  SEQ CHAPTER \h \r 1 ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[EPA- HQ-OAR-2006-1016; FRL-]

Protection of Stratospheric Ozone: The 2008 Critical Use Exemption From
the Phaseout of Methyl Bromide

AGENCY:  Environmental Protection Agency (EPA).

ACTION:   Proposed Rule.

SUMMARY:  EPA is proposing an exemption to the phaseout of methyl
bromide to meet the needs of 2008 critical uses.  Specifically, EPA is
proposing uses that will qualify for the 2008 critical use exemption and
the amount of methyl bromide that may be produced, imported, or supplied
from existing stocks for those uses in 2008.  EPA is taking action under
the authority of the Clean Air Act to reflect recent consensus decisions
taken by the Parties to the Montreal Protocol on Substances that Deplete
the Ozone Layer (Protocol) at the 18th Meeting of the Parties (MOP). 
EPA is seeking comment on the list of critical uses and on EPA’s
determination of the amounts of methyl bromide needed to satisfy those
uses.

DATES:  Comments must be submitted by [Insert date 30 days after date of
publication].  Any party requesting a public hearing must notify the
contact person listed below by 5 p.m. Eastern Standard Time on [Insert
date 5 days after date of publication].  If a hearing is requested it
will be held on [Insert date 15 days after date of publication] and
comments will be due to the Agency [Insert date 45 days after
publication].  EPA will post information regarding a hearing, if one is
requested, on the Ozone Protection website   HYPERLINK
"http://www.epa.gov/ozone"  www.epa.gov/ozone .  Persons interested in
attending a public hearing should consult with the contact person below
regarding the location and time of the hearing.

ADDRESSES:  Submit your comments, identified by Docket ID No.
EPA-HQ-OAR-2006-1016, by one of the following methods:

  HYPERLINK "http://www.regulations.gov"  www.regulations.gov : Follow
the on-line instructions for submitting comments.

	•	Email: a-and-r-Docket@epa.gov

   	•	Fax: 202-566-1741

Mail: Docket #, Air and Radiation Docket and Information Center, U.S.
Environmental Protection Agency, Mail code: 6102T, 1200 Pennsylvania
Ave., NW. Washington, DC 20460.  

Hand Delivery: Docket #EPA-HQ-OAR-2006-1016, Air and Radiation Docket at
EPA West, 1301 Constitution Avenue NW, Room B108, Mail Code 6102T,
Washington, D.C. 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-2006-1016.  EPA's policy is that all comments received will
be included in the public docket without change and may be made
available online at   HYPERLINK "http://www.regulations.gov" 
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 www.regulations.gov or e-mail.  The  
HYPERLINK "http://www.regulations.gov"  www.regulations.gov  website is
an “anonymous access” system, 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 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   HYPERLINK
"http://www.epa.gov/epahome/dockets.htm" 
http://www.epa.gov/epahome/dockets.htm .

For Further Information Contact:  For further information about this
proposed rule, contact Aaron Levy by telephone at (202) 343-9215, or by
e-mail at   HYPERLINK "mailto:levy.aaron@epa.gov"  levy.aaron@epa.gov 
or by mail at Aaron Levy, U.S. Environmental Protection Agency,
Stratospheric Protection Division, Stratospheric Program Implementation
Branch (6205J), 1200 Pennsylvania Avenue, N.W., Washington, D.C., 20460.
 You may also visit the Ozone Depletion web site of EPA’s
Stratospheric Protection Division at     HYPERLINK
"http://www.epa.gov/ozone/index.html"  www.epa.gov/ozone  for further
information about EPA’s Stratospheric Ozone Protection regulations,
the science of ozone layer depletion, and other related topics.

Supplementary Information: 

	This proposed rule concerns Clean Air Act (CAA) restrictions on the
consumption, production, and use of methyl bromide (a class I, Group VI
controlled substance) for critical uses during calendar year 2008. 
Under the Clean Air Act, methyl bromide consumption (consumption is
defined under the CAA as production plus imports minus exports) and
production was phased out on January 1, 2005 apart from allowable
exemptions, namely the critical use exemption and the quarantine and
pre-shipment exemption.  With this action, EPA is proposing and seeking
comment on the uses that will qualify for the 2008 critical use
exemption as well as specific amounts of methyl bromide that may be
produced, imported, or sold from stocks for proposed critical uses in
2008.

Table of Contents- 

I.	General Information

Regulated Entities

	B.	What Should I Consider When Preparing My Comments?

II.       What is Methyl Bromide?

III.      What is the Background to the Phaseout Regulations for Ozone
Depleting Substances?

IV.      What is the Legal Authority for Exempting the Production and
Import of Methyl Bromide for Critical Uses Authorized by the Parties to
the Montreal Protocol?  

V.	What is the Critical Use Exemption Process?

A.	A.	Background of the Process	

	B.	How Does This Proposed Rulemaking Relate to Previous Critical Use
Exemption Rulemakings?

	C.	Proposed Critical Uses

	D.	Proposed Critical Use Amounts

		1. Background of Proposed Critical Use Amounts

		2. Calculation of Available Stocks

		3. Proposed Approach for Determining Critical Use Amounts

		4. Treatment of Carry-Over Material

		5. Amounts for Research Purposes

		6. Methyl Bromide Alternatives

E.	The Criteria in Decisions IX/6 and Ex. I/4

	F.	Emissions Minimization

	G.	Critical Use Allowance Allocations

	H.	Critical Stock Allowance Allocations and Total Volumes of Critical
Use Methyl Bromide

	I.	Stocks of Methyl Bromide

VI.	Statutory and Executive Order Reviews 

	A.	Executive Order No. 12866: Regulatory Planning and Review

	B.	Paperwork Reduction Act

	C.	Regulatory Flexibility Act

	D.	Unfunded Mandates Reform Act

	E.	Executive Order No. 13132: Federalism

	F.	Executive Order No. 13175: Consultation and Coordination with Indian
Tribal Governments

	G.	Executive Order No. 13045: Protection of Children from Environmental
Health and Safety Risks

	H.	Executive Order No. 13211: Actions that Significantly Affect Energy
Supply, Distribution, or Use

	I.	National Technology Transfer and Advancement Act

J.	Executive Order No. 12898:  Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations

I.  General Information

A.  Regulated Entities

	Entities potentially regulated by this proposed action are those
associated with the production, import, export, sale, application, and
use of methyl bromide covered by an approved critical use exemption. 
Potentially regulated categories and entities include:

Category		Examples of Regulated Entities

Industry	Producers, Importers and Exporters of methyl bromide;
Applicators, Distributors of methyl bromide; Users of methyl bromide,
e.g., farmers of vegetable crops, fruits and seedlings; and owners of
stored food commodities and structures such as grain mills and
processors, agricultural researchers.

	The above table is not intended to be exhaustive, but rather to provide
a guide for readers regarding entities likely to be regulated by this
proposed action.  This table lists the types of entities that EPA is
aware could potentially be regulated by this proposed action.  To
determine whether your facility, company, business, or organization is
regulated by this proposed action, you should carefully examine the
regulations promulgated at 40 CFR Part 82, Subpart A.  If you have
questions regarding the applicability of this action to a particular
entity, consult the person listed in the preceding section.

B.  What Should I Consider When Preparing My Comments?

1. Confidential Business Information.  Do not submit this information to
EPA through 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:

Identify the rulemaking by docket number and other identifying
information (subject heading, Federal Register date and page number).

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.

Explain why you agree or disagree; suggest alternatives and substitute
language for your requested changes.

Describe any assumptions and provide any technical information and/or
data that you used.

If you estimate potential costs or burdens, explain how you arrived at
your estimate in sufficient detail to allow for it to be reproduced.

Provide specific examples to illustrate your concerns, and suggest
alternatives.

Explain your views as clearly as possible, avoiding the use of profanity
or personal threats.

Make sure to submit your comments by the comment period deadline
identified.

II.  What is Methyl Bromide?

	Methyl bromide is an odorless, colorless, toxic gas which is used as a
broad-spectrum pesticide and is controlled under the CAA as a class I
ozone-depleting substance (ODS).  Methyl bromide is used in the U.S. and
throughout the world as a fumigant to control a variety of pests such as
insects, weeds, rodents, pathogens, and nematodes.  Additional
characteristics and details about the uses of methyl bromide can be
found in the proposed rule on the phaseout schedule for methyl bromide
published in the Federal Register on March 18, 1993 (58 FR 15014) and
the final rule published in the Federal Register on December 10, 1993
(58 FR 65018).  Information on methyl bromide can be found at
http://www.epa.gov/ozone/mbr and http://www.unep.org/ozone or by
contacting the Stratospheric Ozone Hotline at 1-800-296-1996.

	Because it is a pesticide, methyl bromide is also regulated by EPA
under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)
and other statutes and regulatory authority, as well as by States under
their own statutes and regulatory authority.  Under FIFRA, methyl
bromide is a restricted use pesticide.  Restricted use pesticides are
subject to certain Federal and State requirements governing their sale,
distribution, and use.  Nothing in this proposed rule implementing the
Clean Air Act is intended to derogate from provisions in any other
Federal, State, or Local laws or regulations governing actions
including, but not limited to, the sale, distribution, transfer, and use
of methyl bromide.  All entities that would be affected by provisions of
this proposal must continue to comply with FIFRA and other pertinent
statutory and regulatory requirements for pesticides (including, but not
limited to, requirements pertaining to restricted use pesticides) when
importing, exporting, acquiring, selling, distributing, transferring, or
using methyl bromide for critical uses.  The regulations in this
proposed action are intended only to implement the CAA restrictions on
the production, consumption, and use of methyl bromide for critical uses
exempted from the phaseout of methyl bromide. 

II.  What is the Background to the Phaseout Regulations for
Ozone-Depleting Substances?

	The current regulatory requirements of the Stratospheric Ozone
Protection Program that limit production and consumption of
ozone-depleting substances can be found at 40 CFR part 82, subpart A. 
The regulatory program was originally published in the Federal Register
on August 12, 1988 (53 FR 30566), in response to the 1987 signing and
subsequent ratification of the Montreal Protocol on Substances that
Deplete the Ozone Layer (Protocol).  The Protocol is the international
agreement aimed at reducing and eliminating the production and
consumption of stratospheric ozone depleting substances.  The U.S. was
one of the original signatories to the 1987 Montreal Protocol and the
U.S. ratified the Protocol on April 12, 1988.  Congress then enacted,
and President George H.W. Bush signed into law, the Clean Air Act
Amendments of 1990 (CAAA of 1990) which included Title VI on
Stratospheric Ozone Protection, codified as 42 U.S.C. Chapter 85,
Subchapter VI, to ensure that the United States could satisfy its
obligations under the Protocol.  EPA issued new regulations to implement
this legislation and has made several amendments to the regulations
since that time.

	Methyl bromide was added to the Protocol as an ozone-depleting
substance in 1992 through the Copenhagen amendment to the Protocol.  
The Parties agreed that each industrialized country’s level of methyl
bromide production and consumption in 1991 should be the baseline for
establishing a freeze in the level of methyl bromide production and
consumption for industrialized countries.  EPA published a final rule in
the Federal Register on December 10, 1993 (58 FR 65018), listing methyl
bromide as a class I, Group VI controlled substance, freezing U.S.
production and consumption at this 1991 level of 25,528,270 kilograms,
and, in 40 CFR 82.7 of the rule, setting forth the percentage of
baseline allowances for methyl bromide granted to companies in each
control period (each calendar year) until 2001, when the complete
phaseout would occur.  This phaseout date was established in response to
a petition filed in 1991 under sections 602(c)(3) and 606(b) of the CAAA
of 1990, requesting that EPA list methyl bromide as a class I substance
and phase out its production and consumption.  This date was consistent
with section 602(d) of the CAAA of 1990, which for newly listed class I
ozone-depleting substances provides that “no extension [of the
phaseout schedule in section 604] under this subsection may extend the
date for termination of production of any class I substance to a date
more than 7 years after January 1 of the year after the year in which
the substance is added to the list of class I substances.”  EPA based
its action on scientific assessments and actions by the Parties to the
Montreal Protocol to freeze the level of methyl bromide production and
consumption for industrialized countries at the 1992 Meeting of the
Parties in Copenhagen.

	At their 1995 meeting, the Parties made adjustments to the methyl
bromide control measures and agreed to reduction steps and a 2010
phaseout date for industrialized countries with exemptions permitted for
critical uses.  At that time, the U.S. continued to have a 2001 phaseout
date in accordance with the CAAA of 1990 language.  At their 1997
meeting, the Parties agreed to further adjustments to the phaseout
schedule for methyl bromide in industrialized countries, with reduction
steps leading to a 2005 phaseout for industrialized countries. 

IV.  What is the Legal Authority for Exempting the Production and Import
of Methyl Bromide for Critical Uses Authorized by the Parties to the
Montreal Protocol?

	In October 1998, the U.S. Congress amended the CAA to prohibit the
termination of production of methyl bromide prior to January 1, 2005, to
require EPA to bring the U.S. phaseout of methyl bromide in line with
the schedule specified under the Protocol, and to authorize EPA to
provide exemptions for critical uses.  These amendments were contained
in Section 764 of the 1999 Omnibus Consolidated and Emergency
Supplemental Appropriations Act (Pub. L. 105-277, October 21, 1998) and
were codified in Section 604 of the CAA, 42 U.S.C. 7671c.  The amendment
that specifically addresses the critical use exemption appears at
Section 604(d)(6), 42 U.S.C. 7671c(d)(6).  EPA revised the phaseout
schedule for methyl bromide production and consumption in a direct final
rulemaking on November 28, 2000 (65 FR 70795), which allowed for the
phased reduction in methyl bromide consumption and extended the phaseout
to 2005.  EPA again amended the revised phaseout to allow for an
exemption for quarantine and preshipment purposes on July 19, 2001 (66
FR 37751) with an interim final rule and with a final rule on January 2,
2003 (68 FR 238).  

	On December 23, 2004 (69 FR 76982), EPA published a final rule titled
“Protection of Stratospheric Ozone: Process for Exempting Critical
Uses From the Phaseout of Methyl Bromide” (the “Framework Rule”)
in the Federal Register that established the framework for the critical
use exemption; set forth a list of approved critical uses for 2005; and
specified the amount of methyl bromide that could be supplied in 2005
from stocks and new production or import to meet the needs of approved
critical uses.  EPA then promulgated a second rule that added additional
uses to the exemption program for 2005 and allocated additional stock
allowances (70 FR 73604).  EPA published a final rule on February 6,
2006, to exempt production and import of methyl bromide for 2006
critical uses and indicated which uses met the criteria for the
exemption program for that year (71 FR 5985).  EPA published another
final rule on December 15, 2006, to exempt production and import of
methyl bromide for critical uses in 2007 and indicated which uses met
the criteria for critical uses for that year (71 FR 75386).  Under
authority of section 604(d)(6) of the CAA, EPA is proposing in this
action the uses that will qualify as approved critical uses in 2008 and
the amount of methyl bromide required to satisfy those uses.

	This proposed action reflects Decision XVIII/13, taken at the
Eighteenth Meeting of the Parties in October 2006.  In accordance with
Article 2H(5), the Parties have issued several Decisions pertaining to
the critical use exemption.  These include Decisions IX/6 and Ex. I/4,
which set forth criteria for review of proposed critical uses.  The
status of Decisions is addressed in NRDC v. EPA, (464 F.3d 1, D.C. Cir.
2006) and in EPA’s “Supplemental Brief for the Respondent,” filed
in NRDC v. EPA and available in the docket for this action.  In this
proposed rule, EPA is honoring commitments made by the United States in
the Montreal Protocol context.  

V.  What is the Critical Use Exemption Process?

A.  Background of the Process

	Starting in 2002, EPA began notifying applicants of the process for
obtaining a critical use exemption to the methyl bromide phaseout.  On
May 8, 2003, the Agency published its first notice in the Federal
Register (68 FR 24737) announcing the availability of the application
for a critical use exemption and the deadline for submission of the
requisite data.  Applicants were informed that they may apply as
individuals or as part of a group of users (a “consortium”) who face
the same limiting critical conditions (i.e. specific conditions that
establish a critical need for methyl bromide).  EPA has repeated this
process annually since then.  The critical use exemption is designed to
permit production and import of methyl bromide for uses that do not have
technically and economically feasible alternatives.

	The criteria for the exemption initially appeared in Decision IX/6 of
the Parties to the Protocol.  In that Decision, the Parties agreed that
“a use of methyl bromide should qualify as ‘critical’ only if the
nominating Party determines that: (i) The specific use is critical
because the lack of availability of methyl bromide for that use would
result in a significant market disruption; and (ii) there are no
technically and economically feasible alternatives or substitutes
available to the user that are acceptable from the standpoint of
environment and public health and are suitable to the crops and
circumstances of the nomination.”  These criteria are reflected in
EPA’s definition of “critical use” at 40 CFR 82.3.

	In response to the yearly requests for critical use exemption
applications published in the Federal Register, applicants have provided
data on the technical and economic feasibility of using alternatives to
methyl bromide.  Applicants further submit data on their use of methyl
bromide, on research programs into the use of alternatives to methyl
bromide, and on efforts to minimize use and emissions of methyl bromide.

	EPA’s Office of Pesticide Programs reviews the data submitted by
applicants, as well as data from governmental and academic sources, to
establish whether there are technically and economically feasible
alternatives available for a particular use of methyl bromide and
whether there would be significant market disruption if no exemption
were available.  In addition, EPA reviews other parameters of the
exemption applications such as dosage and emissions minimization
techniques and applicants’ research or transition plans.  This
assessment process culminates with the development of a document
referred to as the “Critical Use Nomination” or CUN.  The U.S.
Department of State submits the CUN annually to the United Nations
Environment Programme (UNEP) Ozone Secretariat.  The CUNs of various
countries are subsequently reviewed by the Methyl Bromide Technical
Options Committee (MBTOC) and the Technical and Economic Assessment
Panel (TEAP), which are independent advisory bodies to Parties to the
Montreal Protocol.  These bodies make recommendations to the Parties on
the nominations.  The Parties then take a Decision to authorize a
critical use exemption for a particular country.  The Decision also
identifies how much methyl bromide may be supplied for the exempted
critical uses.  As required in Section 604(d)(6) of the Clean Air Act,
for each exemption period, EPA consults with the United States
Department of Agriculture and other departments and institutions of the
Federal government that have regulatory authority related to methyl
bromide, and provides an opportunity such as this for public comment on
the amounts of methyl bromide that the Agency has determined to be
necessary for critical uses and the uses that the Agency has determined
meet the criteria of the critical use exemption.

	For more information on the domestic review process and methodology
employed by the Office of Pesticide Programs, please refer to a detailed
memo titled “Development of 2003 Nomination for a Critical Use
Exemption for Methyl Bromide for the United States of America”
available on the docket for this rulemaking.  While the particulars of
the data continue to evolve and clerical matters are further
streamlined, the technical review itself has remained the same since the
inception of the exemption program.

	On January 24, 2006, the U.S. Government (USG) submitted the fourth
Nomination for a Critical Use Exemption for Methyl Bromide for the
United States of America to the Ozone Secretariat of the United Nations
Environment Programme.  This fourth nomination contained the request for
2008 critical uses.  In March 2006, MBTOC sent questions to the USG
concerning technical and economic issues in the nomination.  In April
2006 the USG transmitted responses to MBTOC’s requests for
clarification.  The USG received MBTOC’s second-round of questions in
June 2006, and sent responses to MBTOC in August 2006.  These documents,
together with reports by the advisory bodies noted above, can be
accessed in the public docket for this rulemaking.  The determination in
this proposed rule reflects the analysis contained in those documents.

B.  How Does This Proposed Rulemaking Relate to Previous Critical Use
Exemption Rulemakings?

	The December 23, 2004 Framework Rule (69 FR 76982) established the
operational framework for the critical use exemption program in the
U.S., including trading provisions and recordkeeping and reporting
obligations.  The Framework Rule defined the terms “critical use
allowances” (CUAs) and “critical stock allowances” (CSAs) at 40
CFR 82.3.  Today’s action proposes the uses that will qualify as
critical uses for 2008 and the amounts of CUAs and CSAs to be allocated
for those uses.  The uses that EPA is proposing to qualify as 2008
critical uses are the uses which USG included in the fourth CUN, and
which were approved by the Parties in Decision XVIII/13.  In this
action, EPA is also proposing a new approach for determining the amount
of CSAs to allocate in 2008 and each year thereafter.  EPA discusses
this proposal in detail in Section V.D. of this preamble.

C.  Proposed Critical Uses

	In Decision XVIII/13, taken in October 2006, the Parties to the
Protocol agreed as follows: “for the agreed critical-use categories
for 2008, set forth in table C of the annex to the present decision for
each Party to permit, subject to the conditions set forth in the present
decision and decision Ex.I/4, to the extent that those conditions are
applicable, the levels of production and consumption for 2008 set forth
in table D of the annex to the present decision which are necessary to
satisfy critical uses …”

	The following uses are those set forth in table C of the annex to
Decision XVIII/13: Commodities, Cocoa beans (NPMA subset), NPMA food
processing structures (cocoa beans removed), Mills and processors,
Smokehouse ham, Cucurbits – field, Eggplant – field, Forest nursery,
Nursery stock – fruit, nut, flower, Orchard replant, Ornamentals,
Peppers – field, Strawberry – field, Strawberry runners, Tomatoes
– field, Sweet potato slips.  The agreed critical-use levels for 2008
total 5,355,946 kilograms (kg), which is equivalent to 21.0% of the U.S.
1991 methyl bromide consumption baseline of 25,528,270 kg.  However, the
maximum amount of allowable new production and import as set forth in
table D of Decision XVIII/13 is 4,595,040 kg (18.0% of baseline).  For
the reasons described in Section V.D of this preamble, EPA is proposing
to allow limited amounts of new production or import of methyl bromide
for critical uses for 2008 up to the amount of 3,640,508 kg (14.3% of
baseline), with 1,715,438 kg (6.7% of baseline) coming from stocks.  To
clarify, while the Parties require only 760,906 kg of stockpile
consumption if the entire US allotment is utilized, EPA is proposing
consumption of 1,715,438 kg of stockpiles for critical uses.  

	In this proposed rule, EPA is proposing to modify Columns B and C of
Appendix L to 40 CFR Part 82, Subpart A to reflect the agreed
critical-use categories identified in Decision XVIII/13 for the 2008
control period (calendar year).  The Agency is proposing to amend the
table of critical uses based, in part, on the technical analysis
contained in the 2008 U.S. nomination that assesses data submitted by
applicants to the critical use exemption program as well as public and
proprietary data on the use of methyl bromide and its alternatives.  EPA
is seeking comment on the aforementioned analysis and, in particular,
any information regarding changes to the registration or use of
alternatives that may have transpired after the 2008 U.S. nomination was
written.  Such information has the potential to alter the technical or
economic feasibility of an alternative and could thus cause EPA to
modify the analysis that underpins EPA’s determination as to which
uses and what amounts of methyl bromide qualify for the critical use
exemption.  EPA notes that while we may, in response to comments, reduce
the proposed quantities of critical use methyl bromide, or decide not to
approve uses authorized by the Parties, we do not intend to increase the
quantities or add new uses in the final rule beyond those authorized by
the Parties.  Therefore, if there has been a change in registration of
an alternative that results in that alternative no longer being
available to a particular use, EPA does not intend to add uses or
amounts of methyl bromide to the critical use exemption program beyond
those identified here.  Under such circumstances, the user should apply
to EPA, requesting that the U.S. nominate its use for a critical use
exemption in the future. Based on the information described above, EPA
is proposing that the uses in Table I: Approved Critical Uses, with the
limiting critical conditions specified, qualify to obtain and use
critical use methyl bromide in 2008.  

Table I: Approved Critical Uses 

Column A	Column B	Column C

	

Approved Critical Uses	Approved Critical User and Location of Use
Limiting Critical Conditions 

that either exist, or that the approved critical user reasonably expects
could arise without methyl bromide fumigation:

PRE-PLANT USES			

Cucurbits	(a) Michigan growers	Moderate to severe soilborne disease
infestation  

A need for methyl bromide for field trial research purposes

	(b) Southeastern U.S. limited to growing locations in Alabama,
Arkansas, Kentucky, Louisiana, Mississippi, North Carolina, South
Carolina, Tennessee, and Virginia  	Moderate to severe yellow or purple
nutsedge infestation

Moderate to severe soilborne disease infestation 

Moderate to severe root knot nematode infestation

A need for methyl bromide for field trial research purposes

	(c) Georgia growers	Moderate to severe yellow or purple nutsedge
infestation

Moderate to severe soilborne disease infestation 

Moderate to severe root knot nematode infestation

A need for methyl bromide for field trial research purposes

Eggplant	(a) Florida growers	Moderate to severe yellow or purple
nutsedge infestation 

Moderate to severe soilborne disease infestation

Restrictions on alternatives due to karst topographical features and
soils not supporting seepage irrigation

A need for methyl bromide for field trial research purposes

	(b) Georgia growers	Moderate to severe yellow or purple nutsedge
infestation Moderate to severe nematode infestation

Moderate to severe pythium collar, crown and root rot

Moderate to severe southern blight infestation

Restrictions on alternatives due to karst topographical features

A need for methyl bromide for field trial research purposes 

	(c) Michigan growers	Moderate to severe soilborne disease infestation 

A need for methyl bromide for field trial research purposes

Forest Nursery Seedlings	(a) Growers in Alabama, Arkansas, Georgia,
Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina,
Tennessee, Texas, and Virginia 	Moderate to severe yellow or purple
nutsedge infestation 

Moderate to severe soilborne disease infestation

Moderate to severe nematode infestation



	(b) International Paper and its subsidiaries limited to growing
locations in Alabama, Arkansas, Georgia, South Carolina, and Texas 
Moderate to severe yellow or purple nutsedge infestation  Moderate to
severe soilborne disease infestation



	(c) Public (government-owned) seedling nurseries in Illinois,  Indiana,
Kentucky, Maryland, Missouri, New Jersey, Ohio, Pennsylvania, West
Virginia, and Wisconsin	Moderate to severe weed infestation including
purple and yellow nutsedge infestation

Moderate to severe Canada thistle infestation

Moderate to severe nematode infestation

Moderate to severe soilborne disease infestation



	(d) Weyerhaeuser Company and its subsidiaries limited to growing
locations in Alabama, Arkansas, North Carolina, and South Carolina 
Moderate to severe yellow or purple nutsedge infestation 

Moderate to severe soilborne disease infestation

Moderate to severe nematode or worm infestation 

	(e) Weyerhaeuser Company and its subsidiaries limited to growing
locations in Oregon and Washington 	Moderate to severe yellow nutsedge
infestation

Moderate to severe soilborne disease infestation

	(f) Michigan growers	Moderate to severe soilborne disease infestation

Moderate to severe Canada thistle infestation

Moderate to severe nutsedge infestation

Moderate to severe nematode infestation

	(g) Michigan herbaceous perennials growers	Moderate to severe nematode
infestation

Moderate to severe soilborne disease infestation

Moderate to severe  yellow nutsedge and other weed infestation

Orchard Nursery Seedlings	(a) Members of the Western Raspberry Nursery
Consortium limited to growing locations in California and Washington 
Moderate to severe nematode infestation

Presence of medium to heavy clay soils

Prohibition on use of 1,3-dichloropropene products because local
township limits on use of this alternative have been reached

A need for methyl bromide for field trial research purposes

	(b) Members of the California Association of Nursery and Garden Centers
representing Deciduous Tree Fruit Growers	Moderate to severe nematode
infestation

Presence of medium to heavy clay soils

Prohibition on use of 1,3-dichloropropene products because local
township limits on use of this alternative have been reached

A need for methyl bromide for field trial research purposes

	(c) California rose nurseries	Moderate to severe nematode infestation

Prohibition on use of 1,3-dichloropropene products because local
township limits on use of this alternative have been reached

A need for methyl bromide for field trial research purposes

Strawberry Nurseries	(a) California growers	Moderate to severe soilborne
disease infestation

Moderate to severe yellow or purple nutsedge infestation

Moderate to severe nematode infestation

A need for methyl bromide for field trial research purposes

	(b) North Carolina and Tennessee growers	Moderate to severe black root
rot

Moderate to severe root-knot nematode infestation

Moderate to severe yellow and purple nutsedge infestation

A need for methyl bromide for field trial research purposes

Orchard Replant	(a) California stone fruit growers	Moderate to severe
nematode infestation

Moderate to severe soilborne disease  infestation

Replanted (non-virgin) orchard soils to prevent orchard replant disease

Presence of medium to heavy soils

Prohibition on use of 1,3-dichloropropene products because local
township limits on use of this alternative have been reached

	(b) California table and raisin grape growers 	Moderate to severe
nematode infestation

Moderate to severe soilborne disease  infestation

Replanted (non-virgin) orchard soils to prevent orchard replant disease

Medium to heavy soils

Prohibition on use of 1,3-dichloropropene products because local
township limits for this alternative have been reached

	(c) California wine grape growers	Moderate to severe nematode
infestation

Moderate to severe soilborne disease infestation

Replanted (non-virgin) orchard soils to prevent orchard replant disease

Medium to heavy soils

Prohibition on use of 1,3-dichloropropene products because local
township limits for this alternative have been reached

	(d) California walnut growers	Moderate to severe nematode infestation

Moderate to severe soilborne disease infestation

Replanted (non-virgin) orchard soils to prevent orchard replant disease

Medium to heavy soils

Prohibition on use of 1,3-dichloropropene products because local
township limits for this alternative have been reached

	(e) California almond growers	Moderate to severe nematode infestation

Moderate to severe soilborne disease infestation

Replanted (non-virgin) orchard soils to prevent orchard replant disease

Medium to heavy soils

Prohibition on use of 1,3-dichloropropene products because local
township limits for this alternative have been reached

Ornamentals	(a) California growers	Moderate to severe soilborne disease
infestation

Moderate to severe nematode infestation

Prohibition on use of 1,3-dichloropropene products because local
township limits for this alternative have been reached

A need for methyl bromide for field trial research purposes

	(b) Florida growers	Moderate to severe weed infestation

Moderate to severe soilborne disease infestation

Moderate to severe nematode infestation

Restrictions on alternatives due to karst topographical features and
soils not supporting seepage irrigation 

A need for methyl bromide for field trial research purposes

Peppers	(b) Alabama, Arkansas, Kentucky, Louisiana, Mississippi, North
Carolina, South Carolina, Tennessee, and Virginia growers	Moderate to
severe yellow or purple nutsedge infestation Moderate to severe nematode
infestation

Moderate to severe pythium root, collar, crown and root rots

A need for methyl bromide for field trial research purposes

	(c) Florida growers	Moderate to severe yellow or purple nutsedge
infestation

Moderate to severe soilborne disease infestation

Moderate to severe nematode infestation

Restrictions on alternatives due to karst topographical features and
soils not supporting seepage irrigation 

A need for methyl bromide for field trial research purposes

	(d) Georgia growers	Moderate to severe yellow or purple nutsedge
infestation Moderate to severe nematode infestation, or moderate to
severe pythium root and collar rots

Moderate to severe southern blight infestation, crown or root rot

A need for methyl bromide for field trial research purposes

	(e) Michigan growers	Moderate to severe soilborne disease  infestation

A need for methyl bromide for field trial research purposes

Strawberry Fruit	(a) California growers	Moderate to severe black root
rot or crown rot

Moderate to severe yellow or purple nutsedge infestation

Moderate to severe nematode infestation

Prohibition on use of 1,3-dichloropropene products because local
township limits for this alternative have been reached

Time to transition to an alternative

A need for methyl bromide for field trial research purposes

	(b) Florida growers	Moderate to severe yellow or purple nutsedge
infestation

Moderate to severe nematode infestation

Moderate to severe soilborne disease infestation

Carolina geranium or cut-leaf evening primrose infestation

Restrictions on alternatives due to karst topographical features and
soils not supporting seepage irrigation 

a need for methyl bromide for field trial research purposes

	(c) Alabama, Arkansas, Georgia, Illinois, Kentucky, Louisiana,
Maryland, Mississippi, Missouri, New Jersey, North Carolina, Ohio, South
Carolina, Tennessee, and Virginia growers	Moderate to severe yellow or
purple nutsedge infestation

Moderate to severe nematode infestation

Moderate to severe black root and crown rot

A need for methyl bromide for field trial research purposes

Sweet Potato Slips	(a) California growers	Prohibition on use of
1,3-dichloropropene products because local township limits for this
alternative have been reached

Tomatoes	(a) Michigan growers	Moderate to severe soilborne disease
infestation

Moderate to severe fungal pathogen infestation

A need for methyl bromide for field trial research purposes

	(c) Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, 
Mississippi, North Carolina, South Carolina, Tennessee, and Virginia
growers	Moderate to severe yellow or purple nutsedge infestation
Moderate to severe soilborne disease infestation

Moderate to severe nematodes

Restrictions on alternatives due to karst topographical features, and in
Florida, soils not supporting seepage irrigation

A need for methyl bromide for field trial research purposes

POST-HARVEST  USES

Food Processing	(a) Rice millers in all locations in the U.S. who are
members of the USA Rice Millers Association.	Moderate to severe
infestation of beetles, weevils or moths

Older structures that can not be properly sealed to use an alternative
to methyl bromide

Presence of sensitive electronic equipment subject to corrosion

Time to transition to an alternative

	(b) Pet food manufacturing facilities in the U.S. who are active
members of the Pet Food Institute  (For this proposed rule, “pet
food” refers to domestic dog and cat food).  	Moderate to severe
infestation or beetles, moths, or cockroaches

Older structures that can not be properly sealed to use an alternative
to methyl bromide

Presence of sensitive electronic equipment subject to corrosion

Time to transition to an alternatives

	(c) Bakeries in the U.S.	Older structures that can not be properly
sealed to use an alternative to methyl bromide

Presence of sensitive electronic equipment subject to corrosion

Time to transition to an alternative

	(d) Members of the North American Millers’ Association in the U.S.
Moderate to severe beetle infestation

Older structures that can not be properly sealed to use an alternative
to methyl bromide

Presence of sensitive electronic equipment subject to corrosion

Time to transition to an alternative

	(e) Members of the National Pest Management Association associated with
dry commodity structure fumigation (cocoa) and dry commodity fumigation
(processed food, herbs and spices, dried milk and cheese processing
facilities)	Moderate to severe beetle or moth  infestation

Older structures that can not be properly sealed to use an alternative
to methyl bromide

Presence of sensitive electronic equipment subject to corrosion

Time to transition to an alternatives

Commodities	(a) California entities storing walnuts, beans, dried plums,
figs, raisins, dates (in Riverside county only), and pistachios in
California	Rapid fumigation is required to meet a critical market
window, such as during the holiday season, rapid fumigation is required
when a buyer provides short (2 working days or less) notification for a
purchase or there is a short period after harvest in which to fumigate
and there is limited silo availability for using alternatives

A need for methyl bromide for field trial research purposes

Dry Cured Pork Products	(a) Members of the National Country Ham
Association	Moderate to severe red legged ham beetle infestation

Moderate to severe cheese/ham skipper infestation

Moderate to severe dermested beetle infestation

Ham mite infestation

	(b) Members of the American Association of Meat Processors	Moderate to
severe red legged ham beetle infestation

Moderate to severe cheese/ham skipper infestation

Moderate to severe dermested beetle infestation

Ham mite infestation

	(c) Nahunta Pork Center (North Carolina)	Moderate to severe red legged
ham beetle infestation

Moderate to severe cheese/ham skipper infestation

Moderate to severe dermested beetle infestation

Ham mite infestation

	(d) Gwaltney and Smithfield Inc.	Moderate to severe red legged ham
beetle infestation

Moderate to severe cheese/ham skipper infestation

Moderate to severe dermested beetle infestation

Ham mite infestation



EPA is proposing to amend the table in 40 CFR part 82, subpart A,
Appendix L, as reflected above.  Specifically, EPA is adding six and
deleting four references to and from column B.  The changes are as
follows: adding Mississippi to the approved locations for cucurbit
growers because that location was included in the approved Southeast
Cucurbit Consortium application for 2008; removing Florida from the
approved forest seedling locations because a 2008 application for that
location was not submitted to EPA; removing Maryland from the approved
strawberry nursery locations because a 2008 application for that
location was not submitted to EPA; removing California from the approved
locations for pepper growers because the United States Government did
not support this location in its 2008 Critical Use Nomination; adding
Mississippi to the approved locations for pepper growers because that
location was included in the approved Southeast Pepper Consortium
application for 2008; adding Mississippi and Missouri to the approved
locations for strawberry fruit growers because those locations were
included in the approved Southeastern Strawberry Consortium application
for 2008; adding California sweet potato slip growers to reflect the
authorization of that use in Decision XVIII/13; adding Mississippi to
the approved locations for tomato growers because that location was
included in the approved Southeastern Tomato Consortium application for
2008; removing turfgrass because that use was not agreed to by the
Parties in Decision XVIII/13; adding Gwaltney and Smithfield Inc. to the
approved entities for dry cured pork products because their application
was approved for 2008.

	The categories listed in Table I above have been designated critical
uses for 2008 in Decision XVIII/13 of the Parties.  The amount of methyl
bromide approved for field trial purposes is included in the amount of
methyl bromide approved by the Parties for the commodities for which
“field trials” is indicated as a limiting critical condition in the
table above.  As explained in Section V.D.5., EPA is allowing sale of
15,491 kg of methyl bromide from existing stocks for field trial
purposes.  Section V.D.5. also explains the reasoning for and
implications of EPA’s use of the term “field trial purposes” in
this proposed action, instead of the term “research purposes,” which
EPA used in previous CUE rulemakings.  Methyl bromide is needed for
field trial purposes including experiments that require methyl bromide
as a standard control treatment with which to compare the trial
alternatives’ results.  

In accordance with the recommendations in Table 9 of the TEAP’s
September 2006 Final Report titled “Evaluations of 2006 Critical Use
Nominations for Methyl Bromide and Related Matters,” available on the
docket for this rulemaking, EPA is proposing that the following sectors
be allowed to use critical use methyl bromide for field trial purposes:
commodities, cucurbits (field), eggplant (field), nursery stock (fruit,
nut, flower), ornamentals, peppers (field), strawberry (field),
strawberry runners, and tomatoes (field).  In their applications to EPA,
these sectors identified field trial research programs that require the
use of methyl bromide.

D. Proposed Critical Use Amounts 

	Section V.C. of this preamble explains that Table C of the annex to
Decision XVIII/13 lists critical uses and amounts agreed to by the
Parties to the Montreal Protocol. When added together, the authorized
critical use amounts for 2008 total 5,355,946 kilograms (kg), which is
equivalent to 21.0% of the U.S. 1991 methyl bromide consumption baseline
of 25,528,270 kg as defined at 40 CFR 82.3.  However, the maximum amount
of authorized new production or import as set forth in Table D of the
annex to Decision XVIII/13 is 4,595,040 kg (18.0% of baseline).  In the
December 23, 2004 Framework Rule (69 FR 76982) EPA issued critical stock
allowances (CSAs) in an amount equal to the difference between the total
authorized critical use exemption (CUE) amount and the amount of
authorized new production and import (Total Authorized CUE Amount –
Authorized New Production and Import).  In the CUE rules for 2006 and
2007, EPA applied the same formula but issued additional CSAs as an
exercise of discretion, making a corresponding reduction in the amount
of critical use allowances (CUAs).  In this section, EPA proposes to
change certain aspects of the Agency’s approach for determining the
amount of methyl bromide that may be produced or imported for critical
uses each year, and the amount of material that may be sold from stocks
for critical uses each year.

For the reasons described below, EPA is proposing to allow limited
amounts of new production and import of methyl bromide for critical uses
for 2008 up to the amount of 3,640,508 kg (14.3% of baseline) as shown
in Table II.  EPA is also proposing to allow sale of 1,715,438 kg (6.7%
of baseline) of existing inventories for critical uses in 2008.  EPA is
seeking comment on the proposed total levels of exempted new production
and import for critical uses.  This section explains EPA’s reasons for
proposing the above critical use amounts for 2008.

V.D.1. Background of Proposed Critical Use Amounts

The Framework Rule and subsequent CUE rules each took note of language
regarding stocks of methyl bromide in relevant decisions of the Parties.
  In developing this proposed action, the Agency notes that paragraph
six of Decision XVIII/13 contains the following language: “that each
Party which has an agreed critical use renews its commitment to ensure
that the criteria in paragraph 1 of decision IX/6 are applied when
licensing, permitting or authorizing critical use of methyl bromide and
that such procedures take into account available stocks of banked or
recycled methyl bromide, in particular, the criterion laid down in
paragraph 1(b)(ii) of decision IX/6.”  Language calling on Parties to
address stocks also appears in prior Decisions related to the critical
use exemption.  In the Framework Rule, which established the
architecture of the CUE program and set out the exempted levels of
critical use for 2005, EPA interpreted paragraph 5 of Decision Ex. I/3,
which is similar to Decision XVIII/13(6), “as meaning that the U.S.
should not authorize critical use exemptions without including
provisions addressing drawdown from stocks for critical uses” (69 FR
76987).  

Consistent with that interpretation, The Framework Rule (69 FR 52366)
established provisions governing the sale of pre-phaseout inventories
for critical uses, including the concept of CSAs and a prohibition on
the sale of pre-phaseout inventories for critical uses in excess of the
amount of CSAs held by the seller.  In addition, EPA noted that stocks
were further taken into account through the trading provisions that
allow CUAs to be converted into CSAs.  EPA is not proposing changes to
these basic CSA provisions for calendar year 2008.

In the August 25, 2004 Proposed Framework Rule (69 FR 52366), EPA
proposed to adjust the authorized level of new production and
consumption for critical uses by the amount of “available” stocks. 
The methodology for determining the amount of “available” stocks
considered exports, methyl bromide for feedstock uses, and the need for
a buffer in case of catastrophic events.  However, EPA did not adopt the
proposed methodology for determining available stocks in the final
Framework Rule.  Instead, EPA issued CSAs in an amount equal to the
difference between the total authorized CUE amount and the amount of new
production or import authorized by the Parties (Total Authorized CUE
Amount – Authorized New Production and Import).

In the 2006 CUE Rule, published February 6, 2006 (71 FR 5997), EPA
applied the approach described in the Framework Rule by allocating as
CSAs the difference between the total authorized CUE amount and the
amount of new production and import authorized by the Parties (2.0% of
baseline), as well as the small supplemental allocation in Decision
XVII/9 (0.4% of baseline), and EPA also issued CSAs allowing additional
amounts of existing stocks to be sold for critical uses (roughly 3.0% of
baseline).  In the 2006 CUE Rule EPA issued a total of 1,136,008 CSAs,
equivalent to 5.0% of baseline.  Similarly, in the 2007 CUE Rule, EPA
issued a number of CSAs that represented not only the difference between
the total authorized CUE amount and the amount of authorized new
production and import (6.2% of baseline), but also an additional amount
(1.3% of baseline) for a total of 1,915,600 CSAs (7.5% of baseline).  By
allocating additional CSAs, EPA adjusted the portion of CUE methyl
bromide to come from new production and import as compared to the
proportion to come from stocks so that the total amount of methyl
bromide exempted for critical uses did not exceed the total amount
authorized by the Parties for that year.  EPA viewed the additional CSA
amounts as an appropriate exercise of its discretion.  

EPA reasoned that the Agency was not required to allocate the full
amount of authorized new production and consumption.  The Parties agreed
to “permit” a particular level of production and consumption; they
did not—and could not—mandate that the U.S. authorize this level of
production and consumption domestically. Nor does the CAA require EPA to
exempt the full amount permitted by the Parties. Section 604(d)(6) of
the Clean Air Act (CAA) does not require EPA to exempt any amount of
production and consumption for critical uses, but instead specifies that
the Agency “may” exempt amounts for production, importation, and
consumption, thus providing EPA with substantial discretion in creating
critical use exemptions. 

In the July 6, 2006 Proposed 2007 CUE Rule (71 FR 38325), EPA sought
comment on “whether, in the critical use exemption context, it would
be appropriate to adjust the level of new production and import with the
goal of maintaining a stockpile of some specified duration […] and on
how many months of methyl bromide inventory would be appropriate, in
order to maintain non-disruptive management of this chemical in the
supply chain” (71 FR 38339).  In the Final 2007 CUE Rule, EPA noted
that, “the Parties have not taken a decision on an appropriate amount
of inventory for reserve. Nor has EPA reached any conclusion regarding
what amount might be appropriate.  Given this uncertainty, and the
continuing decline in inventory levels, EPA is exercising caution in
this year’s CSA allocation.  EPA will consider various approaches to
this issue in the future based on the data received during this notice
and comment rulemaking process and other information obtained by the
Agency” (71 FR 75399).

Data on the aggregate amount of methyl bromide held in inventory at the
end of calendar years 2003, 2004, 2005, and 2006 is available in the
public docket for this rulemaking.  Using this aggregated inventory
data, and other data gathered by EPA, the Agency estimates that on
January 1, 2008 the aggregate inventory will be less than one-year’s
supply of critical use methyl bromide.

The benefits of methyl bromide reserves for critical uses were discussed
at the 18th Meeting of the Parties (MOP).  The Report of the Eighteenth
Meeting of the Parties to the Montreal Protocol on Substances that
Deplete the Ozone Layer (18th MOP Report), available in the docket for
this proposed rulemaking, recounts that discussion.  Daniel Reifsnyder,
the Deputy Assistant Secretary for Environment in the Department of
State’s Bureau of Oceans, Environment and Science spoke for the United
States delegation.  The 18th MOP Report summarized part of Mr.
Reifsnyder’s argument:  “There [is] a case for maintaining
stockpiles in order to ensure a smoothly functioning supply chain to
meet critical use demands from non-Article 5 Parties and to meet needs
in the event of a catastrophic event or production plant failure.  On
that basis […] it would be appropriate to agree an adequate methyl
bromide stockpile allowance for Parties, as had been done for other
ozone-depleting substances. Agreeing such a figure would be necessary in
order to assess the Party’s critical-use exemptions for coming years,
since it would determine how much would be taken from stockpiles and how
much from fresh production.”  The Parties did not take a decision at
the 18th MOP on whether it would be appropriate for a member country to
maintain a reserve, or what size inventory would be adequate.  Instead,
they left the matter for future discussion, and left open the
possibility that a decision related to the issue might be taken at the
19th Meeting of the Parties in September 2007.

In this action, EPA is not proposing to maintain a reserve of methyl
bromide for critical uses.  EPA is, however, proposing to calculate the
amount of existing methyl bromide stocks that is available for critical
uses in 2008, and to consider this amount in the Agency’s
determination of how much sale of existing stocks and how much
production and importation to allow for critical uses in 2008.  Section
V.D.2. describes EPA’s proposed method to calculate the amount of
existing stocks that is available for critical use in 2008.  Section
V.D.3. explains how EPA proposes to apply the calculated amount of
available stocks in the Agency’s critical use amount determinations.  

The specific critical use amounts proposed in Section V.D. of this
preamble apply only to calendar year 2008.  The proposed methods for
determining the critical use amounts, described in Section V.D.2. and
V.D.3. of this preamble, form a new approach for determining how much
critical use methyl bromide may be produced and imported and how much
may be sold to critical users from existing inventories in a given year.
 EPA proposes to use this new approach in 2008 and, as feasible and
appropriate, each year thereafter.

V.D.2. Calculation of Available Stocks

In this action, EPA is proposing to adjust the authorized level of new
production and consumption for critical uses to account for the amount
of existing stocks that is “available” for critical uses.  This
section explains how EPA proposes to calculate the amount of existing
stocks that is available for critical uses in 2008. As explained above,
EPA also proposes to use this calculation method in each year after
2008, as feasible and appropriate.  As described in more detail in
Section V.D.3. of this preamble, EPA proposes to allow sale of the
amount of existing inventory that the Agency has determined to be
available for critical uses by issuing an equivalent number of critical
stock allowances (CSAs), on a one CSA per one kilogram of methyl bromide
basis.

The Proposed Framework Rule explained that in their Decisions, the
Parties to the Protocol recognized that the level of existing stocks may
differ from the level of available stocks.  Most recently, Decision
XVIII/13(4) states, “That a Party with a critical use exemption level
in excess of permitted levels of production and consumption for critical
uses is to make up any such differences between those levels by using
quantities of methyl bromide from stocks that the Party has recognized
to be available.”  Thus, in Decisions XVIII/13, XVII/9, Ex. II/1,
XVI/2, Ex. I/3 and IX/6 the Parties recognized that not all existing
stocks may be available to meet critical needs.  While the Clean Air Act
(CAA) does not specifically address this issue, section 604(d)(6)
provides that, “to the extent consistent with the Montreal Protocol”
EPA “may” exempt production, importation, and consumption of methyl
bromide for critical uses, thus providing the Agency substantial
discretion to determine whether, and to what extent, production and
import is appropriate for critical uses.  Section 604(d)(6) does not
require that EPA adjust the amount of new production and import to
reflect the availability of stocks: however, making such an adjustment
is a reasonable exercise of EPA’s discretion under this provision. 
The proposed approach is a logical extension of the approach used in
EPA’s 2006 and 2007 CUE allocation rules where EPA concluded that it
was reasonable to adjust the proportion of CUE methyl bromide to come
from new production and import as compared to the proportion to come
from stocks.  Furthermore, it is appropriate for EPA to refine its
approach in light of new information.  EPA is considering new
information it has gathered about the availability of stocks for
critical uses, because that information helps the Agency balance the
environmental and economic implications of exempting amounts of methyl
bromide production, importation, and consumption for critical uses.

EPA is proposing, and seeking comment on, the following approach to
calculate the amount of existing stocks that is available for critical
uses.  EPA’s proposed methodology for calculating the amount of
available stocks can be expressed as follows: AS = ES – D – SCF,
where AS = available stocks; ES = existing stocks of methyl bromide held
in the United States by producers, importers, and distributors on
January 1, 2007; D = estimated drawdown of existing stocks during
calendar year 2007; and SCF = a supply chain factor, the calculation of
which is described below and in more detail in the Technical Support
Document available in the public docket for this rulemaking.  Using the
above formula, EPA calculates that 1,715,438 kg (6.7% of baseline) of
existing methyl bromide stocks will be “available” for critical uses
on January 1, 2008.  EPA seeks comment on the amount of existing stocks
that the Agency estimates will be available for critical uses on January
1, 2008.

In the above formula, “existing stocks” refers to pre-phaseout
inventory – i.e., methyl bromide produced before the January 1, 2005
phaseout of production and import – and to critical use methyl bromide
that was produced after January 1, 2005 and carried over into subsequent
years.  The treatment of carry-over methyl bromide is discussed in
Section V.D.4. of this preamble.  The term “existing stocks” does
not include methyl bromide produced under the exemption for quarantine
and preshipment (QPS), methyl bromide produced with Article 5 allowances
to meet the basic domestic needs of Article 5 countries, or methyl
bromide produced for feedstock or transformation purposes.  Methyl
bromide produced for QPS uses or for export to Article 5 countries may
not be sold to domestic entities for critical uses.  That methyl
bromide, therefore, is separate from the CUE program.

To estimate the drawdown of existing stocks during 2007, the “D”
term in the above formula, EPA proposes to project the size of the
methyl bromide inventory on January 1, 2008 with a least squares
regression using EPA collected data about the size of that inventory on
January 1 of the years for which EPA has data: 2003, 2004, 2005, and
2006.  Using a least squares regression of past inventory data, EPA
projects that the existing methyl bromide inventory, which was 9,973,650
kg on January 1, 2006, will be drawn down by 3,224,351 kg during 2007. 
Therefore, EPA estimates that the inventory will be 4,447,740 kg on
January 1, 2008.  The 95% Prediction Interval is 1,718,170 kg to
7,175,310 kg, meaning there is 95% certainty that the true inventory
will be between this range.  EPA’s methodology for estimating the
inventory drawdown is described in more detail in the Technical Support
Document available on the public docket for this proposed rulemaking.

	EPA’s proposed formula for determining the amount of existing stocks
that is available for critical uses includes a supply chain factor
(SCF).  The SCF represents EPA’s technical estimate of the amount of
existing stocks that would be adequate to meet critical use methyl
bromide shortfalls after an unforeseen domestic production failure.  For
2008, EPA proposes to use a SCF equal to 2,731,211 kg in the Agency’s
calculation of the amount of existing stocks that is available.  The SCF
is a transparent analytical tool that will help EPA to continue issuing
responsible CSA amounts.

EPA estimates that following an unforeseen shutdown of the domestic
production facility, it would take 6-12 months to restart production,
but only 15-weeks for significant imports of methyl bromide to reach the
U.S.  As discussed in the Technical Support Document, EPA estimates that
after 15-weeks, U.S. demand for critical use methyl bromide could be
adequately supplied with imported material.  In Decision XVIII/13, the
Parties authorized 5,355,946 kg for U.S. critical uses in 2008.  If
supply is evenly distributed across each 15-week period of 2008, then a
supply disruption would cause a 15-week shortfall of 1,544,984 kg
(15-weeks/52-weeks * 5,355,946 kg).  However, EPA data –collected
pursuant to the reporting requirements at 40 CFR 82.13– shows that a
disproportionate amount of critical use methyl bromide is produced in
the first 15-weeks of each year.  EPA’s analysis in the Technical
Support Document suggests that heavy production at the beginning of each
year is related to peak demand during the summer planting season.
Therefore, EPA estimates that a supply disruption at or near the
beginning of 2008 would cause a supply shortfall greater than 1,544,984
kg.  

EPA proposes a conservative estimate of the supply chain factor that
considers a supply disruption during the estimated peak 15-week period
of critical use supply.  As explained in more detail in the Technical
Support Document, EPA estimates that since the beginning of the CUE
program on January 1, 2005, critical use methyl bromide production in
the first 15-weeks of each year has accounted for 51.0% of annual
critical use methyl bromide production.  EPA, therefore, estimates that
the peak 15-week shortfall in 2008 could be 2,731,211 kg (51.0% *
5,355,946 kg).  For the reasons discussed above, EPA proposes to include
a supply chain factor of 2,731,211 kg in its calculation of the amount
of existing stocks that are available in 2008.  EPA’s analysis
considers many factors including foreign production capacity, shipping
container capacity, shipping logistics and market dynamics.  EPA seeks
comment on the proposed supply chain factor in its calculation of the
amount of available stocks in 2008, and on its methods and reasoning for
this proposal as described in the Technical Support Document. 

As discussed in Section V.D.1. of this preamble, in the August 25, 2004
Proposed Framework Rule (69 FR 52366) EPA presented a methodology for
determining the size of a catastrophic reserve.  EPA received 14
comments on the methodology: five in favor and nine suggesting
refinements. However, since EPA did not adjust the level of new
production and consumption in order to maintain a catastrophic reserve
for the 2005 control period, the final Framework Rule did not respond in
detail to those comments.  

In the July 6, 2006 Proposed 2007 CUE Rule (71 FR 38325) EPA sought
comment on whether, in the CUE context, it would be appropriate to
adjust the level of new production and import with the goal of
maintaining a stockpile of some specified duration and how many months
of methyl bromide inventory would be appropriate in order to maintain
non-disruptive management of this chemical in the supply chain for
purposes of determining availability as inventories are reduced over
time.  EPA received ten comments on this issue but did not reach a
conclusion on how many months of inventory would be appropriate for a
strategic inventory, and EPA did not respond in detail to those
comments.  EPA is no longer using the concept of a “strategic
inventory.”  Nevertheless, the supply chain factor included in the
proposed formula for calculating the amount of available stocks has
certain similarities to the concept of a strategic inventory. 
Therefore, the Agency is responding to the parts of previously received
comments that are relevant to the proposals in this preamble.

One commenter on the Proposed Framework Rule believed there was no basis
for a catastrophic reserve.  The commenter gave three reasons: (1) the
commenter was not aware of any precedent where inventory of a chemical
was held “as a reserve against a hypothetical catastrophic loss of
production capacity”; (2) “there has never been such an event for
methyl bromide”; and (3) “EPA has not provided a basis for believing
that such a catastrophe is a reasonable possibility.”

The concept of a catastrophic reserve as it was previously proposed, may
have caused confusion, which is one reason why EPA is now employing a
different concept.  For clarification, EPA is not proposing to take
possession of any methyl bromide supplies or to designate specific
private holdings as either “reserve” or “available” inventory. 
Furthermore, EPA is not proposing to guarantee that a certain amount of
methyl bromide would always be held in reserve.  Rather, by including a
supply chain factor in its calculation of available stocks, EPA is
introducing a transparent analytical tool that will help EPA to continue
issuing responsible CSA amounts. To further clarify, EPA is not
proposing in this action to add or eliminate any sales restrictions on
methyl bromide produced before January 1, 2005.

EPA believes there is precedent for allowing a reasonable amount of a
chemical that has been phased out to remain in the supply chain to meet
the needs of exempted uses.  For example, in the context of the
essential use exemption, as explained in the “FDA determination
letter” available on the public docket for this rulemaking, FDA bases
its determination of the amount of CFC production that is necessary for
medical devices “on an estimate of the quantity of CFCs that would
allow manufacturers to maintain as much as a 12-month stockpile.” 
That action is consistent with Decision XVI/12(3), which specifies that
“Parties, when preparing essential use nominations for CFCs, should
give due consideration to existing stocks, whether owned or agreed to be
acquired from a metered-dose inhaler manufacturer, of banked or recycled
controlled substances as described in paragraph 1(b) of decision IV/25,
with the objective of maintaining no more than one year’s operational
supply.” 

	The fact that EPA is not aware of a major methyl bromide supply
disruption does not mean that such a disruption is impossible or even
improbable in the future.  Furthermore, factors such as the small number
of methyl bromide production facilities around the world, and the
continued drawdown of existing methyl bromide inventories make a major
supply disruption possible.

	Another commenter on the Proposed Framework Rule supported the
inclusion of a catastrophic reserve, but proposed that the amount in
reserve be reduced to six weeks’ supply. To support this proposed
reduction the commenter added that if a single manufacturer experiences
a catastrophic production failure, there exists a significant number of
manufacturers worldwide with excess production capacity.

	The Technical Support Document discusses in detail the efficacy and
limitations of importing methyl bromide from abroad in the event of a
domestic production plant failure.  In fact, EPA estimates that in the
event of a plant production failure, importing methyl bromide from
abroad is likely to be the fastest and most practical way to replace the
lost production.  Therefore, issues such as foreign excess production
capacity, shipping container capacity, shipping logistics, and market
dynamics are the primary focus of EPA’s analysis.

	Three commenters on the Proposed Framework Rule suggested that
additional methyl bromide should be held in reserve in order to fill the
distribution chain.  As explained above, EPA is not proposing to set
aside, or physically separate, stocks as an inventory reserve.  By
including a supply chain factor in its calculation of available stocks
EPA is considering the drawdown of stocks and allocating critical use
amounts that reflect the size of the existing stockpile of pre-phaseout
material.  Under EPA’s proposed approach, stocks of methyl bromide may
be used to “fill the distribution chain” and simultaneously provide
some buffer in case of a major supply disruption.

Several commenters on the Proposed Framework Rule had questions about
EPA’s treatment of methyl bromide held for export.  Exports were an
important consideration in EPA’s inclusion of the supply chain factor.
 The U.S. faces different circumstances from many other Parties because
it is a methyl bromide producer country as well as a user country.  In
fact, historically the U.S. has been the world’s largest supplier of
methyl bromide.  Since U.S. companies supply a significant portion of
the world demand for methyl bromide, a supply disruption in the U.S.
would not only affect U.S. users, but would probably affect users with
agreed critical uses in developed countries as well as users in
developing countries that have basic domestic needs for methyl bromide. 
Therefore, depending on how domestic suppliers manage their stockpiles,
the supply chain factor could indirectly reduce the risks for entities
in other countries which need methyl bromide.

One commenter on the Proposed Framework Rule had a number of questions
about EPA’s treatment of quarantine and preshipment (QPS) stocks.  The
commenter requested that EPA clarify the definition of the “restricted
stocks of methyl bromide that were produced for quarantine and
preshipment.”

As explained in the Technical Support Document, EPA did not directly
consider domestic demand for methyl bromide for QPS uses in its
estimation of the possible shortfall of methyl bromide supplies in the
event of a major supply disruption.  Congress provided separate grants
of authority to EPA for the quarantine and preshipment exemption and the
critical use exemption in CAA sections 604(d)(5) and 604(d)(6),
respectively.  Therefore, methyl bromide produced for QPS uses is
regulated under a completely separate exemption program from the CUE. 
On January 2, 2003 EPA published the QPS Rule in the Federal Register
(68 FR 2138), which established the framework and guidelines for
regulating methyl bromide produced for uses that meet the definition of
QPS uses, as defined in that rule and at 40 CFR 82.3.  The QPS exemption
program does not restrict the amount of methyl bromide that is newly
produced and imported for QPS purposes.  In addition, existing
regulations allow manufacturers and distributors of QPS methyl bromide
to manage stockpiles of QPS methyl bromide. 

EPA is acting consistently with the Montreal Protocol by not including
QPS methyl bromide in calculating consumption and inventory levels
related to the phase-out of methyl bromide and the CUE.  Article 2H(6)
of the Protocol states that the 1991 baseline level of consumption and
production “shall not include the amounts used by the Party for
quarantine and pre-shipment purposes.”

	Similarly, EPA did not consider domestic demand for methyl bromide for
feedstock and transformation purposes in its calculation of the supply
chain factor.  As with the QPS exemption, methyl bromide producers are
allowed to responsibly manage inventories of feedstock methyl bromide. 
Therefore, EPA does not find compelling reasons to account for domestic
demand for feedstock methyl bromide in the supply chain factor.  In this
action, EPA is not proposing to change or add restrictions on methyl
bromide produced for feedstock and transformation purposes.

	As discussed in Section V.D.1. of this preamble, in the August 25, 2004
Proposed Framework Rule (69 FR 52366) EPA proposed to adjust the
authorized level of new production and consumption for critical uses by
the amount of available stocks.  In the Proposed Framework Rule, EPA
presented a methodology for determining available stocks, which
considered exports, feedstocks, and the need for a buffer in case of
catastrophic events.  EPA received ten comments on the methodology
explained in the Proposed Framework Rule for determining available
stocks: five in favor and nine suggesting further refinements. However,
since EPA did not use that proposed methodology to determine available
stocks for the 2005 control period, the final Framework Rule did not
respond in detail to the comments.  As described above, EPA is proposing
a new formula for determining available stocks.  Therefore, the Agency
is now responding to parts of the comments on the Proposed Framework
Rule that are relevant to the proposals in this preamble.

One commenter disagreed with EPA’s interpretation in the Proposed
Framework Rule that the Agency has the authority, as recognized by the
Parties in Decision Ex.I/3 and similar Decisions, to “assess how much
methyl bromide is available from existing inventories” (69 FR 52373). 
According to the commenter, EPA was making a “false distinction”
between the terms “available” stocks and “existing” stocks of
methyl bromide.  The commenter submitted that the only difference
between “available” and “existing” is the deduction to reflect
developing country needs.  The commenter based this argument on the
language in Decision IX/6(1)(b)(ii), which states the condition that
methyl bromide “is not available in sufficient quality and quantity
from existing stocks of banked or recycled methyl bromide, also bearing
in mind the developing countries’ need for methyl bromide.”  Thus,
the commenter argued that Dec. Ex.I/3 does not create a new meaning for
“available” that encompasses more deductions than for the developing
country needs.

	EPA disagrees with the commenter’s broad application of the language
in Decision IX/6(1)(b)(ii).  EPA believes that in Dec. IX/6(1)(b)(ii)
the Parties were stressing the importance of developing countries’
needs, and not precluding the consideration of other factors in each
individual Party’s determination of available stocks of methyl
bromide.  Dec. IX/6(1)(b)(ii) says “also bearing in mind developing
countries’ need,” it does not say “only bearing in mind…” 
Furthermore, EPA underscores Dec. XVIII/13(4) and similar decisions
which use the phrasing, “quantities of methyl bromide from stocks that
the Party has recognized to be available.”  EPA believes that in that
Decision, and in similar language in other decisions, the Parties
acknowledged that individual Parties have the discretion to determine
their level of available stocks.  EPA is not aware of specific
guidelines or instructions agreed on by the Parties for determining
available stocks.  For these reasons, EPA believes it is acting
consistently with the relevant decisions.  In addition, given the
substantial discretion afforded by Congress under section 604(d)(6) of 
the Clean Air Act, EPA believes it has the authority to determine,
through a notice and comment rulemaking process, what factors to include
in the formula for calculating the amount of existing stocks that is
available.

	Five commenters were somewhat supportive of the methodology for
calculating available stocks in the Proposed Framework Rule.  These
commenters called EPA’s proposed methodology “logical” and
supported the methodology “in principle.”  However, three of the
commenters called EPA’s methodology too complex.  They said that given
the lack of clearly defined terms, the proposed methodology could only
give at best a qualitative result.

	EPA has tried to make the terms in the formula for calculating
available stocks proposed in this preamble as clear and definitive as
possible.  Since the Proposed Framework Rule, EPA has gained significant
experience and information pertaining to the CUE program, and the methyl
bromide industry more generally.  EPA is using its added knowledge to
propose a more lucid and definitive formula for calculating the amount
of available stocks.  Further detail about the factors in the formula
proposed in this preamble is provided in the Technical Support Document
available on the public docket for this rulemaking.

V.D.3. Proposed Approach for Determining Critical Use Amounts

	As described in Section V.D.2. of this preamble, EPA estimates that
1,715,438 kg of existing stocks will be available on January 1, 2008. 
Based on these calculated figures and the new allocation approach
described in this Section, and after making reductions for carry-over
amounts as explained in Section V.D.4. of this preamble, EPA proposes to
allocate critical use allowances (CUAs) permitting 3,640,508 kg of new
methyl bromide production and import for critical uses in 2008, and to
allow sale of 1,715,438 kg from existing stocks for critical uses by
allocating an equivalent number of critical stock allowances (CSAs). 
EPA seeks comment on the amount of CUAs and CSAs that the Agency is
proposing to distribute in 2008.  EPA also seeks comment on the new
allocation approach that the Agency is proposing to use in 2008 and
beyond, as described below in this Section.

	EPA’s proposed allocation amounts will drawdown existing stockpiles
faster than required by the Parties.  This is consistent with Decision
Ex. 1/3(5), which EPA has interpreted “as meaning that the U.S. should
not authorize critical use exemptions without including provisions
addressing drawdown from stocks for critical uses” (69 FR 76987). 
Furthermore, as 2008 will be the fourth year of the CUE program, the
utility of existing stockpiles to ease the transition to alternatives
for entities that decide not to participate in the CUE process has
diminished.  Using existing stocks for critical uses also has
stratospheric ozone protection benefits, because it eliminates the need
for extra production of new methyl bromide to meet those needs.  These
are some of the reasons that EPA is proposing a new analytical approach
for drawing down existing stockpiles at a responsible rate.

In this action, EPA is proposing a new allocation approach for 2008 and
beyond.  EPA proposes that in 2008 and in each year thereafter, when
appropriate and feasible, EPA will allocate a number of CSAs that is
equal to the number of kilograms of available stocks on January 1 of the
year in question, as calculated by EPA using the formula described in
Section V.D.2. of this preamble. As in past years, EPA intends to
allocate a total number of CUAs, such that the total number of CUAs and
CSAs is not greater than the total critical use amount authorized by the
Parties for the year in question.  To account for carry-over amounts of
methyl bromide, amounts for research purposes, or for other appropriate
reasons, including updated information on alternatives, EPA may allocate
a total number of CUAs and CSAs that is less than the total critical use
amount authorized by the Parties for the year in question.  As in
previous CUE rules, if EPA does allow less than the total amount
authorized by the Parties, the Agency will propose and seek comment on
the reasons for, and amounts of, each reduction before finalizing any
such reductions.

	EPA recognizes that in the future, the Agency could estimate, using the
formula described in Section V.D.2. of this preamble, that the amount of
available stocks at the beginning of a future year is less than the
difference between the total critical use amount authorized by the
Parties and the amount of new production and imports authorized by the
Parties for the year in question.  This scenario can be described with
the following inequality: Available Stocks < (Total CUE Amount
Authorized – New Production and Imports Authorized).   If that
scenario arises, EPA proposes to allow the maximum amount of new
production and imports authorized by the Parties, minus any reductions
as described below.  EPA would also allow critical users to access a
limited amount of existing stocks by allocating a number of CSAs equal
to the difference between the total CUE amount authorized by the Parties
and the amount of new production and imports authorized for the year in
question (CSA = Total CUE Amount Authorized – New Production and
Imports Authorized), again minus any reductions as discussed here.  To
account for carry-over amounts of methyl bromide, amounts for research
purposes, or for other appropriate reasons, including updated
information on alternatives, EPA could allocate a total number of CUAs
and CSAs that is less than the total critical use amount authorized by
the Parties for the year in question.  As in previous CUE rules, if EPA
does allow less than the total amount authorized by the Parties, the
Agency will propose and seek comment on the reasons for, and amounts of,
each reduction before finalizing any such reductions.

	EPA recognizes that in the future the Agency could estimate, using the
formula described in Section V.D.2. of this preamble, that the amount of
available stocks at the beginning of a future year is greater than the
total critical use amount authorized by the Parties for the year in
question.  This scenario can be described with the following inequality:
Available Stocks > Total CUE Amount Authorized.  In that somewhat
unlikely scenario, EPA proposes to allocate a number of CSAs that is
equivalent to the total CUE amount authorized by the Parties for the
year in question.  However, EPA could still make reductions, such as for
amounts of carry-over CUE material.  Therefore, in the situation
described by the above inequality, EPA would not allocate any CUAs for
the year in question, because the amount of existing stocks would be
large enough to provide critical use material for the year in question
with an adequate amount of available stocks remaining to allow suppliers
to responsibly manage their existing pre-phaseout stockpiles.

	EPA recognizes that future consensus decisions of the Parties have the
potential to influence the approach that EPA takes in the final 2008 CUE
Rule.  For example, EPA anticipates that that at the 19th Meeting of the
Parties in September 2007, the Parties may discuss the future when it is
likely that there will be no more, or very little, pre-phaseout
inventory remaining.  At this point in time EPA is not proposing
specific approaches that the Agency might take when pre-phaseout
inventories are gone.  EPA is, however, seeking advance comment on
approaches that the Agency might consider when very little or no
pre-phaseout inventory remains.

V.D.4. Treatment of Carry-Over Material

	As described in the December 23, 2004 Framework Rule (69 FR 76997), EPA
is not permitting entities to build stocks of methyl bromide produced or
imported under the critical use exemption.  Under the current
regulations, quantities of methyl bromide produced, imported, exported,
or sold to end-users under the critical use exemption in a calendar year
must be reported to EPA the following year.  These reporting
requirements appear at Sections 82.13(f)(3), 82.13(g)(4)  82.13(h)(1),
82.13(bb)(2 ), and 82.13(cc)(2).  EPA uses the reported information to
calculate the amount of methyl bromide produced or imported under the
critical use exemption, but not exported or sold to end-users in that
year.  An amount equivalent to this “carry-over,” whether pre-plant
or post-harvest, is then deducted from the total level of allowable new
production and import in the year following the year of the data report.
 For example, the amount of carry-over from 2005, which was reported in
2006, was deducted from the allowable amount of production or import for
critical uses in 2007.

In 2007, 53 entities reported information to EPA under the reporting
requirements at 40 CFR 82.13 about critical use methyl bromide
production, imports, exports, sales and/or inventory holdings in 2006. 
6,923,926 kg of critical use methyl bromide was acquired through
production or import in 2006.  The information reported to EPA indicates
that 6,384,493 kg of critical use methyl bromide was exported or sold to
end-users in 2006.  EPA calculates that the carry-over amount at the end
of 2006 was 539,433 kg, which is the difference between the reported
amount of critical use methyl bromide acquired in 2006 and the reported
amount of exports or sales of that material to end users in 2006
(6,923,926 kg – 6,384,493 kg = 539,433 kg).  EPA’s calculation of
the amount of carry-over at the end of 2006 is consistent with the
method used in the final 2007 CUE Rule, and with the method agreed to by
the Parties in Decision XVI/6, which established the Accounting
Framework for critical use methyl bromide, for calculating column L of
the U.S. the Accounting Framework.  The 2006 U.S. Accounting Framework
is available in the public docket for this rulemaking.  EPA seeks
comment on its method for calculating the amount of carry-over critical
use material at the end of each year.  EPA also seeks comment on ways to
improve the completeness of data reporting by affected companies.  It is
important for stakeholders to recognize that the process for calculating
the amount of carry-over CUE material each year relies on sales to
end-user data reported to EPA by distributors and applicators.

For 2008, EPA is proposing to reduce the total level of new production
and import for critical uses by 539,428 kg to reflect the total level of
carry-over material available at the end of 2006.  As described in the
Framework Rule, after applying this reduction to the total volumes of
allowable new production or import, EPA is pro-rating critical use
allowances (CUAs) to each company based on their 1991 baseline market
share.  In an endeavor to address concerns from stakeholders, EPA will
consider comments on its practice of applying the carry-over reduction
to the total quantity of allowable new production and import, and then
pro-rating CUAs to each company based on their 1991 baseline market
share.  Comments suggesting alternative practices should be detailed and
comprehensive; address what changes would be needed to the reporting
requirements; and the degree of burden the alternative practice might
impose.

V.D.5. Amounts for Research Purposes

	Decision XVII/9(7) “request[ed] Parties to endeavor to use stocks,
where available, to meet any demand for methyl bromide for the purposes
of research and development.”  Consistent with that Decision, in the
2007 CUE Rule, EPA reduced the amount of new production and import by
21,702 kilograms, which was the amount needed for research. Consistent
with Decision XVII/9, EPA continued to encourage methyl bromide
suppliers to sell inventory to researchers and encouraged researchers to
purchase inventory.

Decision XVIII/15(1) authorizes “the production and consumption of
[methyl bromide] necessary to satisfy laboratory and analytical critical
uses.”  Paragraph 2 of that decision states that methyl bromide
produced under the exemption for laboratory and analytical uses may be
used as a reference or standard; in laboratory toxicology studies; to
compare the efficacy of methyl bromide and its alternatives inside a
laboratory; and as a laboratory agent which is destroyed in a chemical
reaction in the manner of feedstock.  In a separate notice-and-comment
rulemaking titled the “Global Essential Laboratory and Analytical Use
Exemption,” EPA is proposing to implement the exemption authorized in
Decision XVIII/15.  More information about that rulemaking process is
available on the docket for that rule (EPA-HQ-OAR-2007-0384). 

Decision XVIII/15 distinguishes between laboratory and analytical uses
and field trial uses.  In this proposed action, EPA is also making that
distinction, and using the phrase “field trial purposes” where it
had used the phrase “research purposes” in previous CUE rules.  A
common example of a field trial use of methyl bromide is an experiment
that requires methyl bromide as a standard control treatment with which
to compare the trial alternatives’ results.  Field trial uses of
methyl bromide can take place indoors or outdoors in a variety of
critical use sectors.   Table I in this preamble lists the sectors that
EPA is proposing be allowed to obtain critical use methyl bromide for
field trial purposes.

In this action, EPA is proposing to allow sale of 15,491 kg of existing
stocks for field trial research purposes in 2008 to account for the
amount authorized for those purposes.  EPA proposes to allow methyl
bromide sale from stocks for exempted field trial purposes by expending
CSAs.  This proposal is consistent with EPA’s treatment of research
needs in the Final 2007 CUE Rule.  An explanation of what amounts of
methyl bromide and of what sectors qualify for field trial purposes can
be found in Section V.C. of this preamble.  If EPA adopts this proposal
it will continue to encourage methyl bromide suppliers to sell inventory
to researchers and to encourage researchers to purchase inventory for
field trial purposes.  EPA seeks comment on its proposal to issue CSAs
for sale of methyl bromide stocks for exempted field trial purposes.

V.D.6. Methyl Bromide Alternatives 

	In the 2006 CUE Rule (71 FR 5985) EPA allocated less methyl bromide for
critical uses than was authorized by the Parties in order to account for
the recent registration of sulfuryl fluoride.  In the 2007 CUE Rule, EPA
explained why a similar reduction was made in that rule: “The report
of the Methyl Bromide Technical Options Committee (MBTOC) indicated that
the MBTOC did not make any reductions in these [post-harvest] use
categories for the uptake of sulfuryl fluoride in 2007 because the
United States Government indicated that it would do so in its domestic
allocation procedures. Therefore, EPA is reducing the total volume of
critical use methyl bromide by 53,703 kilograms to reflect the
continuing transition to sulfuryl fluoride” (75 FR 75390).

	In this action, EPA is not proposing to make a reduction in
post-harvest or pre-plant critical use allowances to account for the
uptake of sulfuryl fluoride, or any other pre-plant or post-harvest
alternatives.  In the 2008 Critical Use Nomination (CUN) the Agency
applied finalized transition rates for all critical use sectors.  The
MBTOC report of September 2006 included reductions in its
recommendations for critical use categories based on the finalized
transition rates in the 2008 CUN.  MBTOC’s recommendations were then
considered in the Parties’ 2008 authorization amounts, as listed in
Decision XVIII/13.  Therefore, finalized transition rates, which account
for the uptake of alternatives, have already been applied for authorized
2008 critical use amounts.  Furthermore, the 2009 CUN, which represents
the most recent analysis and the best available data for methyl bromide
alternatives, does not conclude that transition rates should be
increased for 2008.

As the 2009 CUN reflects, the United States Government (USG) has not
found new information that supports changing the 2008 transition rates
included in the 2008 CUN and applied by MBTOC.  EPA continues to gather
information about methyl bromide alternatives through the CUE
application process, and by other means.  For example, in August 2006,
under the authority of Section 114 of the Clean Air Act, EPA collected
information from a group of millers and fumigators about their
experiences with sulfuryl fluoride and methyl bromide.

EPA seeks comment on its proposal not to make further reductions in 2008
to account for the uptake of methyl bromide alternatives, because the
Agency has already accounted for alternatives’ transition rates.  EPA
continues to support research and adoption of methyl bromide
alternatives, and to request information about the economic and
technical feasibility of all existing and potential alternatives.

E. The Criteria in Decisions IX/6 and Ex. I/4

	Paragraphs 2 and 6 of Decision XVIII/13 request parties to ensure that
the conditions or criteria listed in Decisions Ex. I/4 and IX/6,
paragraph 1, are applied to exempted critical uses for the 2008 control
period.  A discussion of the Agency’s application of the criteria in
paragraph 1 of Decision IX/6 appears in sections V.A., V.C., V.D., and
V.H. of this preamble.  In section V.C. the Agency is soliciting
comments from the public on the technical basis for determining that the
uses listed in this proposed rule meet the criteria of the critical use
exemption (CUE).  The critical use nominations (CUNs) detail how each
proposed critical use meets the criteria listed in paragraph 1 of
Decision IX/6, apart from the criterion located at (b)(ii), as well as
the criteria in paragraphs 5 and 6 of Decision Ex. I/4. 

	The criterion in Decision IX/6(1)(b)(ii), which refers to the use of
available stocks of methyl bromide, is addressed in sections V.D., V.G.,
and V.H. of this preamble.  The Agency has previously provided its
interpretation of the criterion in Decision IX/6(1)(a)(i) regarding the
presence of significant market disruption in the absence of an
exemption, and EPA refers readers to the 2006 CUE final rule (71 FR
5989) as well as to the memo on the docket titled “Development of 2003
Nomination for a Critical Use Exemption for Methyl Bromide for the
United States of America” for further elaboration.

	The remaining considerations, including the lack of available
technically and economically feasible alternatives under the
circumstance of the nomination; efforts to minimize use and emissions of
methyl bromide where technically and economically feasible; the
development of research and transition plans; and the requests in
Decision Ex. I/4(5) that Parties consider and implement MBTOC
recommendations, where feasible, on reductions in the critical use of
methyl bromide and in paragraph 6 for Parties that submit critical use
nominations to include information on the methodology they use to
determine economic feasibility, are all addressed in the nomination
documents.

	Some of these criteria are evaluated in other documents as well.  For
example, the U.S. has further considered matters regarding the adoption
of alternatives and research into methyl bromide alternatives, criterion
(1)(b)(iii) in Decision IX/6, in the development of the National
Management Strategy (NMS) submitted to the Ozone Secretariat in December
2005 and in on-going consultations with industry.  The NMS addresses all
of the aims specified in Decision Ex.I/4(3) to the extent feasible and
is available in the docket for this rulemaking.

F.   Emissions Minimization

	EPA notes for the regulated community the reference to emission
minimization techniques in paragraph 8 of Decision XVIII/13, which
states that Parties shall request critical users to employ “emission
minimization techniques such as virtually impermeable films, barrier
film technologies, deep shank injection and/or other techniques that
promote environmental protection, whenever technically and economically
feasible.”  In addition, EPA understands that research is being
conducted on the potential to reduce rates and emissions using newly
available high-barrier films and that these studies show promising
results.  Users of methyl bromide should make every effort to decrease
overall emissions of methyl bromide by implementing measures such as the
ones listed above, to the extent consistent with state and local laws
and regulations.  The Agency encourages researchers and users who are
successfully utilizing such techniques to inform EPA of their
experiences as part of their comments on this proposed rule and to
provide such information with their critical use applications.  In
addition, the Agency welcomes comments on the implementation of emission
minimization techniques and whether and how further emission
minimization could be achieved.

F.  Critical Use Allowance Allocations

	EPA is proposing to allow limited amounts of new production or import
of methyl bromide for critical uses for 2008 up to the amount of
3,640,508 kg (14.3% of baseline) as shown in Table II below.  EPA is
seeking comment on the total levels of exempted new production or import
for pre-plant and post-harvest critical uses in 2008.  Each critical use
allowance (CUA) is equivalent to 1 kg of critical use methyl bromide. 
These allowances expire at the end of the control period and, as
explained in the Framework Rule, are not bankable from one year to the
next.  This proposal for allocating the following number of pre-plant
and post-harvest CUAs to the entities listed below is subject to the
trading provisions at 40 CFR 82.12, which are discussed in section V.G.
of the preamble to the Framework Rule (69 FR 76982).

Table II: Proposed Allocation of Critical Use Allowances

Company	2008 Critical use allowances for pre-plant uses* (kilograms)
2008 Critical use allowances for post-harvest uses* (kilograms)

Great Lakes Chemical Corp.

A Chemtura Company	1,985,474	226,863

Albemarle Corp.	816,472	93,291

Ameribrom, Inc.	451,199	51,555

TriCal, Inc.	14,049	1,605

Total	3,267,194	373,314

* For production or import of class I, Group VI controlled substance
exclusively for the Pre-Plant or Post-Harvest uses specified in Appendix
L to 40 CFR Part 82. 

	

Paragraph five of Decision XVIII/13 states “that Parties shall
endeavor to license, permit, authorize, or allocate quantities of
critical use methyl bromide as listed in tables A and C of the annex to
the present decision.”  This is similar to language in Decisions Ex.
I/3(4), Ex. II/1(4) and VII/9(4) regarding 2005, 2006 and 2007 critical
uses, respectively.  The language from these Decisions calls on Parties
to endeavor to allocate critical use methyl bromide on a sector basis.

	In establishing the critical use exemption program, the Agency
endeavored to allocate directly on a sector-by-sector basis by analyzing
and proposing this option among others in the August 2004 Framework Rule
notice (69 FR 52366).  EPA solicited comment on both universal and
sector-based allocation of critical use allowances.  The Agency
evaluated the various options based on their economic, environmental,
and practical effects.  After receiving comments, EPA determined in the
final Framework Rule (69 FR 76989) that a lump-sum, or universal,
allocation, modified to include distinct caps for pre-plant and
post-harvest uses, was the most efficient and least burdensome approach
that would achieve the desired environmental results, and that a
sector-specific approach would pose significant administrative and
practical difficulties.  Although the approach adopted in the Framework
Rule does not directly allocate allowances to each category of use, the
Agency anticipates that reliance on market mechanisms will achieve
similar results indirectly.  The TEAP recommendations are based on data
submitted by the U.S. which in turn are based on recent historic use
data in the current methyl bromide market.  In other words, the TEAP
recommendations agreed to by the Parties are based on current use and
the current use patterns take place in a market where all pre-plant and
post-harvest methyl bromide uses compete for a lump sum supply of
critical use material.  Therefore, the Agency believes that under a
system of universal allocations, divided into pre-plant and post-harvest
sectors, the actual critical use will closely follow the sector breakout
listed by the TEAP. These issues were addressed in the previous rule and
EPA is not aware of any factors that would alter the analysis performed
during the development of the Framework Rule.  A summary of the options
analysis conducted by EPA is available in the docket for this
rulemaking.

EPA is not proposing to change the approach adopted in the Framework
Rule for the allocation of CUAs but, in an endeavor to address Decision
XVIII/13(5), EPA will consider additional comment on the Agency’s
allocation of CUAs in the two groupings (pre-plant and post-harvest)
that the Agency has employed in the past.  

H.  Critical Stock Allowance Allocations and Total Volumes of Critical
Use Methyl Bromide

	For the reasons described in Section V.D., EPA is proposing to allocate
critical stock allowances (CSAs) to the entities listed below in Table
III for the 2008 control period in the amount of 1,715,438 kilograms
(kg) (6.7% of US 1991 baseline).  This proposed amount of CSA allowances
is consistent with the proposed approach described in Section V.D.4. and
in a Technical Support Document available on the public docket for this
rulemaking (Docket ID#: EPA-HQ-OAR-2006-1016).

	In 2006 the United States District Court for the District of Columbia
upheld EPA’s treatment of company-specific methyl bromide inventory
information as confidential.  NRDC v. Leavitt, 2006 WL 667327 (D.D.C.
March 14, 2006).  EPA’s allocation of CSAs is based on each
company’s proportionate share of the aggregate inventory.  Therefore,
the documentation regarding company-specific allocation of CSAs is in
the confidential portion of the rulemaking docket and the individual CSA
allocations are not listed in the table below.  EPA will inform the
listed companies of their CSA allocations in a letter following
publication of the final rule.  

Table III: Allocation of Critical Stock Allowances 

Company

	Albemarle	Industrial Fumigation Company

Ameribrom, Inc.	J.C. Ehrlich Co.

Bill Clark Pest Control, Inc.	Pacific Ag

Blair Soil Fumigation	Pest Fog Sales Corp.

Burnside Services, Inc.	Prosource One 

Cardinal Professional Products	Reddick Fumigants

Carolina Eastern, Inc.	Royster-Clark, Inc.

Degesch America, Inc.	Southern State Cooperative, Inc.

Dodson Bros.	Trical Inc.

Great Lakes Chemical Corp.	Trident Agricultural Products

Harvey Fertilizer & Gas	UAP Southeast (NC)

Helena Chemical Co.	UAP Southeast (SC)

Hendrix & Dail	Univar

Hy Yield Bromine	Vanguard Fumigation Co.

	Western Fumigation

TOTAL – 1,715,438  kilograms 

	

	Several companies that receive very small amounts of CSAs from EPA have
contacted the Agency and requested that they be permitted to permanently
retire their allowances.  Some companies receive as few as 3 allowances
which allow the holder to sell up to 3 kilograms of methyl bromide to
critical uses.  Due to the small allocation and because they typically
do not sell critical use methyl bromide, they find the allocation of
CSAs, and associated record-keeping and reporting requirements, to be
unduly burdensome.  In response to this concern, in the Proposed 2007
CUE rule EPA proposed to allow CSA holders, on a voluntary basis, to
permanently relinquish their allowances through written notification to
the Agency.  EPA received no adverse comments.  However, no CSA holders
contacted EPA to take advantage of that voluntary opportunity.  

For purposes of the 2008 CUE rule and beyond, EPA is again allowing CSA
holders, on a voluntary basis, to permanently relinquish their
allowances through written notification to the person indicated in the
“addresses” section of this preamble during the comment period for
this rulemaking.  Such companies would not receive CSA allocations and
would be excluded from future allocations.  All allowances forfeited by
companies through the written notification process will be reallocated
to the remaining companies on a pro-rata basis.  EPA strongly encourages
CSA holders to take advantage of this voluntary opportunity to retire
their CSA allocations in order to reduce their administrative burden.

I.  Stocks of Methyl Bromide

	As discussed above and in the December 23, 2004 Framework Rule, an
approved critical user may obtain access to exempted production and
import of methyl bromide and to limited inventories of pre-phaseout
methyl bromide, the combination of which constitute the supply of
“critical use methyl bromide” intended to meet the needs of agreed
critical uses.  The Framework Rule established provisions governing the
sale of pre-phaseout inventories for critical uses, including the
concept of CSAs and a prohibition on the sale of pre-phaseout
inventories for critical uses in excess of the amount of CSAs held by
the seller.  In the Framework Rule EPA also established trading
provisions that allow critical use allowances (CUAs) to be converted
into CSAs.  Under this proposed action, no significant changes would be
made to those provisions.

	  EPA believes that the new approach proposed in Section V.D. of this
preamble includes important measures that could reduce the risks of
methyl bromide shortages for critical uses.  For example, EPA’s new
approach considers the amount of available stocks, and, as explained in
Section V.D.3. of this preamble, the Agency accordingly makes certain
adjustments to the allowed critical use amounts.  However, the Agency
will continue to closely monitor CUA and CSA data.  Further, as stated
in the final 2006 CUE rule, if an inventory shortage occurs, EPA may
consider various options including, but not limited to, promulgating a
final version of the petition process proposed on October 27, 2005 (70
FR 62030), taking into account comments received on that proposal;
proposing a different administrative mechanism to serve the same
purpose; or authorizing conversion of a limited number of CSAs to CUAs
through a rulemaking, bearing in mind the upper limit on U.S.
production/import for critical uses.  In sections V.D. and V.G. of this
preamble, EPA seeks comment on the amount of critical use methyl bromide
to come from stocks compared to new production and import.

	With regard to information about stocks of methyl bromide, EPA has
requested such information since late 2003.  On December 11, 2003, EPA
initially requested information on the amount of methyl bromide held in
inventory from a group of five methyl bromide producers, importers, and
distributors.  The information submitted in response to that Section 114
request was subsequently requested under the Freedom of Information Act
(“FOIA”). On August 26, 2004, EPA issued a final determination
concerning the confidentiality of that information.  In the
determination, EPA found that aggregated data on the amount of methyl
bromide that had been stockpiled and maintained in inventory in 2002 and
2003 by the group of five businesses (“5-business aggregate”) could
not be withheld pursuant to any FOIA exemption. Part of the basis for
EPA’s determination was that entities’ individual information could
not be deduced from aggregate stockpile data, and therefore, the
5-business aggregate was not confidential.

	Subsequent to the August 26, 2004 determination, two of the businesses
whose information was included in the 5-business aggregate filed suit to
prevent EPA from releasing this information. Ameribrom v. Leavitt et
al., 2:04-cv-04393 (D.N.J.), was filed Sept. 9, 2004 and Hendrix and
Dail v. Leavitt, et al., 04-CV-134 (E.D.N.C.), was filed Sept. 14, 2004.
  However,  both companies subsequently filed for voluntary dismissal.  

	In addition to 2002 and 2003 methyl bromide inventory data for the
group of five entities, EPA has collected similar information for a
broader group of entities for the years 2003, 2004, 2005 and now 2006. 
2003 stockpile data for all entities that held stocks of methyl bromide
for sale or for transfer was collected in accordance with a notice
published on August 25, 2004 (69 FR 52403) titled “Request for
Information on Existing and Available Stocks of Methyl Bromide.”  2004
stockpile data for all methyl bromide producers, importers, exporters,
distributors, and applicators was collected pursuant to a Section 114
request dated April 15, 2005.  2005 and 2006 stockpile data for all
methyl bromide producers, importers, distributors, and applicators was
collected pursuant to a rule published on December 13, 2005 (70 FR
73604) that amended methyl bromide reporting requirements at 40 CFR
82.13 in a manner that enables EPA to calculate the aggregate stockpile
for each calendar year.  On September 7, 2006 the Agency released data
on the aggregate amount of methyl bromide held in inventory at the end
of calendar years 2003, 2004 and 2005.

On April 23, 2007 EPA sent letters to all entities which had reported
holding methyl bromide inventory at the end of 2003, 2004, 2005, or
2006.  The letters confirmed EPA’s intention to treat the aggregate of
the methyl bromide stockpile information reported to the Agency for
calendar year 2006 in the same manner as similar aggregates calculated
from information for the years 2003, 2004, and 2005.  The letters
explained that under EPA regulations at 40 CFR 2.204(d)(2), the
aggregate of the methyl bromide stockpile information for calendar year
2006 reported to the Agency under the requirements at 40 CFR 82.13 is
clearly not eligible for confidential treatment.  This determination was
based in part on the great difficulty (due to the number of submitters)
of ascertaining the size of any individual entity’s methyl bromide
stockpile from the information submitted under the reporting
requirements at 40 CFR 82.13, as aggregated by the Agency.  EPA did not
receive any objections to releasing the aggregate information for 2006
and proceeded to release that information on May 14, 2007.  The
aggregate information for 2003, 2004, 2005, and 2006 is available in the
docket for this rulemaking.  

In this action, EPA is proposing to release the aggregate of methyl
bromide stockpile information reported to the Agency under the reporting
requirements at 40 CFR 82.13 for the end of 2007, and each year
thereafter.  For the reasons given in the April 23, 2007 letters, which
are available in the docket, this aggregate information is clearly not
entitled to confidential treatment.  EPA proposes to release the
aggregate of this stockpile data in future years without first notifying
entities by letter, as EPA has done in the past two years.  EPA seeks
comment on this proposal.  If the Agency does not receive any comments
opposing this proposal, the aggregate of methyl bromide stockpile data
collected under the reporting requirements at 40 CFR 82.13 will not be
treated as confidential information and may be released in future
without further notice.

VI. Statutory and Executive Order Reviews

A.  Executive Order No. 12866: Regulatory Planning and Review

	Under Executive Order (EO) 12866   SEQ CHAPTER \h \r 1 (58 FR 51735,
October 4, 1993), this action proposes a "significant regulatory
action.”   SEQ CHAPTER \h \r 1  This action is likely to result in a
rule that may raise novel legal or policy issues.  Accordingly, EPA
submitted this action to the Office of Management and Budget (OMB) for
review under EO 12866 and any changes made in response to OMB
recommendations have been documented in the docket for this action.

B.  Paperwork Reduction Act

	  SEQ CHAPTER \h \r 1  This proposed action does not impose any new
information collection burden.  The Office of Management and Budget
(OMB) has previously approved the information collection requirements
contained in the existing regulations at 40 CFR Part 82 under the
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and
has assigned OMB control number 2060-0564, and EPA ICR numbers 2179.02
and 2179.03.   A copy of the OMB approved Information Collection Request
(ICR) may be obtained from Susan Auby, Collection Strategies Division;
U.S. Environmental Protection Agency (2822T); 1200 Pennsylvania Ave.,
NW, Washington, DC 20460 or by calling (202) 566-1672. 

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. 

C.  Regulatory Flexibility Act

	The RFA generally requires an agency to prepare a regulatory
flexibility analysis of any rule subject to notice-and-comment
rulemaking requirements under the Administrative Procedure 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
this proposed rule on small entities, small entity is defined as: (1) a
small business that is identified by the North American Industry
Classification System (NAICS) Code in the Table below; (2) a small
governmental jurisdiction that is a government of a city, county, town,
school district or special district with a population of less that
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.

Category	NAICS code	SIC code	NAICS Small business size standard (in
number of employees or millions of dollars)

Agricultural production

Storage Uses

Distributors and Applicators

Producers and Importers	1112- Vegetable and Melon farming

1113- Fruit and Nut Tree Farming

1114- Greenhouse, Nursery, and Floriculture Production

115114- Postharvest Crop activities (except Cotton Ginning)

311211- Flour Milling

311212- Rice Milling

493110- General Warehousing and Storage

493130- Farm Product Warehousing and Storage

115112- Soil Preparation, Planting and Cultivating

325320- Pesticide and Other Agricultural Chemical Manufacturing	0171-
Berry Crops

0172- Grapes

0173- Tree Nuts

0175- Deciduous Tree Fruits (except apple orchards and farms)

0179- Fruit and Tree Nuts, NEC

0181- Ornamental Floriculture and Nursery Products

0831- Forest Nurseries and Gathering of Forest Products

2041- Flour and Other Grain Mill Products

2044- Rice Milling

4221- Farm Product Warehousing and Storage

4225- General Warehousing and Storage

0721- Crop Planting, Cultivation, and Protection

2879- Pesticides and Agricultural Chemicals, NEC	$0.75 million

$6 million

$21.5 million

$6 million

500 employees

	Agricultural producers of minor crops and entities that store
agricultural commodities are categories of affected entities that
contain small entities.  This proposed rule will only affect entities
that applied to EPA for a de-regulatory exemption.  In most cases, EPA
received aggregated requests for exemptions from industry consortia.  On
the exemption application, EPA asked consortia to describe the number
and size distribution of entities their application covered.  EPA
estimated that 3,218 entities petitioned EPA for an exemption for the
2005 control period.  EPA received requests from a comparable number of
entities for the 2006 and 2007 control periods.  Since many applicants
did not provide information on the distribution of sizes of entities
covered in their applications, EPA estimated that, based on the above
definition, between one-fourth and one-third of the entities may be
small businesses.  In addition, other categories of affected entities do
not contain small businesses based on the above description.

	After considering the economic impacts of this proposed rule on small
entities, EPA certifies 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- 604).  Thus, an Agency may certify that a rule will not have a
significant economic impact on a substantial number of small entities if
the rule relieves a regulatory burden, or otherwise has a positive
economic effect on all of the small entities subject to the rule.  Since
this rule exempts methyl bromide for approved critical uses after the
phaseout date of January 1, 2005, this is a de-regulatory action which
will confer a benefit to users of methyl bromide.  EPA believes the
estimated de-regulatory value for users of methyl bromide is between $20
million and $30 million annually.  We have therefore concluded that this
proposed rule will relieve regulatory burden for all small entities.

D.  Unfunded Mandates Reform Act

	Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.L.
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.

	This proposed 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.  This action is deregulatory and does
not impose any new requirements on any entities.  Thus, this proposed
rule is not subject to the requirements of sections 202 and 205 of the
UMRA.   Further, EPA has determined that this rule contains no
regulatory requirements that might significantly or uniquely affect
small governments.

E.  Executive Order No. 13132: Federalism

	Executive Order No. 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.”  The phrase “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 proposed 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 No. 13132.  This proposed rule is expected
to primarily affect producers, suppliers, importers and exporters and
users of methyl bromide.  Thus, Executive Order 13132 does not apply to
this proposed rule. 

F. Executive Order No. 13175:  Consultation and Coordination with Indian
Tribal Governments 

	Executive Order No. 13175, entitled “Consultation and Coordination
with Indian Tribal Governments” (65 FR 67249, November 9, 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.”  This proposed rule does not
have tribal implications, as specified in Executive Order No. 13175. 
This proposed rule does not significantly or uniquely affect the
communities of Indian tribal governments.  The proposed rule does not
impose any enforceable duties on communities of Indian tribal
governments.  Thus, Executive Order No. 13175 does not apply to this
proposed rule.

G.  Executive Order No. 13045: Protection of Children from Environmental
Health and Safety Risks

	Executive Order No. 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 Section 5–501 of the Order has the
potential to influence the regulation.  This proposed rule is not
subject to Executive Order 13045 because it does not establish an
environmental standard intended to mitigate health or safety risks.

H.  Executive Order No. 13211: Actions that Significantly Affect Energy
Supply, Distribution, or Use

	This proposed rule is not a “significant energy action” as defined
in Executive Order No. 13211, “Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355
(May 22, 2001)) because it is not likely to have a significant adverse
effect on the supply, distribution, or use of energy.  This proposed
rule does not pertain to any segment of the energy production economy
nor does it regulate any manner of energy use.  Therefore, we have
concluded that this proposed rule is not likely to have any adverse
energy effects.

I.  National Technology Transfer and Advancement Act

	Section 12(d) of the National Technology Transfer and Advancement Act
of 1995 ("NTTAA"), Public Law. No. 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 rulemaking
does not involve technical standards.   Therefore, EPA is not
considering the use of any voluntary consensus standards.

J.  Executive Order 12898:  Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations

Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes
federal executive policy on environmental justice.  Its main provision
directs federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission by
identifying and addressing, as appropriate, disproportionately high and
adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the United States.  

EPA has determined that this proposed rule will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations, because it effects the
level of environmental protection equally for all affected populations
without having any disproportionately high and adverse human health or
environmental effects on any population, including any minority or
low-income population.  Any ozone depletion that results from this
proposed rule will impact all affected populations equally because ozone
depletion is a global environmental problem with environmental and human
effects that are, in general, equally distributed across geographical
regions.

List of Subjects in 40 CFR Part 82

	Environmental protection, Ozone depletion, Chemicals, Exports, Imports.

Dated:  ____________________

______________________________________________

Stephen L. Johnson, Administrator.

For the reasons stated in the preamble, 40 CFR Part 82 is proposed to
be amended as follows:

PART 82- PROTECTION OF STRATOSPHERIC OZONE

1. The authority citation for part 82 continues to read as follows:

Authority: 42 U.S.C. 7414, 7601, 7671-7671q.

2. Section 82.8 is amended by revising the table in paragraph (c)(1) and
paragraph (c)(2) to read as follows:

§ 82.8 Grant of essential use allowances and critical use allowances.

*   *   *   *   *

(c) * * *

(1) * * * 

Company	2008 Critical use allowances for pre-plant uses* (kilograms)
2008 Critical use allowances for post-harvest uses* (kilograms)

Great Lakes Chemical Corp.	1,985,474	226,863

Albemarle Corp.	816,472	93,291

Ameribrom, Inc.	451,199	51,555

TriCal, Inc.	14,049	1,605

Total	3,267,194	373,314

* For production or import of class I, Group VI controlled substance
exclusively for the Pre-Plant or Post-Harvest uses specified in appendix
L to this subpart.

(2) Allocated critical stock allowances granted for specified control
period.  The following companies are allocated critical stock allowances
for 2008 on a pro-rata basis in relation to the inventory held by each.

Company

	Albemarle	Industrial Fumigation Company

Ameribrom, Inc.	J.C. Ehrlich Co.

Bill Clark Pest Control, Inc.	Pacific Ag

Blair Soil Fumigation	Pest Fog Sales Corp.

Burnside Services, Inc.	Prosource One 

Cardinal Professional Products	Reddick Fumigants

Carolina Eastern, Inc.	Royster-Clark, Inc.

Degesch America, Inc.	Southern State Cooperative, Inc.

Dodson Bros.	Trical Inc.

Great Lakes Chemical Corp.	Trident Agricultural Products

Harvey Fertilizer & Gas	UAP Southeast (NC)

Helena Chemical Co.	UAP Southeast (SC)

Hendrix & Dail	Univar

Hy Yield Bromine	Vanguard Fumigation Co.

	Western Fumigation

TOTAL – 1,715,438 kilograms 

	

3. Appendix L to Subpart A is revised to read as follows:

APPENDIX L TO PART 82 SUBPART A – APPROVED CRITICAL USES AND LIMITING
CRITICAL CONDITIONS FOR THOSE USES FOR THE 2008 CONTROL PERIOD

Column A	Column B	Column C

	

Approved Critical Uses	Approved Critical User and Location of Use
Limiting Critical Conditions 

that either exist, or that the approved critical user reasonably expects
could arise without methyl bromide fumigation:

PRE-PLANT USES			

Cucurbits	(a) Michigan growers	Moderate to severe soilborne disease
infestation  

A need for methyl bromide for field trial research purposes

	(b) Southeastern U.S. limited to growing locations in Alabama,
Arkansas, Kentucky, Louisiana, Mississippi, North Carolina, South
Carolina, Tennessee, and Virginia  	Moderate to severe yellow or purple
nutsedge infestation

Moderate to severe soilborne disease infestation 

Moderate to severe root knot nematode infestation

A need for methyl bromide for field trial research purposes

	(c) Georgia growers	Moderate to severe yellow or purple nutsedge
infestation

Moderate to severe soilborne disease infestation 

Moderate to severe root knot nematode infestation

A need for methyl bromide for field trial research purposes

Eggplant	(a) Florida growers	Moderate to severe yellow or purple
nutsedge infestation 

Moderate to severe soilborne disease infestation

Restrictions on alternatives due to karst topographical features and
soils not supporting seepage irrigation

A need for methyl bromide for field trial research purposes

	(b) Georgia growers	Moderate to severe yellow or purple nutsedge
infestation Moderate to severe nematode infestation

Moderate to severe pythium collar, crown and root rot

Moderate to severe southern blight infestation

Restrictions on alternatives due to karst topographical features

A need for methyl bromide for field trial research purposes 

	(c) Michigan growers	Moderate to severe soilborne disease infestation 

A need for methyl bromide for field trial research purposes

Forest Nursery Seedlings	(a) Growers in Alabama, Arkansas, Georgia,
Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina,
Tennessee, Texas, and Virginia 	Moderate to severe yellow or purple
nutsedge infestation 

Moderate to severe soilborne disease infestation

Moderate to severe nematode infestation



	(b) International Paper and its subsidiaries limited to growing
locations in Alabama, Arkansas, Georgia, South Carolina, and Texas 
Moderate to severe yellow or purple nutsedge infestation  Moderate to
severe soilborne disease infestation



	(c) Public (government-owned) seedling nurseries in Illinois,  Indiana,
Kentucky, Maryland, Missouri, New Jersey, Ohio, Pennsylvania, West
Virginia, and Wisconsin	Moderate to severe weed infestation including
purple and yellow nutsedge infestation

Moderate to severe Canada thistle infestation

Moderate to severe nematode infestation

Moderate to severe soilborne disease infestation



	(d) Weyerhaeuser Company and its subsidiaries limited to growing
locations in Alabama, Arkansas, North Carolina, and South Carolina 
Moderate to severe yellow or purple nutsedge infestation 

Moderate to severe soilborne disease infestation

Moderate to severe nematode or worm infestation 

	(e) Weyerhaeuser Company and its subsidiaries limited to growing
locations in Oregon and Washington 	Moderate to severe yellow nutsedge
infestation

Moderate to severe soilborne disease infestation

	(f) Michigan growers	Moderate to severe soilborne disease infestation

Moderate to severe Canada thistle infestation

Moderate to severe nutsedge infestation

Moderate to severe nematode infestation

	(g) Michigan herbaceous perennials growers	Moderate to severe nematode
infestation

Moderate to severe soilborne disease infestation

Moderate to severe  yellow nutsedge and other weed infestation

Orchard Nursery Seedlings	(a) Members of the Western Raspberry Nursery
Consortium limited to growing locations in California and Washington 
Moderate to severe nematode infestation

Presence of medium to heavy clay soils

Prohibition on use of 1,3-dichloropropene products because local
township limits on use of this alternative have been reached

A need for methyl bromide for field trial research purposes

	(b) Members of the California Association of Nursery and Garden Centers
representing Deciduous Tree Fruit Growers	Moderate to severe nematode
infestation

Presence of medium to heavy clay soils

Prohibition on use of 1,3-dichloropropene products because local
township limits on use of this alternative have been reached

A need for methyl bromide for field trial research purposes

	(c) California rose nurseries	Moderate to severe nematode infestation

Prohibition on use of 1,3-dichloropropene products because local
township limits on use of this alternative have been reached

A need for methyl bromide for field trial research purposes

Strawberry Nurseries	(a) California growers	Moderate to severe soilborne
disease infestation

Moderate to severe yellow or purple nutsedge infestation

Moderate to severe nematode infestation

A need for methyl bromide for field trial research purposes

	(b) North Carolina and Tennessee growers	Moderate to severe black root
rot

Moderate to severe root-knot nematode infestation

Moderate to severe yellow and purple nutsedge infestation

A need for methyl bromide for field trial research purposes

Orchard Replant	(a) California stone fruit growers	Moderate to severe
nematode infestation

Moderate to severe soilborne disease  infestation

Replanted (non-virgin) orchard soils to prevent orchard replant disease

Presence of medium to heavy soils

Prohibition on use of 1,3-dichloropropene products because local
township limits on use of this alternative have been reached

	(b) California table and raisin grape growers 	Moderate to severe
nematode infestation

Moderate to severe soilborne disease  infestation

Replanted (non-virgin) orchard soils to prevent orchard replant disease

Medium to heavy soils

Prohibition on use of 1,3-dichloropropene products because local
township limits for this alternative have been reached

	(c) California wine grape growers	Moderate to severe nematode
infestation

Moderate to severe soilborne disease infestation

Replanted (non-virgin) orchard soils to prevent orchard replant disease

Medium to heavy soils

Prohibition on use of 1,3-dichloropropene products because local
township limits for this alternative have been reached

	(d) California walnut growers	Moderate to severe nematode infestation

Moderate to severe soilborne disease infestation

Replanted (non-virgin) orchard soils to prevent orchard replant disease

Medium to heavy soils

Prohibition on use of 1,3-dichloropropene products because local
township limits for this alternative have been reached

	(e) California almond growers	Moderate to severe nematode infestation

Moderate to severe soilborne disease infestation

Replanted (non-virgin) orchard soils to prevent orchard replant disease

Medium to heavy soils

Prohibition on use of 1,3-dichloropropene products because local
township limits for this alternative have been reached

Ornamentals	(a) California growers	Moderate to severe soilborne disease
infestation

Moderate to severe nematode infestation

Prohibition on use of 1,3-dichloropropene products because local
township limits for this alternative have been reached

A need for methyl bromide for field trial research purposes

	(b) Florida growers	Moderate to severe weed infestation

Moderate to severe soilborne disease infestation

Moderate to severe nematode infestation

Restrictions on alternatives due to karst topographical features and
soils not supporting seepage irrigation 

A need for methyl bromide for field trial research purposes

Peppers	(b) Alabama, Arkansas, Kentucky, Louisiana, Mississippi, North
Carolina, South Carolina, Tennessee, and Virginia growers	Moderate to
severe yellow or purple nutsedge infestation Moderate to severe nematode
infestation

Moderate to severe pythium root, collar, crown and root rots

A need for methyl bromide for field trial research purposes

	(c) Florida growers	Moderate to severe yellow or purple nutsedge
infestation

Moderate to severe soilborne disease infestation

Moderate to severe nematode infestation

Restrictions on alternatives due to karst topographical features and
soils not supporting seepage irrigation 

A need for methyl bromide for field trial research purposes

	(d) Georgia growers	Moderate to severe yellow or purple nutsedge
infestation Moderate to severe nematode infestation, or moderate to
severe pythium root and collar rots

Moderate to severe southern blight infestation, crown or root rot

A need for methyl bromide for field trial research purposes

	(e) Michigan growers	Moderate to severe soilborne disease  infestation

A need for methyl bromide for field trial research purposes

Strawberry Fruit	(a) California growers	Moderate to severe black root
rot or crown rot

Moderate to severe yellow or purple nutsedge infestation

Moderate to severe nematode infestation

Prohibition on use of 1,3-dichloropropene products because local
township limits for this alternative have been reached

Time to transition to an alternative

A need for methyl bromide for field trial research purposes

	(b) Florida growers	Moderate to severe yellow or purple nutsedge
infestation

Moderate to severe nematode infestation

Moderate to severe soilborne disease infestation

Carolina geranium or cut-leaf evening primrose infestation

Restrictions on alternatives due to karst topographical features and
soils not supporting seepage irrigation 

a need for methyl bromide for field trial research purposes

	(c) Alabama, Arkansas, Georgia, Illinois, Kentucky, Louisiana,
Maryland, Mississippi, Missouri, New Jersey, North Carolina, Ohio, South
Carolina, Tennessee, and Virginia growers	Moderate to severe yellow or
purple nutsedge infestation

Moderate to severe nematode infestation

Moderate to severe black root and crown rot

A need for methyl bromide for field trial research purposes

Sweet Potato Slips	(a) California growers	Prohibition on use of
1,3-dichloropropene products because local township limits for this
alternative have been reached

Tomatoes	(a) Michigan growers	Moderate to severe soilborne disease
infestation

Moderate to severe fungal pathogen infestation

A need for methyl bromide for field trial research purposes

	(c) Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, 
Mississippi, North Carolina, South Carolina, Tennessee, and Virginia
growers	Moderate to severe yellow or purple nutsedge infestation
Moderate to severe soilborne disease infestation

Moderate to severe nematodes

Restrictions on alternatives due to karst topographical features, and in
Florida, soils not supporting seepage irrigation

A need for methyl bromide for field trial research purposes

POST-HARVEST  USES

Food Processing	(a) Rice millers in all locations in the U.S. who are
members of the USA Rice Millers Association.	Moderate to severe
infestation of beetles, weevils or moths

Older structures that can not be properly sealed to use an alternative
to methyl bromide

Presence of sensitive electronic equipment subject to corrosion

Time to transition to an alternative

	(b) Pet food manufacturing facilities in the U.S. who are active
members of the Pet Food Institute  (For this proposed rule, “pet
food” refers to domestic dog and cat food).  	Moderate to severe
infestation or beetles, moths, or cockroaches

Older structures that can not be properly sealed to use an alternative
to methyl bromide

Presence of sensitive electronic equipment subject to corrosion

Time to transition to an alternatives

	(c) Bakeries in the U.S.	Older structures that can not be properly
sealed to use an alternative to methyl bromide

Presence of sensitive electronic equipment subject to corrosion

Time to transition to an alternative

	(d) Members of the North American Millers’ Association in the U.S.
Moderate to severe beetle infestation

Older structures that can not be properly sealed to use an alternative
to methyl bromide

Presence of sensitive electronic equipment subject to corrosion

Time to transition to an alternative

	(e) Members of the National Pest Management Association associated with
dry commodity structure fumigation (cocoa) and dry commodity fumigation
(processed food, herbs and spices, dried milk and cheese processing
facilities)	Moderate to severe beetle or moth  infestation

Older structures that can not be properly sealed to use an alternative
to methyl bromide

Presence of sensitive electronic equipment subject to corrosion

Time to transition to an alternatives

Commodities	(a) California entities storing walnuts, beans, dried plums,
figs, raisins, dates (in Riverside county only), and pistachios in
California	Rapid fumigation is required to meet a critical market
window, such as during the holiday season, rapid fumigation is required
when a buyer provides short (2 working days or less) notification for a
purchase or there is a short period after harvest in which to fumigate
and there is limited silo availability for using alternatives

A need for methyl bromide for field trial research purposes

Dry Cured Pork Products	(a) Members of the National Country Ham
Association	Moderate to severe red legged ham beetle infestation

Moderate to severe cheese/ham skipper infestation

Moderate to severe dermested beetle infestation

Ham mite infestation

	(b) Members of the American Association of Meat Processors	Moderate to
severe red legged ham beetle infestation

Moderate to severe cheese/ham skipper infestation

Moderate to severe dermested beetle infestation

Ham mite infestation

	(c) Nahunta Pork Center (North Carolina)	Moderate to severe red legged
ham beetle infestation

Moderate to severe cheese/ham skipper infestation

Moderate to severe dermested beetle infestation

Ham mite infestation

	(d) Gwaltney and Smithfield Inc.	Moderate to severe red legged ham
beetle infestation

Moderate to severe cheese/ham skipper infestation

Moderate to severe dermested beetle infestation

Ham mite infestation



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 PAGE   80 

DRAFT – DO NOT QUOTE OR CIRUCLATE

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DRAFT – DO NOT QUOTE OR CIRCULATE

The analysis for the Technical Support Document is complete.  The
information contained in that analysis is CBI.  EPA is producing a
redacted version for the public docket, which it will circulate to the
inter-agency group as soon as possible.

