Automotive Fuel Ratings, Certification and Posting, 12470-12483 [2010-5647]
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12470
Federal Register / Vol. 75, No. 50 / Tuesday, March 16, 2010 / Proposed Rules
FEDERAL TRADE COMMISSION
16 CFR Part 306
Automotive Fuel Ratings, Certification
and Posting
Federal Trade Commission
(‘‘FTC’’ or ‘‘Commission’’).
ACTION: Notice of proposed rulemaking,
request for comments.
AGENCY:
emcdonald on DSK2BSOYB1PROD with PROPOSALS-1
SUMMARY: The FTC proposes to amend
its Rule for Automotive Fuel Ratings,
Certification and Posting (‘‘Fuel Rating
Rule’’ or ‘‘Rule’’) by adopting rating,
certification, and labeling requirements
for certain ethanol fuels, revising the
labeling requirements for fuels with at
least 70 percent ethanol, allowing the
use of an alternative octane rating
method, and making certain other
miscellaneous Rule revisions, based on
comments received as part of its
periodic regulatory review of the Rule.
The proposed amendments are intended
to further the Rule’s goal of helping
purchasers identify the correct fuel for
their vehicles.
DATES: Comments on the proposed
information requests must be received
on or before May 21, 2010.
ADDRESSES: Interested parties are
invited to submit written comments
electronically or in paper form by
following the instructions in the
SUPPLEMENTARY INFORMATION section
below. Comments in electronic form
should be submitted by using the
following weblink: (https://
public.commentworks.com/ftc/
fuelratingreview) (and following the
instructions on the web-based form).
Comments filed in paper form should be
mailed or delivered to the following
address: Federal Trade Commission,
Office of the Secretary, Room H-135
(Annex M), 600 Pennsylvania Avenue,
N.W., Washington, D.C. 20580, in the
manner detailed in the SUPPLEMENTARY
INFORMATION section below.
FOR FURTHER INFORMATION CONTACT:
Matthew Wilshire, (202) 326-2976,
Attorney, Division of Enforcement,
Bureau of Consumer Protection, Federal
Trade Commission, 600 Pennsylvania
Avenue, N.W., Washington, D.C. 20580.
SUPPLEMENTARY INFORMATION:
I. Introduction
In March 2009, as part of a systematic
review of the FTC’s rules and guides,
the Commission solicited comment on
the Fuel Rating Rule, including
comments on the economic impact of,
and continuing need for, the Rule; the
benefits of the Rule to purchasers of
automotive fuels; the burdens the Rule
places on firms subject to its
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requirements; and any modifications to
increase the Rule’s benefits or reduce its
burdens. Commenters generally
supported the Rule but recommended
various amendments. Specifically, many
comments supported amending the Rule
to provide specific rating, certification,
and labeling requirements for fuels with
more than 10 percent and less than 70
percent ethanol,1 and to allow octane
rating through the On-Line Direct
Comparison Technique (‘‘On-Line
Method’’) specified in ASTM
International (‘‘ASTM’’) Standard D2885.
In addition, some commenters
recommended altering the Rule’s
requirements for biodiesel, biomassbased diesel, and blends thereof
(collectively, ‘‘biodiesel fuels’’).2
As explained below, the Commission
agrees that the Rule should provide
explicit requirements for ethanol fuels
that contain more than 10 percent
ethanol and less than 70 percent ethanol
(hereinafter, ‘‘Mid-Level Ethanol
blends’’). Furthermore, the Commission
proposes amending the Rule to require
that fuels with at least 70 percent
ethanol have labels with disclosures
more consistent with those in the
proposed Mid-Level Ethanol blend
labels. In addition, the Commission
proposes allowing the On-Line Method
because it produces the same fuel rating
as methods currently prescribed in the
Rule. However, the Commission does
not propose amending the Rule’s
biodiesel fuel provisions because they
already appropriately carry out the
biodiesel labeling mandate of the Energy
Independence and Security Act of 2007
(‘‘EISA’’) while minimizing the burden
to covered entities.
This notice of proposed rulemaking
responds to comments and announces
proposed amendments to the Rule.
Specifically, it provides background on
1 The Fuel Rating Rule already provides
requirements for ethanol fuels of at least 70 percent
concentration, including E85. That fuel generally
contains 85 percent ethanol mixed with 15 percent
gasoline. 16 CFR 306.0(i)(2)(ii). The U.S.
Department of Energy (‘‘DOE’’), however, allows
retailers to reduce the ethanol component of E85 to
as little as 70 percent by volume to allow proper
starting and performance in colder climates. See
(https://www.afdc.energy.gov/afdc/ethanol/
e85_specs.html). Other ethanol blends currently
qualify as alternative fuels under the Rule. See 16
CFR 306.0(i)(2) (providing that alternative fuels are
‘‘not limited to’’ those explicitly listed in the Rule).
The Rule does not provide any specific
requirements for those fuel blends. However,
covered entities must generally rate alternative fuels
by ‘‘the commonly used name of the fuel . . . [and
the] minimum percentage . . . of the principal
component of the fuel.’’ 16 CFR 306.0(j)(2). In
addition, retailers must label these fuels ‘‘consistent
with’’ that rating. 16 CFR 306.10(d).
2 For further background on biodiesel fuels, see
the Commission’s announcement of amendments
expanding the Fuel Rating Rule to cover those fuels.
73 FR 40154 (Jul. 11, 2008).
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the Fuel Rating Rule, a discussion of the
comments submitted, and the
Commission’s response to those
comments with a detailed description of
the proposed amendments.
II. Background
The Commission first promulgated
the Fuel Rating Rule, 16 CFR Part 306,
(then titled the ‘‘Octane Certification
and Posting Rule’’) in 1979 in
accordance with the Petroleum
Marketing Practices Act (‘‘PMPA’’), 15
U.S.C. 2801 et seq.3 The Rule originally
only applied to gasoline. In 1993, in
response to amendments to PMPA, the
Commission expanded the Rule to cover
liquid alternative fuels.4 In 2008, the
Commission again amended the Rule to
incorporate the specific labeling
requirements for biodiesel fuels
required by Section 205 of EISA, 42
U.S.C. 17021.5 Currently, the Rule’s
definition of ‘‘alternative fuels’’ does not
specifically include either biodiesel
fuels at concentrations of 5 percent or
less or Mid-Level Ethanol blends.
The Fuel Rating Rule designates
methods for rating and certifying fuels,
as well as posting the ratings at the
point of sale. The Rule also requires
refiners, importers, and producers of
any liquid automotive fuel to determine
that fuel’s ‘‘automotive fuel rating’’
before transferring it to a distributor or
retailer. For gasoline, the fuel rating is
the octane rating, which covered entities
must determine by deriving research
octane and motor octane numbers using
the procedures in ASTM D2699 and
D2700, respectively, and then averaging
them. For alternative fuels, the rating is
the minimum percentage of the
principal component of the fuel, with
the exception of biodiesel fuels, for
which the rating is the percentage of
biodiesel or biomass-based diesel in the
fuel. In addition, any covered entity,
including a distributor, that transfers a
fuel must provide a certification of the
fuel’s rating to the transferee either by
including it in papers accompanying the
transfer or by letter. Finally, the Rule
requires retailers to post the fuel rating
by adhering a label to the retail fuel
pump and sets forth precise
specifications regarding the content,
size, color, and font of the labels.
On March, 2, 2009, the Commission
solicited comment on the Fuel Rating
Rule as part of its periodic review of its
rules and guides.6 The Commission
sought comments on: the economic
impact of, and the continuing need for,
3 44
FR 19160 (Mar. 30, 1979).
FR 41356 (Aug. 3, 1993).
5 73 FR 40154 (Jul. 11, 2008).
6 74 FR 9054 (Mar. 2, 2009).
4 58
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Federal Register / Vol. 75, No. 50 / Tuesday, March 16, 2010 / Proposed Rules
the Rule; the benefits of the Rule to
purchasers of automotive fuels; the
burdens the Rule places on firms subject
to its requirements; and the need for any
modification to increase the Rule’s
benefits or reduce its burdens.
emcdonald on DSK2BSOYB1PROD with PROPOSALS-1
III. The Record
The Commission received twelve
comments. Commenters explained that
there is a continuing need for the Rule
and that it benefits consumers and
businesses. However, they supported
three significant changes: providing
rating, certification, and labeling
requirements for Mid-Level Ethanol
blends; allowing octane rating through
the On-Line Method; and altering the
Rule’s requirements for biodiesel fuels.
In addition, comments supported
miscellaneous changes to the Rule.
A. Continuing Need for Rule and
Benefits to Consumers and Business
Commenters agreed that there is a
continuing need for the Fuel Rating
Rule and that it benefits consumers and
businesses. The Alliance of Automobile
Manufacturers (‘‘AAM’’) stated that
‘‘there is definitely a need to maintain
the Rule’’ and explained that consumers
could suffer significant harm in the
absence of the Rule’s labeling
requirements:
The [rating] information is critical
because the vehicle warranty is
dependent on use of the proper fuel.
Fuel dispenser labeling that conveys
information about octane rating,
ethanol content, biodiesel content and
other fuel quality properties and
limits is the only mechanism
available to consumers to link fuel
requirements in the owner’s manual
to what is actually being put into the
vehicle.7
In addition, AAM reported results from
compliance surveys of retail gasoline
pumps showing ‘‘very good compliance’’
with the Rule’s octane provisions, and
noted that ‘‘pump labeling of E85
dispensers appears to have been
successful as well, given that reports
about unintentional misfueling of
conventional vehicles have been
virtually nonexistent to date.’’8 The
National Automobile Dealers
Association seconded AAM’s support of
the Rule, explaining that consumers
7 AAM Comment at 1. The comments are located
at: (https://www.ftc.gov/os/comments/
fuelratingreview/index.shtm).
8 Id. at 1-2. AAM also referenced a study showing
some mislabeling of biodiesel blends. Id. at 2.
However, that study tested fuel offered for sale no
later than summer 2008, prior to the December 16,
2008 effective date for the Commission’s biodiesel
labeling requirements. See 73 FR 40154 (Jul. 11,
2008).
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need accurate fuel rating information to
comply with manufacturer
recommendations and warranty
requirements.9
In addition to benefitting consumers,
commenters noted that the Rule benefits
businesses. The Petroleum Marketers
Association of America (‘‘PMAA’’), a
fuel retailer industry group, stated that
‘‘labeling requirements under the
automotive fuel rating rule are generally
beneficial to small business petroleum
retailers.’’10 PMAA further explained:
The labels [required by the Rule]
direct consumers to the octane rating
and/or alternative fuel blends that are
best suited for their vehicle according
to manufacturer specifications. . . . The
labels help to prevent misfueling.
Fewer misfuelings reduce the
potential liability of small business
retailers for damages to engines and
exhaust systems.11
Similarly, the Renewable Fuels
Association (‘‘RFA’’) stated that the Fuel
Rating Rule ‘‘provides producers,
distributors, and retailers the needed
. . . [information] to meet regulatory
requirements and support marketplace
needs and expectations.’’12
B. Labels for Mid-Level Ethanol Blends
Although generally supportive, many
commenters suggested altering the Fuel
Rating Rule to provide specific
requirements for rating, certifying, and
labeling Mid-Level Ethanol blends.
Currently, the Rule provides
requirements for mixtures of gasoline
with 10 percent or less ethanol, defined
as gasoline, and fuels with at least 70
percent ethanol, but does not
specifically address blends with more
than 10 but less than 70 percent ethanol.
Significantly, no commenters opposed
providing requirements for Mid-Level
Ethanol blends.
Several commenters noted that,
though generally not available when the
Commission first promulgated
alternative fuel requirements, Mid-Level
Ethanol blends have subsequently
entered the marketplace. For example,
commenter Downstream Alternatives,
Inc. (‘‘Downstream’’), a renewable fuel
business, stated that:
[When the Commission expanded the
Rule to cover alternative fuels], it was
envisioned that ethanol blends would
be either El0 (gasohol) covered by the
octane rating rule or E85 containing a
minimum of 70% ethanol (to allow
for denaturant and volatility
adjustments) for use in the Flex Fuel
Vehicles (FFV). . . . Today . . . some
marketers are selling blends like E20,
and E30 (20% and 30% ethanol
respectively) for use in FFV’s [sic].
These fuels . . . are typically blended
on site through a blend pump . . . .
Several organizations are promoting
using blender pumps to sell alternate
blend levels such as E20, E30, E40.13
Downstream’s comment included a list
of more than 100 retail establishments
with the capacity to sell Mid-Level
Ethanol blends. RFA also noted that
mid-level blends ‘‘are being developed
and marketed to provide consumers
with more fuel choices at the retail
level.’’14 Similarly, the Iowa Renewable
Fuels Association (‘‘IRFA’’) reported that
‘‘retailers are offering more fuel options
for flex-fuel vehicle owners in the form
of mid-level [ethanol] blends’’ and that
‘‘Iowa retailers are installing blend
dispensers that offer blends such as E20,
E30 or E50 and E85.’’15
Moreover, commenters agreed that the
market for ethanol blends of all types
will grow as part of a general move
toward renewable fuels. RFA noted that
EISA’s provisions included a mandate
for increasing use of renewable fuels,
which ‘‘systematically advances the
production and use of renewable fuels
and ensures that ample amounts of
renewable biofuels, like ethanol, will be
required as an alternative to petroleum
fuels.’’16 In addition, a joint comment
from SIGMA, a fuel-retailer association,
and the National Association of
Convenience Stores (‘‘NACS’’) included
EISA’s specific fuel mandates, showing
an increase in minimum renewables
from 11.1 billion gallons in 2009 to 36
billion in 2022.17 The comment
concluded that ‘‘EISA’s mandates will
clearly require retailers to increase their
sales of biofuels (whether biodiesel or
biomass) in the future.’’18
However, commenters cautioned that
ethanol blends above 10 percent
concentration are not appropriate for
conventional vehicles. AAM stated that
‘‘virtually all conventional vehicles built
to date have been validated for gasoline
containing only up to 10% ethanol
(E10).’’19 AAM, therefore, warned that
‘‘unlabeled dispensers [of ethanol
blends] would cause consumers to
unwittingly put their vehicle warranties
13 Downstream
Comment at 2-3.
Comment at 2.
15 IRFA Comment at 1.
16 RFA Comment at 1.
17 SIGMA and NACS Comment at 2.
18 Id. at 4.
19 AAM Comment at 2.
14 RFA
9 See National Automobile Dealers Association
Comment at 1.
10 PMAA Comment at 3.
11 Id. at 1.
12 RFA Comment at 3.
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Federal Register / Vol. 75, No. 50 / Tuesday, March 16, 2010 / Proposed Rules
at risk.’’20 RFA stated that ‘‘[f]rom an
automotive vehicle perspective, there
are two spark ignition engine types
available to U.S. consumers: [1]
conventional engines designed to use
E10 and unleaded gasoline and [2] flexfuel engines designed to use alternative
fuels such as E85’’21 and Mid-Level
Ethanol blends.22 Indeed, DOE has
explained that ‘‘[a]lthough nearly all
gasoline-fueled passenger cars and lightduty trucks sold in the last 20 years
have been designed to operate on E10,
substantial modifications are made to
[flex-fuel vehicles] so they can use
higher concentrations of ethanol
. . . without adverse effects on fuel
system materials, components, on-board
diagnostics (OBD) systems, or
driveability.’’23
In light of the emergence of Mid-Level
Ethanol blends as retail fuels and the
risk of harm to consumers’ vehicles
from a failure to disclose ethanol
content, commenters urged the
Commission to amend the Fuel Rating
Rule to provide specific labeling, rating,
and certification requirements for those
blends. IRFA urged amending the rule
to provide ‘‘uniformity in pump
labeling, consistent consumer
information and consumer protection’’
and supported a rating regime that, like
that for biodiesel fuels, rates ethanol
blends according to the percentage of
ethanol in the blend, regardless of
whether ethanol is the principal
component in the fuel.24 Downstream
concurred, recommending that, for MidLevel Ethanol blends,
[T]he Commission should adopt a
similar approach to that for labeling
biodiesel. That is, a blend containing
30% denatured ethanol would be E30,
40% denatured ethanol, E40 etc. This
would enable marketers [with] the
ability to properly identify the fuel
while providing consumers guidance
on the approximate ethanol level of
the blend.25
RFA also supported providing ‘‘posting
requirements . . . for all ethanol blended
fuels . . . .’’26
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20 Id.
21 RFA
Comment at 2.
22 See RFA Comment at 2-3. Downstream further
noted that Mid-Level Ethanol blends ‘‘are legal fuels
for use in [Flex-Fuel Vehicles] only.’’ Downstream
Comment at 2.
23 See DOE’s ‘‘Handbook for Handling, Storing,
and Dispensing E85,’’ p.17, available at: (https://
www.afdc.energy.gov/afdc/pdfs/41853.pdf).
24 IRFA Comment at 1.
25 Downstream Comment at 5.
26 RFA Comment at 3.
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C. On-Line Direct Method for
Determining Octane Rating
based diesel blends at any
concentration.
PMPA defines ‘‘octane rating’’ as the
average of gasoline’s research octane
number and motor octane number, as
determined using ASTM D2699 and
D2700, respectively.27 However, PMPA
further provides that the Commission
may prescribe alternate gasoline rating
methods.28 Comments from gasoline
refiners and distributors urged
amending the Fuel Rating Rule to allow
the On-Line Method.
ConocoPhillips, a petroleum refiner,
explained the development of the OnLine Method:
1. Rating All Biodiesel Fuel Blends
Commenters noted that because the
Rule does not require rating of biodiesel
fuels at concentrations of 5 percent or
less, a distributor may transfer those
fuels without disclosing the presence of
biodiesel or biomass-based diesel. API
noted that such a transfer places a
potential burden on retailers and could
lead to inaccurate labels:
[A] company may receive diesel fuel
containing 5% or less biodiesel and
believe that the diesel fuel received
contains no biodiesel. The company
then may add additional biodiesel to
achieve what they believe to be a
blend of 5% or less, resulting in a fuel
with over 5% biodiesel, but because
the company was not made aware of
the existing biodiesel concentration,
they do not appropriately label the
dispenser.33 ConocoPhillips,34
NPRA,35 PMCI,36 and SIGMA/
NACS37 also argued that the current
lack of rating requirements for certain
biodiesel blends could lead to
retailers failing to post required labels
and, as SIGMA noted, ‘‘subject
[retailers] to penalties under the FTC
Act.’’38
To obviate this risk, API,39
ConocoPhillips,40 and NPRA41
recommended subjecting 5 percent and
less biodiesel blends – but not biomassbased diesel blends – to the Fuel Rating
Rule’s rating and certification
requirements, thereby requiring
producers and distributors to disclose
the presence of any biodiesel in fuel
they distribute. PMCI42 and SIGMA/
NACS43 agreed that the Rule should
require rating and certification of all
biodiesel blends, but argued that those
requirements should apply to biomassbased diesel blends as well.
ASTM D 2885 Standard Test Method
for Determination of Octane Number
of Spark-Ignition Engine Fuels by Online Comparison Technique was
adopted by ASTM after the
promulgation of the Automotive Fuel
Rating Rule in 1979. It uses the same
[test] engines but in an updated
methodology that provides
acquisition efficiencies and accuracies
for the industry.29
Therefore, ConocoPhillips argued, the
‘‘test method (suitable for determining
Motor and Research Octane values)
should be allowed to be used for octane
determination.’’30 Two industry groups
also recommended allowing the OnLine Method. The American Petroleum
Institute (‘‘API’’) described the method
as ‘‘reliable’’ and, therefore, stated that it
‘‘should be included’’ as a rating method
prescribed by the Rule.31 The National
Petrochemical & Refiners Association
(‘‘NPRA’’) agreed with ConocoPhillips
that the industry has ‘‘extensive
experience’’ with the On-Line Method
and stated that it ‘‘should be allowed in
addition to ASTM D2699 and D2700.’’32
No comments opposed allowing octane
determination through the On-Line
Method.
D. Biodiesel and Biomass-Based Diesel
Commenters raised two areas of
concern with respect to the Rule’s
biodiesel fuel provisions, which
currently require certifying, rating, and
labeling those fuels if they contain more
than 5 percent biodiesel or biomassbased diesel. Some commenters argued
for expansion of the Rule to include
biodiesel fuels at or below 5 percent
concentration, and one argued for
exemption from the Rule for biomass27 15
U.S.C. 2821(1) and (2).
U.S.C. 2821(1).
29 ConocoPhillips Comment at 1.
30 Id.
31 API Comment at 3.
32 NPRA Comment at 1.
28 15
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2. Applicability of Fuel Rating Rule to
Biomass-Based Diesel
In contrast, API argued that the Rule
should not apply to biomass-based
diesel blends of any concentration. API
gave four reasons in support of its
argument. First, citing an Environmental
Protection Agency (‘‘EPA’’) description
33 API
Comment at 1.
Comment at 2.
35 NPRA Comment at 2.
36 PMCI Comment at 2-3.
37 SIGMA and NACS Comment at 4.
38 Id.
39 API Comment at 1.
40 ConocoPhillips Comment at 2.
41 NPRA Comment at 2.
42 PMCI Comment at 3.
43 SIGMA and NACS Comment at 4.
34 ConocoPhillips
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of a type of biomass-based diesel, API
stated that the fuel ‘‘is indistinguishable
in terms of its hydrocarbon structure
from conventional petroleum diesel’’
and, therefore, ‘‘no standard test method
referenced by ASTM D975 will reveal
renewable diesel content.’’44 Second, the
Rule’s prescribed use of the term
‘‘biodiesel’’ on biomass-based diesel
labels may confuse consumers.45 Third,
the costs of rating and labeling the fuel
increases its cost.46 Finally, because no
standard tests exist for concentration
levels of biomass-based diesel blends,
enforcement of the Rule with respect to
those fuels will be difficult.47
emcdonald on DSK2BSOYB1PROD with PROPOSALS-1
E. Miscellaneous Comments
Commenters also raised several
miscellaneous issues. Many explained
that the Fuel Rating Rule references old
versions of ASTM Standards and a no
longer valid ASTM address.48
Downstream noted that ASTM may
change its E85 standard to provide that
the fuel may contain as little as 68
percent ethanol. To accommodate that
potential change, it recommended that
the Commission consider amending the
Rule, which limits E85 to blends of at
least 70 percent.49 Finally, PMAA urged
allowing greater flexibility in terms of
the size and shape of labels and stated
that the Rule’s provisions conflicted
with unspecified state labeling
requirements, while SIGMA/NACS
similarly argued for a ‘‘heightened
degree of flexibility’’ in labeling to assist
retailers blending alternative fuels and
changing concentration levels on a daily
basis.50
IV. Analysis
In light of the comments discussed
above, the Commission proposes
retaining most of the Fuel Rating Rule
while amending it to include explicit
rating, certification, and labeling
provisions for Mid-Level Ethanol blends
and to provide labeling requirements for
ethanol fuels above 70 percent
concentration consistent with those
proposed for Mid-Level Ethanol blends.
Furthermore, the Commission proposes
allowing octane rating using the OnLine Method. Finally, the Commission
proposes minor amendments in
response to miscellaneous comments.
The Commission declines to propose
amendments to the Rule’s biodiesel
provisions.
44 API
Comment at 2.
45 Id.
46 Id.
47 Id.
48 See,
e.g., ConocoPhillips Comment at 1.
Comment at 5.
50 PMAA Comment at 2; SIGMA/NACS Comment
at 4.
49 Downstream
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A. Retaining the Rule
The Commission promulgated its Fuel
Rating Rule pursuant to PMPA,51 which
requires the FTC to provide rules for
rating, certifying, and labeling liquid
automotive fuels. Commenters noted
that the Rule benefits consumers and
businesses. As AAM reported, the Rule
appears to successfully carry out
PMPA’s goal of alerting consumers to
the type and grade of liquid fuel sold at
retail fuel pumps. The Commission,
therefore, retains the Rule.
B. Ethanol Fuel Labeling
As discussed above, several
commenters noted a risk of misfueling
conventional vehicles with ethanol
blends and, therefore, urged the
Commission to include specific
requirements for rating, certifying, and
labeling Mid-Level Ethanol blends.52 As
explained below, to address this
misfueling risk, the Commission
proposes including such requirements.
The Commission further proposes
altering its labeling requirements for all
ethanol fuels to disclose that blends
with more than 10 percent ethanol may
harm some conventional vehicles.
As reflected in the comments,
retailers currently offer Mid-Level
Ethanol blends and E85 at fuel pumps,
and EISA’s renewable fuel standard will
likely lead to increased availability of
both. Furthermore, commenters noted
that consumers who use those fuels in
conventional vehicles place their
warranties at risk. Similarly, DOE
confirmed that fuels containing more
than 10 percent ethanol are only proper
for flex-fuel vehicles.53 Therefore,
providing specific labeling requirements
for Mid-Level Ethanol blends will
further PMPA’s purpose of ‘‘assisting
purchasers in identifying the specific
type(s) of fuel required for their
vehicles.’’54
The Commission also agrees that
covered entities should rate Mid-Level
Ethanol blends according to their
percentage of ethanol, regardless of
whether ethanol is the predominant fuel
in the blend. Currently, the Rule
requires covered entities to rate blends
of less than 50 percent ethanol
51 The Commission promulgated the Rule’s
biodiesel fuel provisions pursuant to EISA.
52 PMPA authorizes the Commission to designate
methods for fuel rating, fuel certification, and
labeling any alternative liquid fuel. See 15 U.S.C.
2823(c).
53 AAM noted a petition to the EPA seeking
approval of blends containing up to 15 percent
ethanol for use in conventional vehicles. AAM
Comment at 2; see also 74 FR 18228 (Apr. 21, 2009).
If EPA grants this petition, the Commission will
reconsider requiring the proposed Mid-Level
Ethanol blend label for such fuels.
54 58 FR 41356, 41360 (Aug. 3, 1993).
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according to their gasoline percentage;55
therefore, the labels for such blends
would not reflect the presence of
ethanol in all circumstances. However,
as noted above, the significant
information to the consumer is whether
the blend contains more than 10 percent
ethanol because use of ethanol blends at
such concentrations in conventional
vehicles places warranties at risk.
Therefore, as explained in detail below,
the Commission proposes requiring
covered entities to rate and certify MidLevel Ethanol blends according to their
ethanol content and to label them
accordingly.56
1. Definitions
In order to provide requirements for
rating, certifying, and labeling MidLevel Ethanol blends, the Commission
proposes adding ‘‘Mid-Level Ethanol
blend’’ as a new defined term in the Fuel
Rating Rule. Specifically, the proposed
new definition defines the term as ‘‘a
mixture of gasoline and ethanol
containing more than 10 but less than
70 percent ethanol.’’
2. Rating and Certification
Section 306.0(i)(2) of the Fuel Rating
Rule currently lists examples of
alternative fuels, but specifically states
that alternative fuels are ‘‘not limited to’’
those listed. The proposed amendments
expressly add Mid-Level Ethanol blends
to this non-exhaustive list, thereby
making clear that the rating and
certification requirements of § 306 of the
Rule apply to Mid-Level Ethanol blends.
Subjecting such blends to those
requirements should ensure the
accuracy of information on Mid-Level
Ethanol blend labels.
In addition, to ensure that Mid-Level
Ethanol blend labels provide consumers
with useful information, the proposed
amendments include rating and
certification provisions similar to those
for biodiesel fuels. The proposed
amendments modify language in the
Rule’s rating provision (§ 306.5(b)) to
clarify that covered entities must rate
Mid-Level Ethanol blends by ‘‘the
percentage of ethanol contained in the
55 Although the Rule currently does not provide
specific requirements for Mid-Level Ethanol blends,
that fuel qualifies as an alternative fuel under the
Rule. 16 CFR 306.0(i)(2) (providing that alternative
fuels are ‘‘not limited to’’ those explicitly listed in
the Rule). Therefore, covered entities must rate the
fuel according to its ‘‘principal component.’’ 16 CFR
306.5(b).
56 The Rule already requires rating and certifying
E85 according to the percentage of ethanol in the
blend.
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fuel,’’ not by the percentage of the
principal component of the fuel.57
The Commission also proposes
amending § 306.6(b), which allows
transferors of alternative automotive
fuels to certify fuel ratings with a letter
of certification. That section provides
that, generally, a certification by letter
remains valid so long as the fuel
transferred contains the same or greater
rating of the principal component. The
letter remains valid because an increase
in concentration for most alternative
fuels will not trigger different labeling
requirements. An increase or decrease
in concentration for ethanol blends or
biodiesel fuels, however, may trigger
different labeling requirements.58
Therefore, the proposed amendment to
§ 306.6(b) states that if transferors of
ethanol blends choose to use a letter of
certification, that letter remains valid
only as long as the fuel transferred
contains the same percentage of ethanol
as previous fuel transfers covered by the
letter.
emcdonald on DSK2BSOYB1PROD with PROPOSALS-1
3. Labeling
The proposed amendments provide
labeling requirements for Mid-Level
Ethanol blends and amend the labeling
requirements for E85.59 The proposed
requirements provide retailers flexibility
to comply with the law while giving
consumers critical information to avoid
placing their warranties at risk.
Specifically, the proposed Mid-Level
Ethanol blend requirements provide that
retailers must post either: 1) the precise
concentration of ethanol (e.g., ‘‘20%
ETHANOL’’); or 2) a disclosure that the
blend’s concentration is between 10 and
70 percent (‘‘10% - 70% ETHANOL’’), or
within a narrower range (e.g., ‘‘30% 40% ETHANOL’’). These content
disclosures will alert consumers to the
presence of more than 10 percent
ethanol, thereby helping them avoid
placing their warranties at risk.
The proposed amendments allow
some flexibility by permitting Mid-Level
Ethanol blend sellers to provide a
specific ethanol percentage or a range
narrower than 10 - 70 percent, as long
as the label is accurate. This increased
flexibility will allow sellers to compete
within the Mid-Level Ethanol blend
market by disclosing a more specific
ethanol content to consumers who value
57 For example, a 30 percent ethanol blend should
be rated as 30 percent ethanol, not 70 percent
gasoline. However, as explained below, a retailer
selling a 30 percent blend need only disclose that
the fuel contains 10% - 70% ethanol.
58 E.g., an increase from 60 percent ethanol to 85
percent ethanol would qualify the fuel as E85.
59 The proposed amendments at the end of this
notice of proposed rulemaking include sample MidLevel Ethanol blend and E85 labels.
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that information, while ensuring all
consumers have the information
necessary to avoid harming their
vehicles or placing their warranties at
risk. The proposed amendment does
not, however, require labels to disclose
an exact blend percentage or a range
narrower than 10 - 70 percent. Requiring
retailers to post such a disclosure would
likely impose a significant burden
because, as Downstream and IRFA
noted, retailers currently create MidLevel Ethanol blends through blender
pumps. These pumps allow retailers to
adjust the blend concentration
frequently to account for relative
changes in the prices of gasoline and
ethanol. Requiring a specific disclosure,
therefore, likely would force some
sellers to either change pump labels
frequently or alter their blend
concentrations less frequently,
potentially raising their costs.
In addition, labels for all ethanol
blends above 10 percent would state:
∑ MAY HARM SOME VEHICLES
∑ CHECK OWNER’S MANUAL
This additional information should
assist consumers in identifying the
proper fuel for their vehicles.60 As noted
above, AAM reported that consumers
place their warranties at risk if they use
Mid-Level Ethanol blends and E85 in
conventional cars because ‘‘virtually all
conventional vehicles built to date have
been validated for gasoline containing
only up to 10% ethanol.’’61 This
comment raises a question concerning
whether ethanol blends above 10
percent concentration will damage
conventional vehicles, and the
Commission invites comment on that
question.
Although the record contains no
evidence regarding the incidence of
ethanol misfueling, the increasing risk
of such misfueling necessitates this
additional disclosure. As discussed
above, EISA’s fuel mandate will require
significant expansion of the alternative
fuel market. Thus, in the coming years
more retailers will likely offer Mid60 PMPA authorizes the Commission to require
labels displaying fuel ‘‘ratings,’’ which the statute
defines as including information the Commission
deems ‘‘appropriate to carry out the [statute’s]
purposes . . . .’’ 15 U.S.C. 2821(17)(C). The
Commission has explained that, under this
definition, a fuel’s rating encompasses not only a
numerical value but also text necessary to assure
consumers that ‘‘they are purchasing a product that
satisfies automobile engine minimum content
requirements, which may be specified in their
owner’s manuals.’’ 58 FR 41356, 41364-65 (Aug. 3,
1993). Thus, because the proposed additional
language will assist consumers in determining
whether they can use ethanol fuels, the language is
part of the fuel’s rating and the Commission may
require it under PMPA.
61 AAM Comment at 2.
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Level Ethanol blends and E85, and
consumers will encounter more fuel
pumps dispensing those fuels near
pumps dispensing conventional
gasoline. Moreover, consumers’
familiarity with gasoline containing up
to 10 percent ethanol may lead them to
assume wrongly that their conventional
vehicle can tolerate fuels with more
than 10 percent ethanol. The proposed
amendments require the additional
disclosure for both E85 and Mid-Level
Ethanol blends because requiring that
disclosure for only one of those fuels
could confuse consumers. For example,
if the ‘‘may harm some vehicles’’
disclosure appeared on a Mid-Level
Ethanol blend pump but not on an
adjacent E85 pump, consumers might
conclude wrongly that E85 cannot harm
conventional vehicles.
The proposed amendments specify
the size, font, and format requirements
for the new Mid-Level Ethanol blend
labels and the revised labels for ethanol
blends of at least 70 percent
concentration.62 These requirements are
similar to those in place for most other
alternative liquid fuels in the Rule (see
§ 306.12). The proposed labels for both
fuels require an orange background
(PMS 1495 or its equivalent),63 which is
the typical color for alternative fuel
labels and will allow retail consumers to
distinguish Mid-Level Ethanol blends
from gasoline. In addition, consistent
with labeling for other alternative fuels,
the proposed amendments require the
text to be in Helvetica black type and
centered on the label. The Commission
proposes amending § 306.12(f) to
provide sample illustrations of MidLevel Ethanol blend and E85 labels,
which are included at the end of this
notice of proposed rulemaking.64
C. Octane Rating Using the On-Line
Method
The Commission also agrees with the
commenters that the Fuel Rating Rule
should allow octane rating through the
On-Line Method, as specified in ASTM
D2885. As noted above, PMPA
authorizes the Commission to prescribe
octane rating methods beyond those
specified in ASTM D2699 and D2700.
The On-Line Method detailed in ASTM
D2885 produces the exact same octane
rating as the D2699 and D2700
62 The proposed amendments also delete the
Rule’s sample label for ‘‘E-100’’ (i.e., ethanol not
mixed with gasoline) because the record does not
show any retail sales of such fuels.
63 16 CFR 306.12(c)(2).
64 The Rule’s recordkeeping provisions (16
CFR 306.7, 306.9, and 306.11) without amendment
will require covered entities to maintain records
supporting the rating of any Mid-Level Ethanol
blend they produce, transfer, or sell.
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labeling requirements for biodiesel
fuels.69
methods.65 Accordingly, the
Commission proposes amending the
Rule to allow the On-Line Method.66
E. Biodiesel Fuel Provisions
D. Miscellaneous Comments
emcdonald on DSK2BSOYB1PROD with PROPOSALS-1
Commenters raised three
miscellaneous issues. First, several
noted outdated ASTM references.
Therefore, the Commission proposes
updating those references.67 Second,
Downstream argued that the
Commission consider allowing E85 to
contain 68 percent ethanol in light of a
potential change to the relevant ASTM
standard. The Commission declines to
make this change because there is no
current ASTM or DOE standard
allowing E85 to contain 68 percent
ethanol.68 Third, some retail fuel
industry commenters requested more
flexibility in labeling specifications and
noted possible state and FTC labeling
conflicts. However, none of the
comments demonstrated that the
labeling specifications impose a
substantial burden or identified a
specific conflict. Therefore, the
Commission does not propose any
amendments in response to those
comments.
Finally, in addition to the
commenters’ suggested changes, the
Commission on its own initiative
proposes amending the Rule’s labeling
specifications to address an
inconsistency. Section 306.12(b)(2)
requires all uppercase type for labels for
all alternative fuels. Sections
306.12(a)(4) through (9), however,
require some lowercase type on
biodiesel fuel labels. The Commission,
therefore, proposes amending
§ 306.12(b)(2) to make clear that its allcaps requirement does not apply to
65 See ASTM D2885, Standard Test Method for
Determination of Octane Number of Spark-Ignition
Engine Fuels by On-Line Direct Comparison
Technique, available for inspection at the FTC’s
public reference room. Notably, D2885 provides
that the On-Line Method will produce ‘‘octane
numbers’’ as that term is defined in D2699 and
D2700. See id at Sec. 5.3.
66 NPRA and ConocoPhillips recommended
further loosening the Rule’s octane rating
provisions to allow non-ASTM approved
procedures so long as they are ‘‘correlated’’ with
ASTM D2699 and D2700. However, without
specific rating procedures, the Commission would
have difficulty determining whether a supposedly
‘‘correlated’’ procedure accurately rates octane, and
the commenters did not provide any criteria for
showing correlation. Thus, allowing any
‘‘correlated’’ procedure would impede Rule
enforcement and, therefore, the Commission
declines to allow such procedures. See 15 U.S.C.
2823(c)(3)(A)(i) (Commission must consider ‘‘ease of
administration and enforcement’’ before approving
alternative octane rating procedures).
67 E.g., the Commission proposes amending
§ 306.0(b) to provide ASTM’s current street address.
68 See 1 CFR Part 51.
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1. Rating Biodiesel Fuel Blends of 5
Percent or Less
As discussed above, several
commenters argued that, unless the
Commission expanded the Fuel Rating
Rule to require rating of biodiesel fuel
blends at or below 5 percent in
concentration, retailers who blend
biodiesel might not know the blend’s
concentration and, therefore, fail to
label the fuel appropriately. As an
initial matter, the record does not show
that retailers who blend cannot properly
label their fuel in the absence of the
suggested change. Indeed, none of the
commenters presented evidence of such
mislabeling.
Retailers can comply with the Rule in
one of two ways. First, they can test
their blends and label them accordingly.
Alternatively, they can add enough pure
biodiesel to uncertified diesel stock to
ensure that the resulting blend will
contain more than 5, but not more than
20, percent biodiesel. For example, if a
retailer receives uncertified diesel from
a refiner, the retailer knows that the fuel
contains up to 5 percent biodiesel. The
retailer can then add at least six, but not
more than fifteen, percent pure
biodiesel into this uncertified stock. The
final product would thus contain more
than 5, but less than 20, percent
biodiesel. Therefore, the retailer could
comply with the Rule by labeling the
fuel as a ‘‘Biodiesel Blend’’ without a
specific blend percentage.70
Although the Rule’s biodiesel
provisions require retailers who blend
such fuels to take some affirmative
steps, the Commission believes that this
burden is reasonable. Indeed, the
Commission knew of this burden when
it first promulgated biodiesel fuel
requirements, and in announcing those
requirements stated:
[A]n entity blending biodiesel fuels is
responsible for determining the
amount of biodiesel and/or biomassbased diesel in the fuel it sells. This
includes the need to account for
biodiesel and/or biomass-based diesel
in any diesel fuel (e.g., diesel fuel
containing biodiesel at five percent or
69 The Commission also proposes amending
§§ 306.0(b), 306.0(j)(1), 306.0(j)(2), and 306.0(j)(3) to
correct typographical errors, and proposes
amending § 306.0(i) for clarification by eliminating
the subsection number (3) and replacing that with
‘‘provided, however.’’
70 The Rule does not require a specific percentage
disclosure for biodiesel blends with more than 5
and no more than 20 percent biodiesel. Thus,
sellers may label the fuel: ‘‘Biodiesel Blend.’’ 16 CFR
306.12(a)(4).
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12475
less) it uses to create blends that must
be rated, certified, or labeled under
the Rule.71
Moreover, there is no evidence that
requiring producers and distributors of
biodiesel fuels to rate blends of 5
percent or less would decrease the
Rule’s overall burden on businesses.
Amending the Rule as proposed would
require producers and distributors to
rate 5 percent or less biodiesel blends
regardless of whether those fuels would
eventually require a label after blending.
Thus, the proposed amendment might
reduce a burden on some retailers while
increasing the burden on many
producers and distributors. The
Commission, therefore, declines to
adopt the change.
2. Exempting Biomass-Based Diesel
from the Rule
Commenter API argued that the
Commission should not require rating,
certification, or labeling of biomassbased diesel blends because those
blends are indistinguishable from
conventional diesel. It also argued that
the required label is confusing because
it contains both the terms ‘‘biodiesel’’
and ‘‘biomass-based diesel.’’ Even
assuming that API is correct, however,
the Commission cannot exempt
biomass-based diesel blends or provide
for different labels because Section 205
of EISA specifically provides that
‘‘[e]ach retail diesel fuel pump shall be
labeled in a manner that informs
consumers of the percent of biomassbased diesel or biodiesel that is
contained in the biomass-based diesel
blend or biodiesel blend that is offered
for sale’’ (emphasis added) and that all
blends over 5 percent ‘‘shall be
labeled,’’72 depending on concentration
levels, either ‘‘contains biomass-based
diesel or biodiesel in quantities between
5 percent and 20 percent’’ or ‘‘contains
more than 20 percent biomass-based
diesel or biodiesel.’’73 (Emphasis added.)
Thus, the Commission has no discretion
to exempt biomass-based diesel or
exclude the term ‘‘biodiesel’’ from
biomass-based diesel blend labels.
V. Request for Comment
Interested parties are invited to
submit written comments electronically
or in paper form. Comments should
refer to ‘‘Fuel Rating Rule Review,
R811005’’ to facilitate the organization
of comments. Please note that your
comment – including your name and
your state – will be placed on the public
record of this proceeding, including on
71 73
FR 40154, 40159 n.20 (Jul. 11, 2008).
U.S.C. 17021(a) and (b).
73 42 U.S.C. 17021(b).
72 42
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the publicly accessible FTC website, at
(https://www.ftc.gov/os/
publiccomments.shtm).
Because comments will be made
public, they should not include any
sensitive personal information, such as
any individual’s Social Security
Number; date of birth; driver’s license
number or other state identification
number, or foreign country equivalent;
passport number; financial account
number; or credit or debit card number.
Comments also should not include any
sensitive health information, such as
medical records or other individually
identifiable health information. In
addition, comments should not include
‘‘trade secret or any commercial or
financial information which is obtained
from any person and which is privileged
or confidential’’ as provided in Section
6(f) of the Federal Trade Commission
Act (‘‘FTC Act’’), 15 U.S.C. 46(f), and
FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2).
Comments containing matter for which
confidential treatment is requested must
be filed in paper form, must be clearly
labeled ‘‘Confidential,’’ and must
comply with FTC Rule 4.9(c).74
Because paper mail addressed to the
FTC is subject to delay due to
heightened security screening, please
consider submitting your comments in
electronic form. Comments filed in
electronic form should be submitted
using the following weblink: (https://
public.commentworks.com/ftc/
fuelratingreview) (and following the
instructions on the web-based form). To
ensure that the Commission considers
an electronic comment, you must file it
on the web-based form at the weblink
(https://public.commentworks.com/ftc/
fuelratingreview). If this notice of
proposed rulemaking appears at (https://
www.regulations.gov/search/Regs/
home.html#home), you may also file an
electronic comment through that
website. The Commission will consider
all comments that regulations.gov
forwards to it. You may also visit the
FTC Website at (https://www.ftc.gov) to
read the notice of proposed rulemaking
and the news release describing it.
A comment filed in paper form
should include the ‘‘Fuel Rating Rule
Review, R811005’’ reference both in the
text and on the envelope, and should be
mailed or delivered to the following
address: Federal Trade Commission,
74 The comment must be accompanied by an
explicit request for confidential treatment,
including the factual and legal basis for the request,
and must identify the specific portions of the
comment to be withheld from the public record.
The request will be granted or denied by the
Commission’s General Counsel, consistent with
applicable law and the public interest. See FTC
Rule 4.9(c), 16 CFR 4.9(c).
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Office of the Secretary, Room H-135
(Annex M), 600 Pennsylvania Avenue,
N.W., Washington, D.C. 20580. The FTC
is requesting that any comment filed in
paper form be sent by courier or
overnight service, if possible, because
U.S. postal mail in the Washington area
and at the Commission is subject to
delay due to heightened security
precautions.
Comments on any proposed filing,
recordkeeping, or disclosure
requirements that are subject to the
paperwork burden review under the
Paperwork Reduction Act should
additionally be submitted to: Office of
Information and Regulatory Affairs,
Office of Management and Budget
(‘‘OMB’’), Attention: Desk Officer for
Federal Trade Commission. Comments
should be submitted via facsimile to
(202) 395-5167 because U.S. postal mail
at the OMB is subject to delays due to
heightened security precautions.
The FTC Act and other laws that the
Commission administers permit the
collection of public comments to
consider and use in this proceeding as
appropriate. The Commission will
consider all timely and responsive
public comments that it receives,
whether filed in paper or electronic
form. Comments received will be
available to the public on the FTC
website, to the extent practicable, at
(https://www.ftc.gov/os/
publiccomments.shtm). As a matter of
discretion, the FTC makes every effort to
remove home contact information for
individuals from the public comments it
receives before placing those comments
on the FTC website. More information,
including routine uses permitted by the
Privacy Act, may be found in the FTC’s
privacy policy, at (https://www.ftc.gov/
ftc/privacy.htm).
Because written comments appear
adequate to present the views of all
interested parties, the Commission has
not scheduled an oral hearing for these
proposed amendments. Interested
parties may request an opportunity to
present views orally. If such a request is
made, the Commission will publish a
document in the Federal Register
stating the time and place for such oral
presentation(s) and describing the
procedures that will be followed.
Interested parties who wish to present
oral views must submit a hearing
request, on or before April 5, 2010, in
the form of a written comment that
describes the issues on which the party
wishes to speak. If there is no oral
hearing, the Commission will base its
decision on the written rulemaking
record.
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VI. Paperwork Reduction Act
The proposed certification and
labeling requirements for Mid-Level
Ethanol blends constitute a ‘‘collection
of information’’ under the Paperwork
Reduction Act of 1995 (44 U.S.C. 35013521) (‘‘PRA’’). The additional required
disclosures for fuels containing at least
70 percent ethanol, however, do not
invoke the PRA because they comprise
a disclosure supplied by the Federal
Government.75
Consistent with the Fuel Rating Rule’s
requirements for other alternative fuels,
under the proposed amendments
refiners, producers, importers,
distributors, and retailers of Mid-Level
Ethanol blends must retain, for one year,
records of any delivery tickets, letters of
certification, or tests upon which they
based the automotive fuel ratings that
they certify or post.76 The covered
parties also must make these records
available for inspection by staff of the
Commission and Environmental
Protection Agency or by persons
authorized by those agencies. Finally,
retailers must produce, distribute, and
post fuel rating labels on fuel pumps.
Therefore, the Commission will submit
the proposed requirements to OMB for
review under the PRA before issuing a
final rule.
The Commission has previously
estimated the burden associated with
the Rule’s recordkeeping requirements
for the sale of automotive fuels to be no
more than 5 minutes per year (or 1/12th
of an hour) per industry member, and
no more than 1/8th of an hour per year
per industry member for the Rule’s
disclosure requirements.77 Consistent
with OMB regulations that implement
the PRA, these estimates reflect solely
the burden incremental to the usual and
customary recordkeeping and disclosure
activities performed by affected entities
in the ordinary course of business. See
5 CFR 1320.3(b)(2).
Because the procedures for
distributing and selling Mid-Level
Ethanol blends are no different from
those for other automotive fuels, the
75 According to OMB, ‘‘[t]he public disclosure of
information originally supplied by the Federal
Government to the recipient for the purpose of
disclosure to the public is not included’’ within in
the definition of a PRA ‘‘collection of information.’’
5 CFR 1320.3(c)(2).
76 See the Fuel Rating Rule’s recordkeeping
requirements, 16 CFR 306.7; 306.9; and 306.11.
77 See, e.g., 73 FR 12916, 12920 (Mar. 11, 2008);
73 FR 40154, 40160-40161 (Jul. 11, 2008). Staff has
previously estimated that retailers of automotive
fuels incur an average burden of approximately one
hour to produce, distribute, and post fuel rating
labels. Because the labels are durable, staff has
concluded that only about one of every eight
retailers incur this burden each year, hence, 1/8th
of an hour, on average, per retailer.
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Commission expects that, consistent
with practices in the fuel industry
generally, the covered parties will
record the fuel rating certification on
documents (e.g., shipping receipts)
already in use, or will use a letter of
certification. Furthermore, the
Commission expects that labeling of
Mid-Level Ethanol blend pumps will be
consistent, generally, with practices in
the fuel industry. Accordingly, the PRA
burden will be the same as that for other
automotive fuels: 1/12th of an hour per
year for recordkeeping and 1/8th of an
hour per year for disclosure.
Based on information submitted by
commenter Downstream, the
Commission estimates that there are
approximately 130 retailers of MidLevel Ethanol blends. Furthermore, the
Commission understands from the
comments that Mid-Level Ethanol
blends are created through blender
pumps and, therefore, there are no
producers or distributors of such blends.
Thus, assuming that each retailer of
Mid-Level Ethanol blends will spend 1/
12th of an hour per year complying with
the proposed recordkeeping
requirements and 1/8th of an hour per
year complying with the proposed
disclosure requirements, the
Commission estimates the incremental
annual burden for Mid-Level Ethanol
blend retailers to be 10.83 hours for
recordkeeping (1/12th of an hour per
year x 130 entities) and 16.25 hours for
disclosure (1/8th of an hour per year x
130), combined, 27.08 hours.
Labor costs are derived by applying
appropriate hourly cost figures to the
burden hours described above. Staff
estimates the mean hourly wage for
retailer employees to be $15.04.78
Applied to the estimated affected
population, this would total $407.28
($15.04 x 27.08) for recordkeeping and
disclosure, industry-wide.
The Commission invites comment on
the above burden analysis and estimates
to help ensure its accuracy and
completeness.
emcdonald on DSK2BSOYB1PROD with PROPOSALS-1
VII. Regulatory Flexibility Act
The Regulatory Flexibility Act, 5
U.S.C. 601-612, requires an agency to
provide an Initial Regulatory Flexibility
Analysis with a proposed rule and a
Final Regulatory Flexibility Analysis
with the final rule, if any, unless the
agency certifies that the rule will not
have a significant economic impact on
a substantial number of small entities.
See 5 U.S.C. 603-605.
78 Bureau
of Labor Statistics, May 2008
Occupational Employment Statistics Survey,
‘‘Correspondence Clerks,’’ Table 1, at (https://
www.bls.gov/news.release/pdf/ocwage.pdf).
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The FTC does not expect that the
proposed amendments will have a
significant economic impact on a
substantial number of small entities.
The amendment allowing alternative
octane measurements does not impose
any new costs on covered entities
because, under the amendment, those
entities would have the option of using
the octane rating method currently
required by the Rule. As explained in
Section V above, the Commission
expects that Mid-Level Ethanol blend
retailers will spend, at most, 5 minutes
per year complying with the proposed
recordkeeping requirements and 1/8th
of an hour per year complying with the
disclosure requirements. As also
explained in Section V, staff estimates
the mean hourly wage for employees of
ethanol retailers to be $15.04. Even
assuming that all ethanol retailers are
small entities, compliance with the
recordkeeping requirements will cost
retailers $1.25 ($15.04 x 1/12th of an
hour). In addition, under the same
conservative assumptions, compliance
with the proposed disclosure
requirements will cost retailers $1.88
($15.04 x 1/8th of an hour).
In addition, retailers will incur the
cost of procuring and replacing fuel
dispenser labels to comply with the
disclosure requirements of the Rule.
Staff has previously estimated that the
price per automotive fuel label is
approximately fifty cents and that the
average automotive fuel retailer has six
dispensers. However, commenter PMAA
stated that the cost of labels ranges from
one to two dollars. Conservatively
applying the upper range from PMAA’s
estimate results in an initial cost to
retailers of $12.00 (6 pumps x $2). In
addition, staff has previously estimated
the useful life of dispenser labels to
range from 6 to 10 years. Assuming a
useful life of 8 years, the mean of that
range, and distributing the costs on a
per-year basis, staff estimates the total
annual replacement labeling cost to be
$0.25 (1/8 x $2).
This document serves as notice to the
Small Business Administration of the
agency’s certification of no effect.
Nonetheless, the Commission has
determined that it is appropriate to
publish an Initial Regulatory Flexibility
Analysis in order to inquire into the
impact of the proposed ethanol
amendments on small entities.
Therefore, the Commission has prepared
the following analysis.
A. Description of the reasons that action
by the agency is being considered.
The emergence of Mid-Level Ethanol
blends as a retail fuel and the likely
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increased availability of both Mid-Level
Ethanol blends and E85 as retail fuels.
B. Statement of the objectives of, and
legal basis for, the proposed rule.
The Commission proposes these
amendments to provide requirements
for rating and certifying Mid-Level
Ethanol blends and to amend its
requirements for labeling blends of
gasoline and more than 10 percent
ethanol pursuant to PMPA, 15 U.S.C.
2801 et seq.
C. Description of and, where feasible,
estimate of the number of small entities
to which the proposed rule will apply.
Retailers of fuels containing more
than 10 percent ethanol will be
classified as small businesses if they
satisfy the Small Business
Administration’s relevant size
standards, as determined by the Small
Business Size Standards component of
the North American Industry
Classification System (‘‘NAICS’’). The
closest NAICS size standard relevant to
this rulemaking is for ‘‘Gas Stations with
Convenience Stores.’’ That standard
classifies retailers with a maximum $27
million in annual receipts as small
businesses.79 As discussed above, the
only evidence in the comments
regarding ethanol retailers is a list of
Mid-Level Ethanol blend retailers
provided by Downstream. DOE reports
1,944 E85 fueling stations.80 Neither list
contains any information on these
retailers’ revenue. Therefore, the
Commission is unable to determine how
many of these retailers qualify as small
businesses. The Commission invites
comments providing revenue data for
retailers selling ethanol blends
containing more than 10 percent
ethanol.
D. Projected reporting, recordkeeping,
and other compliance requirements.
The proposed amendments make
clear that the Fuel Rating Rule’s
recordkeeping, certification, and
labeling requirements apply to MidLevel Ethanol blends. Small entities
potentially affected are producers,
distributors, and retailers of those
blends. The Commission expects that
the recordkeeping, certification, and
labeling tasks are done by industry
members in the normal course of their
business. Accordingly, we do not expect
the proposed amendments to require
any professional skills beyond those
already employed by industry members.
79 See (https://www.sba.gov/idc/groups/public/
documents/sba_homepage/serv_sstd_tablepdf.pdf).
80 See (https://www.afdc.energy.gov/afdc/fuels/
stations_counts.html).
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The Commission invites comments on
this issue.
1. Revise the authority citation for
part 306 to read as follows:
E. Other duplicative, overlapping, or
conflicting federal rules.
The FTC has identified no other
federal statutes, rules, or policies that
would duplicate, overlap, or conflict
with the proposed amendments. The
Commission invites comment on this
issue.
Authority: 15 U.S.C. 2801 et seq; 42 U.S.C.
17021.
2. Amend § 306.0 by revising
paragraphs (b), (i), and (j), and adding
new paragraph (o), to read as follows:
§ 306.0
F. Alternatives considered.
As explained above, PMPA requires
retailers of liquid automotive fuels to
post labels at the point of sale
displaying those fuels’ ratings. The
posting requirements in the proposed
amendments are minimal and, as noted
above, do not require creating any
separate documents because covered
parties may use documents already in
use to certify a fuel’s rating.
Furthermore, the amendments minimize
what, if any, economic impact there is
from the labeling requirements.
Therefore, the Commission concludes
that there are no alternative measures
that would accomplish the purposes of
PMPA and lessen the burden on small
entities. The Commission invites
comment on this issue.
VIII. Public Hearings
Persons desiring a public hearing
should notify the Commission no later
than April 5, 2010. If there is interest in
a public hearing, it will take place at a
time and date to be announced in a
subsequent notice. If a hearing is held,
persons desiring an appointment to
testify must submit to the Commission
a complete statement in advance, which
will be entered into the record in full.
As a general rule, oral statements should
not exceed 10 minutes. The Commission
will provide further instructions in the
notice announcing the hearing.
IX. Communications by Outside Parties
to the Commissioners or Their Advisors
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Written communications and
summaries or transcripts of oral
communications respecting the merits
of this proceeding from any outside
party to any Commissioner or
Commissioner’s advisor will be placed
on the public record. See 16 CFR
1.26(b)(5).
List of Subjects in 16 CFR Part 306
Fuel ratings, Trade practices.
For the reasons discussed in the
preamble, the Federal Trade
Commission proposes to amend title 16,
Chapter I, Subchapter C, of the Code of
Federal Regulations, part 306, as
follows:
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Definitions.
*
*
*
*
*
(b) Research octane number and
motor octane number. (1) These terms
have the meanings given such terms in
the specifications of the American
Society for Testing and Materials
(‘‘ASTM’’) entitled ‘‘Standard
Specification for Automotive SparkIgnition Engine Fuel’’ designated
D4814–09b and, with respect to any
grade or type of gasoline, are
determined in accordance with test
methods set forth in either:
(i) ASTM D2699-08, ‘‘Standard Test
Method for Knock Characteristics of
Motor Fuels by the Research Method’’
and ASTM D2700-08, ‘‘Standard Test
Method for Knock Characteristics of
Motor and Aviation Fuels by the Motor
Method’’; or
(ii) ASTM D2885-08, ‘‘Standard Test
Method for Determination of Octane
Number of Spark-Ignition Engine Fuels
by On-Line Direct Comparison
Technique.’’
(2)These incorporations by reference
were approved by the Director of the
Federal Register in accordance with 5
U.S.C. 552(a) and 1 CFR part 51. Copies
of ASTM D4814–09b, ASTM D2699-08,
ASTM D2700-08, and ASTM 2885-08,
may be obtained from ASTM
International, 100 Barr Harbor Drive,
West Conshohocken, PA 19428, or may
be inspected at the Federal Trade
Commission, Public Reference Room,
Room 130, 600 Pennsylvania Avenue,
N.W., Washington, D.C., or at the
National Archives and Records
Administration (‘‘NARA’’). For
information on the availability of this
material at NARA, call 202-741-6030, or
go to: (https://www.archives.gov/federalregister/cfr/ibr-locations.html).
*
*
*
*
*
(i) Automotive fuel. (1) This term
means liquid fuel of a type distributed
for use as a fuel in any motor vehicle,
and the term includes, but is not limited
to:
(i) Gasoline, an automotive sparkignition engine fuel, which includes,
but is not limited to, gasohol (generally
a mixture of approximately 90%
unleaded gasoline and 10% denatured
ethanol) and fuels developed to comply
with the Clean Air Act, 42 U.S.C. 7401
et seq., such as reformulated gasoline
and oxygenated gasoline; and
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(ii) Alternative liquid automotive
fuels, including, but not limited to:
(A) Methanol, denatured ethanol, and
other alcohols;
(B) Mixtures containing 85 percent or
more by volume of methanol, denatured
ethanol, and/or other alcohols (or such
other percentage, but not less than 70
percent, as determined by the Secretary
of the United States Department of
Energy, by rule, to provide for
requirements relating to cold start,
safety, or vehicle functions), with
gasoline or other fuels;
(C) Mid-level ethanol blends;
(D) Liquefied natural gas;
(E) Liquefied petroleum gas;
(F) Coal-derived liquid fuels;
(G) Biodiesel;
(H) Biomass-based diesel;
(I) Biodiesel blends containing more
than 5 percent biodiesel by volume; and
(J) Biomass-based diesel blends
containing more than 5 percent
biomass-based diesel by volume.
(2) Provided, however, that biodiesel
blends and biomass-based diesel blends
that contain less than or equal to 5
percent biodiesel by volume and less
than or equal to 5 percent biomassbased diesel by volume, and that meet
American Society for Testing and
Materials (‘‘ASTM’’) standard D975-09b
(‘‘Standard Specification for Diesel Fuel
Oils’’), are not automotive fuels covered
by the requirements of this Part. The
incorporation of ASTM D975-09b by
reference was approved by the Director
of the Federal Register in accordance
with 5 U.S.C. 552(a) and 1 CFR part 51.
Copies of ASTM D975-09b may be
obtained from ASTM International, 100
Barr Harbor Drive, West Conshohocken,
PA 19428, or may be inspected at the
Federal Trade Commission, Public
Reference Room, Room 130, 600
Pennsylvania Avenue, N.W.,
Washington, D.C., or at NARA. For
information on the availability of this
material at NARA, call 202-741-6030, or
go to: (https://www.archives.gov/federalregister/cfr/ibr-locations.html).
(j) Automotive fuel rating means—
(1) For gasoline, the octane rating.
(2) For an alternative liquid
automotive fuel other than biodiesel,
biomass-based diesel, biodiesel blends,
biomass-based diesel blends, and
mixtures of gasoline and more than 10
percent ethanol, the commonly used
name of the fuel with a disclosure of the
amount, expressed as a minimum
percentage by volume, of the principal
component of the fuel. A disclosure of
other components, expressed as a
minimum percentage by volume, may
be included, if desired.
(3) For biomass-based diesel,
biodiesel, biomass-based diesel blends
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with more than 5 percent biomass-based
diesel, biodiesel blends with more than
5 percent biodiesel, a disclosure of the
biomass-based diesel or biodiesel
component, expressed as the percentage
by volume.
(4) For mixtures of gasoline and more
than 10 percent ethanol, including midlevel ethanol blends, a disclosure of the
ethanol component, expressed as a
percentage by volume.
*
*
*
*
*
(o) Mid-level ethanol blend means a
mixture of gasoline and ethanol
containing more than 10 but less than
70 percent ethanol.
3. Revise § 306.5 to read as follows:
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§ 306.5
Automotive fuel rating.
If you are a refiner, importer, or
producer, you must determine the
automotive fuel rating of all automotive
fuel before you transfer it. You can do
that yourself or through a testing lab.
(a) To determine the automotive fuel
rating of gasoline, add the research
octane number and the motor octane
number and divide by two, as explained
by the American Society for Testing and
Materials (‘‘ASTM’’) in ASTM D4814–
09b, entitled ‘‘Standard Specifications
for Automotive Spark-Ignition Engine
Fuel.’’ To determine the research octane
and motor octane numbers you may
either:
(1) Use ASTM standard test method
D2699-08 to determine the research
octane number, and ASTM standard test
method D2700-08 to determine the
motor octane number; or
(2) Use the test method set forth in
ASTM D2885-08, ‘‘Standard Test
Method for Determination of Octane
Number of Spark-Ignition Engine Fuels
by On-Line Direct Comparison
Technique.’’
(b) To determine automotive fuel
ratings for alternative liquid automotive
fuels other than mid-level ethanol
blends, biodiesel blends and biomassbased diesel blends, you must possess a
reasonable basis, consisting of
competent and reliable evidence, for the
percentage by volume of the principal
component of the alternative liquid
automotive fuel that you must disclose.
In the case of biodiesel blends, you must
possess a reasonable basis, consisting of
competent and reliable evidence, for the
percentage of biodiesel contained in the
fuel. In the case of biomass-based diesel
blends, you must possess a reasonable
basis, consisting of competent and
reliable evidence, for the percentage of
biomass-based diesel contained in the
fuel. In the case of mid-level ethanol
blends, you must possess a reasonable
basis, consisting of competent and
reliable evidence, for the percentage of
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ethanol contained in the fuel. You also
must have a reasonable basis, consisting
of competent and reliable evidence, for
the minimum percentages by volume of
other components that you choose to
disclose.
4. Revise § 306.6(b) to read as follows:
§ 306.6
Certification.
*
*
*
*
*
(b) Give the person a letter or other
written statement. This letter must
include the date, your name, the other
person’s name, and the automotive fuel
rating of any automotive fuel you will
transfer to that person from the date of
the letter onwards. Octane rating
numbers may be rounded to a whole or
half number equal to or less than the
number determined by you. This letter
of certification will be good until you
transfer automotive fuel with a lower
automotive fuel rating, except that a
letter certifying the fuel rating of
biomass-based diesel, biodiesel,
biomass-based diesel blend, biodiesel
blend, or mid-level ethanol blend will
be good only until you transfer those
fuels with a different automotive fuel
rating, whether the rating is higher or
lower. When this happens, you must
certify the automotive fuel rating of the
new automotive fuel either with a
delivery ticket or by sending a new
letter of certification.
*
*
*
*
*
5. Revise § 306.10(f) to read as
follows:
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(10) ‘‘100% Biomass-Based Diesel/
contains 100 percent biomass-based
diesel’’
*
*
*
*
*
6. Amend § 306.12 by revising
paragraph (a)(2), by redesignating
existing paragraphs (a)(4) through (a)(9)
as paragraphs (a)(6) through (a)(11),
respectively, by adding new paragraphs
(a)(4) and (a)(5), by revising paragraph
(b)(2), by removing the fifth illustration
in paragraph (f), and by adding new
illustrations after the existing
illustrations in paragraph (f), to read as
follows:
§ 306.12
Labels.
(a) Layout *
*
*
*
*
(2) For alternative liquid automotive
fuel labels (one principal component)
other than, biodiesel, biomass-based
diesel, biodiesel blends, and biomassbased diesel blends, and mixtures of
gasoline and more than 10 percent
ethanol. The label is 3 inches (7.62 cm)
wide × 2 1/2 inches (6.35 cm) long.
‘‘Helvetica black’’ type is used
throughout. All type is centered. The
band at the top of the label contains the
name of the fuel. This band should
measure 1 inch (2.54 cm) deep. Spacing
of the fuel name is 1/4 inch (.64 cm)
from the top of the label and 3/16 inch
(.48 cm) from the bottom of the black
band, centered horizontally within the
black band. The first line of type
beneath the black band is 1/8 inch (.32
§ 306.10 Automotive fuel rating posting.
cm) from the bottom of the black band.
All type below the black band is
*
*
*
*
*
centered horizontally, with 1/8 inch (.32
(f) The following examples of
automotive fuel rating disclosures for
cm) between each line. The bottom line
some presently available alternative
of type is 3/16 inch (.48 cm) from the
liquid automotive fuels are meant to
bottom of the label. All type should fall
serve as illustrations of compliance with no closer than 3/16 inch (.48 cm) from
this part, but do not limit the Rule’s
the side edges of the label. If you wish
coverage to only the mentioned fuels:
to change the dimensions of this single
(1) ‘‘Methanol/Minimum ___%
component label to accommodate a fuel
Methanol’’
descriptor that is longer than shown in
(2) ‘‘20% Ethanol/May harm some
the sample labels, you must petition the
vehicles. Check owner’s manual’’
Federal Trade Commission. You can do
(3) ‘‘M-85/Minimum ___% Methanol’’
this by writing to the Secretary of the
(4) ‘‘E-85/Minimum ___% Ethanol/
Federal Trade Commission,
May harm some vehicles. Check owner’s Washington, D.C. 20580. You must state
manual’’
the size and contents of the label that
(5) ‘‘LPG/Minimum ___% Propane’’ or
you wish to use, and the reasons that
‘‘LPG/Minimum ___% Propane and
you want to use it.
___% Butane’’
*
*
*
*
*
(6) ‘‘LNG/Minimum ___% Methane’’
(4) For mid-level ethanol blends. (i)
(7) ‘‘B-20 Biodiesel Blend/contains
The label is 3 inches (7.62 cm) wide ×
biomass-based diesel or biodiesel in
2 1/2 inches (6.35 cm) long. ‘‘Helvetica
quantities between 5 percent and 20
black’’ type is used throughout. The type
percent’’
(8) ‘‘20% Biomass-Based Diesel Blend/ in the band is centered both
horizontally and vertically. The band at
contains biomass-based diesel or
the top of the label contains one of the
biodiesel in quantities between 5
following:
percent and 20 percent’’
(A) The numerical value representing
(9) ‘‘B-100 Biodiesel/contains 100
the volume percentage of ethanol in the
percent biodiesel’’
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fuel followed by the percentage sign and
then by the term ‘‘ETHANOL’’;
(B) ‘‘X% - Y%,’’ where X represents
the numerical value of the minimum, at
least 10, and Y represents the numerical
value of the maximum, no more than 70,
amount of ethanol in the fuel, followed
by a line break and then the term
‘‘ETHANOL’’; or
(C) ‘‘10% - 70%’’ followed by a line
break and then the term ‘‘ETHANOL.’’
(ii) The band should measure 1 inch
(2.54 cm) deep. The word ‘‘ETHANOL’’
is in 24 point font. The exact percentage
disclosure in subsection (i) is in 24
point font. The range disclosures in
subsections (ii) and (iii) are in 18 point
font. The type below the black band is
centered vertically and inset 3/16 inch
(.48 cm) from the left edge of the box.
The first line begins with a round bullet
point in 16 point font and is followed
by the text ‘‘MAY HARM SOME
VEHICLES’’ in 20 point font. Below that
text, a new line begins with a bullet
point in 16 point font and is followed
by the text ‘‘CHECK OWNER’S
MANUAL’’ in 20 point font.
(5) For mixtures of gasoline and at
least 70 percent ethanol. (i) The label is
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3 inches (7.62 cm) wide × 2 1/2 inches
(6.35 cm) long. ‘‘Helvetica black’’ type is
used throughout. The band should
measure 1 inch (2.54 cm) deep. The type
in the band is in 50 point font and is
centered both horizontally and
vertically.
(A) If the fuel is E85, the type in the
band reads ‘‘E-85.’’
(B) If the common name of the fuel is
something other than E85, the type in
the black band should be the common
name of the fuel.
(ii) The type below the black band is
centered vertically. The first line of text
below the band, in 20 point font and
centered horizontally, is the text:
‘‘MINIMUM X% ETHANOL,’’ where X
represents the numerical value of the
minimum percentage of ethanol in the
fuel. Below that text, a new line is left
justified and inset 1/4 inch (.64 cm)
from the left border of the label. The
line begins with a round bullet point
and is followed by the text ‘‘MAY
HARM SOME VEHICLES’’ in 11 point
font. Below that text, a new line is left
justified and inset 1/4 inch (.64 cm)
from the left border of the label. The
line begins with a bullet point and is
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followed by the text ‘‘CHECK OWNER’S
MANUAL’’ in 11 point font.
*
*
*
*
*
(b) * * *
(2) For alternative liquid automotive
fuel labels (one principal component).
Except as provided above, all type
should be set in upper case (all caps)
‘‘Helvetica Black’’ throughout. Helvetica
Black is available in a variety of
computer desk-top and phototype
setting systems. Its name may vary, but
the type must conform in style and
thickness to the sample provided here.
The spacing between letters and words
should be set as ‘‘normal.’’ The type for
the fuel name is 50 point (1/2 inch;
(1.27 cm) cap height) ‘‘Helvetica Black,’’
knocked out of a 1 inch; (2.54 cm) deep
band. The type for the words
‘‘MINIMUM’’ and the principal
component is 24 pt. (1/4 inch; (.64 cm)
cap height.) The type for percentage is
36 pt. (3/8 inch; (.96 cm) cap height).
*
*
*
*
*
(f) Illustrations of labels.
* * *
BILLING CODE 6750–01–S
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Federal Register / Vol. 75, No. 50 / Tuesday, March 16, 2010 / Proposed Rules
By direction of the Commission.
Donald S. Clark,
Secretary.
detailed instructions on submitting
comments and additional information
on the rulemaking process, see the
‘‘Public Participation’’ heading of the
SUPPLEMENTARY INFORMATION section of
this document.
Docket: For access to the docket to
read background documents or
comments received, go to https://
www.regulations.gov. Submitted
comments may also be inspected during
regular business days between the hours
of 9 a.m. and 4:30 p.m. at the Trade and
Commercial Regulations Branch,
Regulations and Rulings, Office of
International Trade, U.S. Customs and
Border Protection, 799 9th Street, NW.,
5th Floor, Washington, DC.
Arrangements to inspect submitted
comments should be made in advance
by calling Joseph Clark at (202) 325–
0118.
[FR Doc. 2010–5647 Filed 3–15–10: 8:45 am]
Billing Code: 6750–01–S
DEPARTMENT OF HOMELAND
SECURITY
Bureau of Customs and Border
Protection
DEPARTMENT OF THE TREASURY
19 CFR Part 159
[USCBP–2010–0008]
RIN 1505–AC21
Courtesy Notice of Liquidation
emcdonald on DSK2BSOYB1PROD with PROPOSALS-1
AGENCY: Customes and Border
Protection, Department of Homeland
Security; Department of the Treasury.
ACTION: Notice of proposed rulemaking.
SUMMARY: This document proposes to
amend title 19 of the Code of Federal
Regulations (CFR) pertaining to the
method by which CBP issues courtesy
notices of liquidation. Courtesy notices
of liquidation provide informal,
advanced notice of the liquidation date
and are not required by statute.
Currently, CBP provides an electronic
and a paper courtesy notice for
importers of record whose entry
summaries are electronically filed in the
Automated Broker Interface (ABI). In an
effort to streamline the notification
process and reduce printing and mailing
costs, CBP proposes to discontinue
mailing paper courtesy notices of
liquidation to importers of record whose
entry summaries are filed in ABI.
DATE: Comments must be received on or
before May 17, 2010.
ADDRESSES: You may submit comments,
identified by USCBP docket number, by
one of the following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments
via docket number USCBP–2010–0008.
• Mail: Trade and Commercial
Regulations Branch, Regulations and
Rulings, Office of International Trade,
U.S. Customs and Border Protection,
799 9th Street, NW. (Mint Annex),
Washington, DC 20229–1179.
Instructions: All submissions received
must include the agency name and
USCBP docket number for this
rulemaking. All comments received will
be posted without change to https://
www.regulations.gov, including any
personal information provided. For
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FOR FURTHER INFORMATION CONTACT:
Laurie Dempsey, Trade Policy and
Programs, Office of International Trade,
Customs and Border Protection, 202–
863–6509.
SUPPLEMENTARY INFORMATION:
Public Participation
Interested persons are invited to
participate in this rulemaking by
submitting written data, views, or
arguments on all aspects of the
proposed rule. Customs and Border
Protection (CBP) also invites comments
that relate to the economic,
environmental, or federalism effects that
might result from this proposed rule. If
appropriate to a specific comment, the
commenter should reference the specific
portion of the proposed rule, explain the
reason for any recommended change,
and include data, information, or
authority that support such
recommended change.
Background
Section 1500(e) of title 19 of the
United States Code (19 U.S.C. 1500(e))
requires CBP to provide notice of
liquidation to the importer or his agent
and authorizes CBP to determine the
form and manner by which to issue the
notice. Section 159.1 of the CBP
regulations (19 CFR 159.1) defines
‘‘liquidation’’ as the final calculation of
duties (not including vessel repair
duties) or drawback accruing on an
entry. ‘‘Duties’’ is defined in 19 CFR
101.1 as ‘‘[c]ustoms duties and any
internal revenue taxes which attach
upon importation.’’ Accordingly, in the
customhouse at each port of entry, CBP
posts the official bulletin notice of
liquidation indicating the date of
liquidation for the entries listed therein.
19 CFR 159.9(c). The posting of the
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12483
bulletin notice of liquidation is ‘‘legal
evidence of liquidation.’’ 19 CFR
159.9(c).
CBP also has the discretion to provide
advance notice of the liquidation date to
the importer or his agent by issuing
informal, courtesy notices of liquidation
(hereinafter ‘‘courtesy notice’’ or
‘‘courtesy notices’’). 19 CFR 159.9(d).
The courtesy notice is not required by
19 U.S.C. 1500(e) and does not trigger
the date upon which an importer may
file a protest under 19 U.S.C. 1514
challenging certain aspects of the
liquidation.
CBP intends to make certain changes
to the distribution of courtesy notices of
liquidation. Courtesy notices are mailed
and/or issued electronically to two
parties who use the Automated Broker
Interface (ABI) to file their entry
summaries: Importers of record and
customs brokers who are duly
authorized agents of the Importers.
Currently, CBP’s Technology Center
transmits, on a weekly basis, electronic
courtesy notices to all ABI filers and
mails paper courtesy notices, on CBP
Form 4333–A, to all importers of record
whose entry summaries are set to
liquidate by each port of entry. As a
result, two courtesy notices are issued
for importers of record whose electronic
entry summaries are filed in ABI: the
ABI filer receives an electronic courtesy
notice on behalf of the importer of
record; and, the importer of record
receives a paper courtesy notice. If the
importer of record is the ABI filer, then
the importer of record receives both an
electronic and a paper courtesy notice.
See 19 CFR part 143. If an importer files
a paper formal entry with CBP, that
importer receives a mailed courtesy
notice. See 19 CFR parts 141 and 142.
In an effort to streamline the
notification process and reduce printing
and mailing costs, CBP is proposing to
discontinue mailing the paper courtesy
notice to importers of record whose
entry summaries are filed in ABI. The
ABI filer, who is either the importer of
record or a customs broker, already
receives an electronic courtesy notice
thereby rendering the paper courtesy
notice duplicative. If the proposal is
adopted, ABI filers would only receive
electronic courtesy notices. Below is an
analysis of the cost savings that will
result if CBP discontinues paper
courtesy notices to these recipients.
Cost Savings
The following analysis details the cost
savings that would be realized by the
agency as a result of eliminating paper
courtesy notices to importers of record
who personally receive an electronic
courtesy notice or whose broker receives
E:\FR\FM\16MRP1.SGM
16MRP1
Agencies
[Federal Register Volume 75, Number 50 (Tuesday, March 16, 2010)]
[Proposed Rules]
[Pages 12470-12483]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-5647]
[[Page 12470]]
=======================================================================
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FEDERAL TRADE COMMISSION
16 CFR Part 306
Automotive Fuel Ratings, Certification and Posting
AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').
ACTION: Notice of proposed rulemaking, request for comments.
-----------------------------------------------------------------------
SUMMARY: The FTC proposes to amend its Rule for Automotive Fuel
Ratings, Certification and Posting (``Fuel Rating Rule'' or ``Rule'')
by adopting rating, certification, and labeling requirements for
certain ethanol fuels, revising the labeling requirements for fuels
with at least 70 percent ethanol, allowing the use of an alternative
octane rating method, and making certain other miscellaneous Rule
revisions, based on comments received as part of its periodic
regulatory review of the Rule. The proposed amendments are intended to
further the Rule's goal of helping purchasers identify the correct fuel
for their vehicles.
DATES: Comments on the proposed information requests must be received
on or before May 21, 2010.
ADDRESSES: Interested parties are invited to submit written comments
electronically or in paper form by following the instructions in the
SUPPLEMENTARY INFORMATION section below. Comments in electronic form
should be submitted by using the following weblink: (https://public.commentworks.com/ftc/fuelratingreview) (and following the
instructions on the web-based form). Comments filed in paper form
should be mailed or delivered to the following address: Federal Trade
Commission, Office of the Secretary, Room H-135 (Annex M), 600
Pennsylvania Avenue, N.W., Washington, D.C. 20580, in the manner
detailed in the SUPPLEMENTARY INFORMATION section below.
FOR FURTHER INFORMATION CONTACT: Matthew Wilshire, (202) 326-2976,
Attorney, Division of Enforcement, Bureau of Consumer Protection,
Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Washington,
D.C. 20580.
SUPPLEMENTARY INFORMATION:
I. Introduction
In March 2009, as part of a systematic review of the FTC's rules
and guides, the Commission solicited comment on the Fuel Rating Rule,
including comments on the economic impact of, and continuing need for,
the Rule; the benefits of the Rule to purchasers of automotive fuels;
the burdens the Rule places on firms subject to its requirements; and
any modifications to increase the Rule's benefits or reduce its
burdens. Commenters generally supported the Rule but recommended
various amendments. Specifically, many comments supported amending the
Rule to provide specific rating, certification, and labeling
requirements for fuels with more than 10 percent and less than 70
percent ethanol,\1\ and to allow octane rating through the On-Line
Direct Comparison Technique (``On-Line Method'') specified in ASTM
International (``ASTM'') Standard D2885. In addition, some commenters
recommended altering the Rule's requirements for biodiesel, biomass-
based diesel, and blends thereof (collectively, ``biodiesel
fuels'').\2\
---------------------------------------------------------------------------
\1\ The Fuel Rating Rule already provides requirements for
ethanol fuels of at least 70 percent concentration, including E85.
That fuel generally contains 85 percent ethanol mixed with 15
percent gasoline. 16 CFR 306.0(i)(2)(ii). The U.S. Department of
Energy (``DOE''), however, allows retailers to reduce the ethanol
component of E85 to as little as 70 percent by volume to allow
proper starting and performance in colder climates. See (https://www.afdc.energy.gov/afdc/ethanol/e85_specs.html). Other ethanol
blends currently qualify as alternative fuels under the Rule. See 16
CFR 306.0(i)(2) (providing that alternative fuels are ``not limited
to'' those explicitly listed in the Rule). The Rule does not provide
any specific requirements for those fuel blends. However, covered
entities must generally rate alternative fuels by ``the commonly
used name of the fuel . . . [and the] minimum percentage . . . of
the principal component of the fuel.'' 16 CFR 306.0(j)(2). In
addition, retailers must label these fuels ``consistent with'' that
rating. 16 CFR 306.10(d).
\2\ For further background on biodiesel fuels, see the
Commission's announcement of amendments expanding the Fuel Rating
Rule to cover those fuels. 73 FR 40154 (Jul. 11, 2008).
---------------------------------------------------------------------------
As explained below, the Commission agrees that the Rule should
provide explicit requirements for ethanol fuels that contain more than
10 percent ethanol and less than 70 percent ethanol (hereinafter,
``Mid-Level Ethanol blends''). Furthermore, the Commission proposes
amending the Rule to require that fuels with at least 70 percent
ethanol have labels with disclosures more consistent with those in the
proposed Mid-Level Ethanol blend labels. In addition, the Commission
proposes allowing the On-Line Method because it produces the same fuel
rating as methods currently prescribed in the Rule. However, the
Commission does not propose amending the Rule's biodiesel fuel
provisions because they already appropriately carry out the biodiesel
labeling mandate of the Energy Independence and Security Act of 2007
(``EISA'') while minimizing the burden to covered entities.
This notice of proposed rulemaking responds to comments and
announces proposed amendments to the Rule. Specifically, it provides
background on the Fuel Rating Rule, a discussion of the comments
submitted, and the Commission's response to those comments with a
detailed description of the proposed amendments.
II. Background
The Commission first promulgated the Fuel Rating Rule, 16 CFR Part
306, (then titled the ``Octane Certification and Posting Rule'') in
1979 in accordance with the Petroleum Marketing Practices Act
(``PMPA''), 15 U.S.C. 2801 et seq.\3\ The Rule originally only applied
to gasoline. In 1993, in response to amendments to PMPA, the Commission
expanded the Rule to cover liquid alternative fuels.\4\ In 2008, the
Commission again amended the Rule to incorporate the specific labeling
requirements for biodiesel fuels required by Section 205 of EISA, 42
U.S.C. 17021.\5\ Currently, the Rule's definition of ``alternative
fuels'' does not specifically include either biodiesel fuels at
concentrations of 5 percent or less or Mid-Level Ethanol blends.
---------------------------------------------------------------------------
\3\ 44 FR 19160 (Mar. 30, 1979).
\4\ 58 FR 41356 (Aug. 3, 1993).
\5\ 73 FR 40154 (Jul. 11, 2008).
---------------------------------------------------------------------------
The Fuel Rating Rule designates methods for rating and certifying
fuels, as well as posting the ratings at the point of sale. The Rule
also requires refiners, importers, and producers of any liquid
automotive fuel to determine that fuel's ``automotive fuel rating''
before transferring it to a distributor or retailer. For gasoline, the
fuel rating is the octane rating, which covered entities must determine
by deriving research octane and motor octane numbers using the
procedures in ASTM D2699 and D2700, respectively, and then averaging
them. For alternative fuels, the rating is the minimum percentage of
the principal component of the fuel, with the exception of biodiesel
fuels, for which the rating is the percentage of biodiesel or biomass-
based diesel in the fuel. In addition, any covered entity, including a
distributor, that transfers a fuel must provide a certification of the
fuel's rating to the transferee either by including it in papers
accompanying the transfer or by letter. Finally, the Rule requires
retailers to post the fuel rating by adhering a label to the retail
fuel pump and sets forth precise specifications regarding the content,
size, color, and font of the labels.
On March, 2, 2009, the Commission solicited comment on the Fuel
Rating Rule as part of its periodic review of its rules and guides.\6\
The Commission sought comments on: the economic impact of, and the
continuing need for,
[[Page 12471]]
the Rule; the benefits of the Rule to purchasers of automotive fuels;
the burdens the Rule places on firms subject to its requirements; and
the need for any modification to increase the Rule's benefits or reduce
its burdens.
---------------------------------------------------------------------------
\6\ 74 FR 9054 (Mar. 2, 2009).
---------------------------------------------------------------------------
III. The Record
The Commission received twelve comments. Commenters explained that
there is a continuing need for the Rule and that it benefits consumers
and businesses. However, they supported three significant changes:
providing rating, certification, and labeling requirements for Mid-
Level Ethanol blends; allowing octane rating through the On-Line
Method; and altering the Rule's requirements for biodiesel fuels. In
addition, comments supported miscellaneous changes to the Rule.
A. Continuing Need for Rule and Benefits to Consumers and Business
Commenters agreed that there is a continuing need for the Fuel
Rating Rule and that it benefits consumers and businesses. The Alliance
of Automobile Manufacturers (``AAM'') stated that ``there is definitely
a need to maintain the Rule'' and explained that consumers could suffer
significant harm in the absence of the Rule's labeling requirements:
The [rating] information is critical because the vehicle warranty is
dependent on use of the proper fuel. Fuel dispenser labeling that
conveys information about octane rating, ethanol content, biodiesel
content and other fuel quality properties and limits is the only
mechanism available to consumers to link fuel requirements in the
owner's manual to what is actually being put into the vehicle.\7\
---------------------------------------------------------------------------
\7\ AAM Comment at 1. The comments are located at: (https://www.ftc.gov/os/comments/fuelratingreview/index.shtm).
In addition, AAM reported results from compliance surveys of retail
gasoline pumps showing ``very good compliance'' with the Rule's octane
provisions, and noted that ``pump labeling of E85 dispensers appears to
have been successful as well, given that reports about unintentional
misfueling of conventional vehicles have been virtually nonexistent to
date.''\8\ The National Automobile Dealers Association seconded AAM's
support of the Rule, explaining that consumers need accurate fuel
rating information to comply with manufacturer recommendations and
warranty requirements.\9\
---------------------------------------------------------------------------
\8\ Id. at 1-2. AAM also referenced a study showing some
mislabeling of biodiesel blends. Id. at 2. However, that study
tested fuel offered for sale no later than summer 2008, prior to the
December 16, 2008 effective date for the Commission's biodiesel
labeling requirements. See 73 FR 40154 (Jul. 11, 2008).
\9\ See National Automobile Dealers Association Comment at 1.
---------------------------------------------------------------------------
In addition to benefitting consumers, commenters noted that the
Rule benefits businesses. The Petroleum Marketers Association of
America (``PMAA''), a fuel retailer industry group, stated that
``labeling requirements under the automotive fuel rating rule are
generally beneficial to small business petroleum retailers.''\10\ PMAA
further explained:
---------------------------------------------------------------------------
\10\ PMAA Comment at 3.
The labels [required by the Rule] direct consumers to the octane
rating and/or alternative fuel blends that are best suited for their
vehicle according to manufacturer specifications. . . . The labels help
to prevent misfueling. Fewer misfuelings reduce the potential liability
of small business retailers for damages to engines and exhaust
systems.\11\
---------------------------------------------------------------------------
\11\ Id. at 1.
Similarly, the Renewable Fuels Association (``RFA'') stated that the
Fuel Rating Rule ``provides producers, distributors, and retailers the
needed . . . [information] to meet regulatory requirements and support
marketplace needs and expectations.''\12\
---------------------------------------------------------------------------
\12\ RFA Comment at 3.
---------------------------------------------------------------------------
B. Labels for Mid-Level Ethanol Blends
Although generally supportive, many commenters suggested altering
the Fuel Rating Rule to provide specific requirements for rating,
certifying, and labeling Mid-Level Ethanol blends. Currently, the Rule
provides requirements for mixtures of gasoline with 10 percent or less
ethanol, defined as gasoline, and fuels with at least 70 percent
ethanol, but does not specifically address blends with more than 10 but
less than 70 percent ethanol. Significantly, no commenters opposed
providing requirements for Mid-Level Ethanol blends.
Several commenters noted that, though generally not available when
the Commission first promulgated alternative fuel requirements, Mid-
Level Ethanol blends have subsequently entered the marketplace. For
example, commenter Downstream Alternatives, Inc. (``Downstream''), a
renewable fuel business, stated that:
[When the Commission expanded the Rule to cover alternative fuels], it
was envisioned that ethanol blends would be either El0 (gasohol)
covered by the octane rating rule or E85 containing a minimum of 70%
ethanol (to allow for denaturant and volatility adjustments) for use in
the Flex Fuel Vehicles (FFV). . . . Today . . . some marketers are
selling blends like E20, and E30 (20% and 30% ethanol respectively) for
use in FFV's [sic]. These fuels . . . are typically blended on site
through a blend pump . . . . Several organizations are promoting using
blender pumps to sell alternate blend levels such as E20, E30, E40.\13\
---------------------------------------------------------------------------
\13\ Downstream Comment at 2-3.
Downstream's comment included a list of more than 100 retail
establishments with the capacity to sell Mid-Level Ethanol blends. RFA
also noted that mid-level blends ``are being developed and marketed to
provide consumers with more fuel choices at the retail level.''\14\
Similarly, the Iowa Renewable Fuels Association (``IRFA'') reported
that ``retailers are offering more fuel options for flex-fuel vehicle
owners in the form of mid-level [ethanol] blends'' and that ``Iowa
retailers are installing blend dispensers that offer blends such as
E20, E30 or E50 and E85.''\15\
---------------------------------------------------------------------------
\14\ RFA Comment at 2.
\15\ IRFA Comment at 1.
---------------------------------------------------------------------------
Moreover, commenters agreed that the market for ethanol blends of
all types will grow as part of a general move toward renewable fuels.
RFA noted that EISA's provisions included a mandate for increasing use
of renewable fuels, which ``systematically advances the production and
use of renewable fuels and ensures that ample amounts of renewable
biofuels, like ethanol, will be required as an alternative to petroleum
fuels.''\16\ In addition, a joint comment from SIGMA, a fuel-retailer
association, and the National Association of Convenience Stores
(``NACS'') included EISA's specific fuel mandates, showing an increase
in minimum renewables from 11.1 billion gallons in 2009 to 36 billion
in 2022.\17\ The comment concluded that ``EISA's mandates will clearly
require retailers to increase their sales of biofuels (whether
biodiesel or biomass) in the future.''\18\
---------------------------------------------------------------------------
\16\ RFA Comment at 1.
\17\ SIGMA and NACS Comment at 2.
\18\ Id. at 4.
---------------------------------------------------------------------------
However, commenters cautioned that ethanol blends above 10 percent
concentration are not appropriate for conventional vehicles. AAM stated
that ``virtually all conventional vehicles built to date have been
validated for gasoline containing only up to 10% ethanol (E10).''\19\
AAM, therefore, warned that ``unlabeled dispensers [of ethanol blends]
would cause consumers to unwittingly put their vehicle warranties
[[Page 12472]]
at risk.''\20\ RFA stated that ``[f]rom an automotive vehicle
perspective, there are two spark ignition engine types available to
U.S. consumers: [1] conventional engines designed to use E10 and
unleaded gasoline and [2] flex-fuel engines designed to use alternative
fuels such as E85''\21\ and Mid-Level Ethanol blends.\22\ Indeed, DOE
has explained that ``[a]lthough nearly all gasoline-fueled passenger
cars and light-duty trucks sold in the last 20 years have been designed
to operate on E10, substantial modifications are made to [flex-fuel
vehicles] so they can use higher concentrations of ethanol . . .
without adverse effects on fuel system materials, components, on-board
diagnostics (OBD) systems, or driveability.''\23\
---------------------------------------------------------------------------
\19\ AAM Comment at 2.
\20\ Id.
\21\ RFA Comment at 2.
\22\ See RFA Comment at 2-3. Downstream further noted that Mid-
Level Ethanol blends ``are legal fuels for use in [Flex-Fuel
Vehicles] only.'' Downstream Comment at 2.
\23\ See DOE's ``Handbook for Handling, Storing, and Dispensing
E85,'' p.17, available at: (https://www.afdc.energy.gov/afdc/pdfs/41853.pdf).
---------------------------------------------------------------------------
In light of the emergence of Mid-Level Ethanol blends as retail
fuels and the risk of harm to consumers' vehicles from a failure to
disclose ethanol content, commenters urged the Commission to amend the
Fuel Rating Rule to provide specific labeling, rating, and
certification requirements for those blends. IRFA urged amending the
rule to provide ``uniformity in pump labeling, consistent consumer
information and consumer protection'' and supported a rating regime
that, like that for biodiesel fuels, rates ethanol blends according to
the percentage of ethanol in the blend, regardless of whether ethanol
is the principal component in the fuel.\24\ Downstream concurred,
recommending that, for Mid-Level Ethanol blends,
---------------------------------------------------------------------------
\24\ IRFA Comment at 1.
[T]he Commission should adopt a similar approach to that for labeling
biodiesel. That is, a blend containing 30% denatured ethanol would be
E30, 40% denatured ethanol, E40 etc. This would enable marketers [with]
the ability to properly identify the fuel while providing consumers
guidance on the approximate ethanol level of the blend.\25\
---------------------------------------------------------------------------
\25\ Downstream Comment at 5.
RFA also supported providing ``posting requirements . . . for all
ethanol blended fuels . . . .''\26\
---------------------------------------------------------------------------
\26\ RFA Comment at 3.
---------------------------------------------------------------------------
C. On-Line Direct Method for Determining Octane Rating
PMPA defines ``octane rating'' as the average of gasoline's
research octane number and motor octane number, as determined using
ASTM D2699 and D2700, respectively.\27\ However, PMPA further provides
that the Commission may prescribe alternate gasoline rating
methods.\28\ Comments from gasoline refiners and distributors urged
amending the Fuel Rating Rule to allow the On-Line Method.
---------------------------------------------------------------------------
\27\ 15 U.S.C. 2821(1) and (2).
\28\ 15 U.S.C. 2821(1).
---------------------------------------------------------------------------
ConocoPhillips, a petroleum refiner, explained the development of
the On-Line Method:
ASTM D 2885 Standard Test Method for Determination of Octane Number of
Spark-Ignition Engine Fuels by On-line Comparison Technique was adopted
by ASTM after the promulgation of the Automotive Fuel Rating Rule in
1979. It uses the same [test] engines but in an updated methodology
that provides acquisition efficiencies and accuracies for the
industry.\29\
---------------------------------------------------------------------------
\29\ ConocoPhillips Comment at 1.
Therefore, ConocoPhillips argued, the ``test method (suitable for
determining Motor and Research Octane values) should be allowed to be
used for octane determination.''\30\ Two industry groups also
recommended allowing the On-Line Method. The American Petroleum
Institute (``API'') described the method as ``reliable'' and,
therefore, stated that it ``should be included'' as a rating method
prescribed by the Rule.\31\ The National Petrochemical & Refiners
Association (``NPRA'') agreed with ConocoPhillips that the industry has
``extensive experience'' with the On-Line Method and stated that it
``should be allowed in addition to ASTM D2699 and D2700.''\32\ No
comments opposed allowing octane determination through the On-Line
Method.
---------------------------------------------------------------------------
\30\ Id.
\31\ API Comment at 3.
\32\ NPRA Comment at 1.
---------------------------------------------------------------------------
D. Biodiesel and Biomass-Based Diesel
Commenters raised two areas of concern with respect to the Rule's
biodiesel fuel provisions, which currently require certifying, rating,
and labeling those fuels if they contain more than 5 percent biodiesel
or biomass-based diesel. Some commenters argued for expansion of the
Rule to include biodiesel fuels at or below 5 percent concentration,
and one argued for exemption from the Rule for biomass-based diesel
blends at any concentration.
1. Rating All Biodiesel Fuel Blends
Commenters noted that because the Rule does not require rating of
biodiesel fuels at concentrations of 5 percent or less, a distributor
may transfer those fuels without disclosing the presence of biodiesel
or biomass-based diesel. API noted that such a transfer places a
potential burden on retailers and could lead to inaccurate labels:
[A] company may receive diesel fuel containing 5% or less biodiesel
and believe that the diesel fuel received contains no biodiesel. The
company then may add additional biodiesel to achieve what they believe
to be a blend of 5% or less, resulting in a fuel with over 5%
biodiesel, but because the company was not made aware of the existing
biodiesel concentration, they do not appropriately label the
dispenser.\33\ ConocoPhillips,\34\ NPRA,\35\ PMCI,\36\ and SIGMA/
NACS\37\ also argued that the current lack of rating requirements for
certain biodiesel blends could lead to retailers failing to post
required labels and, as SIGMA noted, ``subject [retailers] to penalties
under the FTC Act.''\38\
---------------------------------------------------------------------------
\33\ API Comment at 1.
\34\ ConocoPhillips Comment at 2.
\35\ NPRA Comment at 2.
\36\ PMCI Comment at 2-3.
\37\ SIGMA and NACS Comment at 4.
\38\ Id.
To obviate this risk, API,\39\ ConocoPhillips,\40\ and NPRA\41\
recommended subjecting 5 percent and less biodiesel blends - but not
biomass-based diesel blends - to the Fuel Rating Rule's rating and
certification requirements, thereby requiring producers and
distributors to disclose the presence of any biodiesel in fuel they
distribute. PMCI\42\ and SIGMA/NACS\43\ agreed that the Rule should
require rating and certification of all biodiesel blends, but argued
that those requirements should apply to biomass-based diesel blends as
well.
---------------------------------------------------------------------------
\39\ API Comment at 1.
\40\ ConocoPhillips Comment at 2.
\41\ NPRA Comment at 2.
\42\ PMCI Comment at 3.
\43\ SIGMA and NACS Comment at 4.
---------------------------------------------------------------------------
2. Applicability of Fuel Rating Rule to Biomass-Based Diesel
In contrast, API argued that the Rule should not apply to biomass-
based diesel blends of any concentration. API gave four reasons in
support of its argument. First, citing an Environmental Protection
Agency (``EPA'') description
[[Page 12473]]
of a type of biomass-based diesel, API stated that the fuel ``is
indistinguishable in terms of its hydrocarbon structure from
conventional petroleum diesel'' and, therefore, ``no standard test
method referenced by ASTM D975 will reveal renewable diesel
content.''\44\ Second, the Rule's prescribed use of the term
``biodiesel'' on biomass-based diesel labels may confuse consumers.\45\
Third, the costs of rating and labeling the fuel increases its
cost.\46\ Finally, because no standard tests exist for concentration
levels of biomass-based diesel blends, enforcement of the Rule with
respect to those fuels will be difficult.\47\
---------------------------------------------------------------------------
\44\ API Comment at 2.
\45\ Id.
\46\ Id.
\47\ Id.
---------------------------------------------------------------------------
E. Miscellaneous Comments
Commenters also raised several miscellaneous issues. Many explained
that the Fuel Rating Rule references old versions of ASTM Standards and
a no longer valid ASTM address.\48\ Downstream noted that ASTM may
change its E85 standard to provide that the fuel may contain as little
as 68 percent ethanol. To accommodate that potential change, it
recommended that the Commission consider amending the Rule, which
limits E85 to blends of at least 70 percent.\49\ Finally, PMAA urged
allowing greater flexibility in terms of the size and shape of labels
and stated that the Rule's provisions conflicted with unspecified state
labeling requirements, while SIGMA/NACS similarly argued for a
``heightened degree of flexibility'' in labeling to assist retailers
blending alternative fuels and changing concentration levels on a daily
basis.\50\
---------------------------------------------------------------------------
\48\ See, e.g., ConocoPhillips Comment at 1.
\49\ Downstream Comment at 5.
\50\ PMAA Comment at 2; SIGMA/NACS Comment at 4.
---------------------------------------------------------------------------
IV. Analysis
In light of the comments discussed above, the Commission proposes
retaining most of the Fuel Rating Rule while amending it to include
explicit rating, certification, and labeling provisions for Mid-Level
Ethanol blends and to provide labeling requirements for ethanol fuels
above 70 percent concentration consistent with those proposed for Mid-
Level Ethanol blends. Furthermore, the Commission proposes allowing
octane rating using the On-Line Method. Finally, the Commission
proposes minor amendments in response to miscellaneous comments. The
Commission declines to propose amendments to the Rule's biodiesel
provisions.
A. Retaining the Rule
The Commission promulgated its Fuel Rating Rule pursuant to
PMPA,\51\ which requires the FTC to provide rules for rating,
certifying, and labeling liquid automotive fuels. Commenters noted that
the Rule benefits consumers and businesses. As AAM reported, the Rule
appears to successfully carry out PMPA's goal of alerting consumers to
the type and grade of liquid fuel sold at retail fuel pumps. The
Commission, therefore, retains the Rule.
---------------------------------------------------------------------------
\51\ The Commission promulgated the Rule's biodiesel fuel
provisions pursuant to EISA.
---------------------------------------------------------------------------
B. Ethanol Fuel Labeling
As discussed above, several commenters noted a risk of misfueling
conventional vehicles with ethanol blends and, therefore, urged the
Commission to include specific requirements for rating, certifying, and
labeling Mid-Level Ethanol blends.\52\ As explained below, to address
this misfueling risk, the Commission proposes including such
requirements. The Commission further proposes altering its labeling
requirements for all ethanol fuels to disclose that blends with more
than 10 percent ethanol may harm some conventional vehicles.
---------------------------------------------------------------------------
\52\ PMPA authorizes the Commission to designate methods for
fuel rating, fuel certification, and labeling any alternative liquid
fuel. See 15 U.S.C. 2823(c).
---------------------------------------------------------------------------
As reflected in the comments, retailers currently offer Mid-Level
Ethanol blends and E85 at fuel pumps, and EISA's renewable fuel
standard will likely lead to increased availability of both.
Furthermore, commenters noted that consumers who use those fuels in
conventional vehicles place their warranties at risk. Similarly, DOE
confirmed that fuels containing more than 10 percent ethanol are only
proper for flex-fuel vehicles.\53\ Therefore, providing specific
labeling requirements for Mid-Level Ethanol blends will further PMPA's
purpose of ``assisting purchasers in identifying the specific type(s)
of fuel required for their vehicles.''\54\
---------------------------------------------------------------------------
\53\ AAM noted a petition to the EPA seeking approval of blends
containing up to 15 percent ethanol for use in conventional
vehicles. AAM Comment at 2; see also 74 FR 18228 (Apr. 21, 2009). If
EPA grants this petition, the Commission will reconsider requiring
the proposed Mid-Level Ethanol blend label for such fuels.
\54\ 58 FR 41356, 41360 (Aug. 3, 1993).
---------------------------------------------------------------------------
The Commission also agrees that covered entities should rate Mid-
Level Ethanol blends according to their percentage of ethanol,
regardless of whether ethanol is the predominant fuel in the blend.
Currently, the Rule requires covered entities to rate blends of less
than 50 percent ethanol according to their gasoline percentage;\55\
therefore, the labels for such blends would not reflect the presence of
ethanol in all circumstances. However, as noted above, the significant
information to the consumer is whether the blend contains more than 10
percent ethanol because use of ethanol blends at such concentrations in
conventional vehicles places warranties at risk. Therefore, as
explained in detail below, the Commission proposes requiring covered
entities to rate and certify Mid-Level Ethanol blends according to
their ethanol content and to label them accordingly.\56\
---------------------------------------------------------------------------
\55\ Although the Rule currently does not provide specific
requirements for Mid-Level Ethanol blends, that fuel qualifies as an
alternative fuel under the Rule. 16 CFR 306.0(i)(2) (providing that
alternative fuels are ``not limited to'' those explicitly listed in
the Rule). Therefore, covered entities must rate the fuel according
to its ``principal component.'' 16 CFR 306.5(b).
\56\ The Rule already requires rating and certifying E85
according to the percentage of ethanol in the blend.
---------------------------------------------------------------------------
1. Definitions
In order to provide requirements for rating, certifying, and
labeling Mid-Level Ethanol blends, the Commission proposes adding
``Mid-Level Ethanol blend'' as a new defined term in the Fuel Rating
Rule. Specifically, the proposed new definition defines the term as ``a
mixture of gasoline and ethanol containing more than 10 but less than
70 percent ethanol.''
2. Rating and Certification
Section 306.0(i)(2) of the Fuel Rating Rule currently lists
examples of alternative fuels, but specifically states that alternative
fuels are ``not limited to'' those listed. The proposed amendments
expressly add Mid-Level Ethanol blends to this non-exhaustive list,
thereby making clear that the rating and certification requirements of
Sec. 306 of the Rule apply to Mid-Level Ethanol blends. Subjecting
such blends to those requirements should ensure the accuracy of
information on Mid-Level Ethanol blend labels.
In addition, to ensure that Mid-Level Ethanol blend labels provide
consumers with useful information, the proposed amendments include
rating and certification provisions similar to those for biodiesel
fuels. The proposed amendments modify language in the Rule's rating
provision (Sec. 306.5(b)) to clarify that covered entities must rate
Mid-Level Ethanol blends by ``the percentage of ethanol contained in
the
[[Page 12474]]
fuel,'' not by the percentage of the principal component of the
fuel.\57\
---------------------------------------------------------------------------
\57\ For example, a 30 percent ethanol blend should be rated as
30 percent ethanol, not 70 percent gasoline. However, as explained
below, a retailer selling a 30 percent blend need only disclose that
the fuel contains 10% - 70% ethanol.
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The Commission also proposes amending Sec. 306.6(b), which allows
transferors of alternative automotive fuels to certify fuel ratings
with a letter of certification. That section provides that, generally,
a certification by letter remains valid so long as the fuel transferred
contains the same or greater rating of the principal component. The
letter remains valid because an increase in concentration for most
alternative fuels will not trigger different labeling requirements. An
increase or decrease in concentration for ethanol blends or biodiesel
fuels, however, may trigger different labeling requirements.\58\
Therefore, the proposed amendment to Sec. 306.6(b) states that if
transferors of ethanol blends choose to use a letter of certification,
that letter remains valid only as long as the fuel transferred contains
the same percentage of ethanol as previous fuel transfers covered by
the letter.
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\58\ E.g., an increase from 60 percent ethanol to 85 percent
ethanol would qualify the fuel as E85.
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3. Labeling
The proposed amendments provide labeling requirements for Mid-Level
Ethanol blends and amend the labeling requirements for E85.\59\ The
proposed requirements provide retailers flexibility to comply with the
law while giving consumers critical information to avoid placing their
warranties at risk. Specifically, the proposed Mid-Level Ethanol blend
requirements provide that retailers must post either: 1) the precise
concentration of ethanol (e.g., ``20% ETHANOL''); or 2) a disclosure
that the blend's concentration is between 10 and 70 percent (``10% -
70% ETHANOL''), or within a narrower range (e.g., ``30% - 40%
ETHANOL''). These content disclosures will alert consumers to the
presence of more than 10 percent ethanol, thereby helping them avoid
placing their warranties at risk.
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\59\ The proposed amendments at the end of this notice of
proposed rulemaking include sample Mid-Level Ethanol blend and E85
labels.
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The proposed amendments allow some flexibility by permitting Mid-
Level Ethanol blend sellers to provide a specific ethanol percentage or
a range narrower than 10 - 70 percent, as long as the label is
accurate. This increased flexibility will allow sellers to compete
within the Mid-Level Ethanol blend market by disclosing a more specific
ethanol content to consumers who value that information, while ensuring
all consumers have the information necessary to avoid harming their
vehicles or placing their warranties at risk. The proposed amendment
does not, however, require labels to disclose an exact blend percentage
or a range narrower than 10 - 70 percent. Requiring retailers to post
such a disclosure would likely impose a significant burden because, as
Downstream and IRFA noted, retailers currently create Mid-Level Ethanol
blends through blender pumps. These pumps allow retailers to adjust the
blend concentration frequently to account for relative changes in the
prices of gasoline and ethanol. Requiring a specific disclosure,
therefore, likely would force some sellers to either change pump labels
frequently or alter their blend concentrations less frequently,
potentially raising their costs.
In addition, labels for all ethanol blends above 10 percent would
state:
MAY HARM SOME VEHICLES
CHECK OWNER'S MANUAL
This additional information should assist consumers in identifying
the proper fuel for their vehicles.\60\ As noted above, AAM reported
that consumers place their warranties at risk if they use Mid-Level
Ethanol blends and E85 in conventional cars because ``virtually all
conventional vehicles built to date have been validated for gasoline
containing only up to 10% ethanol.''\61\ This comment raises a question
concerning whether ethanol blends above 10 percent concentration will
damage conventional vehicles, and the Commission invites comment on
that question.
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\60\ PMPA authorizes the Commission to require labels displaying
fuel ``ratings,'' which the statute defines as including information
the Commission deems ``appropriate to carry out the [statute's]
purposes . . . .'' 15 U.S.C. 2821(17)(C). The Commission has
explained that, under this definition, a fuel's rating encompasses
not only a numerical value but also text necessary to assure
consumers that ``they are purchasing a product that satisfies
automobile engine minimum content requirements, which may be
specified in their owner's manuals.'' 58 FR 41356, 41364-65 (Aug. 3,
1993). Thus, because the proposed additional language will assist
consumers in determining whether they can use ethanol fuels, the
language is part of the fuel's rating and the Commission may require
it under PMPA.
\61\ AAM Comment at 2.
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Although the record contains no evidence regarding the incidence of
ethanol misfueling, the increasing risk of such misfueling necessitates
this additional disclosure. As discussed above, EISA's fuel mandate
will require significant expansion of the alternative fuel market.
Thus, in the coming years more retailers will likely offer Mid-Level
Ethanol blends and E85, and consumers will encounter more fuel pumps
dispensing those fuels near pumps dispensing conventional gasoline.
Moreover, consumers' familiarity with gasoline containing up to 10
percent ethanol may lead them to assume wrongly that their conventional
vehicle can tolerate fuels with more than 10 percent ethanol. The
proposed amendments require the additional disclosure for both E85 and
Mid-Level Ethanol blends because requiring that disclosure for only one
of those fuels could confuse consumers. For example, if the ``may harm
some vehicles'' disclosure appeared on a Mid-Level Ethanol blend pump
but not on an adjacent E85 pump, consumers might conclude wrongly that
E85 cannot harm conventional vehicles.
The proposed amendments specify the size, font, and format
requirements for the new Mid-Level Ethanol blend labels and the revised
labels for ethanol blends of at least 70 percent concentration.\62\
These requirements are similar to those in place for most other
alternative liquid fuels in the Rule (see Sec. 306.12). The proposed
labels for both fuels require an orange background (PMS 1495 or its
equivalent),\63\ which is the typical color for alternative fuel labels
and will allow retail consumers to distinguish Mid-Level Ethanol blends
from gasoline. In addition, consistent with labeling for other
alternative fuels, the proposed amendments require the text to be in
Helvetica black type and centered on the label. The Commission proposes
amending Sec. 306.12(f) to provide sample illustrations of Mid-Level
Ethanol blend and E85 labels, which are included at the end of this
notice of proposed rulemaking.\64\
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\62\ The proposed amendments also delete the Rule's sample label
for ``E-100'' (i.e., ethanol not mixed with gasoline) because the
record does not show any retail sales of such fuels.
\63\ 16 CFR 306.12(c)(2).
\64\ The Rule's recordkeeping provisions (16 CFR 306.7, 306.9,
and 306.11) without amendment will require covered entities to
maintain records supporting the rating of any Mid-Level Ethanol
blend they produce, transfer, or sell.
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C. Octane Rating Using the On-Line Method
The Commission also agrees with the commenters that the Fuel Rating
Rule should allow octane rating through the On-Line Method, as
specified in ASTM D2885. As noted above, PMPA authorizes the Commission
to prescribe octane rating methods beyond those specified in ASTM D2699
and D2700. The On-Line Method detailed in ASTM D2885 produces the exact
same octane rating as the D2699 and D2700
[[Page 12475]]
methods.\65\ Accordingly, the Commission proposes amending the Rule to
allow the On-Line Method.\66\
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\65\ See ASTM D2885, Standard Test Method for Determination of
Octane Number of Spark-Ignition Engine Fuels by On-Line Direct
Comparison Technique, available for inspection at the FTC's public
reference room. Notably, D2885 provides that the On-Line Method will
produce ``octane numbers'' as that term is defined in D2699 and
D2700. See id at Sec. 5.3.
\66\ NPRA and ConocoPhillips recommended further loosening the
Rule's octane rating provisions to allow non-ASTM approved
procedures so long as they are ``correlated'' with ASTM D2699 and
D2700. However, without specific rating procedures, the Commission
would have difficulty determining whether a supposedly
``correlated'' procedure accurately rates octane, and the commenters
did not provide any criteria for showing correlation. Thus, allowing
any ``correlated'' procedure would impede Rule enforcement and,
therefore, the Commission declines to allow such procedures. See 15
U.S.C. 2823(c)(3)(A)(i) (Commission must consider ``ease of
administration and enforcement'' before approving alternative octane
rating procedures).
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D. Miscellaneous Comments
Commenters raised three miscellaneous issues. First, several noted
outdated ASTM references. Therefore, the Commission proposes updating
those references.\67\ Second, Downstream argued that the Commission
consider allowing E85 to contain 68 percent ethanol in light of a
potential change to the relevant ASTM standard. The Commission declines
to make this change because there is no current ASTM or DOE standard
allowing E85 to contain 68 percent ethanol.\68\ Third, some retail fuel
industry commenters requested more flexibility in labeling
specifications and noted possible state and FTC labeling conflicts.
However, none of the comments demonstrated that the labeling
specifications impose a substantial burden or identified a specific
conflict. Therefore, the Commission does not propose any amendments in
response to those comments.
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\67\ E.g., the Commission proposes amending Sec. 306.0(b) to
provide ASTM's current street address.
\68\ See 1 CFR Part 51.
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Finally, in addition to the commenters' suggested changes, the
Commission on its own initiative proposes amending the Rule's labeling
specifications to address an inconsistency. Section 306.12(b)(2)
requires all uppercase type for labels for all alternative fuels.
Sections 306.12(a)(4) through (9), however, require some lowercase type
on biodiesel fuel labels. The Commission, therefore, proposes amending
Sec. 306.12(b)(2) to make clear that its all-caps requirement does not
apply to labeling requirements for biodiesel fuels.\69\
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\69\ The Commission also proposes amending Sec. Sec. 306.0(b),
306.0(j)(1), 306.0(j)(2), and 306.0(j)(3) to correct typographical
errors, and proposes amending Sec. 306.0(i) for clarification by
eliminating the subsection number (3) and replacing that with
``provided, however.''
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E. Biodiesel Fuel Provisions
1. Rating Biodiesel Fuel Blends of 5 Percent or Less
As discussed above, several commenters argued that, unless the
Commission expanded the Fuel Rating Rule to require rating of biodiesel
fuel blends at or below 5 percent in concentration, retailers who blend
biodiesel might not know the blend's concentration and, therefore, fail
to label the fuel appropriately. As an initial matter, the record does
not show that retailers who blend cannot properly label their fuel in
the absence of the suggested change. Indeed, none of the commenters
presented evidence of such mislabeling.
Retailers can comply with the Rule in one of two ways. First, they
can test their blends and label them accordingly. Alternatively, they
can add enough pure biodiesel to uncertified diesel stock to ensure
that the resulting blend will contain more than 5, but not more than
20, percent biodiesel. For example, if a retailer receives uncertified
diesel from a refiner, the retailer knows that the fuel contains up to
5 percent biodiesel. The retailer can then add at least six, but not
more than fifteen, percent pure biodiesel into this uncertified stock.
The final product would thus contain more than 5, but less than 20,
percent biodiesel. Therefore, the retailer could comply with the Rule
by labeling the fuel as a ``Biodiesel Blend'' without a specific blend
percentage.\70\
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\70\ The Rule does not require a specific percentage disclosure
for biodiesel blends with more than 5 and no more than 20 percent
biodiesel. Thus, sellers may label the fuel: ``Biodiesel Blend.'' 16
CFR 306.12(a)(4).
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Although the Rule's biodiesel provisions require retailers who
blend such fuels to take some affirmative steps, the Commission
believes that this burden is reasonable. Indeed, the Commission knew of
this burden when it first promulgated biodiesel fuel requirements, and
in announcing those requirements stated:
[A]n entity blending biodiesel fuels is responsible for determining
the amount of biodiesel and/or biomass-based diesel in the fuel it
sells. This includes the need to account for biodiesel and/or biomass-
based diesel in any diesel fuel (e.g., diesel fuel containing biodiesel
at five percent or less) it uses to create blends that must be rated,
certified, or labeled under the Rule.\71\
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\71\ 73 FR 40154, 40159 n.20 (Jul. 11, 2008).
Moreover, there is no evidence that requiring producers and
distributors of biodiesel fuels to rate blends of 5 percent or less
would decrease the Rule's overall burden on businesses. Amending the
Rule as proposed would require producers and distributors to rate 5
percent or less biodiesel blends regardless of whether those fuels
would eventually require a label after blending. Thus, the proposed
amendment might reduce a burden on some retailers while increasing the
burden on many producers and distributors. The Commission, therefore,
declines to adopt the change.
2. Exempting Biomass-Based Diesel from the Rule
Commenter API argued that the Commission should not require rating,
certification, or labeling of biomass-based diesel blends because those
blends are indistinguishable from conventional diesel. It also argued
that the required label is confusing because it contains both the terms
``biodiesel'' and ``biomass-based diesel.'' Even assuming that API is
correct, however, the Commission cannot exempt biomass-based diesel
blends or provide for different labels because Section 205 of EISA
specifically provides that ``[e]ach retail diesel fuel pump shall be
labeled in a manner that informs consumers of the percent of biomass-
based diesel or biodiesel that is contained in the biomass-based diesel
blend or biodiesel blend that is offered for sale'' (emphasis added)
and that all blends over 5 percent ``shall be labeled,''\72\ depending
on concentration levels, either ``contains biomass-based diesel or
biodiesel in quantities between 5 percent and 20 percent'' or
``contains more than 20 percent biomass-based diesel or
biodiesel.''\73\ (Emphasis added.) Thus, the Commission has no
discretion to exempt biomass-based diesel or exclude the term
``biodiesel'' from biomass-based diesel blend labels.
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\72\ 42 U.S.C. 17021(a) and (b).
\73\ 42 U.S.C. 17021(b).
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V. Request for Comment
Interested parties are invited to submit written comments
electronically or in paper form. Comments should refer to ``Fuel Rating
Rule Review, R811005'' to facilitate the organization of comments.
Please note that your comment - including your name and your state -
will be placed on the public record of this proceeding, including on
[[Page 12476]]
the publicly accessible FTC website, at (https://www.ftc.gov/os/publiccomments.shtm).
Because comments will be made public, they should not include any
sensitive personal information, such as any individual's Social
Security Number; date of birth; driver's license number or other state
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. Comments also
should not include any sensitive health information, such as medical
records or other individually identifiable health information. In
addition, comments should not include ``trade secret or any commercial
or financial information which is obtained from any person and which is
privileged or confidential'' as provided in Section 6(f) of the Federal
Trade Commission Act (``FTC Act''), 15 U.S.C. 46(f), and FTC Rule
4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing matter for which
confidential treatment is requested must be filed in paper form, must
be clearly labeled ``Confidential,'' and must comply with FTC Rule
4.9(c).\74\
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\74\ The comment must be accompanied by an explicit request for
confidential treatment, including the factual and legal basis for
the request, and must identify the specific portions of the comment
to be withheld from the public record. The request will be granted
or denied by the Commission's General Counsel, consistent with
applicable law and the public interest. See FTC Rule 4.9(c), 16 CFR
4.9(c).
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Because paper mail addressed to the FTC is subject to delay due to
heightened security screening, please consider submitting your comments
in electronic form. Comments filed in electronic form should be
submitted using the following weblink: (https://public.commentworks.com/ftc/fuelratingreview) (and following the
instructions on the web-based form). To ensure that the Commission
considers an electronic comment, you must file it on the web-based form
at the weblink (https://public.commentworks.com/ftc/fuelratingreview).
If this notice of proposed rulemaking appears at (https://www.regulations.gov/search/Regs/home.html#home), you may also file an
electronic comment through that website. The Commission will consider
all comments that regulations.gov forwards to it. You may also visit
the FTC Website at (https://www.ftc.gov) to read the notice of proposed
rulemaking and the news release describing it.
A comment filed in paper form should include the ``Fuel Rating Rule
Review, R811005'' reference both in the text and on the envelope, and
should be mailed or delivered to the following address: Federal Trade
Commission, Office of the Secretary, Room H-135 (Annex M), 600
Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC is
requesting that any comment filed in paper form be sent by courier or
overnight service, if possible, because U.S. postal mail in the
Washington area and at the Commission is subject to delay due to
heightened security precautions.
Comments on any proposed filing, recordkeeping, or disclosure
requirements that are subject to the paperwork burden review under the
Paperwork Reduction Act should additionally be submitted to: Office of
Information and Regulatory Affairs, Office of Management and Budget
(``OMB''), Attention: Desk Officer for Federal Trade Commission.
Comments should be submitted via facsimile to (202) 395-5167 because
U.S. postal mail at the OMB is subject to delays due to heightened
security precautions.
The FTC Act and other laws that the Commission administers permit
the collection of public comments to consider and use in this
proceeding as appropriate. The Commission will consider all timely and
responsive public comments that it receives, whether filed in paper or
electronic form. Comments received will be available to the public on
the FTC website, to the extent practicable, at (https://www.ftc.gov/os/publiccomments.shtm). As a matter of discretion, the FTC makes every
effort to remove home contact information for individuals from the
public comments it receives before placing those comments on the FTC
website. More information, including routine uses permitted by the
Privacy Act, may be found in the FTC's privacy policy, at (https://www.ftc.gov/ftc/privacy.htm).
Because written comments appear adequate to present the views of
all interested parties, the Commission has not scheduled an oral
hearing for these proposed amendments. Interested parties may request
an opportunity to present views orally. If such a request is made, the
Commission will publish a document in the Federal Register stating the
time and place for such oral presentation(s) and describing the
procedures that will be followed. Interested parties who wish to
present oral views must submit a hearing request, on or before April 5,
2010, in the form of a written comment that describes the issues on
which the party wishes to speak. If there is no oral hearing, the
Commission will base its decision on the written rulemaking record.
VI. Paperwork Reduction Act
The proposed certification and labeling requirements for Mid-Level
Ethanol blends constitute a ``collection of information'' under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (``PRA''). The
additional required disclosures for fuels containing at least 70
percent ethanol, however, do not invoke the PRA because they comprise a
disclosure supplied by the Federal Government.\75\
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\75\ According to OMB, ``[t]he public disclosure of information
originally supplied by the Federal Government to the recipient for
the purpose of disclosure to the public is not included'' within in
the definition of a PRA ``collection of information.'' 5 CFR
1320.3(c)(2).
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Consistent with the Fuel Rating Rule's requirements for other
alternative fuels, under the proposed amendments refiners, producers,
importers, distributors, and retailers of Mid-Level Ethanol blends must
retain, for one year, records of any delivery tickets, letters of
certification, or tests upon which they based the automotive fuel
ratings that they certify or post.\76\ The covered parties also must
make these records available for inspection by staff of the Commission
and Environmental Protection Agency or by persons authorized by those
agencies. Finally, retailers must produce, distribute, and post fuel
rating labels on fuel pumps. Therefore, the Commission will submit the
proposed requirements to OMB for review under the PRA before issuing a
final rule.
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\76\ See the Fuel Rating Rule's recordkeeping requirements, 16
CFR 306.7; 306.9; and 306.11.
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The Commission has previously estimated the burden associated with
the Rule's recordkeeping requirements for the sale of automotive fuels
to be no more than 5 minutes per year (or 1/12th of an hour) per
industry member, and no more than 1/8th of an hour per year per
industry member for the Rule's disclosure requirements.\77\ Consistent
with OMB regulations that implement the PRA, these estimates reflect
solely the burden incremental to the usual and customary recordkeeping
and disclosure activities performed by affected entities in the
ordinary course of business. See 5 CFR 1320.3(b)(2).
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\77\ See, e.g., 73 FR 12916, 12920 (Mar. 11, 2008); 73 FR 40154,
40160-40161 (Jul. 11, 2008). Staff has previously estimated that
retailers of automotive fuels incur an average burden of
approximately one hour to produce, distribute, and post fuel rating
labels. Because the labels are durable, staff has concluded that
only about one of every eight retailers incur this burden each year,
hence, 1/8th of an hour, on average, per retailer.
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Because the procedures for distributing and selling Mid-Level
Ethanol blends are no different from those for other automotive fuels,
the
[[Page 12477]]
Commission expects that, consistent with practices in the fuel industry
generally, the covered parties will record the fuel rating
certification on documents (e.g., shipping receipts) already in use, or
will use a letter of certification. Furthermore, the Commission expects
that labeling of Mid-Level Ethanol blend pumps will be consistent,
generally, with practices in the fuel industry. Accordingly, the PRA
burden will be the same as that for other automotive fuels: 1/12th of
an hour per year for recordkeeping and 1/8th of an hour per year for
disclosure.
Based on information submitted by commenter Downstream, the
Commission estimates that there are approximately 130 retailers of Mid-
Level Ethanol blends. Furthermore, the Commission understands from the
comments that Mid-Level Ethanol blends are created through blender
pumps and, therefore, there are no producers or distributors of such
blends. Thus, assuming that each retailer of Mid-Level Ethanol blends
will spend 1/12th of an hour per year complying with the proposed
recordkeeping requirements and 1/8th of an hour per year complying with
the proposed disclosure requirements, the Commission estimates the
incremental annual burden for Mid-Level Ethanol blend retailers to be
10.83 hours for recordkeeping (1/12th of an hour per year x 130
entities) and 16.25 hours for disclosure (1/8th of an hour per year x
130), combined, 27.08 hours.
Labor costs are derived by applying appropriate hourly cost figures
to the burden hours described above. Staff estimates the mean hourly
wage for retailer employees to be $15.04.\78\ Applied to the estimated
affected population, this would total $407.28 ($15.04 x 27.08) for
recordkeeping and disclosure, industry-wide.
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\78\ Bureau of Labor Statistics, May 2008 Occupational
Employment Statistics Survey, ``Correspondence Clerks,'' Table 1, at
(https://www.bls.gov/news.release/pdf/ocwage.pdf).
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The Commission invites comment on the above burden analysis and
estimates to help ensure its accuracy and completeness.
VII. Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601-612, requires an
agency to provide an Initial Regulatory Flexibility Analysis with a
proposed rule and a Final Regulatory Flexibility Analysis with the
final rule, if any, unless the agency certifies that the rule will not
have a significant economic impact on a substantial number of small
entities. See 5 U.S.C. 603-605.
The FTC does not expect that the proposed amendments will have a
significant economic impact on a substantial number of small entities.
The amendment allowing alternative octane measurements does not impose
any new costs on covered entities because, under the amendment, those
entities would have the option of using the octane rating method
currently required by the Rule. As explained in Section V above, the
Commission expects that Mid-Level Ethanol blend retailers will spend,
at most, 5 minutes per year complying with the proposed recordkeeping
requirements and 1/8th of an hour per year complying with the
disclosure requirements. As also explained in Section V, staff
estimates the mean hourly wage for employees of ethanol retailers to be
$15.04. Even assuming that all ethanol retailers are small entities,
compliance with the recordkeeping requirements will cost retailers
$1.25 ($15.04 x 1/12th of an hour). In addition, under the same
conservative assumptions, compliance with the proposed disclosure
requirements will cost retailers $1.88 ($15.04 x 1/8th of an hour).
In addition, retailers will incur the cost of procuring and
replacing fuel dispenser labels to comply with the disclosure
requirements of the Rule. Staff has previously estimated that the price
per automotive fuel label is approximately fifty cents and that the
average automotive fuel retailer has six dispensers. However, commenter
PMAA stated that the cost of labels ranges from one to two dollars.
Conservatively applying the upper range from PMAA's estimate results in
an initial cost to retailers of $12.00 (6 pumps x $2). In addition,
staff has previously estimated the useful life of dispenser labels to
range from 6 to 10 years. Assuming a useful life of 8 years, the mean
of that range, and distributing the costs on a per-year basis, staff
estimates the total annual replacement labeling cost to be $0.25 (1/8 x
$2).
This document serves as notice to the Small Business Administration
of the agency's certification of no effect. Nonetheless, the Commission
has determined that it is appropriate to publish an Initial Regulatory
Flexibility Analysis in order to inquire into the impact of the
proposed ethanol amendments on small entities. Therefore, the
Commission has prepared the following analysis.
A. Description of the reasons that action by the agency is being
considered.
The emergence of Mid-Level Ethanol blends as a retail fuel and the
likely increased availability of both Mid-Level Ethanol blends and E85
as retail fuels.
B. Statement of the objectives of, and legal basis for, the proposed