasonal components 
of the Complex Model for calculating annual averages, is appropriate 
for gasoline produced or imported for use in the continental U.S., 
where most areas experience seasonal changes in temperature that 
generally correspond to the high ozone/non-high ozone periods. However, 
given that the temperatures in Alaska, Hawaii, Puerto Rico and the 
Virgin Islands are relatively constant year round, we believe that the 
single seasonal statutory baseline and single seasonal version of the 
Complex Model most appropriate to the climatic conditions of the area 
would provide a more accurate evaluation of gasoline produced or 
imported for use in these areas. Therefore, we believe that today's 
proposed action would provide a more appropriate mechanism for ensuring 
that gasoline in these areas does not degrade in comparison to gasoline 
sold in these areas in 1990.
    We request comment on this proposed action and on other possible 
approaches to address the inconsistencies in the anti-dumping 
regulations discussed above regarding the application of the anti-
dumping statutory baseline and the seasonal Complex Models for gasoline 
produced or imported for use in Alaska, Hawaii, Puerto Rico and the 
Virgin Islands.
2. What Change Does EPA Propose To Make to the Anti-Dumping Regulations 
To Implement the Proposal?
    To implement the changes described above, today's rule proposes to 
revise the anti-dumping regulations to allow any refinery or importer 
with an individual 1990 baseline that produces or imports gasoline for 
use in Hawaii, Puerto Rico and the Virgin Islands the option to 
petition EPA to use the summer seasonal model for all baseline and 
compliance calculations for gasoline produced or imported for these 
areas.\13\ As discussed above, given the consistently warm climate in 
Hawaii, Puerto Rico and the Virgin Islands, we believe that the summer 
Complex Model is the most appropriate model for evaluating emissions in 
these areas under the anti-dumping program. Thus, we are proposing to 
modify the baseline submission provisions at Sec.  80.93(d) to allow 
refineries and importers to petition EPA to evaluate all of their 1990 
conventional gasoline produced or imported for use in these areas using 
the summer Complex Model. This would require a refinery or importer to 
calculate a separate 1990 individual baseline for gasoline produced or 
imported for use in these areas, and to recalculate its current anti-
dumping baseline to reflect the subtraction of baseline gasoline 
produced or imported for use in these areas.\14\
---------------------------------------------------------------------------

    \13\ As discussed in footnote 6 above, in a final rule dated 
June 9, 1999 (64 FR 30904), EPA modified the anti-dumping 
regulations to allow refiners and importers who have Puerto Rico 
gasoline, or Puerto Rico and Virgin Islands gasoline, in their 1990 
baseline to petition EPA to replace the winter Complex Model with 
the summer Complex Model for purposes of compliance for their Puerto 
Rico gasoline. Today's rule does not substantively change the 
provisions for Puerto Rico gasoline promulgated on June 9, 1999. 
Rather, today's rule extends the use of the summer only Complex 
Model to gasoline produced or imported for use in Puerto Rico by 
refiners and importers that do not have individual baselines and 
those that have an individual baseline but do not have any Puerto 
Rico gasoline in their baselines.
    \14\ For refineries and importers with individual baselines that 
produce or import gasoline for the continental U.S. as well as 
Alaska, Hawaii, Puerto Rico or the Virgin Islands, the approach in 
today's proposal likely would result in a reduction of the total 
volume of gasoline that currently would be subject to the anti-
dumping statutory baseline, since, under the proposal, gasoline 
produced or imported for Alaska, Hawaii, Puerto Rico or the Virgin 
Islands in excess of the refinery's or importer's baseline volume of 
gasoline for these areas would no longer be included in the volume 
of gasoline subject to the anti-dumping statutory baseline. This may 
have an impact on the refinery's or importer's compliance baseline 
for the annual averaging period.
---------------------------------------------------------------------------

    Today's action also would revise the anti-dumping compliance 
baseline equation at Sec.  80.101(f)(4) by replacing the anti-dumping 
statutory baseline component with the summer statutory baseline 
component for gasoline produced or imported for use in Hawaii, Puerto 
Rico and the Virgin Islands in excess of the refinery's or importer's 
1990 baseline volume of gasoline produced or imported for these areas. 
The proposed modification of the baseline submission provisions at 
Sec.  80.93(d) also would allow refineries and importers currently 
subject to the anti-dumping statutory baseline for all of their 
gasoline to petition EPA to change their baseline to only the summer 
statutory baseline for any conventional gasoline produced or imported 
for use in these areas. The proposal includes a new Sec.  80.101(f)(3) 
which would require such refineries

[[Page 652]]

and importers to comply with the summer statutory baseline for gasoline 
produced or imported for use in these areas. In addition, the proposal 
would modify 40 CFR 80.101(g)(1) to require refineries and importers 
that petition EPA under Sec.  80.93(d) to evaluate all of their 
gasoline produced or imported for these areas during the annual 
averaging period using only the summer Complex Model.
    As discussed above, given Alaska's consistently colder climate, we 
believe that the winter Complex Model is the most appropriate model for 
evaluating emissions of conventional gasoline produced or imported for 
use in Alaska under the anti-dumping program. Today's proposal, 
therefore, does not change the current requirement for Alaska 1990 
baseline gasoline and annual average emissions to be evaluated using 
the winter Complex Model. However, the modifications to the baseline 
submission provisions at Sec.  80.93(d) would require refineries and 
importers of Alaska gasoline that elect to change their baseline to 
calculate a separate baseline for Alaska gasoline, and to recalculate 
their current anti-dumping baseline to reflect the subtraction of 1990 
baseline Alaska gasoline. Today's action would revise the anti-dumping 
compliance baseline equation at Sec.  80.101(f)(4) by replacing the 
anti-dumping statutory baseline component with the winter statutory 
baseline component for gasoline produced or imported in excess of the 
refinery's or importer's 1990 baseline volume of Alaska gasoline. The 
modifications to the baseline submission provisions at Sec.  80.93(d) 
also would allow refineries and importers currently subject to the 
anti-dumping statutory baseline for all of their gasoline to petition 
EPA to change their baseline to the winter statutory baseline for any 
conventional gasoline produced or imported for use in Alaska. The new 
Sec.  80.101(f)(3) would require such refineries and importers to 
comply with the winter statutory baseline for gasoline produced or 
imported for use in Alaska.
    In addition to the proposed changes to the anti-dumping regulations 
discussed above, today's action proposes to modify Sec. Sec.  
80.91(e)(2)(ii)(A) and 80.101(g)(6) to clarify the summer/winter 
distinction with regard to gasoline produced or imported for use in 
Alaska, Hawaii, Puerto Rico and the Virgin Islands. We request comment 
on all of the proposed modifications to the anti-dumping regulations.
3. How Does a Refiner or Importer Change Its Baseline?
    We are proposing that the changes in today's rule would be optional 
for any refiner for a refinery, or importer, that produces or imports 
gasoline intended for use in Alaska, Hawaii, Puerto Rico and the Virgin 
Islands, and would be limited to those refiners and importers that 
petition the Agency for these changes. However, a refinery or importer 
that changes from the anti-dumping statutory baseline to a single 
seasonal statutory baseline must use the appropriate seasonal statutory 
baseline for all gasoline produced or imported for use in any of the 
areas subject to this rule, and must use the appropriate seasonal 
Complex Model for all future calculations. For example, an importer of 
Puerto Rican gasoline that petitions EPA to change from the anti-
dumping statutory baseline to a single seasonal statutory baseline must 
change to the summer statutory baseline and must use the summer Complex 
Model for all future calculations for Puerto Rican gasoline and also 
for any gasoline the importer imports into Hawaii and/or the Virgin 
Islands. Refineries and importers whose 1990 individual baselines 
include gasoline produced or imported for these areas would be required 
to recalculate their individual baselines, as described above, and 
submit the new baselines with their petition. Once such a petition is 
submitted and granted, the new method for determining compliance with 
the anti-dumping requirements would apply from then on and the refinery 
or importer could not revert back to its original baseline. The new 
baseline would apply to the refinery regardless of ownership; i.e., if 
a refinery obtains a new baseline under today's rule, the new baseline 
would apply to the refinery even if the refinery is subsequently sold 
to another refiner.
    Refineries and importers that produce or import gasoline for these 
areas and do not petition EPA to change their baselines would continue 
to be subject to their current baselines and would continue to use the 
Complex Model that is required for calculating emissions under the 
current regulations.
    We believe that it is appropriate to make this baseline change 
optional since, as discussed below, an election not to adopt a baseline 
change would not result in any adverse environmental impact. We request 
comment on the proposal to allow these changes to be optional.
4. What Are the Environmental Effects of This Proposed Action?
    We believe that the proposal to allow refineries and importers to 
change their baselines would not undermine the environmental goals of 
the anti-dumping program (i.e., to ensure that conventional gasoline 
will be no dirtier than 1990 gasoline). Although it is possible that 
the gasoline supplied by parties to the affected areas could have 
increases in emissions, these changes will not result in gasoline with 
emissions that are greater than conventional gasoline in these areas, 
or nationwide, compared to 1990 levels. Today's rule provides an 
alternative compliance method for refiners and importers who, under the 
current regulations, are required to produce or import gasoline that is 
actually cleaner than the average 1990 gasoline produced or imported 
for use in the affected areas or nationwide. As a result, even if all 
of these affected parties choose the new compliance method, the goals 
of the anti-dumping program would be met. To the extent that parties 
choose to retain their current compliance method, there would continue 
to be an added environmental benefit above and beyond that specifically 
required to meet the goals of the anti-dumping program.
    We request comment on the environmental effects of today's proposed 
changes to the anti-dumping rules.
5. When Would the Baseline Changes Become Effective?
    We are proposing that the baseline changes proposed in today's rule 
would become effective beginning with the annual averaging period in 
which a refiner's or importer's petition is granted.
6. Are Refiners and Importers Required To Provide Documentation That 
Gasoline Was Produced or Imported for Use in an Affected Area?
    We are proposing to require refiners and importers who change their 
baseline in accordance with today's rule to retain documents which 
substantiate that gasoline complying with the new baseline, in fact, 
was produced or imported for use in the affected area. We believe that 
such information will be included in business documents associated with 
the sale and distribution of the gasoline. In the absence of such 
documentation, the refiner or importer would have no assurance that the 
product would be used in the affected area, and, thus, would have no 
basis for applying the new baseline. We request

[[Page 653]]

comment on the proposed documentation retention requirement.

IV. Mobile Source Air Toxics Rule (MSAT)

A. Background

    40 CFR part 80, subpart J, contains the provisions applicable to 
refiners and importers for determining their baselines and compliance 
values for the gasoline toxics program, also known as the Mobile Source 
Air Toxics (MSAT) program. As with the conventional gasoline anti-
dumping requirements, the toxics performance provisions in the MSAT 
program apply on a refinery-by-refinery (and importer-by-importer) 
basis. For each refinery, a refiner must identify the appropriate 
toxics performance baseline for its conventional gasoline and its RFG. 
Similarly, each importer must identify an appropriate toxics 
performance baseline for the gasoline that it imports. Refiners and 
importer must then demonstrate compliance with each applicable baseline 
on an annual average basis using the Complex Model.
    The MSAT provisions require that refiners and importers establish 
an individual toxics baseline, separately for RFG and conventional 
gasoline, based on the average toxics performance of their gasoline 
during the baseline period, 1998 through 2000. Refiners and importers 
are also required to establish a total baseline volume based on their 
volume of gasoline production during this baseline period. 
Alternatively, a refiner or importer may be subject to the default 
toxic baseline established by EPA if a refinery or importer did not 
have sufficient production or imports during the MSAT baseline period 
to calculate an average toxics performance for their baseline gasoline. 
Refineries or importers subject to the default baseline do not have an 
MSAT baseline volume.
    MSAT compliance is determined on an annual average basis. The 
gasoline produced or imported during the averaging period can be no 
more polluting than the refiner's or importer's MSAT baseline level for 
that type of gasoline (RFG or conventional). For RFG, total toxics 
emissions are evaluated, and toxics performance is reported as a 
percent reduction from the statutory baseline. For conventional 
gasoline, only exhaust toxics emissions are evaluated, and toxics 
performance is reported in mg/mile. Any volume produced or imported in 
excess of a refiner's or importer's individual MSAT baseline volume can 
be no more polluting than the RFG toxics standard or the refiner's or 
importer's conventional gasoline anti-dumping toxics baseline level, as 
applicable.

B. Action

    EPA believes that it is appropriate to modify the MSAT requirements 
in a manner that is consistent with the changes being proposed today 
for the conventional gasoline anti-dumping program. These changes to 
the MSAT program are necessary because, generally, the MSAT provisions 
applicable to conventional gasoline are of the same form as the anti-
dumping provisions, and because such changes are needed to maintain 
agreement between methods used to establish baselines and those used to 
evaluate gasoline performance for purposes of compliance. Thus, EPA is 
proposing to require a refiner or importer that submits a petition 
under the anti-dumping program as described in today's action to also 
petition for a separate or modified MSAT baseline applicable to 
gasoline produced or imported into Alaska and/or Hawaii, Puerto Rico, 
and the Virgin Islands.
    EPA is proposing the following MSAT baselines and compliance 
determinations for refiners and importers who submit petitions as 
discussed in today's proposal for gasoline produced or imported into 
Alaska and/or Hawaii and/or Puerto Rico and/or the Virgin Islands:
    (1) Affected parties who did not produce or import any gasoline 
during the baseline period (1998-2000), may petition EPA to have the 
appropriate seasonal MSAT conventional gasoline default baseline for 
gasoline produced or imported for use in Alaska and/or Hawaii, Puerto 
Rico, and the Virgin Islands, and use the appropriate seasonal version 
of the Complex Model for evaluating gasoline produced or imported for 
these areas. Such parties would be subject to the annual MSAT 
conventional gasoline default baseline for all other gasoline produced 
or imported (i.e., gasoline for use in the continental U.S.)
    (2) Affected parties who produced gasoline during the baseline 
period, but who did not produce or import gasoline for Alaska and/or 
Hawaii, Puerto Rico, or the Virgin Islands during the baseline period, 
may petition EPA to have the appropriate individual refinery or 
importer conventional gasoline seasonal MSAT baseline for these areas, 
and evaluate any gasoline produced or imported for use in these areas 
using the appropriate seasonal Complex Model. Such gasoline shall not 
be considered in determining whether a refiner or importer has produced 
or imported any incremental gasoline volumes above the refiner's or 
importer's MSAT baseline volume.
    (3) Affected parties who only produced or imported gasoline for 
Alaska and/or Hawaii, Puerto Rico, or the Virgin Islands during the 
baseline period may petition EPA for a revised MSAT baseline using the 
appropriate seasonal version of the Complex Model, and use the 
appropriate seasonal version of the Complex Model for all compliance 
determinations for such gasoline. Gasoline produced or imported for use 
in these areas up to the refiner's or importer's MSAT baseline volume 
would be subject to the refiner's or importer's seasonally appropriate 
MSAT baseline. Any incremental volumes above the baseline volume would 
be subject to the refiner's or importer's appropriate seasonal anti-
dumping baseline. Any gasoline produced or imported for use in the 
continental U.S. would be subject to the annual MSAT conventional 
gasoline default baseline.
    (4) Affected parties who produced or imported gasoline during the 
baseline period for use in the continental U.S. and for use in Alaska 
and/or Hawaii, Puerto Rico, or the Virgin Islands may petition EPA to 
have a separate, seasonally appropriate MSAT baseline and a separate 
MSAT baseline volume for gasoline produced or imported for use in 
Alaska and/or Hawaii, Puerto Rico, and the Virgin Islands. Such 
refiners or importers must then use the appropriate seasonal component 
of the Complex Model to evaluated gasoline sold in these areas. 
Additionally, such refiners must establish a separate annual baseline 
and baseline volume for all other gasoline, which must be evaluated 
using the annual Complex Model.
    We believe that the changes to the MSAT regulations proposed in 
today's rule are consistent with the Agency's findings in the MSAT 
rulemaking, 66 FR 17233-34 (March 29, 2001) respecting air toxics under 
the Act. In that rule, EPA adopted standards under Section 202(l) of 
the Act, which requires EPA to establish regulations which reflect the 
greatest degree of reduction in emissions of air toxics achievable 
through the application of available technology. In the MSAT rule, EPA 
determined that the performance of gasoline during the 1998 through 
2000 baseline period reflected the greatest degree of toxics reduction 
achievable in the near term. Thus, EPA promulgated regulations under 
Subpart J requiring refiners and importers to produce or import 
gasoline that is no dirtier than the gasoline they produced or imported 
during the baseline period, and requiring refiners and importers who

[[Page 654]]

did not produce or import gasoline during the baseline period to 
produce or import gasoline no dirtier than the national annual average 
toxics emissions during the baseline period (i.e., the MSAT default 
baseline). See 66 FR 17233.
    Under the current regulations, refiners and importers who produce 
or import gasoline for use in Alaska, and/or Hawaii, Puerto Rico or the 
Virgin Islands who are subject to the MSAT default baseline are, in 
fact, required to produce or import gasoline that is cleaner than the 
national annual average during the MSAT baseline period. This is 
because the MSAT default baseline was determined using both seasonal 
components of the Complex Model, while parties in the affected areas 
are required to evaluate their gasoline using only the winter Complex 
Model (which, as discussed above, gives higher emission values for the 
same gasoline than if the gasoline were evaluated using both seasonal 
components of the model). Today's proposed rule corrects this 
inconsistency while continuing to require such parties to produce or 
import gasoline that is no more polluting than the average gasoline 
during the MSAT baseline period, as required under EPA's MSAT 
regulations. Similarly, parties with individual MSAT baselines will 
continue to meet the requirements under the Act and EPA's regulations 
for gasoline produced or imported up to their baseline volume, without 
being required to produce or import gasoline that is cleaner than their 
average gasoline during the MSAT baseline period.
    For parties with an individual MSAT baseline who produce or import 
gasoline in excess of their MSAT baseline volume, the MSAT regulations 
require the excess volume to meet the refiner's or importer's standard 
under the anti-dumping rule (i.e., excess volume may not be more 
polluting than the refiner's or importer's individual anti-dumping 
baseline level). Therefore, we believe it is appropriate for gasoline 
produced or imported in excess of the MSAT baseline volume to be 
subject to the anti-dumping baseline that is established for purposes 
of anti-dumping compliance, as discussed earlier in this notice.
    For these reasons, we believe it is appropriate for EPA to permit 
refiners and importers to modify their MSAT baseline, as described 
above, consistent with the changes allowed under today's proposed rule 
for refiners' and importers' anti-dumping baselines, with respect to 
gasoline sold in Alaska and/or Hawaii, Puerto Rico or the Virgin 
Islands.

V. Public Participation

    EPA desires full public participation in arriving at its final 
decisions and solicits comments on all aspects of this proposal. 
Wherever applicable, full supporting data and detailed analysis should 
also be submitted to allow EPA to make maximum use of the comments. All 
comments should be directed, by February 3, 2005, to the EPA Air 
Docket, Docket No. OAR-2003-0010. Any proprietary information being 
submitted for the Agency's consideration should be markedly 
distinguished from other submittal information and clearly labeled 
``Confidential Business Information.'' Proprietary information should 
be sent directly to the contact person listed above, and not to the 
public docket, to ensure that it is not inadvertently placed in the 
docket. Information thus labeled and directed shall be covered by a 
claim of confidentiality and will be disclosed by EPA only to the 
extent allowed and by the procedures set forth in 40 CFR part 2. If no 
claim of confidentiality accompanies a submission when it is received 
by EPA, it may be made available to the public without further notice 
to the commenter.

VI. 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 OMB review and the requirements of the 
Executive Order. The Order defines ``significant regulatory action'' as 
one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    It has been determined that this rule is not a ``significant 
regulatory action'' under the terms of Executive Order 12866 and is 
therefore not subject to OMB review.

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 
Information Collection Request (ICR) document prepared by EPA has been 
assigned EPA ICR number 1591.1