Regulation of Fuels and Fuel Additives: Standards for Reformulated and Conventional Gasoline

SUMMARY: Under the Clean Air Act, as amended in 1990 (CAA or the Act),

the Environmental Protection Agency (EPA or the Agency) promulgated

anti-dumping regulations for conventional gasoline (gasoline not

certified as reformulated gasoline (RFG)). These regulations require

that conventional gasoline not be more polluting than it was in 1990.

The regulations for conventional gasoline include provisions for the

development of individual refinery baselines and other compliance

provisions. This proposal would modify the requirements for obtaining a

baseline adjustment due to the production of JP-4 jet fuel in 1990.

Additionally, EPA is proposing to allow a baseline adjustment due to

the inability to acquire extremely sweet crude that had been available

in 1990 and from which the gasoline used to develop the 1990 individual

baseline was obtained. With regard to both of these baseline adjustment

proposals, EPA is issuing a three-month administrative stay (which is

published elsewhere in this issue of the Federal Register) of the

applicable portions of the December 1993 final rule and proposes to

extend such stay by rule pending the outcome of this rulemaking. EPA is

also proposing a baseline adjustment for refiners which have both

extremely low baseline sulfur and olefin levels. A refiner is severely

limited in its ability to comply with its individual baseline when the

baseline values of both of these parameters are very low. For refiners

which qualify for one or more of the baseline adjustments proposed

today, EPA proposes to apply the adjustments to gasoline produced in

1995. Finally, EPA is also proposing to revise its regulations

concerning the publication and confidentiality of individual baselines

and information submitted to obtain an individual baseline.

DATES: EPA will conduct a hearing (date and location to be announced)

if a request for such is received by September 5, 1995. The comment

period on this document will close September 5, 1995 unless a hearing

is requested, in which case the comment period will close 30 days after

the close of the public hearing.

ADDRESSES: Interested parties may submit written comments (in

duplicate, if possible) to Public Docket No. A-95-03 at Air Docket

Section, U.S. Environmental Protection Agency, Waterside Mall, Room M-

1500, 401 M Street S.W., Washington, D.C. 20460. The Agency requests

that commenters also send a copy of any comments to Christine M.

Brunner at the address listed below in the ``Further Information''

section.

The support document containing detailed discussion of today's

proposal is contained in Public Docket A-95-03. Materials relevant to

the reformulated gasoline final rule are contained in Public Dockets A-

91-02 and A-92-12. These dockets are located at Room M-1500, Waterside

Mall (ground floor), U.S. Environmental Protection Agency, 401 M Street

S.W., Washington, D.C. 20460. The docket may be inspected from 8:00

a.m. until 5:00 p.m. Monday through Friday. A reasonable fee may be

charged by EPA for copying docket materials.

FOR FURTHER INFORMATION CONTACT: Christine M. Brunner, U.S. EPA (RDSD-

12), Regulation Development and Support Division, 2565 Plymouth Road,

Ann Arbor, MI 48105, Telephone: (313) 668-4287.

SUPPLEMENTARY INFORMATION: To Request Copies of This Document Contact:

Delores Frank, U.S. EPA (RDSD-12), Regulation Development and Support

Division, 2565 Plymouth Road, Ann Arbor, MI 48105, Telephone: (313)

668-4295.

A copy of this document is also available electronically on the

EPA's Office of Air Quality Planning and Standards (OAQPS) Technology

Transfer Network Bulletin Board System (TTNBBS). The service is free of

charge, except for the cost of the phone call. The TTNBBS can be

accessed with a dial-in phone line and a high-speed modem per the

following information:

TTN BBS: 919-541-5742

(1200-14400 bps, no parity, 8 data bits, 1 stop bit)

Voice Help-line: 919-541-5384

Accessible via Internet: TELNET ttnbbs.rtpnc.epa.gov Off-line:

Mondays from 8:00 AM to 12:00 Noon ET.

A user who has not called TTN previously will first be required to

answer some basic informational questions for registration purposes.

After completing the registration process, proceed through the

following menu choices from the Top Menu to access information on this

rulemaking.

GATEWAY TO TTN TECHNICAL AREAS (Bulletin Boards)

OMS--Mobile Sources Information

Rulemaking and Reporting

Fuels

File Area #9 * * * Reformulated gasoline

At this point, the system will list all available files in the

chosen category in reverse chronological order with brief descriptions.

These files are compressed (i.e., ZIPed). Today's notice can be

identified by the following title: JP4NPRM.ZIP. To download this file,

type the instructions below and transfer according to the appropriate

software on your computer:

ownload, rotocol, xamine, ew, ist, or elp Selection

or to exit: D filename.zip

You will be given a list of transfer protocols from which you must

choose one that matches with the terminal software on your own

computer. The software should then be opened and directed to receive

the file using the same protocol. Programs and instructions for de-

archiving compressed files can be found via ystems Utilities from

the top menu, under rchivers/de-archivers. After getting the files

you want onto your computer, you can quit the TTNBBS with the oodbye

command. Please note that due to differences between the software used

to develop the document and the software into which the document may be

downloaded, changes in format, page length, etc. may occur.

I. Introduction

Compliance with certain aspects of the reformulated and

conventional gasoline regulations depends on the individual baseline of

the refinery or refiner.1 The individual baseline is the set of

fuel parameter values, emissions and volumes which represent the

quality and quantity of the refiner's 1990 gasoline. See 40 CFR 80.91.

EPA's regulations establish requirements for developing an individual

baseline. For specific situations, the Agency allowed the baseline fuel

parameters, volumes and emissions values to be adjusted to reflect

certain limited unique instances. Allowable circumstances under the

regulations include unforeseen downtime of a gasoline blendstock

producing unit, nonannual maintenance, work-in-progress and

[[Page 40010]]

production of JP-4 jet fuel. In such cases, EPA has ``case-by-case

discretion'' to grant variances or even dispensation from a rule where

imposition of the requirement would result in minimal environmental

benefit but would extremely burden a regulated party.2

\1\ In general, the anti-dumping provisions apply to refiners or

importers of conventional gasoline. The baseline adjustment

provisions proposed in today's notice, however, are applicable only

to refiners and their refineries.

\2\ Alabama Power Company v. Costle, 636 F.2d 323.357 (D.C. Cir

1979).

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This notice of proposed rulemaking (NPRM) proposes to allow

baseline adjustments for three situations where parties would be

extremely burdened by the current regulations were relief not granted.

Specifically, today's notice proposes to revise the requirements for a

baseline adjustment due to JP-4 jet fuel production in 1990, to add a

provision addressing the use of extremely sweet crude in 1990 which is

no longer available, and to add a provision addressing compliance

difficulties arising from a baseline which is very low in both sulfur

and olefins. EPA is also issuing a three-month administrative stay,

which is published elsewhere in this issue of the Federal Register,

with regard to the first two baseline adjustment issues above pending

reconsideration of the applicable provisions by the Agency. In

addition, EPA proposes to extend the stay until final action is taken

on the regulatory changes proposed herein. For refiners which qualify

for one or more of the baseline adjustments proposed today, EPA

proposes to apply the adjustments to gasoline produced in 1995. This

notice also proposes to revise the regulations concerning the

publication and confidentiality of individual baselines and the

information submitted to receive such a baseline. Comments and

supporting data are requested on any aspect of today's document.

II. JP-4 Baseline Adjustment

A. Introduction

JP-4 jet fuel, the use of which is being phased out by the Defense

Department, was produced by many refiners under contract with the

Defense Department in 1990. Because the JP-4 blendstock is now likely

to be used in gasoline, most of that blendstock cannot be used in

gasoline without first going through a reformer to increase its octane

to suitable gasoline levels. Due to the high aromatic content of

streams after reforming, the toxic emissions of the current gasoline of

a refiner which produced JP-4 in 1990 will likely increase relative to

its 1990 values. In addition, it is possible that gasoline production

would increase (relative to 1990 production) due to movement of

blendstocks directly and indirectly from JP-4 to gasoline. The impact

of the increase in aromatic content and/or additional volume due to JP-

4 phaseout will, of course, affect certain refiners more extremely than

others.

The current regulations provide for an adjustment to a refiner's

individual baseline due to production of JP-4 in 1990 if three criteria

are met. The criteria were fashioned to ensure that the requirements of

Alabama Power were met. First, JP-4 baseline adjustments will be

allowed only for a refiner which will not produce reformulated

gasoline. If a refiner granted such an adjustment subsequently produces

reformulated gasoline, its conventional gasoline compliance would be

subject to its original unadjusted baseline during the current

averaging period and all subsequent years. For multi-refinery refiners,

this provision applies on a refiner-wide basis. Second, a JP-4 baseline

adjustment is available primarily to qualifying single-refinery

refiners. A multi-refinery refiner could also receive an adjustment if

each of its refineries produced JP-4 in 1990 and each refinery also met

the other requirements for obtaining the adjustment. Third, the refiner

is required to show that a significant burden would exist if no

baseline adjustment was allowed. The current regulations require that

the ratio of a refinery's 1990 JP-4 production to its 1990 gasoline

production equal or exceed 0.5 in order to qualify as a significant

burden.

EPA expected minimal negative environmental affects from allowing

baseline adjustments under the criteria specified in the current

regulations because (1) the number of refineries meeting the criteria

for a baseline adjustment is expected to be quite small, and (2) the

total production of all such refineries is also small.

B. Proposal

In today's notice, EPA proposes provisions related to JP-4 baseline

adjustments which are essentially as contained in the direct final rule

(DFRM), published July 20, 1994 (59 FR 36944).3 The provisions are

discussed below. For detailed discussion of the provisions proposed

today, refer to the support document for this rule, ``Regulation of

Fuels and Fuel Additives: Standards for Reformulated and Conventional

Gasoline--Detailed Discussion and Analysis'', Air Docket A-95-03.

\3\ Since EPA received adverse comments on the changes specified

in the DFRM with regard to JP-4 baseline adjustments, EPA withdrew

this DFRM based on EPA's determination, announced in the DFRM, that

such provisions would take effect only if no persons submitted

adverse comments or requested an opportunity to comment. For more

discussion, see the support document, ``Regulation of Fuels and Fuel

Additives: Standards for Reformulated and Conventional Gasoline--

Detailed Discussion and Analysis'', Air Docket A-95-03.

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1. Multiple-Refinery Requirement

EPA proposes that the following conditions would have to be met by

a multi-refinery refiner in order for that refiner to qualify for a

baseline adjustment for 1990 JP-4 production at one or more of its

refineries:

(1) Produced JP-4 at one or more of its refineries in 1990.

The current JP-4 baseline adjustment provisions for multi-refinery

refiners require each refinery to have produced JP-4 in 1990. EPA

believes it may use its discretion to provide relief because the

requirements of Alabama Power are satisfied. If a multi-refinery

refiner qualifies for a baseline adjustment under this criterion, it

would (1) determine the adjusted baseline of the refinery(ies) which

actually produced JP-4 in 1990 and (2) determine its anti-dumping

compliance on an aggregate basis.

(2) Has a 1990 JP-4 to gasoline ratio of at least 0.15 (see

discussion below regarding JP-4 baseline adjustment ratio).

(a) For each individual refinery, if all of its refineries produced

JP-4 in 1990, in which case the refiner may comply with the anti-

dumping requirements on an individual or aggregate basis; or

(b) On a refiner-wide basis, in which case the refiner must

determine an individual baseline for each of its refineries but must

comply with the anti-dumping requirements on an aggregate basis; and

(3) Will not produce RFG at any of its refineries.

EPA requests comments on this change to the current JP-4 baseline

adjustment provisions concerning multi-refinery refiners.

2. JP-4 Baseline Adjustment Ratio

The current regulations for a baseline adjustment require that the

ratio of the refinery's 1990 JP-4 production to its 1990 gasoline

production must equal or exceed 0.5. Based on responses from affected

refiners, very few refiners under contract to produce JP-4 would have

the relief intended by the provision. Further, EPA has evaluated data

it received subsequent to December 1993 concerning 1990 JP-4 and

gasoline production for refiners (both multi- and

[[Page 40011]]

single refinery refiners) 4 and is hereby proposing that the ratio

be reduced to 0.15. EPA believes this ratio will allow three to four

refiners which dedicated a substantial amount of 1990 production to JP-

4 production and for which converting the associated feedstock for use

in gasoline would be a severe economic burden. This value is in line

with the ratio options that were suggested by commenters during the

original rulemaking. At a ratio of less than 0.15, EPA believes the

impact on benzene and aromatics may make it more costly for refiners to

comply with the regulations, though it is unlikely that such refiners

will be forced out of business or experience extreme burden.

\4\ Petition for Adjustment to Anti-Dumping Baseline, Atlas

Processing Company, Penzoil Products Company, Attachments B and C,

March 29, 1994.

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EPA expects minimal negative environmental affects due to the

reduction of the ratio requirement to 0.15 because the expanded

provision will still apply to a very limited number of refiners

producing a limited amount of conventional gasoline. EPA requests

comments on the proposal discussed above.

3. Comments Received on the DFRM

For a discussion of comments received on the DFRM, please see the

support document for this rule (``Regulation of Fuels and Fuel

Additives: Standards for Reformulated and Conventional Gasoline--

Detailed Discussion and Analysis'', Air Docket A-95-03).

III. Crude Quality Baseline Adjustment

A. Introduction

Crude sulfur content is increasing nationwide 5 and, while for

most refiners increases in crude sulfur content should be considered

manageable, such increases might be devastating for certain refiners.

EPA has also been informed that the quality of the crude oil (with

regard to sulfur content) available to refiners in PADD IV has been

deteriorating faster than the rest of the U.S. since 1990.6

Additionally, refiners in this region do not have access to imports of

foreign crudes other than those from Canada. Thus, the quality of crude

oil reasonably and economically available to these refiners, from

traditional or alternative sources, is quite limited. Prior to

promulgation of the December 1993 rules, EPA did not know that the

deterioration of crude oil available to certain refiners (with regard

to increasing sulfur content) might in some cases force them to cease

operation in order to avoid noncompliance as compliance options for

such a refiner might be prohibitively expensive.

\5\ E.J. Swain, ``U.S. crude slate continues to get heavier,

higher in sulfur,'' Oil & Gas Journal, p. 37, January 9, 1995.

\6\ Oil & Gas Journal, January 9, 1995.

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The current regulations generally do not allow baseline adjustments

for changing crude quality or availability. However, as discussed in

the preamble to the December 1993 final rule, EPA recognized that a

refiner's ability to comply with its individual baseline can be

extremely burdensome due to certain factors, such as changes in crudes,

markets, and fuel specifications. As with the work-in-progress baseline

adjustment and the JP-4 baseline adjustment which is discussed above,

EPA believes it has the authority to provide limited relief in the form

of a baseline adjustment in those situations where the anti-dumping

regulatory burden is extremely onerous and where requiring compliance

would yield little or no environmental gain. Thus, EPA is proposing

such a baseline adjustment where a dramatic increase in crude sulfur

content has occurred which could severely affect the anti-dumping

compliance of refiners with extremely low baseline sulfur values. EPA

requests comments on the discussion and proposed criteria presented

today. EPA also requests data which supports or refutes the information

presented in this notice.

B. Proposal

EPA proposes to allow a baseline adjustment only for the

deterioration of crude sulfur levels as it is unaware of other inherent

crude properties which strongly and directly affect baseline fuel

parameters. Comments are requested on other inherent crude properties

which have significantly deteriorated since 1990 and which directly and

significantly affect the values of any of the fuel parameters for which

an individual baseline value must be determined. Comments concerning

crude quality changes since 1990, as well as future trends (including

identifying whether crude sulfur content increases will flatten off or

continue to increase), especially on a regional or PADD basis, are also

requested.

As with other baseline adjustments such as work-in-progress, the

proposed criteria for obtaining an adjustment are necessarily stringent

so as to provide relief only in cases of extreme burden and to maintain

the environmental benefits of the (anti-dumping) program. EPA does not

intend to allow adjustments for all refiners who have experienced

increasing crude sulfur levels in the time period since 1990 or will

experience such increases in the future. Thus, the existing provisions

in section 80.91 of the regulations still apply, i.e., no adjustments

for crude quality or availability changes are allowed unless the

proposed criteria are met.

If a refiner meets the following proposed criteria, it would be

able to petition for a baseline adjustment to account for crude sulfur

changes:

(1) The refinery produces no reformulated gasoline. While the anti-

dumping requirements, in general, apply to all conventional gasoline

whether or not reformulated gasoline is also produced, in these

specific cases no dumping will occur due to reformulated gasoline

production. If a refinery granted such an adjustment subsequently

produces reformulated gasoline, its conventional gasoline compliance

would be subject to its original unadjusted baseline during the current

averaging period and in all subsequent years.

(2) A refiner has an unadjusted baseline value of not more than 50

ppm. EPA believes that requiring a threshold value of 50 ppm is

appropriate because higher baseline values would indicate that the

refiner's 1990 crude slate was not extremely low in sulfur.

Additionally, a refiner with a higher baseline sulfur value should have

sufficient leeway, e.g., types of crudes utilized and processing

flexibility, to comply with its individual baseline. EPA requests

comments on the appropriateness of requiring a threshold value, and on

the suitability of 50 ppm or another value as a threshold value.

(3) The affected refinery of a multi-refinery refiner may not be

aggregated with the refiner's other refineries for compliance purposes.

Since both the unadjusted and adjusted baselines must be determined, if

a refinery granted such an adjustment subsequently is included in an

aggregate baseline, its conventional gasoline compliance would be

subject to its original unadjusted baseline during the current

averaging period and in all subsequent years.

(4) The installation of the refinery units necessary to process

higher sulfur crudes to comply with the refinery's actual (i.e.,

unadjusted) baseline would cost $10 million or be at least 10 percent

of the depreciated book value of the refinery as of January 1, 1995.

The purpose of this provision would be to ensure that an adjustment be

limited to cases of extreme burden or economic hardship and de minimis

environmental impact, and is the same economic burden requirement which

must be met

[[Page 40012]]

by a refiner seeking a work-in-progress baseline adjustment.7 EPA

requests comments on this criterion and whether the specified values

are adequate given the type of unit (e.g., hydrotreater) that a refiner

would have to install in order to comply. EPA also requests comments on

(1) the economic burden, if any, of producing and selling gasoline

blendstocks in lieu of finished gasoline, and (2) the economic burden

of complying with an unadjusted baseline under the circumstances

described above by modifying refinery operations in ways other than

installing major refinery units. For instance, the principal source of

sulfur in gasoline is the catalytic gasoline blendstock. An option for

lowering sulfur would be to lower the catalytic gasoline end point and

shift the back (heavy, high boiling) portion of the gasoline into the

distillate stream. While this would move barrels of crude oil into

distillates and out of gasoline and shift the refinery product mix

8, it would lower the sulfur content of the catalytic gasoline.

EPA also requests information on the effect of crude sulfur levels on

gasoline sulfur.

\7\ 40 CFR 80.91(e)(5)(v).

\8\ Because sulfur content of petroleum products increases with

the boiling range of the material.

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(5) The refiner has access to a geographically-limited crude

supply. The refiner must show that it could not reasonably or

economically obtain crude oil from an alternative source that would

permit it to produce conventional gasoline which would comply with its

unadjusted baseline. EPA requests comment on this proposed provision

and on which criteria that should be used to evaluate ``reasonably and

economically available''.

(6) The refiner has experienced an average crude sulfur increase of

at least 25 percent since 1990. EPA proposes that the highest annual

average crude sulfur slate utilized during the period 1991-1994,

inclusive, be used for comparison to 1990 to determine if the ``25

percent'' criterion is met. Comments are requested concerning the level

of difference between 1990 and post-1990 crude sulfur contents that

should exist in order to obtain an adjustment, and whether 1991-1994 is

an appropriate comparison period or whether some other comparison

should be established. Comments are also requested as to whether it is

appropriate, and feasible, to distinguish crudes used solely for

gasoline production from crudes used to produce other refinery

products. If such distinction is possible, EPA believes it would be

appropriate to base all calculations pertaining to this proposed

baseline adjustment only on those volumes of each crude used to produce

gasoline.

(7) Gasoline sulfur changes are directly and solely attributable to

the crude sulfur change, and not due to alterations in refinery

operation nor choice of products.

(8) A baseline adjustment is available to both single-refinery and

multi-refinery refiners.

(9) The eligibility of a refinery of a multi-refinery refiner for

this proposed baseline adjustment is not dependent on the RFG

production of the other refineries of the refiner.

EPA is proposing several options for determining the adjusted

baseline sulfur value if a refiner meets the above criteria and is

approved for a baseline adjustment. EPA will finalize only one option;

certain portions of the other proposed options could also be

incorporated. For this reason, EPA requests comments on all aspects of

the options proposed. For brevity, only OPTION 1 is included in the

proposed regulatory language. EPA proposes that, regardless of which

option is finalized, the adjusted baseline sulfur value may not exceed

338 ppm, the annual average value specified in 40 CFR 80.91(c)(5)(iii).

See the support document for this rule for more discussion related to

the various options presented (``Regulation of Fuels and Fuel

Additives: Standards for Reformulated and Conventional Gasoline--

Detailed Discussion and Analysis'', Air Docket A-95-03.)

Option 1: EPA proposes that the adjusted baseline sulfur value be

related to the ratio of the sulfur value of the highest sulfur crude

utilized in 1994 to the average sulfur content of the crude slate

utilized in 1990. Under this option, if a refiner utilized two crudes

in its gasoline production in 1994 with sulfur levels of 1000 ppm and

2100 ppm, the higher sulfur crude would be utilized in the

determination of the adjusted baseline sulfur value. If, for example,

the 1990 average crude sulfur content was 500 ppm (resulting, say, in a

20 ppm baseline), the adjusted baseline sulfur value would be 84 ppm

20 ppm x (2100/500) . EPA requests comments on this proposed option,

including whether the highest sulfur crude from 1991-1994 should be

used rather than just considering 1994.

Option 2: EPA proposes that the adjusted baseline sulfur value be

related to the ratio of the highest average sulfur content of the crude

slate utilized in 1991, 1992, 1993 or 1994 to the average sulfur

content of the crude slate utilized in 1990. Using the 1990 baseline

and crude sulfur values from Option 1, and average crude sulfur

contents of 1000, 1100, 1400, and 1300 ppm for years 1991, 1992, 1993

and 1994, respectively, the adjusted baseline sulfur value would be 56

ppm, i.e., 20 ppm x [1400/500]. EPA requests comments on this

proposed methodology and solicits alternative methods of determining

the adjusted baseline sulfur value.

Option 3: EPA proposes that an adjusted baseline sulfur value be

determined for each year through 1999. Beginning January 1, 2000, the

adjusted baseline sulfur value would be the same as it was in 1999. EPA

proposes that the annual adjusted value be determined over the four

years prior to the year before the new value takes effect, except for

1995 and 1996 which would be determined as specified in OPTION 1 above

(and for which the adjusted baseline sulfur value would be the same).

EPA also proposes that if less than a 25 percent difference occurs

between the 1990 average crude sulfur level and the average crude

sulfur level over a four-year time period, the refiner would receive no

additional adjustments, and its most recent adjusted baseline sulfur

value would become its permanent baseline sulfur value at that point.

For example, the standard for 1997 would be based on the ratio of the

average sulfur content of the crude slate utilized in 1992, 1993, 1994

or 1995 to the average sulfur content of the crude slate utilized in

1990. EPA proposes that the resulting adjusted baseline sulfur value be

submitted to the Agency for evaluation and approval by June 1 of the

year preceding the year for which it would be the standard. In the

example given, the adjusted baseline value (and all supporting

information) would have to be submitted by June 1, 1996.

EPA requests comments on a refiner's ability, given the other

requirements of this proposed option and the proposed requirements used

to qualify for an adjusted baseline sulfur value, to choose to process

higher sulfur crudes.

Option 4: EPA proposes requirements similar to those presented for

option 3 except that adjustments will only be allowed through 1997,

i.e., the duration of the simple model years. Beginning in 1998, the

adjusted baseline sulfur value would be the value in 1997.

Option 5: EPA proposes that the adjusted baseline sulfur value be

the unadjusted baseline sulfur value plus 50 ppm. EPA requests comments

on this proposed option, including whether 50 ppm is an appropriate

value. EPA specifically seeks comment on the appropriateness of using

100 ppm or 150 ppm instead of 50 ppm.

These five proposed options all result in an adjusted baseline

sulfur value

[[Page 40013]]

which is known prior to the period of production, thus treating the

affected refiner like all other refiners. If one of OPTIONS 1-5 becomes

final, a refiner might have to modify refinery operations in the future

to accommodate increasing crude sulfur levels. However, future refinery

operation modifications will likely be required of most refiners,

without benefit of a baseline adjustment, in order to deal with the

increasing crude sulfur levels. The purpose of this proposed baseline

adjustment is to provide relief in certain cases where increasing crude

sulfur levels could make compliance with the anti-dumping requirements

extremely difficult. However, baseline adjustments are intended to

reduce, not eliminate, the burden associated with complying with the

anti-dumping regulations in situations where the burden is onerous and

the environmental impact is minimal. If the burden were totally

eliminated, then this criteria would no longer be met.

EPA received a suggested option proposing that a refiner would be

able to produce conventional gasoline which does not meet, on average,

the requirements of its individual baseline if it could show that

deviation from its baseline was directly and solely attributable to

crude sulfur change, and not due to alterations in refinery operation

or choice of products. The suggested option also contained other

requirements a refiner would have to meet which are essentially those

proposed today by EPA in order to qualify for this proposed baseline

adjustment.

EPA has many concerns about the concept and detail of this

suggested option. This option basically exempts a qualifying refiner

from complying with its anti-dumping compliance baseline if the refiner

can show, at the end of the compliance period, that deviation from its

baseline was directly and solely attributable to crude sulfur change.

Thus, unlike all other refiners, a qualifying refiner would have no

clearly defined standard prior to year of production. Additionally, if

EPA was not satisfied that deviation from its baseline was directly and

solely attributable to crude sulfur change, the refiner would have to

determine compliance relative to its unadjusted baseline and would

likely be out of compliance.

EPA requests comments as to whether, in order to show that

increased gasoline sulfur is due solely to the increased crude sulfur,

no changes in refinery configuration or refinery operation would be

allowed. Or is it possible to ``back out'' the effects of such changes?

If it is not possible to ``back out'' the effects of refinery changes

to determine just the effect of crude sulfur on gasoline sulfur, then a

refiner which would use this option could potentially not make any

refinery changes in order to qualify for a baseline adjustment.

Alternatively, if refinery changes were made under this suggested

option, it would seem that the refiner's compliance baseline would

revert back to its unadjusted baseline. EPA requests comments on this

suggested option, particularly addressing its enforceability and

competitive concerns.

Since today's proposed baseline adjustment focuses on sulfur

(unless commenters suggest other baseline fuel parameters which are

directly affected by crude oil quality), if the suggested approach

(which is not part of OPTIONS 1 through 5) were adopted, EPA believes

it would be more appropriate, under the suggested option, that a

refiner be exempt only from complying with its anti-dumping compliance

baseline for sulfur under the simple model and NOX emissions under

the complex model, to the extent that increased sulfur affects NOX

emissions. The refiner would have to comply with NOX emissions

once the effect of increased sulfur is factored out. Basically, the

refiner would (1) determine its baseline NOX emissions after

substituting its annual average sulfur for the compliance period for

its unadjusted baseline sulfur value, (2) determine its annual average

NOX emissions for the compliance period, and (3) compare the

values in (1) and (2) for the purposes of determining compliance. EPA

does not believe that a refiner should be exempt from its other anti-

dumping compliance baselines, i.e., all other simple model requirements

as well as exhaust benzene and exhaust toxics emissions under the

complex model since those emissions are only minimally affected by

sulfur. Comments are requested on these details of this suggested

option.

EPA expects minimal negative environmental affects from allowing

baseline adjustments under the criteria proposed today due to the small

number of refineries expected to qualify for a baseline adjustment and

the relatively small total production volume of all such refineries.

IV. Baseline Adjustment for Very Low Baseline Sulfur and Olefins

A. Introduction

In addition to compliance difficulties resulting from crude quality

changes, the Agency also recognizes that very clean individual

baselines can make compliance extremely difficult or impossible due to

limited maneuverability about the clean baseline and limited

flexibility with regard to annual averaging when certain baseline fuel

parameter values are very low. During the review and approval of

individual baselines, EPA was informed that extremely low baseline

sulfur and olefin values (e.g., below 30 ppm sulfur and 1.0 volume

percent olefins) could force a refiner to cease gasoline production.

This was not EPA's intention when it developed the reformulated

gasoline and anti-dumping requirements. Refiners with very clean

baselines will presumably produce the least polluting gasoline of all

refiners. (For more discussion on these proposed baseline adjustment

provisions, see the support document, ``Regulation of Fuels and Fuel

Additives: Standards for Reformulated and Conventional Gasoline--

Detailed Discussion and Analysis'', Air Docket A-95-03.)

EPA believes it has the authority to provide limited relief in the

form of a baseline adjustment in those few cases where the regulatory

burden is extremely onerous and where requiring compliance would yield

little or no environmental gain. EPA is proposing such a baseline

adjustment in cases where both the baseline sulfur and baseline olefins

values are very low and certain other conditions are met. EPA requests

comments on the discussion and proposed criteria presented today.

B. Proposal

EPA proposes several criteria a refiner must meet in order to

petition for a baseline adjustment to account for restricted

maneuverability due to very low baseline sulfur and olefin values. EPA

does not necessarily intend to allow adjustments for all refiners who

foresee restricted maneuverability due to a clean individual baseline.

EPA requests comments on the appropriate level of stringency to apply

to the minimum criteria that must be met in order to receive an

adjustment.

(1) EPA proposes to allow an adjustment for individual baselines

when the sulfur and olefin contents are extremely low, defined as

values below 30 ppm sulfur and 1.0 vol% olefins. These values are

identical to the minimum levels given in the negligible quantity

provision (see 40 CFR 80.91(d)(3)). Comments are requested on other

fuel components which, when they are found to be extremely low in an

individual baseline, can restrict the refiner's compliance

maneuverability to the point of severe economic burden.

(2) EPA proposes that a refiner seeking a baseline adjustment for

low

[[Page 40014]]

baseline levels of sulfur and olefins must show that the installation

of the refinery units necessary to comply with its actual (i.e.,

unadjusted) baseline would cost $10 million or be at least 10 percent

of the depreciated book value of the refinery as of January 1, 1995.

EPA requests comments on this criterion and specifically whether such

amounts are adequate given the type of unit (e.g., hydrotreater) that a

refiner would have to install in order to comply. EPA also requests

comments on (1) the economic burden, if any, of producing and selling

gasoline blendstocks in lieu of finished gasoline, and (2) the economic

burden of complying with an unadjusted baseline under the circumstances

described above by modifying refinery operations in ways other than

installing major refinery units.

(3) EPA proposes that such an adjustment be available to both

single-refinery and multi-refinery refiners and that the affected

refinery of a multi-refinery refiner may not be aggregated with the

refiner's other refineries for compliance purposes.

(4) If a refiner meets the above criteria and is approved for a

baseline adjustment, EPA proposes that the baseline adjustment simply

amount to setting the annual average sulfur and olefin values to 30 ppm

and 1.0 volume percent, respectively. If at any time the refinery's

baseline is aggregated with another refiner's baseline for compliance

purposes, the applicable individual baseline would revert to the

unadjusted baseline. The summer and winter values would each also be

set to 30 ppm for sulfur and 1.0 volume percent for olefins. Comments

are requested on the methodology of setting the adjusted baseline

sulfur and olefin values. An alternative approach to setting seasonal

values for sulfur and olefins would be to maintain the actual (i.e.,

unadjusted) proportion of summer to winter sulfur and olefin values.

As with the baseline adjustment proposals described earlier, EPA

expects minimal negative environmental effects from allowing baseline

adjustments under the criteria proposed in this section due to the

small number of refiners which might qualify for such an adjustment and

the small amount of additional gasoline that would be affected by the

proposed baseline adjustments.

V. Stay and Reconsideration of the Regulations

A. Authority for Stay and Reconsideration

The administrative stay (which is published elsewhere in this issue

of the Federal Register) of the provisions concerning JP-4 and certain

changes in sweet crude oil are being undertaken pursuant to section

307(d)(7)(B) of the Clean Air Act, 42 U.S.C. 7607(d)(7)(B). That

provision authorizes the Administrator to stay the effectiveness of a

rule for three months if the grounds for an objection arose after the

period for public comment and if the objection is of central relevance

to the outcome of the rule.

The grounds for an objection to the criteria for an individual

baseline adjustment based on production of JP-4 jet fuel arose after

the end of the public comment period, and before the time allowed for

seeking judicial review. Basically, new information has been submitted

to EPA concerning the number of parties potentially affected by the

criteria adopted, and the ability of parties with more than one

refinery to aggregate baselines and thereby avoid the adverse impacts

of a failure to obtain an individual baseline adjustment. This

information became available to EPA after the final criteria were

adopted by EPA, and are directly relevant to the basic rationale for

those criteria. This information was not available before that time,

because it relates to the impact of the final criteria adopted by EPA

as compared to the proposed criteria.

Similarly, the grounds for an objection to a lack of a baseline

adjustment based on changes in the sulfur level of available crude oil

arose after expiration of the period for public comment. It appears

that the sulfur levels of crude have changed significantly since 1990

for certain areas of the country. Until EPA issued its final rules in

December 1993, and more information was obtained on the sulfur levels

of crude that would be available for use in 1995 and later, refiners

that have historically relied on the availability of low sulfur crude

could not identify for EPA the full impact of the final conventional

gasoline requirements on their ability to continue marketing

conventional gasoline.

Based on the above, and the Agency's interest in reconsidering

these provisions through rulemaking, EPA is issuing a three-month

administrative stay (which is published elsewhere in this issue of the

Federal Register) of the effectiveness of the following rules, with

certain conditions keyed to the requirements proposed today. The stay

is structured such that it will only affect those persons who meet the

requirements proposed today.

First, 40 CFR 80.91(e)(7)(i)(A) through (C) is being stayed for

three months for all persons that meet the requirements proposed today

regarding Sec. 80.91(e)(7). In effect, persons who meet the proposed

requirements would be able to receive a baseline adjustment under

Sec. 80.91(e)(7) if they also met the requirements of

Sec. 80.91(e)(7)(ii) and (iii). If a person does meet these conditions,

then the Agency may approve a baseline adjustment under the terms of

this stay, or under the terms of any stay issued through rulemaking.

Second, 40 CFR 80.101(b)(1)(ii) is being stayed for three months

for all persons that meet the requirements proposed today as a new

Sec. 80.91(e)(8), and that comply with an annual average sulfur level

of 125% of the compliance baseline that would apply under the new

Sec. 80.91(e)(8) proposed today. (See the Option 1 discussion in

Section III.B. above.) In effect, the stay would only affect those

persons who meet the proposed requirements for a baseline adjustment

and who also meet the annual average sulfur level for conventional

gasoline that would apply if they received a baseline adjustment under

this proposal.

EPA is also proposing to stay these provisions by rule, pending

completion of this rulemaking. If EPA does not finalize the changes

proposed today, then EPA would revise any such baseline established

during the stay to conform with the final action taken by the Agency.

An appropriate time period would be allowed before a revised baseline

would become effective. The terms of the 3 month administrative stay

and any stay issued through rulemaking would apply to all gasoline

produced from January 1, 1995 through to the end of any such stay.

B. Proposal for a Stay Pending Rulemaking

As described earlier, EPA is issuing a three month administrative

stay of certain provisions pending reconsideration by the Agency. The

authority for this three month administrative stay is section

307(d)(7)(B) of the Act. Since EPA may not be able to complete its

reconsideration and this rulemaking during this time period, EPA

proposes to extend the stay until final action is taken on the

regulatory changes proposed herein. EPA requests public comment on this

extension of the stay during reconsideration and rulemaking.

VI. Confidentiality of Information Submitted for Individual Baselines

A. Introduction

The final regulations issued by EPA in December 1993 determined

that certain information submitted by refiners or

[[Page 40015]]

importers would not be considered confidential. In addition, EPA stated

that it would publish a portion of this information. This information

concerns the individual baseline assigned to refiners and importers for

use in the conventional and reformulated gasoline program, as well as

information submitted by these parties in their petition for a

baseline. See 40 CFR 80.93(b)(6).

Persons affected by this provision sought judicial review,

objecting to the release of this information on grounds of business

confidentiality. American Petroleum Institute v. U.S. Environmental

Protection Agency, No. 94-1138 (D.C. Cir.), and consolidated case

Texaco, Inc. and Star Enterprises v. U.S. Environmental Protection

Agency, No. 94-1143 (D.C. Cir.). Based on discussions with these

parties, EPA has decided to reconsider this provision and is proposing

to revise it. Under the proposal, only a portion of this information

would be published, the exhaust emissions values assigned as an

individual baseline. Issues concerning claims of business

confidentiality for the remaining information would be resolved under

EPA's regulations on ``Confidentiality of Business Information,'' 40

CFR Part 2 subpart B.

B. Background

The conventional gasoline regulations are based in large part on

the use of individual baselines for refiners and importers, while their

use in the reformulated gasoline program is limited to the first three

years of the program. The individual baseline reflects the average

quality of a refiner's or importer's gasoline for the year 1990. The

standards for conventional gasoline are generally expressed in terms of

a refiner's or importer's individual baseline, so that compliance with

the standards is measured by comparing current production of

conventional gasoline against the individual baseline, on an annual

basis. For example, under the simple model for conventional gasoline, a

refiner's annual average for exhaust benzene emissions may not exceed

their compliance baseline, and the annual averages for sulfur, olefins

and T-90 may not exceed 125 percent of their compliance baseline value

for these parameters. 40 CFR 80.101(b)(1). In most cases, the

compliance baseline is the same as the individual baseline. 40 CFR

80.101(f). For reformulated gasoline, certain standards applicable

during 1995 through 1997 are also expressed in terms of a refiner's or

importer's individual baseline. 40 CFR 80.41(H)(2).

EPA assigns an individual baseline after reviewing the individual

baseline values for various fuel parameters, the motor vehicle exhaust

emissions levels calculated from such parameters, individual 1990

baseline gasoline volumes, and the blendstock to gasoline ratios for

1990 through 1993, all submitted by the refiner or importer. This

information would be deemed not confidential under EPA's current

regulations. In addition, under the current regulations, EPA would

publish the individual emissions standard for each refiner or importer,

as well as the sulfur, olefins and T-90 standard noted above. 40 CFR

80.93(b)(6).

C. Proposal

EPA remains concerned that the emissions standards for refiners and

importers should continue to be public. Therefore, EPA is proposing to

publish the individual baseline values for exhaust emissions that

comprise a refiner or importer's standards. EPA is proposing that the

standards for sulfur, olefins and T-90 applicable during 1995 through

1997 not be published, and that the reporting requirements be revised

so a refiner or importer would have to note whether and how much their

annual average for these values exceeded their individual baseline

value. This latter information would be considered non-confidential.

This would effectively provide the same benefits as publishing the

baseline values for these three parameters as it would clearly show

whether a refiner or importer violated the standards applicable for

these fuel parameters. In addition, requests for release of other

baseline information would be governed by the regulations on the

confidentiality of business information at 40 CFR Part 2 subpart B. EPA

is proposing this change so that the factual and legal issues

concerning disclosure of this information may be resolved on a case-by-

case basis under EPA's CBI rules.

For a discussion of industry concerns regarding this issue and

EPA's rationale behind its proposal, see the support document for this

rule, ``Regulation of Fuels and Fuel Additives: Standards for

Reformulated and Conventional Gasoline--Detailed Discussion and

Analysis'', Air Docket A-95-03.

VII. Environmental and Economic Impacts

The environmental impacts of today's proposal are minimal, as

discussed above. Additionally, economic impacts are generally

beneficial to affected refiners due to the additional flexibility

proposed in today's notice. Minimal anti-competitive effects are

expected. The environmental and economic impacts of the reformulated

gasoline program are described in the Regulatory Impact Analysis

supporting the December 1993 rule, which is available in Public Docket

A-92-12 located at Room M-1500, Waterside Mall (ground floor), U.S.

Environmental Protection Agency, 401 M Street SW., Washington, DC

20460.

VIII. Public Participation

EPA desires full public participation in arriving at its final

decisions and solicits comments on all aspects of this proposal.

Wherever applicable, full supporting data and detailed analysis should

also be submitted to allow EPA to make maximum use of the comments. All

comments should be directed, by [30 days after publication] to the EPA

Air Docket, Docket A-95-03 (See ADDRESSES).

Any proprietary information being submitted for the Agency's

consideration should be markedly distinguished from other submittal

information and clearly labelled ``Confidential Business Information.''

Proprietary information should be sent directly to the contact person

listed above, and not to the public docket, to ensure that it is not

inadvertently placed in the docket. Information thus labeled and

directed shall be covered by a claim of confidentiality and will be

disclosed by EPA only to the extent allowed and by the procedures set

forth in 40 CFR Part 2. If no claim of confidentiality accompanies a

submission when it is received by EPA, it may be made available to the

public without further notice to the commenter.

IX. Compliance With the Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) of 1980 requires federal

agencies to examine the effects of their regulations and to identify

any significant adverse impacts of those regulations on a substantial

number of small entities. Pursuant to section 605(b) of the Regulatory

Flexibility Act, 5 U.S.C. 605(b), the Administrator certifies that this

rule will not have a significant economic impact on a substantial

number of small entities. In fact, today's proposals are designed to

promote successful implementation of the anti-dumping requirements of

the reformulated gasoline program for all affected parties and to

minimize any adverse competitive impacts by virtue of the proposal to

report individual baseline emissions and not fuel parameters.

[[Page 40016]]

X. Administrative Designation

Pursuant to Executive Order 12866, (58 FR 51735 (October 4, 1993))

the Agency must determine whether the regulatory action is

``significant'' and therefore subject to OMB review and the

requirements of the executive order. The Order defines ``significant

regulatory action'' as one that is likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 million or more or

adversely affect in a material way the economy, a sector of the

economy, productivity, competition, jobs, the environment, public

health or safety, or State, local or tribal governments or communities;

(2) Create a serious inconsistency or otherwise interfere with an

action taken or planned by another agency;

(3) Materially alter the budgetary impact of entitlement, grants,

user fees, or loan programs or the rights and obligations of recipients

thereof; or

(4) Raise novel legal or policy issues arising out of legal

mandates, the President's priorities, or the principles set forth in

the Executive Order.

Pursuant to the terms of Executive Order 12866, it has been

determined that this notice of proposed rulemaking is not a

``significant regulatory action''.

XI. Paperwork Reduction Act

The Paperwork Reduction Act of 1980, 44 U.S.C. 3501 et seq., and

implementing regulations, 5 CFR Part 1320, do not apply to this action

as it does not involve the collection of information as defined

therein.

XII. Unfunded Mandates Act

Section 202 of the Unfunded Mandates Reform Act of 1995 (``Unfunded

Mandates Act''), signed into law on March 22, 1995, EPA must prepare a

budgetary impact statement to accompany any proposed or final rule that

includes a Federal mandate that may result in expenditure by State,

local, and tribal governments, in the aggregate; or by the private

sector, of $100 million or more. Under Section 205, EPA must select the

most cost-effective and least burdensome alternative that achieves the

objectives of the rule and is consistent with statutory requirements.

Section 203 requires EPA to establish a plan for informing and advising

any small governments that may be significantly or uniquely impacted by

the rule.

EPA has determined that the action promulgated today does not

include a Federal mandate that may result in estimated costs of $100

million or more to either State, local or tribal governments in the

aggregate, or to the private sector. This action has the net effect of

reducing burden of the reformulated gasoline program on regulated

entities. Therefore, the requirements of the Unfunded Mandates Act do

not apply to this action.

XIII. Statutory Authority

The statutory authority for the actions proposed today is granted

to EPA by Sections 114, 211 (c) and (k) and 301 of the Clean Air Act,

as amended; 42 U.S.C. 7414, 7545 (c) and (k), and 7601.

List of Subjects in 40 CFR Part 80

Environmental protection, Air pollution control, Fuel additives,

Gasoline, Motor vehicle pollution, Reporting and recordkeeping

requirements.

Dated: May 25, 1995.

Carol M. Browner,

Administrator.

For the reasons set out in the preamble, part 80 of title 40 of the

Code of Federal Regulations is amended as follows:

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

1. The authority citation for part 80 continues to read as follows:

Authority: Sections 114, 211, and 301(a) of the Clean Air Act as

amended (42 U.S.C. 7414, 7545 and 7601(a)).

2. Section 80.75 is amended by removing ``and'' at the end of

paragraph (b)(2)(ii)(F), by adding a semi-colon in place of the period

at the end of paragraph (b)(2)(ii)(G), and adding paragraphs (b)(2)(ii)

(H), (I), and (J) to read as follows:

Sec. 80.75 Reporting requirements.

* * * * *

(b) * * *

(2) * * *

(ii) * * *

(H) The difference between the applicable sulfur content standard

under Sec. 80.41(h)(2)(i) in parts per million and the average sulfur

content in parts per million, indicating whether the average is greater

or lesser than the applicable standard;

(I) The difference between the applicable olefin content standard

under Sec. 80.41(h)(2)(i) in volume percent and the average olefin

content in volume percent, indicating whether the average is greater or

lesser than the applicable standard; and

(J) The difference between the applicable T90 distillation point

standard under Sec. 80.41(h)(2)(i) in degrees Fahrenheit and the

average T90 distillation point in degrees Fahrenheit, indicating

whether the average is greater or lesser than the applicable standard.

* * * * *

3. Section 80.91 is amended by revising paragraph (e)(7)(i) and

adding paragraphs (e)(8) and (e)(9) to read as follows:

Sec. 80.91 Individual baseline determination.

* * * * *

(e) * * *

(7) * * *

(i) Baseline adjustments may be allowed, upon petition and approval

(per Sec. 80.93), if a refinery produced JP-4 jet fuel in 1990 and all

of the following requirements are also met:

(A) Refinery type.

(1) The refinery is the only refinery of a refiner such that it

cannot form an aggregate baseline with another refinery (per paragraph

(f) of this section); or

(2) The refinery is one refinery of a multi-refinery refiner for

which all of its refineries produced JP-4 in 1990 and each of the

refineries also meets the requirements specified in paragraphs

(e)(7)(i) (B) and (C) of this section; or

(3) The refinery is one refinery of a multi-refinery refiner for

which not all of the refiner's refineries produced JP-4 in 1990.

(B) No refinery of the refiner produces reformulated gasoline. If

any refinery of the refiner produces reformulated gasoline at any time

in a calendar year, the compliance baseline of all its refineries

receiving a baseline adjustment per this paragraph (e)(7) shall revert

to each refinery's unadjusted baseline for that year and all subsequent

years.

(C) 1990 JP-4 to gasoline ratio.

(1) For a refiner per paragraph (e)(7)(i)(A)(1) of this section,

the ratio of its refinery's 1990 JP-4 production to its 1990 gasoline

production must equal or exceed 0.15.

(2) For a refiner per paragraph (e)(7)(i)(A)(2) of this section,

the ratio of each of its refinery's 1990 JP-4 production to its 1990

gasoline production must equal or exceed 0.15.

(3) For a refiner per paragraph (e)(7)(i)(A)(3) of this section,

the ratio of the refiner's 1990 JP-4 production to its 1990 gasoline

production must equal or exceed 0.15, when determined across all of its

refineries.

* * * * *

(8) Baseline adjustments due to increasing crude sulfur content.

(i) Baseline adjustments may be allowed, upon petition and approval

(per Sec. 80.93), if a refinery meets all of the following

requirements:

(A) The refinery does not produce reformulated gasoline. If the

refinery

[[Page 40017]]

produces reformulated gasoline at any time in a calendar year, its

compliance baseline shall revert to its unadjusted baseline values for

that year and all subsequent years;

(B) Has an unadjusted baseline sulfur value of not more than 50

ppm;

(C) Is not aggregated with one or more other refineries per

paragraph (f) of this section. If a refinery which received an

adjustment per this paragraph (e)(8) subsequently is included in an

aggregate baseline, its compliance baseline shall revert to its

unadjusted baseline values for that year and all subsequent years;

(D) Would require refinery improvements of at least $10 million or

10 percent of the depreciated value of the refinery to comply with its

unadjusted baseline;

(E) Can show that it could not reasonably or economically obtain

crude oil from an alternative source that would permit it to produce

conventional gasoline which would comply with its unadjusted baseline;

(F) Has experienced at least a 25% increase in the average sulfur

content of the crude oil used in the production of gasoline in the

refinery since 1990, calculated as follows:

[GRAPHIC][TIFF OMITTED]TP04AU95.007

Where:

CSHI=highest annual average crude slate per paragraph (e)(8)(ii)(B) of

this section

CS90=1990 annual average crude slate sulfur per paragraph (e)(8)(ii)(A)

of this section.

CS%CHG=percent change in average sulfur content of crude slate;

(G) Can show that gasoline sulfur changes are directly and solely

attributable to the crude sulfur change, and not due to alterations in

refinery operation nor choice of products.

(ii) The adjusted baseline sulfur value shall be calculated as

follows:

(A) Determine the average sulfur content (ppm) of the crude slate

utilized in the production of gasoline in the refinery in 1990;

(B) Determine the highest crude sulfur level (ppm) of the crude

slate utilized in the production of gasoline in the refinery in 1994;

(C) Determine the adjusted baseline sulfur value as follows:

[GRAPHIC][TIFF OMITTED]TP04AU95.008

Where

ASULF=adjusted baseline sulfur value, ppm

BSULF=actual baseline sulfur value, ppm

CSHI=highest crude sulfur (ppm) per paragraph (e)(8)(ii)(B) of this

section

CS90=1990 annual average crude slate sulfur per paragraph (e)(8)(ii)(A)

of this section

(iii) In no case can the adjusted baseline sulfur value determined

per paragraph (e)(8)(ii) of this section exceed the sulfur value

specified in paragraph (c)(5)(iii) of this section.

(iv) All adjustments made pursuant to this paragraph (e)(8) must be

accompanied by:

(A) Unadjusted and adjusted fuel parameters and emissions; and

(B) A narrative describing the situation, the types of

calculations, and the reasoning supporting the types of calculations

done to determine the adjusted values.

(9) Baseline adjustment for low sulfur and olefins.

(i) Baseline adjustments may be allowed, upon petition and approval

(per Sec. 80.93), if a refinery meets all of the following

requirements:

(A) The unadjusted annual average baseline sulfur value is less

than 30 ppm;

(B) The unadjusted annual average baseline olefin value is less

than 1.0 vol%;

(C) Would require refinery improvements of at least $10 million or

10 percent of the depreciated value of the refinery to comply with its

unadjusted baseline.

(ii) If a refinery is aggregated with one or more other refineries

per paragraph (f) of this section, then no adjustment per this

paragraph (e)(9) shall be allowed, and the unadjusted baseline shall be

used in the aggregated baseline.

(iii) (A) The adjusted baseline shall have an annual average sulfur

value of 30 ppm, and an annual average olefin value of 1.0 vol%.

(B) The adjusted baseline shall have a summer sulfur value of 30

ppm, and a summer olefin value of 1.0 vol%.

(C) The adjusted baseline shall have a winter sulfur value of 30

ppm, and a winter olefin value of 1.0 vol%.

* * * * *

4. Section 80.93 is amended by revising paragraph (b)(6) to read as

follows:

Sec. 80.93 Individual baseline submission and approval.

* * * * *

(b) * * *

(6) Confidential business information.

(i) Upon approval of an individual baseline, EPA will publish the

individual annualized baseline exhaust emissions, on an annual average

basis, specified in paragraph (b)(5)(ii) of this section. Such

individual baseline exhaust emissions shall not be considered

confidential. In addition, the reporting information required under

Sec. 80.75(b)(2)(ii) (H), (I) and (J), and Sec. 80.105(a)(4) (ii),

(iii) and (iv) shall not be considered confidential.

(ii) Information in the baseline submission which the submitter

desires to be considered confidential business information (per 40 CFR

part 2, subpart B) must be clearly identified. If no claim of

confidentiality accompanies a submission when it is received by EPA,

the information may be made available to the public without further

notice to the submitter pursuant to the provisions of 40 CFR part 2,

subpart B.

* * * * *

5. Section 80.105 is amended by redesignating paragraph (a)(4) as

paragraph (a)(4)(i) and adding paragraphs (a)(4) (ii), (iii), and (iv)

to read as follows:

Sec. 80.105 Reporting requirements.

(a) * * *

(4)(i) * * *

(ii) If using the simple model, the difference between the

applicable sulfur content standard under Sec. 80.101(b)(1)(ii) in parts

per million and the average sulfur content in parts per million,

indicating whether the average is greater or lesser than the applicable

standard;

(iii) If using the simple model, the difference between the

applicable olefin content standard under Sec. 80.101(b)(1)(iii) in

volume percent and the average olefin content in volume percent,

indicating whether the average is greater or lesser than the applicable

standard; and

(iv) If using the simple model, the difference between the

applicable T90 distillation point standard under Sec. 80.101(b)(1)(iv)

in degrees Fahrenheit and the average T90 distillation point in degrees

Fahrenheit, indicating whether the average is greater or lesser than

the applicable standard.

* * * * *

[FR Doc. 95-14429 Filed 8-3-95; 8:45 am]

BILLING CODE 6560-50-P