Approval and Promulgation of Implementation Plans (Minnesota)

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[MN28-02-7253; FRL-5402-2]

Approval and Promulgation of Implementation Plans (Minnesota)

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The United States Environmental Protection Agency (USEPA) is

approving a year-round oxygenated fuels program as a revision to

Minnesota's State Implementation Plan (SIP) for carbon monoxide (CO).

The use of oxygenated fuels can reduce emissions of CO from vehicles,

thereby reducing the threat to human health posed by CO, which can

contribute to heart and lung disease and reduce the concentration of

oxygen in the blood stream. Minnesota already has an approved SIP which

requires the use of oxygenated fuels during the winter; the extension

of the oxygenated fuels program beyond the winter months will serve as

the contingency measure required for nonattainment plans under section

172(c)(9) of the Clean Air Act (the Act). USEPA's action is based upon

a SIP revision request which was submitted by the State to satisfy the

requirements of the Act.

DATES: This final rule is effective on March 22, 1996.

ADDRESSES: Copies of the SIP revision request, public comments on the

rulemaking, and other materials relating to this rulemaking are

available for inspection at the following address: (It is recommended

that you telephone Alexis Cain at (312) 886-7018 before visiting the

Region 5 Office.) United States Environmental Protection Agency, Region

5, Air and Radiation Division, 77 West Jackson Boulevard (AT-18J),

Chicago, Illinois 60604.

FOR FURTHER INFORMATION CONTACT: Alexis Cain, Air Toxics and Radiation

Branch, Regulation Development Section (AT-18J), United States

Environmental Protection Agency, Region 5, Chicago, Illinois 60604,

(312) 886-7018.

SUPPLEMENTARY INFORMATION:

I. Summary of State Submittal

On November 12, 1993, the Commissioner of the Minnesota Pollution

Control Agency submitted elements of a contingency measure for the

carbon monoxide nonattainment area in the Twin-Cities area of the

State. This area includes the following counties which comprise the CO

control area: Anoka, Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey,

Scott, Washington, and Wright.1 The State's

[[Page 6548]]

CO contingency plan consists of an expansion of the State's existing

wintertime oxygenated gasoline program to a year-round program

beginning on October 31, 1995. The program requires gasoline sold in

the control area of the Twin Cities to contain no less than 2.0 percent

oxygen and average 2.7 percent oxygen during the control period. On

January 25, 1994, the USEPA issued a letter stating that the submittal

was complete except for two items: the public hearing process and a

report of the results of a study regarding the year-round use of

ethanol as the oxygenate and its effect on summer-time ozone

concentrations. The results of the public hearing process were received

in a letter from the Commissioner of the MPCA on January 26, 1994, and

contained the required information demonstrating that the public

process was carried out. The letter included a report prepared by an

environmental consultant regarding the year-round use of ethanol in the

State. USEPA requested this report because of the potential for

increased evaporative emissions of hydrocarbons resulting from splash

blending ethanol in gasoline. The emission of hydrocarbons during

summertime conditions results in the formation of tropospheric ambient

ozone.

\1\ St. Louis County (in the Duluth-Superior, Wisconsin MSA) was

redesignated to attainment for carbon monoxide on April 14, 1994.

The maintenance plan contains a ``park and ride'' measure to reduce

vehicle miles traveled in the event maintenance cannot be assured.

If the first choice measure (park and ride) does not succeed in

reducing the CO concentrations the State will consider the

implementation of an oxygenated gasoline program.

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The State submittal was submitted to satisfy the provisions under

section 172(c)(9) of the Clean Air Act (Act), which requires

contingency measures in moderate CO nonattainment areas with design

values of 12.7 parts per million or less. These contingency measures

must be implemented in the event the area fails to attain the national

standard by December 31, 1995. Contingency measures, once triggered,

are to take effect automatically, without further rulemaking action by

the State or the Administrator. States must show that their contingency

measures can be implemented with minimal further action on their part

and with no additional rulemaking actions.

A proposed rulemaking was published in the June 1, 1995 Federal

Register (60 FR 28557), which proposed approval of the CO contingency

SIP, but raised invited public comment on three issues: potential

increases in ozone concentrations as a result of the use of oxygenated

fuels in the summer months; potential problems in enforcing the program

in the event that a possible future increase in the price of ethanol

(which is the oxygenate in use in Minnesota) gives fuel retailers and/

or blenders an incentive not to comply with the program, and the need

to define an endpoint for reporting purposes in the oxygenate program.

II. Public Comment/USEPA Response

USEPA received comments on the proposed rulemaking from KOCH

Refining and the Minnesota Department of Agriculture.

KOCH Refining Comments and USEPA Response

KOCH requested that the USEPA disapprove the proposed contingency

measure because:

(1) There is no need for summertime CO reductions, based on current

and historical summertime CO ambient monitoring;

(2) The lack of an end point for reporting purposes will lead to

unnecessary regulatory complications;

(3) There is great potential for increases in ambient ozone

concentrations due to use of year-round oxygenated fuel; and

(4) There is great potential for adverse impacts in price and

availability of gasoline in the event of reduction or curtailment of

federal or state subsidies for ethanol production and blending.

Comment 1: There is no need for summer time CO reductions, based on

current and historical summertime CO ambient monitoring.

While there has not been a violation of the CO air quality standard

since 1991, several of the exceedances which contributed to violations

between 1987 and 1991 were registered outside of the current four-month

program period. Moreover, the most recent exceedance of the standard

occurred during the summer of 1995. Therefore, the USEPA believes that

the extension of the program beyond the winter months, which seems to

have been effective in reducing ambient CO concentrations, will be

useful in providing a margin of protection against exceedances outside

of the current program period.

Comment 2: The lack of an end point for reporting purposes will

lead to unnecessary regulatory complications.

In the proposal action, USEPA noted that while the oxygenated

gasoline program requires reports to be submitted by registered

blenders of oxygenated fuels at the end of the control period, the end

of the control period has not been defined for the year-round program.

The State has been made aware of this minor technical problem, and is

exploring means to correct it. The USEPA believes that this problem can

be resolved without difficulty, and that it is not an adequate reason

to delay final rulemaking.

Comment 3: There is great potential for increases in ambient ozone

concentrations due to use of year-round oxygenated fuel.

The addition of ethanol to gasoline raises the vapor pressure of

the mixture to a level higher than that of either of the two

components. The USEPA allows a one pound per square inch (psi) waiver

for gasolines containing up to 10 volume percent ethanol. So, for

example, the vapor pressure of gasoline sold during summer months is

limited to nine psi. However, a gasoline blend of 10 volume percent

ethanol may have a vapor pressure of 10 psi. This increase in vapor

pressure may lead to higher evaporative emissions of volatile organic

compounds (VOCs), which are precursors of ozone, potentially increasing

the formation of ozone.

While the use of oxygenated fuels during the summer (the ozone

season) may lead to increases in ambient ozone concentrations, the

USEPA has no basis for disapproving the CO contingency SIP request

since there is no information available that indicates that it will

lead to violations of the ozone NAAQS. Section 110(l) of the Act

prohibits USEPA from approving a SIP if it would interfere with any

applicable requirement concerning attainment or reasonable further

progress, or any other applicable requirement of the Act. Since

Minnesota has no nonattainment areas for ozone, reasonable further

progress is not an issue; the only concern is whether use of oxygenated

fuels jeopardizes the attainment status of the Twin Cities.

KOCH argues that a possible tightening of the ozone NAAQS could

make it more difficult to avoid a violation. However, USEPA cannot base

its current rulemaking on speculation about future changes in the

standard. Koch also argues that the possibility of hotter summers in

the future, which would be more conducive to ozone formation, makes it

risky to implement the oxygenated fuels program during the summer.

However, USEPA concludes that there is no available evidence that use

of oxygenated fuels will lead to violation of the standard in the Twin

Cities. Air quality data show no exceedances or violations of the ozone

standard in the last four years, with the last exceedance recorded in

1990. Moreover, there is some dispute over the extent to which ethanol

will increase ozone formation. A study contracted by MPCA (discussed

below) found that ethanol might slightly reduce ozone formation; while

USEPA disputes this study's methodology and still believes that some

ozone increases are possible as a result of the oxygenated

[[Page 6549]]

fuels program, the magnitude of these increase in the Twin Cities

cannot be determined. Furthermore, ethanol blends are already in use

year-round in Minnesota, with 50 percent or greater market penetration

during the past 3 ozone seasons, without causing an exceedance of the

ozone standard. An increase from more than 50 percent use of ethanol

blends to nearly 100 percent is not likely to lead to a significant

increase in ozone.

The Minnesota Pollution Control Agency submitted a contractor's

report which suggested that the use of ethanol would not cause

violations of the ozone standard.2 The USEPA reviewed the report

and found that it was flawed in a number of areas including:

uncertainty on how to take into account VOC reactivity; incorrect

speciation profiles; inability to replicate exhaust VOC benefit of the

ethanol blends; lack of evidence to support the contention of an

enrichment benefit for ethanol, and the use of excessively high highway

speeds in the modelling. Despite USEPA's criticism of this study, no

new information was submitted by the consultant or the State. The

USEPA's comments on this report remain unchanged. However, KOCH did not

provide any additional studies which demonstrate that there will be

ozone violations as a result of summertime ethanol use.

\2\ Systems Applications International, Ozone Impact of Year-

Round Oxy-Fuel Program in Minnesota, San Rafael, CA, January 10,

1994.

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Comment 4: There is great potential for adverse impacts in price

and availability of gasoline in the event of reduction or curtailment

of federal or state subsidies for ethanol production and blending.

Koch expressed concern that federal codification of this existing

program will reduce the State's ability to respond flexibly to price

increases and disruptions in availability. KOCH believes that a

hypothetical reduction or elimination of federal and State ethanol

subsidies, which amount to as high as 89 cents per gallon of pure

ethanol, will not lead to ``cheating'' as suggested in the USEPA

proposal. Instead, Koch is concerned that limited oxygenate

availability would lead to a tight supply of blended specification

gasoline and price increases. Koch expects the potential for shortages

to increase in 1997 when the oxygenated gasoline program area is

expected to be expanded to cover the entire State.

The State does not expect or anticipate a change in the subsidy

program associated with the use of ethanol. If there is a change in

State and/or Federal subsidies, the USEPA believes the state does have

the flexibility to discontinue the measure, assuming that no violation

of the CO NAAQS occur. The USEPA would retain the contingency measure

as a Section 172(c) requirement, however, which the State would need to

implement if the area fails to attain the CO standard by the attainment

date. If the area fails to attain and the State shuts the program off,

the USEPA has the authority to require the implementation or continued

operation of the program. If the area is in attainment (through a

redesignation process) and the State wishes to eliminate the program as

even a contingency measure, the State would need to identify a

substitute contingency program.

Minnesota Department of Agriculture Comments and USEPA Response

The Minnesota Department of Agriculture objected to statements in

the proposed rulemaking that the year-round use of ethanol could lead

to increased ozone pollution. The Department of Agriculture argues that

air quality studies have shown that increased ozone will not result.

As stated above, USEPA does not believe that this issue has been

resolved conclusively. While it is possible to make a case that

increased ozone concentrations may result from summertime use of

oxygenated gasoline, it cannot be shown that violations of the NAAQS

will result. Thus, USEPA is approving the program.

III. Rulemaking Action

The USEPA is approving the Minnesota year-round oxygenated fuels

program as the CO contingency measure required for nonattainment plans

under section 172(c)(9) of the Clean Air Act.

Nothing in this action should be construed as permitting, allowing

or establishing a precedent for any future request for revision to any

SIP. USEPA shall consider each request for revision to the SIP in light

of specific technical, economic, and environmental factors and in

relation to relevant statutory and regulatory requirements.

This action has been classified as a Table 3 action for signature

by the Regional Administrator under the procedures published in the

Federal Register on January 19, 1989 (54 FR 2214-2225), as revised by a

July 10, 1995, memorandum from Mary Nichols, Assistant Administrator

for Air and Radiation. The Office of Management and Budget (OMB) has

exempted this regulatory action from Executive Order 12866 review.

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

must prepare a regulatory flexibility analysis assessing the impact of

any proposed or final rule on small entities (5 U.S.C. 603 and 604).

Alternatively, USEPA may certify that the rule will not have a

significant impact on a substantial number of small entities. Small

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

and government entities with jurisdiction over populations of less than

50,000.

Under Section 307(b)(1) of the Clean Air Act, petitions for

judicial review of this action must be filed in the United States Court

of Appeals for the appropriate circuit by April 22, 1996. Filing a

petition for reconsideration by the Administrator of this final rule

does not affect the finality of this rule for the purposes of judicial

review nor does it extend the time within which a petition for judicial

review may be filed, and shall not postpone the effectiveness of such

rule or action. This action may not be challenged later in proceedings

to enforce its requirements. (See Section 307(b)(2).)

Note--Incorporation by reference of the State Implementation

Plan for the State of Minnesota was approved by the Director of the

Federal Register on July 1, 1982.

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Carbon monoxide,

Incorporation by reference, Intergovernmental relations, Ozone,

Volatile organic compounds.

Dated: November 6, 1995.

David A. Ullrich,

Acting Regional Administrator.

40 CFR part 52 is amended as follows:

PART 52--[AMENDED]

1. The authority citation for part 52 continues to read as follows:

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

Subpart Y--[Amended]

2. Section 52.1220 is amended by adding paragraph (c)(43) to read

as follows:

Sec. 52.1220 Identification of plan.

* * * * *

(c) * * *

(43) On November 12, 1993, the State of Minnesota submitted a

contingency plan to control the emissions of carbon monoxide from

mobile sources by use of oxygenated gasoline on a year-round basis. The

submittal of this program satisfies the provisions under section

172(c)(9) and 172(b) of the Clean Air Act as amended.

[[Page 6550]]

(i) Incorporation by reference.

(A) Laws of Minnesota for 1992, Chapter 575, section 29(b), enacted

by the legislature and signed into law on April 29, 1992.

[FR Doc. 96-3789 Filed 2-20-96; 8:45 am]

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