Regulation of Fuel and Fuel Additives: Refiner and Importer Quality Assurance Requirements for Downstream Oxygenate Blending and Requirements for Pipeline Interface, 32015-32027 [06-5050]
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Federal Register / Vol. 71, No. 106 / Friday, June 2, 2006 / Proposed Rules
This action is not subject to Executive
Order 13045 because it is not
‘‘economically significant’’ as defined
under Executive Order 12866 and
because it is not expected to have a
disproportionate effect on children.
H. Executive Order 13211: Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use
This action 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. This action merely withdraws
the revisions to the text of §§ 70.6(c)(1)
and 71.6(c)(1) proposed on September
17, 2002 and proposes for comment that
these provisions do not establish a
separate regulatory standard or basis for
requiring or authorizing review and
enhancement of existing monitoring
independent of any review and
enhancement of monitoring as may be
required under §§ 70.6(a)(3) and
71.6(a)(3). Further, we have concluded
that this action is not likely to have any
adverse energy effects.
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I. National Technology Transfer and
Advancement Act
Section 12(d) of the National
Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law No.
104–113, § 12(d) (15 U.S.C. § 272 note),
directs EPA to use voluntary consensus
standards in its regulatory activities
unless to do so would be inconsistent
with applicable law or otherwise
impractical. Voluntary consensus
standards are technical standards (e.g.,
materials specifications, test methods,
sampling procedures, and business
practices) that are developed or adopted
by voluntary consensus standards
bodies. The NTTAA directs EPA to
provide Congress, through OMB,
explanations when the Agency decides
not to use available and applicable
voluntary consensus standards.
The NTTAA does not apply to this
action because it does not involve
technical standards. Therefore, EPA did
not consider the use of any voluntary
consensus standards.
J. Executive Order 12898: Federal
Actions to Address Environmental
Justice in Minority Populations and
Low-Income Populations
Executive Order 12898, ‘‘Federal
Actions to Address Environmental
Justice in Minority Populations and
Low-Income Populations’’ (February 11,
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1994), is designed to address the
environmental and human health
conditions of minority and low-income
populations. EPA is committed to
addressing environmental justice
concerns and has assumed a leadership
role in environmental justice initiatives
to enhance environmental quality for all
citizens of the United States. The
Agency’s goals are to ensure that no
segment of the population, regardless of
race, color, national origin, income, or
net worth bears disproportionately high
and adverse human health and
environmental impacts as a result of
EPA’s policies, programs, and activities.
Our goal is to ensure that all citizens
live in clean and sustainable
communities. This action merely
proposes an interpretation of an existing
rule and includes no changes that are
expected to significantly or
disproportionately impact
environmental justice communities.
Dated: May 25, 2006.
Stephen L. Johnson,
Administrator.
[FR Doc. E6–8613 Filed 6–1–06; 8:45 am]
BILLING CODE 6560–50–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 80
[EPA–HQ–OAR–2003–0216; EPA–HQ–OAR–
2005–0149; FRL–8178–4]
RIN 2060–AM27 and RIN 2060–AM88
Regulation of Fuel and Fuel Additives:
Refiner and Importer Quality
Assurance Requirements for
Downstream Oxygenate Blending and
Requirements for Pipeline Interface
Environmental Protection
Agency (EPA).
ACTION: Notice of proposed rulemaking.
AGENCY:
SUMMARY: This proposed rule would
amend the reformulated gasoline (RFG)
regulations to allow refiners and
importers of reformulated gasoline
blendstock for oxygenate blending, or
RBOB, the option to use an alternative
method of fulfilling a regulatory
requirement to conduct quality
assurance sampling and testing at
downstream oxygenate blending
facilities. This alternative method
consists of a comprehensive program of
quality assurance sampling and testing
that would cover all terminals that
blend oxygenate with RBOB in a
specified reformulated gasoline covered
area. The program would be carried out
by an independent surveyor funded by
industry. The program would be
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conducted pursuant to a survey plan,
approved by EPA, that is calculated to
achieve the same objectives as the
current regulatory quality assurance
requirement.
This proposed rule also would largely
codify existing guidance for compliance
by parties that handle pipeline interface
with requirements for gasoline content
standards, recordkeeping, sampling and
testing. The proposed rule also contains
new provisions which would provide
additional flexibility to these regulated
parties. The proposed rule would also
establish gasoline sulfur standards for
transmix processors and blenders that
are consistent with the sulfur standards
for other entities, such as pipelines and
terminals, that are downstream of
refineries in the gasoline distribution
system, and would clarify the
requirements for transmix processors
under the Mobile Source Air Toxics
program.
DATES: Comments: Comments must be
received on or before July 3, 2006.
Under the Paperwork Reduction Act,
comments on the information collection
provisions must be received by OMB on
or before July 3, 2006.
Hearings: If EPA receives a request
from a person wishing to speak at a
public hearing by June 19, 2006, a
public hearing will be held on July 3,
2006. If a public hearing is requested, it
will be held at a time and location to be
announced in a subsequent Federal
Register notice. To request to speak at
a public hearing, send a request to the
contact in FOR FURTHER INFORMATION
CONTACT.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–HQ–
OAR–2003–0216 for comments on the
transmix provisions, and EPA–HQ–
OAR–2005–0149 for comments on the
RBOB provisions, by one of the
following methods:
• https://www.regulations.gov: Follow
the online instructions for submitting
comments.
• E-mail: a-and-r-docket@epa.gov.
• Fax: (202) 566–1741, Attention
Docket ID No. EPA–HQ–OAR–2003–
0216 or EPA–HQ–OAR–2005–0149, as
appropriate.
• Mail: Air Docket, Docket ID No.
EPA–HQ–OAR–2003–0216, or EPA–
HQ–OAR–2005–0149, as appropriate,
Environmental Protection Agency,
Mailcode: 6102T, 1200 Pennsylvania
Ave., NW., Washington, DC 20460.
• Hand Delivery: EPA Docket Center,
Room B102, EPA West Building, 1301
Constitution Avenue, NW., Washington,
DC, Attention Air Docket ID No. EPA–
HQ–OAR–2003–0216, or EPA–HQ–
OAR–2005–0149, as appropriate. Such
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deliveries are accepted during the
Docket’s normal hours of operation, and
special arrangements should be made
for deliveries of boxed information.
Instructions: Direct your comments to
Docket ID No. EPA–HQ–OAR–2003–
0216, or EPA–HQ–OAR–2005–0149, as
appropriate. EPA’s policy is that all
comments received will be included in
the public docket without change and
may be made available online at
https://www.regulations.gov, including
any personal information provided,
unless the comment includes
information claimed to be Confidential
Business Information (CBI) or other
information whose disclosure is
restricted by statute. Do not submit
information that you consider to be CBI
or otherwise protected through
www.regulations.gov. The
www.regulations.gov Web site is an
‘‘anonymous access’’ system, which
means EPA will not know your identity
or contact information unless you
provide it in the body of your comment.
If you send an e-mail comment directly
to EPA without going through
www.regulations.gov your e-mail
address will be automatically captured
and included as part of the comment
that is placed in the public docket and
made available on the Internet. If you
submit an electronic comment, EPA
recommends that you include your
name and other contact information in
the body of your comment and with any
disk or CD–ROM you submit. If EPA
cannot read your comment due to
technical difficulties and cannot contact
you for clarification, EPA may not be
able to consider your comment.
Electronic files should avoid the use of
special characters, any form of
encryption, and be free of any defects or
viruses. For additional information
about EPA’s public docket visit the EPA
Docket Center homepage at https://
www.epa.gov/epahome/dockets.htm.
For additional instructions on
submitting comments, go to Section I.B.
of the SUPPLEMENTARY INFORMATION
section of this document.
Docket: All documents in the docket
are listed in the www.regulations.gov
index. Although listed in the index,
some information is not publicly
available, e.g., CBI or other information
whose disclosure is restricted by statute.
Certain other material, such as
copyrighted material, will be publicly
available only in hard copy. Publicly
available docket materials are available
either electronically in https://
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.
FOR FURTHER INFORMATION CONTACT:
Chris McKenna, mailcode 6406J,
Environmental Protection Agency, 1200
Pennsylvania Ave., NW., Washington,
DC 20460; telephone number: 202–343–
9037; fax number: 202–343–2802; e-mail
address: mckenna.chris@epa.gov.
NAICS codes a
Category
Industry .........................................................................
Industry .........................................................................
Industry .........................................................................
a North
324110
422710;
422720
484220;
484230
SIC codes b
For
further information, please see the
information provided in the direct final
action that is located in the ‘‘Rules and
Regulations’’ section of this Federal
Register publication.
In the ‘‘Rules and Regulations’’
section of the Federal Register, we are
issuing these amendments to the RFG
regulations as a direct final rule without
prior proposal because we view them as
non-controversial amendments and
anticipate no adverse comment. If we
receive no adverse comment, we will
not take further action on this proposed
rule. If we receive adverse comment, we
will publish a timely withdrawal in the
Federal Register informing the public
that the portion of the direct final rule
on which adverse comment was
received will not take effect. Those
portions of the rule on which adverse
comment was not received will go into
effect on the effective date noted in the
DATES section. We will address all
public comments in a subsequent final
rule based on this proposed rule. We
will not institute a second comment
period on this action. Any parties
interested in commenting must do so at
this time.
SUPPLEMENTARY INFORMATION:
General Information
A. Does This Action Apply to Me?
Entities potentially affected by this
action include those involved with the
production or importation of gasoline
motor fuel. Regulated categories and
entities affected by this action include:
Examples of potentially regulated entities
2911
5171; 5172
Petroleum Refiners.
Gasoline Marketers and Distributors.
4212; 4213
Gasoline Carriers.
American Industry Classification System (NAICS).
Industrial Classification (SIC) system code.
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b Standard
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
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person in the preceding FOR FURTHER
section.
INFORMATION CONTACT
B. What Should I Consider as I Prepare
My Comments for EPA?
1. Submitting CBI. Do not submit this
information to EPA through
www.regulations.gov or e-mail. Clearly
mark the part or all of the information
that you claim to be 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
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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:
A. Identify the rulemaking by docket
number and other identifying
information (subject heading, Federal
Register date and page number).
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B. 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.
C. Explain why you agree or disagree;
suggest alternatives and substitute
language for your requested changes.
D. Describe any assumptions and
provide any technical information and/
or data that you used.
E. If you estimate potential costs or
burdens, explain how you arrived at
your estimate in sufficient detail to
allow for it to be reproduced.
F. Provide specific examples to
illustrate your concerns, and suggest
alternatives.
G. Explain your views as clearly as
possible, avoiding the use of profanity
or personal threats.
H. 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 by 40 CFR Part 2.
Outline of This Preamble
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I. Refiner and Importer Quality Assurance
Requirements for Downstream
Oxygenate Blending
A. Background
B. Need for Action
C. This Action
II. Requirements for Pipeline Interface
A. Background
B. 1997 Notice of Proposed Rulemaking
C. Pipelines
D. Transmix Processors
E. Transmix Blenders
III. Administrative Requirements
A. Executive Order 12866: Regulatory
Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
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: Acts that
Significantly Affect Energy Supply,
Distribution, or Use
I. National Technology Transfer and
Advancement Act
IV. Statutory Provisions and Legal Authority
I. Refiner and Importer Quality
Assurance Requirements for
Downstream Oxygenate Blending
A. Background
The RFG regulations currently require
RFG to contain a minimum of 2.0
weight percent oxygen. 40 CFR 80.41.
To fulfill this requirement, oxygenate is
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added either at the refinery before the
gasoline is certified by the refiner as
meeting RFG requirements, or it is
added downstream from the refinery at
an oxygenate blending facility. As
discussed in more detail below, refiners
often wish to require that more than the
minimum amount of oxygenate be
added downstream in order to include
the additional oxygenate in their
emissions performance compliance
calculations. Although Congress
recently removed the oxygen
requirement for RFG in the Clean Air
Act,1 we believe many refiners and
importers may wish to continue to
include oxygenate added downstream in
their emissions compliance
calculations. Under the current
regulations, refiners must conduct a
program of quality assurance testing at
the downstream oxygenate blending
facility in order to include the
oxygenate in their compliance
calculations. This proposed rule would
provide an alternative QA requirement
for these refiners and importers.
Under the current regulations, when
oxygenate is to be added to produce
RFG at a downstream oxygenate
blending facility, refiners produce a
product called reformulated gasoline
blendstock for oxygenate blending, or
RBOB. RBOB is certified by the refiner,
or by an importer who imports RBOB,
as complying with all of the RFG
requirements except the minimum 2.0
weight percent oxygen requirement. The
oxygenate blender is responsible for
complying with the oxygen requirement
when the oxygenate is added to the
RBOB to produce RFG at the oxygenate
blending facility.
Various oxygenates may be used to
fulfill the oxygen requirement. Some
oxygenates, such as methyl tertiary
butyl ether, or MTBE, typically are
added at the refinery. However, some
oxygenates, such as ethanol, have a
propensity to attract water, and, as a
result, cannot be added at the refinery,
particularly where the finished gasoline
will be traveling through a pipeline on
its way to terminals and retail gasoline
stations. As a result, RFG containing
ethanol is typically produced by
blending the ethanol with RBOB at a
blending facility downstream from the
refinery that produced the RBOB.
1 1 Energy Policy Act of 2005, Pub. L. 109–58
(HR6), section 1504(a), 119 STAT 594, 1076–
1077(2005). In accordance with the Energy Policy
Act, EPA has issued a rule amending the RFG
regulations for California to remove the 2.0 weight
percent oxygen standard (71 FR 8965 (February 22,
2006)), and has proposed a similar rule that would
be applicable in the rest of the country (71 FR 9070
(February 22, 2006)).
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Refiners and importers of RBOB are
required to calculate compliance with
the RFG emissions performance
standards for VOC, NOX and toxics by
sampling and testing a hand blended
mixture of the RBOB and the type and
amount of oxygenate that the refiner or
importer of the RBOB designates must
be added downstream. The type and
amount of oxygenate to be added
downstream must be indicated on the
product transfer documents that
accompany the gasoline when it is
transferred to the downstream
oxygenate blender. The oxygenate
blender is required to add the type and
amount of oxygenate designated on the
product transfer documents.
Under the current regulations, RBOB
refiners and importers can designate
either a specific type and specific
amount of oxygenate to be added
downstream, or they can designate one
of two generic categories of RBOB: ‘‘anyoxygenate’’ RBOB or ‘‘ether-only’’
RBOB. 40 CFR 80.69(a)(8). Where the
RBOB is designated as any-oxygenate
RBOB, the refiner or importer must
assume for purposes of its handblend
that 2.0 weight percent ethanol will be
added downstream. The downstream
oxygenate blender may add any type of
legal 2 oxygenate, to any-oxygenate
RBOB in an amount sufficient to meet
the minimum 2.0 weight percent
requirement. Where the RBOB is
designated as ether-only RBOB, the
refiner or importer must assume for
purposes of its handblend that 2.0
weight percent MTBE will be added
downstream. The oxygenate blender
may add any legal ether oxygenate to
ether-only RBOB in an amount
sufficient to meet the minimum 2.0
weight percent requirement.
Where a specific type and amount of
oxygenate is designated for the RBOB
rather than one of the two generic
designations, the regulations require the
refiner or importer to conduct
downstream oversight quality assurance
(QA) sampling and testing of the
downstream oxygenate blending facility.
40 CFR 80.69(a)(7). This is to ensure
that the specific type and amount of
oxygenate that is designated, which
typically is greater than the 2.0 weight
percent requirement, in fact is added to
the RBOB by the oxygenate blender. In
addition, the refiner or importer must
have a contract with the oxygenate
blender which requires the blender to
comply with the blending procedures
specified by the RBOB refiner or
importer and allows the refiner or
2 Oxygenates that are allowed under EPA’s
‘‘substantially similar’’ rule and any section 211(f)
waiver that may apply.
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importer to conduct the required QA
sampling and testing. 40 CFR
80.69(a)(6). If the refiner or importer
does not meet the contractual and
quality assurance requirements and
does not designate its RBOB as etheronly or any-oxygenate, the refiner or
importer must assume for purposes of
its handblend that 4.0 volume percent
ethanol will be added to the RBOB
downstream.
B. Need for Action
Recently, the states of New York and
Connecticut promulgated state laws
banning the use of MTBE in gasoline
sold in these states. As a result, many
refiners and importers that historically
produced or imported RFG containing
MTBE for the NY/CT RFG area currently
produce or import RBOB for ethanol
blending. Refiners in this area have
indicated that, due to the complex
gasoline marketplace in New York and
Connecticut, it is extremely difficult, if
not impossible, to track RBOB from the
refinery where it is produced to the
terminal where it is blended with
ethanol in order to fulfill the
downstream QA sampling and testing
requirement. As a result, under the
current regulations, refiners in the NY/
CT RFG area are effectively precluded
from producing an RBOB which
requires a specific type and amount of
oxygenate, such as 10 volume percent
ethanol, and instead must produce a
generic any-oxygenate RBOB, which
does not require the refiner to conduct
downstream QA testing at the ethanol
blender facility.
As discussed above, for purposes of
calculating compliance with RFG
emissions performance standards, these
refiners may then only include in their
handblends ethanol in an amount which
would result in gasoline having 2.0
weight percent ethanol (approximately
5.7 volume percent ethanol.) Some
refiners have indicated that they will
need to produce RBOB requiring 10
volume percent ethanol, which would
allow them to include 10 volume
percent ethanol for purposes of
compliance calculations, in order to
meet emissions performance standards.
As a result, these refiners have asked
EPA to allow use of an alternative
method of meeting the downstream QA
sampling and testing requirement.
For the reasons discussed below, we
believe it is appropriate to provide
refiners and importers who produce or
import RBOB for the NY/CT RFG area
with an alternative means of meeting
the QA sampling and testing
requirement. We also believe it is
appropriate to provide this alternative to
refiners and importers who produce or
import gasoline RBOB for other RFG
areas. As a result, this proposed rule
would amend the RFG regulations to
provide an alternative QA sampling and
testing option which will be available to
any RBOB refiner or importer in any
RFG covered area. As indicated above,
we believe that providing this
alternative QA requirement would be
appropriate even after the 2.0 weight
percent minimum oxygen standard is
removed.
C. This Action
This proposal would provide RBOB
refiners and importers the option to
comply with an alternative QA
requirement which consists of a
program of sampling and testing
designed to provide oversight of all
terminals that blend ethanol with RBOB
for use in a specified RFG covered area.
Under this option, a refiner or importer
would need to either arrange to have an
independent surveyor conduct a
program of compliance surveys, or
participate in the funding of an
organization which arranges to have
independent surveyor conduct a
program of compliance surveys. In
either event, compliance surveys would
need to be carried out by an
independent surveyor pursuant to a
survey plan calculated to achieve the
same QA objectives as the current
regulatory requirement. A detailed
survey plan would be submitted to EPA
for approval by September 1st of the
year preceding the annual averaging
period in which the alternative QA
sampling and testing program would be
implemented. The survey plan would
include a methodology for determining
when the survey samples will be
collected, the location of the retail
outlets where the samples will be
collected, the number of samples to be
included in the survey, and any other
elements that EPA determines are
necessary to achieve the same level of
quality assurance as the current QA
requirement.
Under this alternative QA option, the
independent surveyor would be
required to obtain samples at retail
stations in the RFG covered area in
accordance with the survey plan and
have the samples tested for type and
amount of oxygenate. The sampling and
testing conducted under this alternative
QA option would be required to be done
in accordance with the provisions in
§§ 80.8 and 80.46. The surveyor would
obtain from the retail outlet the product
transfer documents associated with the
gasoline, which will provide the
surveyor with information regarding the
type and amount of oxygenate that the
gasoline is supposed to contain, and the
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terminal that conducted the oxygenate
blending. The surveyor would be
required to notify EPA of any instance
where the product transfer documents
do not contain such information. If the
test results show that the gasoline does
not contain the type and/or the
minimum amount of oxygenate
indicated on the product transfer
documents, the surveyor would be
required to ask the terminal determined
to have supplied the gasoline to produce
documentation of the blending
instructions from the refiner or importer
of the RBOB. The surveyor would be
required to notify EPA of any instances
where the refiner’s or importer’s
blending instructions indicate that the
oxygenate blender did not add the type
or minimum amount of oxygenate
designated for the RBOB by the refinery
or importer. The surveyor would be
required to submit to EPA a report
which includes the information and
data collected during the survey, and to
maintain records associated with the
surveys for five years.
This proposed rule would require
each refiner and importer who chooses
to comply with the alternative QA
requirement to take all reasonable steps
to ensure that parties downstream from
the refiner or importer cooperate with
the program by allowing the
independent surveyor to collect
samples, and by providing to the
independent surveyor copies of product
transfer documents and other
information regarding the source of any
gasoline received, the destination of any
gasoline distributed, the oxygenate
blending instructions for RBOB, and the
rate the oxygenate was blended. In
partial satisfaction of the ‘‘reasonable
steps’’ requirement, the rule would
require the refiner or importer to
include such a requirement in
contractual agreements with its branded
downstream facilities.
In addition, this proposed rule would
require parties downstream from a
refiner or importer that complies with
the alternative QA requirement to
include on product transfer documents
the type and amount of oxygenate
contained in the gasoline and
identification of the oxygenate blending
terminal that blended the gasoline. This
proposed rule would require that the
survey plan include a process for
notifying all oxygenate blending
terminals and other downstream parties
in the affected area of the product
transfer documentation requirement.
Where a downstream party fails to
receive notice of the product transfer
requirement, the party would be
required to begin complying with the
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product transfer requirement upon
notification by EPA.
We believe that use of this QA
compliance alternative would result in
oversight sampling and testing that is
equivalent to the current regulatory QA
requirement, and, in fact, may result in
significantly superior QA oversight
since the sampling and testing would be
conducted by an independent surveyor
in accordance with a comprehensive
plan approved by EPA, rather than by
individual refiners and importers. This
rule would not have any adverse
environmental impact, and would
provide refiners and importers with
additional flexibility in complying with
the regulations. As a result, while this
rulemaking was initiated in response to
the compliance issues raised by refiners
in the NY/CT area, we believe it is
appropriate to provide this compliance
alternative to refiners and importers
supplying any RFG covered area. The
rule, therefore, would provide this QA
compliance alternative to any RBOB
refiner or importer in any RFG area who
either arranges to have an independent
surveyor conduct a program of
compliance surveys, or who participates
in the funding of an organization that
arranges to have an independent
surveyor conduct a program of
compliance surveys, in accordance with
the provisions in this proposed rule.
Compliance with this QA alternative
would be optional. Refiners and
importers may choose to comply with
the existing QA requirement and not
participate in a survey program.
Refiners and importers who supply
more than one RFG area may choose to
participate in the survey program for
one RFG area and comply with the
existing QA requirement for another
RFG area.
This proposed rule would add a new
paragraph (a)(11) to 40 CFR 80.69,
which contains the current QA
requirement. This proposed rule also
would amend § 80.77 to require parties
to include on product transfer
documents the information required
under § 80.69(a)(11) as described above.
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II. Requirements for Pipeline Interface
A. Background
Refined petroleum products that are
transported by pipeline normally are
pumped sequentially, as a continuous
flow through the pipeline. As a result,
some amount of mixing of adjacent
product types normally occurs. The
product in a pipeline between two
adjacent volumes of petroleum product
consists of a mixture of the two adjacent
volumes and is called ‘‘interface.’’
Generally, interface is blended into the
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two adjoining products that created the
interface. For example, half of the
interface between premium and regular
gasoline is blended into the premium
gasoline and half into the regular
gasoline (called a ‘‘fifty percent cut’’ or
a ‘‘mid-point cut.’’) However, certain
product types, such as jet fuel, are not
mixed with any other product type, and
all of the interface that contains jet fuel
is blended into the other product (called
a ‘‘clean cut.’’)
Where interface consists of a mixture
of finished fuels that cannot be cut with
adjoining product so as to produce a
product that meets the specifications for
a fuel that can be used or sold without
further processing, the interface is
called ‘‘transmix’’. Transmix is not
blended into either of the two adjacent
products transported by the pipeline,
but is diverted by the pipeline as a
distinct product into a separate storage
tank. Transmix is generally transported
via tank truck, pipeline or barge to a
facility designed to separate the
transmix into its fuel components. For
example, where the transmix consists of
gasoline and distillate fuel, the transmix
may be transported to a ‘‘transmix
processing’’ facility where the gasoline
portion is separated from the distillate
fuel. At locations where it is either
relatively expensive or inconvenient to
transport transmix to a transmix
processing facility for separation, the
transmix is sometimes blended into
gasoline in very small amounts,
typically around 0.25 volume percent of
the gasoline.
The reformulated gasoline (RFG) and
anti-dumping requirements apply at any
facility where gasoline is produced. See
40 CFR 80.2(h) and (i), 80.65(a), and
80.101. Gasoline most commonly is
produced by processing crude oil at
refineries, but it is also produced by
other processes, such as combining
blendstocks or adding blendstocks to
finished gasoline. Gasoline is also
produced when transmix is blended
into gasoline, or when transmix is
separated into gasoline and distillate
fuel. Transmix blending is similar to
adding blendstock to gasoline where the
addition of the transmix, like
blendstock, may change the properties
of the gasoline. Similarly, the process of
separating gasoline and distillate fuel
may result in gasoline with different
properties than the gasoline as
originally certified by the refinery.
Transmix processors and transmix
blenders are refiners under the RFG/
anti-dumping regulations, but EPA has
historically provided transmix
processors and transmix blenders
flexibility in complying with the refiner
requirements. This proposed rule would
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codify some of the existing practices
into EPA regulations, and would also
include modifications reflecting EPA
experience.
B. 1997 Notice of Proposed Rulemaking
On July 11, 1997, EPA proposed to
add a new § 80.84 to the RFG/antidumping regulations at 40 CFR Part 80
to clarify the manner in which interface,
including transmix, would be treated
under the RFG/anti-dumping
regulations. The NPRM proposed
requirements for designating different
combinations of gasoline in interface.
The NPRM also proposed requirements
for transmix processors and transmix
blenders that produce either RFG or
conventional gasoline.
The NPRM proposed to allow parties
to blend transmix into conventional
gasoline provided that the transmix
resulted from normal pipeline
operations, and either there was no
means of transporting the transmix to a
transmix processor via pipeline or
water, or there was an historical practice
of blending transmix at the facility
before 1995. The rate of transmix
blending was limited to the greater of
0.25 volume percent or the
demonstrated blending rate in 1994. The
NPRM proposed to allow transmix to be
blended into RFG provided that the
transmix resulted from normal pipeline
operations, there was no means of
transporting the transmix to a transmix
processing facility via pipeline or water,
and the party was unable to blend the
transmix into conventional gasoline.
The rate of transmix blending into RFG
was limited to a maximum of 0.25
volume percent. The NPRM also
proposed requiring transmix blenders to
carry out a program of periodically
sampling and testing of the RFG
subsequent to transmix blending to
ensure that the downstream standards
were met.
The NPRM proposed to require
transmix processors who designate the
gasoline produced from the transmix
(such gasoline is one type of transmix
gasoline product, or TGP) as
conventional gasoline to exclude the
TGP from anti-dumping compliance
calculations for the transmix processing
facility, but to include any blendstocks
added to the TGP since such
blendstocks would not previously have
been included in any refinery’s
compliance calculations. The NPRM
proposed to require transmix processors
who designate the gasoline produced
from transmix as RFG to include the
TGP, as well as any blendstocks used,
in the RFG compliance calculations for
the transmix processing facility to
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ensure that the gasoline produced using
the transmix meets all RFG standards.
Parties have been processing and
blending transmix in accordance with
EPA guidance which describes similar
treatment of interface and transmix as
that outlined in the July 11, 1997
NPRM. (See Reformulated Gasoline and
Anti-dumping Questions and Answers
(November 12, 1996)). Our experience
since the guidance was issued indicates
that the approach taken in the guidance
is mostly appropriate, but that some
revisions are warranted. EPA is also
aware, from recent discussions with
several pipeline operators, that volumes
of transmix may increase as pipelines
begin transporting ultra-low sulfur
diesel fuel. EPA had anticipated that
transporting ultra-low sulfur diesel
would require greater volumes of diesel
to be cut as interface into other highersulfur distillate fuels such as heating oil
and jet fuel. However, some pipelines
have indicated they intend to change
their product sequencing by
transporting volumes of ultra-low sulfur
diesel between volumes of gasoline, in
order to minimize sulfur contamination
of the ultra-low sulfur diesel. This
change would increase the number of
gasoline/diesel interfaces cut to
transmix, and increase the overall
volume of transmix. Pipeline operators
have also indicated that transporting
ultra-low sulfur diesel fuel will cause
them to generate transmix at locations
where they have not historically
generated transmix.
In this proposed rule, we are
including the provisions in § 80.84,
which were previously proposed in the
July 11, 1997 NPRM, with certain
changes made in response to the
comments we received on the NPRM, as
discussed below. We believe it is
appropriate to include in this proposal
the provisions in § 80.84 given the
length of time since they were originally
proposed, and to include changes made
in response to prior comments. We have
also added several new provisions in
this proposal clarifying, and in some
instances expanding, the flexibilities
available to transmix processors and
transmix blenders for complying with
the RFG/antidumping regulations. This
proposed rule also includes modest
recordkeeping requirements in §§ 80.74
and 80.104 which would require parties
that handle interface and transmix to
keep records verifying that the
requirements of § 80.84 were met. In
addition, this proposed rule includes
provisions for transmix processors and
transmix blenders related to gasoline
sulfur and air toxics. This proposed rule
only addresses gasoline produced by
transmix processors and transmix
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blenders. Distillate fuel produced by
transmix processors and transmix
blenders is addressed in the diesel
sulfur regulations under 40 CFR part 80,
subpart I.
EPA believes the flexibilities available
in this proposed rule are appropriate
given the unique roles that transmix
processors and transmix blenders fill in
the petroleum products distribution
system. Although transmix processors
and transmix blenders are refiners
under EPA’s regulations, almost all of
the gasoline and distillate fuel they
produce is derived from fuel which has
already been produced and certified by
an upstream refinery. Thus, this
proposed rule would allow transmix
processors the flexibility to exclude
from their antidumping compliance
calculations conventional gasoline that
they recover directly from transmix,
since the conventional gasoline has
already been accounted for in the
compliance calculations of an upstream
refinery. Similarly, this proposed rule
would allow transmix processors to
only have to meet the downstream
sulfur standards for gasoline they
recover directly from transmix, since the
gasoline has already been accounted for
in the compliance calculations of an
upstream refinery. However, transmix
processors must comply with all refiner
standards at each of their transmix
processing facilities for any blendstocks
they add to gasoline. Lastly, this
proposed rule would allow transmix
blenders to blend transmix into gasoline
without restriction on location or rate,
provided the endpoint of the transmixblended gasoline does not exceed 437
degrees Fahrenheit, and that the
gasoline meets all applicable
downstream standards.
C. Pipelines
This proposed rule includes
designations for pipeline interface that
are consistent with the designations in
EPA’s current guidance and the 1997
NPRM. The designations for pipeline
interface are primarily intended to
ensure that pipelines cut their interfaces
in a manner that maintains the quality
of any RFG or VOC-controlled gasoline
transported by a pipeline. For example,
interfaces between volumes of RFG and
conventional gasoline should be cut into
the conventional gasoline to maintain
the quality of the RFG. Regardless of
gasoline product designation, all
gasoline containing interface must meet
all downstream standards, including but
not limited to any standards and
requirements that apply downstream of
the refinery in 40 CFR Part 80 and the
Clean Air Act.
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D. Transmix Processors
1. Comments on the 1997 Notice of
Proposed Rulemaking
EPA received a number of comments
on the 1997 NPRM regarding transmix
processors. One commenter said that the
definition of transmix should be
changed since transmix processors and
transmix blenders sometimes process or
blend mixtures of fuels that were
unintentionally combined in tanks.
Although such mixtures are similar in
composition to transmix, they do not fit
the definition of transmix proposed in
the 1997 NPRM, which specified that
transmix must be generated in a
pipeline. EPA agrees that a product that
in composition is similar to transmix,
and that is produced by unintentionally
mixing gasoline and distillate fuel in
tanks, should be afforded the same
treatment as transmix product generated
in a pipeline. EPA also understands that
transmix may include mixtures of
gasoline and distillate fuel produced
through normal operational activities at
pipelines and terminals, such as
draining tanks, or draining piping and
hoses used to transfer gasoline or
distillate fuel to tanks or trucks, or from
a safety relief valve discharging to
protect equipment from overpressuring.
As a result, § 80.84(e) in this proposed
rule specifically allows such products to
be covered under the transmix
provisions.
EPA is aware that some transmix
processors and transmix blenders may
also be adding feedstocks to their
transmix that were not produced from
normal pipeline interface, or from
inadvertently mixing gasoline and
distillate fuel in tanks, or through
normal operational activities at
pipelines and terminals. Mixing other
feedstocks in transmix prior to
processing may cause these other
feedstocks to be inappropriately
accounted for under the antidumping
regulations and gasoline sulfur
regulations, as discussed later. The
flexibility provided in this rule extends
only to transmix composed of pipeline
interface, mixtures of gasoline and
distillate fuel that were unintentionally
combined in a tank, and mixtures of
gasoline and distillate fuel produced
through normal operational activities at
pipelines and terminals. A transmix
processor or transmix blender who adds
feedstocks derived from any other
sources to their transmix must comply
with all the standards applicable to a
refiner under EPA’s regulations for all
the gasoline they produce during a
compliance period, including but not
limited to any standards and
requirements in 40 CFR parts 79, 80 and
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the Clean Air Act. Transmix processors
that add feedstocks from any other
sources should also take extra care to be
sure that they are complying with
Subtitle C of the Resource Conservation
and Recovery Act (RCRA), 42 U.S.C.
6921–6939(e), and any state provision
authorized pursuant to Section 3006 of
RCRA, 42 U.S.C. 6926.
One commenter said that the 1997
NPRM should clarify that the transmix
processing requirements do not apply to
transmix processed by a crude oil
refinery where the transmix is received
into a crude or other feedstock stream
and is not separated before it is added
to other feedstocks. EPA believes that
the regulations in this proposed rule are
clear in this regard, since they
specifically apply to persons who
separate transmix at a transmix
processing facility. The term ‘‘transmix
processing facility’’ is defined as
excluding refineries that ‘‘produce
gasoline by processing crude oil’’. Such
refineries must comply with all existing
refiner requirements, and would not be
eligible to take advantage of the
flexibilities available in this proposed
rule.
Some commenters said that they do
not know the source of the transmix
and, therefore, would not know the
original designation of the gasoline
portion of the transmix (e.g., RFG,
conventional gasoline, blendstocks).
The commenters said that the transmix
processor should not be required to
track and segregate transmix generated
from different types of gasoline or
blendstocks. This proposed rule would
not require a transmix processor to track
and segregate transmix. However,
§ 80.65 requires the transmix processor
to designate the gasoline portion (i.e.,
conventional gasoline, RFG, or RBOB)
that is separated from the distillate fuel.
One commenter said that, under
previous guidance, EPA provided for
the exclusion of the transmix-based
portion of conventional gasoline from
anti-dumping compliance calculations
as an option, whereas in the 1997
NPRM, the exclusion would be
mandatory. The commenter believes the
exclusion should be optional. Another
commenter believes that transmix
processing improves the quality of the
gasoline separated from transmix by
removing more heavy aromatics and
sulfur compounds and improving E300
distillation point, and therefore, TGP
should be included in compliance
calculations for conventional gasoline to
give credit for the improvements. EPA
agrees with the commenters, and this
proposed rule would modify the 1997
NPRM to allow the exclusion of the TGP
from anti-dumping compliance
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calculations to be optional, provided the
TGP meets all of the downstream
standards for conventional gasoline.
However, in order to prevent transmix
processors from selectively including
only high quality TPG batches in their
compliance calculations, while
excluding those of low quality, transmix
processors must consistently include or
exclude TGP in their compliance
calculations during each annual
compliance period, with one exception.
The exception occurs if transmix
contains gasoline blendstocks that are
derived from pipeline interface. EPA
understands that some pipelines
transport gasoline blendstocks, and that
these pipelines may cut interfaces
containing gasoline blendstock to a
transmix tank. If a transmix processor
produces conventional gasoline from
transmix containing gasoline
blendstocks and was allowed to exclude
the TGP from their anti-dumping
compliance calculations, the finished
conventional gasoline would not be
included in any refiner’s anti-dumping
compliance calculations. Thus, under
this proposal, if a transmix processor
produces conventional gasoline at a
transmix processing facility from
transmix containing gasoline
blendstocks derived from pipeline
interface, the transmix processor must
consistently include all TGP produced
during a compliance period in their
antidumping compliance calculations
for that transmix processing facility. As
discussed previously, if transmix
processors add any feedstocks to their
transmix that were not produced from
normal pipeline interface, or from
inadvertently mixing gasoline and
distillate fuel in tanks, or through
normal operational activities at
pipelines and terminals, they would
need to comply with all standards
applicable to refiners under EPA’s
regulations for all the gasoline they
produce during a compliance period.
This proposed rule would also require
any RFG or RBOB produced by a
transmix processor to be included in the
RFG compliance calculations for the
transmix processing facility.
This proposed rule would also modify
the 1997 NPRM by treating TGP as a
blendstock when the transmix processor
mixes the TGP with other blendstock(s)
to produce conventional gasoline. In
this situation, the TGP would be
included in compliance calculations for
the resulting conventional gasoline. We
believe it is appropriate to treat TGP as
a blendstock rather than as a previously
certified gasoline in this situation, since
the TGP is likely to have undergone
changes as a result of having been
interfaced with another product and
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separated through transmix processing.
For example, one transmix processor
indicated that their TGP could not be
directly sold as gasoline because it does
not meet standards for octane or Reid
vapor pressure. This approach is
consistent with the approach taken in
both the 1997 NPRM and the Question
and Answer guidance with regard to
RFG, where TGP is required to be
included in compliance calculations
when it is mixed with blendstock to
produce RFG.
Where TGP is sold as a blendstock,
the transmix processor would be
required to exclude the TGP from
compliance calculations, with one
exception. The exception is when the
transmix processor sells the TGP to an
oxygenate blender as a blendstock
which becomes conventional gasoline
solely upon the addition of an
oxygenate, such as ethanol or MTBE. In
this circumstance, the transmix
processor would need to include the
TGP in compliance calculations. This
exception would not apply if the TGP is
combined with any other nonoxygenated blendstocks to produce
conventional gasoline. Thus, in order
for a transmix processor to properly
account for any TGP sold as a
blendstock in compliance calculations
for a transmix processing facility, the
transmix processor must clearly state on
the TGP product transfer documents
whether or not the TGP may only be
combined with an oxygenate to produce
conventional gasoline. This approach is
consistent with the anti-dumping
regulations at § 80.101(d)(3), which
require blendstocks that become
conventional gasoline solely upon the
addition of an oxygenate to be included
in anti-dumping compliance
calculations for the refiner that
produced the blendstock.
Transmix processors also sometimes
blend sub-octane TGP with previously
certified premium gasoline (PCG) to
produce regular gasoline. EPA is
proposing that transmix processors
which blend sub-octane TGP with
premium PCG to produce conventional
gasoline must include the TGP in
compliance calculations for the
transmix processing facility, but may
meet the sampling and testing
requirements in one of three ways. First,
the transmix processor may directly
measure the properties of the TGP and
treat each volume of TGP blended with
PCG as a separate batch for purposes of
compliance calculations. As a second
alternative, the transmix processor may
measure the volume and properties of
the PCG prior to blending with the TGP,
then measure the volume and properties
of the gasoline subsequent to blending
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with the TGP, and calculate the volume
and properties of the TGP by subtracting
the volume and properties of the PCG
from the volume and properties of the
gasoline subsequent to blending. As a
third alternative, the transmix processor
may demonstrate compliance using the
procedures in § 80.101(g)(9). Where TGP
is mixed with previously certified
gasoline to produce RFG or RBOB, the
transmix processor must demonstrate
compliance using the procedures in
§ 80.65(i).
One commenter said that EPA should
allow transmix processors to blend
oxygenates and other blendstocks into
transmix-based conventional gasoline to
produce RFG. This proposed rule would
address this comment by allowing
transmix processors to treat their TGP as
a blendstock, and combine the TGP with
other blendstocks to produce either
conventional or reformulated gasoline.
In this situation, the transmix processor
would be required to fulfill all the
requirements and standards for RFG that
apply to a refiner.
2. Issues Not Addressed in the 1997
NPRM
a. Gasoline Sulfur. In the preamble to
the gasoline sulfur regulations, EPA
indicated that the Agency would
establish requirements for transmix
processors in a future rulemaking (65 FR
6800, February 10, 2000). Therefore, as
part of this rulemaking, EPA is also
including proposed requirements for
transmix processors and transmix
blenders under the gasoline sulfur
regulations at 40 CFR part 80, subpart H.
As under the RFG/anti-dumping rule,
transmix processors and transmix
blenders are refiners under the gasoline
sulfur regulations. As a result, transmix
processors and transmix blenders are
subject to the refinery sulfur standards
under § 80.195 of the gasoline sulfur
regulations. However, for reasons
discussed below, we believe it is
appropriate that such parties be held to
the gasoline sulfur standards applicable
to downstream parties under §§ 80.210
and 80.220 of the gasoline sulfur
regulations, and not be held to the more
stringent refinery standards in § 80.195.
As indicated above, transmix
processors generally do not control their
feedstock, but receive mixtures of
products from upstream refineries. The
gasoline portion of transmix may be
relatively high in sulfur if it was
originally produced by a small refiner,
a refiner producing gasoline for use in
the Geographic Phase-in Area (GPA), or
a refiner who has been given a
temporary hardship extension to
produce relatively high sulfur gasoline.
As a result, holding transmix processors
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to the downstream sulfur standards
rather than the more stringent refinery
standards would provide transmix
processors the flexibility to recover
gasoline originally produced by small
refiners, refiners of GPA gasoline, or
temporary hardship refiners. To ensure
compliance with the applicable
downstream sulfur standards, transmix
processors will be required to test any
gasoline produced from transmix for
sulfur content.
Under this proposed rule, transmix
processors who add blendstocks not
derived from transmix to their recovered
gasoline would be required to meet all
of the requirements and standards that
apply to refiners under 40 CFR Part 80,
subpart H, for such blendstocks. Where
certain requirements are met, the
transmix processor may use sulfur test
results from the blendstock supplier for
purposes of meeting the sampling and
testing requirements under the sulfur
rule.
As mentioned previously, EPA has
learned that some transmix processors
have added feedstocks to their transmix,
before the transmix is processed, that
are not produced from pipeline
interface, or from mixtures of gasoline
and distillate fuel unintentionally
combined in a tank, or from normal
operations at pipelines and terminals.
Under this proposal, transmix
processors that use these other
feedstocks would need to meet all EPA
standards applicable to a refiner for all
the gasoline they produce during a
compliance period, including the
refinery level sulfur standards in 40 CFR
80.195. These transmix processors could
not utilize the flexibilities in this rule
because they have chosen to use
feedstocks that have not been previously
accounted for by a refinery in the
production of gasoline. When the
transmix is processed, the previously
compliant gasoline present in the
transmix and the other feedstocks both
distill out of the transmix together as a
fungible product, and the transmix
processor cannot distinguish exactly
which portion of the TGP was derived
from previously compliant gasoline and
which was derived from other
feedstocks. Thus, EPA proposes limiting
the flexibility allowed by this proposed
rule to gasoline produced from
transmix, only if the transmix was
produced from pipeline interface, or
from mixtures of gasoline and distillate
fuel that were unintentionally combined
in a tank, or from mixtures of gasoline
and distillate fuel produced from
normal operational activities at
pipelines and terminals. Transmix
processors who add any other material
to their transmix would need to comply
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with all EPA standards applicable to a
refiner for all the gasoline they produce
during a compliance period, including
the refinery level sulfur standards in 40
CFR 80.195.
This proposed rule would, however,
allow transmix processors that produce
gasoline from pipeline interface to meet
the less stringent downstream gasoline
sulfur standards, even if the interface
contains small amounts of gasoline
blendstocks that are transported via
pipeline as a normal part of pipeline
operations. EPA believes it is
appropriate to allow transmix
processors that produce gasoline from
these interface mixtures to meet the
downstream sulfur standards because
they do not have the same level of
control over their transmix as the
transmix processors that intentionally
introduce other feedstocks into the
production process. Furthermore,
because the volume of gasoline
blendstocks in the transmix will be
relatively small and since the gasoline
will still have to meet downstream
standards, EPA believes the
environmental consequences of
allowing these transmix processors to
meet the less stringent downstream
sulfur standard should be negligible.
This proposed rule would add a new
§ 80.213 to the gasoline sulfur
regulations. This section contains the
additional requirements for
demonstrating compliance with the
gasoline sulfur rule discussed above for
refiners who process or blend transmix
in accordance with the provisions in
§ 80.84. EPA believes that the additional
proposed requirements for transmix
processors and transmix blenders in
§ 80.213 are necessary to maintain the
flexibility of the current practices
regarding transmix, and will not result
in any adverse environmental
consequences. This proposed rule
would also add modest recordkeeping
requirements to § 80.365 which require
parties to retain records of any sampling
and testing required under § 80.213.
b. Air Toxics. The mobile source air
toxics (MSAT) rule (66 FR 17230, March
29, 2001) requires the annual average
toxics performance of a refinery’s or
importer’s gasoline to be at least as
clean as the average of its gasoline
during the three-year baseline period
1998–2000. The MSAT requirements
apply separately to RFG and to
conventional gasoline. MSAT
compliance is determined from the
same gasoline data used by a refiner to
determine its compliance with the RFG
or anti-dumping requirements. As a
result, only gasoline which would be
included in the RFG or anti-dumping
compliance determination of a refiner is
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included in the refiner’s MSAT baseline
and compliance determinations.
Most, if not all, transmix processors
have unique individual MSAT
baselines. Under MSAT, those with
unique individual MSAT baselines
(§ 80.915) are subject to their MSAT
baseline up to their associated MSAT
baseline volume (§ 80.850). Gasoline
production above the MSAT baseline
volume is subject to either the RFG
toxics performance standard (§ 80.41) or
to the refiner’s anti-dumping standard
(§ 80.91). Because these standards are
equal to or less stringent than the
refiner’s MSAT baseline, they offer
some flexibility to the refiner’s overall
compliance with its MSAT standard.
Because gasoline demand is increasing,
EPA expects that this provision will
provide most refiners with some degree
of MSAT compliance flexibility. The
MSAT rules also provide for limited
credit and deficit carryover, allowing
refiners to weather slightly off years
with better toxics performance in an
adjacent year (§ 80.815). Finally,
because all refiners are subject to MSAT
standards which are typically more
stringent than the RFG toxics
performance standard or their
individual anti-dumping standard, it is
likely that the gasoline portion of the
transmix is also cleaner with respect to
toxics performance than it was during
the baseline period 1998–2000, thus
providing some immediate flexibility to
transmix processors and transmix
blenders.
This action clarifies that any gasoline
or blendstock a transmix processor
includes in their RFG or anti-dumping
compliance determination is also
included in their MSAT compliance
calculations. Also, EPA has recently
proposed to replace the existing MSAT
regulations with a standard that would
limit the benzene content of gasoline to
an annual average of 0.62 percent by
volume for most refiners, beginning in
2011. See 71 FR 15803 (March 29,
2006). The proposed toxics regulations
would exempt transmix processors from
the new benzene standard for any
gasoline they recover from transmix, but
require transmix processors to meet the
standard for any blendstocks they add to
transmix.
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E. Transmix Blenders
1. Comments on the 1997 Notice of
Proposed Rulemaking
One commenter was concerned that
the sampling and testing procedures in
the 1997 NPRM for blends of transmix
and RFG, which would be performed
after blending the transmix, may not
prevent the release of noncompliant
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RFG in the distribution system. For
reasons discussed below, however, EPA
believes that commercial standards limit
transmix blending to such small
percentages, that blending transmix in
RFG will cause essentially no change in
the emissions performance of the RFG.
This proposed rule would specifically
require that all gasoline produced by
transmix blenders have an endpoint less
than 437 degrees Fahrenheit. As
described below, as a practical matter,
EPA believes that this endpoint
standard will effectively prevent the
blending of transmix into gasoline from
causing any appreciable changes in
gasoline emissions performance.
One commenter said that the 1996
Question and Answer guidance
regarding transmix blended into
conventional gasoline requires that the
transmix be blended at a rate no greater
than the historical rate that was used by
the pipeline, whereas the NPRM
provided that the transmix be blended
at a rate no greater than the historical
rate at the terminal or 0.25 volume
percent, whichever is greater. The
commenter said the NPRM did not
cover a situation where, historically,
transmix was moved through a pipeline
to a terminal that is no longer used for
blending transmix, and the transmix is
currently moved through the same
pipeline but blended at an intermediate
terminal which historically had not
been used for blending transmix. The
commenter recommended that the
language in the Q&A guidance, which
covers this situation by allowing
blending at the historical rate used by
the pipeline rather than by the terminal,
be adopted in the regulations.
We believe the Q&A guidance is
consistent with the 1997 NPRM in
stating that if a pipeline stops blending
transmix at a terminal, that the pipeline
may not begin blending transmix at a
second terminal at a rate equal to the
first terminal’s blending rate. The Q&A
guidance states: ‘‘* * * the transmix
must be present in a terminal from
which there is no out-bound pipeline or
water transportation by which the
transmix could be transported to a
transmix processor, or the pipeline’s
historical practice at the terminal
[emphasis added] (the practice
beginning at least before January, 1994)
has been to blend all transmix into
conventional gasoline without further
processing.’’ This language indicates
that the criteria regarding historical
practice applies to the terminal in
which the transmix was blended by the
pipeline. Where a pipeline blends
transmix at more than one terminal, the
historical practice criterion would apply
separately to each of the pipeline’s
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terminals at which transmix is blended.
However, as described below, this
proposed rule would change this
approach.
2. This Proposal
This proposed rule would eliminate
the historical practice criterion for
determining amounts of transmix to be
blended into conventional gasoline and
the locations where this may occur, and
also would eliminate the 0.25 volume
percent limit for blending transmix in
reformulated gasoline. This proposed
rule would instead allow transmix to be
blended into conventional or
reformulated gasoline in any location
and in any amount, provided the
endpoint of the transmix-blended
gasoline does not exceed 437 degrees
Fahrenheit,3 and meets all other
applicable downstream standards. As
EPA’s diesel sulfur regulations begin
phasing in, transmix will be generated
at new locations. EPA believes it is
appropriate to allow the flexibility to
blend transmix into gasoline at locations
which have not historically blended
transmix, provided the endpoint of the
transmix-blended gasoline does not
exceed 437 degrees Fahrenheit, and the
gasoline meets all other applicable
downstream standards. In addition, EPA
believes it is appropriate to use gasoline
endpoint to regulate transmix blending
because it takes into account the quality
of the transmix-blended gasoline. The
historical practice criterion for
conventional gasoline and the 0.25
volume percent limit for RFG were
crude approaches that did not account
for the variability of transmix and its
effect on the gasoline into which it was
blended.
EPA believes that blending small
percentages of transmix in gasoline
should be allowed at any facility,
provided the facility takes appropriate
steps to ensure that the endpoint of the
transmix-blended gasoline does not
exceed 437 degrees Fahrenheit.
Transmix typically contains significant
percentages of distillate fuels such as
diesel fuel or heating oil, and distillate
fuels have higher boiling points and
much lower octane ratings than
3 437 degrees Fahrenheit is the maximum
allowable endpoint for gasoline specified in
ASTM’s standard for automotive spark-ignition
engine fuel, D 4814–88. Gasoline endpoint is
measured using ASTM D86–01. ASTM D86–01
measures the percentage of a gasoline sample that
evaporates, as a function of temperature, as the
sample is heated up under controlled conditions.
Endpoint is the temperature at which all the
volatile portion of a gasoline sample is evaporated.
ASTM D4814–88 specifies a maximum allowable
endpoint of 437 degrees Fahrenheit in order to limit
the amount of higher-boiling point compounds that
can be present in the gasoline.
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gasoline. EPA’s existing guidance
regarding transmix blending reflected a
concern that blending excessive
amounts of transmix in gasoline could
have an appreciable effect on emissions.
However, EPA believes that where
transmix is blended at sufficiently low
percentages, such that the endpoint of
the transmix-blended gasoline does not
exceed 437 degrees Fahrenheit, the
emissions effect of blending transmix in
gasoline will be negligible.
In addition to affecting gasoline
endpoint and octane, blending transmix
in gasoline also affects parameters in
EPA’s complex model, the model used
to ensure that imported or produced
gasoline complies with EPA standards.
Although the complex model does not
use gasoline endpoint or octane to
predict gasoline emissions, the complex
model does use several other gasoline
parameters to predict gasoline
emissions. These parameters include
sulfur content, benzene content,
aromatics content, olefin content,
oxygen content, Reid vapor pressure
(RVP), and two distillation points (E200
and E300). Compared to gasoline, the
distillate fuel portion of transmix
contains much less benzene, olefins,
and oxygen (typically zero for all three
parameters), has a much lower RVP,
may contain a moderately greater
percentage of aromatics, has
significantly lower (typically zero) E200
and E300 distillation points, and may
contain more sulfur.
EPA is primarily concerned with the
effect of transmix blending on average
gasoline sulfur content. Beginning in
2006, EPA’s gasoline sulfur regulations
specify that all gasoline produced by
most refineries or imported by each
importer must contain an annual
average sulfur content of 30 ppm or less,
in order to help significantly reduce
emissions from gasoline-powered
vehicles.4 Transmix may contain
significant percentages of high sulfur
distillate fuel such as heating oil,
nonroad diesel or jet fuel, and blending
transmix containing high sulfur
distillate fuels into gasoline could cause
an increase in the sulfur content of the
gasoline.
EPA believes, for two reasons, that the
potential increase in gasoline sulfur due
to blending transmix into gasoline
would be so small, that the effect on
emissions from gasoline engines would
be negligible. The first reason is that the
4 Gasoline produced by most refineries or
imported by each importer must also contain no
more than 80 ppm sulfur per gallon beginning in
2006. However, EPA has allowed flexibility for
some refiners to be able to produce gasoline that is
higher on both an average basis and a per gallon
basis through December 31, 2010.
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percentage of transmix that can be
blended into gasoline is significantly
limited by the amount of distillate fuel
in the transmix. Distillate fuels have
much higher boiling points than
gasoline, so transmix blenders must
limit the addition of transmix so that the
endpoint of the transmix-blended
gasoline does not exceed 437 degrees
Fahrenheit. Refiners already have to
meet the ASTM endpoint standard
under the ‘‘substantially similar’’
requirements for gasoline (56 FR 5352,
February 11, 1991). Consequently,
transmix which contains relatively high
percentages of distillate fuel must be
blended into gasoline at relatively low
percentages so that the endpoint of the
transmix-blended gasoline does not
exceed 437 degrees Fahrenheit.
The second reason is that EPA
anticipates that the distillate fuel
portion of transmix will contain
significantly less sulfur beginning June,
2006, when the sulfur standard for
highway diesel fuel drops sharply from
500 to 15 parts per million (ppm).
Beginning in June, 2006, EPA estimates
that the national average sulfur content
of transmix will drop from
approximately 800 ppm to 141 ppm,
using product sulfur levels and pipeline
product sequencing arrangements from
Chapter 7 of the Regulatory Support
Document (RSD) for the nonroad diesel
sulfur regulations. Blending 0.25
volume percent transmix containing 141
ppm sulfur into gasoline raises the
sulfur level of the gasoline by only
approximately 0.3 ppm. Although the
percentage of gasoline that is blended
with transmix would be anticipated to
increase under this proposed rule, EPA
anticipates that transmix will be
blended at no more than 0.25 volume
percent on average nationwide, and that
the overall average increase in gasoline
sulfur from transmix blending will have
a negligible impact on emissions from
gasoline engines. Using EPA’s model for
calculating emissions from vehicle fleets
for a given year (MOBILE 6.2.03), EPA
estimates that blending 0.25 volume
percent transmix in gasoline would
change emissions of various pollutants
by only ¥0.2 to 0.3 percent.
EPA believes that the effect of
blending transmix in gasoline at
relatively low percentages will have a
similarly small effect on other complex
model parameters, such that the
consequent effect on gasoline emissions
will also be negligible. Since gasoline
toxics emissions are primarily affected
by benzene, and the distillate fuel
portion of transmix typically contains
no benzene, transmix-blended gasoline
is not expected to produce any more
toxics than gasoline which does not
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contain transmix. Similarly, since
evaporative emissions are primarily
affected by RVP, and the distillate fuel
portion of transmix has a much lower
RVP than gasoline, volatile emissions
from transmix-blended gasoline are not
expected to be any greater than volatile
emissions from gasoline which does not
contain transmix.
EPA is aware that the physical
properties of gasoline and transmix can
vary due to a variety of factors, which
affect the percentage of transmix that
can be blended into gasoline, without
causing the endpoint of the transmixblended gasoline to exceed 437 degrees
Fahrenheit. For example, gasoline that
is produced for use during colder winter
months often has an endpoint which is
lower than the endpoint of gasoline
produced during warmer summer
months. Similarly, reformulated
gasoline often has an endpoint which is
lower than the endpoint of conventional
gasoline produced during the same time
of the year. Gasoline which has a
relatively low endpoint compared to the
ASTM standard can be blended with a
greater percentage of distillate fuel
without causing the endpoint of the
transmix-blended gasoline to exceed
437 degrees Fahrenheit. Additionally,
the properties of the transmix itself can
vary widely due to the practices of the
pipeline or terminal that produced the
transmix. If transmix contains a
relatively high percentage of gasoline, a
relatively greater percentage of transmix
can be blended into gasoline without
causing the endpoint of the transmixblended gasoline to exceed 437 degrees
Fahrenheit, since the transmix itself is
already mostly composed of gasoline.
Alternatively, if transmix contains a
relatively high percentage of distillate
fuel, the percentage of transmix that can
be blended into gasoline without
causing the endpoint of the transmixblended gasoline to exceed 437 degrees
Fahrenheit is relatively low. EPA is not
including any requirements in this
proposed rule to list additional
information on product transfer
documents identifying gasoline or
transmix properties. However, as
described below, EPA is proposing that
transmix blenders maintain a quality
assurance program.
EPA also understands that distillate
fuel can potentially be blended more
than once into the same volume of
gasoline through transmix blending and
other normal pipeline operations.
Blending transmix multiple times into
the same volume of gasoline can cause
an excessive cumulative percentage of
transmix to be blended into the
gasoline, and cause the endpoint of the
transmix-blended gasoline to exceed
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437 degrees Fahrenheit. For example, a
pipeline or terminal may blend transmix
into gasoline, then send the gasoline to
another pipeline or terminal which may
blend transmix into the gasoline a
second time. Similarly, as part of
normal pipeline operation, pipeline
operators may cut an interface between
adjacent volumes of gasoline and
distillate fuel directly into the gasoline
volume. Cutting distillate fuel directly
into gasoline has an effect on gasoline
properties similar to the effect of
blending transmix directly into the
gasoline (gasoline endpoint increases
and octane decreases). A downstream
pipeline or terminal could then
subsequently blend transmix into the
same volume of gasoline which already
contains distillate fuel from the
interface cut. EPA is not including any
requirements in this proposed rule to
list any additional information on
product transfer documents identifying
whether gasoline has been blended with
transmix or any distillate fuel. EPA
believes that the requirement that
gasoline produced by transmix blenders
meet the 437 degree Fahrenheit
endpoint standard will prevent any
potentially deleterious effects from
successive transmix blending. However,
as described below, EPA is proposing
that transmix blenders maintain a
quality assurance program designed to
ensure compliance with the endpoint
standard.
This proposed rule requires transmix
blenders to maintain a quality assurance
program that will ensure that the
endpoint of transmix-blended gasoline
does not exceed 437 degrees Fahrenheit,
and that the transmix-blended gasoline
will comply with the downstream
standards for conventional or
reformulated gasoline. As a part of this
quality assurance program, transmix
blenders must either sample and test
transmix-blended gasoline at certain
frequencies to determine the end-point
of the gasoline, or submit a petition to
EPA documenting how their quality
assurance program ensures that the
endpoint of their transmix-blended
gasoline will not exceed 437 degrees
Fahrenheit, and that the transmixblended gasoline meets all EPA
downstream standards for conventional
or reformulated gasoline.
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III. Administrative Requirements
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
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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
proposed rule does not satisfy the
criteria stated above. As a result, this
rule is not a ‘‘significant regulatory
action’’ under the terms of Executive
Order 12866 and is therefore not subject
to OMB review. It would not have an
annual effect on the economy of $100
million or more and is not expected to
have any adverse economic effects as
described in the Order. This proposed
rule does not raise issues of consistency
with the actions taken or planned by
other agencies, would not materially
alter the cited budgetary impacts, and
does not raise any novel legal or policy
issues as defined in the Order.
B. Paperwork Reduction Act
The modifications to the RFG
information collection requirements in
this 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 1591.21,
OMB control number 2060–0277.
This proposed rule addresses certain
adverse impacts on refiners and
importers of RBOB under the current
rule and provides these refiners and
importers with additional flexibility to
comply with the regulations. The
flexibility afforded under this rule is
optional. Modest information collection
requirements in the form gasoline
surveys of oxygenate blending facilities
are required for those parties who avail
themselves of the flexibility provided in
this rule. It is estimated that refiners and
importers who choose this option will
save, at a minimum, half of the cost they
would incur if they complied with the
existing QA requirements.
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The estimated total hourly burden per
respondent for the gasoline surveys is
20 hours. The estimated total hourly
burden for all respondents is 700 hours
(35 respondents maximum). The
estimated hourly cost is estimated to be
$71 per hour. The total estimated cost
per respondent for the gasoline surveys
is $1,420. The total estimated cost for all
respondents is $49,700. In addition, the
gasoline survey requirement is
estimated to require purchase of
services costs to industry of
approximately $220,000, assuming that
refiners and importers in all potentially
affected RFG areas choose the
compliance option under this rule.
This rule would provide flexibility for
transmix processors and transmix
blenders to produce gasoline under
certain circumstances without having to
meet all of EPA’s standards for refiners.
Transmix processors would be allowed
to recover gasoline from transmix that
does not need to be included in their
compliance calculations, under certain
circumstances. Transmix blenders
would be provided with the additional
flexibility to blend transmix at any rate
and at any location, provided the
endpoint of their transmix-blended
gasoline does not exceed 437 degrees
Fahrenheit. However, in order to ensure
the endpoint of the transmix-blended
gasoline does not exceed 437 degrees,
transmix blenders would be required to
either test every batch of transmixblended gasoline or submit a petition to
EPA documenting that they maintain an
oversight program that will prevent the
endpoint of transmix-blended gasoline
from exceeding 437 degrees. This
proposed rule would codify existing
practices designed to ensure that
products transported by pipelines meet
existing downstream standards.
EPA estimates that approximately 25
transmix blenders will submit one-time
petitions for approval of their quality
testing programs. One transmix blender
estimated that they would need 1–2
person-weeks to prepare a petition for
EPA approval. For calculating the
burden and cost of this rule, EPA has
estimated that the average labor cost
would be $71/hour, and that each
petition would take 2 person-weeks (80
hours) to prepare. Multiplying the
average labor cost by the total time
required to prepare each petition (80
hours) by the total number of petitions
(25) results in a total respondent cost of
$142,000.
The information under this rule will
be collected by EPA’s Transportation
and Regional Programs Division, Office
of Transportation and Air Quality,
Office of Air and Radiation (OAR), and
by EPA’s Air Enforcement Division,
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Office of Regulatory Enforcement, Office
of Enforcement and Compliance
Assurance (OECA). The information
collected will be used by EPA to
evaluate compliance with the
requirements under the RFG and
antidumping programs, and gasoline
sulfur program. This oversight by EPA
is necessary to ensure attainment of the
air quality goals of the RFG and
antidumping programs, and gasoline
sulfur program.
Burden means the total time, effort, or
financial resources expended by persons
to generate, maintain, retain, or disclose
or provide information to or for a
Federal agency. This includes the time
needed to review instructions; develop,
acquire, install, and utilize technology
and systems for the purposes of
collecting, validating, and verifying
information, processing and
maintaining information, and disclosing
and providing information; adjust the
existing ways to comply with any
previously applicable instructions and
requirements; train personnel to be able
to respond to a collection of
information; search data sources;
complete and review the collection of
information; and transmit or otherwise
disclose the information.
An agency may not conduct or
sponsor, and a person is not required to
respond to a collection of information
unless it displays a currently valid OMB
control number. The OMB control
numbers for EPA’s regulations in 40
CFR are listed in 40 CFR part 9. When
this ICR is approved by OMB, the
Agency will publish a technical
amendment to 40 CFR part 9 in the
Federal Register to display the OMB
control number for the approved
information collection requirements
contained in this proposed rule.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
generally requires an agency to prepare
a regulatory flexibility analysis of any
rule subject to notice and comment
rulemaking requirements under the
Administrative Procedure Act or any
other statute unless the agency certifies
that the rule will not have a significant
economic impact on a substantial
number of small entities. Small entities
include small businesses, small
organizations, and small governmental
jurisdictions.
For purposes of assessing the impacts
of this proposed rule on small entities,
small entity is defined as: (1) A small
business as defined by the Small
Business Administration (SBA)
regulations at 13 CFR 121.201; (2) a
small governmental jurisdiction that is a
government of a city, county, town,
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school district or special district with a
population of less than 50,000; and (3)
a small organization that is any not-forprofit enterprise which is independently
owned and operated and is not
dominant in its field.
After considering the economic
impacts of this proposed rule on small
entities, I certify that this action will not
have a significant economic impact on
a substantial number of small entities.
In determining whether a rule has a
significant economic impact on a
substantial number of small entities, the
impact of concern is any significant
adverse economic impact on small
entities, since the primary purpose of
the regulatory flexibility analyses is to
identify and address regulatory
alternatives ‘‘which minimize any
significant economic impact of the rule
on small entities.’’ 5 U.S.C. 603 and 604.
Thus, an agency may certify that a rule
will not have a significant economic
impact on a substantial number of small
entities if the rule relieves regulatory
burden, or otherwise has a positive
economic effect on all of the small
entities subject to the rule.
This proposed rule will not have any
adverse economic impact on small
entities. This proposed rule would
codify existing guidance for the RFG
and antidumping regulations, and
establish provisions in the gasoline
sulfur regulations (65 FR 6698, February
10, 2000) that allow transmix processors
and transmix blenders more flexibility
for compliance. The proposed rule
would establish gasoline sulfur
standards for transmix processors and
blenders that are consistent with the
sulfur standards for other entities, such
as pipelines and terminals, that are
downstream of refineries in the gasoline
distribution system, and would clarify
the requirements for transmix
processors under the Mobile Source Air
Toxics program. This proposed rule
would codify existing practices
designed to ensure that products
transported by pipelines meet existing
downstream standards. This proposed
rule would also provide refiners and
importers with an alternative
compliance option for fulfilling a
requirement to conduct downstream
sampling and testing at oxygenate
blender facilities. We have, therefore,
concluded that this proposed rule
would relieve regulatory burden for all
small entities subject to the RFG
regulations. We continue to be
interested in the potential impacts of the
proposed rule on small entities and
welcome comments on issues related to
such impacts.
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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 costeffective or least burdensome alternative
that achieves the objectives of the rule.
The provisions of section 205 do not
apply when they are inconsistent with
applicable law. Moreover, section 205
allows EPA to adopt an alternative other
than the least costly, most cost-effective
or least burdensome alternative if the
Administrator publishes with the final
rule an explanation why that alternative
was not adopted. Before EPA establishes
any regulatory requirements that may
significantly or uniquely affect small
governments, including tribal
governments, it must have developed
under section 203 of the UMRA a small
government agency plan. The plan must
provide for notifying 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
small governments on compliance with
the regulatory requirements.
This proposed rule contains no
Federal mandates (under the regulatory
provisions of Title II of the UMRA) for
State, local or tribal governments or the
private sector that would result in
expenditures of $100 million or more.
This proposed rule provides refiners
and importers of gasoline with
additional flexibility in complying with
regulatory requirements. As a result,
this proposed rule would have the
overall effect of reducing the burden of
the RFG regulations on these regulated
parties. This proposed rule would also
codify existing practices designed to
ensure that products transported by
pipelines meet existing downstream
standards. Therefore, the requirements
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of the Unfunded Mandates Act do not
apply to this action.
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E. Executive Order 13132: Federalism
Executive Order 13132, entitled
‘‘Federalism’’ (64 FR 43255, August 10,
1999), requires EPA to develop an
accountable process to ensure
‘‘meaningful and timely input by State
and local officials in the development of
regulatory policies that have federalism
implications.’’ ‘‘Policies that have
federalism implications’’ is defined in
the Executive Order to include
regulations that have ‘‘substantial direct
effects on the States, on the relationship
between the national government and
the States, or on the distribution of
power and responsibilities among the
various levels of government.’’
This proposed rule does not have
federalism implications. It would not
have substantial direct effects on the
States, on the relationship between the
National Government and the States, or
on the distribution of power and
responsibilities among the various
levels of government, as specified in
Executive Order 13132. This proposed
rule would provide refiners and
importers of gasoline with additional
flexibility in complying with regulatory
requirements. This proposed rule would
also codify existing practices designed
to ensure that products transported by
pipelines meet existing downstream
standards. The requirements of this
proposed rule would be enforced by the
Federal Government at the national
level. Thus, Executive Order 13132 does
not apply to this rule.
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 6, 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.’’ ‘‘Policies that have tribal
implications’’ is defined in the
Executive Order to include regulations
that have ‘‘substantial direct effects on
one or more Indian tribes, on the
relationship between the Federal
Government and the Indian tribes, or on
the distribution of power and
responsibilities between the Federal
Government and Indian tribes.’’
VerDate Aug<31>2005
17:22 Jun 01, 2006
Jkt 208001
This proposed rule does not have
tribal implications. It would not have
substantial direct effects on tribal
governments, on the relationship
between the Federal Government and
Indian tribes, or on the distribution of
power and responsibilities between the
Federal Government and Indian tribes,
as specified in Executive Order 13175.
This rule would apply to gasoline
refiners and importers of gasoline. This
action contains certain modifications to
the federal requirements for RFG, and
would not impose any enforceable
duties on communities of Indian tribal
governments. Thus, Executive Order
13175 does not apply to this rule.
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,
the Agency must evaluate the
environmental health or safety effects of
the planned rule on children, and
explain why the planned regulation is
preferable to other potentially effective
and reasonably feasible alternatives
considered by the Agency.
EPA interprets Executive Order 13045
as applying only to those regulatory
actions that are based on health or safety
risks, such that the analysis required
under the Order has the potential to
influence the regulation. This proposed
rule is not subject to Executive Order
13045 because it is not economically
significant and does not establish an
environmental standard intended to
mitigate health or safety risks.
H. Executive Order 13211: Acts That
Significantly Affect Energy Supply,
Distribution, or Use
This proposed rule would not be an
economically ‘‘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 would not have a
significant adverse effect on the supply,
distribution, or use of energy. This
PO 00000
Frm 00050
Fmt 4702
Sfmt 4702
32027
proposed rule will provide refiners and
importers of gasoline with additional
flexibility in complying with regulatory
requirements. This proposed rule would
also codify existing practices designed
to ensure that products transported by
pipelines meet existing downstream
standards. As a result, this proposed
rule may have a positive effect on
gasoline supplies.
I. National Technology Transfer and
Advancement Act
Section 12(d) of the National
Technology Transfer and Advancement
Act of 1995 (‘‘NTTAA’’), Public Law
104–113, section 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.
This proposed rule does not establish
new technical standards within the
meaning of the NTTAA. Therefore, EPA
did not consider the use of any
voluntary consensus standards.
IV. Statutory Provisions and Legal
Authority
The statutory authority for the actions
in this proposed rule comes from
sections 211 and 301(a) of the CAA.
For the reasons set out in the
preamble, the regulatory text proposed
today is set forth in the concurrent
direct final rule published in today’s
Federal Register.
List of Subjects in 40 CFR Part 80
Environmental protection, Air
pollution control, Fuel additives,
Gasoline, Imports, Incorporation by
reference, Motor vehicle pollution,
Reporting and recordkeeping
requirements.
Dated: May 25, 2006.
Stephen L. Johnson,
Administrator.
[FR Doc. 06–5050 Filed 6–1–06; 8:45 am]
BILLING CODE 6560–50–P
E:\FR\FM\02JNP1.SGM
02JNP1
Agencies
[Federal Register Volume 71, Number 106 (Friday, June 2, 2006)]
[Proposed Rules]
[Pages 32015-32027]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-5050]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80
[EPA-HQ-OAR-2003-0216; EPA-HQ-OAR-2005-0149; FRL-8178-4]
RIN 2060-AM27 and RIN 2060-AM88
Regulation of Fuel and Fuel Additives: Refiner and Importer
Quality Assurance Requirements for Downstream Oxygenate Blending and
Requirements for Pipeline Interface
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would amend the reformulated gasoline (RFG)
regulations to allow refiners and importers of reformulated gasoline
blendstock for oxygenate blending, or RBOB, the option to use an
alternative method of fulfilling a regulatory requirement to conduct
quality assurance sampling and testing at downstream oxygenate blending
facilities. This alternative method consists of a comprehensive program
of quality assurance sampling and testing that would cover all
terminals that blend oxygenate with RBOB in a specified reformulated
gasoline covered area. The program would be carried out by an
independent surveyor funded by industry. The program would be conducted
pursuant to a survey plan, approved by EPA, that is calculated to
achieve the same objectives as the current regulatory quality assurance
requirement.
This proposed rule also would largely codify existing guidance for
compliance by parties that handle pipeline interface with requirements
for gasoline content standards, recordkeeping, sampling and testing.
The proposed rule also contains new provisions which would provide
additional flexibility to these regulated parties. The proposed rule
would also establish gasoline sulfur standards for transmix processors
and blenders that are consistent with the sulfur standards for other
entities, such as pipelines and terminals, that are downstream of
refineries in the gasoline distribution system, and would clarify the
requirements for transmix processors under the Mobile Source Air Toxics
program.
DATES: Comments: Comments must be received on or before July 3, 2006.
Under the Paperwork Reduction Act, comments on the information
collection provisions must be received by OMB on or before July 3,
2006.
Hearings: If EPA receives a request from a person wishing to speak
at a public hearing by June 19, 2006, a public hearing will be held on
July 3, 2006. If a public hearing is requested, it will be held at a
time and location to be announced in a subsequent Federal Register
notice. To request to speak at a public hearing, send a request to the
contact in FOR FURTHER INFORMATION CONTACT.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2003-0216 for comments on the transmix provisions, and EPA-HQ-OAR-
2005-0149 for comments on the RBOB provisions, by one of the following
methods:
https://www.regulations.gov: Follow the online instructions
for submitting comments.
E-mail: a-and-r-docket@epa.gov.
Fax: (202) 566-1741, Attention Docket ID No. EPA-HQ-OAR-
2003-0216 or EPA-HQ-OAR-2005-0149, as appropriate.
Mail: Air Docket, Docket ID No. EPA-HQ-OAR-2003-0216, or
EPA-HQ-OAR-2005-0149, as appropriate, Environmental Protection Agency,
Mailcode: 6102T, 1200 Pennsylvania Ave., NW., Washington, DC 20460.
Hand Delivery: EPA Docket Center, Room B102, EPA West
Building, 1301 Constitution Avenue, NW., Washington, DC, Attention Air
Docket ID No. EPA-HQ-OAR-2003-0216, or EPA-HQ-OAR-2005-0149, as
appropriate. Such
[[Page 32016]]
deliveries are accepted during the Docket's normal hours of operation,
and special arrangements should be made for deliveries of boxed
information.
Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2003-0216, or EPA-HQ-OAR-2005-0149, as appropriate. EPA's policy is
that all comments received will be included in the public docket
without change and may be made available online at https://
www.regulations.gov, including any personal information provided,
unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through www.regulations.gov. The
www.regulations.gov Web site is an ``anonymous access'' system, which
means EPA will not know your identity or contact information unless you
provide it in the body of your comment. If you send an e-mail comment
directly to EPA without going through www.regulations.gov your e-mail
address will be automatically captured and included as part of the
comment that is placed in the public docket and made available on the
Internet. If you submit an electronic comment, EPA recommends that you
include your name and other contact information in the body of your
comment and with any disk or CD-ROM you submit. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses. For additional
information about EPA's public docket visit the EPA Docket Center
homepage at https://www.epa.gov/epahome/dockets.htm. For additional
instructions on submitting comments, go to Section I.B. of the
SUPPLEMENTARY INFORMATION section of this document.
Docket: All documents in the docket are listed in the
www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, will be publicly available only in hard copy.
Publicly available docket materials are available either electronically
in https://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.
FOR FURTHER INFORMATION CONTACT: Chris McKenna, mailcode 6406J,
Environmental Protection Agency, 1200 Pennsylvania Ave., NW.,
Washington, DC 20460; telephone number: 202-343-9037; fax number: 202-
343-2802; e-mail address: mckenna.chris@epa.gov.
SUPPLEMENTARY INFORMATION: For further information, please see the
information provided in the direct final action that is located in the
``Rules and Regulations'' section of this Federal Register publication.
In the ``Rules and Regulations'' section of the Federal Register,
we are issuing these amendments to the RFG regulations as a direct
final rule without prior proposal because we view them as non-
controversial amendments and anticipate no adverse comment. If we
receive no adverse comment, we will not take further action on this
proposed rule. If we receive adverse comment, we will publish a timely
withdrawal in the Federal Register informing the public that the
portion of the direct final rule on which adverse comment was received
will not take effect. Those portions of the rule on which adverse
comment was not received will go into effect on the effective date
noted in the DATES section. We will address all public comments in a
subsequent final rule based on this proposed rule. We will not
institute a second comment period on this action. Any parties
interested in commenting must do so at this time.
General Information
A. Does This Action Apply to Me?
Entities potentially affected by this action include those involved
with the production or importation of gasoline motor fuel. Regulated
categories and entities affected by this action include:
----------------------------------------------------------------------------------------------------------------
NAICS codes Examples of potentially regulated
Category \a\ SIC codes \b\ entities
----------------------------------------------------------------------------------------------------------------
Industry................................... 324110 2911 Petroleum Refiners.
Industry................................... 422710; 422720 5171; 5172 Gasoline Marketers and
Distributors.
Industry................................... 484220; 484230 4212; 4213 Gasoline Carriers.
----------------------------------------------------------------------------------------------------------------
\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.
B. What Should I Consider as I Prepare My Comments for EPA?
1. Submitting CBI. Do not submit this information to EPA through
www.regulations.gov or e-mail. Clearly mark the part or all of the
information that you claim to be 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:
A. Identify the rulemaking by docket number and other identifying
information (subject heading, Federal Register date and page number).
[[Page 32017]]
B. 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.
C. Explain why you agree or disagree; suggest alternatives and
substitute language for your requested changes.
D. Describe any assumptions and provide any technical information
and/or data that you used.
E. If you estimate potential costs or burdens, explain how you
arrived at your estimate in sufficient detail to allow for it to be
reproduced.
F. Provide specific examples to illustrate your concerns, and
suggest alternatives.
G. Explain your views as clearly as possible, avoiding the use of
profanity or personal threats.
H. 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 by 40 CFR Part 2.
Outline of This Preamble
I. Refiner and Importer Quality Assurance Requirements for
Downstream Oxygenate Blending
A. Background
B. Need for Action
C. This Action
II. Requirements for Pipeline Interface
A. Background
B. 1997 Notice of Proposed Rulemaking
C. Pipelines
D. Transmix Processors
E. Transmix Blenders
III. Administrative Requirements
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
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: Acts that Significantly Affect Energy
Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
IV. Statutory Provisions and Legal Authority
I. Refiner and Importer Quality Assurance Requirements for Downstream
Oxygenate Blending
A. Background
The RFG regulations currently require RFG to contain a minimum of
2.0 weight percent oxygen. 40 CFR 80.41. To fulfill this requirement,
oxygenate is added either at the refinery before the gasoline is
certified by the refiner as meeting RFG requirements, or it is added
downstream from the refinery at an oxygenate blending facility. As
discussed in more detail below, refiners often wish to require that
more than the minimum amount of oxygenate be added downstream in order
to include the additional oxygenate in their emissions performance
compliance calculations. Although Congress recently removed the oxygen
requirement for RFG in the Clean Air Act,\1\ we believe many refiners
and importers may wish to continue to include oxygenate added
downstream in their emissions compliance calculations. Under the
current regulations, refiners must conduct a program of quality
assurance testing at the downstream oxygenate blending facility in
order to include the oxygenate in their compliance calculations. This
proposed rule would provide an alternative QA requirement for these
refiners and importers.
---------------------------------------------------------------------------
\1\ 1 Energy Policy Act of 2005, Pub. L. 109-58 (HR6), section
1504(a), 119 STAT 594, 1076-1077(2005). In accordance with the
Energy Policy Act, EPA has issued a rule amending the RFG
regulations for California to remove the 2.0 weight percent oxygen
standard (71 FR 8965 (February 22, 2006)), and has proposed a
similar rule that would be applicable in the rest of the country (71
FR 9070 (February 22, 2006)).
---------------------------------------------------------------------------
Under the current regulations, when oxygenate is to be added to
produce RFG at a downstream oxygenate blending facility, refiners
produce a product called reformulated gasoline blendstock for oxygenate
blending, or RBOB. RBOB is certified by the refiner, or by an importer
who imports RBOB, as complying with all of the RFG requirements except
the minimum 2.0 weight percent oxygen requirement. The oxygenate
blender is responsible for complying with the oxygen requirement when
the oxygenate is added to the RBOB to produce RFG at the oxygenate
blending facility.
Various oxygenates may be used to fulfill the oxygen requirement.
Some oxygenates, such as methyl tertiary butyl ether, or MTBE,
typically are added at the refinery. However, some oxygenates, such as
ethanol, have a propensity to attract water, and, as a result, cannot
be added at the refinery, particularly where the finished gasoline will
be traveling through a pipeline on its way to terminals and retail
gasoline stations. As a result, RFG containing ethanol is typically
produced by blending the ethanol with RBOB at a blending facility
downstream from the refinery that produced the RBOB.
Refiners and importers of RBOB are required to calculate compliance
with the RFG emissions performance standards for VOC, NOX
and toxics by sampling and testing a hand blended mixture of the RBOB
and the type and amount of oxygenate that the refiner or importer of
the RBOB designates must be added downstream. The type and amount of
oxygenate to be added downstream must be indicated on the product
transfer documents that accompany the gasoline when it is transferred
to the downstream oxygenate blender. The oxygenate blender is required
to add the type and amount of oxygenate designated on the product
transfer documents.
Under the current regulations, RBOB refiners and importers can
designate either a specific type and specific amount of oxygenate to be
added downstream, or they can designate one of two generic categories
of RBOB: ``any-oxygenate'' RBOB or ``ether-only'' RBOB. 40 CFR
80.69(a)(8). Where the RBOB is designated as any-oxygenate RBOB, the
refiner or importer must assume for purposes of its handblend that 2.0
weight percent ethanol will be added downstream. The downstream
oxygenate blender may add any type of legal \2\ oxygenate, to any-
oxygenate RBOB in an amount sufficient to meet the minimum 2.0 weight
percent requirement. Where the RBOB is designated as ether-only RBOB,
the refiner or importer must assume for purposes of its handblend that
2.0 weight percent MTBE will be added downstream. The oxygenate blender
may add any legal ether oxygenate to ether-only RBOB in an amount
sufficient to meet the minimum 2.0 weight percent requirement.
---------------------------------------------------------------------------
\2\ Oxygenates that are allowed under EPA's ``substantially
similar'' rule and any section 211(f) waiver that may apply.
---------------------------------------------------------------------------
Where a specific type and amount of oxygenate is designated for the
RBOB rather than one of the two generic designations, the regulations
require the refiner or importer to conduct downstream oversight quality
assurance (QA) sampling and testing of the downstream oxygenate
blending facility. 40 CFR 80.69(a)(7). This is to ensure that the
specific type and amount of oxygenate that is designated, which
typically is greater than the 2.0 weight percent requirement, in fact
is added to the RBOB by the oxygenate blender. In addition, the refiner
or importer must have a contract with the oxygenate blender which
requires the blender to comply with the blending procedures specified
by the RBOB refiner or importer and allows the refiner or
[[Page 32018]]
importer to conduct the required QA sampling and testing. 40 CFR
80.69(a)(6). If the refiner or importer does not meet the contractual
and quality assurance requirements and does not designate its RBOB as
ether-only or any-oxygenate, the refiner or importer must assume for
purposes of its handblend that 4.0 volume percent ethanol will be added
to the RBOB downstream.
B. Need for Action
Recently, the states of New York and Connecticut promulgated state
laws banning the use of MTBE in gasoline sold in these states. As a
result, many refiners and importers that historically produced or
imported RFG containing MTBE for the NY/CT RFG area currently produce
or import RBOB for ethanol blending. Refiners in this area have
indicated that, due to the complex gasoline marketplace in New York and
Connecticut, it is extremely difficult, if not impossible, to track
RBOB from the refinery where it is produced to the terminal where it is
blended with ethanol in order to fulfill the downstream QA sampling and
testing requirement. As a result, under the current regulations,
refiners in the NY/CT RFG area are effectively precluded from producing
an RBOB which requires a specific type and amount of oxygenate, such as
10 volume percent ethanol, and instead must produce a generic any-
oxygenate RBOB, which does not require the refiner to conduct
downstream QA testing at the ethanol blender facility.
As discussed above, for purposes of calculating compliance with RFG
emissions performance standards, these refiners may then only include
in their handblends ethanol in an amount which would result in gasoline
having 2.0 weight percent ethanol (approximately 5.7 volume percent
ethanol.) Some refiners have indicated that they will need to produce
RBOB requiring 10 volume percent ethanol, which would allow them to
include 10 volume percent ethanol for purposes of compliance
calculations, in order to meet emissions performance standards. As a
result, these refiners have asked EPA to allow use of an alternative
method of meeting the downstream QA sampling and testing requirement.
For the reasons discussed below, we believe it is appropriate to
provide refiners and importers who produce or import RBOB for the NY/CT
RFG area with an alternative means of meeting the QA sampling and
testing requirement. We also believe it is appropriate to provide this
alternative to refiners and importers who produce or import gasoline
RBOB for other RFG areas. As a result, this proposed rule would amend
the RFG regulations to provide an alternative QA sampling and testing
option which will be available to any RBOB refiner or importer in any
RFG covered area. As indicated above, we believe that providing this
alternative QA requirement would be appropriate even after the 2.0
weight percent minimum oxygen standard is removed.
C. This Action
This proposal would provide RBOB refiners and importers the option
to comply with an alternative QA requirement which consists of a
program of sampling and testing designed to provide oversight of all
terminals that blend ethanol with RBOB for use in a specified RFG
covered area. Under this option, a refiner or importer would need to
either arrange to have an independent surveyor conduct a program of
compliance surveys, or participate in the funding of an organization
which arranges to have independent surveyor conduct a program of
compliance surveys. In either event, compliance surveys would need to
be carried out by an independent surveyor pursuant to a survey plan
calculated to achieve the same QA objectives as the current regulatory
requirement. A detailed survey plan would be submitted to EPA for
approval by September 1st of the year preceding the annual averaging
period in which the alternative QA sampling and testing program would
be implemented. The survey plan would include a methodology for
determining when the survey samples will be collected, the location of
the retail outlets where the samples will be collected, the number of
samples to be included in the survey, and any other elements that EPA
determines are necessary to achieve the same level of quality assurance
as the current QA requirement.
Under this alternative QA option, the independent surveyor would be
required to obtain samples at retail stations in the RFG covered area
in accordance with the survey plan and have the samples tested for type
and amount of oxygenate. The sampling and testing conducted under this
alternative QA option would be required to be done in accordance with
the provisions in Sec. Sec. 80.8 and 80.46. The surveyor would obtain
from the retail outlet the product transfer documents associated with
the gasoline, which will provide the surveyor with information
regarding the type and amount of oxygenate that the gasoline is
supposed to contain, and the terminal that conducted the oxygenate
blending. The surveyor would be required to notify EPA of any instance
where the product transfer documents do not contain such information.
If the test results show that the gasoline does not contain the type
and/or the minimum amount of oxygenate indicated on the product
transfer documents, the surveyor would be required to ask the terminal
determined to have supplied the gasoline to produce documentation of
the blending instructions from the refiner or importer of the RBOB. The
surveyor would be required to notify EPA of any instances where the
refiner's or importer's blending instructions indicate that the
oxygenate blender did not add the type or minimum amount of oxygenate
designated for the RBOB by the refinery or importer. The surveyor would
be required to submit to EPA a report which includes the information
and data collected during the survey, and to maintain records
associated with the surveys for five years.
This proposed rule would require each refiner and importer who
chooses to comply with the alternative QA requirement to take all
reasonable steps to ensure that parties downstream from the refiner or
importer cooperate with the program by allowing the independent
surveyor to collect samples, and by providing to the independent
surveyor copies of product transfer documents and other information
regarding the source of any gasoline received, the destination of any
gasoline distributed, the oxygenate blending instructions for RBOB, and
the rate the oxygenate was blended. In partial satisfaction of the
``reasonable steps'' requirement, the rule would require the refiner or
importer to include such a requirement in contractual agreements with
its branded downstream facilities.
In addition, this proposed rule would require parties downstream
from a refiner or importer that complies with the alternative QA
requirement to include on product transfer documents the type and
amount of oxygenate contained in the gasoline and identification of the
oxygenate blending terminal that blended the gasoline. This proposed
rule would require that the survey plan include a process for notifying
all oxygenate blending terminals and other downstream parties in the
affected area of the product transfer documentation requirement. Where
a downstream party fails to receive notice of the product transfer
requirement, the party would be required to begin complying with the
[[Page 32019]]
product transfer requirement upon notification by EPA.
We believe that use of this QA compliance alternative would result
in oversight sampling and testing that is equivalent to the current
regulatory QA requirement, and, in fact, may result in significantly
superior QA oversight since the sampling and testing would be conducted
by an independent surveyor in accordance with a comprehensive plan
approved by EPA, rather than by individual refiners and importers. This
rule would not have any adverse environmental impact, and would provide
refiners and importers with additional flexibility in complying with
the regulations. As a result, while this rulemaking was initiated in
response to the compliance issues raised by refiners in the NY/CT area,
we believe it is appropriate to provide this compliance alternative to
refiners and importers supplying any RFG covered area. The rule,
therefore, would provide this QA compliance alternative to any RBOB
refiner or importer in any RFG area who either arranges to have an
independent surveyor conduct a program of compliance surveys, or who
participates in the funding of an organization that arranges to have an
independent surveyor conduct a program of compliance surveys, in
accordance with the provisions in this proposed rule.
Compliance with this QA alternative would be optional. Refiners and
importers may choose to comply with the existing QA requirement and not
participate in a survey program. Refiners and importers who supply more
than one RFG area may choose to participate in the survey program for
one RFG area and comply with the existing QA requirement for another
RFG area.
This proposed rule would add a new paragraph (a)(11) to 40 CFR
80.69, which contains the current QA requirement. This proposed rule
also would amend Sec. 80.77 to require parties to include on product
transfer documents the information required under Sec. 80.69(a)(11) as
described above.
II. Requirements for Pipeline Interface
A. Background
Refined petroleum products that are transported by pipeline
normally are pumped sequentially, as a continuous flow through the
pipeline. As a result, some amount of mixing of adjacent product types
normally occurs. The product in a pipeline between two adjacent volumes
of petroleum product consists of a mixture of the two adjacent volumes
and is called ``interface.'' Generally, interface is blended into the
two adjoining products that created the interface. For example, half of
the interface between premium and regular gasoline is blended into the
premium gasoline and half into the regular gasoline (called a ``fifty
percent cut'' or a ``mid-point cut.'') However, certain product types,
such as jet fuel, are not mixed with any other product type, and all of
the interface that contains jet fuel is blended into the other product
(called a ``clean cut.'')
Where interface consists of a mixture of finished fuels that cannot
be cut with adjoining product so as to produce a product that meets the
specifications for a fuel that can be used or sold without further
processing, the interface is called ``transmix''. Transmix is not
blended into either of the two adjacent products transported by the
pipeline, but is diverted by the pipeline as a distinct product into a
separate storage tank. Transmix is generally transported via tank
truck, pipeline or barge to a facility designed to separate the
transmix into its fuel components. For example, where the transmix
consists of gasoline and distillate fuel, the transmix may be
transported to a ``transmix processing'' facility where the gasoline
portion is separated from the distillate fuel. At locations where it is
either relatively expensive or inconvenient to transport transmix to a
transmix processing facility for separation, the transmix is sometimes
blended into gasoline in very small amounts, typically around 0.25
volume percent of the gasoline.
The reformulated gasoline (RFG) and anti-dumping requirements apply
at any facility where gasoline is produced. See 40 CFR 80.2(h) and (i),
80.65(a), and 80.101. Gasoline most commonly is produced by processing
crude oil at refineries, but it is also produced by other processes,
such as combining blendstocks or adding blendstocks to finished
gasoline. Gasoline is also produced when transmix is blended into
gasoline, or when transmix is separated into gasoline and distillate
fuel. Transmix blending is similar to adding blendstock to gasoline
where the addition of the transmix, like blendstock, may change the
properties of the gasoline. Similarly, the process of separating
gasoline and distillate fuel may result in gasoline with different
properties than the gasoline as originally certified by the refinery.
Transmix processors and transmix blenders are refiners under the RFG/
anti-dumping regulations, but EPA has historically provided transmix
processors and transmix blenders flexibility in complying with the
refiner requirements. This proposed rule would codify some of the
existing practices into EPA regulations, and would also include
modifications reflecting EPA experience.
B. 1997 Notice of Proposed Rulemaking
On July 11, 1997, EPA proposed to add a new Sec. 80.84 to the RFG/
anti-dumping regulations at 40 CFR Part 80 to clarify the manner in
which interface, including transmix, would be treated under the RFG/
anti-dumping regulations. The NPRM proposed requirements for
designating different combinations of gasoline in interface. The NPRM
also proposed requirements for transmix processors and transmix
blenders that produce either RFG or conventional gasoline.
The NPRM proposed to allow parties to blend transmix into
conventional gasoline provided that the transmix resulted from normal
pipeline operations, and either there was no means of transporting the
transmix to a transmix processor via pipeline or water, or there was an
historical practice of blending transmix at the facility before 1995.
The rate of transmix blending was limited to the greater of 0.25 volume
percent or the demonstrated blending rate in 1994. The NPRM proposed to
allow transmix to be blended into RFG provided that the transmix
resulted from normal pipeline operations, there was no means of
transporting the transmix to a transmix processing facility via
pipeline or water, and the party was unable to blend the transmix into
conventional gasoline. The rate of transmix blending into RFG was
limited to a maximum of 0.25 volume percent. The NPRM also proposed
requiring transmix blenders to carry out a program of periodically
sampling and testing of the RFG subsequent to transmix blending to
ensure that the downstream standards were met.
The NPRM proposed to require transmix processors who designate the
gasoline produced from the transmix (such gasoline is one type of
transmix gasoline product, or TGP) as conventional gasoline to exclude
the TGP from anti-dumping compliance calculations for the transmix
processing facility, but to include any blendstocks added to the TGP
since such blendstocks would not previously have been included in any
refinery's compliance calculations. The NPRM proposed to require
transmix processors who designate the gasoline produced from transmix
as RFG to include the TGP, as well as any blendstocks used, in the RFG
compliance calculations for the transmix processing facility to
[[Page 32020]]
ensure that the gasoline produced using the transmix meets all RFG
standards.
Parties have been processing and blending transmix in accordance
with EPA guidance which describes similar treatment of interface and
transmix as that outlined in the July 11, 1997 NPRM. (See Reformulated
Gasoline and Anti-dumping Questions and Answers (November 12, 1996)).
Our experience since the guidance was issued indicates that the
approach taken in the guidance is mostly appropriate, but that some
revisions are warranted. EPA is also aware, from recent discussions
with several pipeline operators, that volumes of transmix may increase
as pipelines begin transporting ultra-low sulfur diesel fuel. EPA had
anticipated that transporting ultra-low sulfur diesel would require
greater volumes of diesel to be cut as interface into other higher-
sulfur distillate fuels such as heating oil and jet fuel. However, some
pipelines have indicated they intend to change their product sequencing
by transporting volumes of ultra-low sulfur diesel between volumes of
gasoline, in order to minimize sulfur contamination of the ultra-low
sulfur diesel. This change would increase the number of gasoline/diesel
interfaces cut to transmix, and increase the overall volume of
transmix. Pipeline operators have also indicated that transporting
ultra-low sulfur diesel fuel will cause them to generate transmix at
locations where they have not historically generated transmix.
In this proposed rule, we are including the provisions in Sec.
80.84, which were previously proposed in the July 11, 1997 NPRM, with
certain changes made in response to the comments we received on the
NPRM, as discussed below. We believe it is appropriate to include in
this proposal the provisions in Sec. 80.84 given the length of time
since they were originally proposed, and to include changes made in
response to prior comments. We have also added several new provisions
in this proposal clarifying, and in some instances expanding, the
flexibilities available to transmix processors and transmix blenders
for complying with the RFG/antidumping regulations. This proposed rule
also includes modest recordkeeping requirements in Sec. Sec. 80.74 and
80.104 which would require parties that handle interface and transmix
to keep records verifying that the requirements of Sec. 80.84 were
met. In addition, this proposed rule includes provisions for transmix
processors and transmix blenders related to gasoline sulfur and air
toxics. This proposed rule only addresses gasoline produced by transmix
processors and transmix blenders. Distillate fuel produced by transmix
processors and transmix blenders is addressed in the diesel sulfur
regulations under 40 CFR part 80, subpart I.
EPA believes the flexibilities available in this proposed rule are
appropriate given the unique roles that transmix processors and
transmix blenders fill in the petroleum products distribution system.
Although transmix processors and transmix blenders are refiners under
EPA's regulations, almost all of the gasoline and distillate fuel they
produce is derived from fuel which has already been produced and
certified by an upstream refinery. Thus, this proposed rule would allow
transmix processors the flexibility to exclude from their antidumping
compliance calculations conventional gasoline that they recover
directly from transmix, since the conventional gasoline has already
been accounted for in the compliance calculations of an upstream
refinery. Similarly, this proposed rule would allow transmix processors
to only have to meet the downstream sulfur standards for gasoline they
recover directly from transmix, since the gasoline has already been
accounted for in the compliance calculations of an upstream refinery.
However, transmix processors must comply with all refiner standards at
each of their transmix processing facilities for any blendstocks they
add to gasoline. Lastly, this proposed rule would allow transmix
blenders to blend transmix into gasoline without restriction on
location or rate, provided the endpoint of the transmix-blended
gasoline does not exceed 437 degrees Fahrenheit, and that the gasoline
meets all applicable downstream standards.
C. Pipelines
This proposed rule includes designations for pipeline interface
that are consistent with the designations in EPA's current guidance and
the 1997 NPRM. The designations for pipeline interface are primarily
intended to ensure that pipelines cut their interfaces in a manner that
maintains the quality of any RFG or VOC-controlled gasoline transported
by a pipeline. For example, interfaces between volumes of RFG and
conventional gasoline should be cut into the conventional gasoline to
maintain the quality of the RFG. Regardless of gasoline product
designation, all gasoline containing interface must meet all downstream
standards, including but not limited to any standards and requirements
that apply downstream of the refinery in 40 CFR Part 80 and the Clean
Air Act.
D. Transmix Processors
1. Comments on the 1997 Notice of Proposed Rulemaking
EPA received a number of comments on the 1997 NPRM regarding
transmix processors. One commenter said that the definition of transmix
should be changed since transmix processors and transmix blenders
sometimes process or blend mixtures of fuels that were unintentionally
combined in tanks. Although such mixtures are similar in composition to
transmix, they do not fit the definition of transmix proposed in the
1997 NPRM, which specified that transmix must be generated in a
pipeline. EPA agrees that a product that in composition is similar to
transmix, and that is produced by unintentionally mixing gasoline and
distillate fuel in tanks, should be afforded the same treatment as
transmix product generated in a pipeline. EPA also understands that
transmix may include mixtures of gasoline and distillate fuel produced
through normal operational activities at pipelines and terminals, such
as draining tanks, or draining piping and hoses used to transfer
gasoline or distillate fuel to tanks or trucks, or from a safety relief
valve discharging to protect equipment from overpressuring. As a
result, Sec. 80.84(e) in this proposed rule specifically allows such
products to be covered under the transmix provisions.
EPA is aware that some transmix processors and transmix blenders
may also be adding feedstocks to their transmix that were not produced
from normal pipeline interface, or from inadvertently mixing gasoline
and distillate fuel in tanks, or through normal operational activities
at pipelines and terminals. Mixing other feedstocks in transmix prior
to processing may cause these other feedstocks to be inappropriately
accounted for under the antidumping regulations and gasoline sulfur
regulations, as discussed later. The flexibility provided in this rule
extends only to transmix composed of pipeline interface, mixtures of
gasoline and distillate fuel that were unintentionally combined in a
tank, and mixtures of gasoline and distillate fuel produced through
normal operational activities at pipelines and terminals. A transmix
processor or transmix blender who adds feedstocks derived from any
other sources to their transmix must comply with all the standards
applicable to a refiner under EPA's regulations for all the gasoline
they produce during a compliance period, including but not limited to
any standards and requirements in 40 CFR parts 79, 80 and
[[Page 32021]]
the Clean Air Act. Transmix processors that add feedstocks from any
other sources should also take extra care to be sure that they are
complying with Subtitle C of the Resource Conservation and Recovery Act
(RCRA), 42 U.S.C. 6921-6939(e), and any state provision authorized
pursuant to Section 3006 of RCRA, 42 U.S.C. 6926.
One commenter said that the 1997 NPRM should clarify that the
transmix processing requirements do not apply to transmix processed by
a crude oil refinery where the transmix is received into a crude or
other feedstock stream and is not separated before it is added to other
feedstocks. EPA believes that the regulations in this proposed rule are
clear in this regard, since they specifically apply to persons who
separate transmix at a transmix processing facility. The term
``transmix processing facility'' is defined as excluding refineries
that ``produce gasoline by processing crude oil''. Such refineries must
comply with all existing refiner requirements, and would not be
eligible to take advantage of the flexibilities available in this
proposed rule.
Some commenters said that they do not know the source of the
transmix and, therefore, would not know the original designation of the
gasoline portion of the transmix (e.g., RFG, conventional gasoline,
blendstocks). The commenters said that the transmix processor should
not be required to track and segregate transmix generated from
different types of gasoline or blendstocks. This proposed rule would
not require a transmix processor to track and segregate transmix.
However, Sec. 80.65 requires the transmix processor to designate the
gasoline portion (i.e., conventional gasoline, RFG, or RBOB) that is
separated from the distillate fuel.
One commenter said that, under previous guidance, EPA provided for
the exclusion of the transmix-based portion of conventional gasoline
from anti-dumping compliance calculations as an option, whereas in the
1997 NPRM, the exclusion would be mandatory. The commenter believes the
exclusion should be optional. Another commenter believes that transmix
processing improves the quality of the gasoline separated from transmix
by removing more heavy aromatics and sulfur compounds and improving
E300 distillation point, and therefore, TGP should be included in
compliance calculations for conventional gasoline to give credit for
the improvements. EPA agrees with the commenters, and this proposed
rule would modify the 1997 NPRM to allow the exclusion of the TGP from
anti-dumping compliance calculations to be optional, provided the TGP
meets all of the downstream standards for conventional gasoline.
However, in order to prevent transmix processors from selectively
including only high quality TPG batches in their compliance
calculations, while excluding those of low quality, transmix processors
must consistently include or exclude TGP in their compliance
calculations during each annual compliance period, with one exception.
The exception occurs if transmix contains gasoline blendstocks that
are derived from pipeline interface. EPA understands that some
pipelines transport gasoline blendstocks, and that these pipelines may
cut interfaces containing gasoline blendstock to a transmix tank. If a
transmix processor produces conventional gasoline from transmix
containing gasoline blendstocks and was allowed to exclude the TGP from
their anti-dumping compliance calculations, the finished conventional
gasoline would not be included in any refiner's anti-dumping compliance
calculations. Thus, under this proposal, if a transmix processor
produces conventional gasoline at a transmix processing facility from
transmix containing gasoline blendstocks derived from pipeline
interface, the transmix processor must consistently include all TGP
produced during a compliance period in their antidumping compliance
calculations for that transmix processing facility. As discussed
previously, if transmix processors add any feedstocks to their transmix
that were not produced from normal pipeline interface, or from
inadvertently mixing gasoline and distillate fuel in tanks, or through
normal operational activities at pipelines and terminals, they would
need to comply with all standards applicable to refiners under EPA's
regulations for all the gasoline they produce during a compliance
period. This proposed rule would also require any RFG or RBOB produced
by a transmix processor to be included in the RFG compliance
calculations for the transmix processing facility.
This proposed rule would also modify the 1997 NPRM by treating TGP
as a blendstock when the transmix processor mixes the TGP with other
blendstock(s) to produce conventional gasoline. In this situation, the
TGP would be included in compliance calculations for the resulting
conventional gasoline. We believe it is appropriate to treat TGP as a
blendstock rather than as a previously certified gasoline in this
situation, since the TGP is likely to have undergone changes as a
result of having been interfaced with another product and separated
through transmix processing. For example, one transmix processor
indicated that their TGP could not be directly sold as gasoline because
it does not meet standards for octane or Reid vapor pressure. This
approach is consistent with the approach taken in both the 1997 NPRM
and the Question and Answer guidance with regard to RFG, where TGP is
required to be included in compliance calculations when it is mixed
with blendstock to produce RFG.
Where TGP is sold as a blendstock, the transmix processor would be
required to exclude the TGP from compliance calculations, with one
exception. The exception is when the transmix processor sells the TGP
to an oxygenate blender as a blendstock which becomes conventional
gasoline solely upon the addition of an oxygenate, such as ethanol or
MTBE. In this circumstance, the transmix processor would need to
include the TGP in compliance calculations. This exception would not
apply if the TGP is combined with any other non-oxygenated blendstocks
to produce conventional gasoline. Thus, in order for a transmix
processor to properly account for any TGP sold as a blendstock in
compliance calculations for a transmix processing facility, the
transmix processor must clearly state on the TGP product transfer
documents whether or not the TGP may only be combined with an oxygenate
to produce conventional gasoline. This approach is consistent with the
anti-dumping regulations at Sec. 80.101(d)(3), which require
blendstocks that become conventional gasoline solely upon the addition
of an oxygenate to be included in anti-dumping compliance calculations
for the refiner that produced the blendstock.
Transmix processors also sometimes blend sub-octane TGP with
previously certified premium gasoline (PCG) to produce regular
gasoline. EPA is proposing that transmix processors which blend sub-
octane TGP with premium PCG to produce conventional gasoline must
include the TGP in compliance calculations for the transmix processing
facility, but may meet the sampling and testing requirements in one of
three ways. First, the transmix processor may directly measure the
properties of the TGP and treat each volume of TGP blended with PCG as
a separate batch for purposes of compliance calculations. As a second
alternative, the transmix processor may measure the volume and
properties of the PCG prior to blending with the TGP, then measure the
volume and properties of the gasoline subsequent to blending
[[Page 32022]]
with the TGP, and calculate the volume and properties of the TGP by
subtracting the volume and properties of the PCG from the volume and
properties of the gasoline subsequent to blending. As a third
alternative, the transmix processor may demonstrate compliance using
the procedures in Sec. 80.101(g)(9). Where TGP is mixed with
previously certified gasoline to produce RFG or RBOB, the transmix
processor must demonstrate compliance using the procedures in Sec.
80.65(i).
One commenter said that EPA should allow transmix processors to
blend oxygenates and other blendstocks into transmix-based conventional
gasoline to produce RFG. This proposed rule would address this comment
by allowing transmix processors to treat their TGP as a blendstock, and
combine the TGP with other blendstocks to produce either conventional
or reformulated gasoline. In this situation, the transmix processor
would be required to fulfill all the requirements and standards for RFG
that apply to a refiner.
2. Issues Not Addressed in the 1997 NPRM
a. Gasoline Sulfur. In the preamble to the gasoline sulfur
regulations, EPA indicated that the Agency would establish requirements
for transmix processors in a future rulemaking (65 FR 6800, February
10, 2000). Therefore, as part of this rulemaking, EPA is also including
proposed requirements for transmix processors and transmix blenders
under the gasoline sulfur regulations at 40 CFR part 80, subpart H.
As under the RFG/anti-dumping rule, transmix processors and
transmix blenders are refiners under the gasoline sulfur regulations.
As a result, transmix processors and transmix blenders are subject to
the refinery sulfur standards under Sec. 80.195 of the gasoline sulfur
regulations. However, for reasons discussed below, we believe it is
appropriate that such parties be held to the gasoline sulfur standards
applicable to downstream parties under Sec. Sec. 80.210 and 80.220 of
the gasoline sulfur regulations, and not be held to the more stringent
refinery standards in Sec. 80.195.
As indicated above, transmix processors generally do not control
their feedstock, but receive mixtures of products from upstream
refineries. The gasoline portion of transmix may be relatively high in
sulfur if it was originally produced by a small refiner, a refiner
producing gasoline for use in the Geographic Phase-in Area (GPA), or a
refiner who has been given a temporary hardship extension to produce
relatively high sulfur gasoline. As a result, holding transmix
processors to the downstream sulfur standards rather than the more
stringent refinery standards would provide transmix processors the
flexibility to recover gasoline originally produced by small refiners,
refiners of GPA gasoline, or temporary hardship refiners. To ensure
compliance with the applicable downstream sulfur standards, transmix
processors will be required to test any gasoline produced from transmix
for sulfur content.
Under this proposed rule, transmix processors who add blendstocks
not derived from transmix to their recovered gasoline would be required
to meet all of the requirements and standards that apply to refiners
under 40 CFR Part 80, subpart H, for such blendstocks. Where certain
requirements are met, the transmix processor may use sulfur test
results from the blendstock supplier for purposes of meeting the
sampling and testing requirements under the sulfur rule.
As mentioned previously, EPA has learned that some transmix
processors have added feedstocks to their transmix, before the transmix
is processed, that are not produced from pipeline interface, or from
mixtures of gasoline and distillate fuel unintentionally combined in a
tank, or from normal operations at pipelines and terminals. Under this
proposal, transmix processors that use these other feedstocks would
need to meet all EPA standards applicable to a refiner for all the
gasoline they produce during a compliance period, including the
refinery level sulfur standards in 40 CFR 80.195. These transmix
processors could not utilize the flexibilities in this rule because
they have chosen to use feedstocks that have not been previously
accounted for by a refinery in the production of gasoline. When the
transmix is processed, the previously compliant gasoline present in the
transmix and the other feedstocks both distill out of the transmix
together as a fungible product, and the transmix processor cannot
distinguish exactly which portion of the TGP was derived from
previously compliant gasoline and which was derived from other
feedstocks. Thus, EPA proposes limiting the flexibility allowed by this
proposed rule to gasoline produced from transmix, only if the transmix
was produced from pipeline interface, or from mixtures of gasoline and
distillate fuel that were unintentionally combined in a tank, or from
mixtures of gasoline and distillate fuel produced from normal
operational activities at pipelines and terminals. Transmix processors
who add any other material to their transmix would need to comply with
all EPA standards applicable to a refiner for all the gasoline they
produce during a compliance period, including the refinery level sulfur
standards in 40 CFR 80.195.
This proposed rule would, however, allow transmix processors that
produce gasoline from pipeline interface to meet the less stringent
downstream gasoline sulfur standards, even if the interface contains
small amounts of gasoline blendstocks that are transported via pipeline
as a normal part of pipeline operations. EPA believes it is appropriate
to allow transmix processors that produce gasoline from these interface
mixtures to meet the downstream sulfur standards because they do not
have the same level of control over their transmix as the transmix
processors that intentionally introduce other feedstocks into the
production process. Furthermore, because the volume of gasoline
blendstocks in the transmix will be relatively small and since the
gasoline will still have to meet downstream standards, EPA believes the
environmental consequences of allowing these transmix processors to
meet the less stringent downstream sulfur standard should be
negligible.
This proposed rule would add a new Sec. 80.213 to the gasoline
sulfur regulations. This section contains the additional requirements
for demonstrating compliance with the gasoline sulfur rule discussed
above for refiners who process or blend transmix in accordance with the
provisions in Sec. 80.84. EPA believes that the additional proposed
requirements for transmix processors and transmix blenders in Sec.
80.213 are necessary to maintain the flexibility of the current
practices regarding transmix, and will not result in any adverse
environmental consequences. This proposed rule would also add modest
recordkeeping requirements to Sec. 80.365 which require parties to
retain records of any sampling and testing required under Sec. 80.213.
b. Air Toxics. The mobile source air toxics (MSAT) rule (66 FR
17230, March 29, 2001) requires the annual average toxics performance
of a refinery's or importer's gasoline to be at least as clean as the
average of its gasoline during the three-year baseline period 1998-
2000. The MSAT requirements apply separately to RFG and to conventional
gasoline. MSAT compliance is determined from the same gasoline data
used by a refiner to determine its compliance with the RFG or anti-
dumping requirements. As a result, only gasoline which would be
included in the RFG or anti-dumping compliance determination of a
refiner is
[[Page 32023]]
included in the refiner's MSAT baseline and compliance determinations.
Most, if not all, transmix processors have unique individual MSAT
baselines. Under MSAT, those with unique individual MSAT baselines
(Sec. 80.915) are subject to their MSAT baseline up to their
associated MSAT baseline volume (Sec. 80.850). Gasoline production
above the MSAT baseline volume is subject to either the RFG toxics
performance standard (Sec. 80.41) or to the refiner's anti-dumping
standard (Sec. 80.91). Because these standards are equal to or less
stringent than the refiner's MSAT baseline, they offer some flexibility
to the refiner's overall compliance with its MSAT standard. Because
gasoline demand is increasing, EPA expects that this provision will
provide most refiners with some degree of MSAT compliance flexibility.
The MSAT rules also provide for limited credit and deficit carryover,
allowing refiners to weather slightly off years with better toxics
performance in an adjacent year (Sec. 80.815). Finally, because all
refiners are subject to MSAT standards which are typically more
stringent than the RFG toxics performance standard or their individual
anti-dumping standard, it is likely that the gasoline portion of the
transmix is also cleaner with respect to toxics performance than it was
during the baseline period 1998-2000, thus providing some immediate
flexibility to transmix processors and transmix blenders.
This action clarifies that any gasoline or blendstock a transmix
processor includes in their RFG or anti-dumping compliance
determination is also included in their MSAT compliance calculations.
Also, EPA has recently proposed to replace the existing MSAT
regulations with a standard that would limit the benzene content of
gasoline to an annual average of 0.62 percent by volume for most
refiners, beginning in 2011. See 71 FR 15803 (March 29, 2006). The
proposed toxics regulations would exempt transmix processors from the
new benzene standard for any gasoline they recover from transmix, but
require transmix processors to meet the standard for any blendstocks
they add to transmix.
E. Transmix Blenders
1. Comments on the 1997 Notice of Proposed Rulemaking
One commenter was concerned that the sampling and testing
procedures in the 1997 NPRM for blends of transmix and RFG, which would
be performed after blending the transmix, may not prevent the release
of noncompliant RFG in the distribution system. For reasons discussed
below, however, EPA believes that commercial standards limit transmix
blending to such small percentages, that blending transmix in RFG will
cause essentially no change in the emissions performance of the RFG.
This proposed rule would specifically require that all gasoline
produced by transmix blenders have an endpoint less than 437 degrees
Fahrenheit. As described below, as a practical matter, EPA believes
that this endpoint standard will effectively prevent the blending of
transmix into gasoline from causing any appreciable changes in gasoline
emissions performance.
One commenter said that the 1996 Question and Answer guidance
regarding transmix blended into conventional gasoline requires that the
transmix be blended at a rate no greater than the historical rate that
was used by the pipeline, whereas the NPRM provided that the transmix
be blended at a rate no greater than the historical rate at the
terminal or 0.25 volume percent, whichever is greater. The commenter
said the NPRM did not cover a situation where, historically, transmix
was moved through a pipeline to a terminal that is no longer used for
blending transmix, and the transmix is currently moved through the same
pipeline but blended at an intermediate terminal which historically had
not been used for blending transmix. The commenter recommended that the
language in the Q&A guidance, which covers this situation by allowing
blending at the historical rate used by the pipeline rather than by the
terminal, be adopted in the regulations.
We believe the Q&A guidance is consistent with the 1997 NPRM in
stating that if a pipeline stops blending transmix at a terminal, that
the pipeline may not begin blending transmix at a second terminal at a
rate equal to the first terminal's blending rate. The Q&A guidance
states: ``* * * the transmix must be present in a terminal from which
there is no out-bound pipeline or water transportation by which the
transmix could be transported to a transmix processor, or the
pipeline's historical practice at the terminal [emphasis added] (the
practice beginning at least before January, 1994) has been to blend all
transmix into conventional gasoline without further processing.'' This
language indicates that the criteria regarding historical practice
applies to the terminal in which the transmix was blended by the
pipeline. Where a pipeline blends transmix at more than one terminal,
the historical practice criterion would apply separately to each of the
pipeline's terminals at which transmix is blended. However, as
described below, this proposed rule would change this approach.
2. This Proposal
This proposed rule would eliminate the historical practice
criterion for determining amounts of transmix to be blended into
conventional gasoline and the locations where this may occur, and also
would eliminate the 0.25 volume percent limit for blending transmix in
reformulated gasoline. This proposed rule would instead allow transmix
to be blended into conventional or reformulated gasoline in any
location and in any amount, provided the endpoint of the transmix-
blended gasoline does not exceed 437 degrees Fahrenheit,\3\ and meets
all other applicable downstream standards. As EPA's diesel sulfur
regulations begin phasing in, transmix will be generated at new
locations. EPA believes it is appropriate to allow the flexibility to
blend transmix into gasoline at locations which have not historically
blended transmix, provided the endpoint of the transmix-blended
gasoline does not exceed 437 degrees Fahrenheit, and the gasoline meets
all other applicable downstream standards. In addition, EPA believes it
is appropriate to use gasoline endpoint to regulate transmix blending
because it takes into account the quality of the transmix-blended
gasoline. The historical practice criterion for conventional gasoline
and the 0.25 volume percent limit for RFG were crude approaches that
did not account for the variability of transmix and its effect on the
gasoline into which it was blended.
---------------------------------------------------------------------------
\3\ 437 degrees Fahrenheit is the maximum allowable endpoint for
gasoline specified in ASTM's standard for automotive spark-ignition
engine fuel, D 4814-88. Gasoline endpoint is measured using ASTM
D86-01. ASTM D86-01 measures the percentage of a gasoline sample
that evaporates, as a function of temperature, as the sample is
heated up under controlled conditions. Endpoint is the temperature
at which all the volatile portion of a gasoline sample is
evaporated. ASTM D4814-88 specifies a maximum allowable endpoint of
437 degrees Fahrenheit in order to limit the amount of higher-
boiling point compounds that can be present in the gasoline.
---------------------------------------------------------------------------
EPA believes that blending small percentages of transmix in
gasoline should be allowed at any facility, provided the facility takes
appropriate steps to ensure that the endpoint of the transmix-blended
gasoline does not exceed 437 degrees Fahrenheit. Transmix typically
contains significant percentages of distillate fuels such as diesel
fuel or heating oil, and distillate fuels have higher boiling points
and much lower octane ratings than
[[Page 32024]]
gasoline. EPA's existing guidance regarding transmix blending reflected
a concern that blending excessive amounts of transmix in gasoline could
have an appreciable effect on emissions. However, EPA believes that
where transmix is blended at sufficiently low percentages, such that
the endpoint of the transmix-blended gasoline does not exceed 437
degrees Fahrenheit, the emissions effect of blending transmix in
gasoline will be negligible.
In addition to affecting gasoline endpoint and octane, blending
transmix in gasoline also affects parameters in EPA's complex model,
the model used to ensure that imported or produced gasoline complies
wi