Approval and Promulgation of Implementation Plan; Carbon Monoxide; Oxygenated Gasoline Program; Minnesota

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[MN17-2-5959; A-1-FRL-4828-4]

Approval and Promulgation of Implementation Plan; Carbon

Monoxide; Oxygenated Gasoline Program; Minnesota

AGENCY: United States Environmental Protection Agency (USEPA).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The USEPA is proposing to approve a State Implementation Plan

(SIP) revision submitted by the State of Minnesota. This revision

implements an oxygenated gasoline program in the Minneapolis-St. Paul

Metropolitan Statistical Area (MSA), and the Duluth-Superior MSA. Both

MSA's are required to implement an oxygenated gasoline program because

of past violations of the carbon monoxide standard. This SIP revision

was submitted to satisfy the requirement of section 211(m) of the Clean

Air Act as amended by the Clean Air Act Amendments of 19909 (the Act),

which requires all carbon monoxide nonattainment areas with a design

value of 9.5 parts per million (ppm) or above based on 1988 and 1989

air quality monitoring data to implement an oxygenated gasoline

program. The effect of this action is to propose approval of the

oxygenated gasoline program. This action is being taken under section

110 of the Act.

DATES: Comments must be received on or before February 22, 1994.

ADDRESSES: Comments may be mailed to John Paskevicz, AE-17J Air

Enforcement Branch, USEPA, 77 West Jackson Blvd., Chicago, Illinois

60604. Copies of the documents relevant to this action are available

for public inspection during normal business hours at the USEPA

Regional office on the 17th floor, at 77 West Jackson Blvd., Chicago.

FOR FURTHER INFORMATION CONTACT:

John Paskevicz, (312) 886-6084.

SUPPLEMENTARY INFORMATION:

I. Introduction: Statutory Requirements and Guidance

Motor vehicles are significant contributors of carbon monoxide

emissions. An important measure toward reducing these emissions is the

use of cleaner-burning oxygenated gasoline. Extra oxygen enhances fuel

combustion and helps to offset fuel-rich operating conditions,

particularly during vehicle starting, which are more prevalent in the

winter.

Section 211(m) of the Act requires that certain states submit

revisions to the SIPs and implement oxygenated gasoline programs by no

later than November 1, 1992. This requirement applies to all states

with carbon monoxide nonattainment areas with design values of 9.5

parts per million or more based on 1988 and 1989 data. Each state's

oxygenated gasoline program must require gasoline for the specified

control area(s) to contain not less than 2.7 percent oxygen by weight

during that portion of the year in which the area(s) is/are prone to

high ambient concentrations of carbon monoxide. Under section

211(m)(2), the oxygenated gasoline requirements apply to all gasoline

sold or dispensed in the larger of the Consolidated Metropolitan

Statistical Area (CMSA) or the Metropolitan Statistical Area (MSA) in

which the nonattainment area is located. Under section 211(m)(2), the

duration of the control period, to be established by the USEPA

Administrator, shall not be less than four months unless a state can

demonstrate that, because of meteorological conditions, a reduced

control period will assure that there will be no carbon monoxide

exceedances outside of such reduced period. USEPA announced guidance on

the establishment of control periods by area in the Federal Register on

October 20, 1992.\1\

---------------------------------------------------------------------------

\1\See ``Guidelines for Oxygenated Gasoline Credit Programs and

Guidelines on Establishment of Control Periods under section 211(m)

of the Clean Air Act as Amended--Notice of Availability,'' 57 FR

47849 (October 20, 1992).

---------------------------------------------------------------------------

In addition to the guidance on establishment of control periods by

area, the USEPA has issued additional guidance related to the

oxygenated gasoline program. Pursuant to the requirements of section

211(m)(5) of the Act on October 20, 1992, the USEPA announced the

availability of oxygenated gasoline credit program guidelines in the

Federal Register.\2\ Under the credit program, marketable oxygen

credits may be generated from the sale of gasoline with a higher oxygen

content than is required (i.e. an oxygen content greater than 2.7

percent by weight). These oxygen credits may be used to offset the sale

of gasoline with a lower required oxygen content. Where a credit

program has been adopted, USEPA's guidelines provide that no gallon of

gasoline should contain less than 2.0 percent oxygen by weight.

---------------------------------------------------------------------------

\2\See footnote 1. USEPA issued guidelines for credit programs

under section 211(m)(5) of the Act.

---------------------------------------------------------------------------

Section 211(m)(4) of the Act requires that any person selling the

oxygenated gasoline label the fuel dispensing system. The USEPA

promulgated the labeling regulations in the Federal Register on October

20, 1992.\3\

---------------------------------------------------------------------------

\3\See ``Notice of Final Oxygenated Fuels Labeling Regulations

under section 211(m) of the Clean Air Act as Amended--Notice of

Final Rulemaking,'' 57 FR 47769. The labeling regulations may be

found in 40 CFR 80.35.

---------------------------------------------------------------------------

II. Background for this Action: State SIP Revision

The Minneapolis-St. Paul and Duluth-Superior areas in the State of

Minnesota (the control areas) are designated nonattainment for carbon

monoxide and classified as moderate with a design value of 11.4 and 9.9

parts per million respectively, based on 1988 and 1989 data.\4\ Under

section 211(m) of the Act, Minnesota was required to submit a revision

SIP under section 110 and part D of title I of the Act which includes

an oxygenated gasoline program for Minneapolis-St. Paul, and Duluth-

Superior by November 15, 1992.\5\ On November 9, 1992, the

Commissioner, Minnesota Pollution Control Agency, submitted to USEPA a

revised SIP including the oxygenated gasoline program containing rules

that were signed by the Governor on April 29, 1992, and became

effective on August 1, 1992. The USEPA issued a completeness letter to

the State on January 20, 1993. The USEPA summarizes its analysis of the

state submittal below. A more detailed analysis of the state submittal

is contained in a Technical Support Document (TSD) dated June 11, 1993,

which is available from the Region 5 office, listed in the ADDRESSES

section of this proposed rulemaking.

---------------------------------------------------------------------------

\4\See ``Designation of Areas for Air Quality Planning

Purposes,'' 56 FR 56694 (November 6, 1991.)

\5\See credit program guidelines in footnote 3, wherein the

November 15, 1992 SIP revision due date was specified.

---------------------------------------------------------------------------

Type of Program and Oxygen Content Requirement

Section 211(m)(2) of the Act requires that gasoline sold or

dispensed for use in the specified control areas contain not less than

2.7 percent oxygen by weight. Under section 211(m)(5), the USEPA

Administrator issued guidelines for credit programs allowing the use of

marketable oxygen credits from gasoline with a higher oxygen content

than required. However, Minnesota has adopted a system of oxygen

content averaging that does not include oxygen credit trading. Each

registered blender must maintain an individual average of 2.7 percent

oxygen for all gasoline shipped into a control area during a control

period. Gasoline sold in the control area during the control period

must contain a minimum of 2.0 percent oxygen. A registrant cannot

accumulate oxygen credits to be traded to other registrants. The

Minnesota requirements to not distinguish between a control area

responsible (CAR) party and blender CAR.\6\ All registrants are

classified as blenders. The following sections of this notice address

some specific elements of the state's submittal. Parties desiring more

specific information should consult the TSD.

---------------------------------------------------------------------------

\6\The Implementation Guideline for Oxygenated Gasoline

Programs, published on November 20, 1991, provides a definition of

Control Area Responsible (CAR) party. A CAR party is a person who

owns oxygenated gasoline which is sold or dispensed from a control

area terminal. A blender CAR is a person who owns oxygenated

gasoline which is sold or dispensed from a control area oxygenate

blending facility.

---------------------------------------------------------------------------

Applicability and Program and Scope

Section 211(m)(2) requires oxygenated gasoline to be sold during a

control period based on air quality monitoring data and established by

the USEPA Administrator. Minnesota has established control periods

consistent with the USEPA guidance. The 1992 carbon monoxide control

period began on November 1, 1992, and extended through January 31,

1993. In subsequent years, the control periods will begin on October 1,

and end after January 31.

All gasoline sold or dispensed for use within the control area and

during the control period must comply with the average 2.7 percent

oxygen content requirement and must contain not less than 2.0 percent

oxygen by weight. The Minnesota program does not include oxygen credit

trading.

Registration Requirements.

The registration requirements for the Minnesota program are similar

to the guidelines established by the USEPA. The State treats all

registrants as averaging blenders. Oxygenated gasoline purchased by a

non-registered party will be counted into the average of the registered

company that sold the product to the retailer or the non-registered

distributor. Each registrant has the option to choose a per gallon

blending method, or an averaging method. The registrant is required to

maintain an average oxygen content of 2.7 percent or greater, for all

gasoline distributed in the control area.

The Minnesota oxygen plan specifies that records of all gasoline-

oxygenate blends, received, sold, or transferred, must be retained for

at least one year after the control period ends. The records must

include the original transfer documents showing the volume of blended

product and the weight percent of oxygen in each blend. The registrant

is required to commission an attestation engagement within 120 days

after the close of the control period. Records are also required to be

kept by non-registered distributors.

All parties in the gasoline distribution network who are located in

or do business within a control area, and whose product is eventually

sold into the control area for the ultimate consumer, are required to

keep records concerning quantity of blend sold and amount of oxygen in

the product. Registered parties are not specifically required by State

law or by rules or procedures to take samples and test the product.

However, the State plan calls for an extensive sampling and testing

program throughout the product lifecycle.

All refineries and terminals that ship gasoline into the control

area will be inspected at least once each month during the control

period by inspectors from the State Weights and Measures Division.

Samples will be taken and tested for minimum oxygen content, and

transfer documents will be inspected to ensure each contains required

information on every batch shipped. At least 20 percent of all

registered distributors and 20 percent of all retailers in the control

area will be inspected/tested by the State.

Under these inspection requirements, refiners and importers are

required to keep a copy of all the tests that are performed on batches

of gasoline prior to shipment, as well as copies of the bills of lading

or transfer documents for each batch. Terminal owners and operators and

CARs are required to keep records of both the gasoline they receive

from upstream parties, as well as copies of all the tests (if any)

performed as part of the shipping documentation and records created

before the gasoline was transferred to a downstream party.

The USEPA guidelines also require that CARs commission an annual

attest engagement,\7\ performed by either an internal auditor or

independent Certified Public Account (CPA). The guidelines also specify

that the standardized forms, specifying agreed-upon procedures for the

conduct of the attest engagement, for use by the internal auditor or

CPA be provided by the state.

---------------------------------------------------------------------------

\7\The USEPA does not require an attest engagement in a per

gallon program.

---------------------------------------------------------------------------

The State requirement for maintaining records is found in Minnesota

Statute, section 239.791. In addition to the record-keeping

requirement, the registrant must commission an attestation engagement

by a certified public accountant to demonstrate that the blending

records are accurate. The registrant has 120 days after the end of the

control period to report the results of the audit to the State. These

requirements for the State program go beyond the requirements in USEPA

guidelines for a per gallon program but, are acceptable. Comments are

invited on this issue.

Prohibited Activities

The USEPA's credit program guidelines contain provisions designed

to ensure that gasoline that fails to meet the 2.0 percent by weight

minimum oxygen content requirement is not available for use within a

control area. Generally, CARs or blender CARs may not transfer gasoline

for use in a control area that contains less than the minimum percent

of oxygen by weight to parties who are not themselves registered as

CARs or blender CARs. Under USEPA's credit program guidelines,

regulated parties, including refiners, importers, oxygenate blenders,

carriers, distributors, or resellers may not fail to comply with

recordkeeping requirements.\8\

---------------------------------------------------------------------------

\8\USEPA's recommended provisions for prohibited activities are

found at pages 59-61 of the credit program guidelines.

---------------------------------------------------------------------------

The State enforces a variety of provisions in areas where oxygas is

required. The primary focus is violations of the sale of gasoline

containing less than 2.0 percent oxygen, pumps which are not labeled,

and registrants who cannot produce records of blending or transfer

records or shipping manifests.

Transfer Documents

The USEPA's credit program guidelines specify that transfer

documents should include the following information: date of the

transfer, name and address of the transferor, and name and address of

the transferee, the volume of gasoline which is being transferred, the

proper identification of the gasoline as oxygenated or nonoxygenated,

the location of the gasoline at the time of the transfer, the type of

oxygenate, and the oxygen content of the gasoline (for transfer

upstream of the control area terminal and for transfers between CARs,

include the oxygenate volume of the gasoline). Records are to be kept

in a location where they are available for state review.

Minnesota's enforcement plan instructs investigators to inspect

transfer documents to ensure they contain information regarding the

quality and destination of the gasoline. Registration forms and oxygen

units worksheets contain an adequate amount of information regarding

the fuel and the registrants. The State's operation manual for

distributors, refinery operators and terminal operators requires

detailed record keeping and auditing to meet the requirements of the

State legislation. These requirements go beyond what is required for

the Minnesota program but, are acceptable to the USEPA.

Enforcement and Penalty Schedules

State oxygenated gasoline regulation must be enforceable by the

state oversight agency. The USEPA recommends that states will visit at

least 20 percent of regulated parties during a given control period.

Inspections should consist of product sampling and record review. In

addition, each state should devise a comprehensive penalty schedule.

Penalties should reflect the severity of a party's violation, the

compliance history of the party, as well as the potential environmental

harm associated with the violation.

Minnesota Statutes contain a graduated penalty schedule for

violations of any of the winter oxygas requirements. Violation of any

of the requirements is a criminal offense, punishable as a misdemeanor.

The State retains discretionary authority to apply the graduated

penalty schedule including the authority to: issuing written warnings,

issue stop sale orders, lock or seal any gasoline dispenser, and

request a misdemeanor complaint against a violator.

At least 20 percent of the registered distributors will be

inspected during the control period, and samples will be taken of each

product at the facility, according to the State procedure. Samples will

be analyzed by the State at the State laboratory using gas

chromatography and a thermal conductivity detector following an

unspecified ASTM test method. Similarly, retail gasoline stations will

be inspected and samples taken during the control period. Approximately

20 percent of the retail outlets in the control area will be visited

during the control period.

Inspections, which will be unannounced and at random, will include,

in addition to sample collection, a visual check to ensure pumps are

properly labeled, that transfer documentation is on hand, and that only

oxygenated gasoline has been received during the control period.

Test Methods and Laboratory Review

The USEPA's sampling procedures are detailed in appendix D of 40

CFR part 80. The USEPA has recommended, in its credit program

guidelines, that states adopt these sampling procedures. Minnesota has

not adopted USEPA sampling procedures. However, the State does intend

to attempt a statistical validation which it will send to USEPA for

approval.

Each state regulation must include a test method. The USEPA

guidelines recommend the use of the OFID test, although parties may

elect to use ASTM-D4815-89 or another method, if approved by the USEPA.

Minnesota has elected to use an unspecified ASTM test method using gas

chromatography with a thermal conductivity detector and the appropriate

ASTM test method to determine oxygen content. The State will also use a

contractor where needed if the sample is expected to contain a non-

ethanol oxygenate. The State is also expected to use a field screening

method based on a near infra-red spectrophotometer. Information from

these tests will be sent to the USEPA for statistical validation as a

primary oxygenate test method.

The USEPA has established an interim testing tolerance, which

states appropriate ranges for credit and per-gallon programs.\9\ As

USEPA states in that memorandum, the purpose of the testing in a credit

program is to determine if a sample meets the 2.0 percent minimum

oxygen content requirement and to determine whether the documentation

that accompanies that gasoline is correct. For a per-gallon program,

the purpose of the testing is to determine whether the gasoline

contains less than 2.7 percent oxygen by weight. Minnesota has not

provided a description of its testing tolerance.

---------------------------------------------------------------------------

\9\See Memorandum dated October 5, 1992 from Mary T. Smith,

Director, Field Operations and Support Division to State/Local

Oxygenated Fuels Contacts.

---------------------------------------------------------------------------

Labeling

The USEPA was required to promulgate Federal labeling regulations

under section 211(m)(4) of the Act. These regulations were published in

the Federal Register on October 20, 1992\10\. The Minnesota requirement

for labeling is consistent with that of the USEPA. The USEPA's review

of the material indicates that the State of Minnesota has adopted an

oxygenated gasoline regulation substantially in accordance with the

requirements of the Act. The USEPA is proposing to approve the

Minnesota SIP revision for an oxygenated gasoline program, which was

submitted on November 9, 1992. The USEPA is soliciting public comments

on the issues discussed in this notice or on other relevant matters.

Comments regarding program operation during the first and subsequent

years of operation of the oxygenated gasoline program are invited.

---------------------------------------------------------------------------

\10\See footnote 3.

---------------------------------------------------------------------------

These comments will be considered before taking final action.

Interested parties may participate in the Federal rulemaking procedure

by submitting written comments to the USEPA Regional office listed in

the ADDRESSES section of this notice.

III. Proposed Action

The USEPA proposes to approve the oxygenated gasoline program

revision to the Minnesota SIP. Public comment is solicited on the

USEPA's proposed rulemaking action. Comments received on or before

February 22, 1994 will be considered in the development of the final

rulemaking.

This action is classified as a Table 2 action by the Regional

Administrator under the procedures published in the Federal Register on

January 19, 1989 (54 FR 2214-2225). On January 6, 1989, the Office of

Management and Budget (OMB) waived Table 2 and Table 3 SIP revisions

(54 FR 2222) from the requirements of section 3 of Executive Order

12291 for a period of two years. The USEPA has submitted a request for

a permanent waiver for Table 2 and Table 3 SIP revisions. The OMB has

agreed to continue the waiver until such time as it rules on USEPA's

request. This request continues in effect under Executive Order 12866

which superseded Executive Order 12291 on September 30, 1993.

Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., the

USEPA must prepare a regulatory flexibility analysis assessing the

impact of any proposed or final rule on small entities. (5 U.S.C. 603

and 604.) Alternatively, the USEPA may certify that the rule will not

have a significant impact on a substantial number of small entities.

Small entities include small businesses, small not-for-profit

enterprises, and government entities with jurisdiction over populations

of less than 50,000. The USEPA certifies that this rule, which merely

approves state requirements that are already in place, will not have a

significant impact on a substantial number of small entities.

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Carbon monoxide,

Reporting and recordkeeping requirements.

Authority: 42 U.S.C. 7401-7671q.

Dated: January 7, 1994.

Valdas V. Adamkus,

Regional Administrator.

[FR Doc. 94-1400 Filed 1-19-94; 8:45 am]

BILLING CODE 6560-50-F-M