Petition by Guam for Exemption From Anti-Dumping and Detergent Additization Requirements for Conventional Gasoline

ENVIRONMENTAL PROTECTION AGENCY

40 CFR PART 80

[FRL-5636-2]

Petition by Guam for Exemption From Anti-Dumping and Detergent

Additization Requirements for Conventional Gasoline

AGENCY: Environmental Protection Agency.

ACTION: Notice of direct final decision.

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

SUMMARY: The Environmental Protection Agency (``EPA'' or ``the

Agency'') is granting a petition by the Territory of Guam for exemption

from the anti-dumping requirements for gasoline sold in the United

States after January 1, 1995. This action is being taken because of

Guam's unique geographic location and economic factors. EPA is not

granting Guam's petition for exemption from the fuel detergent

additization requirements that all gasoline sold in the United States

after January 1, 1995 contain fuel detergents. If the gasoline anti-

dumping exemption were not granted, Guam would be required to import

gasoline from a supplier meeting the anti-dumping requirements adding a

considerable expense to gasoline purchased by the Guam consumer. Guam

is in full attainment with the national ambient air quality standard

for ozone. This action is not expected to cause harmful environmental

effects to the citizens of Guam.

Today's action is being taken as a direct final decision because

EPA believes that this final decision is noncontroversial. The effects

of this decision are limited to the Territory of Guam.

DATES: This action will be effective on December 16, 1996 document,

unless EPA receives adverse or critical comments by November 15, 1996.

If the Agency receives adverse or critical comments, EPA will withdraw

this action by publishing a timely notice in the Federal Register. In a

separate action published today, EPA is concurrently proposing approval

of the

[[Page 53855]]

gasoline anti-dumping exemption portion of Guam's petition for reasons

discussed in this document. All correspondence should be directed to

the addresses shown below.

ADDRESSES: Any persons wishing to submit comments should submit them

(in duplicate, if possible) to the two dockets listed below, with a

copy forwarded to Marilyn Winstead McCall, U. S. Environmental

Protection Agency, Fuels and Energy Division, 401 M Street, SW., (Mail

Code: 6406J), Washington, DC. 20460.

Materials relevant to this petition are available for inspection in

public docket A-95-19 at the Air Docket Office of the EPA, room M-1500,

401 M Street, SW., Washington, DC 20460, (202) 260-7548, between the

hours of 8:00 a.m. to 5:30 p.m. Monday through Friday. A duplicate

public docket, A-GU-95, has been established at U. S. EPA Region IX, 75

Hawthorne Street, (Mail code: A-2-1), 17th Floor, San Francisco, Ca

94105, (415) 744-1225, and is available between the hours of 8:30 a.m.

to noon, and 1 p.m. to 5 p.m., Monday through Friday. As provided in 40

CFR part 2, a reasonable fee may be charged for copying services.

FOR FURTHER INFORMATION CONTACT: Marilyn Winstead McCall of the Fuels

and Energy Division at (202) 233-9029.

SUPPLEMENTARY INFORMATION:

I. Background

A. Regulated Entities

Entities potentially affected by this action are those involved

with the production, distribution, and sale of conventional gasoline

and gasoline detergent additives for gasoline used in Guam. Regulated

categories and entities include:

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

Category Examples of regulated entities

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

Industry................. Detergent manufacturers, detergent

transporters, gasoline refiners and

importers, gasoline terminals, detergent

blenders, gasoline truckers, and gasoline

retailers and wholesale purchaser-consumers.

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

This table is not intended to be exhaustive, but rather provides a

guide for readers regarding entities likely to be affected by this

action. This table lists the types of entities that EPA is now aware

could potentially be affected by this decision. Other types of entities

not listed could also be affected. To determine whether your

organization is affected by this decision, you should carefully examine

the applicability requirements in Sec. 80.90, Sec. 80.125, and

Sec. 80.161, Subparts E, F, and G respectively of title 40, of the Code

of Federal Regulations (CFR). If you have any questions regarding the

applicability of this action to a particular entity, consult the person

listed in the preceding

FOR FURTHER INFORMATION CONTACT section.

The Governor of Guam petitioned the Agency on December 30, 1994

seeking exemption from certain federal regulations promulgated under

the Clean Air Act (``CAA'' of ``Act''). On December 15, 1993, EPA

promulgated regulations on the production and sale of gasoline that is

not required to be reformulated, or ``conventional'' gasoline. For

conventional gasoline, the gasoline produced by a refiner or importer

is required to cause no more motor vehicle emissions than gasoline

produced by that refiner or importer in 1990. This is commonly called

the ``anti-dumping'' program. On October 14, 1994, and July 5, 1996,

EPA promulgated regulations requiring that all gasoline contain a fuel

detergent to control deposits. The fuel detergent additization

regulations require that all gasoline sold or dispensed in the United

States contain additives to prevent accumulation of deposits in vehicle

engines or fuel supply systems, and that volumetric additive

reconciliation records and product transfer documents be maintained by

certain persons who add the required detergent to the gasoline and

transfer the product to other persons. Since Guam is in attainment for

ozone, it is not required to offer reformulated gasoline. However,

providers of gasoline such as those listed in the table above in Guam

are required to provide conventional gasoline that meets the anti-

dumping provisions and the detergent additization requirements.

B. Statutory Provisions

Section 211(k) of the Clean Air Act (``CAA'' or ``the Act'')

requires that gasoline be reformulated to reduce motor vehicle

emissions of toxic and tropospheric ozone-forming compounds, and that

this reformulated gasoline be sold in the nine largest metropolitan

areas with the most severe summertime ozone levels and other ozone

nonattainment areas that opt into the program. Section 211(k)(8)

prohibits conventional gasoline (gasoline that has not been

``reformulated'') sold in the rest of the country from becoming any

more polluting than it was in 1990. This requirement ensures that

refiners do not ``dump'' fuel components that are restricted in

reformulated gasoline and that cause environmentally harmful emissions

from use of conventional gasoline. This requirement is referred to as

the ``anti-dumping'' standards for conventional gasoline.1

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

\1\ 40 CFR Part 80, Subparts E and F.

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

Section 211(l) states that ``no person may sell or dispense to an

ultimate consumer in the United States, and no refiner or marketer may

directly or indirectly sell or dispense to persons who sell or dispense

to ultimate consumers in the United States any gasoline which does not

contain additives to prevent the accumulation of deposits in engines or

fuel supply systems.'' The regulations implementing this requirement

are commonly referred to as the ``gasoline deposit control'' or

``detergent additization'' regulation. The Territory of Guam is defined

as a state in these regulations.2

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

\2\ 40 CFR Part 80, Subparts A and G.

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

Section 325 of the Act provides that, upon petition by the Governor

of Guam, American Samoa, the Virgin Islands, or the Commonwealth of the

Northern Mariana Islands, the Administrator may exempt any person or

source in such territory from various requirements of the Act. It

states that ``such exemption may be granted if the Administrator finds

that compliance with such requirements is not feasible or is

unreasonable due to unique geographical, meteorological, or economic

factors of such territory, or such other local factors as the

Administrator deems significant.''

EPA previously granted Guam an exemption from the sulfur content

requirements for motor vehicle diesel fuels as specified in sections

211(i) and (g) of the Act on May 7, 1993. That exemption was effective

November 21, 1993. A more in-depth description of Guam's geographical,

meteorological and economic characteristics are discussed in the notice

of direct final decision granting that petition for exemption (see 58

FR 48968, September 21, 1993).

II. Summary of Guam's Petition

On December 30, 1994, the Honorable Joseph F. Ada, Governor of the

Territory

[[Page 53856]]

of Guam, petitioned the Agency for an exemption from the requirements

of regulations promulgated at 40 CFR 80 that require conventional

gasoline meet certain anti-dumping specifications and that this

gasoline be subject to the detergent additization requirements of those

regulations. Specifically, the petition requests exemption from

Subparts E, F, and G of 40 CFR Part 80. Subparts E and F apply to

requirements for refiners and importers to prevent conventional

gasoline sold in the United States from becoming any more polluting

than it was in 1990. Subpart G requires the use of deposit control

(detergent) additives in all gasoline used in the United States

beginning January 1, 1995.

A. Guam's Geographical Characteristics

Guam is the westernmost U.S. territory. Guam is the southernmost

island in the Mariana Archipelago. It is approximately 28 miles long

and its width varies from 4 to 8.5 miles for a total land area of

approximately 1209 square miles. Agana, the capital city, is

approximately 3700 miles west-southwest of Honolulu, 6000 miles

southwest of San Francisco, 1500 miles east of Manila, 1550 miles south

of Tokyo and 3100 miles north-northeast of Sydney.

The island of Guam is composed of two distinct geologic areas of

about equal size. The northern region is a high coralline limestone

plateau rising to 850 feet above sea level. The southern region is of

volcanic origin and mountainous, with elevations ranging from 700 to

1300 feet. The northern and southern regions are separated by a narrow

low lying area.

B. Guam's Meteorological Characteristics

Guam has a tropical climate. According to data compiled by the

National Oceanic and Atmospheric Administration, (NOAA) the average

rainfall is 98 inches. Daytime temperatures are typically around 85

degrees F and nighttime temperatures range from 65 to 75 degrees F.

Relative humidity is typically from 75 to 90%. The island is subject to

consistent strong winds. Most of the time, the island is swept by trade

winds blowing from the east. Normal wind speeds are highest during the

dry season, with sustained wind speeds of 15 to 25 miles per hour. Data

collected by NOAA show a mean wind speed of 7.4 miles per hour.

The dominance of the easterly trade winds is interrupted during the

rainy season when storm systems from the east bring heavy showers and

torrential rain. Typhoons with winds of more than 70 miles an hour pass

within 60 miles of Guam once a year on average. ``Super'' typhoons with

winds in excess of 150 miles per hour occur roughly every 10 to 12

years.

C. Economic Factors in Guam

Guam has no known oil resources and no operating refinery. All

motor vehicle gasoline supplied to the island of Guam is imported.

Transportation costs dictate that the markets supplying gasoline to

Guam be limited to the Far East. Refineries in Singapore and Australia

have historically supplied Guam's gasoline.

Guam is less affluent than any of the 50 states. Its per capita

income in 1990 was $9,928 compared to the national average of

$14,420.\3\ Due to relatively high transportation costs, retail

gasoline prices are already significantly higher in Guam than in the

continental United States, averaging in 1994 at approximately $1.50 per

gallon as opposed to an estimated national average of approximately

$1.17 \4\ per gallon. Information received after the petition was

submitted to the Agency indicates that Guam's economic outlook is not

improving, as the Navy Repair Facility and the Navy Fleet and

Industrial Supply Center are slated to be closed (and the three other

Navy facilities will be realigned), which will mean the loss of

thousands of jobs.\5\

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

\3\ Guam Department of Commerce.

\4\ ``The Oil Daily,'' May 9, 1995.

\5\ Letter dated July 21, 1995, from Eric Murdock, Hunton &

Williams, Washington, D.C., supporting Guam's petition.

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

It is estimated that the total fleet of gasoline-powered cars is

between 100,000 to 140,000. Generally, car ownership is estimated at

greater than one vehicle per person on Guam. Cars do not wear well in

the island's harsh corrosive environment, so the average age of the

fleet is lower than in the mainland United States.

III. Clarification of Anti-Dumping and Detergent Additization

Requirements

Subpart E--Anti-Dumping Requirements--Section 211(k)(8) requires

that average per gallon emissions of VOC, CO, NOX, and toxics due

to conventional gasoline produced by a refiner or importer not increase

over 1990 levels, for each refiner or importer. Each of the four

pollutants is to be considered separately, except that potential

increases in NOX emissions due to oxygenate use may be offset by

equivalent or greater reductions in the other pollutants. Since VOC and

CO emission increases are expected to be controlled through other

regulatory programs, the anti-dumping provisions are limited to

regulating emissions of toxics and NOX emissions.

Pursuant to Section 211(k)(8) of the Act, EPA adopted the

regulations in Subpart E to address motor vehicle emissions of exhaust

benzene, total exhaust toxics and NOX emissions from conventional

gasoline use. Under a simple emissions model, applicable from January

1, 1995 to January 1, 1998, a limit is set for sulfur, olefins and T90

as well as exhaust benzene. A more complex emissions model is required

beginning January 1, 1998, with limits set on exhaust toxics and

NOX. All the limits are set as annual averages.

Compliance is measured by comparing emissions of a refiner's or

importer's conventional gasoline against those of a baseline gasoline--

either a baseline based on the quality of a refiner's 1990 gasoline or

on a statutory baseline specified by the Clean Air Act. Subparts E and

F require a refiner or importer that establishes a baseline to use an

independent auditor to verify its baseline parameters. EPA requires

each refiner or importer to maintain records and to report to EPA

certain information pertaining to production of conventional gasoline

by February 1996, and every subsequent year. Guam 's petition states

that there is insufficient data available to importers of Guam's

gasoline regarding the quality of gasoline produced in 1990 to

establish an individual baseline for these importers. Therefore, if

this exemption were not granted, importers of gasoline to Guam would be

required to measure compliance against the statutory baseline for the

regulated conventional gasoline qualities.

Subpart G--Detergent Gasoline--Section 211(1) requires that,

beginning January 1, 1995, no person may sell or dispense to an

ultimate consumer in the United States, and no refiner or marketer may

sell or dispense to persons who sell or dispense to ultimate consumers

in the United States any gasoline which does not contain additives to

prevent the accumulation of deposits in engines or fuel supply systems.

EPA promulgated a rule on October 14, 1994, under which all gasoline

(reformulated and conventional) sold or transferred to gasoline retail

outlets or wholesale purchaser consumer facilities and all gasoline

sold or transferred to ultimate consumers must be additized with a fuel

detergent additive registered with the EPA, starting January 1, 1995.

On July 5, 1996, EPA published a supplemental rule requiring testing

and certification of the fuel detergents (61 FR 35310).

Fuel deposits in motor vehicle engines and fuel supply systems and

[[Page 53857]]

their impacts on vehicle performance have been studied for many years.

Fuel injector and intake valve deposits have been shown to have

significant adverse effects on drivability, exhaust emissions and, in

some cases, on fuel economy. Deposits in fuel injectors may undercut

the effectiveness of engines' oxygen sensors in ensuring the best fuel/

air ratio to control emissions. Carburetor deposits can cause improper

enrichment of the fuel/air mixture, which can result in rough idling,

stalling, poor acceleration, reduced fuel economy and higher emissions

of hydrocarbons, carbon monoxide, and in some cases nitrogen oxides.

The mechanisms by which intake valve deposits increase emissions are

less clear. Adsorption and desorption of fuel on the intake valves can

lead to improper fuel/air ratios across the cylinders, thereby

interfering with the ability of the oxygen sensor to regulate proper

mixture composition. Intake valve deposits might also increase

emissions by interfering with the proper preparation and delivery of

the fuel air mixture resulting in combustion inefficiency.

Under the current additization program, the detergent additive must

be registered under 40 CFR Part 79, and must be added in concentration

equal to or exceeding the level specified by the additive manufacturer

as being effective in preventing deposits. Each facility where

detergent additization is performed is required to create and maintain

volumetric additive reconciliation (VAR) records to demonstrate that

the gasoline has been additized to the proper concentration. Product

transfer documentation (PTD) is required whenever title or custody to

any gasoline or detergent is transferred, other than when additized

gasoline is sold or dispensed at a retail outlet or wholesale

purchaser-consumer facility to the consumer. Each gasoline refiner,

importer, carrier, distributor, oxygenate blender or detergent blender

who owns, leases, operates, controls or supervises the facility

(including a truck or individual storage tank) is subject to these

requirements.

IV. Rationale for Exemption

A. Rationale for Exemption from Anti-Dumping Requirements

Singapore refineries differ from the configurations of typical

mainland U.S. refineries in that they do not have catalytic cracking

capacity (that is, the Singapore refineries do not employ fluid

catalytic cracking or ``FCC'' units). As a result of these differences

in plant configuration, the properties of the gasoline produced by the

Singapore refineries would be expected to be quite different in some

respects from the properties of gasoline produced by the typical

mainland U.S. refinery (i.e., ``baseline'' conventional gasoline).

Specifically, gasoline produced at the Singapore refineries would

typically have lower concentrations of sulfur and olefins and

relatively higher concentrations of benzene and aromatics.

As a result of these differences, the gasoline produced at the

Singapore refineries cannot consistently satisfy the anti-dumping

requirements when compared to statutory baseline gasoline, particularly

for the winter season. This is not the result of any ``dumping'' of

components restricted in reformulated gasoline; it is a reflection of

differences in the quality of the gasoline produced in Singapore

compared to that typically produced in the mainland U.S.

None of the importers has been able to identify any refineries in

the Pacific Rim that are producing, or are readily able to produce,

gasoline that can consistently satisfy the anti-dumping requirements.

As a result, it is likely that the companies would be forced to import

gasoline from mainland refineries at substantial cost if this exemption

were not granted.

The granting of Guam's petition for exemption could raise the

possibility that a given importer's gasoline might, in a given

compliance period, produce more motor vehicle emissions than produced

by 1990 statutory baseline gasoline.

Guam is in full attainment with both the primary and secondary

national ambient air quality standards (NAAQS) for ozone.

Because of Guam's unique geographic remoteness, there is no risk

that conventional gasoline imported through Guam would be sold in any

area in which anti-dumping restrictions apply.

The three major importers of gasoline to Guam have indicated that

the gasoline normally imported from the Singapore refineries (where

virtually all gasoline supplied to Guam is produced 6) is likely

to contain benzene and aromatic concentrations that exceed the

statutory baseline levels. As previously stated, the anti-dumping

requirements could force the importers of gasoline to Guam to obtain

product from distant refineries, adding substantially to the

transportation costs, and resulting in great increases in the retail

price of gasoline in Guam. Information submitted subsequent to the

petition states that these costs could run approximately $4,500,000 per

year.7 According to estimations by current importers of gasoline

to the island, transporting gasoline from western refineries (those

from the mainland or Hawaii, most likely) would add at least 10 cents

per gallon to the retail price of gasoline on the island, in addition

to other costs associated with the requirements of the anti-dumping and

detergent additization regulations.

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

\6\ Letter dated September 28, 1995, from Eric Murdock, Hunton &

Williams, Washington, D.C., supporting Guam's petition.

\7\ Letter dated September 28, 1995 from Eric Murdock, Hunton &

Williams, Washington, D.C., supporting Guam's petition.

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

Approximately 40,000,000 gallons of gasoline are imported annually

into Guam. If Guam is not granted an exemption from the anti-dumping

requirements, EPA calculates that gasoline, meeting the statutory

baseline, could result in VOC control during a compliance period of

approximately 14 tons of total toxic emissions in Guam as compared to

the fuel quality in Guam in 1994. A simple cost effectiveness analysis

indicates that the cost (based on an annual cost, as stated in Guam's

petition, of approximately $4,500,000) of reducing the total toxic

emissions would be over $300,000 per ton. In EPA's Regulatory Impact

Analysis for Reformulated Gasoline,8 the Agency estimated that

reducing total toxic emissions from combustion and use of gasoline

under the reformulated gasoline program would cost approximately

$55,000 per ton. Therefore, the cost effectiveness of using another

gasoline supplier to reduce air toxics emissions in Guam is several

times higher than EPA's estimate for nationwide control of toxics in

the federal reformulated gasoline program.

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

\8\ See Regulatory Impact Anaylsis for Reformulated Gasoline,

EPA Air Dockets A-92-01 and A-92-12, 401 M Street. S.W., Washington,

D.C. 20460.

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

Guam also does not have the proper facilities to perform the

necessary analyses on conventional gasoline which are required under

the anti-dumping rules. If this exemption were not granted, any samples

would have to be shipped to laboratories in Japan or Hawaii. This

process would entail a significant cost and could precipitate price

increases which would eventually be passed on to the Guam consumer.

Guam's petition states that overall compliance with Subparts E, F,

and G would require capital expenditures of more than $250,000 of which

amount, approximately $22,000 would be required for software

modifications for the VAR and PTD requirements. Annual operating

expenditures would amount to more than $500,000 which includes

approximately $46,000 for VAR and

[[Page 53858]]

PTD expenses. These additional costs would result in increases in the

retail price of gasoline, estimated by the companies to be at least 0.6

to 1.4 cents more per gallon.

Gasoline price increases of the magnitude expected to result from

compliance with Subparts E and F would be especially burdensome for the

great many citizens of Guam whose incomes are modest. The average

income on Guam is at least $4,000 less than on the mainland. If this

exemption were not granted, and gasoline would have to be transported

from the mainland, the average price of a gallon of gasoline at the

retail level could rise approximately 10 to 12 cents or more over the

present price of a gallon of gasoline in Guam. This price increase is

far more than EPA's estimated additional cost of reformulated gasoline

of 3-5 cents.9

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

\9\ 59 Fed. Reg. 7810, February 16, 1994.

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

B. Rationale for Denying Exemption from Fuel Detergent Requirements

Information provided to the Agency subsequent to the petition

10 states that all of the importers that supply Guam's gasoline

use detergent additives in all grades of gasoline that they sell in

Guam. One importer, the largest marketer of gasoline on the island,

began using additives last year for marketing reasons. Another importer

has been using detergent additives in its gasoline for several years.

An additive called RT2276 (also referred to as MTT242), is used in

concentrations equal to or greater than the level specified by the

additive manufacturer. Therefore, compliance with Subpart G's

additization requirements is clearly feasible in Guam.

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

\10\ Letters dated September 28, 1995, and October 26, 1995,

from Eric Murdock, Hunton & Williams, Washington, D.C. supporting

Guam's petition.

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

Guam's petition states that costs of compliance with the

requirements of Subpart G would be over $400,000. These costs were

computed for four importers and their marketers. Since the petition was

filed, EPA has learned that there are now only three importers in

Guam.11 Therefore, these costs could conceivably be lower.

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

\11\ Letter dated October 26, 1995, from Eric J. Murdock, Hunton

& Williams, Washington, D.C., supporting Guam's petition.

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

The petition estimates that the total cost of compliance will add

between .6 to 1.4 cents to the cost of a gallon of gasoline. EPA

estimated that the average incremental cost to consumers of compliance

with the detergent requirements for the mainland United States would be

0.1 cent a gallon,12 with this cost being partially compensated

for by the increased fuel economy and decreased maintenance

requirements which improved deposit control is expected to provide.

Over 90 percent of the total estimated cost of the program is

associated with the price of the additional additive amounts needed to

bring all gasoline up to the effective detergency levels which most of

U.S. gasoline already contains. EPA disagrees with the cost estimate in

the petition. The estimated cost of 0.6 to 1.4 cents per gallon to

comply with the gasoline detergent program in Guam might be a

reasonable estimate if detergent was not already widely used in Guam

gasoline.13 However, given the common use of gasoline detergents

in Guam, EPA believes that the cost to Guam consumers will likely

closely parallel that projected for consumers in the mainland U.S.

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

\12\ Final Rule on the Certification Standards for Deposit

Control Gasoline Additives, July 5, 1996, 61 FR 35309, page 35353.

\13\ EPA estimated that the total cost of the amount of additive

needed to comply with Federal gasoline detergency requirements would

be 0.5 to 1.0 cents per gallon, with much of U. S. gasoline already

containing significant amounts of detergent additives. See the

Regulatory Impact Analysis and Regulatory Flexibility Analysis for

the Interim Detergent Registration Program and Expected Detergent

Certification Program, Docket Item V-B-01, EPA Air Docket A-91-77,

Washington, D.C.

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

Transportation costs associated with shipping detergent additive

which complies with Federal detergency requirements to Guam are likely

to be somewhat higher than that in the mainland U.S. However, EPA

believes this differential in cost will have minimal impact due to the

small volume of detergent additive estimated to be needed to achieve

proper additization (approximately 0.4 to 0.6 gallons of detergent to

1,000 gallons of gasoline). In addition, EPA's estimate of the cost to

the consumer of the detergent program assumed the average motorist

drives 10,000 to 15,000 miles per year and consumes 400 to 600 gallons

of gasoline. Given Guam's small size, the average motorist on Guam

would tend to drive less than the average motorist on the mainland

which would tend to reduce the cost to a Guam consumer relative to

EPA's estimate. All things considered, the cost to the consumer of up

to six dollars a year estimated for the U.S. as a whole, holds for Guam

as well. EPA believes that this would not be an unreasonable economic

burden for the Guam consumer. This is generally consistent with EPA's

estimate of the cost of compliance with the detergent requirements for

the mainland United States. In addition, suppliers of gasoline to Guam

have indicated that the fuel importers intend to continue adding

detergent additives to all gasoline sold in Guam. Thus compliance costs

associated with the recordkeeping (VAR and PTD) requirements of the

detergent rule are the primary additional costs directly attributable

to the detergent program's requirements. EPA estimates that compliance

with the recordkeeping requirements of Subpart G would add only a small

portion--less than 1 cent--to the cost of a gallon of gasoline. EPA

believes that this would not be an unreasonable economic burden for the

Guam consumer.

Guam's petition states that only in the last few months of 1995

have all the gasoline importers and marketers begun using fuel

detergents in all of Guam's gasoline. Therefore start-up costs could be

higher in Guam than in other markets on the mainland where detergent

additization has been an ongoing process for several years. EPA does

not believe that start-up of this program will be significantly more

difficult or expensive in Guam compared to the rest of the U.S.

Further, once compliance programs are established, the annual cost of

compliance will be comparable to that in other areas. In summary, the

small added cost to Guam consumers, and the fact that detergents are

already added to 100% of the gasoline supplied in Guam, lead EPA to

conclude that an exemption from the requirements of Subpart G is not

warranted.

VI. Final Action

A. Anti-Dumping Provisions for Conventional Gasoline

EPA has decided to exempt the Territory of Guam from compliance

with the anti-dumping standards for conventional gasoline under section

211(k)(8). The Agency believes that compliance with the gasoline anti-

dumping requirements is unreasonable given the significantly increased

costs to consumers in Guam in achieving compliance. These increased

costs are directly attributable to Guam's location and resulting

inability of importers to comply with the anti-dumping requirements

without significantly greater costs than those expected for importers

in the U. S. mainland. Gasoline price increases of the magnitude

expected to result from compliance with Subparts E and F could be

especially burdensome for the great many citizens of Guam whose incomes

are modest and whose economic situation is not expected to change

significantly in the near future.

In addition, despite its geographic remoteness from the mainland,

[[Page 53859]]

compliance with the anti-dumping provisions might require that Guam

import conventional gasoline from the U. S. mainland, greatly

increasing the cost of conventional gasoline. EPA finds that these

economic factors are also unique to the Territory of Guam.

This exemption will apply to all persons in Guam subject to the

anti-dumping requirements in section 211(k)(8) of the Act, and subparts

E and F of 40 CFR Part 80. This exemption is retroactive to January 1,

1995, and applies only to gasoline imported to Guam for use in Guam.

EPA reserves the right to review and reopen this exemption in the

future if conditions in Guam change to warrant such an action.

B. Fuel Detergent Additization

EPA is denying the petition from the Territory of Guam for an

exemption from the fuel detergent additization requirement that, after

January 1, 1995, all conventional gasoline contain registered fuel

additives that control fuel deposits as established in 40 CFR Part 80,

Subpart G. Guam has not demonstrated that unique local factors exist

such that compliance with the detergent additization and recordkeeping

requirements would be either infeasible or unreasonable.

VII. Public Participation and Effective Date

The Agency is publishing this action as a direct final decision

because it views it as noncontroversial and limited to the Territory of

Guam. EPA anticipates no adverse or critical comments. Representatives

of automobile and petroleum industry associations have indicated that

their constituents will not be adversely affected by this direct final

decision and therefore the Agency expects no adverse comments from the

members of those associations. Similarly, the Agency does not expect

adverse comments from the environmental community or state and local

governments, since the environmental impact is very minimal.

This action will become effective December 16, 1996. If the Agency

receives adverse comments by November 15, 1996, EPA will publish a

subsequent Federal Register document withdrawing this decision. In the

event that adverse or critical comments are received, EPA is also

publishing a Notice of Proposed Decision in a separate action today,

which proposes the same action contained in this direct final decision.

Any adverse comments received by the date listed above will be

addressed in a subsequent final decision. That final decision will be

based on the relevant portion of the proposed final decision that is

published in the Proposed Rule Section of this Federal Register and

that is identical to this direct final decision. The EPA will not

institute a second comment period on this action. Any parties

interested in commenting on this action should do so at this time. If

no such comments are received, the public is advised that this action

will be effective December 16, 1996.

This procedure allows the opportunity for public comment and

opportunity for oral presentation of data as required under section

307(d) of the Act. This procedure also provides an expedited procedure

for final action where a decision is not expected to be controversial

and no adverse comment is expected.

VIII. Statutory Authority

Authority for the action described in this notice is in section

325(a)(1) (42 U.S.C. 7625-1(a)(1) of the Clean Air Act as amended.

IX. Administrative Designation and Regulatory Analysis

Under Executive Order (E.O.) 12866, the Agency must judge whether a

regulation is ``major'' and thus subject to the requirement to prepare

a regulatory impact analysis. The decision announced today alleviates

any potential adverse economic impacts in Guam and is not a regulation

or rule as defined in E.O. 12866. Therefore, no regulatory impact

analysis has been prepared.

X. Impact on Small Entities

This action either eases or leaves unchanged requirements otherwise

applicable to affected entities. Thus, EPA has determined that it will

not result in a significant adverse impact on a substantial number of

small entities.

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

Under Section 202 of the Unfunded Mandates Reform Act of 1995

(``Unfunded Mandates Act''), EPA must prepare a budgetary impact

statement to accompany any proposed or final rule that includes a

federal mandate that may result in estimated costs to state, local, or

tribal governments in the aggregate, or to 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 exemption in this notice does not

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

million or more to those entities mentioned above. This federal action

approves a request for exemption by petitioners in Guam to reduce the

cost of implementing the Clean Air Act. Accordingly, no additional

costs to state, local, or tribal govenrments, or to the private sector

result from this action.

XIII. Submission to Congress and the General Accounting Office

Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business

Regulatory Enforcement Fairness Act of 1996, EPA submitted a report

containing this decision and other required information to the U.S.

Senate, the U.S. House of Representatives and the Comptroller General

of the General Accounting Office prior to publication of the decision

in today's Federal Register. This action is not a ``major rule'' as

defined by 5 U.S.C. 804(2).

XIV. Electronic Copy of Final Decision

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 title:

GUAM.ZIP. To down load this file, type the instructions below and

transfer according to the appropriate software on your computer:

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

[[Page 53860]]

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 systems 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.

Dated: October 8, 1996.

Carol M. Browner,

Administrator.

[FR Doc. 96-26449 Filed 10-15-96; 8:45 am]

BILLING CODE 6560-50-P