Proposed Rule2023-04375
Request From States for Removal of Gasoline Volatility Waiver
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
March 6, 2023
Issuing agencies
Environmental Protection Agency
Abstract
Pursuant to provisions specified by the Clean Air Act (CAA), governors of eight states submitted petitions requesting that EPA remove the 1-pound per square inch (psi) Reid vapor pressure (RVP) waiver for summer gasoline-ethanol blended fuels containing 10 percent ethanol (E10). This action acts on those requests from the Governors of Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin by proposing to remove the 1-psi waiver. EPA also received multiple petitions from stakeholders requesting an extension of the effective date to the summer of 2024. This action proposes to delay the effective date for one year consistent with statutory provisions. Thus, we propose an effective date for all states of April 28, 2024. This action also proposes a regulatory process by which a state may request to reinstate the 1-psi waiver.
Full Text
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<title>Federal Register, Volume 88 Issue 43 (Monday, March 6, 2023)</title>
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[Federal Register Volume 88, Number 43 (Monday, March 6, 2023)]
[Proposed Rules]
[Pages 13758-13770]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-04375]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 1090
[EPA-HQ-OAR-2022-0513; FRL-9845-01-OAR]
RIN 2060-AV73
Request From States for Removal of Gasoline Volatility Waiver
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: Pursuant to provisions specified by the Clean Air Act (CAA),
governors of eight states submitted petitions requesting that EPA
remove the 1-pound per square inch (psi) Reid vapor pressure (RVP)
waiver for summer gasoline-ethanol blended fuels containing 10 percent
ethanol (E10). This action acts on those requests from the Governors of
Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and
Wisconsin by proposing to remove the 1-psi waiver. EPA also received
multiple petitions from stakeholders requesting an extension of the
effective date to the summer of 2024. This action proposes to delay the
effective date for one year consistent with statutory provisions. Thus,
we propose an effective date for all states of April 28, 2024. This
action also proposes a regulatory process by which a state may request
to reinstate the 1-psi waiver.
DATES: Comments: Comments must be received on or before April 20, 2023.
Public hearing: EPA will hold a virtual public hearing on March 21,
2023. Please refer to the SUPPLEMENTARY INFORMATION section for
additional information on the public hearing.
ADDRESSES: Comments. You may send comments, identified by Docket ID No.
EPA-HQ-OAR-2022-0513, by any of the following methods:
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>
(our preferred method) Follow the online instructions for submitting
comments.
<bullet> Email: <a href="/cdn-cgi/l/email-protection#650448040b01481748210a060e0011250015044b020a13"><span class="__cf_email__" data-cfemail="adcc80ccc3c980df80e9c2cec6c8d9edc8ddcc83cac2db">[email protected]</span></a>. Include Docket ID No. EPA-
HQ-OAR-2022-0513 in the subject line of the message.
<bullet> Mail: U.S. Environmental Protection Agency, EPA Docket
Center, Air Docket, Mail Code 28221T, 1200 Pennsylvania Avenue NW,
Washington, DC 20460.
<bullet> Hand Delivery or Courier: EPA Docket Center, WJC West
Building, Room 3334, 1301 Constitution Avenue NW, Washington, DC 20004.
The Docket Center's hours of operations are 8:30 a.m.-4:30 p.m.,
Monday-Friday (except Federal Holidays).
Instructions: All submissions received must include the Docket ID
No. for this rulemaking. Comments received may be posted without change
to <a href="https://www.regulations.gov">https://www.regulations.gov</a>, including any personal information
provided. For the full EPA public comment policy, information about
confidential business information (CBI) or multimedia submissions, and
general guidance on making effective comments, please visit <a href="https://www.epa.gov/dockets/commenting-epa-dockets">https://www.epa.gov/dockets/commenting-epa-dockets</a>.
Public hearing. The virtual public hearing will be held on March
21, 2023. The hearing will begin at 9:00 a.m. Eastern Daylight Time
(EDT) and end when all parties who wish to speak have had an
opportunity to do so. All hearing attendees (including even those who
do not intend to provide testimony) should register for the public
hearing by March 16, 2023. Information on how to register can be found
at <a href="https://www.epa.gov/gasoline-standards">https://www.epa.gov/gasoline-standards</a>. Additional information
regarding the hearing appears below under SUPPLEMENTARY INFORMATION.
FOR FURTHER INFORMATION CONTACT: For questions regarding this action,
contact Lauren Michaels, Office of Transportation and Air Quality,
Compliance Division, Environmental Protection Agency, 2000 Traverwood
Drive, Ann Arbor, MI 48105; telephone number: (734) 214-4640; email
address: <a href="/cdn-cgi/l/email-protection#375a5e545f56525b44195b56424552597752475619505841"><span class="__cf_email__" data-cfemail="026f6b616a63676e712c6e637770676c426772632c656d74">[email protected]</span></a>. For questions regarding the public
hearing, contact Nick Parsons at <a href="/cdn-cgi/l/email-protection#1e4c584d33567b7f6c7770795e7b6e7f30797168"><span class="__cf_email__" data-cfemail="bbe9fde896f3dedac9d2d5dcfbdecbda95dcd4cd">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Does this action apply to me?
Entities potentially affected by this proposed rule are those
involved with the production, distribution, and sale of transportation
fuels, including gasoline and diesel fuel. Potentially affected
categories include:
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Examples of potentially
Category NAICS \1\ code affected entities
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Industry................... 211130 Natural gas liquids
extraction and
fractionation.
Industry................... 221210 Natural gas production
and distribution.
Industry................... 324110 Petroleum refineries
(including importers).
Industry................... 325110 Butane and pentane
manufacturers.
Industry................... 325193 Ethyl alcohol
manufacturing.
Industry................... 325199 Manufacturers of
gasoline additives.
Industry................... 424710 Petroleum bulk stations
and terminals.
Industry................... 424720 Petroleum and petroleum
products wholesalers.
Industry................... 447110, 447190 Fuel retailers.
Industry................... 454310 Other fuel dealers.
Industry................... 486910 Natural gas liquids
pipelines, refined
petroleum products
pipelines.
Industry................... 493190 Other warehousing and
storage--bulk
petroleum storage.
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\1\ North American Industry Classification System (NAICS).
[[Page 13759]]
This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be affected by this
action. This table lists the types of entities that EPA is now aware
could potentially be affected by this action. Other types of entities
not listed in the table could also be affected. To determine whether
your entity would be affected by this action, you should carefully
examine the applicability criteria in 40 CFR part 1090. If you have any
questions regarding the applicability of this action to a particular
entity, consult the person listed in the FOR FURTHER INFORMATION
CONTACT section.
Participation in Virtual Public Hearing
Information on how to register for the hearing can be found at
<a href="https://www.epa.gov/gasoline-standards">https://www.epa.gov/gasoline-standards</a>. The last day to pre-register to
speak at the hearing will be March 16, 2023.
Each commenter will have 3 minutes to provide oral testimony. EPA
may ask clarifying questions during the oral presentations, but will
not respond to the presentations at that time. Written statements and
supporting information submitted during the comment period will be
considered with the same weight as oral comments and supporting
information presented at the public hearing.
Please note that any updates made to any aspect of the hearing will
be posted online at <a href="https://www.epa.gov/gasoline-standards">https://www.epa.gov/gasoline-standards</a>. While EPA
expects the hearing to go forward as set forth above, please monitor
the website or contact the person listed in the FOR FURTHER INFORMATION
CONTACT section to determine if there are any updates. EPA does not
intend to publish a document in the Federal Register announcing
updates.
If you require the services of a translator or special
accommodations such as audio description, please pre-register for the
hearing and describe your needs by March 16, 2023. EPA may not be able
to arrange accommodations without advance notice.
Outline of this Preamble
I. Executive Summary
II. Background and History
III. Statutory Authority and Provisions To Remove the 1-psi Waver
IV. Petitions for Removal of the 1-psi Waiver and Supporting
Documentation
V. MOVES Modeling Results
VI. Evaluation of Petitions for Removal of the 1-psi Waiver
VII. Statutory Provisions on Implementation and Effective Date
VIII. Fuel System Impacts
A. Production
B. Distribution
C. Retail Operations
IX. Cost Impacts
X. Proposed Finding of Insufficient Supply and Delay of Effective
Date
XI. Associated Regulatory Provisions
XII. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
B. Paperwork Reduction Act (PRA)
C. Regulatory Flexibility Act (RFA)
D. Unfunded Mandates Reform Act (UMRA)
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act (NTTAA) and
1 CFR Part 51
J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
I. Executive Summary
In this action, EPA is responding to requests from eight state
governors to remove the 1-psi volatility waiver for gasoline-ethanol
blends containing 10 percent ethanol beginning with the summer of 2023.
The governors made their requests pursuant to CAA section 211(h)(5),
which provides that the Administrator shall remove the 1-psi waiver via
regulation upon a demonstration by a governor that the 1-psi waiver
increases emissions in their state.
After review of the modeling results presented by the governors in
their requests, EPA is proposing to remove the 1-psi waiver in the
following states: Illinois, Iowa, Nebraska, Minnesota, Missouri, Ohio,
South Dakota, and Wisconsin.
We recognize that the initial requests made by the governors of
many of the states were submitted in the spring of 2022, such that a
summer of 2023 effective date may have been possible, and seek comment
on such an effective date. However, we have also received numerous
petitions to delay the effective date of this action to at least
2024.\1\ After consideration of the petitions, and given current timing
considerations, we propose a finding of insufficient supply of gasoline
in 2023, and therefore also propose an effective date of April 28, 2024
for removal of the 1-psi waiver in all eight states, as described
further in Sections IV and X.
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\1\ We refer to these petitions as ``extension petitions''
throughout this proposal.
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II. Background and History
EPA first took regulatory action to control the volatility of
gasoline in 1987.\2\ Because higher gasoline volatility leads to higher
evaporative emissions, EPA regulates the RVP--a measure of fuel
volatility--of gasoline during summer months in order to reduce
volatile organic compound (VOC) emissions that contribute to the
formation of smog (ground-level ozone).\3\ The volatility of fuel
depends on refineries' decisions in formulating their gasoline.
Subsequent to EPA's actions, Congress enacted the CAA Amendments of
1990, which included statutory volatility provisions for summer
gasoline. These provisions largely codified EPA's regulatory approach,
including establishing a 9.0 psi RVP standard for gasoline volatility
in the summer.\4\ Because blending ethanol into gasoline increases the
volatility of the resulting fuel due to chemical differences between
ethanol and gasoline, Congress also codified a 1-psi volatility waiver
for blends of gasoline and 10 percent ethanol (i.e., E10), allowing
such blends to have a 1.0-psi higher RVP than otherwise allowed for
gasoline, consistent with EPA's prior regulatory approach.\5\ This
allowance only applies to gasoline-ethanol blends containing between 9
and 10 percent ethanol (E10), and does not extend to gasoline-ethanol
blends
[[Page 13760]]
containing greater than 10 and less than or equal to 15-percent ethanol
(E15).\6\ The 1-psi waiver also does not apply to reformulated gasoline
(RFG).
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\2\ See 52 FR 31274 (August 19, 1987); 54 FR 11868 (March 22,
1989); 55 FR 23658 (June 11, 1990).
\3\ Gasoline must have volatility in the proper range to prevent
driveability, performance, and emissions problems. If the volatility
is too low, the gasoline will not ignite properly; if the volatility
is too high, the vehicle may experience vapor lock. Importantly for
this action, excessively high volatility also leads to increased
evaporative emissions from the vehicle. Vehicle evaporative emission
control systems are designed and certified on gasoline with a
volatility of 9.0 psi RVP. Higher volatility gasoline may overwhelm
the vehicle's evaporative control system, leading to a condition
described as ``breakthrough'' of the cannister and mostly
uncontrolled evaporative emissions.
\4\ CAA section 211(h)(1); 42 U.S.C. 7545(h)(1). CAA section
211(h)(1) requires EPA to establish volatility requirements--that
is, a restriction on RVP--during the high ozone season. To implement
these requirements, EPA defines ``high ozone season'' or ``summer
season'' at 40 CFR 1090.80 as ``the period from June 1 through
September 15 for retailers and wholesale purchaser consumers, and
May 1 through September 15 for all other persons, or an RVP control
period specified in a state implementation plan if it is longer.''
In general practice by industry and for purposes of this preamble,
the high ozone season is referred to as the ``summer'' or ``summer
season'' and gasoline produced to be used during the high ozone
season is called ``summer gasoline.'' EPA's regulations do not
impose any volatility requirements on any type of blend of gasoline
outside of the summer season.
\5\ CAA section 211(h)(4); 42 U.S.C. 7545(h)(4).
\6\ See 40 CFR 1090.215(a), codifying the statutory 1-psi
waiver.
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This volatility waiver, at the time the provision was enacted,
applied to a relatively small portion of the gasoline sold in the
United States. Today, however, almost all gasoline sold is E10, and
thus the 1-psi waiver increases the volatility of most gasoline.
On April 28, 2022, eight governors submitted a petition for the
removal of the 1-psi waiver for E10 in their states beginning in the
summer of 2023, pursuant to CAA section 211(h)(5). On June 10, 2022,
the Governor of Ohio also submitted a petition requesting the removal
of the 1-psi waiver in that state.\7\ On July 21, 2022, the Governor of
Kansas notified EPA that they were rescinding their request for removal
of the 1-psi waiver in Kansas.\8\ On October 13, 2022, the Governor of
North Dakota notified EPA that they were rescinding their request for
removal of the 1-psi waiver in North Dakota.\9\ On December 21, 2022,
the Governor of Missouri submitted a petition requesting the removal of
the 1-psi waiver in that state.\10\ This notice refers to the eight
remaining states as the ``petitioning states.'' The petitions included
modeling results indicating reductions in VOCs, nitrogen oxides
(NO<INF>X</INF>), and carbon monoxide (CO).
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\7\ These petitions are available in the docket for this action.
\8\ ``July 2022 Letter from Governor Laura Kelly,'' available in
the docket for this action.
\9\ ``October 2022 Letter from Governor Burgum,'' available in
the docket for this action.
\10\ This petition is also available in the docket for this
action.
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III. Statutory Authority and Provisions To Remove the 1-psi Waver
We are conducting a rulemaking to modify EPA's fuel quality
regulations in 40 CFR part 1090 to remove the 1-psi waiver for the
eight states that have requested it. Specifically, we are proposing to
remove the 1-psi waiver that is applicable to fuel blends containing
gasoline and 10 percent ethanol in Illinois, Iowa, Minnesota, Missouri,
Nebraska, Ohio, South Dakota, and Wisconsin beginning in the summer of
2024.
CAA section 211(h)(5) was enacted as part of the Energy Policy Act
of 2005 (EPAct), and provides that:
Upon notification by the Governor of a State, with supporting
documentation, that implementation of the waiver in section
[211(h)(4)], would increase emissions that contribute to air
pollution in any area of the state, the Administrator shall, by
regulation, apply the volatility limit under [section 211(h)(1)].
CAA section 211(h)(1) requires that gasoline volatility not exceed
9.0 psi during the high ozone season, and that nonattainment areas have
a lower (i.e., more stringent) RVP standard. Thus, regulatory action
under CAA section 211(h)(5) would remove the 1-psi waiver from E10.
Prior to the April 28, 2022 petition, no governor had ever
submitted a CAA section 211(h)(5) request to EPA, and thus we are
interpreting this statutory provision for the first time in this
action. We find that the use of the prescriptive statutory language
``shall'' provides limited if any discretion for EPA to consider other
issues such as economic impacts of removing the 1-psi waiver. Such
impacts are instead appropriately taken into consideration by a
governor when deciding whether to submit a petition to EPA.\11\ EPA's
role in this case is to evaluate the supporting documentation provided
by the governors.\12\ If EPA concludes that the supporting
documentation, as required by the statute, demonstrates emissions
increases with the 1-psi volatility waiver in place, then CAA section
211(h)(5) requires EPA to promulgate regulations to remove the 1-psi
waiver.
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\11\ Considerations like this were cited by the Governors of
Kansas and North Dakota in rescinding their requests.
\12\ Legislative history suggests that the supporting
documentation need not be as stringent as that called for under
Section 211(c)(4)(c) of the CAA. See Senate Report 106-426 at 12
(September 28, 2000).
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Additionally, we do not interpret the CAA as requiring a
demonstration of a reduction in emissions of all pollutants that
contribute to air pollution in the requesting states. Such a
requirement could not have been contemplated by Congress, as lowering
the volatility of fuel would be expected to have differing impacts on
different emissions. Congress was silent on what air pollutants EPA
should consider in responding to petitions for removal of the 1-psi
waiver. Specifically, under CAA section 211(h)(5), EPA is to remove the
1-psi waiver if it ``increase[s] emissions that contribute to air
pollution.'' This contrasts with, for example, CAA section
110(a)(2)(D)(i), which prohibits sources in a state from emitting ``any
air pollutant which will contribute significantly to nonattainment'' in
another state. Air pollution could result from a myriad of sources,
including listed hazardous air pollutants, criteria pollutants, and
greenhouse gases, and thus would appear to be a rather expansive term.
Reducing RVP, however, is a volatility control measure as explained
earlier in Section II. CAA section 211(h)(1) requires EPA to set RVP
standards to address ``evaporative emissions.'' Additionally, EPA has
consistently explained that adding 10 percent ethanol to gasoline
causes roughly a 1.0 psi RVP increase in the blend's volatility, which
is the premise for the 1-psi waiver contained in CAA section 211(h)(4)
and the subject of this action.\13\ EPA is of the view, therefore, that
it is reasonable to consider ``air pollution'' emanating from such
emissions and thus, that it may be more appropriate to evaluate the
impact of the 1-psi waiver on VOC emissions.
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\13\ See, e.g., 52 FR 31274 at 31292 (August 19, 1987).
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The U.S. EPA Motor Vehicle Emissions Simulator (MOVES) is an
appropriate tool to use to model the emission impacts required by the
statute. The MOVES runs performed by the states compared emissions from
motor vehicles and nonroad vehicles and equipment with and without the
1-psi waiver for E10 in each state in the summer. Similar analyses have
been used to support prior EPA actions in removing federal and state
fuel programs in the past.\14\
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\14\ For example, on June 7, 2017, EPA published a final rule to
relax the federal 7.8 psi RVP standard in the Nashville, TN area (82
FR 26354) and on March 12, 2021, EPA published two final rules that
removed approved regulations from the Kansas and Missouri SIPs that
required the sale of 7.0 psi RVP gasoline in the Kansas City, KS-MO
area (86 FR 14000 and 86 FR 14007).
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IV. Petitions for Removal of the 1-psi Waiver and Supporting
Documentation
During the fall of 2021, EPA received several letters from states
requesting that EPA engage in a dialogue about mechanisms to provide
parity between E10 and E15 with respect to gasoline volatility
standards.\15\ Specifically, the letters referred to CAA section
211(h)(5) and inquired about what type of ``supporting documentation''
should accompany such a request. EPA organized and participated in a
series of meetings with representatives from various Midwestern states
that had expressed interest in removing the 1-psi waiver, and in those
meetings, EPA indicated that MOVES modeling would be an appropriate
tool to use for this purpose given its ability to model the emissions
impacts of changes in gasoline volatility and given our past
[[Page 13761]]
reliance on MOVES modeling runs in similar contexts.
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\15\ See ``Letter from Governor Laura Kelly to Administrator
Regan,'' October 13, 2021, and ``Letter from Governors Kim Reynolds,
Pete Ricketts, Doug Burgum, Tim Walz, Michael Parson, Kristi Noem,
and Tony Evers,'' November 4, 2021, available in the docket for this
action.
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On April 28, 2022, the Governors of Illinois, Iowa, Kansas,
Minnesota, Nebraska, North Dakota, South Dakota, and Wisconsin
submitted a joint petition to EPA for the removal of the 1-psi waiver
for E10 in their respective states. The petition specifically requested
the removal of the 1-psi waiver as a permanent solution to provide
year-round E15 in those states beginning in the summer of 2023. As
accompanying documentation, the petition provided quantified reductions
in VOC, NO<INF>X</INF>, and CO emissions as a result of removing the 1-
psi waiver in each state based on MOVES modeling. Subsequent to this
submittal, the Governors of Kansas and North Dakota rescinded their
requests to remove the 1-psi waiver for E10 in those states.\16\
Therefore, we are not proposing to take any action on the 1-psi waiver
in Kansas and North Dakota in this action.
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\16\ July 28, 2022, Letter from Governor Kelly of Kansas to EPA,
available in the docket for this action. October 13, 2022, Letter
from Governor Burgum of North Dakota to EPA, available in the docket
for this action.
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On June 10, 2022, the Governor of Ohio also submitted a petition
requesting the removal of the 1-psi waiver for E10 beginning in the
summer of 2023. The petition provided quantified reductions in VOC,
NO<INF>X</INF>, and CO emissions in Ohio based on MOVES modeling.
On December 21, 2022, the Governor of Missouri also submitted a
petition requesting the removal of the 1-psi waiver for E10 beginning
in the summer of 2023. The petition provided quantified reductions in
VOC, NO<INF>X</INF>, and CO emissions in Missouri based on MOVES
modeling.
Subsequent to submission of the petitions, all petitioning states
except Missouri provided EPA with additional emissions modeling
documentation, including for particulate matter (PM) and benzene.\17\
The original data submitted showed a decrease in VOC, NO<INF>X</INF>,
and CO emissions with removal of the 1-psi waiver, while the additional
data demonstrated an increase in PM for both nonroad and on-road
emissions with removal of the 1-psi waiver. The benzene results
demonstrated an increase in benzene on-road emissions, and a decrease
in benzene nonroad emissions.
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\17\ See ``Emissions Impacts of the Elimination of the 1-psi RVP
Waiver for E10,'' May 9, 2022; ``Emissions Impacts of the
Elimination of the 1-psi RVP Waiver for E10 in Ohio,'' June 10,
2022, available in the docket for this action. While we have not yet
received additional information from Missouri about other pollutants
as we have received from the other petitioning states, we anticipate
directionally similar trends.
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All the petitioning states requested removal of the 1-psi waiver in
all areas within their state for which the limitation under CAA section
211(h)(1) applies. Therefore, the requests did not include areas within
the states where RFG is required because the 1-psi waiver does not
apply to RFG. The petitioning states also requested that the removal of
the 1-psi waiver should take effect for the 2023 high ozone season,
without further discussion. The states noted that rescinding the 1-psi
waiver for E10 would support year-round sales of E15.
V. MOVES Modeling Results
The petitioning states provided technical documentation with their
petitions to demonstrate the reduction of emissions with the removal of
the 1-psi waiver as required by CAA section 211(h)(5) in the form of
MOVES modeling results.\18\ The results for each state were based on a
single day in July 2023, which falls within the high ozone season.
Comparative results demonstrate the change in emissions from the
current 10.0 psi RVP standard to the alternative 9.0 psi RVP standard
as contemplated by the statute.\19\ A summary of the emission impacts
of removing the 1-psi waiver for E10 for each state is provided in
Table V-1.\20\
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\18\ EPA developed MOVES to estimate air pollution emissions
from on-road and nonroad mobile sources.
\19\ Further information about the MOVES runs, including inputs
and nonroad data is available in the docket for this action.
\20\ EPA's evaluation of the MOVES model input data and
assumptions, and results, can be found in the MOVES Technical
Support Document for this action.
Table V-1--Change of Mobile Source Emissions in 2023 MOVES3.01 Sources From 10.0 psi to 9.0 psi
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Pollutant/precursor
-------------------------------------------------------------------------------------------------------------
State CO NOX VOC PM2.5 PM10 Benzene Toluene Ethylbenzene Xylene
(percent) (percent) (percent) (percent) (percent) (percent) (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Illinois.................................. -0.19 -0.05 -0.9 0.09 0.10 -0.2 -1.5 -0.9 -0.9
Iowa...................................... -0.44 -0.09 -1.8 0.14 0.15 -0.1 -3.3 -2.1 -2.1
Minnesota................................. -0.52 -0.09 -2.7 0.15 0.16 -1.3 -4.2 -3.0 -3.1
Missouri.................................. -0.41 -0.14 -0.66 N/A N/A N/A N/A N/A N/A
Nebraska.................................. -0.48 -0.09 -2.6 0.17 0.18 -0.6 -4.4 -2.9 -3.0
Ohio...................................... -0.45 -0.13 -1.6 0.30 0.32 0.08 -2.8 -2.0 -2.0
South Dakota.............................. -0.53 -0.06 -2.9 0.08 0.08 -1.1 -4.8 -3.4 -3.3
Wisconsin................................. -0.44 -0.10 -1.7 0.21 0.22 -0.3 -2.7 -1.8 -1.8
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Each of the petitioning states' submissions demonstrated reductions
in emissions of CO, NO<INF>X</INF>, and VOCs within the state upon
removal of the 1-psi waiver. These demonstrated reductions are
sufficient to fulfill the statutes' supporting documentation
requirement. We seek comment on this data.
VI. Evaluation of Petitions for Removal of the 1-psi Waiver
We have assessed the supporting documentation provided by the
petitioning states and find that the MOVES modeling results submitted
to EPA demonstrate a reduction in emissions of multiple pollutants upon
removal of the 1-psi waiver for E10, as required under CAA section
211(h)(5). In particular, the modeling demonstrated emissions
reductions in CO, NO<INF>X</INF>, and VOCs. Emissions of these
pollutants contribute to air pollution in the states.\21\ We note that
the same documentation also shows an increase in emissions of other
pollutants such as PM. As discussed in Section III, we do not interpret
the statute as requiring reductions in all pollutants. Documentation of
reductions in several
[[Page 13762]]
pollutants, including, in particular, VOCs, is sufficient.
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\21\ Evaporative emissions from gasoline, referred to as
volatile organic compounds (VOC), are precursors to the formation of
tropospheric ozone and contribute to the nation's ground-level ozone
problem. Exposure to ground level ozone can reduce lung function
(thereby aggravating asthma or other respiratory conditions),
increase susceptibility to respiratory infection, and may contribute
to premature death in people with heart and lung disease.
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Therefore, based on the governors' requests, we are proposing to
remove the 1-psi waiver in the petitioning states based on the
supporting documentation provided, as required by the CAA.
VII. Statutory Provisions on Implementation and Effective Date
Under CAA section 211(h)(5)(C), the regulations removing the 1-psi
waiver shall take effect on the later of: (1) the first day of the
first high ozone season for the area that begins after the date of
receipt of the notification; or (2) 1 year after the date of receipt of
the notification. The high ozone season is defined in EPA's regulations
as ``June 1 through September 15 for retailers and [wholesale purchaser
consumers (WPCs)], and May 1 through September 15 for all other
persons,'' which includes gasoline distribution terminals.\22\
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\22\ 40 CFR 1090.80. We note that given the current definition
of ``high ozone season,'' the later date will always be one year
after receipt of the request from a governor.
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Under this language, for the petition dated April 28, 2022, the
later date is April 28, 2023. Therefore, the earliest date on which the
removal of the 1-psi waiver for Illinois, Iowa, Nebraska, Minnesota,
South Dakota, and Wisconsin could be effective is April 28, 2023. This
date would be in advance of the high ozone season beginning May 1,
2023. For the petition from Ohio, dated June 10, 2022, the later date
is June 10, 2023. This would place the effective date within the 2023
high ozone season (i.e., 10 days after the beginning of the high ozone
season for retailers and WPCs, and 41 days after the beginning of the
high ozone season for all other parties). Finally, for the petition
from Missouri, dated December 21, 2022, the later date is December 21,
2023.\23\ This would place the effective date after the 2023 high ozone
season.
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\23\ We recognize that the Missouri petition requested that the
removal take effect for the 2023 high ozone season. However, such an
effective date is not permissible under CAA section 211(h)(5)(C).
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Further, under CAA section 211(h)(5)(C), the effective date can be
extended if the Administrator, on his own motion or on petition from
any person, after consultation with the Secretary of Energy, determines
there would be an insufficient supply of gasoline in a state that has
requested the removal of the 1-psi waiver for E10.\24\ The statute
further provides that the effective date can be extended for not more
than one year, and that the Administrator may renew the extension for
two additional periods, each of which shall not exceed 1 year.
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\24\ CAA section 211(h)(5)(C)(ii).
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As described above, EPA is allowed to extend the effective date of
the removal of the 1-psi waiver upon a finding of ``insufficient supply
of gasoline in the [petitioning] state'' resulting from ``the
promulgation of the regulations [to remove the 1-psi waiver].'' \25\
``Insufficient supply of gasoline'' is not defined in the statute, and
thus EPA applies its expertise to interpret and apply the phrase in a
manner that is consistent with the structure of the statute, historical
application of similar or related provisions, and congressional intent.
We interpret ``insufficient supply of gasoline'' to require a
demonstration that gasoline supply disruptions are likely resulting
from removal of the 1-psi waiver, such that the necessary quantities of
gasoline may not be available in the states at the time they are
required. It is particularly appropriate in this case to consider the
possibility of supply disruptions, and the ability of the fuel to be
physically produced and transported to the petitioning states because
this action would call for a different grade of gasoline to be produced
and transported to the appropriate states. In considering the
likelihood of supply disruptions, we look to the entire production and
distribution chain, from the refinery where gasoline is produced,
through distribution systems such as pipelines and trucking, and
ultimately to the retail station. This reading is also similar to EPA's
interpretation of other provisions in section 211 that call for
consideration of constraints on fuel supply when EPA is acting on
petitions within the fuels program. For instance, CAA section
211(k)(6)(A)(ii) allows EPA, after consultation with the Secretary of
Energy, to extend the effective date for a state that has petitioned to
opt into the RFG program for a period that is up to one year from the
date of receipt of the petition upon a finding of insufficient domestic
capacity to produce RFG. A related provision in CAA section
211(k)(6)(B)(iii) would allow the Administrator to extend the effective
date for areas within the ozone transport region established under CAA
section 184 that opt into RFG, upon a finding of insufficient capacity
to supply RFG. Like the phrase ``insufficient supply of gasoline'' in
CAA section 211(h)(5)(C), the statute does not define either
``insufficient domestic capacity'' or ``insufficient capacity to supply
RFG.'' But in acting on petitions to opt-into RFG, EPA has explained
that setting the effective date allows the Administrator to consider
any sudden and unexpected increases in the demand for RFG on the local
supply and distribution system that is caused by an opt-in.\26\
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\25\ CAA section 211(h)(5)(C).
\26\ 62 FR 30261, 30263 (June 3, 1997)(``Section 211(k)(6)(A) of
the Act gives the Administrator discretion to ``establish an
effective date * * * as he deems appropriate* * *.'' EPA interprets
this provision to mean that it has broad discretion to consider any
factors reasonably relevant to the timing of the effective date.
This would include factors that affect industry and the potential
opt-in area. The factors that affect industry could include
productive capacity and capability, other markets for RFG, oxygenate
supply, cost, lead time, supply logistics for the area, potential
price spikes, and potential disruption to business.'')
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In contrast, the phrase ``insufficient supply of gasoline'' differs
from other sub-provisions of CAA section 211 allowing for waivers of
applicable requirements as well as implementation delays that use
language such as ``inadequate domestic supply.'' \27\ The D.C. Circuit
has provided guidance on the meaning of ``inadequate domestic supply''
in CAA section 211(o)(7)(A)(ii), finding that EPA may properly consider
``supply side factors--such as production and import capacity,'' but
not downstream effects.\28\ While the analysis supporting such findings
is likely to be similar for these production factors, we find that
under CAA section 211(h)(5), the analysis properly should consider
production factors, as well as the distribution of fuel from the
refinery, through the distribution chain, including pipelines and
terminals, to the ultimate endpoint of the gasoline distribution chain,
the retail station. CAA section 211(h)(5) explicitly contemplates the
``supply of gasoline in the State,'' whereas CAA section
211(o)(7)(A)(ii) did not further modify ``supply.'' \29\
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\27\ See CAA section 211(m)(3)(C), 211(o)(7)(A)(ii).
\28\ See Americans for Clean Energy v. EPA, 864 F.3d 691, 710
(2017). Notably CAA section 211(o)(7)(A)(ii) does not specify the
product that is to be inadequate or to whom the supply is
inadequate. This is in contrast to 211(h)(5)(C)(ii) which provides
that it is an insufficient supply of gasoline in the petitioning
state.
\29\ CAA section 211(h)(5)(A). [T]he Administrator shall, by
regulation, apply, in lieu of the Reid vapor pressure limitation
established by paragraph (4), the Reid vapor pressure limitation
established by paragraph (1) to all fuel blends containing gasoline
and 10 percent denatured anhydrous ethanol that are sold, offered
for sale, dispensed, supplied, offered for supply, transported, or
introduced into commerce in the area during the high ozone season.
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EPA's reading of ``adequate supply'' in CAA section
211(c)(4)(C)(ii) would also appear to comport with our interpretation
of CAA section 211(h)(5)(C) given that Congress intended for EPA to act
within certain unique emergency circumstances to relieve supply
disruptions within the ``motor fuel distribution system.'' \30\ And
[[Page 13763]]
while ``motor fuel distribution system'' is not defined in the statute,
EPA's historical practice in granting waivers under section CAA section
211(c)(4)(C)(ii) has been to consider all stages of the gasoline
production and distribution system within states that are experiencing
emergency circumstances.
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\30\ CAA section 211(c)(4)(C)(iii)(V).
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Finally, we note that consideration of the effective date for this
action properly considers supply to the ultimate consumer given the
statutory language ``in the State.'' Therefore, our analysis of
``insufficient supply of gasoline'' properly considers all stages of
the gasoline production and distribution system, from the refinery to
the retail station.
VIII. Fuel System Impacts
In this section, we discuss the potential impacts of removing the
1-psi waiver in the petitioning states on the fuel production and
distribution system, including impacts that would potentially affect
gasoline refineries, pipelines, fuel terminals, retail stations, and,
ultimately, consumers. Further detail on this topic is available in the
``Technical Support Document for the Proposed Removal of the 1-psi
Waiver.''
In short, this proposed action would require a lower volatility
conventional gasoline before oxygenate blending (CBOB) \31\ to be
produced by refineries and distributed by pipelines and terminals, and,
for the blended fuel, ultimately sold at retail stations in the
petitioning states.\32\ For much of the area covered, the new lower RVP
fuel would simply replace the existing fuel, in which case the impacts
are primarily associated with the refinery changes needed to produce
the new fuel. However, in many areas, this would be a new fuel in
addition to the fuel designed to utilize the 1-psi waiver upon blending
of 10 percent ethanol (e.g., a terminal or refinery that distributes
gasoline to states both with and without the 1-psi waiver). In these
areas, there would be additional impacts associated with fuel
distribution system changes needed to distribute the additional grades
(regular and premium) of the new lower RVP blendstocks.
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\31\ Gasoline before oxygenate blending (BOB) means gasoline for
which a gasoline manufacturer has accounted for oxygenate (e.g.,
denatured fuel ethanol) added downstream. See 40 CFR 1090.90. BOB is
subject to all requirements and standards that apply to gasoline
under EPA's fuel quality regulations, and refineries typically
formulate their BOBs with the intent that it will be blended
downstream with ten percent ethanol content to maintain compliance
with EPA and industry specifications. Conventional BOB (CBOB) is BOB
produced or imported for areas outside of RFG areas otherwise known
as conventional areas.
\32\ Because the gasoline distribution system has been
configured to utilize 10 percent ethanol and optimized to utilize
the octane value of ethanol, we expect ethanol to be blended at
least at the same levels it is blended today. Thus, we anticipate
that E10 would continue to be the dominant form of gasoline supplied
to the region, but would now be blended into a lower volatility
blendstock produced by the refineries.
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We note first that volatility controls for gasoline differ across
various states and regions within states. Summer gasoline for use in
the continental U.S. must comply with either the federal RVP standard
of 9.0 psi or the more stringent RVP standard of 7.8 psi, unless the
summer gasoline is either for use in an RFG covered area, is subject to
California's gasoline regulations, or EPA has waived preemption and
approved a state request to adopt a more stringent RVP standard into a
State Implementation Plan (SIP). Most of the U.S. utilizes
``conventional gasoline,'' for which the federal RVP standard is 9.0
psi, with a 1.0 psi allowance for gasoline blended with 10 percent
ethanol. There are also areas that utilize conventional gasoline for
which the federal RVP standard is 7.8 psi, and in such regions, the 1.0
psi allowance also applies for gasoline blended with 10 percent
ethanol.\33\ Several states have ``boutique'' low RVP fuel programs or
SIP programs \34\ that allow the 1-psi waiver for gasoline blended with
10 percent ethanol.\35\ Some boutique fuel programs, or SIP-approved
fuel programs, however, disallow the 1-psi waiver for gasoline blended
with 10 percent ethanol and in those areas, such gasoline must meet the
applicable state RVP standard of either 9.0 psi, 7.8 psi, or 7.0
psi.\36\ Additionally, approximately 30 percent of the gasoline sold in
the U.S. is RFG, which must meet a 7.4 psi RVP standard.\37\ The 1-psi
waiver does not apply to RFG, and thus E10 gasoline blended with 10
percent ethanol that is sold in RFG areas must meet the 7.4 psi RVP
standard. This proposed action would remove the 1-psi waiver only for
conventional gasoline that is sold in the petitioning states and not
such gasoline sold in RFG and SIP program areas. However, due to the
interconnected nature of gasoline distribution, and the changes
required for a new fuel type, impacts on gasoline quality and supply
would be expected to extend beyond the petitioning states, as further
described below.
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\33\ 40 CFR 1090.215(a)(2), (b)(1).
\34\ Of particular note for this action, seven counties in
southeast Michigan that border Ohio have an RVP standard of 7.0 psi
in the summer, with a 1-psi waiver for E10.
\35\ See <a href="https://www.epa.gov/gasoline-standards/state-fuels">https://www.epa.gov/gasoline-standards/state-fuels</a>.
\36\ 40 CFR 1090.215(b)(3). See also <a href="https://www.epa.gov/gasoline-standards/state-fuels">https://www.epa.gov/gasoline-standards/state-fuels</a>.
\37\ 40 CFR 1090.215(a)(3). The Chicago and St. Louis areas are
such RFG areas.
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A. Production
We begin with a discussion of the necessary modifications to
refineries to supply a lower volatility gasoline. There are 11
petroleum refineries located within the petitioning states; that number
increases to 40 refineries if refineries located in states that border
the petitioning states are included. However, additional refineries
outside of the immediate region may modify their operations to provide
a lower RVP fuel, as currently some of the gasoline supply for the
petitioning states also comes from refineries located further west,
east, and south, including refineries in the Gulf Coast.\38\ For
example, gasoline sold in Iowa is often produced by refineries located
in Texas and distributed via pipeline. Therefore, this action could
result in changes at refineries both within and outside of the Midwest
region. Under EPA's current fuel quality regulations, most refineries
producing gasoline for use in the petitioning states produce a CBOB
with an RVP standard of 9.0 psi during the summer season, with the 1-
psi waiver allowing the final gasoline-ethanol blend to meet an RVP
standard of 10.0 psi when 10 percent ethanol is added downstream. With
the removal of the 1-psi waiver, refineries that produce CBOB for use
within the petitioning states would be required to make changes to
their operations to reduce the volatility of the CBOB distributed to
these states to approximately (or slightly below) 8.0 psi in order to
enable the final gasoline-ethanol blend to comply with the 9.0 psi RVP
standard, which could have corresponding impacts on the supply of
gasoline. For some refineries, removal of the 1-psi waiver may result
in the refinery reducing the volatility of all the CBOB they produce.
For other refineries, it may result in a choice to produce a new 8.0
psi RVP CBOB for distribution to the petitioning states, while
continuing to produce the current 9.0 psi RVP CBOB for distribution to
other states.\39\ At this
[[Page 13764]]
time, we cannot predict which of the refineries that currently produce
fuel for use in the petitioning states would choose to produce 8.0 psi
RVP CBOB for use in the petitioning states. Unlike a nationwide change
to the RVP of CBOB, the regional nature of this action means that not
all refineries must adjust their refining processes to provide a lower
RVP CBOB. While it is highly likely that refineries that supply
gasoline only to the petitioning states would adjust their refinery
processes to reduce the RVP of their CBOB, these refineries could
choose to avoid the necessary investments and provide 9.0 psi RVP CBOB
to non-petitioning states instead.
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\38\ According to the Energy Information Administration (EIA),
64 million barrels of gasoline were shipped from PADD 3 into PADD 2,
which corresponds to about 8 percent of the volume of gasoline
consumed in PADD 2. Movements by Pipeline, Tanker, Barge and Rail
between PAD Districts, PADD 3 to PADD 2; <a href="https://www.eia.gov/dnav/pet/pet_move_ptb_dc_R20-R30_mbbl_m.htm">https://www.eia.gov/dnav/pet/pet_move_ptb_dc_R20-R30_mbbl_m.htm</a>.
\39\ Certain areas within the petitioning states and other
states already have more stringent RVP standards during the summer.
Gasoline that refineries produce for these areas would be unaffected
by this proposed rule. Refineries that produce 7.8 psi RVP CBOB for
the 7.8 psi RVP areas, or 7.4 psi RVP RBOB for RFG areas could
expand production of these grades for use in these states rather
than create a new grade at 8.0 psi RVP. This may reduce distribution
cost complexity, but in exchange increase refinery production cost
and lower gasoline production volume.
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Throughout the year, refineries must adjust the volatility of their
gasoline--typically lowering volatility of the gasoline in the summer
and increasing the volatility in the winter by adjusting the quantity
of light hydrocarbons in their gasoline. Refineries typically control
gasoline volatility by adjusting the amount of butane in gasoline, but
sometimes they need to also modify the amount of pentane in gasoline.
Refineries providing fuel to the petitioning states would have to
modify their summertime production operations and potentially add
capital equipment to accommodate the 1-psi lower RVP standard in the
summer. A refinery's ability to adapt to the 1-psi lower RVP standard
and the time that it takes depends on the refinery's structure,
operations, and the crude slate they run. Further discussion of the
changes we expect from refiners associated with removal of the 1-psi
waiver is available in to the ``Technical Support Document for the
Proposed Removal of the 1-psi Waiver.'' \40\
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\40\ Available in the docket for this action.
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In addition to contributing to gasoline's volatility, butane also
contributes to gasoline's octane and volume. Thus, when removing
butane, refineries must also make other changes to replace the lost
octane in order to keep the product consistent and in compliance with
EPA and industry specifications. Refineries could produce more alkylate
or reformate, which are two high octane gasoline blendstocks, to make
up the lost octane. We estimate that the amount of butane that would
have to be removed to produce a gasoline 1 psi lower in RVP amounts to
about 2 volume percent of the volume of gasoline that would be sold to
the petitioning states, which will affect the supply of gasoline in
those states.
Regardless of how a refinery is modified to lower the RVP of
gasoline, it will result in additional butane being produced by the
refinery. If excess onsite butane storage capacity is available, the
refinery has the option of saving excess butane on-site for use in
winter gasoline production, which would minimize the cost impact of the
removal of the 1-psi waiver. However, if excess butane storage is not
available, the refinery would then need to store it offsite (e.g., in
caverns), sell it, or export it. This may require additional butane
rail cars and refinery upgrades for handling rail cars. Refineries may
also utilize some portion of the butane as a feedstock to their
alkylation unit. In the near term, the large additional influx of
excess butane may exceed the existing storage capacity, transport
capacity, amount desired in the markets, or alkylation unit capacity.
This could then limit refinery flexibility to produce gasoline, further
impacting supply and production costs.
Given the high demand for gasoline in the summer months, refineries
often begin producing summertime fuel for storage well ahead of the
upcoming high ozone season. This process can begin as early as December
of the year prior to the applicable high ozone season, and thus storage
of a differing volatility of fuel could impact the refinery's ability
to utilize the fuel the next summer without further modification.
B. Distribution
As discussed above, this rulemaking would require a new lower RVP
grade of gasoline to be produced by refineries that distribute gasoline
to the petitioning states. In some areas, this may mean producing an
additional grade of gasoline. An additional gasoline grade would
require parties involved in gasoline distribution to reconfigure their
pipelines, terminals, and operations in order to accommodate such a
fuel grade. Such changes are likely to affect distribution both within
and outside of the petitioning states given the interstate nature of
gasoline distribution. There are three primary groups within the
distribution chain that would be impacted: refineries, pipelines (with
their breakout terminals), and downstream product terminals.
1. Refinery Distribution
Most refineries have an onsite terminal with numerous product
storage tanks wherein they accumulate and store the range of products
that they produce prior to placing the products into the distribution
system. Once a refinery accumulates a sufficient volume of a gasoline
type and confirms that it meets the applicable gasoline specifications,
the refinery then schedules the shipment of that batch of gasoline to
downstream markets. Shipment can occur via an onsite product terminal
analogous to that discussed in Section VIII.B.3 where trucks load
product and deliver to retail stations. However, most gasoline is
loaded onto product pipelines for delivery to downstream product
terminals. In some cases, refineries also distribute product by rail or
barge. For those refineries that distribute all, or even most, of their
gasoline to the petitioning states, this proposal will have little
impact on their distribution operations. They can switch over their
existing product tanks to hold only the lower RVP gasoline blendstock.
However, for those refineries that produce gasoline for both the
petitioning states and non-petitioning states, they may need to add
additional tanks, pipes, manifolds, and control systems to store the
additional grades of gasoline. The time needed to plan, design, permit,
and construct additional tankage is typically on the order of two or
more years. Until this can be accomplished, the refinery may need to
shift some or all of its production to the lower RVP blendstock.\41\
This could then result in a period where the market goes through a
sorting out process wherein different refineries focus on different
products and shift their historic markets, perhaps requiring more of
one product or requiring another product to flow in from outside the
petitioning states (e.g., from Gulf Coast refineries). All of this can
have significant impacts on gasoline supply not only on the petitioning
states, but also on the surrounding states. It may be that, due to
tankage and logistical limitations, refineries serving both markets may
all initially shift all of their production to the lower RVP
blendstock. This would result in lower RVP fuel in the surrounding
states and compound the overall impact on gasoline supply of butane
removal.
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\41\ Alternatively, some refineries may shift all premium grade
fuel to the lower RVP, while maintaining production of the lower RVP
and 9.0 psi RVP CBOBs.
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In addition to tankage changes, the refineries would also need to
adjust their operations and schedules for loading gasoline blendstock
onto pipelines, barges, or rail in order to split their production into
separate product streams. These logistical changes would initially take
some period of time in order to occur smoothly and safely but should
streamline over time.
[[Page 13765]]
2. Pipelines and Pipeline Breakout Terminals
The majority of fuel in the U.S. flows from refineries to markets
via pipeline systems. Because refineries are located throughout the
Midwest, the pipeline companies must pick up these gasoline batches
where they are located, which can be at the start, middle, or even near
the end of the pipeline; the gasoline then moves to its destination
markets. As discussed in Section VIII.B.1, some portion of gasoline
produced for use in the petitioning states comes from refineries
located outside the petitioning states.
There are a number of pipeline systems serving the petitioning
states, the vast majority of which serve both the petitioning states as
well as non-petitioning states.\42\ The pipelines transport a wide
variety of fuels and other products (e.g., gasoline, diesel, jet fuel,
heating oil, petroleum blendstocks, etc.), including an array of
different grades of gasoline (e.g., conventional gasoline, RFG, state
specific grades, and regular and premium grades of each). Each grade
and type of gasoline must be segregated from other grades and types to
preserve the physical properties of each product. Consequently, the
addition of the new lower RVP gasoline blendstocks required for the
petitioning states would require significant changes in the operations
of the pipeline systems. What was one large fuel market would now be
divided in two, requiring smaller batch sizes, changes in scheduling,
and in some cases cutting off historic supplies from some sources and
making changes to find alternative sources of supply. There would thus
be a period where the pipeline systems go through a planning and
optimization process in order to adjust to the new fuel requirement.
Decisions from refineries on whether they will supply a lower RVP CBOB,
and at what volumes, would be necessary to inform the planning and
optimization process by pipeline systems. All of this can have
significant impacts on gasoline supply not only to the petitioning
states, but also to the surrounding states in the short term. Having
the wrong fuel grades in the wrong volume can result in an inability
for the pipeline to move fuel in and out of tankage as needed, which,
in turn, can result in significant fuel supply disruption not only for
the gasoline grade in question, but also for all of the fuels shipped
on the pipeline. For the longer term, due to the bifurcation of the
market into different grades, some areas in the petitioning states may
lose redundancy for supply, which may then lead to more frequent
shortfalls in supply during times of disruption (e.g., refinery fire,
pipeline outage, hurricane, etc.).
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\42\ See, ``Technical Support Document for the Proposed Removal
of the 1-psi Waiver,'' available in the docket for this action.
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The most significant impact on pipeline operations from the
bifurcation of the gasoline supply caused by a final action on this
proposal, however, will be on pipeline breakout tankage operations.
Breakout tankage is required at junctions where pipelines connect with
differing schedules and flow rates. Thus, the pipelines typically need
tankage to store every grade of product distributed on the pipeline,
with the size and configuration of the tankage matched to the product
and pipeline batch sizes. If new regular and premium grades of the
lower RVP CBOB needs to be shipped on the pipeline, then it may require
the addition of new tankage at these breakout tank facilities. The
planning, permitting, and construction of such additional tankage would
require two or more years. This is likely to be an issue at a number of
breakout tankage facilities both inside and outside the petitioning
states. Until this additional breakout tankage can be brought into
service, an impacted pipeline serving the area may be restricted to
distributing either the higher or lower RVP gasoline, limiting gasoline
supply to either the petitioning states or the other surrounding
states, and in turn restricting what the refineries shipping on the
pipeline are able to produce if the pipeline restrictions do not allow
for the distribution of a particular type of gasoline. Some pipelines
may opt to carry one fuel grade and some the other, limiting the
product offerings at the various downstream product terminals. As with
the refineries, it may be that due to tankage and logistical
limitations, pipelines currently serving both markets may initially
shift all of their production to the lower RVP blendstock. This would
result in lower RVP fuel in the surrounding states and compound the
impact on supply of butane removal. Pipelines would have the option to
blend in butane during gasoline transport to the states with the 1-psi
waiver that are located at the end of the pipeline systems (e.g., North
Dakota and Michigan). This would alleviate some of the excess butane
produced from refineries in the affected states and could reduce
consumer costs in the border states by blending up to 9.0 psi RVP
gasoline. This method could ease some of the fungible pipeline
bifurcation issues by allowing more of the lower RVP gasoline to be
produced. However, similar to refineries, not all pipeline and terminal
facilities currently have the existing infrastructure to utilize butane
blending. Additional tankage and equipment may be needed to maximize
the potential of this opportunity.
Some pipeline companies operate a fungible distribution system.
This allows them to collect a standard grade of gasoline from
refineries into their system and ``transport'' the barrels quickly to
their destination. The barrels delivered are not actually the purchased
barrels from the refinery, but rather the same product meeting the same
specifications from another refinery. An additional grade of gasoline
would disrupt their ability to function as efficiently using the
fungible system. This increases the complexity associated with ensuring
products are able to be distributed to locations in the time frame
needed to ensure supply to the market.
3. Product Terminals
Moving gasoline to market also involves the downstream product
terminals and bulk plants. The product terminals and bulk plants
accumulate gasoline from pipelines and other bulk distribution systems
and distribute the gasoline to retail outlets via tank trucks loaded at
racks at the terminal. Each rack has the ability to load several
different grades of gasoline depending on how they were constructed;
all racks can load premium and regular gasoline, but some racks have
added additional changes to accommodate additional grades of gasoline
at the same time. The potential impact on product terminals varies
depending on whether the terminals provide gasoline only in the
petitioning states, or in non-petitioning states as well. Those
terminals that only provide gasoline to the petitioning states would be
little impacted, as they would simply take delivery of replacement
grades of lower RVP CBOB beginning in the spring leading into the
summer season. They would not have to contend with adding additional
fuel grades and the tankage and logistics associated with them. This
would most likely not be the case for terminals that serve areas both
within and outside the petitioning states. If such terminals do not
have sufficient onsite tankage capacity to handle the additional
regular and premium grades of lower RVP CBOB, then they would need to
either add the tankage or choose to focus on one market or the other.
The decision to focus on a particular market or fuel type may also be
dictated by a fuel marketer on the retail side. Both of these options
could have fuel supply, cost, and price
[[Page 13766]]
impacts both within the petitioning states and in the surrounding areas
the terminals serve. Approximately 75 such terminals are located close
to the borders (i.e., 30 miles) between petitioning states and non-
petitioning states. These terminals are more likely to provide gasoline
to both types of states and would need to change their gasoline
distribution patterns if they lack extra tankage to handle the
additional lower RVP gasoline grades.\43\ Since terminals can serve
gasoline markets up to 200 miles away, the number of terminals impacted
could be significantly greater.
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\43\ EIA. U.S. Energy Atlas--Oil and Natural Gas Maps. <a href="https://www.eia.gov/maps">https://www.eia.gov/maps</a>.
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Regardless of whether the terminals serve only the petitioning
states, or also other states, the terminals would all be impacted to
some degree by a somewhat more challenging transition in the spring
from winter gasoline to summer gasoline, particularly in the first
year. While this transition occurs every year as the terminals blend
down the volatility of the gasoline they have in storage from the
higher RVP of winter gasoline to the lower RVP of summer grades, the
change of having to blend down to ~8.0 psi RVP CBOB instead of ~9.0 psi
RVP CBOB would require additional time and incur additional cost. Due
to blending realities, pipelines and terminals would request lower RVP
fuel to blend down to a fuel that meets the RVP specifications; to
achieve an ~8.0 psi RVP CBOB, blending of gasoline with an RVP as low
as 6.0 psi is likely to be necessary. Terminals additionally would
likely take steps to ensure tanks are drained as low as possible prior
to receiving a lower RVP gasoline, which could add to timing
constraints. This would likely occur more frequently at terminals near
the border of the petitioning states.
4. Tank Trucks
Moving gasoline to market also involves tank trucks that deliver
the gasoline to the retail stations. In some respects, their operations
should be little impacted by the lower RVP standard for gasoline in the
petitioning states; they would simply pick up a different grade of
gasoline from the product terminal than they did before. However,
depending on the changes in product offering at the terminals, there
may still be considerable stress put on their operations. If some
refineries, pipelines, or terminals limit their product offering to
either the lower or higher RVP grades, especially in the near term,
then the tank trucks would need to shift their operations accordingly.
In some cases, this would be expected to increase the distances
traveled, which may in turn require the purchase of additional tank
trucks and hiring of additional drivers. As with the rest of the
distribution system, this can all be accomplished, but would take some
time for the market to respond and optimize around the new norms.
C. Retail Operations
The proposed removal of the 1-psi waiver and resulting transition
from 10.0 psi RVP gasoline to 9.0 psi RVP gasoline received from the
terminal should be minor for the retail stations--they would simply
take delivery of the lower volatility gasoline from the terminal. The
most noticeable effects would be seen at retail stations near the
borders of states maintaining the 1-psi waiver, as the cost of 9.0 psi
RVP gasoline within the petitioning states is likely to be higher than
that of 10.0 psi RVP gasoline across the border in the other states.
The retailers within the petitioning states may have to charge higher
prices to recoup this cost, which could result in consumers
preferentially choosing to refill at stations across the border when
possible.\44\ The retail operations located near state lines on the
border of petitioning and non-petitioning states may have issues
scheduling gasoline shipments to their retail outlets if tank trucks
are shipping their gasoline from terminals located further away and if
there is an initial shortage of tank truck operators, particularly at
the beginning of the transition to the new lower RVP fuel.
---------------------------------------------------------------------------
\44\ This phenomenon is observed today in SIP and RFG regions.
---------------------------------------------------------------------------
IX. Cost Impacts
There are associated costs with the changes to the refining and
distribution systems described in Section VIII. Part of the cost would
be incurred by the refining sector, while another portion would be
incurred by the gasoline distribution system. This is discussed briefly
below with a more in-depth discussion in the ``Technical Support
Document for the Proposed Removal of the 1-psi waiver.''
The refining sector would incur a cost in several different ways.
The largest portion of the cost is the lost opportunity cost for having
to sell the removed butane at market prices for butane instead of
blending it into high value summer gasoline. There are also additional
capital and operating costs as described in Section VIII.A that would
need to be recouped over time. Two separate refinery modeling studies
conducted by Mathpro examined the long-term refining cost for removing
the 1-psi waiver--one conducted for the Renewable Fuels Association
(RFA) \45\ and another conducted for the International Council on Clean
Transportation (ICCT).\46\
---------------------------------------------------------------------------
\45\ ``Assessment of a 1-psi reduction in the RVP of
Conventional Gasoline Blendstock (CBOB) in the Summer Gasoline
Season,'' prepared for Renewable Fuels Association by Mathpro,
December 1, 2021.
\46\ Refining Economics of a National Low Sulfur, Low RVP
Gasoline Standard; prepared for the International Council for Clean
Transportation.
---------------------------------------------------------------------------
Both Mathpro studies estimated refining costs to be about 2 cents
per gallon, but their analysis assumed three years of lead time and
assumed that the entire nationwide conventional gasoline pool would be
converted over to the lower RVP gasoline. We seek comment on whether
these costs might be different if EPA were to use different
assumptions, including a shorter lead time and only regional
application to the petitioning states, as opposed to analysis of the
change nationwide. Mathpro did not assess or quantify the additional
costs that would likely be incurred by the fuels distribution system to
distribute 8.0 psi RVP CBOB in addition to the present slate of
gasoline grades currently being provided. As described in Section
VIII.B, the need to distribute an additional grade of gasoline would
require changes in the operations of pipeline, terminals, and tank
trucks, and in some cases would be expected to require an additional
set of gasoline storage tanks or tank trucks. There likely would be
other costs associated with distributing an additional grade of
gasoline. Since conventional gasoline consumed in the Midwest would be
divided between the two different gasoline grades, gasoline batch sizes
would be smaller in many cases, which would increase the cost of
distributing both gasoline grades. Furthermore, if refineries serving
the Midwest only produce one of the two gasoline grades, it could mean
that other refineries would have to produce a portion of the gasoline
previously served by that refinery, and the gasoline sold by both of
those refineries would likely need to be moved further distances than
before, increasing the distribution cost for both refineries' gasoline.
Similarly, if downstream terminals decide to only sell one of the two
gasoline grades, which requires that they sell solely into petitioning
states or non-petitioning states, it likely would require that the
trucks that distribute the gasoline from that terminal would have to
travel further distance than they currently do.
The cost estimates detailed in the ``Technical Support Document for
[[Page 13767]]
Proposed Removal of the 1-psi Waiver'' reflect cost impacts assuming
the fuels market has had the chance to make the necessary investments
to accommodate the change. In the near term, while the market is going
through the iterative process of deciding what parties produce and
distribute which fuels for which markets and before the necessary
capital has been invested, constructed, and put into service, the
impacts on supply could have a substantially higher impact on the
gasoline prices consumers pay. The current gasoline supply shortfall in
the Midwest may provide one indication of what supply-induced gasoline
price impacts may be. As further described in the ``Technical Support
Document for Proposed Removal of the 1-psi Waiver,'' in late summer the
low volume of gasoline storage in the Midwest grew to about 8 percent
lower than the five-year minimum levels due to a supply shortfall
there. This may explain why regular grade conventional gasoline was
priced about 28[cent] per gallon higher in the Midwest than Gulf Coast
prices compared to previous years. This low gasoline inventory in the
Midwest may be the cause of even larger impact on RFG pricing. Such
large price impacts due to short term supply circumstances,
particularly as compared to cost impacts, are possible should a drop in
supply occur as a result of the removal of the 1-psi waiver in 2024.
X. Proposed Finding of Insufficient Supply and Delay of Effective Date
In this action, we are proposing an effective date of April 28,
2024, for all petitioning states. After consideration of the extension
petitions, we are proposing a 2024 effective date after determining
that a 2023 implementation would result in insufficient supply of
gasoline in the petitioning states.\47\ Our finding of insufficient
supply is based on an assessment of three potential supply constraints:
(1) The already low gasoline inventories; (2) The need for early
coordination between various parties to make the necessary physical
changes to the gasoline production and distribution infrastructure and
the associated lead time required; and (3) The physical loss of supply
necessary to produce a lower RVP gasoline. We believe that these
constraints are likely to lead to supply disruptions in the petitioning
states.
---------------------------------------------------------------------------
\47\ While the statute contemplates extensions of up to one
year, with opportunity to renew the extension for an additional two
years, the ``renew'' language indicates a need for EPA to do so in a
subsequent, separate action.
---------------------------------------------------------------------------
Gasoline inventories in the Midwest are currently well below the
five-year average minimum levels, and at the end of January 2022, were
the lowest recorded since 1990 which the earliest year data is
available.\48\ An emergency refinery closure in the Midwest has reduced
the volume of gasoline available in the region, and as of February 2023
the refinery has remained shuttered. The gasoline inventories typically
recover over the winter in the Midwest; however, they have remained low
and this could lead to a shortfall in supply when gasoline demand
increases in the summer of 2023. EIA estimates a further increase in
gasoline demand in 2023 compared to 2022.\49\ If realized, this
increased demand may be difficult to meet even without a change to the
gasoline volatility standard.
---------------------------------------------------------------------------
\48\ Total Motor Gasoline Stocks, Weekly Stocks; Petroleum and
Other Liquids, US Energy Information Administration; <a href="https://www.eia.gov/dnav/pet/pet_stoc_wstk_dcu_nus_w.htm">https://www.eia.gov/dnav/pet/pet_stoc_wstk_dcu_nus_w.htm</a>.
\49\ EIA. Short Term Energy Outlook (STEO). October 2022.
---------------------------------------------------------------------------
Second, timing considerations to supply a new lower RVP CBOB would
require coordinated investments, planning, and actions between
refineries, pipelines and other fuel distribution companies, terminals,
and retail outlets. Typically, this coordination occurs before winter
to provide the fuel system a chance to make the proper preparations. We
are now past the point in the calendar (late fall of the prior year)
when such coordination typically occurs. We are also entering into the
timeframe when refineries already have to begin producing fuel for use
in the summer months. As such, refineries would not have sufficient and
appropriate notice to begin modifying their fuel supply for the 2023
summer season.
Third, a reduction in supply is likely to occur simply as a result
of the changes necessary to refine and distribute the lower RVP
gasoline to the petitioning states. The removal of the light
hydrocarbons to produce the lower RVP gasoline is estimated to reduce
gasoline supply to the petitioning states by two percent, if refineries
have the necessary equipment to remove, store, or sell the removed
light hydrocarbons. It is likely that this necessary equipment would
not be available for all refineries in the summer of 2023, thus
complicating the process, and requiring an additional reduction in
supply. The distribution system is likely to need additional fuel
storage capacity to store and distribute the new fuel. These changes
are also unlikely to be accommodated ahead of the 2023 summer season.
At this time, we cannot quantify the gasoline supply impacts as a
result of distribution issues; we seek input on such potential impacts.
Reductions in gasoline supply due to lowering the RVP of CBOB at
the refinery could be made up through additional supply from other
refineries in areas such as the Gulf Coast, or through additional
production from Midwest refineries. However, without appropriate notice
of this change, such reductions are not possible for the 2023 summer
season. Additionally, the distribution infrastructure, including
pipelines, terminals, and tank trucks, could allow for the distribution
of lower RVP CBOB to the petitioning states. However, for such changes
to mitigate any supply concerns, various market participants would
require significant notice--first to the refineries at the beginning of
the distribution chain, and then to each party downstream. Inherent in
requiring a different grade of gasoline is a reduction in the
fungibility of the gasoline supply system, thus increasing the
likelihood of supply disruptions due to intermittent disruptions such
as natural disasters and unanticipated refinery or pipeline shutdowns.
Based on the above assessment, EPA finds that the removal of the 1-
psi waiver in petitioning states, if it were to take effect for the
2023 high ozone season, would result in an insufficient supply of
gasoline in those states. As a result, EPA is proposing to delay the
effective date of the removal of the 1-psi wavier by one year to April
28, 2024. This is the latest possible date for the initial petitions
from Illinois, Iowa, Minnesota, Nebraska, South Dakota, and Wisconsin.
We find it appropriate to have a single effective date for all
petitioning states.
We seek comment on this proposed effective date, including whether
this effective date provides sufficient notice to affected parties, and
whether any necessary changes could be made in this timeframe to
accommodate a summer 2024 effective date, or whether a renewal of the
extension may be necessary.
XI. Associated Regulatory Provisions
We are proposing a new designation and associated product transfer
document (PTD) language for summer CBOB in states where the 1-psi
waiver for E10 has been removed under CAA section 211(h)(5).\50\
Designations and PTD language requirements help ensure that batches of
fuel are distributed and used in a manner consistent with EPA's fuel
quality requirements. Without
[[Page 13768]]
proper designation, summer gasolines with different volatilities
intended for use in different areas may get commingled in a fungible
system, causing the introduction and use of non-compliant gasoline in
areas that require lower volatility fuels in the summer. Similarly, PTD
language serves to ensure that parties in the fuel distribution chain
are aware of the designation of the fuel and accompanying Federal
requirements for the distribution and use of the fuel. Because we are
proposing requirements for new grade of summer CBOB in this action, we
need to create a new designation and accompanying PTD language to
ensure that the new CBOB is distributed and used consistent with the
RVP requirements.
---------------------------------------------------------------------------
\50\ The designation and PTD language requirements for gasoline
are located at 40 CFR 1090.1010 and 1090.1110, respectively.
---------------------------------------------------------------------------
We are proposing that gasoline manufacturers would designate summer
CBOB for use in states where we have removed the 1-psi waiver as ``Low-
RVP Summer CBOB.'' We are also proposing related changes to the PTD
language requirements so that gasoline manufacturers that produce Low-
RVP Summer CBOB could accurately and consistently describe the fuel
designation. All other designation and PTD provisions would still apply
(e.g., those designations related to the blending of ethanol). We
believe this approach is the most straight-forward method for updating
the designation and PTD requirements for Low-RVP Summer CBOB, and we
seek comment on the new designation and related PTD language.
Based on discussions with affected stakeholders, we also considered
whether it would be possible to use the existing designations of ``7.8
Summer CBOB'' for 9.0 psi RVP areas or the ``SIP-controlled Summer
CBOB'' designation. The potential advantage of using existing
designations is that the fuel distribution system would not have to
adjust to the new product designation. However, we believe that there
are potential disadvantages to using existing designations for low-RVP
CBOB. First, we believe that most CBOB manufacturers would wish to
target an RVP level of slightly higher than 7.8 psi to meet the 9.0 psi
RVP standard. This could result in a CBOB that simultaneously could not
lawfully use the 7.8 psi RVP designation because the RVP was too high
or use the 9.0 psi RVP designation because the CBOB may be treated
fungibly with other CBOBs that are intended for the 1.0-psi waiver for
E10. Second, in the case of SIP-controlled Summer CBOB, the designation
is not intuitive because this action is not part of any SIP and may
result in confusion on the part of parties that distribute such CBOB.
Because we believe that a new designation would much more effectively
communicate to parties in the distribution chain how the low-RVP CBOB
could lawfully be used more effectively than the existing designations,
the use of the existing designations for such CBOB is not appropriate
and are proposing a new designation as discussed above. Nevertheless,
we seek comment on whether and how we could use the existing
designations for this CBOB instead of creating a new designation.
In addition to proposing regulatory changes to effectuate the
removal of the 1-psi waiver in the petitioning states, we are also
proposing a regulatory mechanism for states to request the
reinstatement of the 1-psi waiver under CAA section 211(h)(5). This
would be available for the petitioning states, as well as any other
state for which EPA removes the 1-psi waiver upon a request under CAA
section 211(h)(5) in the future. During discussions with states and
stakeholders, parties inquired whether such a provision could be
included in this action. Regulations associated with such a request
would provide all states with criteria under which such a request could
be made and granted. We are proposing regulations allowing for the
reinstatement of the 1-psi waiver that are modeled on the existing
regulations in 40 CFR part 1090.295 that allow for the removal of 7.8
psi low-RVP fuels programs.\51\ Removal of federal 7.8 psi low-RVP fuel
programs is appropriately conditioned on either the ability of a state
to demonstrate continued maintenance of the relevant ozone national
ambient air quality standard (NAAQS) in an area (i.e., the state may
have included emission reductions from the federal 7.8 psi low-RVP fuel
in its plan for the area to maintain the relevant ozone NAAQS) or the
ability of the state to demonstrate that removing the requirement for
the federal 7.8 psi low-RVP fuel in a nonattainment area would not
interfere with any applicable requirement for attainment or reasonable
further progress or any other applicable requirement of the CAA (i.e.,
the state may have included emission reductions from the federal 7.8
psi low-RVP fuel in its plan for the area to attain the relevant ozone
NAAQS).\52\ We are proposing to only require a state to request the
reinstatement of the 1-psi waiver in order for EPA to reinstate it,
however, if the state has relied on the 1-psi waiver removal in a SIP,
either pending or approved, the disposition of that SIP would need to
be resolved prior to reinstatement of the 1-psi waiver. We are also
proposing that, to provide appropriate notice and lead time for
corresponding changes to fuel supply, we would again revise our
regulations through a notice-and-comment rulemaking process to fully
implement the request. We seek comment on this approach.
---------------------------------------------------------------------------
\51\ In this action we are not reopening the regulations
associated with removal of a federal 7.8 psi low-RVP program in a
given area (40 CFR 1090.295) or the regulations that allow states to
opt-out of the federal RFG program (40 CFR 1090.290). Any comments
related to these provisions will be treated as beyond the scope of
this action.
\52\ See CAA section 110(l).
---------------------------------------------------------------------------
XII. Statutory and Executive Order Reviews
Additional information about these statutes and Executive Orders
can be found at <a href="http://www.epa.gov/laws-regulations/laws-and-executive-orders">http://www.epa.gov/laws-regulations/laws-and-executive-orders</a>.
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review
This action is a significant regulatory action that was submitted
to the Office of Management and Budget (OMB) for review. Any changes
made at the suggestion or recommendation of OMB have been documented in
the docket.
B. Paperwork Reduction Act (PRA)
This action does not impose any new information collection burden
under the PRA. OMB has previously approved the information collection
activities contained in the existing regulations and has assigned OMB
control number 2060-0731. This action proposes the removal of the 1-psi
waiver in eight states. It does not alter practices used by the
existing recordkeeping and reporting requirements, nor does it change
the number or type of respondents and the manner in which they satisfy
the fuel designation and PTD requirements.
C. Regulatory Flexibility Act (RFA)
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. In
making this determination, EPA concludes that the impact of concern for
this rule is any significant adverse economic impact on small entities
and that the agency is certifying that this rule will not have a
significant economic impact on a substantial number of small entities
because the proposed rule has no net burden on the small entities
subject to the rule.
Small entities that will be subject to this action include small
refiners (which are defined at 13 CFR 121.201) that produce or
distribute gasoline in
[[Page 13769]]
Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota, or
Wisconsin. This action proposes to remove the 1-psi waiver for E10 in
these states and EPA is not aware of any small refiners that produce or
distribute gasoline or diesel fuel in these states. Thus, there would
be no burden from this action on any small refiner. Furthermore, the
removal of the 1-psi waiver in these states does not substantively
alter the regulatory requirements on parties that make and distribute
gasoline. We have therefore concluded that this action will have no net
regulatory burden for all directly regulated small entities.
D. Unfunded Mandates Reform Act (UMRA)
This action does not contain an unfunded mandate of $100 million or
more as described in UMRA, 2 U.S.C. 1531-1538, and does not
significantly or uniquely affect small governments. This action
implements mandates specifically and explicitly set forth in CAA
section 211(h)(5) and we believe that this action represents the least
costly, most cost-effective approach to achieve the statutory
requirements.
E. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have tribal implications as specified in
Executive Order 13175. This action will be implemented at the state
level and would affect gasoline refiners, blenders, marketers,
distributors, and importers. Tribal governments would be affected only
to the extent they produce, purchase, and use gasoline. Thus, Executive
Order 13175 does not apply to this action.
G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that the EPA has reason to believe may disproportionately affect
children, per the definition of ``covered regulatory action'' in
section 2-202 of the Executive Order. This action is not subject to
Executive Order 13045 because it implements specific standards
established by Congress in statutes.
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
This action is not a ``significant energy action'' because it is
not likely to have a significant adverse effect on the supply,
distribution, or use of energy. This action proposes the removal of the
1-psi waiver for eight states. As discussed in Section VIII, it will
require changes to the production and distribution of gasoline, which
is expected to have some short- and long- term impacts on gasoline
supply and cost in the affected areas, but we believe the market will
be able to accommodate the change without any significant disruption.
I. National Technology Transfer and Advancement Act (NTTAA) and 1 CFR
Part 51
This action does not involve technical standards.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
Executive Order 12898 (59 FR 7629, February 16, 1994) directs
federal agencies, to the greatest extent practicable and permitted by
law, to make environmental justice part of their mission by identifying
and addressing, as appropriate, disproportionately high and adverse
human health or environmental effects of their programs, policies, and
activities on minority populations (people of color and/or Indigenous
peoples) and low-income populations.
EPA believes that this action does not have disproportionately high
and adverse human health or environmental effects on communities with
environmental justice concerns. This action proposes the removal of the
1-psi waiver in eight states, which could result in the reduction of
several pollutants, including VOCs, NO<INF>X</INF>, and benzene as
modeled through MOVES. Other pollutants may increase, such as PM.
List of Subjects in 40 CFR Part 1090
Environmental protection, Administrative practice and procedure,
Air pollution control, Fuel additives, Gasoline, Petroleum, Renewable
fuel.
Michael S. Regan,
Administrator.
For the reasons set forth in the preamble, EPA proposes to amend 40
CFR part 1090 as follows:
PART 1090--REGULATION OF FUELS, FUEL ADDITIVES, AND REGULATED
BLENDSTOCKS
0
1. The authority citation for part 1090 continues to read as follows:
Authority: 42 U.S.C. 7414, 7521, 7522-7525, 7541, 7542, 7543,
7545, 7547, 7550, and 7601.
Subpart C--Gasoline Standards
0
2. Amend Sec. 1090.215 by revising paragraph (b)(3) to read as
follows:
Sec. 1090.215 Gasoline RVP Standards.
* * * * *
(b) * * *
(3)(i) RFG and SIP-controlled gasoline that does not allow for the
ethanol 1.0 psi waiver does not qualify for the special regulatory
treatment specified in paragraph (b)(1) of this section.
(ii) Gasoline subject to the 9.0 psi maximum RVP per-gallon
standard in paragraph (a)(1) of this section in the following areas is
excluded from the special regulatory treatment specified in paragraph
(b)(1) of this section:
Table 1 to Paragraph (b)(3)(ii)--Areas Excluded From the Ethanol 1.0 psi
Waiver
------------------------------------------------------------------------
State Counties Effective date
------------------------------------------------------------------------
Illinois...................... All............ April 28, 2024.
Iowa.......................... All............ April 28, 2024.
Minnesota..................... All............ April 28, 2024.
Missouri...................... All............ April 28, 2024.
Nebraska...................... All............ April 28, 2024.
Ohio.......................... All............ April 28, 2024.
South Dakota.................. All............ April 28, 2024.
Wisconsin..................... All............ April 28, 2024.
------------------------------------------------------------------------
* * * * *
0
3. Add Sec. 1090.297 to read as follows:
Sec. 1090.297 Procedures for reinstating the 1.0 psi RVP allowance
for E10.
(a) EPA may approve a request from a state asking to reinstate the
ethanol 1.0 psi waiver specified in Sec. 1090.215(b)(1) for any area
(or portion of an area) specified in Sec. 1090.215(b)(3)(ii) if it
meets the requirements of paragraph (b) of this section. If EPA
approves such a request, an effective date will be set as specified in
paragraph (c) of this section. EPA will notify the state in writing of
EPA's action on the request
[[Page 13770]]
and the effective date of the reinstatement upon approval of the
request.
(b) The request must be signed by the governor of the state, or the
governor's authorized representative, and must include all the
following:
(1) A geographic description of each area (or portion of such area)
that is covered by the request.
(2) A description of all the means in which emissions reduction
from the removal of the ethanol 1.0 psi waiver are relied upon in any
approved SIP or in any submitted SIP that has not yet been approved by
EPA, if applicable.
(3) For any area covered by the request where emissions reductions
from the removal of the ethanol 1.0 psi waiver are relied upon as
specified in paragraph (b)(2) of this section, the request must include
the following information:
(i) Identify whether the state is withdrawing any submitted SIP
that has not yet been approved.
(ii)(A) Identify whether the state intends to submit a SIP revision
to any approved SIP or any submitted SIP that has not yet been
approved, which relies on emissions reductions from the removal of the
ethanol 1.0 psi waiver, and describe any control measures that the
state plans to submit to EPA for approval to replace the emissions
reductions from the removal of the ethanol 1.0 psi waiver.
(B) A description of the state's plans and schedule for adopting
and submitting any revision to any approved SIP or any submitted SIP
that has not yet been approved.
(iii) If the state is not withdrawing any submitted SIP that has
not yet been approved and does not intend to submit a revision to any
approved SIP or any submitted SIP that has not yet been approved,
describe why no revision is necessary.
(4) The governor of a state, or the governor's authorized
representative, must submit additional information needed to administer
the reinstatement of the ethanol 1.0 psi waiver upon request by EPA.
(c)(1) Except as specified in paragraph (c)(2) of this section, EPA
will set an effective date of the reinstatement of the ethanol 1.0 psi
waiver as requested by the governor, or the governor's authorized
representative, but no less than 90 days from EPA's written
notification to the state approving the reinstatement request.
(2) Where emissions reductions from the removal of the ethanol 1.0
psi waiver are included in an approved SIP or any submitted SIP that
has not yet been approved, EPA will set an effective date of the
reinstatement of the ethanol 1.0 psi waiver as requested by the
governor, or the governor's authorized representative, but no less than
90 days from the effective date of EPA approval of the SIP revision
that removes the emissions reductions from the ethanol 1.0 psi waiver,
and, if necessary, provides emissions reductions to make up for those
from the ethanol 1.0 psi waiver reinstatement.
(d) EPA will publish a notice in the Federal Register announcing
the approval of any ethanol 1.0 psi waiver reinstatement request and
its effective date.
(e) Upon the effective date for the reinstatement of the ethanol
1.0 psi waiver in a subject area (or portion of a subject area)
included in an approved request, the ethanol 1.0 psi waiver will apply
in such subject area.
0
4. Amend Sec. 1090.1010 by redesignating paragraph (a)(2)(iii) as
(a)(2)(iv) and adding a new paragraph (a)(2)(iii) to read as follows:
Sec. 1090.1010 Designation requirements for gasoline and regulated
blendstocks.
(a) * * *
(2) * * *
(iii) If the CBOB is excluded from the special regulatory treatment
for ethanol under Sec. 1090.215(b)(3)(ii), Low-RVP Summer CBOB.
* * * * *
0
5. Amend Sec. 1090.1110 by redesignating paragraph (b)(2)(i)(C) as
(b)(2)(i)(D) and adding a new paragraph (b)(2)(i)(C) to read as
follows:
Sec. 1090.1110 PTD requirements for gasoline, gasoline additives, and
gasoline regulated blendstocks.
* * * * *
(b) * * *
(2) * * *
(i) * * *
(C) ``Low-RVP CBOB. This product does not meet the requirements for
summer reformulated gasoline.''
* * * * *
[FR Doc. 2023-04375 Filed 3-3-23; 8:45 am]
BILLING CODE 6560-50-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.