

[Federal Register: February 22, 2006 (Volume 71, Number 35)]
[Rules and Regulations]               
[Page 8973-8986]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22fe06-17]                         

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[EPA-HQ-OAR-2005-0170; FRL-8035-1]

 
Regulation of Fuels and Fuel Additives: Removal of Reformulated 
Gasoline Oxygen Content Requirement and Revision of Commingling 
Prohibition To Address Non-Oxygenated Reformulated Gasoline

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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

SUMMARY: In the Energy Policy Act of 2005 (Energy Act), Congress 
removed the oxygen content requirement for reformulated gasoline (RFG) 
in section 211(k) of the Clean Air Act (CAA). To be consistent with the 
current CAA section 211(k), this direct final rule amends the fuels 
regulations to remove the oxygen content requirement for RFG. This rule 
also removes requirements which were included in the regulations to 
implement and ensure compliance with the oxygen content requirement. In 
addition, this rule extends the current prohibition against combining 
VOC-controlled RFG blended with ethanol with VOC-controlled RFG blended 
with any other type of oxygenate from January 1 through September 15, 
to also prohibit combining VOC-controlled RFG blended with ethanol with 
non-oxygenated VOC-controlled RFG during that time period, except in 
limited circumstances authorized by the Act.

DATES: This rule is effective on May 5, 2006, or April 24, 2006, 
whichever is later, without further notice unless we receive adverse 
comment by March 24, 2006. If EPA receives adverse comment, we will 
publish a timely withdrawal in the Federal Register informing the 
public that the portion of the final rule on which adverse comment was 
received will not take effect. Those portions of the rule on which 
adverse comment was not received will go into effect on the effective 
date noted above.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2005-0170 by one of the following methods:
    1. http://www.regulations.gov: Follow the on-line instructions for 

submitting comments.

[[Page 8974]]

    2. E-mail: Group A-AND-R-DOCKET@epa.gov. Attention Docket ID No. 
OAR-2005-0170.
    4. Mail: Air and Radiation Docket, Environmental Protection Agency, 
Mailcode: 6406J, 1200 Pennsylvania Ave., NW., Washington, DC 20460. 
Please include a total of two copies. In addition, please mail a copy 
of your comments on the information collection provisions to the Office 
of Information and Regulatory Affairs, Office of Management and Budget 
(OMB), Attn: Desk Officer for EPA, 725 17th St. NW., Washington, DC 
20503.
    5. Hand Delivery: EPA Docket Center, Environmental Protection 
Agency, 1301 Constitution Avenue, NW., Room B102, Mail Code 6102T, 
Washington, DC 20460. Such deliveries are only accepted during the 
Docket's normal hours of operation, and special arrangements should be 
made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2005-0170. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 

provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through http://www.regulations.gov or e-mail. The http://www.regulations.gov is an 

``anonymous access'' systems, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through http://www.regulations.gov, your e-mail address will be 

automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses. For additional information about EPA's public 
docket visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm
.

    We are only taking comment on issues related to the removal of the 
oxygen requirement for RFG and associated compliance requirements, and 
the provisions regarding the combining of ethanol blended RFG with non-
oxygenated RFG and provisions for retailers regarding the combining of 
ethanol blended RFG with non-ethanol blended RFG. Comments on any other 
issues or provisions in the RFG regulations are beyond the scope of 
this rulemaking.
    Docket: All documents in the docket are listed in the http://www.regulations.gov
 index. Although listed in the index, some 

information is not publicly available, i.e., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy 
form. Publicly available docket materials are available either 
electronically in http://www.regulations.gov or in hard copy at the Air 

and Radiation Docket, EPA/DC, EPA West, Room B102, 1301 Constitution 
Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 
a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The 
telephone number for the Public Reading Room is (202) 566-1744, and the 
telephone number for the Air and Radiation Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Marilyn Bennett, Transportation and 
Regional Programs Division, Office of Transportation and Air Quality 
(6406J), Environmental Protection Agency, 1200 Pennsylvania Avenue, 
NW., Washington, DC 20460; telephone number: (202) 343-9624; fax 
number: (202) 343-2803; e-mail address: mbennett@epa.gov.

SUPPLEMENTARY INFORMATION: EPA is publishing this rule without prior 
proposal because we view this action to be noncontroversial and 
anticipate no adverse comment. However, in the ``Proposed Rules'' 
section of today's Federal Register publication, we are publishing a 
separate document that will serve as the proposal to adopt the 
provisions in this Direct Final Rule if adverse comments are filed. 
This rule is effective on May 5, 2006, or April 24, 2006, whichever is 
later, without further notice unless we receive adverse comment by 
March 24, 2006. If EPA receives adverse comment, we will publish a 
timely withdrawal in the Federal Register informing the public that the 
portion of the rule on which adverse comment was received will not take 
effect. We will address all public comments in a subsequent final rule 
based on the proposed rule. We will not institute a second comment 
period on this action. Any parties interested in commenting must do so 
at this time. Any distinct amendment, paragraph, or section of today's 
rule for which we do not receive adverse comment will become effective 
on the date set out above, notwithstanding any adverse comment on any 
other distinct amendment, paragraph, or section of today's rule.
    EPA is also publishing today a direct final rule that removes the 
oxygen content requirement for RFG, and makes associated changes in the 
fuels regulations, for California only. Although the California rule is 
similar in effect to this one, it has an earlier effective date.

I. General Information

A. Does This Action Apply To Me?

    Entities potentially affected by this action include those involved 
with the production and importation of conventional gasoline motor 
fuel. Regulated categories and entities affected by this action 
include:

------------------------------------------------------------------------
                                                           Examples of
                              NAICS codes   SIC codes      potentially
          Category                \a\          \b\          regulated
                                                             parties
------------------------------------------------------------------------
Industry....................       324110         2911  Petroleum
                                                         Refiners,
                                                         Importers.
Industry....................       422710         5171  Gasoline
                                                         Marketers and
                                                         Distributors.
                                   422720         5172  ................
Industry....................       484220         4212  Gasoline
                                                         Carriers.
                                   484230         4213  ................
------------------------------------------------------------------------
\a\ North American Industry Classification System (NAICS).
\b\ Standard Industrial Classification (SIC) system code.


[[Page 8975]]

    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 be potentially regulated by this action. Other types of entities 
not listed in the table could also be regulated. To determine whether 
your entity is regulated by this action, you should carefully examine 
the applicability criteria of part 80, subparts D, E and F of title 40 
of the Code of Federal Regulations. If you have any question regarding 
applicability of this action to a particular entity, consult the person 
in the preceding FOR FURTHER INFORMATION CONTACT section above.

B. What Should I Consider as I Prepare My Comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through 
http://www.regulations.gov or e-mail. Clearly mark the part or all of 

the information that you claim to be CBI. For CBI information in a disk 
or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM 
as CBI and then identify electronically within the disk or CD ROM the 
specific information that is claimed as CBI). In addition to one 
complete version of the comment that includes information claimed as 
CBI, a copy of the comment that does not contain the information 
claimed as CBI must be submitted for inclusion in the public docket. 
Information so marked will not be disclosed except in accordance with 
procedures set forth in 40 CFR part 2.
    2. Tips for Preparing Your Comments. When submitting comments, 
remember to:
    1. Identify the rulemaking by docket number and other identifying 
information (subject heading, Federal Register date and page number).
    2. Follow directions--The agency may ask you to respond to specific 
questions or organize comments by referencing a Code of Federal 
Regulations (CFR) part or section number.
    3. Explain why you agree or disagree; suggest alternatives and 
substitute language for your requested changes.
    4. Describe any assumptions and provide any technical information 
and/or data that you used.
    5. If you estimate potential costs or burdens, explain how you 
arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
    6. Provide specific examples to illustrate your concerns, and 
suggest alternatives.
    7. Explain your views as clearly as possible, avoiding the use of 
profanity or personal threats.
    8. Make sure to submit your comments by the comment period deadline 
identified.
    3. Docket Copying Costs. You may be charged a reasonable fee for 
photocopying docket materials, as provided in 40 CFR part 2.

C. Outline of This Preamble

I. General Information
II. Removal of the RFG Oxygen Content Requirement
III. Combining Ethanol Blended RFG With Non-Ethanol Blended RFG
IV. Environmental Effects of This Action
V. Statutory and Executive Order Reviews
VI. Statutory Provisions and Legal Authority

II. Removal of the RFG Oxygen Content Requirement

    Section 211(k) of the 1990 Amendments to the CAA required 
reformulated gasoline (RFG) to contain oxygen in an amount that equals 
or exceeds 2.0 weight percent. CAA section 211(k)(2)(B). Accordingly, 
EPA's current regulations require RFG refiners, importers and oxygenate 
blenders to meet a 2.0 or greater weight percent oxygen content 
standard. 40 CFR 80.41. Recently, Congress passed legislation which 
amended section 211(k) of the CAA to remove the RFG oxygen 
requirement.\1\ To be consistent with the current CAA section 211(k), 
today's rule modifies the RFG regulations to remove the oxygen standard 
in Sec.  80.41.\2\
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    \1\ Energy Policy Act of 2005, Public Law No. 109-58 (HR6), 
section 1504(a), 119 STAT 594, 1076-1077(2005).
    \2\ The RFG regulations were promulgated under authority of CAA 
section 211(c) as well as CAA section 211(k). The regulations were 
adopted under section 211(c) primarily for the purpose of applying 
the preemption provisions in section 211(c)(4). See 59 FR 7809 
(February 16, 1994.)
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    Today's rule also modifies several other sections of the RFG 
regulations which contain provisions designed to implement and ensure 
compliance with the oxygen standard. The modifications to the affected 
sections are listed in the following table:

Sec.   80.2(ii).................................  Removes oxygen in the
                                                   definition of
                                                   ``reformulated
                                                   gasoline credit.''
                                                   With the removal of
                                                   the oxygen standard,
                                                   there is no basis for
                                                   the generation of
                                                   oxygen credits.
Sec.  Sec.   80.41(e) and (f)...................  Removes the per-gallon
                                                   and averaged oxygen
                                                   standards for Phase
                                                   II Complex Model RFG
                                                   \3\
Sec.   80.41(o).................................  Removes the provisions
                                                   relating to oxygen
                                                   survey failures. With
                                                   the removal of the
                                                   oxygen standard,
                                                   oxygen surveys will
                                                   no longer be needed.
Sec.   80.41(q).................................  Removes reference to
                                                   Sec.   80.41(o). Also
                                                   removes reference to
                                                   oxygenate blenders
                                                   since oxygenate
                                                   blenders were subject
                                                   only to adjusted
                                                   standards in the case
                                                   of an oxygen survey
                                                   failure and not any
                                                   other survey failure.
Sec.   80.65 heading............................  Removes oxygenate
                                                   blenders from the
                                                   heading since
                                                   oxygenate blenders
                                                   were only responsible
                                                   for demonstrating
                                                   compliance with the
                                                   oxygen standard which
                                                   has been removed.
Sec.   80.65(c).................................  Removes requirements
                                                   relating to
                                                   compliance with the
                                                   oxygen standard which
                                                   have been removed.
Sec.   80.65(d).................................  Removes the
                                                   designation
                                                   requirement relating
                                                   to oxygen content,
                                                   removes the RBOB
                                                   designation
                                                   categories of ``any
                                                   oxygenate'' and
                                                   ``ether only,'' and
                                                   adds a requirement
                                                   for RBOB to be
                                                   designated regarding
                                                   the type and amount
                                                   of oxygenate required
                                                   to be added.
Sec.   80.65(h).................................  Removes the
                                                   requirement for
                                                   oxygenate blenders to
                                                   comply with the audit
                                                   requirements under
                                                   subpart F since they
                                                   will no longer be
                                                   required to
                                                   demonstrate
                                                   compliance with the
                                                   oxygen standard.
Sec.   80.67(a).................................  Removes the option to
                                                   comply with the
                                                   oxygen standard on
                                                   average for oxygenate
                                                   blenders since there
                                                   no longer is an
                                                   oxygen standard. Also
                                                   removes provisions
                                                   for refiners and
                                                   importers to use
                                                   gasoline that exceeds
                                                   the average standard
                                                   for oxygen to offset
                                                   gasoline which does
                                                   not achieve the
                                                   average standard for
                                                   oxygen.
Sec.   80.67(b).................................  Removes requirements
                                                   relating to oxygenate
                                                   blenders who meet the
                                                   oxygen standard on
                                                   average since there
                                                   no longer is an
                                                   oxygen standard.
Sec.   80.67(f).................................  Removes requirements
                                                   relating to
                                                   compliance with the
                                                   oxygen standard on
                                                   average since there
                                                   no longer is an
                                                   oxygen standard.
Sec.   80.67(g).................................  Removes requirements
                                                   relating to
                                                   compliance
                                                   calculations for
                                                   meeting the oxygen
                                                   standard on average,
                                                   since there no longer
                                                   is an oxygen
                                                   standard. Also
                                                   removes requirements
                                                   relating to the
                                                   generation and use of
                                                   oxygen credits.
Sec.   80.67(h).................................  Removes requirements
                                                   relating to the
                                                   transfer of oxygen
                                                   credits.

[[Page 8976]]


Sec.   80.68(a) and (b).........................  Removes references to
                                                   oxygenate blenders
                                                   since, with the
                                                   removal of the
                                                   requirement for
                                                   oxygen survey, they
                                                   are no longer subject
                                                   to survey
                                                   requirements. Also
                                                   removes reference to
                                                   oxygen regarding
                                                   consequences of a
                                                   failure to conduct a
                                                   required survey.
Sec.   80.68(c).................................  Removes general survey
                                                   requirements relating
                                                   to oxygen surveys.
Sec.   80.73....................................  Clarifies the
                                                   applicability of this
                                                   section to oxygenate
                                                   blenders.
Sec.   80.74(c).................................  Removes recordkeeping
                                                   requirements for
                                                   oxygenate blenders
                                                   who comply with the
                                                   oxygen standard on
                                                   average, since they
                                                   no longer will be
                                                   required to
                                                   demonstrate
                                                   compliance with an
                                                   oxygen standard. Also
                                                   removes reference to
                                                   ``types'' of credits,
                                                   since there now is
                                                   only one type of
                                                   credit (i.e.,
                                                   benzene.)
Sec.   80.74(d).................................  Revises this paragraph
                                                   to clarify
                                                   recordkeeping
                                                   requirements for
                                                   oxygenate blenders.
Sec.   80.75 heading and paragraph (a)..........  Removes reporting
                                                   requirements for
                                                   oxygenate blenders
                                                   since they no longer
                                                   will be required to
                                                   demonstrate
                                                   compliance with an
                                                   oxygen standard.
Sec.   80.75(f).................................  Removes requirement
                                                   for submitting oxygen
                                                   averaging reports
                                                   since there no longer
                                                   is a requirement to
                                                   comply with the
                                                   oxygen standard.
Sec.   80.75(h).................................  Removes credit
                                                   transfer report
                                                   requirements for
                                                   oxygen credits, since
                                                   oxygen credits will
                                                   no longer be
                                                   generated.
Sec.   80.75(i).................................  Removes requirement
                                                   for oxygenate
                                                   blenders to submit a
                                                   report identifying
                                                   each covered area
                                                   that was supplied
                                                   with averaged RFG,
                                                   since they no longer
                                                   will be required to
                                                   demonstrate
                                                   compliance with an
                                                   oxygen standard.
Sec.   80.75(l).................................  Removes reporting
                                                   requirement for
                                                   oxygenate blenders
                                                   who comply with the
                                                   oxygen standard on a
                                                   per-gallon basis,
                                                   since they are no
                                                   longer required to
                                                   demonstrate
                                                   compliance with an
                                                   oxygen standard.
Sec.   80.75(m).................................  Removes requirement
                                                   for oxygenate
                                                   blenders to submit a
                                                   report of the audit
                                                   required under Sec.
                                                   80.65(h), since
                                                   oxygenate blenders
                                                   will no longer be
                                                   required to comply
                                                   with the audit
                                                   requirement.
Sec.   80.75(n).................................  Removes requirement
                                                   for oxygenate
                                                   blenders to have
                                                   reports signed and
                                                   certified, since they
                                                   no longer will be
                                                   required to submit
                                                   reports under this
                                                   section.
Sec.   80.76(a).................................  Clarifies registration
                                                   requirements for
                                                   oxygenate blenders.
Sec.   80.77(g).................................  Removes product
                                                   transfer
                                                   documentation
                                                   requirement for
                                                   oxygen content.
Sec.   80.77(i).................................  Removes requirement
                                                   for RBOB to be
                                                   identified on product
                                                   transfer documents as
                                                   suitable for blending
                                                   with ``any-
                                                   oxygenate,'' ``ether-
                                                   only,'' since these
                                                   categories have been
                                                   removed.
Sec.   80.78(a).................................  Removes the
                                                   prohibition against
                                                   producing and
                                                   marketing RFG that
                                                   does not meet the
                                                   oxygen minimum
                                                   standard since the
                                                   oxygen standard has
                                                   been removed. Also
                                                   removes requirements
                                                   to meet the oxygen
                                                   minimum standard
                                                   during transition
                                                   from RBOB to RFG in a
                                                   storage tank.
                                                   (Today's rule also
                                                   removes the provision
                                                   in Sec.   80.78(a)(1)
                                                   regarding compliance
                                                   with the maximum
                                                   oxygen standard in
                                                   Sec.   80.41 for
                                                   simple model RFG. See
                                                   footnote 3.)
Sec.   80.79....................................  Removes quality
                                                   assurance requirement
                                                   to test for
                                                   compliance with the
                                                   oxygen standard.
Sec.   80.81(b).................................  Removes exemptions for
                                                   California gasoline
                                                   survey and
                                                   independent analysis
                                                   requirements for
                                                   oxygenate blenders
                                                   since they are no
                                                   longer subject to
                                                   these requirements.
Sec.   80.125(a), (c) and (d)...................  Removes attest
                                                   engagement auditor
                                                   requirements for
                                                   oxygenate blenders,
                                                   since they are no
                                                   longer required to
                                                   conduct attest
                                                   engagement audits.
Sec.   80.126(b)................................  Revises attest
                                                   engagement definition
                                                   of credit trading
                                                   records to remove
                                                   reference to oxygen
                                                   credits.
Sec.   80.128(e)................................  Removes reference to
                                                   RBOB designations of
                                                   ``any-oxygenate'' and
                                                   ``ether-only'' with
                                                   regard to refiner and
                                                   importer contracts
                                                   with downstream
                                                   oxygenate blenders,
                                                   since these
                                                   designations have
                                                   been removed from the
                                                   regulations.
Sec.   80.129...................................  Removes and reserves
                                                   this section which
                                                   provided for
                                                   alternative attest
                                                   engagement procedures
                                                   for oxygenate
                                                   blenders, since they
                                                   are no longer
                                                   required to conduct
                                                   attest audits.
Sec.   80.130(a)................................  Removes requirement
                                                   for a certified
                                                   public accountant or
                                                   an internal auditor
                                                   certified by the
                                                   Institute of Internal
                                                   Auditors, Inc. to
                                                   issue an attest
                                                   engagement report to
                                                   blenders, since they
                                                   are no longer
                                                   required to conduct
                                                   attest audits.
                                                   Removes requirement
                                                   for blenders to
                                                   provide a copy of the
                                                   auditor's report to
                                                   EPA.
Sec.   80.133(h)................................  Removes references to
                                                   ``any-oxygenate'' and
                                                   ``ether-only'' RBOB
                                                   under Sec.
                                                   80.69(a)(8) since
                                                   this section has been
                                                   removed.
Sec.   80.134...................................  Removes this section
                                                   which provides attest
                                                   procedures for
                                                   oxygenate blenders
                                                   since they are no
                                                   longer required to
                                                   conduct attest
                                                   audits.


    Today's rule also modifies the provisions for downstream oxygenate 
blending in Sec.  80.69. Under the current regulations, some refiners 
and importers produce or import a product called ``reformulated 
gasoline blendstock for oxygenate blending,'' or RBOB, which is 
gasoline that becomes RFG upon the addition of an oxygenate. The 
refiner or importer of the RBOB determines the type(s) and amount (or 
range of amounts) of oxygenate that must be added to the RBOB. The RBOB 
is then transported to an oxygenate blender downstream from the refiner 
or importer who adds the type and amount of oxygenate designated for 
the RBOB by the refiner or importer. The RBOB refiner or importer 
includes the designated amount of oxygenate in its emissions 
performance compliance calculations for the RBOB, however, it is the 
oxygenate blender who actually adds the oxygenate to the RBOB to comply 
with the 2.0 weight percent oxygen standard for the RFG that is 
produced by blending oxygenate into the RBOB. The regulations require 
oxygenate blenders to conduct testing for oxygen content to ensure that 
each batch of RFG complies with the oxygen standard. With the removal 
of the oxygen standard, the current requirement for oxygenate blenders 
to conduct testing to ensure compliance with the oxygen standard will 
no longer be necessary. Accordingly, the provisions for oxygenate 
blenders in Sec.  80.69 have been modified to remove the requirement 
for oxygenate blenders

[[Page 8977]]

to test RFG for compliance with the oxygen standard.
---------------------------------------------------------------------------

    \3\ The regulations also include oxygen minimum standards for 
simple model RFG and Phase I complex Model RFG, and an oxygen 
maximum standard for simple model RFG. See Sec. Sec.  80.41(a) 
through (d), and (g). These standards are no longer in effect and 
today's rule does not modify the regulations to remove these 
standards or compliance requirements relating to these standards, 
except where such requirements are included in provisions requiring 
other changes in today's rule.
---------------------------------------------------------------------------

    Although there will no longer be an oxygen content requirement for 
RFG, we believe that many refiners and importers will want to continue 
to include oxygenate blended downstream in their emissions performance 
compliance calculations. As a result, the category of RBOB is being 
retained and RBOB refiners and importers will be required to comply 
with the contract and quality assurance (QA) oversight requirements in 
Sec.  80.69 for any RBOB produced or imported.\4\
---------------------------------------------------------------------------

    \4\ EPA is developing a rule which will allow RBOB refiners and 
importers to use an alternative method of quality assurance (QA) 
oversight of downstream oxygenate blenders in lieu of the contract 
and QA requirements in Sec. Sec.  80.69(a)(6) and (a)(7). This 
alternative method consists of a QA sampling and testing survey 
program carried out by an independent surveyor pursuant to a survey 
plan approved by EPA. This alternative QA method is available to 
RBOB refiners and importers under enforcement discretion until the 
rule is promulgated, or December 31, 2007, whichever is earlier. See 
Letter to Edward H. Murphy, Downstream General Manager, American 
Petroleum Institute, dated December 22, 2005, from Grant Y. 
Nakayama, Assistant Administrator, Office of Enforcement and 
Compliance Assurance, U.S. Environmental Protection Agency.
---------------------------------------------------------------------------

    Under the current regulations, RBOB refiners and importers are 
required to have a contract with the downstream oxygenate blender and 
conduct QA oversight testing of the oxygenate blending operation to 
ensure that the proper type and amount of oxygenate is added 
downstream. Sec.  80.69(a)(6) and (7). The regulations also provide 
that, in lieu of complying with these requirements, a refiner or 
importer may designate one of two generic categories of oxygenates to 
be added to the RBOB, and assume for purposes of its emissions 
compliance calculations that the minimum amount of oxygenate needed to 
result in RFG containing 2.0 weight percent oxygen will be added 
downstream. Sec.  80.69(a)(8). RBOB refiner or importer compliance with 
the contract and oversight requirements is not required in this 
situation because, as discussed above, the oxygenate blender has been 
required to meet the 2.0 weight percent oxygen standard and conduct 
testing designed to ensure that each batch of RFG complies with the 
oxygen standard.\5\ Where an RBOB refiner or importer wishes to include 
a larger amount of oxygenate in its compliance calculations (i.e, an 
amount that would result in RFG containing more than 2.0 weight percent 
oxygen), the refiner or importer must comply with the contract and 
oversight requirements in Sec.  80.69(a)(6) and (7) to ensure that the 
proper type and amount of oxygenate is added.
---------------------------------------------------------------------------

    \5\ For a discussion of the downstream oxygenate blending 
requirements, see the preamble to the RFG final rule at 59 FR 7770 
(February 16, 1994).
---------------------------------------------------------------------------

    Because oxygenate blenders will no longer be conducting testing to 
ensure compliance with the oxygen standard, we believe that RBOB 
refiner or importer compliance with the contract and QA oversight 
requirements will be necessary for RBOB designated to be blended with 
any amount of oxygenate, including an amount of oxygenate that would 
result in RFG containing 2.0 weight percent (or less) oxygen. As a 
result, today's rule requires RBOB refiners and importers to comply 
with the contract and QA oversight requirements in Sec.  80.69 for any 
RBOB produced or imported. This approach is consistent with the 
oversight requirements in Sec.  80.101(d)(4) for refiners and importers 
of conventional gasoline who wish to include oxygen added downstream 
from the refinery or importer in anti-dumping emissions compliance 
calculations.
    Although oxygenate blenders will no longer be subject to the oxygen 
standard and associated testing requirements, we believe that the 
current requirements for oxygenate blenders to be registered with EPA, 
to add the specific type(s) and amount (or range of amounts) of 
oxygenate designated for the RBOB, and to maintain records of their 
blending operation continue to be necessary in order to ensure 
compliance with, and facilitate enforcement of, the emissions 
performance standards for the RFG produced by blending oxygenate with 
RBOB downstream. As a result, these oxygenate blender requirements are 
being retained.
    The effective date for the removal of the oxygen requirement will 
occur during 2006.\6\ As a result, refiners, importers and oxygenate 
blenders will be subject to the oxygen standard for the months in 2006 
prior to the effective date of this rule. The current regulations allow 
parties to demonstrate compliance either on a per-gallon basis or on an 
annual average basis. Parties wishing to base their compliance on the 
per-gallon requirements, may formulate and sell RFG without oxygen 
after the effective date of the rule. EPA will interpret its 
regulations regarding annual average as follows. Parties may 
demonstrate compliance based on the average oxygen content of RFG 
during the months prior to the effective date for the removal of the 
oxygen content requirement. In addition, any refiner, importer or 
oxygenate blender who is unable to meet the annual average oxygen 
standard in 2006 based on the months prior to the effective date for 
the removal of the oxygen content standard may include all of the 
oxygenated RFG it produces or imports during 2006 in its annual average 
compliance calculations.
---------------------------------------------------------------------------

    \6\ The effective date for this rule is May 5, 2006, or 60 days 
from the date of publication of the rule in the Federal Register, 
whichever is later.
---------------------------------------------------------------------------

III. Combining Ethanol Blended RFG With Non-Ethanol Blended RFG

    As discussed above, section 211(k) required RFG to contain a 
minimum of 2.0 weight percent oxygen, and the current fuels regulations 
reflect this requirement. Refiners, importers and oxygenate blenders 
have used different oxygenates to meet this requirement. RFG that 
contains ethanol must be specially blended to account for the RVP 
``boost'' that ethanol provides, and the consequent possibility of 
increased VOC emissions. EPA's existing regulations prohibit the 
commingling of ethanol-blended RFG with RFG containing other oxygenates 
because the non-ethanol RFG is typically not able to be mixed with 
ethanol and still comply with the VOC performance standards. Since all 
RFG is currently required to contain oxygen, the regulations do not now 
contain a prohibition against combining ethanol-blended RFG with non-
oxygenated RFG. With the removal of the oxygen content requirement for 
RFG, EPA expects that refiners and importers will be producing some RFG 
without oxygen and some with ethanol or other oxygenates. Mixing 
ethanol-blended RFG with non-oxygenated RFG has the same potential to 
create an RVP ``boost'' for the non-oxygenated gasoline as mixing 
ethanol-blended RFG with RFG blended with other oxygenates. This is of 
particular concern regarding RFG because most refiners and importers 
comply with the RFG VOC emissions performance standard on an annual 
average basis calculated at the point of production or importation. All 
downstream parties are prohibited from marketing RFG which does not 
comply with a less stringent downstream VOC standard. However, even 
though the combined gasoline may meet the downstream VOC standard, 
combining ethanol-blended RFG with non-oxygenated RFG may cause some 
gasoline to have VOC emissions which are higher on average than the 
gasoline as produced or imported. Thus, today's rule extends the 
commingling prohibition currently in the fuels regulations to include a 
prohibition against combining VOC-controlled ethanol-blended RFG with 
VOC-controlled non-oxygenated RFG during the period January 1 through 
September 15, with one exception, described below.

[[Page 8978]]

    The Energy Act contains a provision which specifically addresses 
the combining of ethanol-blended RFG with non-ethanol-blended RFG.\7\ 
Under this new provision, retail outlets are allowed to sell non-
ethanol-blended RFG which has been combined with ethanol-blended RFG 
under certain conditions. First, each batch of gasoline to be blended 
must have been ``individually certified as in compliance with 
subsections (h) and (k) prior to being blended.'' Second, the retailer 
must notify EPA prior to combining the gasolines and identify the exact 
location of the retail outlet and specific tank in which the gasoline 
is to be combined. Third, the retailer must retain, and, upon request 
by EPA, make available for inspection certifications accounting for all 
gasoline at the retail outlet. Fourth, retailers are prohibited from 
combining VOC-controlled gasoline with non-VOC-controlled gasoline 
between June 1 and September 15. Retailers are also limited with regard 
to the frequency in which batches of non-ethanol-blended RFG may be 
combined with ethanol-blended RFG. Retailers may combine such batches 
of RFG a maximum of two periods between May 1 and September 15. Each 
period may be no more than ten consecutive calendar days. Today's 
direct final rule implements this provision of the Energy Act.
---------------------------------------------------------------------------

    \7\ Energy Policy Act of 2005, Public Law 109-58 (HR6), section 
1513, 119 STAT 594, 1088-1090 (2005).
---------------------------------------------------------------------------

    This new provision will typically be used by retail outlets to 
change from the use of RFG containing ethanol to RFG not containing 
ethanol or vice versa. (Such a change is usually referred to as a 
``tank turnover.'') Such blending can result in additional VOC 
emissions, perhaps resulting in gasoline that does not comply with 
downstream VOC standards. The Energy Act is unclear as to when the 
gasoline in the tank where blending occurs must be in compliance with 
the downstream VOC standard.
    EPA has already promulgated regulations setting out a methodology 
for making tank turnovers. 40 CFR 80.78(a)(10). EPA believes retailers 
and wholesale purchaser-consumers should have additional flexibility 
during the time that they are converting their tanks from one type of 
RFG to another, while minimizing the time period during which non-
compliant gasoline is present in their tanks and being sold. Today's 
changes provide additional flexibility to the regulated parties by 
interpreting the Energy Act to provide retailers and wholesale 
purchaser-consumers with relief from compliance with the downstream VOC 
standard during the ten-day blending period, but requiring that the 
gasoline in the tank thereafter be in compliance or be deemed in 
compliance with the downstream VOC standard.
    To provide assurance that gasoline is in compliance with the 
downstream VOC standard after the ten-day period, today's regulations 
provide that there be two options available for retailers and wholesale 
purchaser-consumers. Under the first option, the retailer may add both 
ethanol-blended RFG and non-ethanol-blended RFG to the same tank an 
unlimited number of times during the ten-day period, but must test the 
gasoline in the tank at the end of the ten-day period to make sure that 
the RFG is in compliance with the VOC standard. Under the second 
option, the retailer must draw the tank down as much as practicable at 
the start of the ten-day period, before RFG of another type is added to 
the tank, and add only RFG of one type to the tank during the ten-day 
period. That is, the retailer may not add both ethanol-blended RFG and 
non-ethanol-blended RFG to the tank during the ten-day period, but may 
add only one of these types of RFG. EPA believes that when retailers 
and wholesale purchaser-consumers use this second option it is likely 
that their gasoline will comply with the downstream VOC standard at the 
end of the ten-day period, so that testing will not be necessary. We 
also believe that this approach is compatible with current practices of 
most retailers and wholesale purchaser-consumers, and expect that most 
will find it preferable to testing at the end of the ten-day period.
    The commingling provisions apply at a retail level such that each 
retailer may take advantage of a maximum of two ten-day blending 
periods between May 1 and September 15 of each calendar year. Thus, the 
options described above would be available to each retail outlet for 
each of two ten-day periods during the VOC control period. During each 
ten-day period the options are available for all tanks at that retail 
outlet.
    Regarding the requirement that each batch of gasoline to be blended 
must have been individually certified as in compliance with subsections 
(h) and (k), EPA notes that all gasoline in compliance with RFG 
requirements is deemed certified under section 211(k) pursuant to Sec.  
80.40(a). Section 211(h) addresses RVP requirements for gasoline, but 
EPA does not have a program to certify gasoline as in compliance with 
this provision. For purposes of the commingling exception for retail 
outlets incorporated today in Sec.  80.78(a)(8), EPA will deem gasoline 
that is in compliance with the regulatory requirements implementing 
section 211(h) to be certified under that section. Regarding the 
requirement that retailers retain and make available to EPA upon 
request ``certifications'' accounting for all gasoline at the retail 
outlet, EPA will deem this requirement fulfilled where the retailer 
retains and makes available to EPA, upon request, the product transfer 
documentation required under Sec.  80.77 for all gasoline at the retail 
outlet.
    Under today's direct final rule, the provisions which allow 
retailers to sell non-ethanol-blended RFG that has been combined with 
ethanol-blended RFG also apply to wholesale purchaser-consumers. Like 
retailers, wholesale purchaser-consumers are parties who dispense 
gasoline into vehicles, and EPA interprets the Energy Act reference to 
retailers as applying equally to them. As a result, wholesale 
purchaser-consumers are treated in the same manner as retailers under 
this rule. This is consistent with the manner in which wholesale 
purchaser-consumers have been treated in the past under the fuels 
regulations.
    Most of the provisions of this rule are necessary to implement 
amendments to the Clean Air Act included in the Energy Act that 
eliminate the RFG oxygen content requirement and allow limited 
commingling of ethanol-blended and non-ethanol-blended RFG. The 
extension of the general commingling prohibition in the fuels 
regulations to cover non-oxygenated RFG, and the provisions requiring 
refiners and importers to conduct oversight of downstream blenders 
adding oxygen to RBOB, are necessary because of the Energy Act 
amendments, but are issued pursuant to authority of CAA section 211(k). 
Both provisions extend current programs to reflect the presence of non-
oxygenated RFG, and are designed to enhance environmental benefits of 
the RFG program at reasonable cost to regulated parties.

IV. Environmental Effects of This Action

    Little or no environmental impact is anticipated to occur as a 
result of today's action to remove the oxygenate requirement for RFG. 
The RFG standards consist of content and emission performance 
standards. Refiners and importers will have to continue to meet all the 
emission performance standards for RFG whether or not the RFG contains 
any oxygenate. This includes both the VOC and NOX emission 
performance standards, as well as the air toxics emission performance 
standards which were tightened in the

[[Page 8979]]

mobile source air toxics (MSAT) rule in 2001.\8\ New MSAT standards 
currently under development are anticipated to achieve even greater air 
toxics emission reductions.
---------------------------------------------------------------------------

    \8\ 66 FR 17230 (March 29, 2001).
---------------------------------------------------------------------------

    We have analyzed the potential impacts on emissions that could 
result from removal of the oxygenate requirement in the context of 
requests for waivers of the Federal oxygen requirement.\9\ We found 
that changes in ethanol use could lead to small increases in some 
emissions and small decreases in others while still meeting the RFG 
performance standards. These potential impacts are associated with the 
degree to which ethanol will continue to be blended into RFG after 
removal of the oxygen requirement. Past analyses have projected 
significant use of ethanol in RFG in California despite removal of the 
oxygenate requirement.\10\ Given current gasoline prices and the 
tightness in the gasoline market, the favorable economics of ethanol 
blending, a continuing concern over MTBE use by refiners, the emission 
performance standards still in place for RFG, and the upcoming 
renewable fuels mandate,\11\ we believe that ethanol will continue to 
be used in RFG after the oxygen requirement is removed, and that as 
MTBE is phased out, it is likely to be replaced with ethanol to a large 
degree despite the removal of the oxygenate requirement. As a result, 
we believe that the removal of the oxygenate mandate will have little 
or no environmental impact in the near future. We will be looking at 
the long term effect of oxygenate use in the context of the rulemaking 
to implement the renewable fuels mandate.
---------------------------------------------------------------------------

    \9\ See e.g., California Oxygen Waiver Decision, EPA420-S-05-005 
(June 2005); Analysis of and Action on New York Department of 
Conservation's Request for a Waiver of the Oxygen Content 
Requirement in Federal Reformulated Gasoline, EPA420-D-05-06 (June 
2005).
    \10\ Technical Support Document: Analysis of California's 
Request for Waiver of the Reformulated Gasoline Oxygen Content 
Requirement for California Covered Areas, EPA420-R-01-016 (June 
2001).
    \11\ Energy Policy Act of 2005, Public Law No. 109-58 (HR6), 
section 1501, 119 STAT 594, 1067-1076, (2005).
---------------------------------------------------------------------------

V. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866, (58 FR 51735 (October 4, 1993)) the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant regulatory action'' as 
one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of 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 direct final rule does not satisfy 
the criteria stated above. As a result, this rule is not a 
``significant regulatory action'' under the terms of Executive Order 
12866 and is therefore not subject to OMB review. Today's rule removes 
certain requirements for all refiners, importers and oxygenate blenders 
of RFG. Although small additional compliance costs may be incurred by 
some refiners and importers as a result of this rule, on balance, this 
rule is expected to greatly reduce overall compliance costs for all 
refiners, importers and oxygenate blenders. This rule also provides 
options for gasoline retailers to commingle certain compliant gasolines 
which otherwise would be prohibited from being commingled. Although 
there may be small compliance costs associated with one of these 
options, we believe that the additional flexibility provided by this 
option will reduce overall compliance costs for these parties.

B. Paperwork Reduction Act

    The modifications to the RFG information collection requirements in 
this rule have been submitted for approval to the Office of Management 
and Budget (OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et 
seq. The information collection modifications are not enforceable until 
OMB approves them.
    This rule will have the effect of reducing the burdens on certain 
regulated parties under the reformulated gasoline regulations. All 
parties currently subject to the requirement to submit an annual oxygen 
averaging report will no longer be required to submit such report, 
resulting in an estimated total burden reduction of 100 hours and 
$6,500(100 parties x 1 report/yr x 1 hr/report x $65/hr). Oxygenate 
blenders currently subject to the following requirements will no longer 
be subject to these requirements and associated burdens:
    RFG batch reports: Total 2500 hours, $162,500(25 blenders x 100 
reports/yr x 1 hr/report x $65/hr) plus $600,000 in purchased services;
    RFG annual report: Total 25 hours, $1,625(25 blenders x 1 report/yr 
x 1 hr/report x $65/hr);
    RFG survey reports: Total 500 hours, $32,500(25 blenders x 1 
report/yr x 20 hrs/report x $65/hr) plus $1,200,000 for purchased 
services;
    RFG attest engagement reports: Total 3000 hours, $195,000(25 
blenders x 1 report/yr x 120 hrs/report x $65/hr) plus $250,000 for 
purchased services.
    The estimated total reduction in burdens for this rule is 6,125 
hours and $398,125, plus $2,050,000 in purchased services.
    Small testing costs may be associated with one of the options for 
gasoline retailers to commingle compliant gasolines. However, these 
testing costs are expected to be minimal and will be greatly outweighed 
by the flexibility provided by the option to commingle compliant 
gasolines.
    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 numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9. When this ICR is 
approved by OMB, the Agency will publish a technical amendment to 40 
CFR part 9 in the Federal Register to display the OMB control number 
for the approved information collection requirements contained in this 
direct final rule.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare

[[Page 8980]]

a regulatory flexibility analysis of any rule subject to notice and 
comment rulemaking requirements under the Administrative Procedures Act 
or any other statute unless the agency certifies that the rule will not 
have a significant economic impact on a substantial number of small 
entities. Small entities include small businesses, small organizations, 
and small governmental jurisdictions.
    For purposes of assessing the impacts of today's rule on small 
entities, small entity is defined as: (1) A small business as defined 
by the Small Business Administration's regulations at 13 CFR 121.201; 
(2) a small governmental jurisdiction that is a government of a city, 
county, town, school district or special district with a population of 
less than 50,000; and (3) a small organization that is any not-for-
profit enterprise which is independently owned and operated and is not 
dominant in its field.
    After considering the economic impacts of today's rule on small 
entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. In 
determining whether a rule has a significant economic impact on a 
substantial number of small entities, the impact of concern is any 
significant adverse economic impact on small entities, since the 
primary purpose of the regulatory flexibility analyses is to identify 
and address regulatory alternatives ``which minimize any significant 
economic impact of the proposed rule on small entities.'' 5 U.S.C. 603 
and 604. Thus, an agency may conclude that a rule will not have a 
significant economic impact on a substantial number of small entities 
if the rule relieves regulatory burden, or otherwise has a positive 
economic effect on all of the small entities subject to the rule.
    This direct final rule removes certain requirements for all 
refiners, importers and oxygenate blenders of RFG, including small 
business refiners, importers and oxygenate blenders. Specifically, this 
rule removes the burden on refiners, importers and oxygenate blenders 
to comply with the RFG oxygen requirement and associated compliance 
requirements. Although in certain situations some refiners and 
importers, including some small refiners and importers, may be required 
to conduct additional oversight of oxygenate blenders, we believe that 
the relief from the burden of complying with the oxygen requirement 
will more than outweigh the burden of having to conduct any additional 
oversight. This rule also provides options for gasoline retailers, 
including small gasoline retailers, to commingle certain compliant 
gasolines which otherwise would be prohibited from being commingled. 
Although there may be small compliance costs associated with one of 
these options, we believe that the additional flexibility provided by 
this option will reduce overall compliance costs for these parties. We 
have therefore concluded that today's direct final rule will relieve 
regulatory burden for all small entities subject to the RFG 
regulations.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and 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, and 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 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 direct 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 that will result in 
expenditures of $100 million or more. This rule affects gasoline 
refiners, importers and oxygenate blenders by removing the oxygen 
content requirement for RFG and associated compliance requirements. 
This rule also allows gasoline retailers an option to commingle certain 
compliant gasolines which otherwise would be prohibited from being 
commingled. As a result, this rule will have the overall effect of 
reducing the burden of the RFG regulations on these regulated parties. 
Therefore, the requirements of the Unfunded Mandates Act do not apply 
to this action.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''
    This direct final rule does not have federalism implications. It 
will not have substantial direct effects on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government, as specified in Executive Order 13132. This rule removes 
the oxygen standard for RFG and provides gasoline retailers the option 
to commingle certain compliant gasolines that otherwise would be 
prohibited from being commingled. The requirements of the rule will be 
enforced by the Federal government at the national level. Thus, 
Executive Order 13132 does not apply to this rule.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 6, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' ``Policies that have tribal 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on one or more Indian tribes, on 
the

[[Page 8981]]

relationship between the Federal government and the Indian tribes, or 
on the distribution of power and responsibilities between the Federal 
government and Indian tribes.''
    This direct final rule does not have tribal implications. It will 
not have substantial direct effects on tribal governments, on the 
relationship between the Federal government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
government and Indian tribes, as specified in Executive Order 13175. 
This rule applies to gasoline refiners and importers who supply RFG, 
and to other parties downstream in the gasoline distribution system. 
Today's action contains certain modifications to the Federal 
requirements for RFG, and does not impose any enforceable duties on 
communities of Indian tribal governments. Thus, Executive Order 13175 
does not apply to this rule.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    Executive Order 13045: ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that: (1) Is determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health or safety risk that EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, the Agency must evaluate the environmental health 
or safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency.
    EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that are based on health or safety risks, such that 
the analysis required under the Order has the potential to influence 
the regulation. This direct final rule is not subject to Executive 
Order 13045 because it is not economically significant and does not 
establish an environmental standard intended to mitigate health or 
safety risks.

H. Executive Order 13211: Acts That Significantly Affect Energy Supply, 
Distribution, or Use

    This direct final rule is not an economically ``significant energy 
action'' as defined in Executive Order 13211, ``Actions Concerning 
Regulations That Significantly Affect Energy Supply, Distribution, or 
Use'' (66 FR 28355 (May 22, 2001)) because it does not have a 
significant adverse effect on the supply, distribution, or use of 
energy. This rule eliminates the oxygen content requirement for RFG and 
associated compliance requirements. This change will have the effect of 
reducing burdens on suppliers of RFG, which, in turn, may have a 
positive effect on gasoline supplies. RFG refiners and blenders may 
continue to use oxygenates at their discretion where and when it is 
most economical to do so. With the implementation of the renewable 
fuels standard also contained in the Energy Act, the blending of 
ethanol, in particular, into gasoline is expected to increase 
considerably, not decrease. Therefore, despite this action to remove 
the oxygenate mandate in RFG, when viewed in the context of companion 
energy legislation, overall use of oxygenates is expected to increase 
in the future. This rule also allows gasoline retailers to commingle 
certain compliant gasolines which otherwise would be prohibited from 
being commingled. This also may have a positive effect on gasoline 
supplies.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C. 
272 note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. The NTTAA directs EPA 
to provide Congress, through OMB, explanations when the Agency decides 
not to use available and applicable voluntary consensus standards.
    This direct final rule does not establish new technical standards 
within the meaning of the NTTAA. Therefore, EPA did not consider the 
use of any voluntary consensus standards.

J. Congressional Review Act

    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. 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. A ``major rule'' 
cannot take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(a).

K. Clean Air Act Section 307(d)

    This rule is subject to section 307(d) of the CAA. Section 
307(d)(7)(B) provides that ``[o]nly an objection to a rule or procedure 
which was raised with reasonable specificity during the period for 
public comment (including any public hearing) may be raised during 
judicial review.'' This section also provides a mechanism for the EPA 
to convene a proceeding for reconsideration, ``[i]f the person raising 
an objection can demonstrate to the EPA that it was impracticable to 
raise such objection within [the period for public comment] or if the 
grounds for such objection arose after the period for public comment 
(but within the time specified for judicial review) and if such 
objection is of central relevance to the outcome of the rule.'' Any 
person seeking to make such a demonstration to the EPA should submit a 
Petition for Reconsideration to the Office of the Administrator, U.S. 
EPA, Room 3000, Ariel Rios Building, 1200 Pennsylvania Ave., NW., 
Washington, DC 20460, with a copy to both the person(s) listed in the 
preceding FOR FURTHER INFORMATION CONTACT section, and the Director of 
the Air and Radiation Law Office, Office of General Counsel (Mail Code 
2344A), U.S. EPA, 1200 Pennsylvania Ave., NW., Washington, DC 20004.

VI. Statutory Provisions and Legal Authority

    The statutory authority for the actions in today's direct final 
rule comes from sections 211(c), 211(k) and 301(a) of the CAA.

List of Subjects in 40 CFR Part 80

    Environmental protection, Air pollution control, Fuel additives, 
Gasoline, Motor vehicle pollution, Reporting and recordkeeping 
requirements.

    Dated: February 14, 2006.
Stephen L. Johnson,
Administrator.

0
40 CFR part 80 is amended as follows:

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

0
1. The authority citation for part 80 continues to read as follows:

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

[[Page 8982]]

Subpart A--[Amended]

0
2. Section 80.2 is amended by revising paragraph (ii) to read as 
follows:


Sec.  80.2  Definitions.

* * * * *
    (ii) Reformulated gasoline credit means the unit of measure for the 
paper transfer of benzene content resulting from reformulated gasoline 
which contains less than 0.95 volume percent benzene.
* * * * *

Subpart D--[Amended]

0
3. Section 80.41 is amended by:
0
a. In the table in paragraph (e), removing the entry




``Oxygen content (percent, by weight)...........................   >=2.0
                                                                     '';


0
b. In the table in paragraph (f), removing the entry




``Oxygen content (percent by weight):
    Standard....................................................   >=2.1
    Per-Gallon Minimum..........................................  >=1.5'
                                                                       '


0
b. Removing and reserving paragraph (o); and
0
c. Revising paragraph (q) heading and introductory text and (q)(1), 
with paragraphs (o) and (q) to read as follows:


Sec.  80.41  Standards and requirements for compliance.

* * * * *

    (o) [Reserved]
* * * * *
    (q) Refineries and importers subject to adjusted standards. 
Standards for average compliance that are adjusted to be more or less 
stringent by operation of paragraphs (k), (l) (m) or (n) of this 
section apply to average reformulated gasoline produced at each 
refinery or imported by each importer as follows:
    (1) Adjusted standards for a covered area apply to averaged 
reformulated gasoline that is produced at a refinery if:
    (i) Any averaged reformulated gasoline from that refinery supplied 
the covered area during any year a survey was conducted which gave rise 
to a standards adjustment; or
    (ii) Any averaged reformulated gasoline from that refinery supplies 
the covered area during any year that the standards are more stringent 
than the initial standards; unless
    (iii) The refiner is able to show that the volume of averaged 
reformulated gasoline from a refinery that supplied the covered area 
during any years under paragraphs (q)(1)(i) or (ii) of this section was 
less than one percent of the reformulated gasoline produced at the 
refinery during that year, or 100,000 barrels, whichever is less.
* * * * *

0
4. Section 80.65 is amended by:
0
a. Revising the heading;
0
b. Revising paragraphs (c)(1)(ii) and (c)(3), removing and reserving 
paragraph (c)(2) and removing paragraph (c)(1)(iii);
0
c. Revising paragraph (d)(2)(vi), removing and reserving (d)(2)(v)(D); 
and
0
d. Revising paragraph (h) to read as follows:


Sec.  80.65  General requirements for refiners and importers.

* * * * *
    (c) * * *
    (1) * * *
    (ii) Those standards and requirements it designated under paragraph 
(d) of this section for average compliance on an average basis over the 
applicable averaging period.
    (2) [Reserved]
    (3)(i) For each averaging period, and separately for each parameter 
that may be met either per-gallon or on average, any refiner shall 
designate for each refinery, or any importer shall designate its 
gasoline or RBOB as being subject to the standard applicable to that 
parameter on either a per-gallon or average basis. For any specific 
averaging period and parameter all batches of gasoline or RBOB shall be 
designated as being subject to the per-gallon standard, or all batches 
of gasoline and RBOB shall be designated as being subject to the 
average standard. For any specific averaging period and parameter a 
refiner for a refinery, or any importer may not designate certain 
batches as being subject to the per-gallon standard and others as being 
subject to the average standard.
    (ii) In the event any refiner for a refinery, or any importer fails 
to meet the requirements of paragraph (c)(3)(i) of this section and for 
a specific averaging period and parameter designates certain batches as 
being subject to the per-gallon standard and others as being subject to 
the average, all batches produced or imported during the averaging 
period that were designated as being subject to the average standard 
shall, ab initio, be redesignated as being subject to the per-gallon 
standard. This redesignation shall apply regardless of whether the 
batches in question met or failed to meet the per-gallon standard for 
the parameter in question.
* * * * *
    (d) * * *
    (2) * * *
    (v) * * *
    (D) [Reserved]
* * * * *
    (vi) In the case of RBOB, the gasoline must be designated as RBOB 
and the designation must include the type(s) and amount(s) of oxygenate 
required to be blended with the RBOB.
* * * * *
    (3) Every batch of reformulated or conventional gasoline or RBOB 
produced or imported at each refinery or import facility shall be 
assigned a number (the ``batch number''), consisting of the EPA-
assigned refiner or importer registration number, the EPA facility 
registration number, the last two digits of the year in which the batch 
was produced, and a unique number for the batch, beginning with the 
number one for the first batch produced or imported each calendar year 
and each subsequent batch during the calendar year being assigned the 
next sequential number (e.g., 4321-54321-95-000001, 4321-543321-95-
000002, etc.)
* * * * *
    (h) Compliance audits. Any refiner and importer of any reformulated 
gasoline or RBOB shall have the reformulated gasoline and RBOB it 
produced or imported during each calendar year audited for compliance 
with the requirements of this subpart D, in accordance with the 
requirements of subpart F, at the conclusion of each calendar year.
* * * * *

0
5. Section 80.67 is amended by:
0
a. Revising paragraphs (a)(1) and (a)(2)(i)(A);
0
b. Removing and reserving paragraph (b)(3);
0
c. Removing and reserving paragraph (f);
0
d. Revising paragraphs (g) introductory text, (g)(3), (g)(5) 
introductory text, (g)(6) introductory text, and removing and reserving 
paragraphs (g)(5)(i) and (g)(6)(i); and
0
e. Revising paragraphs (h)(1) introductory text, (h)(1)(iv), (h)(1)(v) 
and (h)(3)(ii), and removing paragraphs (h)(1)(vi), (h)(1)(vii) and 
(h)(1)(viii), to read as follows:


Sec.  80.67  Compliance on average

* * * * *
    (a) * * *
    (1) Any refiner or importer that complies with the compliance 
survey requirements of Sec.  80.68 has the option of meeting the 
standards specified in Sec.  80.41 for average compliance in addition 
to the option of meeting the standards specified in Sec.  80.41 for 
per-gallon compliance; any refiner or importer that does not comply 
with the survey requirements must meet the standards specified in Sec.  
80.41 for per-gallon compliance, and does not have

[[Page 8983]]

the option of meeting standards on average.
    (2)(i)(A) A refiner or importer that produces or imports 
reformulated gasoline that exceeds the average standard for benzene 
(but not for other parameters that have average standards) may use such 
gasoline to offset reformulated gasoline which does not achieve this 
average standard, but only if the reformulated gasoline that does not 
achieve this average standard is sold to ultimate consumers in the same 
covered area as was the reformulated gasoline which exceeds the average 
standard; provided that:
* * * * *
    (b) * * *
    (3) [Reserved]
* * * * *
    (f) [Reserved]
    (g) * * * To determine compliance with the averaged standards in 
Sec.  80.41, any refiner for each of its refineries at which averaged 
reformulated gasoline or RBOB is produced, and any importer that 
imports averaged reformulated gasoline or RBOB shall, for each 
averaging period and for each portion of gasoline for which standards 
must be separately achieved, and for each relevant standard, calculate:
* * * * *
    (3) For the VOC, NOX, and toxics emissions performance 
standards, the actual totals must be equal to or greater than the 
compliance totals to achieve compliance.
* * * * *
    (5) If the actual total for the benzene standard is greater than 
the compliance total, credits for this parameter must be obtained from 
another refiner or importer in order to achieve compliance:
    (i) [Reserved]
* * * * *
    (6) If the actual total for the benzene standard is less than the 
compliance totals, credits for this parameter are generated.
    (i) [Reserved]
* * * * *
    (h) * * *
    (1) Compliance with the averaged standards specified in Sec.  80.41 
for benzene (but for no other standards or requirements) may be 
achieved through the transfer of benzene credits provided that:
* * * * *
    (iv) The credits are transferred, either through inter-company or 
intra-company transfers, directly from the refiner or importer that 
creates the credits to the refiner or importer that uses the credits to 
achieve compliance; and
    (v) Benzene credits are not used to achieve compliance with the 
maximum benzene content standards in Sec.  80.41.
* * * * *
    (3) * * *
    (ii) No refiner or importer may create, report, or transfer 
improperly created credits; and
* * * * *

0
6. Section 80.68 is amended by revising paragraphs (a) introductory 
text, (a)(3), (b) introductory text, (b)(4)(i), (b)(4)(ii), (c)(3), 
(c)(4)(i), and (c)(13)(v)(L), and removing and reserving paragraph 
(c)(12) to read as follows:


Sec.  80.68  Compliance surveys.

    (a) * * * In order to satisfy the compliance survey requirements, 
any refiner or importer shall properly conduct a program of compliance 
surveys in accordance with a survey program plan which has been 
approved by the Administrator of EPA in each covered area which is 
supplied with any gasoline for which compliance is achieved on average 
that is produced by that refinery or imported by that importer. Such 
approval shall be based upon the survey program plan meeting the 
following criteria:
* * * * *
    (3) In the event that any refiner or importer fails to properly 
carry out an approved survey program, the refiner or importer shall 
achieve compliance with all applicable standards on a per-gallon basis 
for the calendar year in which the failure occurs, and may not achieve 
compliance with any standard on an average basis during this calendar 
year. This requirement to achieve compliance per-gallon shall apply ab 
initio to the beginning of any calendar year in which the failure 
occurs, regardless of when during the year the failure occurs.
    (b) * * * A refiner or importer shall be deemed to have satisfied 
the compliance survey requirements described in paragraph (a) of this 
section if a comprehensive program of surveys is properly conducted in 
accordance with a survey program plan which has been approved by the 
Administrator of EPA. Such approval shall be based upon the survey 
program plan meeting the following criteria:
* * * * *
    (4) * * *
    (i) Each refiner or importer who supplied any reformulated gasoline 
or RBOB to the covered area and who has not satisfied the survey 
requirements described in paragraph (a) of this section shall be deemed 
to have failed to carry out an approved survey program; and
    (ii) The covered area will be deemed to have failed surveys for VOC 
and NOX emissions performance, and survey series for benzene 
and toxic and NOX emissions performance.
    (c) * * *
    (3)(i) A VOC survey and a NOX survey shall consist of 
any survey conducted during the period June 1 through September 15;
    (ii) A sample of gasoline taken at a retail outlet or wholesale 
purchaser-consumer facility that has within the past 30 days commingled 
ethanol blended reformulated gasoline with non-ethanol blended 
reformulated gasoline in accordance with the provisions in Sec.  
80.78(a)(8) shall not be used in a VOC survey required under this 
section.
    (4)(i) A toxics and benzene survey series shall consist of all 
surveys conducted in a single covered area during a single calendar 
year.
* * * * *
    (12) [Reserved]
    (13) * * *
    (v) * * *
    (L) The average toxics emissions reduction percentage for simple 
model samples and the percentage for complex model samples, the average 
benzene percentage, and for each survey conducted during the period 
June 1 through September 15, the average VOC emissions reduction 
percentage for simple model samples and the percentage for complex 
model samples, and the average NOX emissions reduction 
percentage for all complex model samples;
* * * * *

0
7. Section 80.69 is amended by:
0
a. Revising paragraphs (a)(6)(ii) and (iii), (a)(10) introductory text, 
removing and reserving paragraphs (a)(8) and (a)(9), and removing 
paragraph (a)(6)(iv);
0
b. Revising paragraph (b);
0
c. Removing and reserving paragraph (c);
0
d. Revising paragraph (d); and
0
e. Revising paragraph (e), to read as follows:


Sec.  80.69  Requirements for downstream oxygenate blending.

* * * * *
    (a) * * *
    (6) * * *
    (ii) Allow the refiner or importer to conduct the quality assurance 
sampling and testing required under this paragraph (a); and
    (iii) Stop selling any gasoline found not to comply with the 
standards under which the RBOB was produced or imported.
* * * * *

[[Page 8984]]

    (8) [Reserved]
    (9) [Reserved]
    (10) Specify in the product transfer documentation for the RBOB 
each oxygenate type or types and amount or range of amounts which, if 
blended with the RBOB will result in reformulated gasoline which:
* * * * *
    (b) Requirements for oxygenate blenders. For all RBOB received by 
any oxygenate blender, the oxygenate blender shall:
    (1) Add oxygenate of the type(s) and amount (or within the range of 
amounts) specified in the product transfer documents for the RBOB; and
    (2) Meet the recordkeeping requirements specified in Sec.  80.74.
    (c) [Reserved]
    (d) Requirements for distributors dispensing RBOB into trucks for 
blending. Any distributor who dispenses any RBOB into any truck which 
delivers gasoline to retail outlets or wholesale purchase-consumer 
facilities, shall for such RBOB so dispensed:
    (1) Transfer the RBOB only to an oxygenate blender who has 
registered with the Administrator or EPA as such; and
    (2) Obtain from the oxygenate blender the oxygenate blender's EPA 
registration number.
    (e) Additional requirements for oxygenate blenders who blend 
oxygenate in trucks. Any oxygenate blender who obtains any RBOB in any 
gasoline delivery truck shall on each occasion it obtains RBOB from a 
distributor, supply the distributor with the oxygenate blender's EPA 
registration number.

0
8. Section 80.73 is amended by revising the introductory text to read 
as follows:


Sec.  80.73  Inability to produce conforming gasoline in extraordinary 
circumstances.

    In appropriate extreme and unusual circumstances (e.g., natural 
disaster or Act of God) which are clearly outside the control of the 
refiner, importer, or oxygenate blender and which could not have been 
avoided by the exercise of prudence, diligence, and due care, EPA may 
permit a refiner, importer, or oxygenate blender, for a brief period, 
to distribute gasoline which does not meet the requirements for 
reformulated gasoline, or does not contain the type(s) and amount(s) of 
oxygenate required under Sec.  80.69(b)(1), if:
* * * * *

0
9. Section 80.74 is amended by revising paragraph (c) heading and 
introductory text, (c)(2), and (d) introductory text to read as 
follows:


Sec.  80.74  Recordkeeping requirements.

* * * * *
    (c) Refiners and importers of averaged gasoline. In addition to 
other requirements of this section, any refiner or importer who 
produces or imports any reformulated gasoline for which compliance with 
one or more applicable standard is determined on an average shall 
maintain records containing the following information:
* * * * *
    (2) For any credits bought, sold, traded or transferred pursuant to 
Sec.  80.67(h), the dates of the transactions, the names and EPA 
registration numbers of the parties involved, and the number of credits 
transferred.
    (d) * * * Any oxygenate blender who blends any oxygenate with any 
RBOB shall, for each occasion such blending occurs, maintain records 
containing the following:
* * * * *

0
10. Section 80.75 is amended by revising the introductory text, 
paragraph (a) introductory text, (h), (i), (l), (m) and (n)(2); and 
removing and reserving paragraphs (a)(2)(vii) and (f) to read as 
follows:


Sec.  80.75  Reporting requirements.

    Any refiner or importer shall report as specified in this section, 
and shall report such other information as the Administrator may 
require.
    (a) * * * Any refiner or importer that produces or imports any 
reformulated gasoline or RBOB shall submit quarterly reports to the 
Administrator for each refinery at which such reformulated gasoline or 
RBOB was produced and for all such reformulated gasoline or RBOB 
imported by each importer. The refiner or importer shall include 
notification to EPA of per-gallon versus average election with the 
first quarterly reports submitted each year.
* * * * *
    (2) * * *
    (vii) [Reserved]
* * * * *
    (f) [Reserved]
* * * * *
    (h) Credit transfer reports. As an additional part of the fourth 
quarterly report required by this section, any refiner or importer 
shall, for each refinery or importer, supply the following information 
for any benzene credits that are transferred from or to another 
refinery or importer:
    (1) The names, EPA-assigned registration numbers and facility 
identification numbers of the transferor and transferee of the credits;
    (2) The number(s) of credits that were transferred; and
    (3) The date(s) of the transaction(s).
    (i) Covered areas of gasoline use report. Any refiner that produced 
any reformulated gasoline that was to meet any reformulated gasoline 
standard on average (``averaged reformulated gasoline'') shall, for 
each refinery at which such averaged reformulated gasoline was produced 
submit to the Administrator, with the fourth quarterly report, a report 
that contains the identity of each covered area that was supplied with 
any averaged reformulated gasoline produced at each refinery during the 
previous year.
* * * * *
    (l) Reports for per-gallon compliance gasoline. In the case of 
reformulated gasoline or RBOB for which compliance with each of the 
standards set forth in Sec.  80.41 is achieved on a per-gallon basis, 
the refiner or importer shall submit to the Administrator, by the last 
day of February of each year beginning in 1996, a report of the volume 
of each designated reformulated gasoline or RBOB produced or imported 
during the previous calendar year for which compliance is achieved on a 
per-gallon basis, and a statement that each gallon of this reformulated 
gasoline or RBOB met the applicable standards.
    (m) Reports of compliance audits. Any refiner or importer shall 
cause to be submitted to the Administrator, by May 31 of each year, the 
report of the compliance audit required by Sec.  80.65(h).
    (n) * * *
    (2) Signed and certified as correct by the owner or a responsible 
corporate officer of the refiner or importer.

0
11. Section 80.76 is amended by revising paragraph (a) to read as 
follows:


Sec.  80.76  Registration of refiners, importers or oxygenate blenders.

    (a) Registration with the Administrator of EPA is required for any 
refiner and importer that produces or imports any reformulated gasoline 
or RBOB, and any oxygenate blender that blends oxygenate into RBOB.
* * * * *

0
12. Section 80.77 is amended by removing and reserving paragraph 
(g)(2)(ii) and revising paragraph (i)(1) to read as follows:


Sec.  80.77  Product transfer documentation.

* * * * *
    (g) * * *
    (2) * * *
    (ii) [Reserved]
* * * * *
    (i) * * *
    (1) The oxygenate type(s) and amount(s) that are suitable for 
blending with the RBOB;
* * * * *

[[Page 8985]]


0
13. Section 80.78 is amended by revising paragraphs (a)(8) and 
(a)(11)(iv), and removing and reserving paragraph (a)(1)(ii) to read as 
follows:


Sec.  80.78  Controls and prohibitions on reformulated gasoline.

* * * * *
    (a) * * *
    (1) * * *
    (ii) [Reserved]
* * * * *
    (8)(i) No person may combine any ethanol-blended VOC-controlled 
reformulated gasoline with any non-ethanol-blended VOC-controlled 
reformulated gasoline during the period January 1 through September 15, 
except that:
    (ii) Notwithstanding the prohibition in paragraph (a)(8)(i), 
retailers and wholesale purchaser-consumers may combine at a retail 
outlet or wholesale purchaser-consumer facility ethanol-blended VOC-
controlled reformulated gasoline with non-ethanol-blended VOC-
controlled reformulated gasoline, provided that the retailer or 
wholesale purchaser-consumer:
    (A) Combines only batches of reformulated gasoline that have been 
certified under this subpart;
    (B) Notifies EPA prior to combining the gasolines and identifies 
the exact location of the retail outlet or wholesale purchase-consumer 
facility and the specific tank in which the gasolines will be combined;
    (C) Retains and, upon request by EPA, makes available for 
inspection product transfer documentation accounting for all gasoline 
at the retail outlet or wholesale purchaser-consumer facility; and
    (D) Does not combine any VOC-controlled gasoline with any non-VOC 
controlled gasoline between June 1 and September 15 of each calendar 
year;
    (iii) A retailer or wholesale purchaser-consumer may combine 
ethanol-blended reformulated gasoline with non-ethanol-blended 
reformulated gasoline under paragraph (a)(8)(ii) of this section a 
maximum of two periods between May 1 and September 15 of each calendar 
year, each such period to extend for a period of no more than ten 
consecutive calendar days. At the end of the ten-day period, the 
gasoline must be in compliance with the VOC minimum standard under 
Sec.  80.41.
    (A) The retailer or wholesale purchaser-consumer may demonstrate 
compliance with the VOC minimum standard by testing the gasoline at the 
end of the ten-day period using the test methods in Sec.  80.46, where 
the test results show that the gasoline meets the VOC minimum standard. 
Under this option, the retailer or wholesale purchaser-consumer may add 
both ethanol-blended reformulated gasoline and non-ethanol-blended 
reformulated gasoline to the same tank an unlimited number of times 
during the ten-day period; or
    (B) The retailer or wholesale purchaser-consumer will be deemed in 
compliance with the VOC minimum standard where the retailer or 
wholesale purchaser-consumer draws the tank down as low as practicable 
before receiving product of the other type into the tank and receives 
only product of the other type into the tank during the ten-day period. 
Under this option, the retailer or wholesale purchaser-consumer is not 
required to test the gasoline at the end of the ten-day period.
    (iv) Nothing in paragraphs (a)(8)(ii) or (iii) of this section 
shall preempt existing State laws or regulations regulating the 
combining of ethanol-blended reformulated gasoline with non-ethanol-
blended reformulated gasoline or prohibit a State from adopting such 
laws or regulations in the future.
* * * * *
    (11) * * *
    (iv) When transitioning from RBOB to reformulated gasoline, the 
reformulated gasoline must meet all applicable standards that apply at 
the terminal subsequent to any oxygenate blending;
* * * * *

0
14. Section 80.79 is amended by adding paragraph (a)(5) and revising 
paragraph (c)(1) to read as follows:


Sec.  80.79  Liability for violations of the prohibited activities.

    (a) * * *
    (5) Notwithstanding the provisions in paragraphs (a)(1) through 
(a)(4) of this section: (i) Only a retailer or wholesale purchaser-
consumer shall be deemed in violation for combining gasolines in a 
manner that is inconsistent with Sec.  80.78(a)(8)(ii) or (iii), or for 
gasoline which does not comply with the VOC minimum standard under 
Sec.  80.41 after the retailer or wholesale purchaser-consumer combines 
or causes the combining of compliant gasolines in a manner inconsistent 
with Sec.  80.78(a)(8)(ii) or (iii);
    (ii) No person shall be deemed in violation for gasoline which does 
not comply with the VOC minimum standard under Sec.  80.41 where the 
non-compliance is solely due to the combining of compliant gasolines by 
a retailer or wholesale purchaser-consumer in a manner that is 
consistent with Sec.  80.78(a)(8)(ii) and (iii).
* * * * *
    (c) * * *
    (1) Of a periodic sampling and testing program to determine if the 
applicable maximum and/or minimum standards for benzene, RVP, or VOC 
emission performance are met.
* * * * *

0
15. Section 80.81 is amended by revising paragraphs (b)(1) and (b)(2) 
to read as follows:


Sec.  80.81  Enforcement exemptions for California gasoline.

* * * * *
    (b)(1) Any refiner or importer of gasoline that is sold, intended 
for sale, or made available for sale as a motor fuel in the State of 
California is, with regard to such gasoline, exempt from the compliance 
survey provisions contained in Sec.  80.68.
    (2) Any refiner or importer of California gasoline is, with regard 
to such gasoline, exempt from the independent analysis requirements 
contained in Sec.  80.65(f).
* * * * *

Subpart F--[Amended]

0
16. Section 80.125 is amended by revising paragraphs (a), (c) and (d) 
introductory text, to read as follows:


Sec.  80.125  Attest engagements.

    (a) Any refiner and importer subject to the requirements of this 
subpart F shall engage an independent certified public accountant, or 
firm of such accountants (hereinafter referred to in this subpart F as 
``CPA''), to perform an agreed-upon procedures attestation engagement 
of the underlying documentation that forms the basis of the reports 
required by Sec. Sec.  80.75 and 80.105.
* * * * *
    (c) The CPA may complete the requirements of this subpart F with 
the assistance of internal auditors who are employees or agents of the 
refiner or importer, so long as such assistance is in accordance with 
the Statements on Standards for Attestation Engagements.
    (d) Notwithstanding the requirements of paragraph (a) of this 
section, any refiner or importer may satisfy the requirements of this 
subpart F if the requirements of this subpart F are completed by an 
auditor who is an employee of the refiner or importer, provided that 
such employee:
* * * * *

0
17. Section 80.126 is amended by revising paragraph (b) to read as 
follows:

[[Page 8986]]

Sec.  80.126  Definitions.

* * * * *
    (b) Credit Trading Records. Credit trading records shall include 
worksheets and EPA reports showing actual and complying totals for 
benzene; credit calculation worksheets; contracts; letter agreements; 
and invoices and other documentation evidencing the transfer of 
credits.
* * * * *

0
18. Section 80.128 is amended by revising paragraph (e)(2) to read as 
follows:


Sec.  80.128  Alternative agreed upon procedures for refiners and 
importers.

* * * * *
    (e) * * *
    (2) Determine that the requisite contract was in place with the 
downstream blender designating the required blending procedures;
* * * * *

0
19. Section 80.129 is removed and reserved.

0
20. Section 80.130 is amended by revising paragraph (a) to read as 
follows:


Sec.  80.130  Agreed upon procedures reports.

    (a) Reports. (1) The CPA or CIA shall issue to the refiner or 
importer a report summarizing the procedures performed in the findings 
in accordance with the attest engagement or internal audit performed in 
compliance with this subpart.
    (2) The refiner or importer shall provide a copy of the auditor's 
report to the EPA within the time specified in Sec.  80.75(m).
* * * * *

0
21. Section 80.133 is amended by revising paragraphs (h)(1) and (h)(4) 
to read as follows:


Sec.  80.133  Agreed upon procedures for refiners and importers.

* * * * *
    (h) * * *
    (1) Obtain from the refiner or importer the oxygenate type and 
volume, and oxygen volume required to be hand blended with the RBOB, in 
accordance with Sec.  80.69(a)(2).
* * * * *
    (4) Perform the following procedures for each batch report included 
in paragraph (h)(4)(i)(B) of this section:
    (i) Obtain and inspect a copy of the executed contract with the 
downstream oxygenate blender (or with an intermediate owner), and 
confirm that the contract:
    (A) Was in effect at the time of the corresponding RBOB transfer; 
and
    (B) Allowed the company to sample and test the reformulated 
gasoline made by the blender.
    (ii) Obtain a listing of RBOB blended by downstream oxygenate 
blenders and the refinery's or importer's oversight test results, and 
select a representative sample, in accordance with the guidelines in 
Sec.  80.127, from the listing of test results and for each test 
selected perform the following:
    (A) Obtain the laboratory analysis for the batch, and agree the 
type of oxygenate used and the oxygenate content appearing in the 
laboratory analysis to the instructions stated on the product transfer 
documents corresponding to a RBOB receipt immediately preceding the 
laboratory analysis and used in producing the reformulated gasoline 
batch selected within the acceptable ranges set forth at Sec.  
80.65(e)(2)(i);
    (B) Calculate the frequency of sampling and testing or the volume 
blended between the test selected and the next test; and
    (C) Agree the frequency of sampling and testing or the volume 
blended between the test selected and the next test to the sampling and 
testing frequency rates stated in Sec.  80.69(a)(7).
* * * * *

0
22. Section 80.134 is removed.

[FR Doc. 06-1612 Filed 2-21-06; 8:45 am]

BILLING CODE 6560-50-P
