Regulations of Fuels and Fuel Additives: Removal of the Reformulated Gasoline Program from the Phoenix, AZ Serious Ozone Nonattainment Area

SUMMARY: In today's final action, EPA is amending its reformulated

gasoline regulations to reflect that the Phoenix, Arizona ozone

nonattainment area will not be a covered area in the federal

reformulated gasoline (RFG) program as of June 10, 1998. As described

in a separate notice published elsewhere in this issue of the Federal

Register, pursuant to 40 CFR 80.72, EPA has approved the petition by

the Governor of Arizona dated September 12, 1997, to opt-out of the

federal RFG program and removed the requirement to sell federal RFG in

the Phoenix ozone nonattainment area as of June 10, 1998. This

effective date applies to retailers, wholesale purchaser-consumers,

refiners, importers, and distributors. This rulemaking will conform the

list of covered areas in the regulations to reflect the effective date

of the opt-out for the Phoenix area. As of June 10, 1998, Arizona's

cleaner burning gasoline state regulations will go into effect in the

Phoenix area. Arizona developed a clean fuel program to reduce

emissions of volatile organic compounds (VOC) and particulates (PM10).

Thus, although opting out of the federal RFG program, the Phoenix area

will continue to enjoy the air quality benefits of a clean burning

gasoline.

DATES: This final rule is effective August 11, 1998.

ADDRESSES: Materials relevant to this rule to amend Sec. 80.70 of the

RFG regulations to reflect the removal of the Phoenix area from the

federal RFG program have been placed in Docket A-98-23. Materials

relevant to the rule to include the Phoenix area in the federal RFG

program may be found in Docket A-97-02. The docket is located at the

Air Docket Section, Mail Code 6102, U.S. Environmental Protection

Agency, 401 M Street, SW, Washington, DC 20460, in room M-1500

Waterside Mall. Documents may be inspected on business days from 8:00

a.m. to 5:30 p.m. A reasonable fee may be charged for copying docket

material.

Materials relevant to the EPA Final Rule to approve the Arizona SIP

revision establishing state clean burning gasoline regulations are

available in the docket located at Region IX. The docket is located at

75 Hawthorne Street, AIR-2, 17th Floor, San Francisco, California

94105. Documents may be inspected from 9:00 a.m. to noon and from

1:00--4:00 p.m. A reasonable fee may be charged for copying docket

material. This approval action is not being addressed in this rule.

FOR FURTHER INFORMATION CONTACT: Janice Raburn, Attorney-Advisor, U.S.

Environmental Protection Agency, Office of Air and Radiation, 401 M

Street, SW (6406J), Washington, DC 20460, (202) 564-9856.

SUPPLEMENTARY INFORMATION:

Availability on the TTNBBS

Copies of this final rule are available electronically from the EPA

Internet Web site and via dial-up modem on the Technology Transfer

Network (TTN), which is an electronic bulletin board system (BBS)

operated by EPA's Office of Air Quality Planning and Standards. Both

services are free of charge, except for your existing cost of Internet

connectivity or the cost of the phone call to TTN. Users are able to

access and download files on their first call using a personal computer

per the following information. An electronic version is made available

on the day of publication on the primary Internet sites listed below.

The EPA Office of Mobile Sources also publishes these notices on the

secondary Web site listed below and on the TTN BBS.

Internet (Web)

http://www.epa.gov/docs/fedrgstr/EPA-AIR/(either select desired date or

use Search feature)

http://www.epa.gov/OMSWWW/(look in What's New or under the specific

rulemaking topic)

TTN BBS: The TTN BBS 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, 9600, or 14400 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:

GATEWAY TO TTN TECHNICAL AREAS (Bulletin Boards)

OMS--Mobile Sources Information (Alerts display a chronological

list of recent documents)

Rulemaking & Reporting

At this point, choose the topic (e.g., Fuels) and subtopic (e.g.,

Reformulated Gasoline) of the rulemaking, and the system will list all

available files in the chosen category in date order with brief

descriptions. To download a file, type the letter ``D'' and hit your

Enter key. Then select a transfer protocol that is supported by the

terminal software on your own computer, and pick the appropriate

command in your own software to receive the file using that same

protocol. After getting the files you want onto your computer, you can

quit the TTN BBS 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.

Regulated Entities

Entities potentially regulated by this action are those which

produce, import, supply or distribute gasoline. Regulated categories

and entities include:

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Examples of regulated

Category entities

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Industry.................................. Refiners, importers,

oxygenate blenders,

terminal operators,

distributors, retail

gasoline stations.

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

guide for readers regarding entities likely to be regulated by this

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

could potentially be regulated by this action. Other types of entities

not listed in the table could also be regulated. To determine whether

your business would have been regulated by this action, you should

carefully examine the list of areas covered by the reformulated

gasoline program in Sec. 80.70 of title 40 of the Code of Federal

Regulations. If you have questions regarding the applicability of this

action to a particular entity, consult the person listed in the

preceding FOR FURTHER INFORMATION CONTACT section.

I. Background

A. Opt-Out Procedures

Section 80.72 of the RFG regulations (Opt-out Rule) provides the

process and criteria for a reasonable transition out of the RFG program

if a state decides to

[[Page 43047]]

opt-out.1 The procedures for opting out are geared towards

achieving a reasonable transition out of the RFG program for industry

and states. The Opt-out Rule provides that the Governor of the state

must submit a petition to the Administrator requesting to opt out of

the RFG program. The petition must include specific information on how,

if at all, the state has relied on RFG in a pending or approved SIP

and, if RFG is in an approved SIP, how the SIP will be revised to

reflect the state's opt-out from RFG. The Opt-out Rule also provides

that EPA will notify the state in writing of the Agency's action on the

petition and the date the opt-out becomes effective when the petition

is approved. The regulations also provide that EPA will publish an FR

notice announcing the approval of any opt-out petition and the

effective date of such opt-out.

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\1\ Pursuant to authority under sections 211(c) and (k) and

301(a) of the Clean Air Act, EPA promulgated regulations to provide

criteria and general procedures for states to opt-out of the RFG

program where the state had previously voluntarily opted into the

program. The regulations were initially adopted on July 8, 1996 (61

FR 35673); and were revised on October 20, 1997 (62 FR 54552).

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The effective date of the opt-out is dependent on how the RFG

program is used by a state in its SIP. Opt-out petitions received prior

to December 31, 1997 become effective 90 days (or later if requested)

from the date EPA provides written notification to the state that the

petition has been approved. If, however, the state included RFG as a

control measure in an approved SIP, the state must revise the SIP to

remove federal RFG as a control measure before the opt-out can be

effective. For the latter case, the opt-out becomes effective no less

than 90 days (or later if requested) after the Agency approves a

revision to the state plan replacing RFG with another control. Opt-out

petitions received after December 31, 1997 are treated differently. See

62 FR 54552 (October 20, 1997).

B. Arizona Opt-In and Opt-Out of RFG for the Phoenix Area

By letter dated January 17, 1997, the Governor of the State of

Arizona applied to EPA to include the Phoenix moderate ozone

nonattainment area in the federal RFG program.2 The Governor

requested an implementation date of June 1, 1997. Pursuant to the

Governor's letter and the provisions of section 211(k)(6) of the Clean

Air Act, and after holding a public hearing in Phoenix on March 18,

1997, EPA adopted regulations on May 28, 1997, that applied the

requirement to sell RFG to the Phoenix area. 62 FR 30260 (June 3,

1997).3

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\2\ EPA reclassified the Phoenix area from moderate to serious

nonattainment for ozone on November 6, 1997 (62 FR 60001).

\3\ See Notice of Proposed Rulemaking at 62 FR 7197 (February

18, 1997); and Notice of public hearing at 62 FR 11405 (March 12,

1997).

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Arizona subsequently enacted legislation which authorized the

establishment of a State cleaner burning gasoline program which would

become effective June 1, 1998. By letter dated September 12, 1997, the

Governor of the State of Arizona applied to EPA to opt-out of the

federal RFG program for the Phoenix area. The Governor requested the

specific opt-out effective date of June 1, 1998, to ensure that the

federal RFG program would be maintained in the Phoenix area until the

State RFG regulations became effective. Thus, the Governor requested

that EPA approve the State's opt-out petition and set the opt-out

effective date only upon EPA approval of the SIP revision containing

the Arizona RFG regulations and the waiver request.

EPA's Office of Air and Radiation (OAR) responded to the Governor's

petition by letter dated October 3, 1997. EPA stated in the letter that

the Governor's petition provided the information required by the Opt-

out Rule and that OAR would work with Region IX to process the SIP

revision as quickly as possible in order to provide the opt-out

effective date requested.

II. Action

In this rule, EPA is amending Sec. 80.70(m) to reflect that Phoenix

will not be a covered area in the federal RFG program as of June 10,

1998. In a separate notice published elsewhere in this issue of the

Federal Register, EPA is announcing its approval of the Governor's

petition and the opt-out effective date. The opt-out effective date for

the Phoenix area is June 10, 1998. This June 10, 1998, opt-out

effective date applies to retailers, wholesale purchaser-consumers,

refiners, importers, and distributors. For a further discussion see 63

FR 6653, February 10, 1998.

In today's final action, EPA is amending Sec. 80.70(m) to reflect

that Phoenix will not be a covered area in the federal RFG program as

of June 10, 1998. This amendment will conform the regulations with

EPA's approval of the Governor of Arizona's petition to opt-out of the

federal reformulated gasoline (RFG) program for the Phoenix area, and

removal of the requirement to sell federal RFG in the Phoenix serious

ozone nonattainment area as of June 10, 1998.

III. Public Participation

EPA is issuing this final rule without prior notice and comment.

The rulemaking procedures provided in section 307(d) of the Act do not

apply when the Agency for good cause finds that the notice and comment

procedures under section 307(d) of the Act are impracticable,

unnecessary, or contrary to the public interest. CAA section 307(d)(1).

This expedited rulemaking procedure is based on the fact that EPA is

amending the CFR today to reflect the approval of Arizona's opt-out

petition, based on criteria in EPA regulations for opting out of the

federal RFG program.

EPA is simply making a ministerial change to the list of RFG

covered areas in the CFR so the list of covered areas in 40 CFR 80.70

will conform to EPA's approval of the Phoenix opt-out request. That

approval is a separate action and is not the subject of this rule. For

these reasons, EPA finds that notice and comment procedures under

section 307(d)(1) of the Act are unnecessary. EPA also finds these

circumstances provide good cause under 5 U.S.C. 553(d) for this

expedited effective date.

IV. Environmental Impact

Although Arizona has decided to opt-out of the federal RFG program

for the Phoenix area, Arizona is replacing the RFG program with a State

clean fuel program in its SIP. Under the Arizona fuel program, refiners

may provide either a federal RFG-like fuel or a California RFG-like

fuel. The state fuel program is expected to achieve air quality

benefits similar to those achieved by federal RFG. Thus, the Phoenix

area will continue to benefit from the use of a clean burning gasoline.

The type of gasoline used in an area does affect its air quality.

Gasoline vapors and vehicle exhaust contain VOCs and NOX

that react in the atmosphere in the presence of sunlight and heat to

produce ozone, a major component of smog. Vehicles also release toxic

emissions, one of which (benzene) is a known human carcinogen. Cleaner

burning gasolines, such as federal and California RFG contain less of

the ingredients that contribute to these harmful forms of air

pollution. Consequently, these gasolines reduce the exposure of the

U.S. public overall to ozone and certain air toxics.

Cleaner burning gasolines such as federal and California RFG

generally provide reductions in ozone-forming VOC emissions, toxic

emissions, and NOX emissions. Reductions in VOCs are

environmentally significant because of the associated reductions in

ozone formation and in secondary formation of

[[Page 43048]]

particulate matter, with the associated improvements in human health

and welfare. Exposure to ground-level ozone (or smog) can damage

sensitive lung tissue, reduce lung function, cause lung inflammation,

increase susceptibility to respiratory infection, and increase

sensitivity of asthmatics to allergens (e.g., pollen) and other

bronchoconstrictors. Symptoms from short-term exposure to ozone include

coughing, eye and throat irritation, and chest pain. Animal studies

suggest that long-term exposure (months to years) to ozone can damage

lung tissue and may lead to chronic respiratory illness.

Toxic emissions from motor vehicles have been estimated to account

for roughly half of the total exposure of the urban U.S. population to

toxic air emissions. Reductions in emissions of toxic air pollutants

are environmentally important because they carry significant benefits

for human health and welfare primarily by reducing the number of cancer

cases each year. The reduction of benzene provides the majority of air

toxics emission reductions from RFG. New monitoring data from the 1995

EPA Air Quality Trends Report shows that in RFG areas, benzene was

reduced by 43 percent. A number of adverse non-cancer health effects,

such as eye, nose, and throat irritation, have also been associated

with exposure to elevated levels of these air toxics.

V. Statutory Authority

The Statutory authority for the action today is granted to EPA by

sections 211(c) and (k), 301, and 307 of the Clean Air Act, as amended;

42 U.S.C. 7545(c) and (k), 7601, 7607; and 5 U.S.C. 553(b).

VI. Regulatory Flexibility

The Agency has determined that the rule being issued today is not

subject to the Regulatory Flexibility Act (RFA), which generally

requires an agency to conduct a regulatory flexibility analysis of any

significant impact the rule will have on a substantial number of small

entities. By its terms, the RFA applies only to rules subject to

notice-and-comment rulemaking requirements under the Administrative

Procedure Act (APA) or any other statute. Today's rule is not subject

to notice and comment requirements under the APA or any other statute.

As described above, EPA has determined that there is good cause for

exempting this action from notice and comment requirements under

section 307(d) of the Act. The Agency nonetheless has assessed the

potential of this rule to adversely impact small entities. EPA has

determined that this action will not have a significant economic impact

on a substantial number of small entities. Today's final rule is a

ministerial action to conform the list of covered areas in EPA

regulations to reflect the effective date of EPA's approval of

Phoenix's opt-out petition. This ministerial revision of the list of

covered areas in the CFR does not have a significant impact on a

substantial number of small entities, since it simply reflects the

effective date of EPA's approval of the RFG opt-out petition for

Phoenix. Because EPA's action to set the effective date for the opt out

was not a rulemaking, it was not subject to the RFA. Nonetheless, EPA

has determined that setting the effective date of EPA's approval of

Phoenix's opt-out petition does not have a significant impact on a

substantial number of small entities. EPA's approval of the opt-out

petition, as well as today's rule conforming the list of covered areas

to reflect the effective date of that approval, will affect only those

refiners, importers or blenders of gasoline and gasoline distributors

and retail stations that chose to produce, import, or sell RFG in the

Phoenix ozone nonattainment area during the period that Phoenix was a

covered area in the federal RFG program (July 3, 1997-June 10, 1998).

These entities will no longer be required to comply with federal RFG

requirements in the Phoenix area. Instead, for federal purposes, these

entities will be subject to the federal anti-dumping and volatility

requirements. Compliance with these requirements will be less

burdensome than compliance with the federal RFG requirements.

VII. Executive Order 12866

Under Executive Order 12866,4 the Agency must determine

whether a regulation is ``significant'' and therefore subject to Office

of Management and Budget (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:

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\4\ See 58 FR 51735 (October 4, 1993).

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(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 of 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

this Executive Order.5

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\5\ Id. At section 3(f) (1)-(4).

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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.

VIII. Paperwork Reduction Act

This action does not add any new requirements under the provisions

of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. OMB has approved

the information collection requirements contained in the final RFG/

antidumping rule and has assigned OMB control number 2060-0277 (EPA ICR

No. 1951.03).

Burden means the total time, effort, or financial resources

expended by persons to generate, maintain, retain, or disclose or

provide information to or for a Federal agency. This includes the time

needed to review instructions; develop, acquire, install, and utilize

technology and systems for the purposes of collecting, validating, and

verifying information, processing and maintaining information, and

disclosing and providing information; adjust the existing ways to

comply with any previously applicable instructions and requirements;

train personnel to be able to respond to a collection of information;

search data sources; complete and review the collection of information;

and transmit or otherwise disclose the information. An Agency may not

conduct or sponsor, and a person is not required to respond to a

collection of information unless it displays a currently valid OMB

control number. The OMB control number for EPA's regulations are listed

in 40 CFR part 9 and 48 CFR Chapter 15.

IX. Unfunded Mandates

Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA''),

Pub. L. 104-4, establishes requirements for Federal agencies to assess

the effects of their regulatory actions on State, local, or tribal

governments and the private sector. Under section 202 of the UMRA, EPA

generally must prepare a written statement, including a cost-benefit

analysis, for proposed and final rules with ``Federal mandates'' that

may result in expenditures to State, local, or tribal governments in

the aggregate, or to the private sector, of $100 million or more in any

one year. Before promulgating an EPA rule for which a written statement

is needed, section 205 of the UMRA generally requires EPA to

[[Page 43049]]

identify and consider a reasonable number of regulatory alternatives

and adopt the least costly, most cost-effective, or least burdensome

alternative that achieves the objectives of the rule. The provisions of

section 205 do not apply when they are inconsistent with applicable

law. Moreover, section 205 allows EPA to adopt an alternative other

than the least costly, most cost-effective, or least burdensome

alternative if the Administrator publishes with the final rule an

explanation why that alternative was not adopted. Before EPA

establishes any regulatory requirements that may significantly or

uniquely affect small governments, including tribal governments, it

must have developed under section 203 of the UMRA a small government

agency plan. The plan must provide for notifying potentially affected

small governments, enabling officials of affected small governments to

have meaningful and timely input in the development of EPA regulatory

proposals with significant Federal intergovernmental mandates, and

informing, educating, and advising small governments on compliance with

the regulatory requirements.

Today's final rule contains no Federal mandates (under the

regulatory provisions of Title II of the UMRA) for State, local or

tribal governments or the private sector. The rule imposes no

enforceable duty on any State, local or tribal governments or the

private sector.

X. Judicial Review

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

judicial review of this action to amend the CFR to reflect the removal

of the federal RFG program from the Phoenix ozone nonattainment area

must be filed in the United States Court of Appeals for the appropriate

circuit by October 13, 1998. 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).)

XI. Submission to Congress and the General Accounting Office

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the

Small Business Regulatory Enforcement Fairness Act of 1996, generally

provides that before a rule may take effect, the agency promulgating

the rule must submit a rule report, which includes a copy of the rule,

to each House of the Congress and to the Comptroller General of the

United States. However, section 808 provides that any rule for which

the issuing agency for good cause finds (and incorporates the finding

and a brief statement of reasons therefor in the rule) that notice and

public procedure thereon are impracticable, unnecessary or contrary to

the public interest, shall take effect at such time as the agency

promulgating the rule determines. 5 U.S.C. 808(2). As stated

previously, EPA has made such a good cause finding, including the

reasons therefor, and established the date of publication as the

effective date of this rule. EPA will submit a report containing this

rule and other required information to the U.S. Senate, the U.S. House

of Representatives, and the Comptroller General of the United States

prior to publication of the rule in the Federal Register. The rule is

not a major rule as defined by 5 U.S.C. 804(2).

XII. Children's Health Protection

This final rule is not subject to E.O. 13045, entitled ``Protection

of Children from Environmental Health Risks and Safety Risks'' (62 FR

19885, April 23, 1997), because it does not involve decisions on

environmental health risks or safety risks that may disproportionately

affect children.

List of Subjects in 40 CFR Part 80

Environmental protection, Fuel additives, Gasoline, Imports,

Labeling, Motor vehicle pollution, Penalties, Reporting and

recordkeeping requirements.

Dated: July 31, 1998.

Carol M. Browner,

Administrator.

40 CFR part 80 is amended as follows:

PART 80--[AMENDED]

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

Authority: Secs. 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 adding two sentences to the end of

paragraph (m) to read as follows:

Sec. 80.70 Covered areas.

* * * * *

(m) * * * The Phoenix, Arizona ozone nonattainment area is a

covered area until June 10, 1998. As of June 10, 1998, the Phoenix area

will no longer be a covered area.

[FR Doc. 98-21212 Filed 8-10-98; 8:45 am]

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