Temporary Administrative Stay of the Reformulated Gasoline Program: Nine Counties in New York, Twenty-Eight Counties in Pennsylvania, and Two Counties in Maine

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[FRL-5134-7]

Temporary Administrative Stay of the Reformulated Gasoline

Program: Nine Counties in New York, Twenty-Eight Counties in

Pennsylvania, and Two Counties in Maine

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: In today's action, EPA is temporarily staying the reformulated

gasoline program requirements in nine opt-in counties in New York, in

twenty-eight opt-in counties in Pennsylvania and in two opt-in counties

in Maine. Today's action stays the applicability of the RFG

requirements for these areas effective from January 1, 1995, until July

1, 1995. Although EPA believes that the RFG program provides a highly

cost-effective means of reducing ground-level ozone and toxic vehicle

emissions, the Agency believes that States should be given the

flexibility to choose which programs best meet each State's needs for

emissions reductions. In a separate notice of proposed rulemaking to be

published soon, EPA will propose to approve the requests for opt-out

for these specified counties from the States of New York, Pennsylvania,

and Maine. EPA will be unable to take final action on this proposed

rulemaking by January 1, 1995, the date when RFG requirements must be

met at the retail level. EPA believes a stay in the implementation of

the reformulated gasoline requirements in these areas effective January

1, 1995 and continuing until July 1, 1995, will avoid significant

disruption in the marketplace while notice and comment rulemaking

proceeds. This temporary stay is issued without prior notice and

comment, based on good cause described herein.

EFFECTIVE DATE: This rule is effective on December 29, 1994.

ADDRESSES: Materials relevant to this action have been placed in Docket

A-94-68. The docket is located at the Air Docket Section (6102), U.S.

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

20460, in room M-1500 Waterside Mall. Documents may be inspected from

8:00 a.m. to 4:00 p.m. A reasonable fee may be charged for copying

docket material.

FOR FURTHER INFORMATION CONTACT:

Mr. Mark Coryell, U.S. Environmental Protection Agency, Office of Air

and Radiation, 401 M Street, SW. (6406J), Washington, DC 20460, (202)

233-9014.

SUPPLEMENTARY INFORMATION: A copy of this action is available on the

OAQPS Technology Transfer Network Bulletin Board System (TTNBBS). The

TTNBBS can be accessed with a dial-in phone line and a high-speed modem

(PH# 919-541-5742). The parity of your modem should be set to none, the

data bits to 8, and the stop bits to 1. Either a 1200, 2400, or 9600

baud modem should be used. When first signing on, the user will be

required to answer some basic informational questions for registration

purposes. After completing the registration process, proceed through

the following series of menus:

(M) OMS

(K) Rulemaking and Reporting

(3) Fuels

(9) Reformulated gasoline

A list of ZIP files will be shown, all of which are related to the

reformulated gasoline rulemaking process. Today's action will be in the

form of a ZIP file and can be identified by the following titles:

STAY.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. 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. Background

A. General Background on Reformulated Gasoline Program and Opt-In

Process

The reformulated gasoline program is designed to reduce ozone

levels in the largest metropolitan areas of the U.S. with the worst

ground-level ozone problems by reducing vehicle emissions of the ozone

precursors, specifically volatile organic compounds (VOC), through fuel

reformulation. Reformulated gasoline also achieves a significant

reduction in air toxics. In Phase II of the program, nitrogen oxides

(NOX), another precursor of ozone, are reduced. The 1990

amendments of the Clean Air Act require reformulated gasoline in the

nine cities with the highest levels of ozone. Congress also provided

the opportunity for states to choose to opt into the RFG program for

their other nonattainment areas.

EPA issued final rules establishing requirements for RFG on

December 15, 1993 (59 FR 7716, February 16, 1994). During development

of the RFG rule, a number of states inquired as to whether they would

be permitted to opt out of the RFG program at a future date or to opt

out of certain of the requirements. This was based on their concern

that the air quality benefits of RFG, given their specific needs, might

not warrant the cost of the program, specifically focusing on the more

stringent standards in Phase II of the program (starting in 2000). Such

states wished to retain their ability to opt out of the program. Other

states indicated they viewed RFG as an interim strategy to help bring

their nonattainment areas into attainment sooner than would otherwise

be the case.

The regulation issued on December of 1993 did not include

procedures for opting out of the RFG program, because EPA had not

proposed and was not ready to adopt such procedures at that time.

However, the Agency did indicate that it intended to propose such

procedures in a separate rule.

B. Jefferson County, New York

Jefferson County was included as a covered area in EPA's

reformulated gasoline regulations based on Governor Mario Cuomo's

request of October 28, 1991, that this county be included under the

Act's opt-in provision for ozone nonattainment areas (57 FR 7926, March

5, 1992). See 40 CFR 80.70(j)(10)(vi). On November 29, 1994, EPA

received a petition from the Commissioner of New York's

[[Page 2697]]

Department of Environmental Conservation, Mr. Langdon Marsh, to remove

Jefferson County, New York, from the list of areas covered by the

requirements of the reformulated gasoline program. EPA understands that

Commissioner Marsh is acting for Governor Cuomo on this matter. The

Administrator responded to the State's request in a letter to

Commissioner Marsh dated December 12, 1994, stating EPA's intention to

grant New York's request as of January 1, 1995, and to conduct

rulemaking to implement the opt-out. The Administrator also announced

that effective January 1, 1995, and until the rulemaking to remove

Jefferson County from the list of covered areas is completed, EPA would

not enforce the reformulated gasoline requirements in Jefferson County.

This decision was based on the particular circumstances that apply in

Jefferson County.

C. The Buffalo and Albany Areas of New York

On December 23, 1994, Commissioner Marsh of New York's Department

of Environmental Conservation wrote to request opt-out of the Albany

and Buffalo areas which include the counties of Albany, Greene,

Montgomery, Rensselaer, Saratoga, Schenectady, Erie and Niagara. The

Assistant Administrator for Air and Radiation, Mary Nichols, responded

to the state's request in a letter to Commissioner Marsh dated December

28, 1994, stating EPA's intention to grant New York's request as of

January 1, 1995, and to conduct rulemaking to implement the opt-out.

The December 28, letter also indicated EPA's intent to stay the RFG

requirements effective from January 1, 1995 until July 1, 1995, while

the Agency completes rulemaking to appropriately change the

regulations.

D. Pennsylvania Counties

Twenty-eight counties in Pennsylvania were included as covered

areas in EPA's reformulated gasoline regulations based on Governor

Robert P. Casey's request dated September 25, 1991 (56 FR 57986,

November 15, 1991). See 40 C.F.R. 80.70(j)(11) (i) through (xxviii).

The counties referred to are listed as follows: Adams, Allegheny,

Armstrong, Beaver, Berks, Blair, Butler, Cambria, Carbon, Columbia,

Cumberland, Dauphin, Erie, Fayette, Lackawanna, Lancaster, Lebanon,

Lehigh, Luzerne, Mercer, Monroe, Somerset, Northhampton, Perry,

Washington, Westmoreland, Wyoming and York. On December 1, 1994, EPA

received a petition from Governor Casey to remove these twenty-eight

counties from the list of areas covered by the requirements of the

reformulated gasoline program. Based on the state of Pennsylvania's

opt-out request of December 1, 1994, the EPA Administrator formally

responded to the State's request in a letter to Governor Casey dated

December 12, 1994. In this letter, the Administrator indicated that

effective January 1, 1995, and until the formal rulemaking to remove

the twenty-eight counties from the list of covered areas is completed,

EPA would not enforce the reformulated gasoline requirements in these

twenty-eight counties. This decision was based on the particular

circumstances that apply in these twenty-eight counties.

E. Hancock and Waldo Counties in Maine

Hancock and Waldo counties were included as a covered areas in

EPA's reformulated gasoline regulation based on Governor John R.

McKernan's request of June 26, 1991, that these counties be included

under the Act's opt-in provision for ozone nonattainment areas (56 FR

46119, September 10, 1991). See 40 CFR 80.70(j)(5) (viii) and (ix). On

December 27, 1994, EPA received a petition from the Acting Commissioner

of Maine's Department of Environmental Protection, Ms. Deborah Garrett,

to remove Hancock and Waldo Counties in Maine from the list of areas

covered by the requirements of the reformulated gasoline program. EPA

understands that Commissioner Garrett is acting for Governor McKernan

in this matter. The Assistant Administrator for Air and Radiation, Mary

Nichols, responded to the state's request in a letter to Commissioner

Garrett, dated December 27, 1994, stating EPA's intention to grant

Maine's request, and conduct rulemaking to implement the opt-out. The

December 28 letter also indicated EPA's intent to stay the reformulated

gasoline requirements effective from January 1, 1995, until July 1,

1995, while the Agency completes rulemaking to appropriately change the

regulations.

II. EPA's Proposal To Grant New York's, Pennsylvania's, and Maine's

Request To Remove Selected Opt-In Areas From the Requirements of the

Reformulated Gasoline Program

EPA believes that it is reasonable to construe section 211(k) as

authorizing the Agency to establish procedures and requirements for

states to opt out of the reformulated gasoline program. This would only

apply to areas that have previously opted in under section 211(k)(6);

the mandatory covered areas would not be allowed to opt out of the

program.

In section 211(k)(6), Congress expressed its clear intention

regarding state opting in to this program. That paragraph establishes

that ``upon the application of the Governor of a State, the

Administrator shall apply the prohibition set forth in paragraph (5) in

any (ozone nonattainment) area in the State * * *. The Administrator

shall establish an effective date for such prohibition * * *.'' \1\

However, with respect to opting out, ``the statute is silent or

ambiguous with respect to the specific issue'' and the question is

whether EPA's interpretation ``is based on a permissible construction

of the statute.'' Chevron U.S.A. Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837, 843 (1984). In addition, ``[i]f Congress

has explicitly left a gap for the Agency to fill, there is an express

delegation of authority to the Agency to elucidate a specific provision

of the statute by regulation.'' Id. at 843-44. If the delegation is

implicit, the Agency may adopt a reasonable interpretation of the

statute. Id. at 844.

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\1\ Paragraph 5 of section 211(k) prohibits the sale of

conventional, or non-reformulated gasoline, in covered areas.

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Section 211(k)(1) provides that EPA is to promulgate ``regulations

establishing requirements for reformulated gasoline.'' This provision

therefore delegates to EPA the authority to define the requirements for

reformulated gasoline. Clean Air Act section 301(a)(1) also delegates

to EPA the general authority to promulgate ``such regulations as are

necessary'' for EPA to carry out its function under the Act. Given

these delegations of legislative rulemaking authority, EPA's

interpretation of section 211(k) with respect to opting out should be

upheld unless manifestly contrary to the Act. Chevron, 467 U.S. at 843-

44.

EPA believes that it is appropriate to interpret section 211(k) as

authorizing states to opt-out of this program, with the requirements

focusing on a reasonable transition out of the program.\2\ There are

really two aspects

[[Page 2698]]

to this, the first being whether states should be allowed to opt out at

all, the second being what conditions, if any, should be placed on

opting out. With respect to the former, a right to opt out is

consistent with the Act's recognition that states have the primary

responsibility to develop a mix of appropriate control strategies

needed to reach attainment with the NAAQS. While various mandatory

control strategies were established under the Clean Air Act, the Act

still evidences a clear commitment to allowing states the flexibility

to determine the appropriate mix of other measures needed to meet their

air pollution goals. Section 211(k)'s opt-in provision reflects this

deference to state choice, providing that opt-in will occur upon

application by the governor. The only discretion EPA retains regarding

opt-in is in setting or extending the effective date. Allowing states

the right to opt-out is a logical extension of these considerations of

deference to state decision making.

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\2\ The preamble to the December 15, 1993, final regulations

failed to provide a clear discussion of EPA's views on this issue.

While EPA noted that it ``may pursue a separate action in the future

that would allow states to opt out of the RFG program, provided

sufficient notice is given,'' the preamble also indicated there were

concerns over whether EPA had authority to allow states to opt-out.

59 FR 7808 (February 16, 1994). The context for these statements,

however, makes it clear that EPA's concerns were based on issues

surrounding questions of opting-in for only Phase I of the

reformulated gasoline program. See 59 FR 7809. As noted above, EPA

believes that it does have authority to establish requirements that

allow states to opt-out of this program.

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Given such deference, it follows that opting out should be

accomplished through application of the governor. It also follows that

the conditions on opting out should be geared towards achieving a

reasonable transition out of the reformulated gasoline program, as

compared to requiring a state to justify its decision. EPA has

identified two principal areas of concern in this regard. The first

involves coordination of air quality planning. For example,

reformulated gasoline in opt-in areas has been relied upon by several

states in their State Implementation Plan submissions or in their

redesignation requests. The second involves appropriate lead time for

industry to transition out of the program.

In a separate notice, to be published soon, EPA will be proposing

to revise its RFG regulations to remove the affected counties from the

program.

III. Temporary Stay Removing the Nine New York Counties, the Twenty-

Eight Counties in Pennsylvania, and Two Counties in Maine From the List

of Areas Covered by the Reformulated Gasoline Requirements as of

January 1, 1995

Clean Air Act section 307(d)(1) requires EPA to follow specified

rulemaking procedures in promulgating regulations under section 211(h).

Section 307(d) provides, however, that notice and comment rulemaking

requirements ``shall not apply in the case of any rule or circumstance

referred to in subparagraph (A) or (B) of subsection 553(b) of title 5

of the United States Code [i.e. sections 553(b) (A) and (B) of the

APA].'' Under APA section 553(b)(B), notice and comment are not

required ``when the agency for good cause finds (and incorporate the

finding and a brief statement of reasons thereof in the rules issued)

that notice and public procedure thereon are impracticable,

unnecessary, or contrary to the public interest.''

EPA is issuing this temporary stay as a final rule without prior

notice and comment. This expedited rulemaking procedure is based on the

need to act quickly to avoid unnecessary disruption at the inception of

the reformulated gasoline program, stemming from recent decisions by

various states to opt out of this program. The different circumstances

for the various covered areas involved are discussed below.

The final regulations establishing the reformulated gasoline

program were issued on December 15, 1993, requiring upstream parties to

have reformulated gasoline in the covered areas as of December 1, 1994,

and to have reformulated gasoline at all retail outlets in those areas

as of January 1, 1995. In late November and December, EPA received

requests from Pennsylvania, New York and Maine to opt out various areas

in these states. EPA responded to the initial requests from New York

and Pennsylvania by letter dated December 12, 1994, indicating EPA's

belief that the Act authorizes states to opt out of the reformulated

gasoline program, and EPA's intention to grant the request considering

the lack of adverse air quality impacts,\3\ the lack of reliance on

reformulated gasoline in the states' SIPs, and the logistical problems

associated with providing reformulated gasoline, at least with respect

to Jefferson County. EPA announced that it would commence rulemaking to

revise its regulations to effectuate the opt out, and effective January

1, 1995 would not enforce the reformulated gasoline requirements in the

respective counties. EPA, of course, retains its authority to take

appropriate action to address any non-compliance that may have occurred

prior to January 1, 1995.

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\3\ The affected areas have not had ozone exceedances for three

years. Several of the areas have requests pending before the agency

for redesignation to attainment status. The other areas are expected

to submit such requests.

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EPA has since learned that its December 12 announcement has led to

confusion and disruption in the market place regarding the transition

back to conventional gasoline. There is also uncertainty regarding

potential liability under EPA's citizen suit provisions. The existence

of confusion within the regulated community has led to unfortunate

disruptions in the market place. EPA neither intended nor expected this

result. Instead, EPA's December 12 announcement was an attempt to

provide certainty and stability, while at the same time recognizing the

value in allowing states to expeditiously opt out of the reformulated

gasoline program under appropriate circumstances.

With respect to the Albany-Buffalo area in New York and the

affected towns in Maine, EPA did not make a prior announcement of its

intention regarding the opt-out of these areas. However, expedited

issuance of a temporary stay is also needed for those areas to avoid a

patchwork of staggered times for opt out, occurring at the inception of

this major program. Such variability would only increase the logistical

and other problems facing the regulated community, and disrupt their

planning to produce and market reformulated gasoline over the next

several months.

This important and complicated program is just starting, and it is

necessary that all parties involved have the certainty and stability

needed for successful implementation. EPA believes that these

circumstances warrant a temporary stay of the reformulated gasoline

requirements in these areas effective from January 1, 1995 until July

1, 1995. That will provide adequate time to conduct notice and comment

rulemaking and take final action on these opt-out requests.

Given all of the above circumstances, EPA's belief that it is fully

authorized to allow the affected areas to opt out, the temporary nature

of this stay, and the ability of all parties to comment on the notice

of proposed rulemaking to allow the opt out of these areas, EPA

believes there is good cause under 5 U.S.C. 553(b) and CAA

Sec. 307(d)(1) to issue this final rule without prior notice and

comment. For the same reasons, EPA finds there is good cause under 5

U.S.C. 553(d) for the expedited effective date of this final rule.

V. Effective Date

This temporary stay is effective as of January 1, 1995.

VI. Environmental Impact

The temporary stay is not expected to have any adverse

environmental effects. The areas covered by this rule have data showing

compliance with the National Ambient Air Quality Standard (NAAQS) for

ozone for three or more consecutive years.

VII. Economic Impact

Pursuant to section 605(b) of the Regulatory Flexibility Act, 5

U.S.C. 605(b), the Administrator certifies that this temporary stay

will not have a

[[Page 2699]]

significant economic impact on a substantial number of small entities.

This temporary stay is not expected to result in any additional

compliance cost to regulated parties and, in fact, is expected to

decrease compliance costs to the industry and decrease costs to

consumer in the affected areas.

VIII. Administrative Requirements

Under Executive Order 12866 (58 FR 51735, October 4, 1993) the

Agency must determine whether a regulation 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 entitlements,

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

recipients thereof; or

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

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

the Executive Order.

It has been determined that this rule is not a ``significant

regulatory action'' under the terms of Executive Order 12866 and is

therefore not subject to OMB review.

Under the Paper Reduction Act, 44 U.S.C. 3501 et seq., EPA must

obtain Office of Management and Budget (OMB) clearance for any activity

that will involve collecting substantially the same information from 10

or more non-Federal respondents. This rule does not create any new

information requirements or contain any new information collection

activities.

IX. Statutory Authority

The statutory authority for the action in this rule is granted to

EPA by section 211 (c) and (k), and section 301(a) of the Clean Air Act

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

List of Subjects in 40 CFR Part 80

Environmental protection, Air pollution control, Fuel additives,

Gasoline, and Motor vehicle pollution.

Dated: December 29, 1994.

Carol M. Browner,

Administrator.

40 CFR Part 80 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 80.70 is amended by revising the introductory text of

paragraph (j) to read as follows.

Sec. 80.70 Covered areas.

* * * * *

(j) The ozone nonattainment areas listed in this paragraph (j) of

this section are covered areas beginning on January 1, 1995, except

that those areas listed in paragraphs (j)(5) (viii) and (ix), (j)(10)

(i), (iii) and (v) through (xi) and j(11) of this section are covered

areas beginning on July 1, 1995. The geographic extent of each covered

area listed in this paragraph (j) of this section shall be the

nonattainment area boundaries as specified in 40 CFR part 81, subpart

C:

* * * * *

[FR Doc. 95-421 Filed 1-10-95; 8:45 am]

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