
[Federal Register: November 4, 2010 (Volume 75, Number 213)]
[Proposed Rules]               
[Page 68043-68091]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04no10-7]                         


[[Page 68043]]

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Part II





Environmental Protection Agency





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40 CFR Part 80



Regulation To Mitigate the Misfueling of Vehicles and Engines With 
Gasoline Containing Greater Than Ten Volume Percent Ethanol and 
Modifications to the Reformulated and Conventional Gasoline Programs; 
Proposed Rule


[[Page 68044]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[EPA-HQ-OAR-2010-0448; FRL-9215-4]
RIN 2060-AQ17

 
Regulation To Mitigate the Misfueling of Vehicles and Engines 
With Gasoline Containing Greater Than Ten Volume Percent Ethanol and 
Modifications to the Reformulated and Conventional Gasoline Programs

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing a regulatory program to help mitigate the 
potential for misfueling of certain engines, vehicles and equipment 
with gasoline containing greater than 10 volume percent (``vol%'') 
ethanol up to 15 vol% ethanol (E15). This proposal is in conjunction 
with the Agency's partial waiver, pursuant to Clean Air Act section 
211(f)(4), which allows for the introduction into commerce of gasoline-
ethanol blends containing up to 15 vol% ethanol for use in model year 
2007 and newer on-highway light-duty motor vehicles. The E15 waiver is 
limited in scope to a portion of the light-duty fleet, and the proposed 
misfueling mitigation program will help avoid the misfueling of all 
other engines, vehicles, and equipment with unapproved fuels. This 
proposed rule would require all E15 gasoline fuel dispensers to have a 
label if a retail station chooses to sell E15 and seeks comment on 
separate labeling requirements for fuel blender pumps and fuel pumps 
that dispense E85. Similar to the prohibition in section 211(f)(1), the 
proposed rule would prohibit the use of gasoline containing greater 
than 10 vol% ethanol in vehicles and engines not covered by the partial 
waiver for E15. In addition, the proposed rule would require product 
transfer documents specifying ethanol content and Reid Vapor Pressure 
(RVP) to accompany the transfer of gasoline blended with ethanol and a 
national survey of retail stations to ensure compliance with the these 
requirements. The proposed rule would also modify the Reformulated 
Gasoline (``RFG'') program by updating the Complex Model to allow fuel 
manufacturers to certify batches of gasoline containing up to 15 vol% 
ethanol.

DATES: Comments must be received on or before January 3, 2011. Under 
the Paperwork Reduction Act, comments on the information collection 
provisions are best assured of full consideration if the Office of 
Management and Budget (OMB) receives a copy of your comments on or 
before December 6, 2010, thirty days after date of publication in the 
Federal Register.
    Hearing: We will hold a public hearing on November 16, 2010 at the 
Millennium Knickerbocker Hotel in Chicago, IL. The hearing will start 
at 10 a.m. local time and continue until everyone has had a chance to 
speak. If you want to testify at the hearing, notify the contact person 
listed under FOR FURTHER INFORMATION CONTACT by November 8, 2010.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2010-0448, by one of the following methods:
     http://www.regulations.gov: Follow the on-line 
instructions for submitting comments.
     E-mail: E15@epa.gov.
     Fax: (202) 566-1741.
     Mail: Air and Radiation Docket, Docket ID No. EPA-HQ-OAR-
2010-0448, Environmental Protection Agency, Mailcode: 6102T, 1200 
Pennsylvania Avenue, NW., Washington, DC 20460. Please include a total 
of two copies.
     Hand Delivery: EPA Docket Center, Public Reading Room, EPA 
West Building, Room 3334, 1301 Constitution Avenue, NW., Washington, DC 
20460. Such deliveries are only accepted during the Docket's normal 
hours of operation, and special arrangements should be made for 
deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2010-0448. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through http://
www.regulations.gov or e-mail. The http://www.regulations.gov Web site 
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 http://www.regulations.gov your e-mail address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses. For additional information about EPA's public 
docket, visit the EPA Docket Center homepage at http://www.epa.gov/
epahome/dockets.htm. For additional instructions on submitting 
comments, go to ``What Should I Consider as I Prepare My Comments for 
EPA?'' in the SUPPLEMENTARY INFORMATION section of this document.
    Docket: All documents in the docket are listed in the http://
www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in http://www.regulations.gov or in hard copy at the Air and Radiation 
Docket, EPA/DC, EPA West, Room 3334, 1301 Constitution Ave., NW., 
Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 
p.m., Monday through Friday, excluding legal holidays. The telephone 
number for the Public Reading Room is (202) 566-1744, and the telephone 
number for the Air Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Julia MacAllister, Office of 
Transportation and Air Quality, Assessment and Standards Division, 
Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 
48105; Telephone number: 734-214-4131; Fax number: 734-214-4816; E-mail 
address: macallister.julia@epa.gov, or Assessment and Standards 
Division Hotline; telephone number (734) 214-4636; E-mail address 
asdinfo@epa.gov.

SUPPLEMENTARY INFORMATION:

Does This Action Apply to Me?

    Entities potentially affected by this action include those involved 
with the production, importation, distribution, marketing, or retailing 
of diesel fuel and production of gasoline. Categories and entities 
affected by this action include:

[[Page 68045]]



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                                                                       NAICS \1\
                             Category                                    codes       SIC \2\ codes       Examples of potentially regulated entities
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Industry..........................................................          324110            2911  Petroleum refineries.
Industry..........................................................          325193            2869  Ethyl alcohol manufacturing.
Industry..........................................................          424710            5171  Petroleum bulk stations and terminals.
Industry..........................................................          424720            5172  Petroleum and petroleum products merchant
                                                                                                     wholesalers.
Industry..........................................................          454319            5989  Other fuel dealers.
Industry..........................................................          447190            5541  Gasoline service stations.
                                                                                                    Marine service stations.
                                                                                                    Truck stops.
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    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be affected by this 
action; however, other types of entities not listed in the table could 
also be affected. To determine whether your entity is affected by this 
action, you should examine the applicability criteria of Parts 79 and 
80 of title 40 of the Code of Federal Regulations. If you have any 
question regarding applicability of this action to a particular entity, 
consult the person in the preceding FOR FURTHER INFORMATION CONTACT 
section.

What should I consider as I prepare my comments for EPA?

    A. Submitting CBI. Do not submit this information to EPA through 
http://www.regulations.gov or e-mail. Clearly mark the information that 
you claim to be CBI. For CBI information on 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 marked as CBI 
will not be disclosed except in accordance with procedures set forth in 
40 CFR Part 2.
    B. 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.
    C. Docket Copying Costs. You may be charged a reasonable fee for 
photocopying docket materials, as provided by 40 CFR Part 2.

Outline of This Preamble

I. Overview
II. Background
    A. Statutory Authority
    B. E15 Waiver Request
    C. Reasons for the Proposed Actions in This Rulemaking
    D. Federalism Implications
III. Misfueling Mitigation Measures
    A. Labeling Requirements
    1. E15 Labels
    a. Information Component
    b. Legal Approval Component
    c. Technical Warning Component
    d. Legal Warning Component
    e. E15 Label Proposal
    2. Additional Fuel Pump Labeling Requirements
    3. Stakeholder Labeling Suggestions
    4. FTC Labeling Proposal
    5. Labeling Requirements and Liability for Misfueling
    B. Product Transfer Document Requirements
    1. PTD Requirements Downstream of the Point of Ethanol Addition
    2. PTD Requirements Up to and Including the Point of Ethanol 
Addition
    3. General PTD Requirements
    C. Retail Fuel Dispenser Label and Fuel Ethanol Content Survey
    D. Program Outreach
    E. What Other Means of Mitigating Misfueling Were Considered?
    F. Cost of Compliance
    1. Labeling Costs
    2. PTD Costs
    3. Survey Costs
    4. Avoided Motor Vehicle and Nonroad Product Repair Costs
    G. Compliance and Enforcement
    1. What are the Prohibited Acts?
    2. What are the Proposed Liability and Penalty Provisions for 
Noncompliance?
    a. Presumptive Liability
    b. Affirmative Defenses for Liable Parties
    c. Penalties for Violations
IV. Other Measures to Ensure Compliance
    A. The 1.0 psi RVP Waiver for E10 Blends
    1. National RVP Survey
    2. RVP and E15 Underground Storage Tank Transition
    B. Credit for RFG Downstream Oxygenate Blending
V. Modification of the Complex Model
    A. Background of RFG Requirements
    B. The Complex Model
VI. Why are we proposing misfueling mitigation measures?
    A. History of Ethanol Use in the U.S.
    B. Chemical and Physical Differences between Ethanol and 
Gasoline
    1. Impact on the A/F Ratio--Combustion Enleanment
    2. Polarity and affinity for water
    3. Material Compatibility
    4. Corrosion
    5. Solvency
    6. Volatility
    C. Model Year 2000 and Older Light-Duty Motor Vehicles
    1. Enleanment
    2. Material Compatibility
    3. Motor Vehicle Population and Anticipated Emissions Impact
    D. Heavy-duty Gasoline Engines and Vehicles
    E. Motorcycles
    F. Nonroad Engines, Vehicles, and Equipment (Nonroad Products)
    1. Introduction
    2. Enleanment
    3. Material Compatibility and Corrosion
    4. Phase Separation and Solvency/Detergency
    G. Model Year 2007 and Newer Light-duty Motor Vehicles
    H. Model Year 2001-2006 Motor Vehicles
    I. Emissions Impact Summary and Conclusions
VII. What is our legal authority for proposing these misfueling 
mitigation measures?
    A. Health and Welfare Concerns of Air Pollution Caused by E15
    B. Impact of E15 Emission Products on Emission Control Systems
    C. Effect of Misfueling Mitigation Measures on the Use of Other 
Fuels or Fuel Additives
VIII. Public Participation
    A. How Do I Submit Comments?
    B. How Should I Submit CBI to the Agency?
    C. Will There Be a Public Hearing?
    D. Comment Period
    E. What Should I Consider as I Prepare My Comments for EPA?
IX. Administrative Requirements

[[Page 68046]]

    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132 (Federalism)
    F. Executive Order 13175
    G. Executive Order 13045: Protection of Children from 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations

I. Overview

    In today's action, the U.S. Environmental Protection Agency (EPA or 
the Agency) is proposing regulations to mitigate the potential for 
misfueling of vehicles and engines with gasoline containing up to 15 
vol% ethanol (E15).\1\ These regulations are being proposed in 
conjunction with today's action by EPA granting of a partial waiver for 
ethanol blends up to 15 vol% ethanol under section 211(f)(4) of the 
Clean Air Act (CAA or the Act). This partial waiver will allow the 
introduction into commerce of E15 for use in 2007 model year (MY) and 
newer light-duty motor vehicles. In partially granting the E15 waiver, 
EPA imposed a number of conditions on the refiners and renewable fuel 
producers subject to the waiver. These conditions are designed to help 
ensure that E15 is introduced into commerce for use in MY2007 and newer 
light-duty motor vehicles and flexible-fueled vehicles, and not for use 
in any other vehicles or engines. Some of the regulatory provisions 
proposed today parallel those conditions and are expected to be a more 
efficient way to help ensure that the conditions of the E15 partial 
waiver decision are met and to minimize in-use emissions increases that 
might result from misfueling vehicles and engines with E15. The 
proposed safeguards would also promote the successful introduction of 
E15 into commerce.
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    \1\ For purposes of this preamble, E15 refers to gasoline-
ethanol blended fuels that contain greater than 10 vol% and no more 
than 15 vol% ethanol content.
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    We are proposing four requirements as part of our misfueling 
mitigation regulations. The first requirement, consistent with the 
partial waiver being granted today, is a prohibition against using E15 
in MY2000 and older motor vehicles, heavy-duty gasoline engines and 
vehicles, on and off-highway motorcycles,\2\ and nonroad engines, 
vehicles, and equipment.\3\ This prohibition is similar in nature to 
the prohibition on producers of fuels and fuel additives under section 
211(f)(1); however, the prohibition in section 211(f)(1) only applies 
to these upstream parties. The prohibitions proposed today would apply 
at the retail level as well as upstream. The conditions on the partial 
waiver and the regulations proposed today are similar in nature and 
have a common goal--ensuring that E15 is used in appropriate motor 
vehicles covered by the partial waiver, and is not used in other motor 
vehicles and engines. Since the Agency is deferring a decision for 
MY2001-2006 light-duty motor vehicles, we are not proposing a 
prohibition with respect to the fuel used in these motor vehicles at 
this time. DOE testing of MY2001-2006 light-duty motor vehicles is 
ongoing and EPA expects to make a waiver determination for these 
vehicles shortly after the results of the DOE testing are available. If 
EPA does not grant an E15 waiver for MY2001-2006 light-duty motor 
vehicles, then we would expect to include the same prohibitions for 
these MY motor vehicles in the final rulemaking.
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    \2\ For purposes of this preamble on and off-highway motorcycles 
are referred to collectively as ``motorcycles.''
    \3\ For purposes of this preamble, nonroad engines, vehicles, 
and equipment are referred to as ``nonroad products.''
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    Second, we are proposing labeling requirements for fuel pumps that 
dispense E15 to effectively inform consumers regarding the appropriate 
fuel to be used in vehicles and engines. Third, EPA proposes that 
product transfer documents (PTDs) from refiners, gasoline terminals, 
and oxygenate blenders specify the ethanol content or approved level of 
ethanol addition, of the fuel being sold to retail stations or 
wholesale purchaser-consumer to ensure that retail stations and 
wholesale purchaser-consumers know the level of ethanol content they 
are buying so that, in turn, the retail pumps can be properly labeled. 
Fourth, EPA proposes a national survey requirement on ethanol producers 
and the blenders of E15 (e.g., refiners, gasoline terminals, oxygenate 
blenders) to ensure that retail station pumps are in fact being labeled 
properly. EPA is seeking comment on including an RVP component to this 
national E15 labeling survey to help ensure that summertime RVP 
requirements are being met throughout the gasoline distribution chain. 
To avoid confusion for consumers when pumps are not labeled, the Agency 
is also seeking comment on requiring the labeling of non-E15 pumps. The 
Agency has used such misfueling mitigation strategies to implement 
several fuel programs over the past thirty years, including the 
unleaded gasoline program, the RFG program, and the diesel sulfur 
program. The Agency believes that the misfueling mitigation measures 
proposed in this rulemaking, coupled with the E15 waiver and a 
substantial consumer education and outreach effort by industry, can be 
an effective strategy to help reduce misfueling and the associated 
emissions impacts while enabling the use of E15 in appropriate 
vehicles.
    The misfueling mitigation program proposed today generally mirrors 
the misfueling conditions in today's partial waiver decision. While the 
waiver provides an opportunity for a fuel or fuel additive manufacturer 
to meet the conditions, the Agency believes that the proposed 
safeguards would provide the most practical method of addressing the 
purposes and satisfying the conditions of today's partial waiver 
decision.
    These misfueling mitigation regulations are proposed under CAA 
section 211(c), based on the projected emission increases that would be 
avoided by deterring the use of E15 in older motor vehicles, heavy-duty 
gasoline engines and vehicles, motorcycles and nonroad products. 
Engineering judgment supported by test data, where available, forms the 
basis for our technical review and conclusions. Our engineering 
assessment described in Section VI identifies a number of emissions 
related concerns with the long-term use of E15 in MY2000 and older 
light-duty motor vehicles, heavy-duty gasoline engines and vehicles, 
motorcycles, and nonroad products. For motor vehicles these concerns 
include the potential for catalyst deterioration or catalyst failure as 
well as material compatibility issues that could lead to extremely 
elevated exhaust and evaporative emissions. For nonroad products and 
for motorcycles the misfueling concerns include not only the potential 
for elevated exhaust and evaporative emissions but also the potential 
for engine failure from overheating. While it is not possible to 
quantify precisely the frequency at which motor vehicles and nonroad 
products might experience these problems with the use of E15, we 
believe that emissions related problems could potentially occur with 
enough frequency that the resulting emission benefits from avoiding 
misfueling would outweigh the relatively low cost imposed by the 
proposed regulations. This would justify the proposed rule,

[[Page 68047]]

even if a very low percentage of vehicle and engines experiences 
problems.
    As described below in Section VI and in the E15 partial waiver 
decision document,\4\ our assessment indicates that manufacturers have 
designed at least MY2007 and newer light-duty motor vehicles to be 
durable for use on gasoline blends up to E15. This conclusion is 
primarily based on the recently completed catalyst durability test 
program conducted by the Department of Energy (DOE) wherein they tested 
19 vehicle models representative of the Tier 2 motor vehicle fleet out 
to their full useful life. The study found that Tier 2 motor vehicles 
continued to meet their emissions standards after operating on E15 for 
full useful life mileage accumulation. Additionally, according to our 
analysis of the DOE test data, for Tier 2 motor vehicles we found no 
statistically significant increases in the emissions of regulated 
pollutants for motor vehicles operating on E15, and no apparent 
material compatibility issues, when compared to vehicles that were 
operated on E0.\5\ These results confirm our engineering assessment 
that MY2007 and newer motor vehicle's emissions should be less 
sensitive to the increased ethanol content in E15. This engineering 
assessment is based on the advances in motor vehicle materials and 
technology in response to in-use experience with E10 and the 
requirement that motor vehicles comply with a series of important new 
EPA emission requirements over the years, e.g., enhanced evaporative 
emission standards and E10 durability testing, supplemental FTP 
emission standards, CAP2000 in-use durability requirements, and the 
Tier 2 motor vehicle standards themselves.
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    \4\ See Partial Grant and Partial Denial of Clean Air Act Waiver 
Application Submitted by Growth Energy to Increase the Allowable 
Ethanol Content of Gasoline to 15 Percent; Decision of the 
Administrator elsewhere in this issue of the Federal Register.
    \5\ See Partial Grant and Partial Denial of Clean Air Act Waiver 
Application Submitted by Growth Energy to Increase the Allowable 
Ethanol Content of Gasoline to 15 Percent; Decision of the 
Administrator elsewhere in this issue of the Federal Register.
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    For MY2001-2006 light-duty motor vehicles, it is currently less 
clear whether they could experience significant emission increases when 
fueled on E15 like MY2000 and older motor vehicles, or continue to 
function properly like the newer 2007 and newer motor vehicles. On the 
one hand we believe that many of the same elements for ethanol 
compatibility of MY2007 and newer light-duty motor vehicles also apply 
to MY2001-2006 light-duty motor vehicles (e.g., enhanced evaporative 
emission standards, SFTP, CAP2000). On the other hand, they were not 
all required to demonstrate evaporative emission system durability on 
E10 or to upgrade their catalyst and emission control systems to the 
extent needed to comply with the Tier 2 standards. Furthermore, 
currently available test data on these model year vehicles is much more 
limited. DOE is in the process of developing relevant data for these 
model year vehicles. Specifically, DOE is conducting catalyst 
durability testing on six motor vehicle models certified to NLEV 
standards and two motor vehicles certified to Tier 1 standards 
scheduled to be completed in November, 2010. Additionally, a study of 
in-use motor vehicles by Rochester Institute of Technology on E20 \6\ 
suggests such motor vehicles may operate acceptably on E20--and by 
interpolation E15. However, the mileage accumulation of RIT test 
vehicles is limited and the study is still ongoing until November 2010. 
This additional information, as well as information gathered through 
comment on this proposal and any final decision on a section 211(f) 
waiver for MY2001-2006 light-duty motor vehicles, will be considered in 
the decisions made for the final rule.
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    \6\ The effect of E20 ethanol fuel on vehicle emissions, B 
Hilton and B Duddy, Center for Integrated Manufacturing Studies, 
Rochester Institute of Technology, June 26, 2009. See Docket ID No. 
EPA-HQ-OAR-2010-0448.
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    In addition to misfueling mitigation measures, today's action also 
proposes slight modifications to the Reformulated Gasoline and 
Antidumping fuels programs to open the way for refiners and importers 
to produce and certify gasoline containing up to 15 vol% ethanol. To 
measure compliance with the RFG and anti-dumping standards, the 
emissions performance of gasoline is calculated using a model, called 
the Complex Model, which predicts the emissions of each regulated 
pollutant based on the measured values of certain gasoline properties. 
For gasoline to be sold in the U.S., it must comply with the RFG and 
Antidumping standards and refiners are required to certify that their 
fuel meets the standards by using the Complex Model. Currently, the 
equations in the model are limited to an oxygen content of no more than 
4.0% by weight in gasoline, which is the maximum possible amount of 
oxygen in E10. EPA is proposing to modify the Complex Model to allow 
fuel manufacturers to certify batches of E15 fuel.
    Finally, EPA proposes to require that Reid Vapor Pressure (RVP) be 
identified on PTDs from fuel refineries to oxygenate blenders for 
conventional gasoline to ensure that EPA summertime RVP requirements 
are met. This is necessary because the waiver announced today is for 
blends that meet the summertime gasoline volatility standards for 
conventional gasoline.\7\ In order to introduce a fuel that meets both 
the Federal summertime RVP standards and contains between 10 and 15 
vol% ethanol, fuel refiners would have to create a fuel or blendstock 
that has approximately 1.0 psi lower RVP than a fuel or blendstock 
intended for E10 due to the interaction between gasoline volatility and 
ethanol when blended. Oxygenate blenders would need to know the RVP of 
a blendstock or have the intended ethanol content of a blendstock be 
specified on the PTD to ensure that they know the correct amount of 
ethanol that should be blended into a fuel. The Agency is not proposing 
to change RFG PTD requirements found at 40 CFR 80.77 since RVP is 
carefully controlled throughout the distribution chain in order to 
comply with summertime RFG VOC emissions performance standards.
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    \7\ See section IV.A. for more information on the 1.0 psi RVP 
waiver.
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II. Background

A. Statutory Authority

    CAA section 211(f)(1) makes it unlawful for any manufacturer of any 
fuel or fuel additive to first introduce into commerce, or to increase 
the concentration in use of, any fuel or fuel additive for use in motor 
vehicles manufactured after model year 1974 unless it is substantially 
similar to any fuel or fuel additive utilized in the certification of 
any model year 1975, or subsequent model year, vehicle or engine under 
section 206 of the Act.
    Section 211(f)(4) of the Act provides that upon application by any 
fuel or fuel additive manufacturer, the Administrator may waive the 
prohibition of section 211(f)(1). A waiver may be granted if the 
Administrator determines that the applicant has established that the 
fuel or fuel additive, and the emission products of such fuel or fuel 
additive, will not cause or contribute to a failure of any emission 
control device or system (over the useful life of the motor vehicle, 
motor vehicle engine, nonroad engine or nonroad vehicle in which such 
device or system is used) to achieve compliance with the emission 
standards to which the vehicle or engine has been certified. In other 
words, the Administrator may grant a waiver for an

[[Page 68048]]

otherwise prohibited fuel or fuel additive if the applicant can 
demonstrate that the fuel or fuel additive will not cause or contribute 
to engines, vehicles or equipment failing to meet their emissions 
standards over their useful life.
    EPA previously issued a ``substantially similar'' interpretive rule 
for unleaded gasoline which allows oxygen content up to 2.7% by weight 
for certain ethers and alcohols.\8\ E10 contains approximately 3.5% 
oxygen by weight, which means E10 is not ``substantially similar'' to 
certification fuel under the current interpretation. As explained at 44 
FR 20777 (April 6, 1979), E10 received a waiver of the substantially 
similar prohibition by operation of law since EPA did not grant or deny 
a waiver request for a fuel containing 90% unleaded gasoline and 10% 
ethyl alcohol within 180 days of receiving that request. This waiver by 
operation of law was based on the then current terms of CAA section 
211(f)(4), which has subsequently been amended.
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    \8\ See 56 FR 5352 (February 11, 1991).
---------------------------------------------------------------------------

    Section 211(c)(1) of the Act allows the Administrator, by 
regulation, to ``control or prohibit the manufacture, introduction into 
commerce, offering for sale, or sale of any fuel or fuel additive for 
use in a motor vehicle, motor vehicle engine, or nonroad engine or 
nonroad vehicle (A) if, in the judgment of the Administrator, any fuel 
or fuel additive or any emission product of such fuel or fuel additive 
causes, or contributes, to air pollution or water pollution (including 
any degradation in the quality of groundwater) that may reasonably be 
anticipated to endanger the public health or welfare, or (B) if 
emission products of such fuel or fuel additive will impair to a 
significant degree the performance of any emission control device or 
system which is in general use, or which the Administrator finds has 
been developed to a point where in a reasonable time it would be in 
general use were such regulation to be promulgated.'' Today's proposed 
misfueling regulations are based on this authority in section 
211(c)(1), as well as our recordkeeping and information collection 
authority under sections 208 and 114.

B. E15 Waiver Request

    On March 6, 2009, Growth Energy and 54 ethanol manufacturers 
submitted an application to EPA for a waiver under section 211(f)(4) of 
the CAA. This application sought a waiver for ethanol-gasoline blends 
of up to 15 vol% ethanol.\9\ On April 21, 2009, EPA published notice of 
the receipt of the application, and, as required by CAA section 
211(f)(4) of the Act, EPA requested public comment on all aspects of 
the waiver application, to assist the Administrator in determining 
whether the statutory basis for granting the waiver request for 
ethanol-gasoline blends containing up to 15 vol% ethanol had been met. 
(See 74 FR 18228).
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    \9\ Since E15 has greater than 2.7 wt% oxygen content, E15 needs 
a waiver under CAA section 211(f)(4).
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    In a separate action today, EPA waived the prohibition in CAA 
section 211(f)(1) to allow introduction into commerce of E15 for use in 
MY2007 and newer light-duty motor vehicles, including passenger cars, 
light-duty trucks and medium duty passenger vehicles (hereafter light-
duty motor vehicles). EPA is deferring a decision concerning MY2001-
2006 light-duty motor vehicles, and has denied the waiver for all other 
motor vehicles.\10\ EPA's partial waiver decision is based on a 
determination that E15 will not cause or contribute to a failure of 
MY2007 and newer light-duty motor vehicles to achieve compliance with 
the emissions standards to which they were certified under section 206 
of the CAA over their useful lives. EPA is still evaluating the effect 
of E15 on MY2001-2006 light-duty motor vehicles to determine whether a 
waiver of CAA section 211(f)(1) is appropriate for use of E15 in those 
motor vehicles. EPA also decided that it could not make such a 
determination and therefore was denying the waiver for all other motor 
vehicles, including MY2000 and older light-duty motor vehicles. EPA 
requests comment and additional information regarding the use of E15 in 
MY 2000 and older motor vehicles.
---------------------------------------------------------------------------

    \10\ See Partial Grant and Partial Denial of Clean Air Act 
Waiver Application Submitted by Growth Energy to Increase the 
Allowable Ethanol Content of Gasoline to 15 Percent; Decision of the 
Administrator elsewhere in this issue of the Federal Register.
---------------------------------------------------------------------------

    EPA issued the partial waiver with several conditions, some of 
which would be fulfilled by the safeguards being proposed today. The 
conditions apply to the upstream parties subject to the waiver 
(refiners, producers of ethanol and oxygenate blenders that introduce 
E15 into commerce), and are designed to ensure that when E15 is 
introduced into commerce, it will only be used in the appropriate 
light-duty motor vehicles. Some of the conditions call for the ethanol 
blenders, fuel manufacturers, and fuel additive manufacturers (ethanol 
producers) to take various actions to control the distribution and use 
of their product so that E15 is only used in approved motor vehicles. 
The partial waiver imposes different conditions on the different 
parties. Ethanol blenders, fuel manufacturers, and ethanol producers 
that introduce E15 into commerce are all responsible for making sure 
that appropriate labeling occurs on fuel pumps to mitigate potential 
misfueling. However, this condition, in particular, may be difficult 
for these parties to satisfy given their limited control over actions 
taken at retail, which, as discussed below, prompted today's proposal 
for fuel pump labels. All three parties are also responsible for 
conducting fuel pump labeling surveys to ensure that pumps are properly 
labeled and that the correct ethanol blends are loaded into the 
appropriate tanks at retail stations. Ethanol blenders and fuel 
manufacturers must also use PTDs to properly document information 
regarding the ethanol blends to help ensure proper blending and 
distribution.
    In June 2010 EPA received a request from ADM to consider, within 
the context of the E15 waiver application, a waiver for E12 for all 
motor vehicles.\11\ As discussed in the E15 waiver decision document, 
EPA concluded that there was insufficient basis to support such a 
waiver for motor vehicles or nonroad products beyond the MY2007 and 
newer model year light-duty motor vehicles for which the E15 waiver was 
being granted.
---------------------------------------------------------------------------

    \11\ Woertz, P.A. Letter to Lisa P. Jackson. 7 June 2010. See 
Docket ID EPA-HQ-OAR-2009-0211.
---------------------------------------------------------------------------

C. Reasons for the Proposed Actions in This Rulemaking

    The proposed rules would directly prohibit or control the 
distribution and use of E15. The rules would apply to parties such as 
retail stations that are not directly subject to the conditions on the 
waiver. Collectively, these provisions would mitigate misfueling and 
maximize the likelihood that E15 is only used in approved motor 
vehicles. This would also promote the successful introduction of E15 
into commerce. The specific provisions are discussed in detail in 
Sections III-V.
    In this action, the Agency is proposing to use its authority to 
help minimize the potential for emissions increases associated with 
misfueling with E15. Importantly, the proposed safeguards would also 
assist the ethanol producers and blenders in carrying out the 
conditions of the waiver. EPA realizes that ethanol blenders, fuel 
manufacturers, and ethanol producers

[[Page 68049]]

may have difficulty satisfying the conditions outlined in the E15 
partial waiver decision, particularly the fuel pump labeling 
requirements. Most retail stations are independently owned and 
operated, which may make it difficult for the ethanol blenders, fuel 
manufacturers, and ethanol producers to ensure that labels are properly 
placed on fuel pumps dispensing E15. Under CAA section 211(f)(4), EPA 
is limited in what kind of conditions it can place on a waiver decision 
and on whom those conditions may be placed. For example, EPA placed the 
partial waiver conditions on the ethanol blenders, fuel manufacturers, 
and ethanol producers, the parties subject to the prohibition in 
section 211(f)(1), and not on the retail stations. This makes it 
difficult to ensure effective or complete pump labeling and misfueling 
mitigation. Without Agency action that requires the provisions proposed 
in today's rulemaking (i.e. fuel pump labeling, PTDs, and a national 
survey), the conditions contained in the E15 partial waiver decision 
would likely make the distribution of E15 impracticable. However, under 
CAA section 211(c), EPA has the authority to adopt appropriate controls 
or prohibitions on the distribution and sale of fuels and fuel 
additives to avoid emissions increases. EPA's proposed use of this 
authority would also assist the ethanol blenders, fuel manufacturers, 
and ethanol producers in carrying out the conditions of the partial 
waiver so the conditions on the E15 partial waiver are properly 
implemented. Today's rulemaking also provides EPA with additional tools 
for regulatory oversight of the ethanol blenders, fuel manufacturers, 
and ethanol producers introducing E15 into commerce.

D. Federalism Implications

    As mentioned in Section II.A, the proposed prohibition regarding 
use of E15 in MY2000 and older vehicles, heavy-duty gasoline engines 
and vehicles, motorcycles, and nonroad engines, vehicles, and equipment 
is based on the authority in section 211(c)(1) of the Act, as well as 
our recordkeeping and information collection authority under sections 
208 and 114. Section 211(c)(4)(A) of the CAA provides that no State or 
political subdivision thereof may prescribe or attempt to enforce ``for 
purposes of motor vehicle emission control'' any control or prohibition 
``respecting any characteristic or component of a fuel or fuel 
additive'' in a motor vehicle or motor vehicle engine if EPA has 
prescribed a control or prohibition applicable to such characteristic 
or component of the fuel or fuel additive under section 211(c)(1). This 
prohibition applies to all States except California, as provided in 
section 211(c)(4)(B). Also, section 211(c)(4)(A) applies only to 
controls or prohibitions respecting any characteristics or components 
of fuels or fuel additives for motor vehicles or motor vehicle engines, 
that is, highway vehicles. Therefore, a State control or prohibition 
would be preempted under section 211(c)(4)(A), only if it is ``for the 
purposes of motor vehicle emission control.'' Further, even if a State 
rule is established for purposes of motor vehicle emission control, it 
will not be preempted under section 211(c)(4)(A) unless it is for the 
same ``characteristic or component of a fuel or fuel additive in a 
motor vehicle or motor vehicle engine'' for which EPA has prescribed a 
control or prohibition under section 211(c)(1)(A). Today's action 
proposes a rule that would limit the ethanol content in fuel used in 
certain vehicles and engines as well as proposes misfueling mitigation 
measures to effectuate that limitation.
    The Agency is not aware of any State rules or laws that would be 
preempted by today's proposed rule if adopted. States have not 
controlled ethanol volumes in gasoline for purposes of motor vehicle 
emission control. Also, our rule would not require States to change 
their existing labels. The rule as proposed would impose no substantial 
direct costs, nor would it have any substantial direct effects on State 
or local governments. EPA requests comments on the issue of preemption 
of State fuel programs.
    Further, EPA consulted with State and local officials early in the 
process of developing the proposed action to permit them to have 
meaningful and timely input into its development. EPA met with members 
of the National Association of Clean Air Agencies (NACAA) to discuss 
the nature of today's proposed rule. Additionally, we provided State 
and local governments an opportunity to provide comment on the 
implementation of misfueling mitigation measures for a partial E15 
waiver in both the RFS2 NPRM (see 74 FR 25016) and the E15 waiver 
request notice (see 74 FR 18228). We received comments from only one 
State on this issue in the RFS2 NPRM, and it supported efforts for 
properly labeling fuel pumps containing gasoline-ethanol blends.

III. Misfueling Mitigation Measures

    As explained above, CAA section 211(c) grants the Agency authority 
to control or prohibit the distribution of a fuel or fuel additive when 
it will significantly impair emission controls or the emission products 
from that fuel will cause or contribute to air pollution that we 
reasonably anticipate may endanger public health or welfare. As more 
fully discussed in Section VI, we are proposing to prohibit use of E15 
in MY2000 and older light-duty motor vehicles, and in all heavy-duty 
gasoline engines and vehicles, motorcycles and nonroad products based 
on the projected increased emissions that would occur from using E15 in 
those motor vehicles and nonroad products. We are also proposing to 
prohibit gasoline retail stations and wholesale purchaser-consumer 
facilities from selling E15 for use in these products if pumps at those 
locations are not properly labeled. Since the Agency is deferring a 
decision for MY2001-2006 light-duty motor vehicles, we are not 
proposing a prohibition for fuel used in these motor vehicles at this 
time. DOE testing of MY2001-2006 light-duty motor vehicles is ongoing 
and EPA expects to make a waiver determination for these vehicles 
shortly after the results of the DOE testing are available. If EPA does 
not grant an E15 waiver for MY2001-2006 light-duty motor vehicles, then 
we would expect to include the same prohibitions for these MY motor 
vehicles in the final rulemaking .\12\
---------------------------------------------------------------------------

    \12\ Even though we are not proposing an actual prohibition for 
motor vehicles MY2001-2006, it is still unlawful to use E15 in these 
motor vehicles until an E15 waiver is granted for these motor 
vehicles.
---------------------------------------------------------------------------

    EPA is proposing a misfueling mitigation strategy to effectuate 
those proposed prohibitions and to more generally limit the use of E15 
to MY2007 and newer light-duty motor vehicles as approved today in the 
E15 partial waiver decision. We believe that there are four important 
components to an effective misfueling mitigation strategy for reducing 
the potential for misfueling with E15. First, effective labeling is a 
key factor. Labeling is needed to inform consumers of the potential 
impacts of using E15 in vehicles and engines not approved for its use, 
to mitigate the potential for intentional and unintentional misfueling 
of these vehicles and engines. Labeling is also done at the point of 
sale where the consumer most likely will be choosing which fuel to use. 
Second, retail stations and wholesale purchaser-consumers need 
assurance regarding the ethanol content of the fuel that they purchase 
so they can direct the fuel to the appropriate storage tank and 
properly label their fuel pumps. The use of proper

[[Page 68050]]

documentation in the form of PTDs has proven to be an effective means 
of both ensuring that retail stations know what fuel they are 
purchasing and as a possible defense for retail stations in cases of 
liability in the event of a violation of EPA standards. Third, national 
labeling and fuel sampling surveys are necessary to ensure that retail 
stations are complying with labeling requirements, ethanol blenders are 
not blending more than the stated amount of ethanol on PTDs, and 
assuring downstream compliance for fuel refiners. The Agency has used 
this general strategy to implement several fuel programs over the past 
thirty years, including the unleaded gasoline program, the RFG program, 
and the diesel sulfur program. EPA solicits comments on all of these 
provisions as more fully described below.
    The fourth component of an effective misfueling mitigation strategy 
is effective public outreach and consumer education. Outreach to 
consumers and stakeholders is critical to mitigate misfueling incidents 
that can result in increased emissions and vehicle or engine damage. 
Consumers will need to be engaged through a variety of media to ensure 
that accurate information is conveyed to the owners and operators of 
vehicles and engines.
    The misfueling mitigation program proposed today generally mirrors 
the misfueling conditions in today's partial waiver decision. While the 
waiver provides an opportunity for a fuel or fuel additive manufacturer 
to meet the conditions, the Agency believes that the proposed the 
measures would provide the most practical method of meeting the 
purposes of and satisfying the conditions of today's partial waiver 
decision.

A. Labeling Requirements

    Today's rule proposes to require that retailers and wholesale 
purchaser-consumers who choose to sell or dispense E15 must label any 
dispensers of this gasoline-ethanol blend. We are also seeking comment 
on requiring that dispensers of other gasoline-ethanol blends that 
contain 10 vol% ethanol or less to be labeled at such time as a retail 
station chooses to dispense E15 to help alleviate any confusion to 
consumers. Additionally, we seek comment on requiring labels for E85 
pumps and blender pumps.
1. E15 Labels
    We are proposing requirements that gasoline pumps dispensing E15 be 
labeled. The label would have to indicate that the fuel contains up to 
15 vol% ethanol--that is, the fuel is a gasoline-ethanol blend that 
contains greater than 10 vol% ethanol but not more than 15 vol% 
ethanol. Retailers and wholesale purchaser-consumers who choose to sell 
E15 would be required to label pumps dispensing E15, clearly indicating 
that the fuel should not be used in MY2000 and older motor vehicles, 
motorcycles, heavy-duty gasoline engines and vehicles, or any nonroad 
products. However, EPA also proposes that the label would be modified 
if the E15 waiver is extended to earlier model year vehicles and/or 
nonroad products.
    Based on the Agency's experience with fuel pump labeling for Ultra-
Low Sulfur Diesel (ULSD) and Low Sulfur Diesel (LSD) (see 40 CFR 
80.570), there are four important elements to an effective label for 
misfueling. The Agency proposes that the language of the E15 label 
would have four components: (1) An information component; (2) a legal 
approval component; (3) a technical warning component; and (4) a legal 
warning component. Together, these four components highlight the 
critical information necessary to inform consumers about the impacts of 
using E15.
a. Information Component
    The first component informs consumers of the maximum ethanol 
content the fuel may contain. For E15, the Agency proposes that the 
information component of the label should contain two aspects, both an 
acronym for the fuel (in this case E15) and a description of what the 
acronym means (in this case informing consumers that the fuel may 
consist of a range of ethanol up to a maximum of 15 vol% ethanol by 
volume). We propose that this component of the label read:

    This fuel contains 15% ethanol maximum

We propose that this label be applied to any fuel dispenser with 
greater than 10% ethanol but not more than 15 vol% ethanol. Thus, in 
the case of any mid-grade fuel that might be blended from E10 and E15, 
it would also be required to have the E15 label.
b. Legal Approval Component
    The second component of the label language would include 
information that informs consumers of what vehicles and engines are 
approved to use E15, mirroring EPA's decisions taken in the waiver 
context. Since EPA granted a partial waiver of E15 limiting its legal 
use to MY2007 and later light-duty motor vehicles, its use is only 
permitted in these motor vehicles. Based on the partial waiver, the 
Agency proposes that this portion of the label read as follows:

Use only in:
    2007 and newer gasoline cars
    2007 and newer light-duty trucks
    Flex-fuel vehicles.

As discussed elsewhere in today's proposal, if EPA decides to include 
more model years in a subsequent waiver decision based on the findings 
of the testing program, then the model year distinction on the label 
would also need to be adjusted accordingly. We anticipate this will 
occur before this rulemaking is finalized, and we will make that 
adjustment in the final rule. Therefore, the proposed language could 
read as follows:

Use only in:
    2001 and newer gasoline cars
    2001 and newer light-duty trucks
    Flex-fuel vehicles.
c. Technical Warning Component
    The third component of the label language would alert consumers 
that use of E15 in other engines, vehicles, and equipment might cause 
damage to these products. Our experience with past labeling provisions 
supports the need for both the legal and technical warning so that 
consumers are informed of the reason for the prohibition. As discussed 
more fully in Section VI, it appears that use of E15 in these 
particular products may not only lead to increased emissions but also 
has the potential, even if limited in nature, to lead to damage of 
motor vehicle and nonroad product components. Without this component to 
the label, consumers may more likely be tempted to misfuel--
particularly if the price in the marketplace for E15 is lower than E10. 
Therefore, EPA proposes the following language: ``This fuel might 
damage other vehicles or engines.''
d. Legal Warning Component
    The fourth component of the label would inform consumers that using 
E15 in a vehicle or engine not approved for E15 use violates Federal 
law. This is similar to the approach used to mitigate the use of LSD in 
2007 and newer on-highway diesel engines. Based on that experience, EPA 
believes that explicitly notifying consumers that E15 is prohibited by 
Federal law for use in MY2000 and older motor vehicles, heavy-duty 
gasoline engines and vehicles, on and off-highway motorcycles, and all 
nonroad products will result in consumers being less likely to misfuel.
    Based on the language currently used on the LSD label (see 40 CFR 
80.570), the Agency proposes that the label read

[[Page 68051]]

as follows: ``Federal law prohibits its use in other vehicles and 
engines.''
    The Agency has traditionally had ``WARNING'' language appear before 
the legal warning component to better draw consumers' attention to the 
prohibition of using a fuel in certain vehicles and engines (e.g. LSD 
in 2007 and newer highway diesel vehicles). After consultation with 
stakeholders, it was suggested that the Agency should both change 
``WARNING'' to ``CAUTION!'' and place this language at the top of the 
label. This would draw consumer attention to the label and help 
mitigate both intentional and unintentional misfueling. Therefore, we 
propose to have the word ``CAUTION!'' appear at the top of the label 
before the information component. The Agency also considered the use of 
the word ``ATTENTION'' instead of ``WARNING'' or ``CAUTION.'' We 
specifically seek comment on using the term ``CAUTION!'' versus 
``WARNING'' or ``ATTENTION''. In addition, the Agency is also 
interested in whether using ``STOP'', with or without including a 
depiction of a stop sign, would be an appropriate way to draw 
consumers' attention to the label. We seek comment on whether there are 
other words that would better convey the message to consumers.
e. E15 Label Proposal
    Taken together, the Agency proposes the following E15 label:
    [GRAPHIC] [TIFF OMITTED] TP04NO10.000
    
    EPA seeks comment on all aspects of the label language. For 
example, we seek comment on whether any additional label language 
should be required or whether any language should be removed. In 
particular, we seek comment on ways to portray the information in ways 
that are the most concise and meaningful to consumers. EPA proposes 
that the pump labels for E15 be required to be placed on pumps that 
will dispense E15 prior to any commercial sale of E15.
    One issue that arose from the labeling provisions of the diesel 
sulfur program was that the diesel sulfur labeling provisions were 
written in a way that allowed flexibility in color and design, causing 
retailers difficulty with coming up with a suitable design that 
satisfied EPA labeling requirements at the least possible cost. To help 
address this issue, stakeholders met with EPA to discuss standardized 
label designs that would both satisfy EPA diesel sulfur requirements 
and make it easier for retail stations to procure labels. Labeling 
templates were designed and made available to retail stations to use. 
Based on this experience, we are proposing more explicit specifications 
for the E15 label, covering not only the content, but also the 
appearance of the E15 pump label.
    In today's rulemaking, we are proposing similar appearance and 
placement requirements for the E15 labels that were required for the 
diesel sulfur program labels. We propose that the titles of the labels 
(e.g., E15) must be 24-point, white, bold Arial font, the ``CAUTION!'' 
text should also be red, uppercase 16-point bold type, the text in the 
labels which describes the ethanol content of the fuel must be 20-point 
type and that all other required language in the labels must be 14-
point black, Arial font. We propose that the word ``prohibits'' be in 
14 point, black, bold, italic, Arial font. All text should be centered 
with the arrangement and spacing of the text consistent with the 
illustration. We further propose that the label be 3.625'' width by 
3.125'' height and that the background for the area which includes 
``CAUTION!'', the title (i.e. ``E15''), and the ethanol content (i.e., 
``15% Ethanol Maximum) shall be 1-inch wide and neon-orange in color, 
except that a rectangular white background large enough to encompass 
``CAUTION!'' shall be superimposed on this neon-orange background. 
While we believe it is important to propose these specific label 
appearance requirements to aid in consumer recognition and avoid 
unnecessary burden on retailers in developing their own designs, we 
also recognize that there is a great deal of variation in the design of 
fuel pumps and dispensers throughout the nation. Consequently, we not 
only seek comment on all visual aspects of our proposed label, but also 
suggest that if changes are deemed necessary, regulated and other 
interested parties work together to provide us with a consensus 
recommendation in their comments, if possible.
    In addition to content and appearance, the placement of the label 
on the pump is also of concern given the limited space available on the 
fuel pump itself. In the diesel sulfur program

[[Page 68052]]

we required that labels must be placed on the vertical surface of each 
pump housing and on each side that has gallon and price meters and that 
labels be on the upper two-thirds of the pump in a location where they 
are clearly visible (see 40 CFR 80.570(d)). We propose the same 
placement requirements for the E15 labels. However, since most States 
require labels for gasoline blended with ethanol and the Federal Trade 
Commission (FTC) requires labels specifying minimum octane levels 
across grades of gasoline, the addition of the proposed E15 label may 
impact placement of other labels required by State or Federal law. 
Furthermore, FTC has proposed a mid-level ethanol gasoline-blend label 
(described below) in addition to its octane label which may further 
confuse consumers and make E15 label placement difficult. The Agency 
seeks comment on the proposed placement of the E15 label in order to 
most effectively mitigate misfueling, while at the same time avoid 
interference with other labels on the pumps.
2. Additional Fuel Pump Labeling Requirements
    In addition to the E15 label proposed above, the Agency is seeking 
comment on three additional fuel pump labels that would provide 
consistent labeling across all gasoline fuel pumps. First, the Agency 
seeks comment on requiring a label on gasoline dispensing fuel pumps 
that are dispensing fuels which contain ethanol in concentrations up to 
10 vol% (``E10 label'').\13\ We further seek comment on whether E10 
labels should be required at a retail station only if and when E15 is 
made available for sale at a particular retail station. Such an E10 
label would have similar appearance and location requirements to the 
E15 label and the required label language would follow a similar form 
to that of the E15 label so as to standardize labels for consumers.
---------------------------------------------------------------------------

    \13\ If the fuel contains no ethanol, it could be labeled as 
such.
---------------------------------------------------------------------------

    The purpose of such a label would be to enhance the effectiveness 
of the E15 label to protect against consumer misfueling and the 
associated emissions impacts. Without such labels, consumers may be 
confused regarding whether an unlabeled pump was appropriate for their 
vehicle or engine, undercutting the effectiveness and confidence in the 
E15 label. This approach is consistent with the labeling requirements 
we used in the diesel sulfur program where we required the use of 
labels specifying which type of diesel fuel (low-sulfur diesel, ultra-
low sulfur diesel, etc.) was being dispensed from each pump dispensing 
diesel fuel.
    However, since increasing the number of labels will increase the 
total cost to retail stations by requiring that all gasoline dispensing 
fuel pumps at a station be labeled, we seek comment on the 
appropriateness of such a requirement. The Agency seeks comment on the 
following E10 label language:

    E10
    (Contains up to 10% Ethanol)
    For use in all gasoline vehicles and engines.

    The Agency also seeks comment on requiring a label on pumps 
distributing E85 fuel. E85 is fuel that contains up to 85 vol% ethanol 
and at least 15 vol% gasoline, used by flex fuel vehicles (FFVs).\14\ 
As we noted in the RFS2 NPRM, fuel retailers expressed concern that if 
E85 were priced low enough to encourage FFV owners to fuel on it more 
frequently, then owners of non-FFVs would also be enticed to misfuel on 
it (see 74 FR 24977). This could cause the vehicles and equipment to 
operate very poorly, increasing emissions, as well as cause potential 
long-term damage and long-term emissions increases. We believe that in 
most cases fuel pump labels warning that the use of E85 in non-flex 
fuel vehicles is illegal, can damage the vehicle, and can void vehicle 
manufacturer warranties may be a sufficient disincentive to mitigate 
intentional misfueling. Non-FFVs and nonroad products were not designed 
for operation on E85 and may experience serious emissions increases, 
operability, and driveability issues, particularly with prolonged use 
(e.g. accelerated catalyst deterioration, fuel system component 
failures, etc.).
---------------------------------------------------------------------------

    \14\ FFVs are vehicles or engines that are designed to run on 
gasoline or gasoline-ethanol blends up to E85.
---------------------------------------------------------------------------

    Such an E85 label would have similar appearance and location 
requirements to the E15 label (discussed above) and the required label 
language would follow a similar form to that of the E15 label. The 
Agency seeks comment on the following E85 label language:

E85
    (Contains up to 85% Ethanol)
    For use in flex-fuel vehicles only.
    WARNING
    Federal law prohibits use in all other vehicles and engines.
    May damage these vehicles and engines.

We request comment on whether the proposed labeling requirements would 
provide sufficient warning to consumers not to refuel non-flex-fuel 
vehicles with E85. Additionally the Agency seeks comment on the label 
language for the E85 label.
    The Agency also seeks comment on requiring labels for so-called 
blender pumps. Blender pumps allow station owners to blend E85 and 
gasoline in their storage tanks to create intermediate gasoline-ethanol 
blends. This allows either station owners or potentially FFV drivers to 
choose which gasoline-ethanol blend they prefer, based on operating 
characteristics and price. During both the RFS2 and E15 waiver request 
comment periods, the Agency received several comments asking us to 
require labeling provisions for blender pumps to address misfueling. 
Similar to E85, consumers may misfuel their non-FFVs and engines on 
ethanol blends greater than 10% (greater than 15% for 2007 and newer 
light-duty motor vehicles) due to possible price differences between 
intermediate ethanol blends and gasoline. Non-FFVs and nonroad products 
were not designed for operation on such high levels of ethanol and may 
experience serious emission, operability, and driveability issues, 
particularly with prolonged use (e.g. accelerated catalyst 
deterioration, fuel system component failures, etc.).
    Such a blender pump label would have similar appearance and 
location requirements to the E15 label (discussed above) and the 
required label language would follow a similar form to that of the E15 
label. The Agency seeks comment on the following two blender pump label 
language options. The first option's language addresses a situation 
where a vehicle operator can ``dial'' their own gasoline-ethanol blend 
level.

E15-E85
    (Contains between 15% and 85% ethanol)
    For use in flex-fuel vehicles.
    WARNING
    Federal law prohibits use in all other vehicles and engines.
    May damage these vehicles.

    The second option's language is to provide for a specific blend of 
higher than 15 vol% ethanol content within this range, in which case 
the station owner would replace the option 1's language with the 
specific value. The language for option 2 would be as follows:

EXX
    (Contains up to XX% Ethanol)
    For use in flex-fuel vehicles.
    WARNING
    Federal law prohibits use in all other vehicles and engines
    May damage these vehicles and engines.

On this label, ``XX'' is the exact maximum ethanol content a fuel 
dispensed from a particular blender

[[Page 68053]]

pump setting is expected to dispense that is greater than 15 vol% 
ethanol.
    The blender pump labels would not need to specify blends containing 
between 10 and 15% ethanol because any such fuel pumps would be 
required to display the E15 label. However, since a blender pump may 
dispense several intermediate ethanol blends (e.g. E20, E30, E40, 
etc.), the label should specify a range of ethanol content from E15 
through E85. Therefore, under this second option the blender pump would 
have multiple labels for each of the blends that the pump dispenses.
3. Stakeholder Labeling Suggestions
    In anticipation of this proposal, EPA met with several stakeholders 
to discuss the potential label language used for the E15 label 
language. To date, the Agency has received label language suggestions 
from Growth Energy.\15\ AllSAFE and the American Petroleum Institute 
provided EPA with their public comments to the FTC labeling 
proposal.\16\ Copies of these labeling recommendations may be viewed in 
the docket.\17\ We have considered the suggestions in these comments 
for our proposal, but nevertheless seek comment on whether and if so 
how to modify our label proposals based on these and other suggestions.
---------------------------------------------------------------------------

    \15\ Buis, T. Letter to Karl Simon. 4 April 2010. See Docket ID 
No. EPA-HQ-OAR-2010-0448.
    \16\ See Docket ID No. EPA-HQ-OAR-2010-0448.
    \17\ Federal Trade Commission, `` 335; FTC File No. 
R811005; 16 CFR Part 306: The Federal Trade Commission Rule For 
Automotive Fuel Ratings, Certification and Posting: Notice of 
Proposed Rulemaking and Request for Comments.'' September 2010. 
Available at http://www.ftc.gov/os/comments/fuelratingnprm/
index.shtm.
---------------------------------------------------------------------------

4. FTC Labeling Proposal
    On February 26, 2010, the Federal Trade Commission (FTC) issued a 
proposed rulemaking that proposes explicit requirements for gasoline-
ethanol blends that contain more than 10 vol% ethanol and less than 70 
vol% ethanol (``Mid-Level Ethanol blends'') (see 75 FR 12470). Since 
the FTC labeling proposal did not contemplate the granting of a waiver 
for E15, it would have to be modified to be consistent with our recent 
E15 partial waiver decision. In addition, as discussed above, we 
believe it is important that the label contain certain components and 
language necessary to both inform and warn the consumer that are not 
fully captured in the FTC labels.
    Therefore, EPA is working with FTC to develop coordinated labeling 
requirements and seeks comment on how best to achieve this outcome. 
Preferably, one label would be developed that meets EPA and FTC 
labeling requirements, since imposing separate labeling requirements 
may confuse consumers and would ultimately limit the effectiveness of 
labeling to mitigate misfueling. Requiring two separate labels would 
also create issues concerning the placement of the E15 label and may 
impose an unnecessary burden on retail stations. Finally, we also 
believe that to ensure the effectiveness of all gasoline pump labels, 
it is important that they be of similar type and format (i.e. those for 
E10, E15, E85, and blender pumps).
5. Labeling Requirements and Liability for Misfueling
    It is important to note that compliance with the labeling 
requirements specified in this rule does not protect responsible 
parties from liability for misfueling. Today's regulations not only 
impose labeling requirements but also a prohibition of the sale or 
offer for sale of E15 for use in unapproved engines, vehicles, and 
equipment (see section III.G below). Compliance with the labeling 
requirement does not ensure that the responsible parties have not made 
prohibited sales. In addition, our regulations do not address issues of 
common law or contract liability between private parties.

B. Product Transfer Document Requirements

    Product transfer documents (PTDs) are customarily generated and 
used in the course of business and are familiar to parties who transfer 
or receive blendstocks, base gasoline for oxygenate blending and 
oxygenated gasoline. In addition, EPA has historically put in place 
certain requirements for PTDs for reformulated gasoline blends and 
blendstocks to help ensure downstream compliance with our fuel 
standards. The introduction of E15 into the marketplace results in the 
need for additional information on the PTDs that accompany the transfer 
of gasoline and the base gasoline/gasoline blendstocks used for 
oxygenate blending, both for reformulated gasoline and conventional 
gasoline. The type of additional information needed is different 
upstream versus downstream of the point of ethanol addition. We believe 
that the additions discussed below to existing PTDs are necessary to 
minimize misfueling, to help ensure downstream compliance with our fuel 
standards, and thereby to support the introduction of E15.
1. PTD Requirements Downstream of the Point of Ethanol Addition
    Downstream of the point where ethanol blending takes place, 
information on the maximum ethanol concentration in the ethanol blend 
is needed to help ensure that fuel shipments are delivered into the 
appropriate storage tanks at retail and fleet fueling facilities.\18\ 
Information on the maximum Reid Vapor Pressure (RVP) of E0, E10 and E15 
blends is needed on PTDs to help ensure that the fuel is compliant with 
the applicable summertime RVP requirements. The RVP reported on the PTD 
for E10 and E15 blends could be based on the intended RVP that the 
manufacturer of the blendstock for oxygenate blending designed for as 
identified on the PTD for the blendstock.\19\ Therefore, RVP testing 
after the addition of ethanol would not be necessary to provide the 
information on RVP that would be required on the PTD.
---------------------------------------------------------------------------

    \18\ Currently, ethanol blending typically takes place at the 
terminal. Evaluations are underway which may facilitate the shipment 
of ethanol-gasoline blends by pipeline to terminals. Hence, although 
the proposed PTD requirements regarding maximum ethanol content 
currently would typically apply to parties downstream of the 
terminal, parties upstream of the terminal may need to include 
information on maximum ethanol concentration on product PTDs in the 
future.
    \19\ This is dependent on the proper amount of ethanol being 
added to the blendstock, and on the product being segregated from 
all products with a different RVP.
---------------------------------------------------------------------------

    We are proposing that the following statements would be included on 
the PTDs for the various fuel blends:

For E0: ``E0: Contains no ethanol.
    The RVP does not exceed [Fill in appropriate value]''
For E10: ``E10: Contains between 9 and 10 volume percent ethanol
    The RVP does not exceed [Fill in appropriate value]''
For E15: ``E15: Contains up to 15 volume percent ethanol
    The RVP does not exceed [Fill in appropriate value]''
For EXX: ``EXX--Contains up to XX% ethanol.

    ``EXX'' refers to fuels blends above E15 up to and including E85 
and fuel blends below 9 volume percent ethanol. The maximum potential 
ethanol content of the fuel would be required to be specified on the 
PTD in the place of ``XX''.
    We request comment on whether additional language on E10 PTDs is 
needed to inform parties that a blend containing between 9 and 10 
volume percent ethanol which benefits from the 1 psi RVP waiver may not 
be commingled with an E0 or E15 blend.\20\ We request comment on 
whether any other additional information should be

[[Page 68054]]

provided on the PTDs for ethanol fuel blends.
---------------------------------------------------------------------------

    \20\ Such as, ``Designed for the special RVP provisions for 
ethanol blends. Do not blend with gasoline containing less than 9 
vol% ethanol or E15.''
---------------------------------------------------------------------------

2. PTD Requirements Up to and Including the Point of Ethanol Addition
    Upstream of the point where E10 and E15 blends are manufactured, 
information is needed on the PTDs for base gasoline or gasoline 
blendstock used for oxygenate blending (BOB) \21\ to facilitate ethanol 
blender compliance with the applicable EPA summertime RVP 
requirements.\22\ This information would need to include the maximum 
potential RVP of the BOB and the maximum ethanol concentration that may 
be added to the BOB.
---------------------------------------------------------------------------

    \21\ For purposes of this discussion, the blendstock or base 
gasoline (BOB) is typically referring to the fungible base gasoline 
produced at a refinery for the specific intention of adding ethanol. 
The fungible gasoline produced for this purpose is subject to all of 
the 40 CFR parts 79 and 80 regulations applicable to gasoline. 
However, under 40 CFR 80.101(d)(4), a refiner with direct control of 
the ethanol addition to the actual gasoline produced by that refiner 
may consider the final fuel including the ethanol when complying 
with part 79 and 80 regulations.
    \22\ See section IV of this preamble for a discussion of the RVP 
requirements for E15 and E10.
---------------------------------------------------------------------------

    To satisfy these needs, we are proposing that PTDs for BOBs for use 
in the manufacture of ethanol blends that are subject to summertime RVP 
controls include the maximum RVP of the BOB. We are also proposing that 
such PTDs in non-RFG areas indicate what ethanol concentration is 
suitable to be blended with the BOB. The RFG requirements found at 40 
CFR 80.77 already contain requirements that PTDs indicate what 
oxygenate and oxygenate amount are suitable to be blended with the 
reformulated blendstocks for oxygenate blending (RBOBs).
    We are proposing that the following statements would be included on 
the PTDs for BOBs in non-RFG areas:

    ``Suitable for blending with ethanol at a concentration up to 15 
volume % ethanol'' or, in the case of a BOB designed to take 
advantage of the 1psi allowance for E10 in 40 CFR 80.27(d)(2):
    ``Designed for the special RVP provisions for ethanol blends 
that contain between 9 and 10 volume % ethanol''
    ``The RVP of this blendstock/base gasoline for oxygenate 
blending does not exceed [Fill in appropriate value]''

    As we are proposing and seeking comment on blendstock commingling 
prohibitions in addition to those already in place for RFG (see section 
III.D.) we also request comment on whether additional information is 
needed on the PTDs for BOBs to help ensure that these blending 
restrictions are observed. We request comment on whether the following 
language should be added to the PTD for a BOB designed to take 
advantage of the 1psi allowance for E10 in order to help prevent 
downstream violations of the RVP standards: ``The use of this gasoline 
to manufacture a gasoline-ethanol blend with less than 9 vol% ethanol 
or E15 may cause an RVP violation.'' We request comment on whether any 
additional information should be provided on the PTDs for BOBs.
3. General PTD Requirements
    We are proposing that on each occasion when any person transfers 
custody and/or ownership of any gasoline or base gasoline/gasoline 
blendstock used for oxygenate blending, the transferor would be 
required to provide the transferee with an appropriate PTD identifying 
the gasoline/blendstock/base gasoline and its characteristics (as 
defined below), as well as such general information as the names and 
addresses of the transferor and transferee, the volume of product being 
transferred, the location of the product on the date of transfer, and 
specific information described in this preamble. We are proposing that 
all parties would be required to retain PTDs for a period of not less 
than five years and would be required to provide them to EPA upon 
request. Five years is the normal record retention requirement for 40 
CFR part 80 fuels programs, such as the reformulated gasoline (RFG) 
program.
    We are proposing that PTDs would be required to be used by all 
parties in the distribution chain down to the point where the product 
is sold, dispensed, or otherwise made available to the ultimate 
consumer. We are proposing that product codes could be used to convey 
the information required as long as the codes are clearly understood by 
each transferee. However, we believe that product codes alone would not 
be sufficient for transfers to truck carriers, retailers, or wholesale-
purchaser consumers. Hence, we are proposing that the full proposed 
text would need to be included on the PTD for transfers to truck 
carriers, retailers, or wholesale-purchaser consumers.
    Parties would be afforded significant freedom with regard to the 
form PTDs take under this proposal, although we are proposing that the 
PTDs would be required to travel in some manner (paper or 
electronically) with the volume of blendstock or fuel being 
transferred. The addition of the proposed information to PTDs would not 
require any additional testing of fuel composition. Adoption of these 
proposed changes would add a one-time burden to program and implement 
new product codes and statements, as well as a continuing small burden 
associated with using product codes and statements on PTDs. Given this 
and the fact that PTDs are used in the course of business, we believe 
that the proposed new PTD requirements could be readily accommodated by 
industry. The increased burden which would result from the adoption of 
these proposed PTD requirements is detailed in section IX.B. of this 
preamble.

C. Retail Fuel Dispenser Label and Fuel Ethanol Content Survey

    To help mitigate the potential for misfueling, oversight of fuel 
retailer compliance with the proposed E15 labeling requirements and of 
the actual ethanol content of the dispensed fuel in comparison to the 
information on the label is needed. To provide adequate oversight, EPA 
conditioned the E15 partial waiver on a requirement that ethanol 
blenders, ethanol producers, ethanol importers, petroleum refiners, and 
petroleum importers participate in a survey of compliance at fuel 
retail facilities.\23\ The E15 partial waiver decision specified that 
an EPA-approved survey plan is to be in place prior to introduction of 
E15 to the marketplace and that the results of the survey must be 
provided to EPA for use in its enforcement and compliance assurance 
activities.
---------------------------------------------------------------------------

    \23\  See Partial Grant and Partial Denial of Clean Air Act 
Waiver Application Submitted by Growth Energy to Increase the 
Allowable Ethanol Content of Gasoline to 15 Percent; Decision of the 
Administrator elsewhere in this issue of the Federal Register.
---------------------------------------------------------------------------

    Today's notice contains our proposal on requiring a survey as part 
of a misfueling mitigation program. This proposal covers how the 
required survey should be formulated and conducted. As discussed in 
section III.G., we are proposing that the survey could be used to meet 
the periodic sampling and testing elements of a regulated party's 
affirmative defenses to presumptive liability in cases where instances 
of noncompliance with the applicable maximum ethanol content 
specification are discovered. Should EPA finalize the additional 
labeling requirements that we requested comment on in section III.A.2. 
of this proposal, evaluation of retailer compliance with these labeling 
requirements would also be included in the survey. Regardless of 
whether we finalize labeling provisions, testing on the ethanol content 
of the fuel delivered from all non-FFV dispensers would need to be 
included in the survey to help mitigate misfueling.
    The survey requirements that we are proposing are based on an 
existing

[[Page 68055]]

survey of compliance with the EPA labeling requirements for retail 
diesel fuel dispensers, and with the maximum allowable sulfur content 
of the diesel fuel delivered from these dispensers under EPA's ULSD 
program. EPA recently codified the requirements for this diesel fuel 
survey in a direct final rule that became effective on July 12, 
2010.\24\ The reformulated gasoline (RFG) program also utilizes a 
compliance survey program to ensure seasonal RFG area requirements are 
met for predicted emissions performance based on average area fuel 
parameters. Based on the ULSD and RFG programs, we are proposing two 
options for obligated parties to satisfy the survey requirement. Survey 
Option 1 allows individual obligated parties to elect to individually 
survey gasoline and retail stations anywhere their fuel might be sold. 
Survey Option 2 allows obligated parties to form a consortium that 
contracts an independent survey association to conduct a national 
ethanol content and E15 labeling survey.
---------------------------------------------------------------------------

    \24\ Alternative Affirmative Defense Requirements for Ultra-Low 
Sulfur Diesel and Gasoline Benzene Technical Amendment, 75 FR 26121, 
May 11, 2010.
---------------------------------------------------------------------------

    For Survey Option 1, we propose that obligated parties choosing the 
individual survey option must survey labels and ethanol content at 
retail stations wherever their gasoline may be distributed if it may be 
blended as E15. Prior to conducting such a survey a survey plan would 
have to be approved by EPA. We seek comment on all aspects related to 
Survey Option 1.
    For Survey Option 2, we propose that the survey would consist of a 
nationwide program of sampling and testing designed to provide 
oversight of all retail stations that sell gasoline. Details of the 
proposed survey requirements are similar to those included in the ULSD 
and RFG programs. We propose that the survey organization would be 
required to submit survey plans on an annual basis that would be 
applicable from January 1 through December 31. We propose that EPA 
would review the first survey plan within two months of its receipt. We 
propose that the survey organization would be required to submit 
subsequent survey plans to EPA for approval by November 1 of the year 
proceeding the calendar year in which the sampling and testing program 
would be implemented. The Agency also proposes that proof that the 
amount of money necessary has been paid to the surveyor is sent to EPA 
no later than December 15 of the year proceeding the calendar year in 
which the sampling and testing program would be implemented. For the 
first annual survey, we propose that proof of payment be submitted to 
the Agency no later than one month before the sampling and testing 
program would be implemented. We seek comment on the deadlines for both 
the survey plan and proof of payment for the survey for the first 
survey and on subsequent surveys.
    We propose that the sampling and testing program would ensure 
comprehensive geographic coverage nationally representative of gasoline 
sold at retail outlets by providing proportionate coverage of gasoline 
across three sampling strata. These three strata generally refer to: 
(1) Densely populated areas, which include Metropolitan Statistical 
Areas and the reformulated gasoline control areas; (2) transportation 
corridors, which are based on interstate highways outside the densely 
populated areas;\25\ and (3) rural areas, which include all areas not 
included in the previous two strata. These areas would be subdivided 
into clusters, generally based on groupings of counties. The specific 
criteria used for selecting sampling areas for each survey plan would 
be subject to EPA approval. We seek comment on all aspects of the 
proposed elements that a survey plan should include.
---------------------------------------------------------------------------

    \25\ Transportation corridors would include areas immediately 
adjacent to the highways themselves and a swath within several miles 
on each side of the highway. For any given survey, a certain length 
of any specific highway might be deemed appropriate as a sampling 
unit or cluster.
---------------------------------------------------------------------------

    Comment is specifically requested on the criteria which should be 
used to determine the minimum sample size for the survey. The sampling 
and testing program would need to both accurately estimate the 
proportion of retail stations that are non-compliant with E15 labeling 
and ethanol content requirements and provide a credible deterrent to 
deliberate or inadvertent violations of downstream enforcement 
standards. For the ULSD survey program, we require a minimum of 5,250 
samples annually. For a national survey looking at all gasoline retail 
stations, we believe the minimum number of samples needs to be greater 
because there are more than three times the number of retail stations 
that sell gasoline compared with stations that sell diesel. We propose 
that the survey take a minimum of 7,500 samples spread across four 
quarterly surveys. We also propose a sample size equation similar to 
the one used to determine sample sizes for the ULSD survey program (see 
equation in the proposed regulations at 80.1502(b)(4)(v)(A)). This 
equation bases sample size on the proportion of retail stations that 
are non-compliant. We seek comment on both the minimum number of 
samples and the method for determining samples sizes.
    Since initially E15 may be introduced into commerce in a limited 
geographical area, it may not be necessary to carry out the full survey 
or to carry it out nationwide. One way to potentially resolve this 
issue would be to limit the areas required to be surveyed to areas that 
are known to have E15 being distributed. Unfortunately, there are no 
reliable real-time data that show when E15 is first introduced into an 
area and it could take awhile for the proposed annual survey program to 
incorporate these new geographic areas. Additionally, the borders of 
such areas are difficult to define and constantly shift in response to 
market forces. This approach also undermines one of the stated purposes 
of the survey program, namely that the survey program helps deter 
either intentional or unintentional violations by increasing the 
likelihood of violators being randomly caught. If EPA allows only 
certain areas to be surveyed while excluding others, some parties may 
manufacturer, blend, or distribute E15 without properly identifying the 
fuel as E15 or properly labeling the fuel dispenser as dispensing E15. 
By the time the survey program caught up, motor vehicles and nonroad 
products not approved for E15 use may have been misfueled for a long 
time. On the other hand, if there were ways to properly identify areas 
that are distributing E15 real time, then limiting the survey to only 
those areas could considerably reduce the cost of compliance with the 
proposed survey requirements. The Agency seeks comment on ways to 
possibly limit surveys to only those areas that have E15 being 
introduced into commerce.
    Another option to limit survey requirements would be to require a 
national survey, but have a lower minimum sample size that gradually 
increases over time. Since the proposed approach for determining sample 
sizes above 7,500 discussed above is based on the proportion of retail 
stations that are noncompliant with ethanol content and/or E15 labeling 
requirements, if there is very little E15 being introduced into the 
marketplace, the proportion of noncompliant retail stations would be 
small. In this case, 7,500 samples may be substantially higher than the 
number of samples required by the proposed method for determining 
sample sizes. Since this is most likely to occur at the beginning of 
the survey program, the survey program could gradually increase the 
annual minimum sample

[[Page 68056]]

size to reduce the burden to industry. For example, the Agency may only 
require a minimum of 2,000 samples the first full survey year (2012), 
4,000 samples in 2013, 6,000 samples in 2014, and 7,500 samples in 
2015. We seek comment on this gradual minimum sample size approach and 
all other issues related to determining the minimum number of samples 
for a national ethanol content and E15 labeling survey.
    We also are proposing that the independent survey association would 
ship fuel samples on the same day that the sample was collected and 
that the sample be analyzed for ethanol content within 24 hours from 
the time the samples were acquired. Although having such a short 
delivery time for fuel samples to be analyzed may increase costs, this 
time period is both consistent with other fuel survey programs and 
would allow ethanol content and E15 labeling violations found by the 
survey to be corrected quickly to mitigate misfueling. We seek comment 
on the proposed amount of time allowed for samples to be shipped for 
the analysis of ethanol content.
    For both survey options, we require that survey plans would include 
a methodology for determining when the survey samples will be 
collected, the locations of the retail outlets where the samples will 
be collected, the number of samples to be included in the survey, 
procedures that would prevent the advance notification of retail 
stations, and how individual retail stations will be determined for 
sampling. We propose that samples at retail stations be taken from all 
gasoline dispensers and have the samples tested for ethanol content and 
that retail stations be selected randomly with the probability of 
selection proportionate to the volume of gasoline sold at the retail 
outlet. We also propose that ethanol content be measured in accordance 
with a test method that meets the requirement of 40 CFR 80.46(g). We 
seek comment on these requirements for survey plans and whether any 
additional requirements are necessary. We also seek comment on all 
matters related to the national ethanol content and E15 labeling survey 
proposed today.

D. Program Outreach

    Effective outreach to consumers and stakeholders is often essential 
to the successful implementation of environmental protection programs. 
To implement the RFS program, for example, EPA provides training 
seminars for stakeholders and manages dedicated telephone and e-mail 
support lines. Various industry representatives and organizations 
provided program information and coordination to their members and 
customers as well as to facilitate the introduction of new program 
requirements this past July.
    In the case of E15, outreach to consumers and stakeholders may be 
critical to help mitigate misfueling incidents that can result in 
increased emissions or vehicle or engine damage. The potential for E15 
misfueling incidents exists because consumers tend to choose the lowest 
priced fuel, and E15 may cost less than E10 since ethanol currently 
tends to be less expensive than gasoline.
    A recent example of successful outreach to consumers and 
stakeholders is the coordinated work done in support of the ULSD 
program. ULSD was a new fuel with the possibility of consumer 
misfueling that could result in engine damage. With ULSD, the fuel 
industry trade association API took the lead in working with 
stakeholders to establish the Clean Diesel Fuel Alliance (CDFA), a 
collaboration of public and private organizations designed to ensure a 
smooth program transition by providing comprehensive information and 
technical coordination. The organizations represented in the CDFA 
include engine manufacturers, fuel retailers, trucking fleets, DOE and 
EPA. CDFA efforts to educate ULSD users include developing technical 
guidance and educational information, including a Web site (http://
www.clean-diesel.org), as well as serving as a central point of contact 
to address ULSD-related questions.
    The CDFA outreach model could prove beneficial in this case. EPA 
anticipates that all parties that may be involved in bringing higher 
gasoline-ethanol blends to market would participate in a coordinated 
industry-led consumer education and outreach effort. In the context of 
this program, potential key participants include ethanol producers, 
fuel manufacturers, automobile, engine and equipment manufacturers, 
States, non-governmental organizations, parties in the fuel 
distribution system, EPA, DOE, and USDA. Potential education and 
outreach activities a public/private group could undertake include 
serving as a central clearinghouse for technical questions about E15 
and its use, promoting best practices to educate consumers or mitigate 
misfueling instances, and developing educational materials and making 
them available to the public.
    Some stakeholders have also suggested that a Web site be created to 
inform consumers of the potential impacts of E15 on older motor 
vehicles, heavy-duty gasoline engines and vehicles, motorcycles, and 
nonroad products. Stakeholders have further suggested that, if a unique 
misfueling Web site is created, then EPA should require the Web site 
address to be displayed on the E15 label. EPA seeks comment on the 
appropriateness of a unique misfueling Web site and of including such a 
Web site address on the E15 label.

E. What other means of mitigating misfueling were considered?

    EPA believes that the proposed misfueling mitigation approach will 
effectively and sufficiently mitigate misfueling based on our past 
experience. The Agency employed a similar and relevant misfueling 
mitigation program when ULSD was introduced in 2006. Retail stations 
and wholesale purchaser-consumers were required to have fuel dispenser 
labels indicating whether the diesel being dispensed was 500 ppm (low 
sulfur diesel or LSD) or 15 ppm (ULSD). MY2007 and newer on-highway 
diesel vehicles and engines were required to use ULSD and prohibited 
from using LSD. At the beginning of the ULSD program, we were aware of 
several instances where consumers, after checking the labels, had 
difficulty finding ULSD in some areas. Consumers were informed that 
misfueling would result in significant engine damage. We are not aware 
of any significant instances when misfueling occurred during this 
labeling program. This indicates that EPA outreach and information 
provided by the engine manufacturers, Clean Diesel Fuel Alliance, and 
other stakeholders, was effective in educating consumers and mitigating 
misfueling. Additionally, we feel that product transfer document 
requirements and the ULSD survey program were vital in implementing and 
enforcing this fuel transition. Based on the success of the ULSD 
program, we believe that similar requirements for E15 will be 
sufficient and successful.
    Some have argued that the ULSD program example is not applicable in 
this case since the MY2007 and newer on-highway diesel vehicles and 
engines were at risk from misfueling, whereas for E15, it is primarily 
older motor vehicles (i.e., MY2000 and older motor vehicles) that are 
at risk. While EPA believes that the potential for engine repair costs 
applies in both cases, the Agency also believes that similar misfueling 
mitigation measures can be effective for E15 as well. Coupled with an 
effective outreach and public education program, the proposed 
mitigation measures should deter

[[Page 68057]]

misfueling and encourage consumers to pay close attention to the E15 
labels. Some have also argued that the ULSD program is not applicable 
because the ULSD program focused primarily on commercial truck drivers, 
who may be more cognizant of fuel choices due to the potential impact 
on their commercial investments, than the general public. We believe 
that consumers are also concerned about their private vehicles, and 
that the potential costs associated with misfueling (discussed below in 
section III.F) will have just as much of an impact in informing 
consumer fuel choices. As long as fuel dispensers are properly labeled 
and consumers are adequately informed of the associated risks of 
misfueling nonroad products and older motor vehicles on E15, we believe 
the proposed misfueling mitigation program will be effective.
    While EPA believes that the misfueling mitigation provisions 
included in today's proposal will address potential misfueling 
concerns, we recognize that these provisions are not the only potential 
means for addressing misfueling concerns. EPA has received many 
suggestions for mitigating misfueling. For example, API conducted a 
scoping study, ``Evaluation of Measures to Mitigate Misfueling of Mid- 
to High-Ethanol Blend Fuels at Fuel Dispensing Facilities,'' that 
includes many of these suggestions. That study may be found in the 
docket.\26\
---------------------------------------------------------------------------

    \26\ American Petroleum Institute, ``Evaluation of Measures to 
Mitigate Misfueling of Mid- to High-Ethanol Blend Fuels at Fuel 
Dispensing Facilities,'' EPA Docket  EPA-HQ-OAR-2010-0448.
---------------------------------------------------------------------------

    One suggestion in API's study was to have full service attendants 
at gas stations that ensure E15 is only used in appropriate motor 
vehicles. While such a measure may be effective, its overall 
effectiveness is unknown and it would be a large burden on service 
stations to employ service attendants for this purpose. This option 
would come at an extremely large cost, and there would need to be 
significant training of new employees. API estimates the average annual 
cost per service station at $67,500 and the annual nationwide cost at 
$10.6 billion. Another suggestion was to have separate islands at 
service stations, with one for blends at E10 and below, and one for 
mid- and high- gasoline-ethanol blends. It was noted that this measure 
would also likely cause congestion at the pumps, be inconvenient for 
the consumer, reduce the number of pumps available for higher-demand 
fuels, and not prevent intentional misfueling. API estimates the cost 
of separate islands at $700 per station and $40 million nationwide, 
though they did not cost out the consumer implications.
    Another option discussed is a measure in which keypads or 
touchscreens would be made available at each pump to allow consumers to 
input data about their motor vehicle or simply answer ``yes'' or ``no'' 
to the question of whether their motor vehicle is an FFV or non-FFV. If 
the motor vehicle is appropriate for the fuel, then the pump would 
allow fueling. If existing dispensers do not already have display 
screens, this strategy would require retail stations to install keypads 
or touchscreens at an approximate cost of $5,000 for dispensers that 
may be retrofitted, with the cost prohibitive for dispensers that may 
not be retrofitted. There may also be an additional cost per station of 
$10,000--$20,000 to install a central controller to accept motor 
vehicle information. Such a strategy may cause some congestion at the 
pumps. Intentional misfueling would not be prevented through such 
measure.
    Also discussed in the report was a strategy in which retail 
stations would have a video or audio presentation play when a mid- to 
high- gasoline-ethanol blend pump is lifted from the dispenser. The 
presentation would provide information to the consumer about E10+, 
which motor vehicles may fuel with it, and why other motor vehicles 
should not. Optionally, the consumer could be required to confirm 
fueling with E10+ at the end of the presentation. The cost of such an 
alternative for those stations without display screens, is estimated to 
be $5,000; if the existing dispenser could not be retrofitted with a 
display screen, there would be additional and considerable costs 
incurred for replacing a dispenser. Costs for this option could be as 
high as $20,000 per station.
    API also suggested that a different colored hand warmer or a 
different type of nozzle grip for fuel pumps with E15+ may help alert 
consumers to the new type of fuel without a large burden on retail 
stations. Hand nozzles for E15+ would be a different color than for 
other gasoline types, or would have a different texture from other hand 
grips. To be effective, one color or one type of grip should be used 
for E15+ on a national basis. Consumers would know by the color and/or 
texture that those pumps were for E15+. Some concerns about this option 
are that it would not be possible to distinguish nozzles that dispense 
both E10 and E15, some consumers may not notice the warmer or grip, and 
this would not prevent intentional misfueling. However, API believes 
that nozzle grips with different textures would be noticeable to most 
consumers, even those who do not read the pump labels. Also, hand 
nozzle grips are easy to install and replace as needed. API has 
estimated the cost at $5 to $11 per nozzle with a national cost of 
$800,000 to $1.6 million.
    While many of the strategies discussed in the API study may be 
effective in communicating with the consumer about E15, EPA believes 
that the combination of pump labels, regulatory prohibition on 
misfueling, PTDs, a survey, and consumer outreach will adequately 
mitigate misfueling by consumers. The labels on the fuel pumps will 
notify consumers that the pump is for E15 and only certain MY motor 
vehicles should use that fuel. Consumer outreach will give the consumer 
more in-depth information, such as why older MY motor vehicles, heavy-
duty gasoline engines and vehicles, motorcycles, and nonroad products 
should not fuel with E15 and what damage may occur from misfueling. The 
PTDs will help ensure that E15 is identified as such through the 
distribution chain, which will help prevent inadvertent mislabeling of 
fuel. Finally, a survey will identify where mislabeling (or no 
labeling) of E15 has occurred so that appropriate labels are used.
    Other options that have been suggested may be too expensive, 
difficult to implement, and/or otherwise not likely acceptable to 
consumers. As such, EPA does not deem it appropriate to include these 
options in today's proposal. We seek comment on any other measures not 
proposed in the rule that the regulated industries and other interested 
parties feel may be necessary to mitigate misfueling. We seek comment 
on any other cost-effective mitigation measures that may be 
appropriate. If EPA considers requiring any other mitigation measures 
that are suggested by commenters in the final rule, EPA will conduct 
appropriate analyses of such measures, including the impacts on small 
businesses, before deciding whether to include such mitigation measures 
in the final rule.

F. Cost of Compliance

    The cost of compliance with the provisions being proposed today 
include the periodic capital costs of labeling fuel dispensers, the 
onetime costs of the PTD requirements, and the annual cost of the 
survey requirements. The cost of the proposed labeling requirements is 
estimated at $1.04 million per year on an annualized basis. The cost of 
the proposed PTD

[[Page 68058]]

requirements is estimated at $0.56 million per year on an annualized 
basis. The cost of the proposed survey requirements is estimated at 
$2.05 million per year. The total cost of all of the proposed 
requirements is estimated at $3.65 million per year. These estimated 
costs are detailed in the following sections. As discussed in section 
III.F.4, we believe that these costs will be more than offset by the 
avoided costs of repairing engines/vehicles that could otherwise have 
been damaged by misfueling in the absence of the implementation of the 
proposed requirements.
1. Labeling Costs
    Our estimate of the cost of the proposed E15 fuel dispenser 
labeling requirement includes the cost to the fuel retailer of 
purchasing the label, the administrative cost to ensure that all 
gasoline dispensers are labeled appropriately, and the labor cost to 
replace fuel dispenser labels. Based on our past experience with 
labeling programs, the RFS2 NPRM and industry input, the cost of an E15 
label is estimated to be $5.00 per label.\27\ There are approximately 
162,000 retail gas stations in the U.S. according to National Petroleum 
News.\28\ The RFS2 Final RIA estimates that there is an average of 7.7 
gasoline refueling positions per retail station.\29\ Thus, for a retail 
facility that has 8 refueling positions, the total cost if all of the 
dispenser labels are replaced would be $40.00. A number of fuel 
retailers are small businesses. However, we believe that the minor cost 
of label replacement would not represent a significant additional 
burden to any fuel retailer. Specifically, making the conservative 
assumption that there will be the maximum number of pumps (8) even for 
small stations and assuming an 8 year life before labels need to be 
replaced, the annualized cost to a service station is $5 per year. The 
amount of gasoline sold at a small service station is estimated to be 
approximately 60,000 gallons/month.\30\ Assuming an average cost of 
gasoline at $2.31/gal (per the EIA 2009 national average regular grade 
gasoline price) the annual revenue for a small service station from its 
gasoline sales is approximately $1.7 million.\31\ Thus, the cost of the 
labels represents less than 0.001% of the total annual revenue of a 
small gas station from its gasoline sales.\32\
---------------------------------------------------------------------------

    \27\ RFS2 NPRM RIA page 581 (EPA-420-D-09-001; May, 2009); 
available at: http://www.epa.gov/otaq/renewablefuels/420d09001.pdf).
    \28\ National Petroleum News, ``2008 marketfacts'', states that 
there were 161,768 gasoline retail facilities in 2008 http://
www.npnweb.com.
    \29\ RFS2 Final RIA, page 232 (EPA-420-R-10-006; February 2010); 
available at: http://www.epa.gov/otaq/renewablefuels/420r10006.pdf).
    \30\ The National Association of Convenience Stores (NACS) 2006 
State of the Industry Report states that for motor fuel retail 
stations that sell less than 75,000 gallons of all motor fuels, the 
average monthly throughput is 57,778 gallons.
    \31\ Energy Information Administration (EIA) annual national 
average gasoline price data http://www.eia.gov/dnav/pet/pet_pri_
gnd_dcus_nus_a.htm.
    \32\ See section IX.D. of this notice for additional discussion 
of potential impacts from today's proposal on small businesses.
---------------------------------------------------------------------------

    Although we are requesting comment on whether all gasoline fuel 
dispensers should be labeled,\33\ today's notice only includes proposed 
labeling requirements for E15 fuel dispensers. Nevertheless, we are 
assuming all gasoline refueling positions would be relabeled for the 
purposes of estimating the costs of this proposal. This approach 
provides a conservatively high estimate of costs if only the proposed 
E15 labeling requirements are finalized. By multiplying the average 
number of gasoline refueling positions per retail facility, by the 
number of fuel retailers, and the cost per label, we arrived at an 
estimated cost of $6.23 million to replace all of the labels at 
gasoline refueling positions at all fuel retailers in the U.S. We 
assumed an 8 year label life before it needs to be replaced. Amortizing 
the periodic labeling costs using a 7% cost of capital, we estimate the 
annualized cost to comply with the proposed labeling provisions to be 
approximately $1.04 million per year. We request comments on these 
estimated costs.
---------------------------------------------------------------------------

    \33\ Including E0, E10, E15, EXX, and E85 fuel dispensers. See 
section III.A. of this notice.
---------------------------------------------------------------------------

2. PTD Costs
    Section IX.B. of today's preamble contains a discussion of the 
costs of the PTD requirements proposed in today's notice.\34\ There 
would be a one-time cost of $5.1 million to regulated parties to modify 
the formatting of their existing PTDs to accommodate the new 
information which would be required as a result of the implementation 
of today's proposal. After the one-time modification of PTD formatting 
is complete, we believe that there would be no significant additional 
costs associated with communicating the additional information that 
would be required by today's proposal to downstream parties in the 
distribution system (either in electronic or paper form). By amortizing 
the one-time reformatting costs over a period of 15 years at a 7% cost 
of capital, we arrive at an annualized cost of $560,000 for the 
proposed PTD requirements. We request comment on these estimated costs.
---------------------------------------------------------------------------

    \34\ Section III.B. contains a discussion of the proposed PTD 
requirements.
---------------------------------------------------------------------------

3. Survey Costs
    The estimated costs of the proposed ethanol content and labeling 
survey are based on experience with the existing RFG and ULSD surveys 
and discussions with industry. The RFG survey includes all of the 
elements required in the proposed nationwide survey except the survey 
of compliance with the proposed labeling requirements. We estimate that 
the cost of adding the proposed survey of compliance with the proposed 
labeling requirements to the existing RFG survey at $50,000 per year. 
The cost to implement all of the proposed survey provisions for 
conventional gasoline is estimated at $2 million per year. Thus, the 
total cost of the proposed survey requirements is estimated to be $2.05 
million per year.\35\ We request comments on this estimate.
---------------------------------------------------------------------------

    \35\ See section III.C. for a discussion of the proposed survey 
provisions.
---------------------------------------------------------------------------

4. Avoided Motor Vehicle and Nonroad Product Repair Costs
    We believe that proposed labeling and associated survey and PTD 
provisions will be an effective tool at mitigating unintentional 
misfueling based on our experience with other labeling provisions (such 
as ULSD). The resulting prevention of misfueling will not only minimize 
the potential emission increases that could result (as discussed in 
section VI.I.), but also avoid potentially costly highway motor 
vehicle, heavy-duty gasoline engines and vehicles, motorcycles, and 
nonroad product repairs that would be anticipated to far exceed the 
cost of the labels. For example, based on a poll of automobile repair 
facilities, fuel pump and catalyst replacements average $427 and 
$1,250, respectively. Similarly, for nonroad equipment, the cost for a 
fuel line repair of handheld equipment (e.g. trimmers, chainsaws) or 
non-handheld equipment (e.g. lawnmowers, generators) could cost $100-
$400 (based on information received from repair facilities in Ann 
Arbor, Michigan and vicinity) and replacing this same equipment can 
range from $100 (consumer handheld) to $5,000 (commercial grade garden 
tractor) should the engine fail.\36\ While there are no data to 
estimate the frequency at which these repairs or other potential 
complications (discussed in section VI) associated with misfueling on 
E15 might

[[Page 68059]]

occur, even if these potential complications were avoided on a tiny 
fraction of MY2000 and older motor vehicles and nonroad products as a 
result of the regulations (as opposed to actions taken independently by 
industry in response to conditions on the partial waiver), the savings 
would still far exceed the costs of compliance. We request comment on 
this assessment.
---------------------------------------------------------------------------

    \36\ While this analysis is focused on small SI engines, note 
that other nonroad equipment/vehicle categories can incur higher 
expenses due to the higher complexity of the equipment/vehicle 
compared to small SI engines.
---------------------------------------------------------------------------

G. Compliance and Enforcement

1. What are the prohibited acts?
    There is a long-standing prohibition, under CAA section 211(f)(1), 
that fuel manufacturers may not introduce gasoline-ethanol blends 
containing greater than 10 vol% ethanol into commerce for use in non-
flex-fuel vehicles. The partial waiver modifies this prohibition so 
that gasoline-ethanol blends containing up to 15 vol% ethanol may 
legally be introduced into commerce by fuel manufacturers for use in 
MY2007 and later light-duty motor vehicles. The waiver does not apply 
to any MY heavy-duty gasoline engine or vehicle, motorcycle, or nonroad 
product.
    We are proposing that all parties would be prohibited from selling, 
introducing into commerce or causing or allowing the sale or 
introduction into commerce of gasoline that has an ethanol content 
above 10 vol% ethanol into MY 2000 and older light-duty motor vehicles, 
any heavy-duty gasoline engine or vehicle, any motorcycle, and any 
nonroad product. We are also proposing that fuel distributors who 
transport or store a gasoline-ethanol blend, base gasoline or 
blendstock for ethanol blending would be prohibited from increasing the 
ethanol content to exceed the value noted on the PTD.\37\ Since the 
Agency is deferring a decision for MY2001-2006 motor vehicles, we are 
not proposing a prohibition for fuel used in these motor vehicles at 
this time. DOE testing of MY2001-2006 light-duty motor vehicles is 
ongoing and EPA expects to make a waiver determination for these 
vehicles shortly after the results of the DOE testing are available. If 
EPA does not grant an E15 waiver for MY2001-2006 light-duty motor 
vehicles, then we would expect to include the same prohibitions for 
these MY motor vehicles in the final rulemaking. Even though we are not 
proposing an actual prohibition for motor vehicles MY2001-2006, it is 
still unlawful for fuel manufacturers to introduce E15 into commerce 
for use in these motor vehicles unless we grant an E15 waiver for these 
motor vehicles.
---------------------------------------------------------------------------

    \37\ A violation of this prohibition could cause or contribute 
to vehicle misfueling downstream.
---------------------------------------------------------------------------

    In addition to this general misfueling prohibition, there are 
several other prohibited acts that we are proposing in conjunction with 
the regulatory provisions being proposed today. We are proposing that 
retailers and wholesale purchaser consumers would be prohibited from 
dispensing E15 unless they comply with the proposed dispenser labeling 
requirements in section III.A. of today's preamble. We are proposing 
that ethanol blenders would be prohibited from introducing E15 into 
commerce without complying with the proposed ethanol content survey 
requirements in section III.C. of today's preamble.
    In addition, there are several RVP related prohibitions that exist 
today that may need to be modified in light of E15. There is an 
existing prohibition with respect to exceeding applicable summertime 
RVP requirements.\38\ We are proposing to prohibit the commingling of 
an E10 gasoline-ethanol blend with either E0 or E15 due to potential 
concerns about causing a violation of summertime RVP requirements 
unless the E10 blend had not taken advantage of the 1 psi RVP waiver. 
For the same reasons, prohibitions on the commingling of BOBs is 
necessary. Therefore we are proposing certain prohibitions against 
commingling conventional gasoline BOBs similar to the prohibitions for 
reformulated blendstocks for oxygenate blending (RBOBs) in 40 CFR 80.78 
under the RFG program. Specifically, we are proposing to prohibit 
commingling an E10 BOB (produced to take advantage of the 1 psi RVP 
waiver) with an E15 BOB unless the resulting mixture is designated as 
an E10 BOB. We request comment on whether other modifications to these 
existing RVP related regulatory requirements are needed as a result of 
the introduction of E15.
---------------------------------------------------------------------------

    \38\ See 40 CFR 80.27.
---------------------------------------------------------------------------

2. What are the proposed liability and penalty provisions for 
noncompliance?
    Today's proposed rule contains prohibition and liability provisions 
that are similar to those of the other fuels programs in 40 CFR Part 
80.\39\ Under the proposed regulation, regulated parties would be 
liable for committing certain prohibited acts, such as selling or 
distributing gasoline-ethanol blends with an ethanol content that 
exceeds the maximum for the intended end-use category of vehicles/
engines, or causing/contributing to others committing prohibited acts. 
In addition, parties would be liable for a failure to meet certain 
affirmative requirements or causing others to fail to meet their 
affirmative requirements. All parties in the fuel distribution system 
would be liable for a failure to fulfill the recordkeeping and PTD 
requirements.
---------------------------------------------------------------------------

    \39\ See section 80.5 (penalties for fuels violations); section 
80.23 (liability for lead violations); section 80.28 (liability for 
volatility violations); section 80.30 (liability for diesel 
violations); section 80.79 (liability for violation of RFG 
prohibited acts); section 80.80 (penalties for RFG/CG violations); 
section 80.395 (liability for gasoline sulfur violations); section 
80.405 (penalties for gasoline sulfur regulations).
---------------------------------------------------------------------------

a. Presumptive Liability
    All EPA fuels programs include a presumptive liability scheme for 
violations of prohibited acts. Under this approach, liability is 
imposed on two types of parties: (1) The party in the fuel distribution 
system that controls the facility where the violation was found or has 
occurred; and (2) those parties, typically upstream in the fuel 
distribution system from the initially listed party (such as any 
distributor of the fuel), whose prohibited activities could have caused 
the program nonconformity to exist.\40\ This presumptive liability 
scheme has worked well in enabling us to enforce our fuels programs 
since it creates comprehensive liability for essentially all the 
potentially responsible parties. The presumptions of liability may be 
rebutted by establishing an affirmative defense.
---------------------------------------------------------------------------

    \40\ An additional type of liability, vicarious liability, is 
also imposed on branded refiners under these fuels programs.
---------------------------------------------------------------------------

    To clarify the inclusive nature of these presumptive liability 
schemes, today's proposed rule would explicitly include as prohibitions 
causing another person to commit a prohibited act and causing the 
presence of a non-conforming gasoline-ethanol blend (such as a blend 
designated as containing less than 15 vol% ethanol which actually 
contains a greater concentration of ethanol) to be in the distribution 
system. This is consistent with the provisions and implementation of 
other fuels programs.
    Today's proposed rule, therefore, provides that most parties 
involved in the chain of distribution would be subject to a presumption 
of liability for committing prohibited actions and causing violations 
by other parties. For example, an ethanol blender could be held 
presumptively liable for causing a gasoline-ethanol blend that exceeds 
the maximum ethanol content stated on the product's PTD to be present 
in the distribution system unless the blender provides an affirmative 
defense to

[[Page 68060]]

demonstrate that it did not cause the exceedance. An ethanol blender 
could cause such an exceedance by adding too much ethanol to a blend or 
making an error on the PTD that they prepare. An ethanol manufacturer 
could be held presumptively liability for causing an exceedance of the 
maximum ethanol content requirements unless it could demonstrate that 
the ethanol it produced could not have caused the downstream 
violation.\41\ Like other fuels regulations, a refiner also would be 
subject to a presumption of vicarious liability for violations by any 
downstream facility that displays the refiner's brand name, based on 
the refiner's ability to exercise control at these facilities. 
Carriers, however, would be liable only for violations arising from 
product under their control or custody and not for causing non-
conforming gasoline to be in the distribution system, except where 
specific evidence of causation exists. A carrier might cause an 
exceedance of the ethanol content stated on the PTD for product in its 
custody by commingling products with dissimilar ethanol contents. For 
example, a carrier might cause the ethanol content of a product 
designated as E15 to exceed 15 vol% ethanol by transporting the product 
in a tank truck that had previously transported E85 that had not been 
properly drained.
---------------------------------------------------------------------------

    \41\ For example, an ethanol manufacturer might cause a 
downstream exceedance of maximum ethanol content requirements if 
they did not add the required amount of denaturant.
---------------------------------------------------------------------------

b. Affirmative Defenses for Liable Parties
    This proposal also includes affirmative defenses for each party 
that is deemed liable for a violation. Additionally, all presumptions 
of liability are rebuttable. The proposed defenses are similar to the 
defenses available to parties for violations of the RFG and diesel 
sulfur regulations. We believe that these defense elements set forth 
reasonably attainable criteria to rebut a presumption of liability. We 
are proposing that the affirmative defense require a party to 
demonstrate all of the following: (1) The party did not commit or cause 
the violation; (2) the party has PTDs indicating that the fuel was in 
compliance at its facility; and (3) except for retailers and wholesale 
purchaser-consumers, the party conducted a quality assurance program. 
For parties other than tank truck carriers, we are proposing that the 
quality assurance program would be required to include periodic 
sampling and testing of gasoline-ethanol blends for their ethanol 
content. For tank truck carriers, we are proposing that the quality 
assurance program would not need to include periodic sampling and 
testing of the gasoline-ethanol blend, but in lieu of sampling and 
testing, the carrier would be required to demonstrate evidence of an 
oversight program for monitoring compliance, such as appropriate 
guidance to drivers on compliance with applicable requirements and the 
periodic review of records concerning the quality of gasoline-ethanol 
blends and their delivery.
    With respect to the assessment of liability for the introduction of 
E15 into any engines, vehicles or equipment that are not covered by the 
partial waiver for use of E15, EPA would typically not hold a self-
service fuel retailer liable for customer misfueling if the retailer 
has labeled their dispensers appropriately and did not condone or 
facilitate such misfueling.
    We are proposing that participation in the ethanol content survey 
could be used to meet some or all of the periodic sampling and testing 
elements of a regulated party's (e.g. branded refiners, ethanol 
blenders, and fuel distributors) affirmative defenses to presumptive 
liability in cases where instances of noncompliance with the applicable 
maximum ethanol content specification are discovered.\42\ In addition 
to participation in the survey, we are proposing that ethanol blenders 
would be required to periodically test the accuracy of their equipment/
methods used to add ethanol to gasoline. We are proposing that all 
other regulated parties could satisfy all of the periodic sampling and 
testing elements of their affirmative defenses to presumptive liability 
by participating in the survey.
---------------------------------------------------------------------------

    \42\ See section III.C. of today's notice for a discussion of 
the ethanol content survey and section IV for a discussion of the 
RVP survey.
---------------------------------------------------------------------------

    As in other fuel regulations, branded refiners would be subject to 
more stringent standards for establishing a defense because of the 
control such refiners have over branded downstream parties. Under 
today's rule, in addition to other presumptive liability defense 
elements, we are proposing that branded refiners would also be required 
to show that the violation was caused by an action by another person in 
violation of law, an action by another person in violation of a 
contractual agreement with the refiner, or the action of a distributor 
not subject to a contract with the refiner for the transportation of 
the gasoline.
    Based on experience with other fuels programs, we believe that a 
presumptive liability approach would increase the likelihood of 
identifying persons who cause violations of the prohibited acts in 
today's proposal. We normally do not have the information necessary to 
establish the cause of a violation found at a downstream facility. We 
believe that those persons who actually handle the fuel are in the best 
position to identify the cause of the violation, and that a rebuttable 
presumption of liability would provide an incentive for parties to be 
forthcoming with information regarding the cause of the violation. In 
addition to identifying the party that caused the violation, providing 
evidence to rebut a presumption of liability would serve to establish a 
defense for the parties that are not responsible. Presumptive liability 
is familiar to both the petroleum industry and EPA, and we believe that 
this approach would make the most efficient use of EPA's enforcement 
resources. For these reasons we are proposing a liability scheme based 
on a presumption of liability. We request comment on the proposed 
liability provisions.
c. Penalties for Violations
    CAA section 211(d)(1) provides for penalties for violations of the 
fuels regulations. These penalty provisions subject any person that 
violates any requirement or prohibition of the rule to a civil penalty 
of up to $27,500 for every day of each such violation and the amount of 
economic benefit or savings resulting from the violation. Pursuant to 
40 CFR 19.4, the amounts of civil penalties for these violations 
increased to $37,500 per day, plus the amount of any economic benefit 
or savings resulting from the violation, for violations that occurred 
after January 12, 2009. Today's proposal would subject any person who 
violates any of the proposed requirements or prohibitions to a civil 
penalty up to $37,500 for every day of each such violation and the 
amount of the economic benefit or savings resulting from the violation.
    We propose that a violation of the requirements in today's notice 
would constitute a separate day of violation for each day the gasoline 
giving rise to the violation remains in the fuel's distribution system. 
The length of time the gasoline in question remains in the distribution 
system would be deemed to be twenty-five days unless there is evidence 
that the fuel remained in its distribution system a lesser or greater 
amount of time. These proposed penalty provisions are similar to those 
in the RFG, Tier 2 sulfur, and diesel sulfur programs. We request 
comment on the proposed penalty provisions.

[[Page 68061]]

IV. Other Measures To Ensure Compliance

A. The 1.0 psi RVP Waiver for E10 Blends

    One concern that was raised in the comment periods on the E15 
waiver and RFS2 NPRM in addition to stakeholder meetings prior to this 
proposal was whether E15 would qualify for the 1.0 psi RVP waiver 
permitted under the Clean Air Act (CAA) section 211(h) for conventional 
gasoline. As discussed in the partial waiver decision document, we 
believe that E15 blends with higher volatility would cause vehicles to 
violate their evaporative emission standards in-use. Consequently, the 
waiver announced today is for E15 blends that meet the summertime 
gasoline volatility standards for conventional gasoline without any 1.0 
psi RVP waiver, and the regulatory provisions proposed today reflect 
this decision. Furthermore, EPA interprets section 211(h)(4) of the CAA 
as limiting the 1.0 psi waiver to gasoline-ethanol blends that contain 
10 vol% ethanol, including limiting the provision concerning ``deemed 
to be in full compliance'' to the same 10 vol% blends. EPA implemented 
CAA section 211(h)(4) through 40 CFR 80.27(d) which provides that 
gasoline-ethanol blends that contain at least 9 vol% ethanol and not 
more than 10 vol% ethanol qualify for the 1.0 psi waiver of the 
applicable RVP standard. Nevertheless, we seek comment on whether 
section 211(h) of the CAA could be interpreted such that E15 is 
eligible for the RVP provisions in section 211(h)(4) and whether this 
would have any impact on our E15 waiver decision.
    In order to introduce a fuel that meets both the Federal summertime 
RVP standards and contains between 10 and 15 vol% ethanol, fuel 
refiners would have to create a fuel or blendstock that has 
approximately 1.0 psi lower RVP than a fuel or blendstock intended for 
E10 due to the interaction between gasoline volatility and ethanol when 
blended. Oxygenate blenders would need to know the RVP of a blendstock 
or have the intended ethanol content of a blendstock be specified on 
the PTD to ensure that they know the correct amount of ethanol that 
should be blended into a fuel. If an oxygenate blender or retail 
station blended more than 10 vol% ethanol into a fuel or blendstock 
produced with the expectation of taking advantage of the 1 psi waiver 
that applies to E10, the resulting blend would be in violation of 
summertime RVP standards.
    Having E10 and E15 at different RVP levels in-use also raises the 
potential that mixtures of the two at retail would cause the blend to 
exceed the summertime RVP requirements. Many retail stations only have 
two underground storage tanks and those tanks typically contain regular 
and premium grade fuels. Since, in many cases, midgrade gasoline is 
made by blending regular and premium grade gasoline, the possibility 
exists that a midgrade fuel blended from a high-RVP E10 fuel and a low-
RVP E15 fuel would exceed summertime RVP requirements. This fuel would 
not receive the 1.0 psi RVP waiver and selling such a fuel would 
violate RVP requirements.
    These RVP related complications could be avoided by refiners 
producing a lower RVP blendstock for E10 as well. While there are cost 
and supply considerations refiners and fuel distributors may find it in 
their best interest to do so given the flexibility it affords. 
Regardless, the Agency believes that it would be possible to help 
alleviate some of these challenges with the slight modifications to the 
PTDs and the national fuel survey requirements discussed in Section III 
of this proposal. RFG already has similar requirements to those that we 
are proposing in today's rulemaking, and given the effectiveness we 
have had with the RFG program, we believe that the proposed approach 
would be an effective means of allowing fuel manufacturers to ensure 
that the correct amount of ethanol was blended into the appropriate 
blendstock or finished fuel with only slight additions at minimal 
costs. We believe that these PTD proposals are appropriate under our 
authority under sections 208 and 114 of the Clean Air Act.
1. National RVP Survey
    In section III.C., we described our proposal for a national E15 
labeling and ethanol content survey that is intended to ensure that 
fuel pumps would be properly labeled if retail stations chose to sell 
E15. In order to determine if the proposed labeling requirements are 
being met and the ethanol content is consistent with the label, fuel 
sampling and testing would be required to determine the ethanol 
content. Since fuel refiners will have difficulty ensuring that 
downstream summertime RVP requirements are met in non-RFG areas, adding 
testing for RVP to this survey would be a low-cost \43\ approach to 
enforcing downstream RVP standards and help provide an affirmative 
defense for upstream parties in the event of a violation downstream. We 
seek comment on whether RVP survey requirements should be included as 
part of the national ethanol survey proposed in section III.C.
---------------------------------------------------------------------------

    \43\ Based EPA discussions with industry, the costs of for RVP 
survey requirements as part of the E15 labeling survey would add 
approximately $200,000 dollars per year to the total costs of the 
survey.
---------------------------------------------------------------------------

2. RVP and E15 Underground Storage Tank Transition
    Another issue associated with the RVP standards is the potential 
comingling of a higher RVP E10 fuel that received the 1.0 psi RVP 
waiver with a lower RVP E15 that met summertime RVP requirements in 
underground storage tanks when a retail station decides to transition 
from selling E10 to E15. If the retail station does not completely 
remove all E10 from a tank before E15 is added to the tank, the retail 
station would create a fuel that violates RVP standards. The resulting 
blend would be above 10 vol% ethanol and would not qualify for the 1.0 
psi waiver, but would have an RVP above the requirement for E0 and E15.
    Section 211(t) of the Clean Air Act, as amended by the Energy 
Policy Act of 2005, allows retail stations to blend compliant RFG 
batches of non-ethanol blended and ethanol-blended gasoline in storage 
tanks twice a year as long as the duration of the blended period is no 
longer than 10 consecutive calendar days. However, the authority 
granted to the Agency for the transition of fuels in underground 
storage tanks was specifically limited to that case and we do not 
believe this provision authorizes a blending down of E10 and E15 over 
time in non-RFG areas.
    We seek comment on the issue of tank transition from E10 to E15 
fuels and if there are ways that the Agency could address this issue.

B. Credit for RFG Downstream Oxygenate Blending

    Pursuant to 40 CFR 80.69, refiners of RBOB are permitted to take 
credit for downstream oxygenate blending toward compliance with RFG 
standards. To do so the refiner must direct the downstream oxygenate 
blender on the PTD to add a particular type and amount of oxygenate. 
However, these provisions may require some reconsideration. In light of 
the addition of E15 to the RFG marketplace, it may be more difficult to 
ensure that 15 vol% ethanol is in fact added downstream if the RBOB 
would also meet all other finished gasoline specifications with the 
addition of just 10 vol% ethanol. Oxygenate blenders could also be left 
in the untenable position of having a supply of RBOB for E15 blending 
and an inability to blend more than 10 vol%

[[Page 68062]]

ethanol. We request comment regarding how the final regulation should 
address this issue. For example, the regulation could limit the 
refiner's claimed ethanol content to 10 vol% ethanol unless: (A) The 
final blend would not comply with all gasoline specifications (e.g., 
octane) without the addition of 15 vol% ethanol, or (B) until such time 
as the RBOB surveys for a particular RFG area indicates that there is a 
sufficient, stable market demand for E15. We request comment on this 
and other approaches to resolve this issue.

V. Modification of the Complex Model

A. Background of RFG Requirements

    Reformulated gasoline (RFG) is gasoline that is required to be sold 
in certain parts of the country, and is required to be reformulated to 
meet certain performance standards for emissions of smog forming and 
toxic air pollutants. In 1990 Congress amended the CAA to require that 
RFG be sold in cities with the worst ozone pollution problems. In 
addition, other cities with significant smog problems were provided the 
opportunity to voluntarily opt-in to the RFG program. RFG is currently 
used in portions of 17 States and the District of Columbia. About 30% 
of gasoline sold in the U.S. is reformulated. In the 1990 Amendments, 
Congress also required that conventional gasoline (CG, or non-RFG) sold 
in the rest of the country become no more polluting than gasoline sold 
in 1990. Often referred to as ``anti-dumping'', this requirement 
ensures that refiners do not ``dump'' into conventional gasoline fuel 
components that are restricted in RFG and that increase environmentally 
harmful emissions.
    EPA introduced the RFG program in 1995, as required by the CAA. The 
RFG program established emissions performance standards for volatile 
organic compounds (VOCs), nitrogen oxides (NOX), and toxics. 
These standards are based on percent reductions from the average 
emissions of these pollutants in 1990 model year vehicles operated on a 
specified baseline gasoline. The program required an oxygen minimum 
standard of 2.0% by weight, however the Energy Policy Act of 2005 
removed that requirement. For conventional gasoline, the program 
establishes emissions standards for exhaust toxics and NOX 
designed to ensure that an individual refinery's or importer's gasoline 
will not have higher levels of these pollutants than the refinery's or 
importer's 1990 gasoline.
    Refiners of RFG must comply with the RFG standards separately for 
each refinery. Refiners of conventional gasoline may comply separately 
for each refinery, or they may aggregate their refineries. Importers 
comply with both the RFG and conventional gasoline standards for the 
aggregate of the gasoline they import during the year.

B. The Complex Model

    To measure compliance with the RFG and anti-dumping standards, the 
emissions performance of gasoline is calculated using a model, called 
the Complex Model, which predicts the emissions level of each regulated 
pollutant based on the measured values of certain gasoline properties. 
These properties are: Aromatics, olefins, sulfur, Reid Vapor Pressure 
(RVP), benzene, oxygen and distillation points, as well as the content 
of ethanol, ETBE, TAME and MTBE. Refiners and importers are required to 
measure these properties in each batch of gasoline they produce or 
import, using a prescribed test method, and calculate the emissions 
level of each pollutant for each batch of gasoline using the Complex 
Model. The emissions level as computed by the Complex Model is compared 
to the baseline emissions for each pollutant, and the percent reduction 
is then calculated. The standards for VOC, NOX and toxics 
are stated in terms of percent reductions from the baseline. Thus, for 
fuel to comply with the standards, the percent reduction computed by 
the Complex Model must be equal to or greater than the standard for 
each pollutant. Under the Clean Air Act, baseline emissions must be 
based on 1990 vehicle technology, not current fleets, nor off-road 
equipment.
    For gasoline to be sold in the U.S., it must comply with the 
standards. Refiners are therefore required to certify that their fuel 
meets the standards by using the Complex Model. Currently, the 
equations in the model are limited to an oxygen content of no more than 
4.0% by weight in gasoline, which is the maximum amount of oxygen in 
gasoline containing 10 vol% ethanol, or E10.\44\ In order for refiners 
to produce gasoline that will contain 15 vol% ethanol, the model must 
be modified to predict the effect of the additional oxygen.
---------------------------------------------------------------------------

    \44\ Because the percent by weight of oxygen in the fuel varies 
depending on the density of the fuel, the limit in the Complex Model 
is currently 4.0% by weight to reflect the maximum amount of oxygen 
associated with E10. In most fuels, however, this volume is 
equivalent to 3.5% by weight oxygen.
---------------------------------------------------------------------------

    The applicability of the Complex Model to gasoline certification 
has become limited as EPA's more recent clean gasoline standards take 
effect and provide even greater emission reductions beyond those of the 
RFG program. The NOX emission performance requirements for 
RFG and conventional gasoline have not been required since January 1, 
2007 when the Tier2 gasoline average sulfur standard of 30 ppm took 
effect (see 40 CFR 80.101(c)(3)(i)). Finally, beginning January 1, 
2011, the air toxics emission standards for gasoline will be deemed met 
by compliance with the new MSAT2 nationwide benzene standard for 
gasoline, the volatility standard, and sulfur standard (see 40 CFR 
80.41(e)(2) and (3)). The result is that beginning January 1, 2011, 
only the VOC equation in the Complex Model will continue to be binding 
and only for RFG. For conventional gasoline, there are no VOC 
performance standards; only RVP limits. Thus, compliance with the anti-
dumping regulations does not require use of the Complex Model to 
evaluate VOC emissions.
    The one exception to this is small refiners that take advantage of 
the option for delayed compliance with the MSAT2 benzene standard until 
January 1, 2015. They would still need the Complex Model for air toxics 
emission performance compliance during this interim period. However, 
since no small refiners are currently producing RFG, it would only be 
for CG. For CG, since refiners typically certify CG as E0, with 
oxygenate blended downstream, they should be unaffected by the increase 
in ethanol content from E10 to E15. Therefore, it appears that the only 
equation that needs to be modified in the Complex Model to allow 
refiners and importers to certify gasoline containing E15 after January 
1, 2011 is the VOC equation.
    Because emissions performance at issue is specified in the Act as 
the emissions performance of 1990 vehicle technology, we are not able 
to use current emission test data on motor vehicles using E15 gasoline 
as a basis for evaluating appropriate changes to the VOC equation. The 
test results from today's vehicle fleet would not represent the 1990 
vehicle technology required to calculate the emission baseline. 
Instead, we relied on a study conducted in 1994 by Guerrieri, et al., 
that examined the exhaust emissions from 1990 vehicles using gasoline 
with ethanol levels varying from 0 to 40 volume percent.\45\ Figure 
V.B-1 shows data reported by Guerrieri et al.\46\ The figure shows the 
average values of

[[Page 68063]]

hydrocarbon emissions (representative of VOC) at several ethanol levels 
relevant to this discussion, as well as the uncertainty bars at each 
value. The study data showed that on average exhaust hydrocarbon 
emissions increased from E10 to E12, but then decreased beyond E12. 
While the study does not provide sufficient data to determine the 
precise VOC emission effect between E10 and E15, the linear regression 
results presented in the study (also shown in Figure V.B-1) indicate a 
decreasing trend in hydrocarbon emissions with increased ethanol in 
gasoline. Based on the study findings, we are reasonably confident that 
the average VOC emissions for ethanol blends greater than E10 up to and 
including E15 will be no worse than for E10, for 1990 technology motor 
vehicles. This outcome is consistent with our engineering judgment. As 
discussed in Section VI.C the general trend across vehicles of all ages 
is that the addition of ethanol to gasoline tends to lower VOC 
emissions due to its enleanment effect during open loop operation.

    \45\ Guerrieri, David Al., Peter Caffrey, and Venkatesch Rao; 
Investigation Into the Vehicle Exhaust Emissions of High Percentage 
Ethanol Blends''; SAE Technical Paper Series; 950777; presented at 
International Congress and Exposition; Detroit, Michigan; March, 
1995.
    \46\ Guerrieri, et al.; op. cit.
    [GRAPHIC] [TIFF OMITTED] TP04NO10.001
    
    Because the data available on 1990 vehicles is limited, we are not 
proposing to change the Complex Model to indicate decreasing VOC 
emissions with increased ethanol content between E10 and E15. Instead, 
we are proposing to modify the application of the Complex Model 
equations to treat VOC exhaust emissions at ethanol levels greater than 
E10 and up to E15 the same as for E10. We are therefore proposing in 
today's rule to modify the Complex Model to allow up oxygen levels up 
to 5.8% by weight to be input to the model but that the VOC emissions 
effects would be modeled the same as if it contained 4.0% by weight 
oxygen.\47\ This will provide flexibility for the Complex Model to be 
used over a broader range of ethanol content. We request comment on 
whether the data and rationale discussed above are an appropriate basis 
for the proposed adjustment to the Complex Model to account for E15.
---------------------------------------------------------------------------

    \47\ The level of 5.8% by weight of oxygen is the potential 
maximum oxygen level associated with E15 due to lighter than average 
gasoline components. The typical weight of oxygen in E15 is 5.2%.
---------------------------------------------------------------------------

VI. Why are we proposing misfueling mitigation measures?

    In previous sections we proposed to prohibit the use of E15 in 
MY2000 and older motor vehicles, heavy-duty gasoline engines and 
vehicles, motorcycles, and all nonroad products (which includes marine 
applications). This section provides the technical rationale supporting 
this decision. As discussed below, it appears that the unique physical 
and chemical properties of ethanol may impact these products when they 
are using gasoline-ethanol blends, particularly as many of these 
products were not designed to operate on such fuels. The potential 
impacts could be the impairment of the performance of their emission 
control devices or systems, which would likely lead to increased HC, CO 
and/or NOX emissions.
    Light-duty motor vehicles (i.e., passenger cars and light-duty 
trucks) have evolved significantly over time, mainly in response to 
increasingly tighter emission standards, but also to improve fuel 
economy, vehicle driveability, and vehicle durability. The primary 
advancements in emissions control have been in the control of the air-
to-fuel (A/F) ratio matched with advancements in catalyst formulations 
and designs with each new generation of motor vehicles. Today's motor 
vehicles are far more sophisticated and up to 99% less polluting than 
they were in the 1970s while also more tolerant of variables like fuel 
composition (i.e., RVP, oxygen content). However, MY2000 and older 
light-duty motor vehicles have not benefitted from these

[[Page 68064]]

advancements in technology and could experience combustion and material 
compatibility problems leading to increased emissions if operated on 
E15. While motorcycles (highway and off-highway), heavy-duty gasoline 
engines and vehicles, and nonroad products have also evolved over time, 
since they have not been regulated as long, and have much more diverse 
applications, they do not reflect the same level of advanced technology 
across the board as do today's light-duty motor vehicles. Consequently, 
their engines and emission control systems may also be impacted in ways 
that affect emission performance if operated on E15.
    On the other hand, the Agency believes that newer light-duty motor 
vehicles (vehicles designed to meet Tier 2 emissions standards) were 
designed with significantly more robust emission controls and fuel 
system components to regularly use gasoline-ethanol blends. For MY2001-
2006 light-duty motor vehicles, EPA does not have enough data on which 
to base a decision at this point in time. DOE testing of MY2001-2006 
light-duty motor vehicles is ongoing and will factor into the Agency's 
decisions for the final rule.
    The sections that follow discuss in more detail the history of 
ethanol use in the U.S., the chemical and physical differences between 
ethanol and gasoline, and how these differences, especially combustion 
enleanment and material compatibility, could impact exhaust and 
evaporative components and emissions. Specifically, we discuss the 
ability of the following groups of vehicles and engines to handle E15: 
(1) MY2000 and older light-duty motor vehicles; (2) heavy-duty gasoline 
engines and vehicles; (3) motorcycles; (4) nonroad products; (5) MY2007 
and newer light-duty motor vehicles; and (6) MY2001-2006 light-duty 
motor vehicles.

A. History of Ethanol Use in the U.S.

    Any assessment of the impacts of E15 use in vehicles, engines, and 
equipment must begin with an understanding of the degree to which they 
were designed for the use of low level gasoline-ethanol blends. E10 is 
currently blended in significant quantities in most gasoline 
distributed and sold in most States, but this was not always the case. 
Most auto manufacturers today support the use of E10 in their vehicles 
and engines since their designs have evolved over time in response to 
the growing use of E10 across the country. However, the total fleet is 
made up of old and new vehicles, engines, and equipment with varying 
technologies and therefore varying compatibility with gasoline-ethanol 
blends.
    Ethanol and ethanol-gasoline blends have a long history as 
automotive fuels in the United States. Inexpensive crude oil prices 
kept ethanol from making a significant presence in the transportation 
sector until the end of the 20th century when tax subsidies and 
environmental programs helped to spur growth. On November 9, 1978, the 
U.S. passed the Energy Tax Act which defined ``gasohol'' as a blend of 
gasoline with 10% alcohol by volume (excluding alcohol made from 
petroleum, natural gas or coal) and offered the fuel an excise tax 
exemption to encourage its use.\48\ While the ethanol tax subsidy has 
been modified over the years, conventional ethanol continues to receive 
a $0.45/gallon tax credit and cellulosic ethanol is eligible for a 
$1.01/gallon credit.
---------------------------------------------------------------------------

    \48\ Refer to the Energy Tax Act of 1978, Public Law 95-618, 
enacted November 9, 1978.
---------------------------------------------------------------------------

    Environmental programs have also been an important contributor to 
ethanol expansion in the United States. First, in the late 1980s and 
early 1990s, ethanol was used as a gasoline oxygenate (along with MTBE) 
to help reduce carbon monoxide (CO) emissions in various CO 
nonattainment areas. Then, ethanol was used as part of the requirements 
for reformulated gasoline in the worst ozone nonattainment areas 
beginning in the mid 1990s.
    Tax subsidies and environmental programs resulted in the growth of 
the fuel ethanol market such that by the late 1990s, E10 represented 
slightly more than 10% of gasoline nationwide. By 1999, 35 States were 
blending ethanol into at least a portion of their gasoline.\49\ 
However, its use remained concentrated in the Midwest, e.g., Illinois, 
Ohio, and Minnesota. Ethanol did not begin expanding significantly 
beyond the Midwest until the early 2000s when States started banning 
the use of Methyl Tertiary-butyl Ether (MTBE) due to groundwater 
concerns. Ethanol quickly became the primary oxygenate in the gasoline 
market. With the removal of the RFG oxygen mandate by the Energy Policy 
Act of 2005 (EPAct), MTBE was removed from gasoline almost entirely by 
2006. Ethanol replaced MTBE, broadening the fuel's use into California, 
the East Coast, and other RFG areas. From 2000 to 2006, the share of 
gasoline containing 10% ethanol by volume (``E10 market share'') more 
than doubled as shown in Figure VI.A.-1. According to fuel survey and 
certification data, ethanol is the only oxygenate currently used in any 
significant quantity today.
---------------------------------------------------------------------------

    \49\ EIA, Motor Gasoline Outlook and State MTBE Bans, Table 2, 
available at: http://www.eia.doe.gov/emeu/steo/pub/special/
mtbeban.html and FHWA, Estimate Use of Gasohol, 1999, available at: 
http://www.fhwa.dot.gov/ohim/hs99/tables/mf33e.pdf.

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

[[Page 68065]]

[GRAPHIC] [TIFF OMITTED] TP04NO10.002

    Since 2006, E10's market share has continued to rise. The increase 
can be attributed primarily to rising crude oil prices which led to 
very favorable ethanol blending economics over most of the past 4-5 
years, but also to the market certainty provided by the Renewable Fuel 
Standard (RFS) established by EPAct and later modified by the Energy 
Independence and Security Act of 2007 (EISA). EPAct required 7.5 
billion gallons of renewable fuel to be blended into transportation 
fuel by 2012. In 2007, EISA expanded the RFS to 36 billion gallons by 
2022. On March 26, 2010, EPA promulgated final RFS2 regulations to 
implement the EISA volumes.\50\ While there are a number of renewable 
fuels that can be used to meet the RFS2 requirements, EPA projects a 
large percentage will come from ethanol. According to EIA, ethanol 
comprised 9.4% of total U.S. motor gasoline sales during the first half 
of 2010.\51\ In other words, over 90% of motor gasoline sold today is 
E10.
---------------------------------------------------------------------------

    \50\ 75 FR 14670 (March 26, 2010).
    \51\ Refer to EIA Monthly Energy Review September 2010 (Tables 
10.3 and 3.7c, respectively).
---------------------------------------------------------------------------

    As E10's market share has increased over the last few years, its 
prevalence has also expanded nationwide. A map showing today's 
estimated E10 penetration by State is provided in Figure VI.A-2. This 
State-level information, provided by HART Energy Consulting, does not 
reflect California's recent shift from 5.7 to 10 vol% ethanol. While 
vehicles, engines, and equipment in the Midwest have been experiencing 
E10 use for a number of years, this is not the case in most of the 
country. Even in much of the Midwest, E10 has become the dominant fuel 
only recently. It took many years for States to reach 25% E10 
saturation and even longer for States to reach 50% E10 saturation. As 
shown in Figure VI.A-3, 23 States (including the District of Columbia) 
just recently reached 50% saturation between 2008 and 2009.\52\ Alaska 
is the only State without significant ethanol blending. According to 
HART, only 10% of Alaska's gasoline is currently comprised of E10.
---------------------------------------------------------------------------

    \52\ 1999-2004 state E10 marketshares based on FHWA ethanol and 
EIA total motor gasoline sales. 2005 ethanol usage based on EIA's 
National Emission Inventory Estimates. 2007-2009 based on HART 
estimates.

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

[[Page 68066]]

[GRAPHIC] [TIFF OMITTED] TP04NO10.003

[GRAPHIC] [TIFF OMITTED] TP04NO10.004


[[Page 68067]]



B. Chemical and Physical Differences Between Ethanol and Gasoline

    Understanding the chemical and physical differences between 
gasoline and ethanol is helpful in determining how increased ethanol 
concentrations in gasoline may impact vehicle and engine technologies 
and whether emission differences may occur. Throughout most of the 20th 
century, engines and vehicles were designed to run on gasoline. Engines 
can and have been designed for the use of ethanol, and in the case of 
FFVs, have been designed to operate effectively on both.\53\ Over the 
last couple of decades, manufacturers have also taken varying steps to 
redesign their gasoline engines to be more compatible with blends of 
gasoline and ethanol up to 10 vol%.
---------------------------------------------------------------------------

    \53\ In the U.S., the most common FFVs are also known as ``E85'' 
vehicles. They are designed to run on gasoline or a blend of up to 
85 vol% ethanol (E85) and are equipped with modified components 
designed specifically to be compatible with ethanol's chemical 
properties.
---------------------------------------------------------------------------

    Gasoline is a complex mixture of several hundred hydrocarbon 
molecules (organic compounds containing carbon and hydrogen) ranging in 
carbon number from four to twelve that are produced from various 
refinery streams. In contrast, fuel ethanol contains only one kind of 
molecule with two carbon atoms. Alcohols such as ethanol are derived 
from hydrocarbons by replacing the hydrogen atoms in their parent 
hydrocarbon (ethane is the parent of ethanol) with one or more hydroxyl 
groups containing oxygen and hydrogen.
    Gasoline quality specifications are provided by ASTM D4814,\54\ 
while ethanol quality specifications for blending in gasoline are 
provided by ASTM D4806.\55\ Several properties of ethanol, as compared 
to typical gasoline and toluene, are listed below in Table VI.B-1. 
Since toluene is a common hydrocarbon used as an octane enhancer in 
gasoline, it is included below for comparison purposes.\56\ Ethanol has 
been used successfully in gasoline for several decades as a volumetric 
fuel extender due to its beneficial Research Octane Number and Motor 
Octane Number blending values.
---------------------------------------------------------------------------

    \54\ ASTM D4814, Standard Specification for Automotive Spark 
Ignition Fuel.
    \55\ ASTM D4806, Standard Specification for Denatured Fuel 
Ethanol for Blending with Gasoline for Use in Automotive Spark 
Ignition Fuel.
    \56\ SAE J1297, revised July, 2007, Surface Vehicle Information 
Report, Alternative Fuels.

                       Table VI.B-1--Properties of Ethanol, Gasoline and Toluene 57 58 59
----------------------------------------------------------------------------------------------------------------
                                         Gasoline (typical
              Property                      properties)                 Toluene                  Ethanol
----------------------------------------------------------------------------------------------------------------
Chemical Formula....................  Mixed C4 to C12          C7H8....................  CH3CH2OH.
                                       Hydrocarbons.
Molecular Weight....................  95-115.................  92......................  46.
Oxygen Weight Percent...............  .......................  0.......................  34.7.
Boiling Point [deg]F................  85-437.................  231.....................  173.
Specific Gravity 60 [deg]F/60 [deg]F  0.72-0.78..............  0.87....................  0.79.
Research Octane Number..............  91-100.................  111.....................  111.
Motor Octane Number.................  82-92..................  95......................  92.
(R + M)/2...........................  87-92..................  103.....................  102.
Net Heat of Combustion BTU/Gal \60\.  117,000................  126,000.................  76,000.
Latent Heat of Vaporization BTU/Gal   800....................  1130....................  2600.
 \61\.
Solubility in Water, gram/100g H2O..  Trace..................  Trace...................  Infinite.
Stoichiometric A/F Ratio, Mass Air/   14.6...................  13.5....................  9.0.
 Mass Fuel.
Vapor Flammability Limits Percent by  0.6-8..................  ........................  3.5-15.
 Volume.
Vapor Pressure @ 100 [deg]F psi.....  9-13...................  ........................  2.5.
----------------------------------------------------------------------------------------------------------------

    Because gasoline is composed of different molecules of different 
lengths, it has a boiling range as well as a distillation curve. On the 
other hand, because ethanol is composed of a single type of molecule, 
it has a single boiling point and lacks the characteristic distillation 
curve of gasoline. Functional groups such as ethanol's hydroxyl group 
generally determine how a molecule will behave.
---------------------------------------------------------------------------

    \57\ SAE J1297, revised July, 2007, Surface Vehicle Information 
Report, Alternative Fuels. Note: The values in Table 1 should be 
considered for relative comparisons only.
    \58\ SAE 861178, ``The Properties and Performance of Modern 
Automotive Fuels,'' P. Dorn, A.M. Mourao, and S. Herbstman, Texaco 
Research Center, Beacon, N.Y.
    \59\ SAE 912413 ``An Overview of the Technical Implications of 
Methanol and Ethanol as Highway Motor Vehicle Fuels,'' Frank Black, 
U.S. Environmental Protection Agency, Research Triangle Park, N.C.
    \60\ BTU/Gal = 279 J/L
    \61\ BTU/Gal = 279 J/L
---------------------------------------------------------------------------

    The question with the use of E15 is whether or not the vehicles, 
engines, equipment, and products that are designed for the properties 
of gasoline and/or E10 are also designed for the properties of E15. 
Some property differences between E10 and E15 may be dealt with in fuel 
blending such that the base gasoline can be adjusted in advance to 
accommodate the ethanol. This adjustment will ensure that the resulting 
blend meets a target specification for properties such as volatility 
and octane rating. On the other hand, some property differences between 
E10 and E15 are inherent to the ethanol fraction and cannot be 
accounted for by blending. For example, the impact of E15 versus E10 on 
engine combustion is a potential concern. How a vehicle or engine 
adapts to combust fuels with different ethanol concentrations depends 
on the vehicle hardware and software control strategies. Vehicles and 
engines operating on E15 may have hotter exhaust temperatures than the 
same vehicles and engines running on E10. In addition, material 
compatibility is time, temperature, and concentration dependent. Some 
material effects with E15 are possible that may not have been 
experienced with E10 in the past.
    The following sections describe in greater detail the chemical and 
physical differences of gasoline and ethanol, particularly focusing on 
the effects of these differences when ethanol is blended with gasoline. 
This discussion lays the foundation for vehicle and engine specific 
discussion in sections VI.C.-VI.I.
1. Impact on the A/F Ratio--Combustion Enleanment
    When gasoline is combusted in an engine, the stoichiometric A/F 
ratio (i.e., the ideal ratio for complete combustion of the fuel and 
air into carbon dioxide and water vapor) is approximately 14.7 times 
the mass of air to fuel (14.7:1). For gasoline, any mixture less than 
14.7:1 is

[[Page 68068]]

considered to be a rich mixture (excess fuel), and any mixture more 
than 14.7:1 is a lean mixture (excess air/oxygen) given ideal test fuel 
and complete combustion. The addition of oxygenates such as ethanol 
(with its hydroxyl group) to gasoline alters the stoichiometric A/F 
ratio and therefore affects combustion. Engines/vehicles equipped with 
feedback controls can adjust the A/F ratio to stoichiometric 
conditions--around 14.0:1 for E10 and 13.8:1 for E15 (the ratio is 
lower as ethanol contains oxygen so less air is needed). However, for 
gasoline engines that do not have the ability to react to the desired 
stoichiometric A/F ratio for a different fuel (e.g., gasoline-ethanol 
blends), combustion is enleaned. E10 would result in approximately 4% 
enleanment when compared with gasoline, E15 would result in 
approximately 6% enleanment. This means E10 and E15 have 4% and 6% more 
oxygen, respectively, than the stoichiometric A/F ratio.
    Fuel metering components are sized to deliver an A/F mixture that 
optimizes emission performance, power output, fuel economy, and 
durability. If an engine is allowed to operate at a mixture that is 
leaner than it is designed for (too much oxygen for a given amount of 
fuel), it may run at a somewhat higher combustion temperature. This in 
turn can lead to changes in exhaust temperatures which may affect 
catalyst durability, and, especially in the case of nonroad products, 
engine durability, causing an increase in emissions. In addition, 
combustion instability from lean mixtures, which can cause misfire, can 
then lead to accelerated catalyst performance degradation or damage.
2. Polarity and Affinity for Water
    Water is one of the most polar molecules (an uneven distribution of 
charge with the hydrogen atoms being positively charged and the oxygen 
atom negatively charged) while ethanol is only slightly polar and a 
hydrophilic (meaning water loving) molecule because of its hydroxyl 
group. Ethanol dissolves in water when the two are mixed together. 
Unlike ethanol, gasoline is considered to be a non-polar and 
hydrophobic hydrocarbon molecule which means that it does not attract 
water in the same way as ethanol does. As a result, gasoline and water 
are only very slightly soluble. If enough water is added to straight 
gasoline, two layers will form, known as phase separation: a water 
layer and a gasoline layer.
    Ethanol is soluble in gasoline though to a lesser extent than it is 
in water. If a gasoline-ethanol blend is saturated with water, a 
reduction in ambient temperature may cause the ethanol and gasoline to 
separate into two layers. However, the presence of ethanol in gasoline 
will allow more water to be absorbed by the gasoline-ethanol blend 
before phase separation occurs. Some level of water carried through the 
fuel distribution system is generally acceptable and likely unavoidable 
given fuel exposure to moisture and humidity in normal dispensing and 
storage, either at the fuel station or on-board. However, excessive 
water in the fuel can lead to phase separation that can in turn cause 
stalling or permanent damage to most internal combustion engines.
3. Material Compatibility
    The hydroxyl group of ethanol also reacts with natural rubber 
materials. Certain elastomers exposed to alcohols may swell or soften 
and lose strength.\62\ Some plastics and fiberglass can become brittle 
leading to cracks and leaks.\63\ Table VI.B.2.-1 shows the effects of 
gasoline and ethanol on some of the many elastomers that have been 
developed.\64\ As noted from this table, polyfluorocarbons have been 
shown to be compatible with ethanol and ethanol blends. As discussed 
below in VI.C.2., the physical interaction of ethanol with certain 
elastomers also leads to increased permeation of ethanol and 
hydrocarbons through the walls of components made from such materials.
---------------------------------------------------------------------------

    \62\ SAE 912413 ``An Overview of the Technical Implications of 
Methanol and Ethanol as Highway Motor Vehicle Fuels,'' Frank Black, 
U.S. Environmental Protection Agency, Research Triangle Park, N.C.
    \63\ SAE 912413 ``An Overview of the Technical Implications of 
Methanol and Ethanol as Highway Motor Vehicle Fuels,'' Frank Black, 
U.S. Environmental Protection Agency, Research Triangle Park, N.C.
    \64\ Discussion of additional studies evaluating the impacts of 
gasoline-ethanol blends on materials used in vehicles and nonroad 
engines, vehicles, and equipment can be found in the subsections 
that follow.

      Table VI.B.2-1--Effects of Gasoline and Ethanol on Elastomers
------------------------------------------------------------------------
                                       Volume swell (%) after 72 hour
                                               immersion in:
            Elastomer             --------------------------------------
                                     Gasoline     Ethanol        E10
------------------------------------------------------------------------
Fluorocarbon (FKM)...............            0            2            3
Polyester urethane...............           11           19           37
Fluorosilicone (FMQ).............           14            6           18
Butadiene-acrylonitrile (NBR)....           43            8           51
Polyacrylate (ACM)...............           44          101          136
Chlorosulfonated polyethylene               49            1           56
 (CSM)...........................
Ethylene-propylenediene                    137           13          124
 terpolymer (ePDM)...............
Natural Rubber (NR)..............          169            2          176
------------------------------------------------------------------------
Adapted from SAE 912413 ``An Overview of the Technical Implications of
  Methanol and Ethanol as Highway Motor Vehicle Fuels,'' Frank Black,
  U.S. Environmental Protection Agency, Research Triangle Park, N.C.

4. Corrosion
    Ethanol can also contribute to corrosion due to galvanic coupling 
or the absorption of water. Alcohols are better electrical conductors 
compared to gasoline so gasoline-ethanol blends could promote galvanic 
corrosion and galvanic-couple effects between electrochemically 
dissimilar alloys in the fuel system.65, 66 The National 
Ethanol Vehicle Coalition and the Petroleum Equipment Institute have 
demonstrated that aluminum is sensitive to corrosion from ethanol. In 
addition, water in gasoline-ethanol blends can cause corrosion of 
metallic materials (such as brass, cast iron, copper, and various types 
of steel) as the

[[Page 68069]]

water/ethanol layer becomes acidic if phase separation occurs.\67\ The 
presence of water in the fuel distribution system also provides a 
suitable habitat for the growth of microbes which excrete acids that in 
turn are also detrimental to metallic fuel storage systems.\68\ 
Contaminants in water may also impact additives used in finished fuel 
that are designed to maintain the integrity of the finished 
fuel.69, 70, 71 Because of these corrosion concerns, actions 
are usually taken to accommodate ethanol in ethanol production, 
storage, and distribution systems, as well as in vehicles and engines. 
Such actions include the careful selection of materials and/or the use 
of appropriate ethanol compatible coatings on susceptible metal parts 
that come into contact with the ethanol fuel, as well as the use of 
corrosion and biocide additives.
---------------------------------------------------------------------------

    \65\ SAE 750124, ``Racing Experiences with Methanol and Ethanol-
Based Motor-Fuel Blends,'' T. Powell, Automotive Engineering 
Congress and Exposition, Detroit, Michigan, February 24-28, 1975.
    \66\ SAE 912413 ``An Overview of the Technical Implications of 
Methanol and Ethanol as Highway Motor Vehicle Fuels,'' Frank Black, 
U.S. Environmental Protection Agency, Research Triangle Park, N.C.
    \67\ Nakaguichi, G.M., ``Ethanol Fuel Modifications for Highway 
Vehicle Use-Final Report,'' U.S. DOE Contract EY-76-C-04-3683, NTIS 
document ALO-3683-T1, Washington, DC July, 1989.
    \68\ Microbiologically Influenced Corrosion of Galvanic Steel, 
Frederick J. Passman, PhD, Biodeterioration Control Associates, 
Princeton, NJ, USA., ASTM Workshop on Fuel Corrosivity, July, 2010.
    \69\ Behavior of Corrosion Inhibitor Acids In Fuel/Water Blends, 
Andrew McKnight, PhD, Innospec, Newark, DE, USA, ASTM Workshop on 
Fuel Corrosivity, July 2010.
    \70\ Interaction of Contaminants with Pipeline Corrosion 
Inhibitors, Joseph Stark, PhD, Baker Hughes, Sugarland, TX, USA, 
ASTM Workshop on Fuel Corrosivity, July 2010.
    \71\ Diesel Soap--Formation and Related Problems, Richard 
Chapman, BP Global Fuel Technology, Naperville, IL, USA, ASTM 
Workshop on Fuel Corrosivity, July 2010.
---------------------------------------------------------------------------

5. Solvency
    Ethanol can also act as a solvent for various materials. As such, 
ethanol has historically been known to remove or dissolve components 
built up in the fuel storage, handling and delivery systems (e.g. fuel 
tank, fuel lines, injectors, etc.). Once these components are loosened 
or partially dissolved, they are transported through the fuel system, 
and if excessive, may cause fuel filter, injector plugging or other 
component problems, all of which can lead to poor operability and 
degraded emission performance. Gasoline-ethanol blends may also pick up 
contaminants from storage tanks and delivery trucks. The amount of 
build-up is related to a combination of fuel composition properties and 
fuel usage patterns (i.e., regular fuel usage versus infrequent, etc.). 
Non-automotive equipment may experience fuel filter plugging related 
more to extended storage periods where gasoline can deteriorate and 
lead to more deposits requiring a plugged fuel filter replacement.
6. Volatility
    Fuel volatility is a measure of a fuel's vapor pressure or its 
tendency to vaporize. When ethanol is blended into gasoline, the 
hydrogen bonding between the ethanol molecules is weakened 
significantly and the alcohol ``depolarizes.'' This results in higher 
Reid Vapor Pressures (RVP) for gasoline containing ethanol. Ethanol's 
effects on RVP have been well documented,\72, 73, 74\ where low level 
ethanol blends, in general, will increase gasoline RVP by up to one 
pound per square inch with the maximum effect occurring at 
approximately 3 vol% ethanol concentration. The RVP of the base fuel 
will also influence just how much increase will occur by the addition 
of ethanol.\75\ Increases in RVP result in increased vapor generation 
and increased evaporative emissions.
---------------------------------------------------------------------------

    \72\ J.L. Keller, ``Methanol and Ethanol Fuels for Modern Cars, 
44th Refinery Mid-year Meeting/Session on Fossil Fuels in 1980's, 
Reprint No. 08-79, May 15, 1979.
    \73\ F.W. Cox, Physical Properties of Gasoline/Alcohol 
Automotive Fuels, Presented at the Alcohol Fuel Technology 
Conference, May 28-31, 1979.
    \74\ SAE 912413 ``An Overview of the Technical Implications of 
Methanol and Ethanol as Highway Motor Vehicle Fuels,'' Frank Black, 
U.S. Environmental Protection Agency, Research Triangle Park, N.C.
    \75\ SAE 861178, ``The Properties and Performance of Modern 
Automotive Fuels,'' P. Dorn, A.M. Mourao, and S. Herbstman, Texaco 
Research Center, Beacon, N.Y.
---------------------------------------------------------------------------

    Additionally, while ethanol at certain levels may raise the general 
volatility of the gasoline-ethanol blend, because of ethanol's single 
boiling point and high latent heat of vaporization, the ethanol 
fraction may cause combustion difficulties and increased emissions 
during the start of some spark-ignition engines when the engines are 
cold, particularly at colder start temperatures. Further, once the 
engine is hot, the single boiling point can also cause difficulty in 
operating and starting a hot engine as observed in older motor vehicles 
when ethanol first became available. The ethanol would reach its 
boiling point in the fuel system and result in what is known as ``vapor 
lock.''

C. Model Year 2000 and Older Light-Duty Motor Vehicles

    Ethanol impacts motor vehicles in three primary ways. First, as 
discussed in Section VI.B.1 above, ethanol enleans the A/F ratio which 
leads to increased exhaust gas temperatures and therefore potentially 
incremental deterioration of emission control hardware and performance 
over time. Second, over time, enleanment caused by ethanol can 
ultimately lead to catalyst failure. Third, ethanol can cause material 
compatibility issues which may lead to other component failure. 
Ultimately, all of these impacts may lead to exhaust and/or evaporative 
emission increases.
1. Enleanment
    MY2000 and older light-duty motor vehicles have much less 
sophisticated emissions control systems compared to today's motor 
vehicles and, as described below, may experience conditions that lead 
to both immediate emission increases and increases over time if 
operated on E15. Vehicles produced prior to the mid-1980s were equipped 
primarily with carbureted engines. The A/F ratio of the carburetor is 
preset at the factory based on the expected operating conditions of the 
engine such as ambient temperature, atmospheric pressure, speed, and 
load. As a result, carburetors have ``open loop'' fuel control which 
means that the air and fuel are provided at a specified, predetermined 
ratio that is not automatically adjusted during motor vehicle 
operation. As fuel composition can vary, an engine with a carburetor 
and open loop fuel control would never know whether it achieved the 
desired A/F ratio. Since the motor vehicles at this time operated 
``open loop'' all of the time with no ability to react for changes in 
the A/F ratio, the addition of ethanol to the fuel tended to make the 
A/F ratio leaner--closer to stoichiometry, which had the immediate 
effect of reducing HC and CO emissions, but increasing NOX 
emissions. However, some of these older open loop systems already 
operate at the lean edge of combustion on current commercial fuels so 
an increase in ethanol may cause them to begin to misfire resulting in 
HC and CO increases.
    As a result of the Clean Air Act, EPA established standards and 
measurement procedures for exhaust, evaporative, and refueling 
emissions of criteria pollutants. From 1975 into the 1980s, motor 
vehicles became equipped with catalytic converters, first with 
catalysts capable of oxidizing HC and CO, and then, in response to 
EPA's ``Tier 0'' standards, with three-way catalysts that also reduced 
NOX. Motor vehicles produced in the 1980s and even more so 
in the 1990s as a result of more stringent California and Federal 
(e.g., ``Tier 1'') standards evolved to incorporate more sophisticated 
and durable emission control systems. These systems generally included 
an onboard computer, oxygen sensor, and electronic fuel injection with 
more precise closed-loop fuel compensation and therefore A/F ratio 
control during more of the engine's operating range. However, even

[[Page 68070]]

with the use of closed loop systems through the late 1990s, the 
emission control system and controls remained fairly simple with a 
limited range of authority and were primarily designed to adjust for 
component variability (i.e., fuel pressure, injectors, etc.) and not 
for changes in the fuel composition. During this period, ethanol was 
only available in very limited areas of the US so the manufacturers' 
designs of the emission controls and the durability of emission control 
hardware generally did not account for the increased oxygen content of 
ethanol. As a result, this generation of vehicles certified to Tier 0 
and early Tier 1 emission standards operated leaner on ethanol, causing 
immediate emission impacts (lower HC and CO emissions, higher 
NOX emissions) and may have also deteriorated at different 
rates when exposed to ethanol. These designs continued to evolve during 
the early period of the Tier 1 emission standards as manufacturers and 
component suppliers gained experience with vehicles in-use. However, 
the largest improvements to emission controls and hardware durability 
came after 2000 with the introduction of several new emission standards 
and durability requirements forcing manufacturers to better account for 
the implications of in-use fuels on the evaporative and exhaust 
emission control systems.
    While most motor vehicles are operating today on E10, motor 
vehicles operated on E15 will likely run even leaner than those 
operated on E10 depending on the motor vehicle technology and operating 
conditions. Enleaned combustion leads to an increase in the temperature 
of the exhaust gases. This increase in exhaust gas temperatures has the 
potential to raise the temperatures of various exhaust system 
components (e.g., exhaust valves, exhaust manifolds, catalysts, and 
oxygen sensors) beyond their design limits. However, based on past 
experience, the most sensitive component is likely the catalyst, 
particularly in older motor vehicles with early catalyst technology. 
Catalyst durability is highly dependent on temperature, time, and fuel 
gas composition. Catalyst temperatures must be controlled and catalyst 
deterioration minimized during all motor vehicle operation modes for 
the catalyst to maintain high conversion efficiency over the motor 
vehicle's life. This is particularly important during high load 
operation of a motor vehicle where high exhaust gas temperatures are 
encountered and the risk for catalyst deterioration is highest. 
Catalysts that exceed temperature thresholds will deteriorate at rates 
higher than expected, compromising the motor vehicle's ability to meet 
the required emission standards over its full useful life. Extended 
catalyst exposure to higher exhaust temperatures can accelerate 
catalyst thermal deactivation mechanisms (e.g., sintering of active 
precious metal sites, sintering of oxygen storage materials, and 
migration of active materials into inert support materials). While this 
damage can occur at a highly accelerated rate with a sudden change in 
temperature (e.g., with a misfire allowing raw fuel to reach the 
catalyst), it is more likely to occur over time from elevated exhaust 
temperatures as may be experienced with frequent or even occasional 
exposure to E15. This deterioration may adversely affect a motor 
vehicle's ability to control emissions, particularly after significant 
mileage accumulation.
    Some motor vehicles may be able to manage catalyst temperatures by 
compensating for the oxygen in the fuel under all operating conditions, 
including high loads. This is achieved by using a closed-loop fuel 
system that measures the A/F ratio and makes the appropriate 
corrections to maintain the A/F ratio in the very tight ban of 
operation around stoichiometry necessary for optimum catalyst 
performance and reductions in HC, CO, and NOX emissions. The 
part of the closed-loop fuel system that is responsible for the 
correction to the A/F ratio is referred to as ``fuel trim.'' The fuel 
trim adds or removes fuel to the engine to maintain the required A/F 
ratio. If the measured A/F ratio has insufficient oxygen, or is 
``rich'' compared to what the engine needs, the fuel trim will instruct 
the fuel injectors to inject less fuel, making the A/F ratio 
``leaner.'' The opposite is true if the measured A/F ratio has too much 
oxygen and needs to inject more fuel for a ``richer'' A/F ratio. The 
fuel trim is generally comprised of two major parts, short term fuel 
trim and long term or adaptive learned fuel trim. Learned fuel trim, 
also known as adaptive fuel trim, can also be applied to open loop 
operation such as high load or wide open throttle to alleviate the 
catalyst temperature increases caused by operating on E15 fuel. 
However, while this strategy was more common in later model years 
closer to MY2000, it was not consistently employed by all 
manufacturers. Some manufacturer models may have less range of 
authority than others and some may require longer periods of time to 
adapt. Hence, control algorithms and calibrations used by some 
manufacturers may be more effective than others.
    The fuel trim has a limited range of adjustment in which it can 
continue to update the A/F ratio and maintain the fuel system at or 
near stoichiometry. For MY2000 and older light-duty motor vehicles, the 
fuel trim range is generally more limited than the range for newer 
light-duty motor vehicles, and MY2000 and older motor vehicles may use 
their full range of fuel trim adjustment to account for normal 
component deterioration. Injectors, sensors and changes to fuel 
pressure may shift with time and aging to use all of the fuel trim's 
range of adjustment. The additional oxygenate in E15 may actually shift 
the A/F ratio more than the earlier introduction of E10 if the engine's 
A/F ratio feedback cannot compensate because it has reached its 
adjustment limit. In short, MY2000 and older motor vehicles are at risk 
of having insufficient thermal margins to accommodate ethanol blends up 
to E15 due to the limits of their fuel trim range.
    Test data to confirm or refute concerns over the use of E15 in 
older vehicles is very limited in scope and content. The available data 
do not prove or disprove the concerns, although there are several 
studies that support the potential for long term durability issues 
consistent with engineering theory. Three studies--the CRC Screening 
Study, DOE Pilot Study, and the Orbital Study--discussed in section 
IV.A. highlight in particular the concern with MY2000 and older motor 
vehicles. The CRC Screening Study (E-87-1) was a test program developed 
to look at the effects of mid-level ethanol blends on U.S. 
vehicles.\76\ This screening study was the first phase of a two-phase 
study evaluating the effects of mid-level ethanol blends on emission 
control systems. The purpose of this first phase of the study was to 
identify vehicles which used learned fuel trims to correct open loop 
air-fuel rations. Under the test program a fleet of 25 test vehicles 
was identified and acquired with six of those vehicles being MY2000 and 
older. The study collected vehicle speed, oxygen sensor air-fuel-ratio, 
and catalyst temperature data for four fuels (E0, E10, E15, and E20). 
The results of the three ethanol blended fuels compared to E0 showed 
that four of the six MY2000 and older vehicles tested failed to apply 
long-term fuel trim to open loop operation in order to compensate for 
increasing ethanol levels. And that these

[[Page 68071]]

same four vehicles exhibited increased catalyst temperatures when 
operated on E20 as compared to E0. While the subsequent DOE Catalyst 
Study concluded that this learned fuel trim was not important for 
MY2007 and newer motor vehicles because they are durable (and therefore 
can handle E15) as discussed in section IV.A, there was no such follow 
on program for MY2000 and older motor vehicles so the durability of 
these vehicles on E15 is unknown.
---------------------------------------------------------------------------

    \76\ Mid-level Ethanol Blends Catalyst Durability Study 
Screening (CRC Report: E-87-1), June 2009 (``CRC Screening Study''). 
http://www.crcao.com/reports/recentstudies2009/E-87-1/E-87-
1%20Final%20Report%2007_06_2009.pdf
---------------------------------------------------------------------------

    Another study suggests that many MY2000 and older motor vehicles 
may also have emission exceedances if operated on E15. In 2003, the 
Orbital Engine Company issued a report on the findings of vehicle 
testing it completed to assess the impact of E20 on the Australian 
passenger vehicle fleet. While the Australian vehicles in this study 
were not representative of U.S. vehicles of the same model years, they 
are similar to MY2000 and older U.S. motor vehicles with respect to 
technology and emission standards. The testing program covered vehicle 
performance and operability testing, vehicle durability testing, and 
component material compatibility testing, on nine different vehicle 
makes or models, five vehicles from MY2001 and four vehicles from 
MY1985 to MY1993. Testing results showed increases in exhaust gas 
temperature in five of the nine vehicles tested with three showing 
increases in catalyst temperature. Enleanment was found to occur in six 
of the nine vehicles tested, with three having closed loop control--the 
old vehicles without closed loop control all displayed enleanment. In 
general, the increase in exhaust gas temperature was found to follow 
those vehicles with enleanment. Furthermore, one vehicle in the study 
experienced catalyst degradation sufficient to make the tested vehicle 
no longer meet its applicable Australian emission standards.
    EPA recently received a report by Ricardo \77\ commissioned by the 
Renewable Fuels Association specifically discussing the potential 
impacts of E15 on MY1994-2000 light-duty motor vehicles. However, as 
discussed in the decision document, it sheds little new light on the 
potential emission impacts of E15 on MY2000 and older motor vehicles. 
While arguing that many MY1994-2000 motor vehicles may be designed to 
be compatible with E15, it did so only for ``properly engineered'' 
vehicles. Furthermore, it acknowledged potential emission increases in-
use, but in the context of the waiver decision highlighted that they 
were likely within manufacturer compliance margins. Finally, it drew 
many of its conclusions only relative to E10, not to E0.
---------------------------------------------------------------------------

    \77\ Ricardo Inc., Technical Assessment of the Feasibility of 
introducing E15 Blended Fuel in U.S. Vehicle Fleet, 1994 to 2000 
Model Years, 10 September, 2010. EPA Docket  EPA-HQ-OAR-
2010-0448.
---------------------------------------------------------------------------

    Hence, based on the limited data available and our engineering 
judgment, we conclude that MY2000 and older motor vehicles have the 
potential to experience conditions when operated on E15 which may 
ultimately lead to an increase in emissions.
2. Material Compatibility
    Data and information exist in the literature regarding ethanol's 
impacts on motor vehicle material compatibility. Engine, fuel system, 
and emission control materials (metals, plastics, and elastomers) must 
maintain their integrity for motor vehicles to meet their exhaust and 
evaporative emissions standards. Material incompatibility can result 
from the chemical reaction or physical interaction between a fuel and 
material with which it comes into contact. This can lead to emissions 
compliance problems not only immediately upon using the new fuel or 
fuel additive, but especially over time. In most cases one would expect 
any materials incompatibility to show up in the emissions tests, but 
there may be impacts that do not show up due to the way the testing is 
performed or because the tests simply do not capture the effect. As a 
result, along with emissions testing, materials compatibility is a key 
factor in assessing the emissions durability of a fuel or fuel 
additive.
    Based on our engineering assessment, it appears that manufacturers 
took varying steps at different points in time to transition the 
materials in their motor vehicle designs to be E10 compatible. Many in 
the mid-to-late 1980s took steps for E10 compatibility at least for the 
more immediate effects of ethanol (e.g., the dissolving of certain 
elastomers). Large parts suppliers began testing materials on gasoline-
ethanol blends in the mid-to-late 1980s and early 1990s, but practices 
varied with manufacturer. At the same time, certain areas have now had 
E10 for a number of years and therefore motor vehicles in these areas 
have experienced a much higher frequency of ethanol exposure. This has 
led many to argue that ethanol is compatible for all motor vehicles in 
the in-use fleet and therefore E15 should be too. However, since the 
effects would be long term, it is difficult to assess whether these 
motor vehicles experienced any higher rates of deterioration or 
component failure on E10. Furthermore, material compatibility with 
ethanol is time, condition (e.g., temperature, pressure), and 
concentration dependent, such that problems may occur with E15 that did 
not show up with E10.
    Moving from E10 to E15 reflects a 50% increase in the volume of 
ethanol present in gasoline. Therefore, since the impacts of ethanol on 
materials are a function of concentration, E15 has the potential to 
have more significant impacts than E10 if used in motor vehicles not 
equipped for it. For MY2000 and older motor vehicles, E15 use may 
result in degradation of metallic and non-metallic components in the 
fuel and evaporative emissions control systems that can lead to highly 
elevated hydrocarbon emissions from both vapor and liquid leaks. 
Potential problems such as fuel pump corrosion or fuel hose swelling 
would likely be worse with E15 than historically with E10, especially 
if motor vehicles will be operating exclusively on it. Since ethanol 
historically comprised a much smaller portion of the fuel supply (see 
section VI.A.), in-use experience with E10 was often discontinuous or 
temporary, while material effects are time and exposure dependent. 
Thus, problems may surface with E15 that have not surfaced historically 
in-use. Additionally, leak detection diagnostics did not appear until 
MY1996 and enhanced evaporative test procedures were not fully 
implemented until the late 1990s.
    In addition to potential vapor or liquid leaks, ethanol is also 
known to facilitate permeation through the materials in the fuel 
system. Studies have shown this to be a significant source of increased 
emissions with gasoline-ethanol blends, especially on older motor 
vehicles. Following additional testing requirements as part of the Tier 
2 motor vehicle emission standards beginning in 2004, materials in 
newer motor vehicles have been able to mitigate the permeation effects 
of ethanol in the fuel, as discussed in the waiver decision document. 
However, as shown in the Figure VI.C.2-1 below, permeation emissions 
from older model year vehicles may be very high with ethanol 
blends.\78\
---------------------------------------------------------------------------

    \78\ Diurnal testing refers to a process for measuring 
evaporative emissions where a vehicle is placed in a sealed 
enclosure and the temperature varied over multiple cycles to 
simulate ambient day and night conditions in summertime. Enhanced 
Evaporative Emission Vehicles (CRC Report: E-77-2), March 2010, and 
Evaporative Emissions from In-Use Vehicles: Test Fleet Expansion 
(CRC Report: E-77-2b), June 2010.

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

[[Page 68072]]

[GRAPHIC] [TIFF OMITTED] TP04NO10.005

    As part of its waiver application, Growth Energy submitted a series 
of studies completed by the State of Minnesota and the Renewable Fuels 
Association (RFA) that investigated materials compatibility of motor 
vehicle engines and engine components using three test fuels: E0, E10, 
and E20 (``Minnesota Compatibility Study'').\79\ The Minnesota 
Compatibility Study looked at 19 metals (``Metals Study''),\80\ eight 
elastomers (rubber materials) (``Elastomers Study''),\81\ eight 
plastics (``Plastics Study''),\82\ and 24 common fuel sending unit and 
fuel pump combinations (``Fuel Pumps Study'' and ``Fuel Pump Endurance 
Study''),83, 84 currently used in automotive, marine, small 
engine, and fuel system dispensing equipment for physical or chemical 
effects due to ethanol.\85\
---------------------------------------------------------------------------

    \79\ ``The Feasibility of 20 Percent Ethanol Blends by Volume as 
a Motor Fuel;'' State of Minnesota and Renewable Fuels Association.
    \80\ ``The Effects of E20 on Metals Used in Automotive Fuel 
System Components;'' Bruce Jones, Gary Mead, Paul Steevens, and Mike 
Timanus; Minnesota Center for Automotive Research at Minnesota State 
University, Mankato; February 22, 2008.
    \81\ ``The Effects of E20 on Elastomers Used in Automotive Fuel 
System Components;'' Bruce Jones, Gary Mead, Paul Steevens, and 
Chris Connors; Minnesota Center for Automotive Research at Minnesota 
State University, Mankato; February 22, 2008.
    \82\ ``The Effects of E20 on Plastic Automotive System 
Components;'' Bruce Jones, Gary Mead, and Paul Steevens; Minnesota 
Center for Automotive Research at Minnesota State University, 
Mankato; February 21, 2008.
    \83\ ``The Effects of E20 on Automotive Fuel Pumps and Sending 
Units;'' Nathan Hanson, Thomas Devens, Colin Rohde, Adam Larson, 
Gary Mead, Paul Steevens, and Bruce Jones; Minnesota State 
University, Mankato; February 21, 2008.
    \84\ ``An Examination of Fuel Pumps and Sending Units During a 
4000 Hour Endurance Test in E20;'' Gary Mead, Bruce Jones, Paul 
Steevens, Nathan Hanson, and Joe Harrenstein, Minnesota Center for 
Automotive Research at Minnesota State University, Mankota; March 
25, 2009.
    \85\ Effects assessed in the studies include: Pitting, surface 
texture change, discoloration, or loss of mass for metals; 
appearance, volume, weight, tensile strength, elongation, and 
hardness for elastomers; mass loss or gain, volume loss or gain, 
tensile elongation, impact resistance, and tensile strength for 
plastics; and corrosion and longevity as measured by flow and 
pressure tests for pumps and sending units.
---------------------------------------------------------------------------

    Results from the Minnesota study were mixed depending on if the 
comparison was being made between E20 and E10 or E20 and E0. Some 
materials were compatible with the ethanol blends while some displayed 
larger property changes with the ethanol blends. Because of the immense 
variety of materials available and the overlap in use of the different 
materials over time, the study could not test all materials in the 
fleet, nor did it directly assign the materials tested to a vehicle 
generation or model year. Instead, the study generalized that because 
ethanol was available in some parts of the U.S., these materials were 
likely E10 compatible. However, these materials were used prior to the 
widespread use of ethanol and therefore conceivably prior to many 
manufacturer's requirement for prolonged exposure to ethanol and 
specifically not for gasoline-ethanol blends above 10%. It is difficult 
to quantify the overall impact of changes in any material due to 
ethanol at E15 or E20 levels and what those changes would mean to the 
older motor vehicle fleet, only that some portion of the fleet may 
experience changes that could result in accelerated component failures 
beyond what would be expected on E0 or E10. In addition, it is 
important to note that the Minnesota Compatibility Study assessed 
component parts using laboratory bench tests rather than durability 
studies of whole motor vehicle fuel systems simulating ``real world'' 
motor vehicle use.

[[Page 68073]]

    In addition to providing comments on the Minnesota Compatibility 
Study as discussed in the waiver decision document, the Alliance 
commented that engines need to be hardened for resistance to ethanol. 
Use of gasoline-ethanol blends in unhardened engines can result in 
bore, ring, piston and valve seat wear. Deterioration of these 
components can lead to compression and power loss, misfire and catalyst 
damage.
    Based on our review of the literature and industry comments on the 
E15 waiver request, we believe that MY2000 and older light-duty motor 
vehicles have the potential for increased material degradation with E15 
use. In addition, some MY2000 and older light-duty motor vehicles may 
have been designed for only limited exposure to E10 while the oldest 
vehicles on the road pre-date ethanol blends in the marketplace all 
together. This potential for material degradation may make the 
emissions control and fuel systems more susceptible to corrosion and 
chemical reactions from E15 when compared to the E0 certification fuels 
for these motor vehicles and may ultimately increase vehicle emissions, 
especially for MY2000 and older motor vehicles.
3. Motor Vehicle Population and Anticipated Emissions Impact
    There is a long history of test programs that have been carried out 
on light-duty motor vehicles and trucks that have quantified the 
immediate emission impacts of blending ethanol up to 10 vol% into 
gasoline. These test programs, dating back to the earliest days of 
gasoline-ethanol blends, have found that the oxygen content of ethanol 
enleans the A/F ratio in motor vehicles during open-loop operation, 
causing a decrease in HC and CO emissions, but also results in a 
corresponding increase in NOX emissions. These studies have 
been used to develop emission models, such as the EPA Predictive Models 
\86\ incorporated into the Agency's MOVES model,\87\ that have been 
thoroughly peer reviewed. The result is that for a typical E10 blend of 
gasoline, exhaust NMHC emissions have been found to decrease by about 
5%, and NOX emissions to increase by about 6%, relative to 
E0.\88\ While the magnitude of impact may vary by a few percent 
depending on the motor vehicle technology and how other fuel properties 
change when ethanol is blended into gasoline, the relative magnitude 
and direction of the impacts remains consistent for typical fuels.\89\ 
The limited available data on E15 suggests that this trend continues, 
and is slightly more pronounced due to the higher ethanol content. 
However, these emission impacts are not the focus of this proposal as 
their magnitude tends to be within vehicle compliance margins (the 
difference between a vehicle's actual emission certification level and 
the standard). Rather, for this proposal, we have focused on long-term 
durability issues associated with E15, as discussed in more detail 
below. The issue of immediate emission increases for E15 is more 
properly addressed as part of the anti-backsliding study and rulemaking 
under section 211(v) of the Act.
---------------------------------------------------------------------------

    \86\ A detailed description of the development of the EPA 
Predictive Models is available in a Technical Support Document: 
``Analysis of California's Request for Waiver of the Reformulated 
Gasoline Oxygen Content Requirement for California Covered Areas'', 
EPA420-R-01-016, June 2001.
    \87\ The Agency's MOVES model has undergone extensive peer 
review and testing, and incorporates the EPA Predictive Models.
    \88\ These effects are based the EPA Predictive Models and are 
generally consistent with conclusions of CRC E-74b report (e.g., 
Figure ES-2). Fuels properties evaluated were based on market 
averages and were as follows: E0 had aromatics content of 29.5 vol%, 
a T50 of 215 [deg]F, a T90 of 325 [deg]F, and an RVP of 8.9 psi and 
E10 had aromatics content of 24.9 vol%, a T50 of 202 [deg]F, T90 of 
325 [deg]F, and an RVP of 8.9 psi. Other parameters not mentioned 
here were assumed to be held constant between the blends.
    \89\ Results based on data mostly from vehicle models that 
predated the Tier 2 emission standards, so several recent test 
programs have been focused on Tier 2 vehicles that will soon make up 
the majority of the in-use fleet.
---------------------------------------------------------------------------

    Sufficient data do not exist to predict specific changes in 
emission rates for the various motor vehicle technologies due to long-
term use of E15 blends. However, with respect to exhaust emissions, if 
a catalyst were to be damaged to the point of having no significant 
remaining functionality, we could expect NOX emissions 
similar in magnitude to those in untreated engine-out exhaust (i.e., 
before treatment by the catalyst). If, in this situation, the fuel 
control system continued to operate in closed-loop mode, NOX 
emission levels in the range of 2-4 g/mi would be expected, or 
approximately ten times the typical emissions rate for a properly 
operating 1990s-era motor vehicle and about 60 times that of new cars 
today.\90\ Similarly, loss of catalyst function could also cause 
significant HC emission increases, where levels on the order of 2 g/mi 
could be expected.\91\ This would be equivalent to combined HC 
emissions of 40 new cars today. While this kind of complete failure 
would likely be limited in nature, misfueled motor vehicles may 
experience a reduction in catalyst efficiency earlier than intended, 
resulting in emissions levels increased above current levels and up to 
the uncontrolled engine-out levels presented above.
---------------------------------------------------------------------------

    \90\ See ``Effects of Gasoline Composition on Vehicle Engine-Out 
and Tailpipe Hydrocarbon Emissions--The Auto/Oil Air Quality 
Improvement Research Program'', SAE Paper No. 920329. See also 
``Engine-out and Tail-Pipe Emission Reduction Technologies of V-6 
LEVs'', SAE Paper No. 980674. A vehicle not operating in closed-loop 
mode may emit more or less NOX depending on combustion 
behavior. During the 1990s, Federal emission standards for 
NOX dropped from 1 g/mi to 0.4 g/mi.
    \91\ See ``Effects of Gasoline Composition on Vehicle Engine-Out 
and Tailpipe Hydrocarbon Emissions--The Auto/Oil Air Quality 
Improvement Research Program'', SAE Paper No. 920329. See also 
``Engine-out and Tail-Pipe Emission Reduction Technologies of V-6 
LEVs'', SAE Paper No. 980674.
---------------------------------------------------------------------------

    Another area of concern related to exhaust emissions is fuel pump 
malfunction occurring due to material incompatibility of higher ethanol 
content with parts such as plastic pump rotors, shaft seals or 
elastomeric tubing, and increased corrosion of metallic or electrical 
components. As described in Section VI.B, ethanol increases the 
electrical conductivity of fuel, increasing the likelihood that 
galvanic corrosion of metal parts would occur. Before outright failure, 
malfunctioning fuel pumps often provide inconsistent fuel pressure for 
some period of time, resulting in long crank (starting) times, 
misfires, and other erratic engine behavior. Should such conditions 
occur, they may cause increases in exhaust emissions and possible 
deterioration of exhaust catalysts.
    In addition to the potential for exhaust emissions increases, 
evaporative emissions are also expected to increase, not only 
immediately due to increased permeation (as discussed above), but also 
due to long-term E15 use that may cause from increased corrosion of 
metallic fuel system components and accelerated deterioration of 
elastomeric hoses and seals. Corrosion may result in vapor or liquid 
leaks, depending on where in the fuel system the corrosion is located. 
Many types of elastomers used in o-rings and fuel lines swell or crack 
when exposed to ethanol, resulting in increased permeation of vapor or 
liquid leaks. Elastomeric seals on older motor vehicles may already be 
brittle and weakened from age. Exposure to E15 may produce accelerated 
failures of these elastomeric components.
    Though it is difficult to quantify the impacts of these types of 
evaporative component failures, a recent evaporative emissions study 
produced some relevant data. During the program, a motor vehicle with a 
fuel system leak due to an o-ring failure produced between 23-26 times 
more gasoline vapor during a pair of diurnal tests than

[[Page 68074]]

a properly-functioning new motor vehicle meeting current standards.\92\ 
The study also placed very small simulated leaks (essentially pin 
holes) in gas caps of three motor vehicles, representative of what 
could occur as a result of tiny corrosion sites in the vapor space of 
the fuel tank. Diurnal tests were performed to compare the emissions 
with and without the leaks. The MY1996 motor vehicle produced 54 times 
more evaporative emissions with the simulated leak, while the MY2001 
and 2004 motor vehicles produced two and three times more vapors, 
respectively. The study authors point out that the two newer motor 
vehicles had tank vent systems designed to meet onboard refueling vapor 
recovery (ORVR) requirements, suggesting this may mitigate the effect 
of vapor space leaks.\93\
---------------------------------------------------------------------------

    \92\ Diurnal testing refers to a process for measuring 
evaporative emissions where a vehicle is placed in a sealed 
enclosure and the temperature varied over multiple cycles to 
simulate ambient day and night conditions in summertime. See 
Coordinating Research Council Report No. E-77-2 for detailed results 
(available at http://www.crcao.org).
    \93\ Onboard refueling vapor recovery systems were phased into 
production in light-duty motor vehicles over MY1998-2000, and 
provide a relatively short, large-diameter pathway for vapors to 
reach the carbon canister where they are stored for combustion 
during engine operation. See Coordinating Research Council Report 
No. E-77-2 for detailed results (available at http://www.crcao.org).
---------------------------------------------------------------------------

    Thus, we may conclude that even small vapor space leaks occurring 
in older motor vehicles (before ORVR was required) have the potential 
to result in large increases in HC emissions.
    For more discussion on potential evaporative issues, refer to the 
Waiver Decision document Section IV.A.3 that was also released today.
    Table V1.C.3-1 below shows the projected population of motor 
vehicles--passenger cars and light-duty trucks in the fleet--by model 
year for 2011. According to this information, of the total estimated 
225 million cars and trucks that operate on gasoline in the fleet 
today,\94\ nearly 73 million or one-third are MY2000 and older light-
duty motor vehicles, and it is these motor vehicles for which the 
effects of E15 are uncertain but indicate the potential for anywhere 
from small to significant emission increases from the deterioration of 
the emissions control system over time. As discussed above, if motor 
vehicles experience engine or emission component failure, the potential 
exists for very elevated exhaust and/or evaporative system emissions 
rates. If only a fraction of the fleet were to experience problems with 
E15, that would still be a large number of motor vehicles with a 
potentially significant impact on in-use emissions.
---------------------------------------------------------------------------

    \94\ There are approximately 250 million cars and trucks in the 
fleet today when diesels are included.

               Table VI.C.3-1--Projected Population of Cars and Light Trucks by Model Year in 2011
----------------------------------------------------------------------------------------------------------------
                                                                             Cars and trucks
             Model year                      Cars           Light trucks         combined       Cumulative total
----------------------------------------------------------------------------------------------------------------
2000 and earlier....................         41,548,800         32,162,084         73,710,884         73,710,884
2001-2006...........................         46,567,413         38,594,752         85,162,165        158,873,049
2007-2011...........................         39,068,213         26,755,598         65,823,812        224,696,860
                                     ---------------------------------------------------------------------------
    Total...........................        127,184,425         97,512,435        224,696,860  .................
----------------------------------------------------------------------------------------------------------------
Source: EPA's vehicle certification data and Mobile Vehicle Emissions Simulator (MOVES) model.

D. Heavy-Duty Gasoline Engines and Vehicles

    Given its limited market, heavy-duty gasoline engines and vehicles 
have not been the focus of test programs and efforts to assess the 
potential impacts of E15 on such engines. From a historical 
perspective, the introduction of heavy-duty gasoline engine and vehicle 
technology has lagged behind the implementation of similar technology 
for light-duty motor vehicles. Similarly, emission standards for this 
sector have lagged behind those of light-duty motor vehicles, such that 
current heavy-duty gasoline engine standards remain comparable from a 
technology standpoint to older light-duty motor vehicle standards. 
Consequently, we believe the discussion in Section VI.C. for MY2000 and 
older motor vehicles should also be applicable to the majority of the 
in-use fleet of heavy-duty gasoline engines and vehicles. Therefore, we 
are proposing to prohibit the use of E15 in heavy-duty gasoline engines 
and vehicles. We seek comment on this assessment.

E. Motorcycles

    Motorcycles come in many different sizes, styles and applications. 
The biggest distinction between motorcycle types are that some are 
designed for operation on-road and others are designed for operation 
off-road. The motorcycles designed for operation on-road are referred 
to as highway motorcycles. Highway motorcycles can range from small 
scooters equipped with a 50 cubic centimeter (cc) single cylinder two-
stroke engine to a large touring motorcycle equipped with a multi-
cylinder four-stroke engine with an engine displacement exceeding 2,000 
cc. Motorcycles designed for off-road operation are referred to as off-
highway motorcycles and can differ significantly from highway 
motorcycles in design and appearance.
    Motorcycles have been around for well over 100 years. The fuel 
system used to manage the A/F ratio for motorcycles has been the 
carburetor. In fact, the carburetor has been the fuel control system of 
choice for highway and off-highway motorcycles until the last decade. 
Starting in the late 1990s, some of the more expensive high performance 
highway motorcycles began to use electronic fuel injection (EFI) to 
manage the A/F ratio. While EFI is becoming more common today in many 
highway motorcycles, there are still many models that use carburetors. 
Off-highway motorcycles have only begun to use EFI in a very few 
expensive competition models. The vast majority of off-highway 
motorcycles continue to use carburetors.
    All internal combustion engines need a system to cool the engine 
from the excessive heat generated as part of the combustion process. 
Without a cooling system, the engine would quickly overheat and fail. 
Motorcycles use two types of engine cooling systems: liquid-cooled and 
air-cooled. Liquid-cooled systems are very similar to the systems used 
by automobiles. A radiator stores a liquid coolant that is distributed 
throughout the engine which cools the engine. The heated coolant is 
returned to the radiator where it is cooled by air from the moving 
motorcycle or from an external fan. An air-cooled system is similar to 
that used for most nonroad engines and is less sophisticated than a

[[Page 68075]]

liquid-cooled system. An air-cooled system uses a series of external 
``fins'' located on the cylinders and cylinder heads that help direct 
heat away from the cylinder and cylinder head. Since the engine in a 
motorcycle is exposed to the atmosphere and not contained in an engine 
compartment like an automobile, the engine is exposed to passing air as 
the machine is operated on the road or trail. The passing air is 
channeled through the fins and helps cool the cylinder and cylinder 
head, which helps cool the combustion chamber, reducing the overall 
engine temperature. Air-cooling is not nearly as effective at 
controlling engine temperature as liquid cooling. One of the strategies 
to help with engine cooling for engines that rely on air-cooling is to 
operate the engine at an A/F ratio that is rich of stoichiometry. The 
additional fuel helps reduce combustion temperature, keeping overall 
engine temperature lower. For this reason, any increase in the A/F 
ratio beyond that designed for at the time of manufacturing, such as 
the enleanment resulting from ethanol, raises potential concerns.
    In 1978, EPA issued HC and CO emission standards for highway 
motorcycles. There were no standards for NOX emissions. To 
meet these standards, the vast majority of motorcycle models used the 
approach of adjusting the A/F ratio rather than using any unique 
emission control technologies, such as catalytic converters, EFI, and 
air injection. For performance and durability purposes, most 
motorcycles operated with an A/F ratio that was considerably rich of 
stoichiometry. The strategy used to control HC and CO emissions was to 
lean the A/F ratio from these rich values traditionally used for 
maximum performance. As with light-duty motor vehicles, this strategy 
resulted in lower HC and CO emissions, but caused an increase in 
NOX emissions. Since there were no NOX emission 
standards, the increased NOX emissions were allowed. This 
strategy also resulted in complaints about vehicle performance and 
driveability. As a result, a common practice was for motorcycle owners 
to change the A/F ratio on their own to a richer setting that improved 
the performance concerns, but also possibly resulted in an exceedance 
of the emissions standards. These emission standards were unchanged 
until 2006 when more stringent standards for HC and new standards for 
NOX were introduced for MY2008.
    Off-highway motorcycles were unregulated until 2006. Beginning with 
MY2006, off-highway motorcycles were required to meet emission 
standards for HC, CO, and NOx emissions. In general, the overall 
majority of motorcycles designed from 1978 through 2006 either used an 
A/F ratio leaner than desired for maximum performance and durability to 
comply with highway motorcycle emission standards or ran rich, in the 
case of off-highway motorcycles, to help cool the engine and protect it 
from overheating and failure. The practice of motorcycle owners 
adjusting the A/F ratio to a richer setting to improve performance and 
driveability was even more prevalent in the off-highway motorcycle 
sector, especially for competition motorcycles where performance is an 
important attribute.
    As E10 fuel has become more prevalent in the marketplace, many 
owners of off-highway and older highway motorcycles have chosen to 
either operate their motorcycles on E0 fuel whenever it is available or 
have modified their A/F ratio to a richer setting. In fact, the 
internet is full of blogs of motorcycle owners discussing concerns with 
operation on E10 fuel and ways to avoid these concerns, including how 
to change the A/F ratio setting. It is a violation of the CAA to modify 
a certified motorcycle from its certified configuration. Changing the 
A/F ratio from the certified setting would be considered tampering, yet 
it is clear it is practiced in-use.
    For highway motorcycles designed to already operate leaner to 
comply with emission standards, the use of E15 fuel would result in a 
further leaning of the A/F ratio. These motorcycles were designed with 
an optimized A/F ratio setting taking into consideration the delicate 
balance of emissions, performance, and engine protection. Since most of 
these motorcycles use carburetors, the A/F ratio is not easily adjusted 
to adapt to the increased amount of oxygen in the A/F mixture. The 
additional enleanment of the A/F ratio could cause an increase in 
combustion temperature and ultimately engine temperature, potentially 
resulting in an exceedance of the emission standards and engine 
failure. For off-highway motorcycles that have typically been designed 
to operate rich of stoichiometry for engine protection, the enleanment 
of the A/F ratio could cause an increase in engine temperature beyond 
what the engine was designed to accommodate and ultimately result in 
engine failure. As a result of the increased enleanment resulting from 
E15 fuel, more motorcycle owners may be tempted to adjust the A/F 
setting of their motorcycles to protect vehicles from potential damage 
resulting in possible exceedances of the emissions standards.
    In either case, the use of E15 fuel could cause engine damage and 
emission increases for highway motorcycles built prior to 2008 and for 
all off-highway motorcycles, regardless of age. For highway motorcycles 
built after MY2008 there is the possibility that some models may be 
able to successfully accommodate the use E15 fuel. For MY2008 and 
beyond, there are a number of models that use EFI and catalytic 
converters. The systems are similar to automotive closed-loop catalyst 
systems. However, one of the advantages to modern Tier 2 light-duty 
emission control systems is that they use very sophisticated fuel trim 
learning systems that allow a very precise ``learning and adapting'' of 
changes to the A/F ratio mixture. While many of today's motorcycle 
models use closed-loop systems, they do not have the advanced fuel trim 
control of today's motor vehicles, meaning they would most likely not 
be able to accommodate the enleanment of the A/F ratio in the same 
manner as today's motor vehicles. Their closed-loop technology is more 
similar to that of MY2000 and older motor vehicles than to current 
motor vehicles.
    In light of the above, while there is no actual E15 test data on 
motorcycles, EPA believes that any operation of highway or off-highway 
motorcycles on fuel containing E15 could result in engine damage and 
emission increases for highway and off-highway motorcycles. It also 
could have the unintentional result of encouraging motorcycle owners to 
violate the CAA by tampering with the vehicles A/F ratio setting to 
improve performance, driveability, and protect the engine from damage, 
while at the same time significantly increasing hydrocarbon and CO 
emissions. Therefore, we are proposing to prohibit the use of E15 in 
all motorcycles (highway and off-highway) but seek comment on our 
assessment.

F. Nonroad Engines, Vehicles, and Equipment (Nonroad Products)

1. Introduction
    The nonroad product market is extremely diverse which makes it 
difficult to determine what the impacts of E15 use might be. However, 
similar to older motor vehicles, it appears that nonroad products may 
experience emissions increases related to enleanment and material 
compatibility issues if operated on E15. This is based in large part on 
the history of the design of nonroad products operating on E10 in 
relation to the age of those products in the field, and the 
implications of

[[Page 68076]]

extrapolating this in-use operating experience with E10 to E15.
    The majority of nonroad products are still carbureted, or have very 
simplistic electronic fuel injection which cannot adjust the engine A/F 
ratio, and do not have any onboard diagnostics to monitor engine 
performance before components may fail. The experience of consumers 
with E10 in nonroad products in the 1980s pushed most manufacturers to 
take some steps to address enleanment and E10 material compatibility 
issues at that time, either with changes in engine design or warnings 
in consumer owner manuals (either to avoid ethanol blended fuels or 
blends higher than 10%). However, the design practices and 
recommendations varied across the industry due to the breadth of the 
nonroad market (as highlighted in Table VI.F.1-1) and the wide range of 
manufacturers, applications, and markets. The design practices also 
continued to evolve over time in part due to emission regulations.\95\ 
While a review of current nonroad engine and equipment manufacturer Web 
sites indicates a general acceptance of E10 use with the new products 
being produced today, manufacturers continue to caution against any 
higher level ethanol use, and marine manufacturers still caution 
against E10 use.\96\ In addition, nonroad product manufacturers are 
clearly still learning how to design for compatibility with E10 as 
evidenced by a recent large recall of snowblowers due to corroded 
carburetors.\97\
---------------------------------------------------------------------------

    \95\ The first exhaust emission regulations for nonroad products 
began with Small SI Engines in 1997 and the last onroad categories 
of Marine Inboard/Sterndrive and Snowmobiles will meet their first 
exhaust emission standards in 2010. The design changes to comply 
with the standards tended to enlean the A/F ratio of new engines 
compared to prior engines and limit the ability to manually adjust 
the A/F ratio, so while newer engines may use materials better 
suited for ethanol, they may also be more susceptible to enleanment 
concerns.
    \96\ See EPA-HQ-OAR-2010-0448, Submittal to Docket on Yamaha Web 
site information.
    \97\ See EPA-HQ-OAR-2010-0448, CPSC, Health Canada and Toro 
snowblower recall.

              Table VI.F.1-1--2010 Estimated Population of Nonroad Engines, Equipment and Vehicles
----------------------------------------------------------------------------------------------------------------
                                                                           Estimated 2010 in-use population
           Nonroad category              Typical equipment/vehicles                   (millions)
----------------------------------------------------------------------------------------------------------------
Small SI Engine......................  Handheld: Trimmers,            131.
                                        chainsaws, blowers, hedge
                                        trimmers.
                                       Nonhandheld: Lawnmowers,
                                        generators, riding tractors.
Marine Outboard......................  Outboard engines to power      10.
                                        fishing boats, pontoon boats.
Marine Sterndrive/Inboard............  Speed boats, Ocean going       2.
                                        fishing boats.
Marine Personal Watercraft...........  Jet skis, jet boats, etc.....  1.3.
All Terrain Vehicles.................  Four wheelers................  11.
Nonroad Motorcycles..................  Nonroad motorcycles..........  2.6.
Snowmobiles..........................  Snowmobiles..................  2.4.
Large SI.............................  Fork Lifts...................  0.24.
On-Highway Motorcycles...............  On-Highway Motorcycles.......  8 (2008 estimated population).
----------------------------------------------------------------------------------------------------------------

    In addition, as shown in Table VI.F.1-2, consumers are still using 
a considerable amount of older nonroad products (e.g., marine engines) 
that are not necessarily designed for E10 use. In recognition of this 
situation, States such as Minnesota, Missouri, Oregon, and Washington 
that have mandated the use of ethanol blends have also provided 
exceptions to the mandate for sale of ethanol free gasoline (E0) for a 
variety of nonroad products. In addition, Oregon has taken the 
additional step of publishing a list of retail stations distributing E0 
to assist their nonroad consumers in locating it.\98\
---------------------------------------------------------------------------

    \98\ See EPA-HQ-OAR-2010-0448, Oregon State Government Non-
Ethanol Fuel Supplier Listing.

    Table VI.F.1-2--2010 Estimated Active Nonroad Product Population
------------------------------------------------------------------------
                                            Nonroad SI,
                                             excluding       Marine SI
               Sales years                   marine SI      (thousands)
                                            (thousands)
------------------------------------------------------------------------
2007-2010...............................          98,255           3,155
2003-2006...............................          39,466           2,953
1999- 2002..............................           7,245           2,484
1995-1998...............................           1,253           1,828
1991-1994...............................             475           1,215
1987-1990...............................             208             656
1983-1986...............................              72             348
1979-1982...............................              28             177
1975-1978...............................              18             100
1971-1974...............................              11              50
1967-1970...............................               6              23
1963-1966...............................               3              10
                                         -------------------------------
    Total...............................         147,040          12,999
------------------------------------------------------------------------
Source: UnEPA Nonroad8a model.


[[Page 68077]]

2. Enleanment
    Given the relatively undeveloped technological design of the 
nonroad product fleet for purposes of emissions control, one of the 
main concerns with the use of E15 in nonroad products, as for older 
motor vehicles, is the increased temperatures caused by enleanment of 
the A/F ratio. With higher levels of ethanol, the stoichiometric 
(ideal) A/F ratio becomes lower (i.e., more fuel is needed for the same 
amount of air) due to the increased oxygen in the fuel; hence, the 
nonroad products run leaner since they do not adjust to the fuel oxygen 
content. Engines designed to operate on non-ethanol fuels (0 wt% 
oxygen) are currently operating on E10, which typically contains about 
3.5-3.7 wt% oxygen, and would operate on approximately 5.5 wt% oxygen 
when operating on E15. As evidenced by various studies,\99\ enleanment 
has an immediate impact on emissions, causing HC and CO emissions to 
decrease and NOX emissions to increase. However, since the 
HC and NOX impacts are directionally opposite, these 
immediate impacts are of less concern than the impacts of long-term 
operation and durability. Leaner operation increases cylinder and 
exhaust temperatures that can lead to overheating of the engine. In 
some cases this can lead to expansion of the engine block and pistons 
and result in a seized engine. Increased combustion temperature can 
also result in expansion and contraction of the engine block and head 
metals which leads to loosening of the head bolts. With looser bolts, 
the gap between the engine block and the head will open and the head 
gasket can get damaged, which in turn damages other engine components 
(e.g., intake and exhaust valves, manifolds, etc.) which can result in 
increased emissions and potential engine failure.
---------------------------------------------------------------------------

    \99\ ``Effects of Intermediate Ethanol B lends on Legacy 
Vehicles and Small Non-Road Engines, Report 1'', NREL/TP-540-43543 
and ORNL/TM-2008/117, October 2008.
---------------------------------------------------------------------------

    The likelihood that nonroad products may experience such issues 
with E15 is difficult to quantify. However, limited testing by DOE 
\100\ showed some engine failures with E15, and this is not entirely 
unexpected since nonroad products are particularly prone to enleanment 
for several reasons. First, nonroad products remain primarily 
carbureted and/or have open loop fuel control.\101\ This means they do 
not have the ability to self-adjust the A/F ratio in-use for the 
presence of ethanol in the fuel. The amount of enleanment an engine 
experiences in-use depends on several factors, including manufacturing 
variability, engine wear, and, importantly for E15, the A/F ratio 
setting of the engine in comparison to the setting needed for the fuel 
the engine is operating on. Engine manufacturers set the A/F ratio 
settings at the time of production based on a number of factors 
including the emission standards, expected deterioration of emissions 
over time and the emission certification fuels.\102\ In-use engines are 
Federally certified on E0, while engines certified to California 
standards are certified on an MTBE blend (the equivalent oxygen content 
of about E6 or about 2.0 wt% oxygen).\103\ Thus, when nonroad products 
switch to using E10 in the field, they operate leaner than they were 
set to operate and would operate leaner still on E15. Older nonroad 
products may have more headroom to tolerate enleanment from ethanol 
than newer engines. This is because manufacturers have tended to set 
the A/F ratio for their newer engines closer to stoichiometry (less 
rich) to meet newer, more stringent emission standards in recent 
years.\104\ Second, the majority of nonroad products are air-cooled 
(rely on fins designed into the engine block to dissipate heat and some 
have a fan to aid in cooling) and fuel-cooled (rely on rich operation -
excess fuel--to cool certain engine components like exhaust valves and 
manifolds). Thus, they are much less forgiving of temperature increases 
that might result from enleanment. Third, nonroad products frequently 
operate at wide open throttle for much of their duty cycle where 
exhaust temperatures are highest.
---------------------------------------------------------------------------

    \100\ ``Effects of Intermediate Ethanol B lends on Legacy 
Vehicles and Small Non-Road Engines, Report 1'', NREL/TP-540-43543 
and ORNL/TM-2008/117, October 2008.
    \101\ Of the nearly 1200 gasoline-fueled nonroad engine families 
certified in 2010, only 36 are estimated to have closed loop 
electronic fuel injection, and most of those are large spark-ignited 
nonroad engines.
    \102\ Older nonroad products--those prior to emission 
standards--tended to have A/F ratio adjustment screws so 
knowledgeable consumers or maintenance facilities could adjust the 
A/F ratio of the engine if it operating poorly. Manufacturers tended 
to remove or limit the capability for such manual adjustments to 
meet emission standards.
    \103\ Standards for some nonroad categories which require 
evaporative emission certification on E10 and allow it as an option 
for exhaust are just beginning to phase in.
    \104\ Some engines have been under emission regulation for 13 
years while others are just falling under emission regulation. In 
order to meet EPA emission standards, engines have either been 
enleaned and/or taken on engine designs of a more efficient engine 
such as a 4 stroke engine.
---------------------------------------------------------------------------

    Additionally, as enleanment occurs, the potential for an engine to 
reach its lean limit is increased. A lean limit is found when the 
typical emissions trend for enleanment (decreased HC and CO emissions 
and increased NOX emissions) reverses and results in 
increased HC and CO and decreased NOX. The reversal of 
emissions at the lean limit is a signal the engine is starting to 
experience incomplete combustion and is beginning to experience 
misfires, hence the increases in HC. This often results in engine 
failure since the engine cannot operate for an extended period of time 
under this condition. Results from a DOE pilot study on small SI 
nonroad products confirmed the potential enleanment concerns.\105\ 
Several engines failed prior to reaching their full useful life, and 
the emission results for one of these (a consumer market trimmer) 
indicated that it indeed may have exceeded its lean limit when 
operating on E15.
---------------------------------------------------------------------------

    \105\ ``Effects of Intermediate Ethanol B lends on Legacy 
Vehicles and Small Non-Road Engines, Report 1'', NREL/TP-540-43543 
and ORNL/TM-2008/117, October 2008.
---------------------------------------------------------------------------

    Finally, as highlighted above in VI.C., catalysts are an emission 
reduction technology that is sensitive to increases in exhaust 
temperature that would result from the use of E15. Although not yet 
commonly found on nonroad products, they began phasing-in on small SI 
handheld engines in 2002. High exhaust temperatures are already a 
concern with these catalysts due to the close location of the catalyst 
to the combustion chamber (catalysts are located within the muffler 
which is commonly attached to the engine block). The hotter combustion 
temperatures from engine enleanment result in hotter exhaust 
temperatures experienced by the catalyst and can increase the 
likelihood of catalyst washcoat sintering. If sintered, the catalyst 
becomes nearly useless. The likelihood that an engine/catalyst setup 
would reach this state is dependent on the engine/catalyst design and 
the production variability. Both of these vary from engine manufacturer 
to engine manufacturer and engine to engine.
    These potential enleanment problems would also impact the emission 
performance of engines operated on E15 over their full useful life. 
Unfortunately, emissions data from nonroad products operated over their 
full useful life on E15 is very limited and currently is known only to 
exist for the small spark-ignition sector of nonroad engines. DOE 
performed a pilot and durability study on four small SI engine models 
operated

[[Page 68078]]

on E10 and E15.\106\ The HC emissions from a commercial string trimmer 
engine were considerably higher after operation over the full useful 
life on E15 in comparison to E10 (191% vs. 101% increases in HC). 
Hydrocarbon emissions were similarly increased on a commercial 
generator with E15 vs. E10 when tested over their full useful life (47% 
increase for HC on E15 vs. 4.7% increase for E10) and for a consumer 
power washer (150% increase on E15 vs. a 44% increase for E10 \107\ The 
consumer blower engines tested did not make it to aging at full useful 
life on E15. The blower engines did have catalysts, however, the study 
was not able to analyze its effectiveness over time. If the catalyst on 
the blower was to fail and the engine continued to operate, then the 
engine could have emitted almost the same emissions as pre-regulation 
engines (e.g., 100-120 g/kW-hr without a catalyst vs. 50 g/kW-hr with a 
catalyst). Thus, while it was only a small test sample, it is clearly 
suggestive that exhaust emissions may increase considerably with E15 
over the full useful life of the engines. Furthermore, while the study 
was only conducted on the small SI segment of the nonroad market, the 
similarities between it and most other segments of the nonroad market 
would raise similar concerns.
---------------------------------------------------------------------------

    \106\ ``Effects of Intermediate Ethanol B lends on Legacy 
Vehicles and Small Non-Road Engines, Report 1'', NREL/TP-540-43543 
and ORNL/TM-2008/117, October 2008.
    \107\ The NOX emission results on commercial engines 
change less over time on E15 compared to E10, however they start at 
a higher value at new engine condition on E15. (ref: ``Effects of 
Intermediate Ethanol B lends on Legacy Vehicles and Small Non-Road 
Engines, Report 1'', NREL/TP-540-43543 and ORNL/TM-2008/117, October 
2008.)
---------------------------------------------------------------------------

3. Material Compatibility and Corrosion
    Materials used in engine and fuel system components (e.g. metals, 
plastics, and rubbers) must be compatible with the full range of 
expected fuel compositions. Any deterioration of materials could result 
in loss of function of critical engine components, which can result in 
emissions increases from fuel leaks and equipment failure. Nonroad 
products do not have onboard diagnostics to detect these conditions and 
report it to the user prior to engine failure. Not much is known about 
the use of E15 in nonroad products in real world use. However, concern 
exists because, as discussed above in section VI.B., ethanol has 
different material compatibility characteristics than gasoline, and 
even products operating adequately on E10 today may have issues with 
E15. In addition, the vast range of nonroad product designs and 
technologies over the years indicates that material incompatibility may 
exist in portions of the in-use fleet when using E15.
    Motor vehicle manufacturers, as discussed in section VI.G, were 
driven by both market forces and EPA emission standards to redesign 
motor vehicles and upgrade materials for continual use of E10. This is 
not the case for nonroad products. We are not aware of any standard 
design practices self imposed by industry in relation to the presence 
of ethanol in gasoline either in the early 1980s with gasohol in the 
Midwest or in the 2000s as gasoline-ethanol blends expanded nationwide. 
As a result, it appears that manufacturers used a variety of approaches 
at different points in time in response to market conditions. One 
reason for this is that the nonroad market serves a wide range of 
consumers--the low cost consumer quality and the higher cost 
professional quality--and the target market may govern how decisions 
are made. Another reason is the vast diversity of nonroad products as 
discussed above. The wide range of engines, applications, 
manufacturers, and markets leads to a wide range of equipment design 
practices. Finally, some manufacturers of nonroad vehicles and 
equipment may purchase another manufacturer's engine and modify it and/
or its fuel system for a different application (e.g. purchasing a small 
SI engine and replacing the fuel tank with a different design so it 
fits in the equipment, or marinizing an automotive engine for use as a 
marine engine and recertifying). Since there have been no evaporative 
requirements for small SI engines until the Phase 3 standards 
(beginning in 2009), in prior years the hoses and tanks could be 
changed without concern. Consequently, even engine fuel systems 
designed for the presence of ethanol by the original engine 
manufacturer may be compromised by the vehicle/equipment manufacturer. 
Thus, it is very difficult to quantify the volume of nonroad products 
in today's fleet designed to operate on E10 let alone E15. As shown in 
Figure VI.A-1, since E10 now represents more than 80% of the gasoline 
market, it is clearly being used in nonroad products today. However, as 
shown in Figures VI.A-3 and VI.A-4 the expansion of E10 nationwide is 
still a relatively recent event and the effects we are focused on are 
effects from longer term use of the fuel.
    Based on manufacturer Web sites and owner's manual recommendations, 
most new nonroad products produced today are designed to be compatible 
with E10. The main exceptions are marine applications (as well as 
aircraft, which are not nonroad for purposes of section 211(c), but in 
some cases use the same gasoline as nonroad products). The transition 
appears to have occurred at different points in time across the market. 
However, this is not to say that these engines have been designed to be 
compatible with E15. The effects of ethanol are time and concentration 
dependent such that the effects of E15 may be more severe than E10 on 
materials. Consequently, manufacturers, while approving the use of E10 
today, now also warn against the use of any higher gasoline-ethanol 
blends.
    Unlike motor vehicles, most nonroad products are used periodically 
and not for daily tasks. Many of these products are designed to be 
inexpensive consumer products that last a relatively short time or are 
used irregularly and for short periods of time. However a considerable 
fraction may remain in the in-use fleet for a long time (10-40+ years). 
Table VI.F.1-2 shows an estimated age distribution of nonroad products 
in 2010. Marine engines are separated in the table to illustrate the 
fact that these products in particular remain in the fleet for many 
years. Consequently, even if nonroad products today are designed by the 
manufacturer for the presence of 10% ethanol in the gasoline, a large 
number of pieces of equipment still exist in the field from model years 
when ethanol was not present in gasoline, or was just beginning to be 
introduced into the fuel stream. Based on subsequent experience, some 
of this equipment may operate fine on E10, while others may have 
complications due to the enleanment or material incompatibility effects 
of using ethanol.
    There have been several attempts to study the material 
compatibility of E15 use in nonroad engines, vehicles and equipment. 
However, the broad range of equipment and designs over time make it 
extremely difficult to do any definitive study on the nonroad sector 
that would address the entire fleet. A literature and information 
search prepared by the University of Minnesota Center for Diesel 
Research outlines a number of the concerns with ethanol that could be 
experienced with E15.
--Corrosion of steel is accelerated by the presence of alcohols in the 
fuel, both because the ethanol itself is considered to be more 
corrosive but also because it is a solvent that removes oils and 
coatings from the surface that might protect against corrosion. In 
addition, ethanol attracts and mixes with water which is also corrosive 
and tends to create a slightly acidic solution, especially over time.

[[Page 68079]]

--Elastomers exposed to higher gasoline-ethanol blends over time can 
increase in weight gain, swell, soften and increase in hardness when 
dried and as a result lose tensile strength, causing fuel pumps and 
fuel lines to fail. For fuel hoses, swelling and softening creates a 
risk of failure of the joints. The swelling and softening of O-rings, 
seals and gaskets causes a risk of damage or incorrect fit of the seal 
during assembly of joints leading to fuel leakage.
--Seals and gaskets on equipment that have not been previously exposed 
to higher alcohol fuels could deteriorate and break down creating 
leakage.
--Fiberglass-reinforced plastic fuel tanks, such as those on marine 
engines and motorcycles, may also experience problems depending on the 
type of resin and how much the ethanol will contribute to the corrosion 
of it.
--Materials such as lead/tin-coated steel used in fuel tanks and 
aluminum fuel system components require corrosion inhibitors due to the 
presence of the higher alcohol in E15.
    In addition, four studies have been reported which tested the 
effect of a number of ethanol containing fuels (E10, E20) on materials 
compatibility of polymers, metal, and elastomers in motor vehicles and 
nonroad engines. While none of these studies reported on E15, a number 
of reports gave conditions seen on E10 and E20 and so results for E15 
can be interpolated. The results of one technical assessment, published 
in 2002,\108\ of E10 and E20 on two 2-stroke engines indicated 
materials compatibility concerns for E20 for both engine types, 
including effects on some polymeric materials that were deemed 
unacceptable and E20 tarnishing and corroding brass and aluminum parts. 
Similarly, three other studies conducted by the University of Minnesota 
published in 2008 on metal, plastic, and elastomer materials, 
respectively,109, 110, 111 used in highway vehicles and 
nonroad products found a variety of impacts with E20 relative to E10 or 
E0, including clear incompatibility with some materials. The existence 
of such materials on equipment in the in-use fleet could lead to 
increased emissions, fuel leaks, and potentially engine failure from 
longer term use of E15. The degree to which such incompatible materials 
exist in the in-use fleet is unknown, but it is clear that they do 
exist based on in-use experience with E10.112, 113
---------------------------------------------------------------------------

    \108\ ``A Technical Assessment of E10 and E20 Petrol Ethanol 
Blends Applied to Non-Automotive Engines. Failure Mode and Effects 
Analysis of Engine Function and Component Design for Mercury Marine 
15hp Outboard and Stihl FS45 Line-Trimmer Engines,'' conducted by 
Orbital Engine Company, Report to Environment Australia, November 
2002.
    \109\ ``The Effects of E20 on Metals Used in Automotive Fuel 
System Components,'' by Bruce Jones, Gary Mead, Paul Steevens and 
Mike Timanus, Minnesota Center for Automotive Research at Minnesota 
State University, Mankato, February 22, 2008.
    \110\ ``The Effects of E20 on Elastomers Used in Automotive Fuel 
System Components,'' by Bruce Jones, Gary Mead, Paul Steevens, and 
Mike Timanus, Minnesota Center for Automotive Research at Minnesota 
State University, Mankato, February 22, 2008.
    \111\ ``The Effects of E20 on Plastic Automotive Fuel System 
Components,'' by Bruce Jones, Gary Mead, and Paul Steevens, 
Minnesota Center for Automotive Research at Minnesota State 
University, Mankato, February 21, 2008.
    \112\ http://www.fuel-testers.com/marine_e10_bad_gas_
reports.html.
    \113\ http://www.sail-world.com/USA/
index.cfm?SEID=0&Nid=38442&SRCID=0&ntid=0&tickeruid=0&tickerCID=0.
---------------------------------------------------------------------------

    We are not aware of any testing that has been done that might help 
quantify the potential impact on emissions from the types of engine 
problems that would result from material compatibility problems. 
However on July 14, 2010 the United States Consumer Protection Safety 
Commission (CPSC) and Health Canada (HC) announced a recall of Toro 
snowblowers stating that ``Exposure to ethanol in gasoline can cause 
the carburetor needle to become corroded. A corroded needle can stick 
in the open position and allow fuel to leak from the carburetor.'' 
\114\ Clearly fuel leaks would result in a considerable increase in 
evaporative emissions, and material issues with carburetors, fuel 
pumps, and other engine components could clearly lead to significant 
changes in exhaust emissions, if not engine survivability.
---------------------------------------------------------------------------

    \114\ See EPA-HQ-OAR-2010-0448, CPSC, Health Canada and Toro 
snowblower recall.
---------------------------------------------------------------------------

4. Phase Separation and Solvency/Detergency
    Two additional concerns with E10 use in nonroad products are phase 
separation and solvency/detergency (see section VI.B.). However, if 
nonroad products have already been operating on E10, the degree to 
which these would be a concern with E15 is unknown. Phase separation 
occurs if a gasoline-ethanol blend is saturated with water. Phase 
separation is more likely in nonroad products due to the fact that 
these engines are typically used only seasonally or occasionally 
throughout the year and in the case of marine applications, the 
equipment is generally in a humid, water environment. In addition, 
specifically for small SI engines, some of the fuel systems are open to 
the atmosphere through a direct vent in the gas cap which exposes the 
fuel to air and humidity. If phase separation occurs, it has been 
reported by repair shops to be acidic and result in corroded 
carburetors and potential fuel line leaks. However, while phase 
separation has been and continues to be a significant concern with E10, 
as evidenced by ongoing guidance on manufacturer literature \115\ and 
nonroad engine Web sites,\116\ the additional ethanol in E15 would 
increase the water tolerance of the blend and thereby potentially 
reduce the frequency of phase separation occurring.
---------------------------------------------------------------------------

    \115\ See EPA-HQ-OAR-2010-0448, Collection of manufacturer 
literature from 1980 to present.
    \116\ See EPA-HQ-OAR-2010-0448, Submittal to Docket on Yamaha 
Web site information.
---------------------------------------------------------------------------

    Similarly, in areas that have transitioned to E10, problems have 
historically also shown up in repair shops due to the solvency/
detergency characteristics of ethanol. Ethanol has been known to 
dislodge sludge and varnish in the fuel system, causing it to clog fuel 
filters and carburetors. However, if in-use engines have already been 
operated on E10, the cleansing effect of the ethanol may have already 
occurred, and transitioning to E15 may not result in any additional 
problems.

G. Model Year 2007 and Newer Light-Duty Motor Vehicles

    MY2007 and newer light-duty motor vehicles are covered by EPA's 
Tier 2 program which established dramatically more stringent 
NOX standards. While the program allowed the standards to 
phase in from MY2004 through MY2009, manufacturer certification data 
show that gasoline-fueled motor vehicles actually reached full 
implementation with MY2007. MYs 2004-2006 included a mix of vehicles--
some Tier 2 and some non-Tier 2. Tier 2 motor vehicles are more 
technologically advanced and robust than cars built years ago, are 
fully capable of running on E10, and must have their evaporative 
emission systems aged on E10 for durability purposes. Sophisticated 
computer systems and sensors constantly monitor the engine and the 
exhaust to be sure that everything (i.e., the A/F ratio mixture) is 
kept at its optimum level. All auto manufacturers now warrant their new 
motor vehicles to operate on E10 or less. As found in the E15 waiver 
decision also published today, we believe on the basis of testing 
performed and our own engineering assessment, that these MY2007 and 
newer Tier 2 light-duty motor vehicles are durable and will maintain 
their emission performance when operated on E15.
    To evaluate the impacts of E15 on Tier 2 motor vehicles, DOE 
performed a

[[Page 68080]]

catalyst durability test program \117\ on 19 Tier 2 motor vehicles from 
high sales volume models produced by the various light-duty vehicle 
manufacturers throughout 2009 and 2010. The specific purpose of the 
test program was to evaluate the long term effects of E0, E10, E15, and 
E20 on catalyst system durability. However, a number of the motor 
vehicles were also torn down and evaluated for any other impacts E15 
may have had, including material compatibility in the fuel and 
evaporative emission control systems. As discussed in the waiver 
decision document, program results indicate that the changes 
manufacturers made (calibration, hardware, etc.) to their motor 
vehicles to comply with the Tier 2 standards have enabled the motor 
vehicles to operate satisfactorily on E15, including the ability of 
their catalysts to withstand the additional enleanment caused by E15.
---------------------------------------------------------------------------

    \117\ Catalyst Durability Study, Department of Energy/
Coordinating Research Council Report: E-87-2, September 2010.
---------------------------------------------------------------------------

    The DOE test program was critical in supporting the waiver 
decision. However, it also serves to confirm our engineering assessment 
of the ability of light-duty motor vehicles to handle E15. The emission 
standards that EPA has implemented over time affecting motor vehicles 
have become more and more stringent (i.e., Tier 0 to Tier 1 to LEV1 and 
NLEV to Tier 2 and LEV2). In addition, full useful life requirements 
have increased and new test cycles have been added. To comply with the 
stringent Tier 2 standards, manufacturers must minimize deterioration 
of their vehicle emission control systems over a vehicle's full useful 
life of 120,000 miles. By MY2004, new test procedures took effect to 
better represent actual consumer driving habits and conditions. These 
additional test cycles, coupled with the in-use testing required under 
the Compliance Assurance Program (CAP2000), pushed manufacturers to 
develop more robust emissions control systems (such as systems using 
wide range oxygen sensors) capable of withstanding the higher 
temperatures experienced during these more severe cycles without simply 
relying on enriching of the A/F ratio, causing emissions to rise. With 
each new program, manufacturers were required to improve the efficiency 
and durability of emission control hardware and the methods and control 
systems governing hardware performance causing newer motor vehicles to 
be able to accommodate gasoline-ethanol blends more so than older motor 
vehicles.
    Perhaps the most critical changes made over time were the changes 
to the engine calibrations and catalyst systems to accommodate changes 
in the A/F ratio such as those that occur when switching to operation 
on gasoline-ethanol blends. Evolution in emission standards prompted 
corresponding evolution in motor vehicle emission control systems. In 
particular, catalyst deterioration must be minimized and catalyst 
temperatures controlled during all vehicle operation modes for the 
catalyst to work properly (i.e., for it to maintain the necessary high 
efficiency demanded by the Tier 2 standards). Tier 2 motor vehicles, 
especially the MY2007 and newer motor vehicles, have improved hardware 
as well as more sophisticated emission control systems and strategies 
to help maintain catalyst effectiveness, and an extended motor vehicle 
operating range over which emissions performance must be maintained. 
MY2007 and newer motor vehicles have the ability to precisely adjust 
for changes in the A/F ratio and ultimately maintain peak catalyst 
efficiency under almost any condition, such as exposure to oxygenated 
fuels like those containing ethanol. To do so, some manufacturers 
incorporated learned or adaptive fuel trim into their motor vehicle 
designs to modulate the A/F ratio and alleviate catalyst temperature 
increases even under open loop conditions. Others, through careful 
hardware selection and certain calibration approaches, have motor 
vehicle designs with higher thermal margins to accommodate the effects 
of enleanment with gasoline-ethanol blends.
    Prior to completion of the DOE catalyst durability test program 
some concern had been expressed that when operated on E15, vehicles, 
even Tier 2 motor vehicles that did not apply learned fuel trim, may 
experience catalyst degradation and higher emissions over time due to 
the higher exhaust temperatures it may cause. Several screening studies 
had measured exhaust and catalyst temperature and/or evaluated the 
ability of vehicles to apply learned fuel trim to adjust for the 
enleanment due to ethanol during open loop operation.\118,\ \119\ They 
had found that those vehicles that did not apply learned fuel trim 
tended to experience higher catalyst and exhaust temperatures when 
operated on E15. However, as evidenced by the DOE catalyst durability 
test program, at least for Tier 2 motor vehicles this does not appear 
to be the case. Even those vehicles that do not apply learned fuel trim 
appear to have sufficient thermal margins. Therefore, not only do all 
manufacturers warrant their Tier 2 motor vehicles for operation on E10, 
but as discussed in the waiver decision document, we believe that they 
will also operate properly on gasoline-ethanol blends up to E15.
---------------------------------------------------------------------------

    \118\ Mid-level Ethanol Blends Catalyst Durability Study 
Screening, Coordinating Research Council Report: E-87-1, June 2009.
    \119\ Effects of Intermediate Ethanol Blends on Legacy Vehicles 
and Small Non-road Engines, Report 1--Updated, National Renewable 
Energy Laboratory, February 2009.
---------------------------------------------------------------------------

    With respect to evaporative emissions control, evaporative systems 
have had leak detection diagnostic requirements since at least MY2000 
as a result of the Agency's Onboard Diagnostic (OBD) program. In 
addition, CAP2000 which took effect with MY2001 motor vehicles placed 
more emphasis on the ``in-use'' performance of motor vehicle emission 
controls with motor vehicles operating nationwide on the different 
available fuels. This emphasis on real world motor vehicle testing 
prompted manufacturers to consider different available fuels, including 
gasoline-ethanol blends, when developing and testing their emission 
systems. However, even with the CAP2000 requirements, some materials 
issues continued to arise during in-use emissions testing. 
Consequently, as part of the new Tier 2 standards, EPA added the 
requirement that the evaporative control system and all related 
components (i.e. fuel tanks, fuel lines, etc.) demonstrate durability 
over their full useful life while operating on E10. Due to this new 
requirement, materials that would compromise evaporative emission 
compliance over the full useful life with exposure at E10 levels were 
eliminated as options for fuel system components. This requirement, 
coupled with much more stringent evaporative emission standards (over a 
50% reduction for passenger cars and light trucks), was phased-in with 
the Tier 2 exhaust standards. Prior to Tier 2, materials are believed 
to have also been selected for ethanol compatibility but perhaps not 
for continuous exposure over the full useful life. Based on 
conversations with original equipment manufacturer parts suppliers, it 
is our understanding that in designing materials for continuous E10 
exposure, they tested materials, components, and systems using ethanol 
levels in excess of 20% to ensure compatibility with E10. Consequently, 
Tier 2 motor vehicle designs should also be designed to be compatible 
with E15, and the results of the DOE catalyst durability test program 
served to confirm this belief.

[[Page 68081]]

H. Model Year 2001-2006 Motor Vehicles

    For MY2001-2006 motor vehicles, both our engineering assessment and 
the available data make it less clear whether motor vehicles produced 
during those model years could have emission increases from long-term 
fueling with E15 like MY2000 and older motor vehicles or whether they 
would continue to function properly like MY2007 and newer motor 
vehicles. On the one hand, we believe that many of the same elements 
for ethanol compatibility of MY2007 and newer motor vehicles also apply 
to these motor vehicles (e.g., designing to enhanced evaporative 
emission standards, SFTP, CAP2000). On the other hand, they were not 
all required to demonstrate evaporative emission system durability on 
E10 or to upgrade their catalyst and emission control systems to the 
extent needed to comply with the Tier 2 standards. The NLEV standards 
that began phasing in with MY2001 required improvements in closed loop 
A/F ratio control and catalyst efficiency, but the Tier 2 standards 
represented a considerable step change beyond NLEV. Furthermore, as 
discussed below, while there are some ongoing test programs evaluating 
the effects of E15, we do not yet have sufficient data that would serve 
to confirm or deny any engineering analysis of the situation, and in 
particular to address the potential concerns raised over those motor 
vehicles that do not apply learned fuel trim during open loop 
operation.
    Two studies that might help inform the situation are currently 
still in process. The Rochester Institute of Technology is conducting a 
study of 10 motor vehicles spanning MY1998-2004 on E20 and is operating 
roughly 300 motor vehicles in-use on E20.\120\ While the results of 
this study to date suggest vehicles may operate acceptably on E20--and 
by interpolation E15--mileage accumulation is limited, so its ability 
to assess emission impacts over the FUL of the vehicles is also 
limited. In addition, since there are no control vehicles operating on 
E0, comparisons of emission effects are restricted. The study is 
ongoing until November 2010. In addition, DOE is in the process of 
conducting catalyst durability testing on six motor vehicles certified 
to NLEV standards and two motor vehicles certified to Tier 1 standards 
which will also be completed by November. Since the motor vehicles are 
older, they are starting the test program with a significant number of 
miles already driven by consumers on E0. However, at least 50,000 miles 
are being accumulated on each motor vehicle, and identical motor 
vehicles of the same model are being tested on E0, E10, E15, and E20.
---------------------------------------------------------------------------

    \120\ The effect of E20 ethanol fuel on vehicle emissions, B 
Hilton and B Duddy, Center for Integrated Manufacturing Studies, 
Rochester Institute of Technology, June 26, 2009.
---------------------------------------------------------------------------

I. Emissions Impact Summary and Conclusions

    As discussed above, the potential exists for E15 use to cause long-
term or permanent increases in exhaust emissions from MY2000 and older 
light-duty motor vehicles, heavy-duty gasoline engines and vehicles, 
motorcycles, and nonroad products, as a result of accelerated 
deterioration of engine and emission control components. This 
deterioration can be a result of changes in engine operation, such as 
higher exhaust temperature, or damage to materials not compatible with 
E15. Similarly, evaporative emission increases may occur immediately 
due to increased permeation or over time due to repeated or on-going 
exposure of the fuel and evaporative emission control systems to E15. 
In some cases the potential emission impacts could be quite dramatic 
(i.e., more than an order of magnitude) given the large differences 
between controlled and uncontrolled emissions on today's light-duty 
motor vehicles, heavy-duty gasoline engines and vehicles, motorcycles, 
and nonroad products. Consequently, the in-use emissions increases and 
air quality impact could be substantial for any of these products that 
experience very significant deterioration.
    While it is not possible to quantify the frequency at which all of 
these products might experience problems with the use of E15, the 
degree of emissions increases associated with them, or the 
effectiveness of the proposed misfueling mitigation measures, we 
believe that the emission related problems would occur with enough 
frequency that the resulting emission benefits from the avoided 
misfueling would clearly outweigh the relatively low cost imposed by 
the proposed regulations. The emission benefits are the emissions 
increases from longer term use of E15 that would not occur because of 
this misfueling mitigation program. This is particularly the case 
considering the significant consumer savings for avoided repairs and 
replacement that, as discussed in section III.F., would by themselves 
be expected to exceed the costs of the misfueling mitigation measures.
    For these reasons, the Agency proposes to prohibit the use of 
gasoline blended with greater than 10 vol% ethanol in (1) MY2000 and 
older motor vehicles, (2) heavy-duty gasoline engines and vehicles, (3) 
motorcycles, and (4) nonroad products. Today's prohibitions and other 
requirements are intended to reduce emissions due to the use of E15 in 
the group of vehicles or engines reasonably expected to have these 
adverse effects. The term misfueling describes use of E15 in the 
prohibited engines, vehicles and equipment listed above. We are 
inviting comment on whether this prohibition should also apply for 
MY2001-MY2006 motor vehicles.

VII. What is our legal authority for proposing these misfueling 
mitigation measures?

    As explained above, we are proposing misfueling mitigation measures 
pursuant to our authority under CAA section 211(c)(1). This section 
gives EPA authority to ``control or prohibit the manufacture, 
introduction into commerce, offering for sale, or sale'' of any fuel or 
fuel additive (A) whose emission products, in the judgment of the 
Administrator, cause or contribute to air pollution ``which may be 
reasonably anticipated to endanger public health or welfare'' or (B) 
whose emission products ``will impair to a significant degree the 
performance of any emission control device or system which is in 
general use, or which the Administrator finds has been developed to a 
point where in a reasonable time it would be in general use'' were the 
fuel control or prohibition adopted. Under section 211(c)(1), EPA may 
adopt a fuel control if at least one of the two criteria above are met. 
We are proposing the misfueling mitigation measures based on both of 
these criteria. Under section 211(c)(1)(B), we believe that E15 would 
significantly impair the emission control systems used in MY2000 and 
older light-duty motor vehicles, heavy-duty gasoline engines and 
vehicles, highway and off-highway motorcycles, and all nonroad 
products. This leads us to conclude, under section 211(c)(1)(A), that 
the likely result would be increased HC, CO and NOx 
emissions when these particular engines, vehicles and nonroad products 
use E15. The following sections summarize our analysis of each 
criterion.

A. Health and Welfare Concerns of Air Pollution Caused by E15

    We believe that the emissions products of E15 contribute to air 
pollution that can reasonably be anticipated to endanger public health 
and welfare. As described in Section VI.B., the unique physical and 
chemical

[[Page 68082 ]]

properties of ethanol may negatively impact certain engines, vehicles 
and equipment when those products use gasoline-ethanol blends 
containing increased amounts of ethanol, particularly if those engines, 
vehicles and equipment are not designed for accommodating that 
increase. The result is likely an increase in HC, CO and NOx emissions 
from these engines, vehicles and equipment (see Sections VI.C.-F.). 
This potential increase in emissions of these particular pollutants 
contributes to air pollution levels that, for example, can violate the 
NAAQS for ozone or PM.
    Section 211(c)(2)(A) requires that, prior to adopting fuel controls 
based on a finding that the fuel's emission products contribute to air 
pollution that can reasonably be anticipated to endanger public health 
or welfare, EPA consider ``all relevant medical and scientific evidence 
available, including consideration of other technologically or 
economically feasible means of achieving emission standards under 
[section 202 of the Act].'' EPA's analysis of the evidence relating to 
the emissions impact of emissions from E15 is described in Section VI 
above, while the evidence concerning the NAAQS is discussed in the 
NAAQS rulemakings themselves.
    EPA has also satisfied the statutory requirement to consider 
``other technologically or economically feasible means of achieving 
emission standards under section [202 of the Act].'' This provision has 
been interpreted as requiring consideration of establishing emissions 
standards under section 202 prior to establishing controls or 
prohibitions on fuels or fuel additives under section 211(c)(1)(A). See 
Ethyl Corp. v. EPA, 541 F.2d 1, 31-32 (DC Cir. 1976). In Ethyl, the 
Court stated that section 211(c)(2)(A) calls for good faith 
consideration of the evidence and options, not for mandatory deference 
to regulation under section 202 compared to fuel controls. Id. at 32, 
n.66. For MY2000 and older motor vehicles, proposing emissions 
standards under section 202 is not an option since emissions standards 
promulgated under section 202 only apply to new motor vehicles. This is 
also true for the other categories (heavy-duty gasoline engines and 
vehicles, highway and off-highway motorcycles, and all nonroad 
products) to the extent these products are already in the marketplace. 
Thus, for all of these products, the proposed measures under section 
211(c)(1) are appropriate for addressing misfueling. Additionally, EPA 
has previously promulgated the most technologically and economically 
feasible HC, CO and NOX emissions standards for all of these 
engines, vehicles and equipment, so new emissions standards under 
section 202 for any of these products would not achieve any additional 
protection beyond those obtained through the misfueling mitigation 
measures being proposed today under section 211(c)(1).
    It is therefore appropriate for EPA to exercise its authority under 
section 211(c)(1)(A) and propose these misfueling mitigation measures 
that will likely reduce or eliminate the emissions products from E15 
that contribute to the air pollution that endangers our public health 
or welfare.

B. Impact of E15 Emission Products on Emission Control Systems

    EPA believes that E15 can significantly impair the emissions 
control technology in MY2000 and older light-duty motor vehicles, 
heavy-duty gasoline engines and vehicles, highway and off-highway 
motorcycles, and all nonroad products. As discussed in Section VI 
above, ethanol enleans the A/F ratio; this may lead to emissions 
products that can cause increased exhaust gas temperatures and, over 
time, incremental deterioration of emission control hardware and 
performance. Enleanment can also lead to catalyst failure. 
Additionally, ethanol can cause material compatibility issues which may 
lead to other component failure. Ultimately, all of these impacts would 
likely significantly impair the emissions control systems or devices 
and lead to exhaust and/or evaporative emission increases.
    Section 211(c)(2)(B) requires that, prior to adopting a fuel 
control based on a significant impairment to emission control systems, 
EPA consider available scientific and economic data, including a cost 
benefit analysis comparing emission control devices or systems which 
are or will be in general use that require the proposed fuel control 
with such devices or systems which are or will be in general use that 
do not require the proposed fuel control. This provision is not 
applicable to the proposed misfueling mitigation measures since a 
particular emission control device or system is not required for use 
with the measures being proposed today. Instead, the misfueling 
mitigation measures are being proposed to protect existing controls on 
existing engines, vehicles and equipment already in the marketplace 
from the detrimental impacts they may incur when using E15.
    Thus, EPA may exercise its authority under section 211(c)(1)(B) and 
propose these misfueling mitigation measures since use of E15 would 
significantly impair the emission control devices or systems in MY2000 
and older light-duty motor vehicles, heavy-duty gasoline engines and 
vehicles, highway and off-highway motorcycles, and all nonroad 
products.

C. Effect of Misfueling Mitigation Measures on the Use of Other Fuels 
or Fuel Additives

    Section 211(c)(2)(C) requires that, prior to prohibiting a fuel or 
fuel additive, EPA establish that such prohibition will not cause the 
use of another fuel or fuel additive ``which will produce emissions 
which endanger the public health or welfare to the same or greater 
degree'' as the prohibited fuel or fuel additive. Even assuming that 
this proposal amounts to a prohibition, as compared to a control, EPA 
does not believe that the proposed misfueling mitigation measures will 
result in the use of any other fuel or fuel additive that will produce 
emissions that will endanger public health or welfare to the same or 
greater degree as the emissions produced by E15. In fact, the measures 
being proposed today should lessen the overall public health or welfare 
impacts from the emissions from these products. To the extent that EPA 
is proposing a prohibition of using E15 in certain engines, vehicles 
and equipment, such a prohibition should serve to prevent or reduce 
misfueling in those products and avoid the increased detrimental 
effects this provision seeks to protect against. These products would 
instead use other gasoline or gasoline-ethanol blends currently 
available in the marketplace and be able to meet their current 
emissions standards. Thus, EPA may propose these misfueling mitigation 
measures under 211(c)(1) without causing other public health or welfare 
effects from the use of another fuel or fuel additive.

VIII. Public Participation

    We request comment on all aspects of this proposal. This section 
describes how you can participate in this process.

A. How do I submit comments?

    We are opening a formal comment period by publishing this document. 
We will accept comments during the period indicated under DATES in the 
first part of this proposal. If you have an interest in the proposed 
program described in this document, we encourage you to comment on any 
aspect of this rulemaking. We also request comment on specific topics 
identified throughout this proposal.
    Your comments will be most useful if you include appropriate and 
detailed supporting rationale, data, and analysis. Commenters are 
especially encouraged

[[Page 68083]]

to provide specific suggestions for any changes to any aspect of the 
regulations that they believe need to be modified or improved. You 
should send all comments, except those containing proprietary 
information, to our Air Docket (see ADDRESSES in the first part of this 
proposal) before the end of the comment period.
    You may submit comments electronically, by mail, or through hand 
delivery/courier. To ensure proper receipt by EPA, identify the 
appropriate docket identification number in the subject line on the 
first page of your comment. Please ensure that your comments are 
submitted within the specified comment period. Comments received after 
the close of the comment period will be marked ``late.'' EPA is not 
required to consider these late comments. If you wish to submit 
Confidential Business Information (CBI) or information that is 
otherwise protected by statute, please follow the instructions in 
Section XI.B.

B. How should I submit CBI to the agency?

    Do not submit information that you consider to be CBI 
electronically through the electronic public docket, http://
www.regulations.gov, or by e-mail. Send or deliver information 
identified as CBI only to the following address: U.S. Environmental 
Protection Agency, Assessment and Standards Division, 2000 Traverwood 
Drive, Ann Arbor, MI 48105, Attention Docket ID EPA-HQ-OAR-2010-0448. 
You may claim information that you submit to EPA as CBI by marking any 
part or all of that information as CBI (if you submit CBI on disk or CD 
ROM, 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 CBI). Information so marked will not be disclosed except in 
accordance with procedures set forth in 40 CFR part 2.
    In addition to one complete version of the comments that include 
any information claimed as CBI, a copy of the comments that does not 
contain the information claimed as CBI must be submitted for inclusion 
in the public docket. If you submit the copy that does not contain CBI 
on disk or CD ROM, mark the outside of the disk or CD ROM clearly that 
it does not contain CBI. Information not marked as CBI will be included 
in the public docket without prior notice. If you have any questions 
about CBI or the procedures for claiming CBI, please consult the person 
identified in the FOR FURTHER INFORMATION CONTACT section.

C. Will there be a public hearing?

    We will hold a public hearing in Chicago, IL on November 16, 2010 
at the location shown below. The hearing will start at 10 a.m. local 
time and continue until everyone has had a chance to speak.

    Millennium Knickerbocker Hotel Chicago, 163 East Walton Place, @ 
North Michigan Avenue, Chicago, IL 60600, Phone 312-751-8100.

    If you would like to present testimony at the public hearing, we 
ask that you notify the contact person listed under FOR FURTHER 
INFORMATION CONTACT in the first part of this proposal at least 8 days 
before the hearing. You should estimate the time you will need for your 
presentation and identify any needed audio/visual equipment. We suggest 
that you bring copies of your statement or other material for the EPA 
panel and the audience. It would also be helpful if you send us a copy 
of your statement or other materials before the hearing.
    We will make a tentative schedule for the order of testimony based 
on the notifications we receive. This schedule will be available on the 
morning of the hearing. In addition, we will reserve a block of time 
for anyone else in the audience who wants to give testimony.
    We will conduct the hearing informally, and technical rules of 
evidence will not apply. We will arrange for a written transcript of 
the hearing and keep the official record of the hearing open for 30 
days to allow you to submit supplementary information. You may make 
arrangements for copies of the transcript directly with the court 
reporter.

D. Comment Period

    The comment period for this rule will end on January 3, 2011.

E. What should I consider as I prepare my comments for EPA?

    You may find the following suggestions helpful for preparing your 
comments:
     Explain your views as clearly as possible.
     Describe any assumptions that you used.
     Provide any technical information and/or data you used 
that support your views.
     If you estimate potential burden or costs, explain how you 
arrived at your estimate.
     Provide specific examples to illustrate your concerns.
     Offer alternatives.
     Make sure to submit your comments by the comment period 
deadline identified.
     To ensure proper receipt by EPA, identify the appropriate 
docket identification number in the subject line on the first page of 
your response. It would also be helpful if you provided the name, date, 
and Federal Register citation related to your comments.

XI. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), 
this action is a ``significant regulatory action.'' This action 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

    The information collection requirements in this proposed rule have 
been submitted for approval to the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The 
Information Collection Request (ICR) document prepared by EPA has been 
assigned EPA ICR number 2408.01.
    This proposed rule imposes some new information collection burdens 
regarding product transfer documentation. Product transfer documents, 
or PTDs, are commonly used in the fuels distribution system and are 
their use is a customary business practice. This proposed rule is 
expected to add a one-time burden to program and implement new product 
codes and statements, as well as a continuing, small burden associated 
with affixing (using) products codes and statements. This proposed 
regulation contains provisions requiring standard product labels, which 
will not impose any information collection burden on regulated parties. 
We have also estimated the burden associated with parties who elect to 
use proposed ``Survey Option 1.''
    For the proposed information collection, we estimate that there 
will be 9,608 annual respondents; 2,009,226 annual responses; and 
71,809 annual hours. We estimate that annual cost of this information 
collection to respondents will be $5,098,427. The average burden is 
0.04 hours per response. Burden is defined at 5 CFR 1320.3(b).
    We estimate that the cost of adding the proposed survey of 
compliance

[[Page 68084]]

(which requires sampling and testing) with the proposed labeling 
requirements to the existing RFG survey at $50,000 per year. The cost 
to implement all of the proposed survey provisions for conventional 
gasoline is estimated at $2 million per year. Thus, the total cost of 
the proposed survey requirements is estimated to be $2.05 million per 
year
    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.
    To comment on the Agency's need for this information, the accuracy 
of the provided burden estimates, and any suggested methods for 
minimizing respondent burden, EPA has established a public docket for 
this rule, which includes this ICR, under Docket ID number EPA-HQ-OAR-
2010-0448. Submit any comments related to the ICR to EPA and OMB. See 
ADDRESSES section at the beginning of this notice for where to submit 
comments to EPA. Send comments to OMB at the Office of Information and 
Regulatory Affairs, Office of Management and Budget, 725 17th Street, 
NW., Washington, DC 20503, Attention: Desk Office for EPA. Since OMB is 
required to make a decision concerning the ICR between 30 and 60 days 
after November 4, 2010 a comment to OMB is best assured of having its 
full effect if OMB receives it by December 6, 2010. The final rule will 
respond to any OMB or public comments on the information collection 
requirements contained in this proposal.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (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 today's rule on small 
entities, small entity is defined as: (1) A small business as defined 
by the Small Business Administration's (SBA) regulations at 13 CFR 
121.201; (2) a small governmental jurisdiction that is a government of 
a city, county, town, school district or special district with a 
population of less than 50,000; and (3) a small organization that is 
any not-for-profit enterprise which is independently owned and operated 
and is not dominant in its field.
    After considering the economic impacts of today's proposed rule on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. The small 
entities directly regulated by this proposed rule are petroleum 
refiners and importers, ethanol producers, ethanol blenders, gasoline 
terminals, gasoline stations with convenience stores, and other 
gasoline stations. While there are small entities in each of these 
market sectors as discussed in Section III.F., the cost impact on any 
particular entity is expected to be a tiny fraction of annual revenues.
    We continue to be interested in the potential impacts of the 
proposed rule on small entities and welcome comments on issues related 
to such impacts.

D. Unfunded Mandates Reform Act

    This rule does not contain a Federal mandate that may result in 
expenditures of $100 million or more for State, local, and Tribal 
governments, in the aggregate, or the private sector in any one year. 
The total annual cost is expected to be $6 million. Thus, this rule is 
not subject to the requirements of sections 202 or 205 of UMRA.
    This rule is also not subject to the requirements of section 203 of 
UMRA because it contains no regulatory requirements that might 
significantly or uniquely affect small governments. This action 
primarily affects the private sector, specifically petroleum refiners 
and importers, ethanol producers, ethanol blenders, gasoline terminals, 
gasoline stations with convenience stores, and other gasoline stations.

E. Executive Order 13132 (Federalism)

    EPA believes that this action does not have federalism 
implications. This rule will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government, as specified in Executive Order 13132. 
Any preemption of State or local controls under section 211(c)(4)(A), 
based on issuance of this rule under section 211(c)(1), would only 
apply to State or local controls adopted for purposes of motor vehicle 
emissions control.
    EPA consulted with State and local officials early in the process 
of developing the proposed action to permit them to have meaningful and 
timely input into its development. EPA met with members of the National 
Association of Clean Air Agencies (NACAA) to discuss the nature of 
today's proposed rule. Additionally, we provided State and local 
governments an opportunity to provide comment on the implementation of 
misfueling mitigation measures for a partial E15 waiver in both the 
RFS2 NPRM (see 74 FR 25016) and the E15 waiver request notice (see 74 
FR 18228). We received comments from only one State on this issue in 
the RFS2 NPRM, and it supported efforts for properly labeling fuel 
pumps containing gasoline-ethanol blends. Thus, Executive Order 13132 
does not apply to this action. In the spirit of Executive Order 13132, 
and consistent with EPA policy to promote communications between EPA 
and State and local governments, EPA specifically solicits comment on 
this proposed action from State and local officials.

F. Executive Order 13175

    This action does not have Tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000). This rule will 
be implemented at the Federal level and impose compliance costs only on 
petroleum refiners and importers, gasoline stations with convenience 
stores, and other gasoline stations. Thus, Executive Order 13175 does 
not apply to this action.

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

    EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as applying 
only to those regulatory actions that concern health or safety risks, 
such that the analysis required under section 5-501 of the EO has the 
potential to influence the regulation. This action is not subject to EO 
13045 because it does not establish an environmental standard intended 
to mitigate health or safety risks.

H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This action is not a ``significant energy action'' as defined in 
Executive Order 13211 (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 would require a 
label to be placed on E15 fuel dispensers, for those stations that 
elect to sell E15. The cost of the labels would average $6.45 per year 
per gasoline station. This is a tiny fraction of the station's annual 
profit, and is not expected to significantly affect energy 
distribution.

[[Page 68085]]

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, 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. NTTAA directs EPA to provide 
Congress, through OMB, explanations when the Agency decides not to use 
available and applicable voluntary consensus standards.
    This proposed 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 increases the 
level of environmental protection 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. This action would affect all gasoline stations that 
choose to sell E15 and therefore will not affect any particular area 
disproportionately.

List of Subjects in 40 CFR Part 80

    Environmental protection, Air pollution control, Fuel additives, 
Diesel, Gasoline, Imports, Incorporation by reference, Labeling, Motor 
vehicle pollution, Penalties, Reporting and recordkeeping requirements.

    Dated: October 13, 2010.
Lisa P. Jackson,
Administrator.
    For the reasons set forth in the preamble, 40 CFR part 80 is 
proposed to be amended as follows:

PART 80-REGULATION OF FUEL AND FUEL ADDITIVES

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

    Authority: 42 U.S.C. 7414, 7542, 7545, and 7601(a).

    2. Section 80.45 is amended by adding a new paragraph 
(c)(1)(iii)(C) to read as follows:


Sec.  80.45  Complex emissions model.

* * * * *
    (c) * * *
    (1) * * *
    (iii) * * *
    (C) During Phase II, fuels with an ethanol concentration greater 
than 10 volume percent and not more than 15 volume percent shall be 
evaluated with the OXY fuel parameter set equal to 4.0 percent by 
weight when calculating VOCE using the equations described in 
paragraphs (c)(1)(i) and (c)(1)(ii) of this section.
* * * * *
    3. A new subpart N is added to read as follows:
Subpart N--Additional Requirements for Gasoline-Ethanol Blends
Sec.
80.1500 Definitions.
80.1501 What are the labeling requirements that apply to retailers 
and wholesale purchaser-consumers of gasoline-ethanol blends that 
contain greater than 10 volume percent ethanol and not more than 15 
volume percent ethanol?
80.1502 What are the survey requirements for gasoline-ethanol 
blends?
80.1503 What are the product transfer document requirements for 
gasoline-ethanol blends, base gasolines, and conventional 
blendstocks for oxygenate blending subject to this subpart?
80.1504 What acts are prohibited under this subpart?
80.1505 Who is liable for violations of this subpart?
80.1506 What penalties apply under this subpart?
80.1507 What are the defenses for acts prohibited under this 
subpart?
80.1508 What evidence may be used to determine compliance with the 
requirements of this subpart and liability for violations of this 
subpart?

Subpart N--Additional Provisions for Gasoline-Ethanol Blends


Sec.  80.1500  Definitions.

    All of the definitions in Sec.  80.2 apply to this subpart. As used 
in this subpart:
    (a) Blendstock for oxygenate blending means gasoline blendstock 
which could become gasoline solely upon the addition of an oxygenate.
    (b) Conventional blendstock for oxygenate blending means gasoline 
blendstock which could become conventional gasoline solely upon the 
addition of an oxygenate.
    (c) Carrier has the same meaning as defined in Sec.  80.2(t).
    (d) Conventional gasoline has the same meaning as defined in Sec.  
80.2(ff)
    (e) E0 means a gasoline that contains no ethanol.
    (f) E10 means a gasoline-ethanol blend that contains between 9 and 
10 volume percent ethanol.
    (g) E15 means a gasoline-ethanol blend that contains greater than 
10 volume percent ethanol and not more than 15 volume percent ethanol.
    (h) EX means a gasoline-ethanol blend that contains less than 9 
volume percent ethanol where X equals the maximum volume percent 
ethanol in the gasoline-ethanol blend.
    (i) EXX means a gasoline-ethanol blend above E15 where XX equals 
the maximum volume percent ethanol in the gasoline-ethanol blend.
    (j) Ethanol blender has the same meaning as defined in Sec.  
80.2(v).
    (k) Ethanol importer means a person who brings ethanol into the 
United States (including from the Commonwealth of Puerto Rico, the 
Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands) 
for use in motor vehicles and nonroad engines.
    (l) Ethanol producer means any person who owns, leases, operates, 
controls, or supervises a facility that produces ethanol for use in 
motor vehicles and nonroad engines.
    (m) Flex-fuel vehicle has the same meaning as flexible-fuel vehicle 
as defined in Sec.  86.1803-01.
    (n) Fuel dispenser means the apparatus used to dispense fuel into 
the fuel tank that is used to power a motor vehicle or a nonroad 
engine, and that is attached to a motor vehicle or nonroad engine.
    (o) Gasoline has the same meaning as defined in Sec.  80.2(c).
    (p) Gasoline importer means an importer as defined in Sec.  80.2(r) 
that imports gasoline or gasoline blending stocks that could become 
gasoline solely upon the addition of oxygenates.
    (q) Gasoline refiner means a refiner as defined as in Sec.  80.2(i) 
that produces gasoline or gasoline blending stocks that could become 
gasoline solely upon the addition of oxygenates.
    (r) Oxygenate blender has the same meaning as defined in Sec.  
80.2(mm).

[[Page 68086]]

    (s) Oxygenate blending facility has the same meaning as defined in 
Sec.  80.2(ll).
    (t) Regulatory control periods has the same meaning as defined in 
Sec.  80.27(a)(1). Regulatory control periods is defined in Sec.  
80.27(a)(1) to mean June 1 to September 15 for retail outlets and 
wholesale purchaser-consumers and May 1 to September 15 for all other 
facilities.
    (u) Retail outlet has the same meaning as defined Sec.  80.2(j).
    (v) Retailer has the same meaning as defined in Sec.  80.2(k).
    (w) Survey series means the four quarterly surveys that comprise a 
survey program.
    (x) Sampling strata means the three types of areas sampled during a 
survey which include the following:
    (1) Densely populated areas;
    (2) Transportation corridors; and
    (3) Rural areas.
    (y) Wholesale purchaser-consumer has the same meaning as defined in 
Sec.  80.2(o).


Sec.  80.1501  What are the labeling requirements that apply to 
retailers and wholesale purchaser-consumers of gasoline-ethanol blends 
that contain greater than 10 volume percent ethanol and not more than 
15 volume percent ethanol?

    (a) Any retailer or wholesale purchaser-consumer who sells, 
dispenses, or offers for sale or dispensing, gasoline-ethanol blends 
that contain greater than 10 volume percent ethanol and not more than 
15 volume percent ethanol shall affix the following conspicuous and 
legible label to the fuel dispenser:

CAUTION!
    This fuel contains 15% ethanol maximum
    Use only in:
    2007 and newer gasoline cars
    2007 and newer light-duty trucks
    Flex-fuel vehicles
    This fuel might damage other vehicles and engines. Federal law 
prohibits its use in all other vehicles and engines

    (b) Labels shall meet the following requirements for appearance and 
placement:
    (1) Dimensions. The label shall measure 3 and \5/8\ inches wide by 
3 and \1/8\ inches high.
    (2) Placement. The label shall be placed on the upper two-thirds of 
each fuel dispenser in a location that is clearly visible to the 
consumer.
    (3) Text. The text shall be centered and the appropriate font and 
background shall be used as described in paragraphs (b)(3)(i) through 
(iii) and (b)(4)(i) through (iv).
    (i) The word ``CAUTION!'' shall be in 24-point, dark red, bold, 
Arial font.
    (ii) The ethanol content ``This fuel contains 15% ethanol maximum'' 
shall be in 14 point, white, Arial font.
    (iii) All other text on the label shall appear in 14-point, black, 
Arial font, except that the word ``prohibits'' shall appear in 14-
point, black, bold, italic, Arial font.
    (4) Color. (i) The background for the area which includes the word 
``CAUTION!'', and the ethanol content ``This fuel contains 15% ethanol 
maximum'' shall be 1-inch wide and neon-orange in color, except that a 
rectangular white background large enough to encompass the word 
``CAUTION!'' shall be superimposed on this neon-orange background.
    (ii) The background for all other text on the label shall be white.
    (iii) The label shall have a \1/16\-inch neon-orange three-sided 
border to the left, right, and bottom of the area which includes the 
text described in paragraph (b)(3)(iii) of this section. This border 
shall be attached to the neon-orange background area described in 
paragraph (b)(4)(i) of this section.
    (iv) The label shall have a \1/16\-inch white border, located to 
the outside of the neon-orange border described in paragraph 
(b)(4)(iii) of this section and neon-orange background area described 
in paragraph (b)(4)(i) of this section.


Sec.  80.1502  What are the survey requirements related to gasoline-
ethanol blends?

    No responsible party identified in paragraphs (a) and (b) of this 
section shall introduce E15 into commerce until the survey program 
requirements in either paragraph (a) or paragraph (b) in this section 
are satisfied.
    (a) Survey option 1. In order to satisfy the survey program 
requirements, any gasoline refiner, gasoline importer, ethanol blender, 
ethanol producer, or ethanol importer shall properly conduct a program 
of compliance surveys in accordance with a survey program plan which 
has been approved by EPA in all areas which may be supplied with their 
gasoline, blendstock for oxygenate blending, ethanol, or gasoline-
ethanol blend if these may be used to manufacture E15 or as E15. Such 
approval shall be based upon the survey program plan meeting the 
following criteria:
    (1) The survey program shall consist of at least four quarterly 
surveys which shall occur during the following time periods:
    (i) One survey during the period January 1 through March 31;
    (ii) One survey during the period April 1 through June 30;
    (iii) One survey during the period July 1 through September 30; and
    (iv) One survey during the period October 1 through December 31.
    (2) The survey program plan shall meet the general requirements of 
paragraph (b)(4) of this section.
    (b) Survey option 2.
    (1) To comply with the requirements under this paragraph (b), 
ethanol blenders, ethanol producers, ethanol importers, gasoline 
refiners, and gasoline importers must participate in the funding of a 
consortium which arranges to have an independent survey association 
conduct a statistically valid program of compliance surveys pursuant to 
a survey program plan which has been approved by EPA, in accordance 
with the requirements of paragraphs (b)(2) through (b)(4) and (b)(6) of 
this section.
    (2) General requirements. The consortium survey program under this 
paragraph (b) must be:
    (i) Planned and conducted by a survey association that is 
independent of the ethanol blenders, ethanol producers, ethanol 
importers, gasoline refiners, and/or gasoline importers that arrange to 
have the survey conducted. In order to be considered independent:
    (A) Representatives of the survey association shall not be an 
employee of any ethanol blender, ethanol producer, ethanol importer, 
gasoline refiner, or gasoline importer;
    (B) The survey association shall be free from any obligation to or 
interest in any ethanol blender, ethanol producer, ethanol importer, 
gasoline refiner, or gasoline importer; and
    (C) The ethanol blenders, ethanol producers, ethanol importers, 
gasoline refiners, and/or gasoline importers that arrange to have the 
survey conducted shall be free from any obligation to or interest in 
the survey association.
    (ii) Conducted at retail outlets that sell gasoline; and
    (iii) Represent all gasoline dispensed nationwide.
    (3) Independent Survey Association Requirements. The consortium 
described in paragraph (b)(1) of this section shall require the 
independent survey association conducting the surveys to:
    (i) Submit to EPA for approval each calendar year a proposed survey 
program plan in accordance with the requirements of paragraph (b)(4) of 
this section.
    (ii) Obtain samples of gasoline offered for sale at gasoline retail 
outlets in accordance with the survey program plan approved under this 
paragraph (b), or immediately notify EPA of any refusal of retail 
outlets to allow samples to be taken.

[[Page 68087]]

    (iii) Test, or arrange to be tested, the samples required under 
paragraph (b)(3)(ii) of this section for oxygenate content as follows:
    (A) Samples collected at retail outlets shall be shipped the same 
day the samples are collected via overnight service to the laboratory 
and analyzed for oxygenate content within 24 hours after receipt of the 
sample in the laboratory.
    (B) Any laboratory to be used by the independent survey association 
for oxygenate testing shall be approved by EPA and its test method for 
determining oxygenate content shall be a method permitted under Sec.  
80.46(g).
    (iv) In the case of any test that yields a result that does not 
match the label affixed to the product (e.g., a sample greater than 15 
volume percent ethanol dispensed from a fuel dispenser labeled as 
``E15'' or a sample containing greater than 10 volume percent ethanol 
and not more than 15 volume percent ethanol dispensed from a fuel 
dispenser not labeled as ``E15''), the independent survey association 
shall, within 24 hours after the laboratory receives the sample, send 
notification of the test result as follows:
    (A) In the case of a sample collected at a retail outlet at which 
the brand name of a gasoline refiner or gasoline importer is displayed, 
to the gasoline refiner or gasoline importer, and EPA. This initial 
notification to a gasoline refiner or gasoline importer shall include 
specific information concerning the name and address of the retail 
outlet, contact information, the brand, and the ethanol content of the 
sample.
    (B) In the case of a sample collected at other retail outlets, to 
the retailer and EPA.
    (C) The independent survey association shall provide notice to the 
identified contact person or persons for each party in writing (which 
includes e-mail or facsimile) and, if requested by the identified 
contact person, by telephone.
    (v) Confirm that each fuel dispenser sampled is labeled as required 
in Sec.  80.1501 by confirming that:
    (A) The label meets the appearance and content requirements of 
Sec.  80.1501.
    (B) The label is located on the fuel dispenser according to the 
requirements in Sec.  80.1501.
    (vi) In the case of a fuel dispenser that is improperly labeled, 
the survey association shall provide notice as provided in paragraphs 
(b)(2)(iv)(A) through (C) of this section.
    (vii) Provide to EPA quarterly and annual summary survey reports 
which include the information specified in paragraph (b)(5) of this 
section.
    (viii) Maintain all records relating to the surveys conducted under 
this paragraph (b) for a period of at least five (5) years.
    (ix) Permit any representative of EPA to monitor at any time the 
conducting of the surveys, including sample collection, transportation, 
storage, and analysis.
    (4) Survey Plan Design Requirements. The proposed survey program 
plan required under paragraph (b)(3)(i) of this section shall, at a 
minimum, include the following:
    (i) Number of Surveys. The survey program plan shall include four 
quarterly surveys each calendar year. The four quarterly surveys 
collectively are called the survey series as defined in Sec.  80.1500.
    (ii) Sampling Areas. The survey program plan shall include sampling 
in all sampling strata, as defined in Sec.  80.1500, during each 
survey. These sampling strata shall be further divided into discrete 
sampling areas or clusters. Each survey shall include sampling in at 
least 40 sampling areas in each stratum which are randomly selected.
    (iii) No advance notice of surveys. The survey plan shall include 
procedures to keep the identification of the sampling areas that are 
included in any survey plan confidential from any regulated party prior 
to the beginning of a survey in an area. However, this information 
should not be kept confidential from EPA.
    (iv) Retail outlet selection.
    (A) The retail outlets to be sampled in a sampling area shall be 
selected from among all retail outlets in the sampling area that sell 
gasoline, with the probability of selection proportionate to the volume 
of gasoline sold at the retail outlets; the sample should also include 
retail outlets with different brand names as well as those retail 
outlets that are unbranded.
    (B) In the case of any retail outlet from which a sample of 
gasoline was collected during a survey and determined to have an 
ethanol content that does not match the fuel dispenser label (e.g. a 
sample greater than 15 volume percent ethanol dispensed from a fuel 
dispenser labeled as ``E15'' or a sample with greater than 10 volume 
percent ethanol and not more than 15 volume percent ethanol dispensed 
from a fuel dispenser not labeled as ``E15''), that retail outlet shall 
be included in the subsequent survey.
    (C) One sample of each product dispensed as gasoline shall be 
collected at each retail outlet, and separate samples shall be taken 
that represent the gasoline contained in each gasoline storage tank 
unless collection of separate samples is not practicable.
    (v) Number of samples.
    (A) The minimum number of samples to be included in the survey plan 
for each calendar year shall be calculated as follows:

[GRAPHIC] [TIFF OMITTED] TP04NO10.006


Where:

n = minimum number of samples in a year-long survey series. However, 
in no case shall n be smaller than 7,500.
Z[alpha] = upper percentile point from the normal distribution to 
achieve a one-tailed 95% confidence level (5% [alpha]-level). Thus, 
Z[alpha] equals 1.645.
Z[beta] = upper percentile point to achieve 95% power. Thus, Z[beta] 
equals 1.645.
[phis]1 = the maximum proportion of non-compliant 
stations for a region to be deemed compliant. In this test, the 
parameter needs to be 5% or greater, i.e., 5% or more of the 
stations, within a stratum such that the region is considered non-
compliant. For this survey, [phis]1 will be 5%.
[phis]0 = the underlying proportion of non-compliant 
stations in a sample. For the first survey plan, [phis]0 
will be 2.3%. For subsequent survey plans [phis]0, will 
be the average of the proportion of stations found to be non-
compliant over the previous four surveys.
Stn = number of sampling strata. For purposes of this 
survey program, Stn equals 3.
Fa = adjustment factor for the number of extra samples 
required to compensate for collected samples that cannot be included 
in the survey, based on the number of additional samples required 
during the previous four surveys. However, in no case shall the 
value of Fa be smaller than 1.1.
Fb = adjustment factor for the number of samples required 
to resample each retail outlet with test results exceeding the 
labeled amount (e.g. a sample greater than 15 volume percent ethanol 
dispensed from a fuel dispenser labeled

[[Page 68088]]

as ``E15'' or a sample with greater than 10 volume percent ethanol 
and not more than 15 volume percent ethanol dispensed from a fuel 
dispenser not labeled as ``E15''), based on the rate of resampling 
required during the previous four surveys. However, in no case shall 
the value of Fb be smaller than 1.1.
Sun = number of surveys per year. For purposes of this 
survey program, Sun equals 4.

    (B) The number of samples determined pursuant to paragraph 
(b)(4)(v)(A) of this section, after being incremented as necessary to 
allocate whole numbers of samples to each cluster, shall be distributed 
approximately equally for the quarterly surveys conducted during the 
calendar year.
    (5) Summary survey reports. The quarterly and annual summary survey 
reports required under paragraph (b)(3)(vii) of this section shall 
include the following information:
    (i) An identification of the parties that are participating in the 
survey.
    (ii) The identification of each sampling area included in a survey 
and the dates that the samples were collected in that area.
    (iii) For each retail outlet sampled:
    (A) The identification of the retail outlet;
    (B) The gasoline refiner or gasoline importer brand name displayed, 
if any;
    (C) The fuel dispenser labeling (e.g., ``E15'');
    (D) The sample test result for oxygenate content; and
    (E) The test method used to determine oxygenate content under Sec.  
80.46(g).
    (iv) Ethanol level summary statistics by brand and unbranded for 
each sampling area, strata, and survey series. These summary statistics 
shall:
    (A) Include the number of samples, the average, median and range of 
ethanol content, expressed in volume percent.
    (B) [Reserved]
    (v) The quarterly reports required under this paragraph (b)(5) are 
due 60 days following the end of the quarter. The annual reports 
required under this paragraph (b)(5) are due 60 days following the end 
of the calendar year.
    (vi) The reports required under this paragraph (b)(5) shall be 
submitted to EPA in an electronic spreadsheet.
    (6) Procedures for obtaining approval of survey plan. The first 
year in which a survey program is conducted may consist of only a 
portion of a calendar year ending on December 31 (i.e. in the initial 
year, a survey program may begin on a date after January 1, but would 
still end on December 31). Subsequent survey programs shall be 
conducted on a calendar year basis. The procedure for obtaining EPA 
approval of a survey program plan under this paragraph (b), and for 
revocation of such approval, is as follows:
    (i) For the first year in which a survey will be conducted, a 
survey program plan that complies with the requirements of this 
paragraph (b) must be submitted to EPA no later than 60 days prior to 
the date on which the survey program is to begin.
    (ii) For subsequent years in which a survey will be conducted, a 
survey program plan that complies with the requirements of this 
paragraph (b) must be submitted to EPA no later than November 1 of the 
year preceding the calendar year in which the survey will be conducted.
    (iii) The survey program plan must be signed by a responsible 
officer of the consortium which arranges to have an independent 
surveyor conduct the survey program.
    (iv) The survey program plan must be sent to the following address: 
Director, Compliance and Innovative Strategies Division, U.S. 
Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Mail Code 
6506J, Washington, DC 20460.
    (v) EPA will send a letter to the party submitting the survey 
program plan that indicates whether EPA approves or disapproves the 
survey plan.
    (vi) EPA may revoke its approval of a survey plan if EPA determines 
that the requirements in this section have not been complied with, or 
that the provisions of the survey plan approved by EPA pursuant to 
paragraph (b)(6)(v) of this section have not been diligently 
implemented.
    (vii) The approving official for a survey plan under this section 
is the Director of the Compliance and Innovative Strategies Division, 
Office of Transportation and Air Quality.
    (viii) Any notifications or reports required to be submitted to EPA 
under this paragraph (b) must be directed to the official designated in 
paragraph (b)(6)(iv) of this section.
    (7) Independent surveyor contract.
    (i) For the first year in which a survey program will be conducted, 
no later than 30 days preceding the start of the survey, the contract 
with the independent surveyor shall be in effect, and an amount of 
money necessary to carry out the entire survey plan shall be paid to 
the independent surveyor or placed into an escrow account with 
instructions to the escrow agent to pay the money to the independent 
surveyor during the course of the conduct of the survey plan.
    (ii) For subsequent years in which a survey program will be 
conducted, no later than December 1 of the year preceding the year in 
which the survey will be conducted, the contract with the independent 
surveyor shall be in effect, and an amount of money necessary to carry 
out the entire survey plan shall be paid to the independent surveyor or 
placed into an escrow account with instructions to the escrow agent to 
pay the money to the independent surveyor during the course of the 
conduct of the survey plan.
    (iii) For the first year in which a survey program will be 
conducted, no later than 15 days preceding the start of the survey EPA 
must receive a copy of the contract with the independent surveyor and 
proof that the money necessary to carry out the survey plan has either 
been paid to the independent surveyor or placed into an escrow account; 
if the money has been placed into an escrow account, a copy of the 
escrow agreement must to be sent to the official designated in 
paragraph (b)(6)(iv) of this section.
    (iv) For subsequent years in which a survey program will be 
conducted, no later than December 15 of the year preceding the year in 
which the survey will be conducted, EPA must receive a copy of the 
contract with the independent surveyor and proof that the money 
necessary to carry out the survey plan has either been paid to the 
independent surveyor or placed into an escrow account; if placed into 
an escrow account, a copy of the escrow agreement must be sent to the 
official designated in paragraph (b)(6)(iv) of this section.
    (8) Failure to fulfill requirements. A failure to fulfill or cause 
to be fulfilled any of the requirements of this paragraph (b) is a 
prohibited act under Clean Air Act section 211(c) and Sec.  80.1504.


Sec.  80.1503  What are the product transfer document requirements for 
gasoline-ethanol blends, base gasolines, and conventional blendstocks 
for oxygenate blending subject to this subpart?

    (a) Product transfer documentation for conventional blendstock for 
oxygenate blending, or base gasoline transferred upstream of an ethanol 
blending facility.
    (1) In addition to any other product transfer document requirements 
under 40 CFR part 80, on each occasion when any person transfers 
custody or title to any conventional blendstock for oxygenate blending 
which could become conventional gasoline solely upon the addition of 
ethanol, or base gasoline upstream of an oxygenate blending facility, 
as defined in Sec.  80.2(ll),

[[Page 68089]]

the transferor shall provide to the transferee product transfer 
documents which include the following information:
    (i) The name and address of the transferor;
    (ii) The name and address of the transferee;
    (iii) The volume of conventional blendstock for oxygenate blending 
or gasoline being transferred;
    (iv) The location of the conventional blendstock for oxygenate 
blending or gasoline at the time of the transfer;
    (v) The date of the transfer;
    (vi) For gasoline during the regulatory control periods defined in 
Sec.  80.27(a)(1):
    (A) The maximum Reid Vapor Pressure (RVP), as determined by a 
method permitted under Sec.  80.46(c), stated in the following format: 
``The RVP of this base gasoline does not exceed [fill in appropriate 
value]''; and
    (B) For base gasoline designed for the special provisions for 
gasoline-ethanol blends in Sec.  80.27(d)(2), information about the 
suitable ethanol content stated in the following format: ``Designed for 
the special RVP provisions for ethanol blends that contain between 9 
and 10 volume % ethanol.''
    (C) For base gasoline not described in paragraph (a)(vi)(B) of this 
section, information regarding the suitable ethanol content, stated in 
the following format: ``Suitable for blending with ethanol at a 
concentration of no more than 15 volume percent ethanol.''
    (2) The requirements in paragraph (a)(1) do not apply to 
reformulated gasoline blendstock for oxygenate blending, as defined in 
Sec.  80.2(kk), which are subject to the product transfer document 
requirements of Sec.  80.69 and Sec.  80.77.
    (b) Product transfer documentation for gasoline transferred 
downstream of an oxygenate blending facility.
    (1) In addition to any other product transfer document requirements 
under 40 CFR part 80, on each occasion when any person transfers 
custody or title to any gasoline-ethanol blend downstream of an 
oxygenate blending facility, as defined in Sec.  80.2(ll), except for 
transfers to the ultimate consumer, the transferor shall provide to the 
transferee product transfer documents which include the following 
information:
    (i) The name and address of the transferor;
    (ii) The name and address of the transferee;
    (iii) The volume of gasoline being transferred;
    (iv) The location of the gasoline at the time of the transfer;
    (v) The date of the transfer; and
    (vi) One of the statements detailed in paragraph (b)(1)(vi)(A) 
though (E) which accurately describes the gasoline-ethanol blend. The 
information regarding the ethanol content of the fuel is required year-
round. The information regarding the RVP of the fuel is only required 
for gasoline during the regulatory control periods defined in Sec.  
80.27(a)(1).
    (A) For gasoline containing no ethanol (E0), the following 
statement: ``E0: Contains no ethanol. The RVP does not exceed [fill in 
appropriate value] psi.''
    (B) For gasoline containing less than 9 volume percent ethanol, the 
following statement: ``EX--Contains up to X% ethanol. The RVP does not 
exceed [fill in appropriate value] psi.'' The term X refers to the 
maximum volume percent ethanol present in the gasoline.
    (C) For gasoline containing between 9 and 10 volume percent ethanol 
(E10), the following statement: ``E10: Contains between 9 and 10 volume 
percent ethanol. The RVP does not exceed [fill in appropriate value] 
psi.''
    (D) For gasoline containing greater than 10 volume percent and not 
more than 15 volume percent ethanol (E15), the following statement: 
``E15: Contains up to 15 volume percent ethanol. The RVP does not 
exceed [fill in appropriate value] psi;'' or
    (E) For all other gasoline that contains ethanol, the following 
statement: ``EXX--Contains no more than XX% ethanol,'' where XX equals 
the volume % ethanol.
    (2) Except for transfers to truck carriers, retailers, or wholesale 
purchaser-consumers, product codes may be used to convey the 
information required under paragraph (b)(1) of this section if such 
codes are clearly understood by each transferee.
    (c) The records required by this section must be kept by the 
transferor and transferee for five (5) years from the date they were 
created or received by each party in the distribution system.
    (d) On request by EPA, the records required by this section must be 
made available to the Administrator or the Administrator's authorized 
representative. For records that are electronically generated or 
maintained, the equipment or software necessary to read the records 
shall be made available, or, if requested by EPA, electronic records 
shall be converted to paper documents.


Sec.  80.1504  What acts are prohibited under this subpart?

    No person shall--
    (a)(1) Sell, introduce, or cause or allow the sale or introduction 
of gasoline containing greater than 10 volume % ethanol (i.e., greater 
than E10) into any model year 2000 or older light duty gasoline motor 
vehicle, any heavy-duty gasoline motor vehicle or engine, any highway 
or off-highway motorcycle, or any gasoline-powered nonroad engines, 
vehicles or equipment;
    (2) Notwithstanding Sec.  80.1504(a)(1), no person shall be 
prohibited from selling, introducing, or causing or allowing the sale 
or introduction of gasoline containing greater than 10 volume % ethanol 
into any flex-fuel vehicle.
    (b) Sell, offer for sale, dispense, or otherwise make available at 
a retail or wholesale purchaser-consumer facility a gasoline-ethanol 
blend that is not correctly labeled as to its ethanol content in 
accordance with Sec.  80.1501;
    (c) Fail to fulfill, or cause a failure of the fulfillment of, any 
survey required under Sec.  80.1502;
    (d) Fail to generate, use, transfer and maintain product transfer 
documents that accurately reflect the type of product, ethanol content, 
maximum Reid Vapor pressure (RVP), and other information required under 
Sec.  80.1503;
    (e) Improperly blend, or cause the improper blending of, ethanol 
into conventional blendstock for oxygenate blending, base gasoline or 
gasoline already containing ethanol, in a manner inconsistent with the 
information on the product transfer document under Sec.  
80.1503(a)(1)(vi) or Sec.  80.1503(b)(1)(vi);
    (f) For gasoline during the regulatory control periods defined in 
Sec.  80.27(a)(1), combine any base gasoline or conventional blendstock 
for oxygenate blending intended for blending with E10 that took 
advantage of the 1 psi waiver applicable for 9-10 volume percent 
gasoline-ethanol blends with any gasoline or conventional blendstock 
for oxygenate blending intended for blending with E15, unless the 
resultant combination is designated, in its entirety, as an E10 
blendstock for oxygenate blending.
    (g) For gasoline during the regulatory control periods defined in 
Sec.  80.27(a)(1), combine any gasoline-ethanol blend containing E10 
that took advantage of the 1 psi waiver applicable to 9-10 volume 
percent gasoline-ethanol blends, with any gasoline containing E0 or any 
gasoline blend containing E15.
    (h) Fail to meet any other requirement of this subpart.
    (i) Cause another person to commit an act in violation of 
paragraphs (a) through (h) of this section.


Sec.  80.1505  Who is liable for violations of this subpart?

    (a) Persons liable. Any person who violates Sec.  80.1504(a) 
through (i) is liable for the violation. In addition, when the gasoline 
contained in any storage tank at

[[Page 68090]]

any facility owned, leased, operated, controlled or supervised by any 
gasoline refiner, gasoline importer, oxygenate blender, carrier, 
distributor, reseller, retailer, or wholesale purchaser-consumer is 
found in violation of the prohibitions described in Sec.  80.1504(a), 
and (c) through (i), the following persons shall be deemed in 
violation:
    (1) Each gasoline refiner, gasoline importer, oxygenate blender, 
carrier, distributor, reseller, retailer, or wholesale purchaser-
consumer who owns, leases, operates, controls or supervises the 
facility where the violation is found.
    (2) Each gasoline refiner or gasoline importer whose corporate, 
trade, or brand name, or whose marketing subsidiary's corporate, trade, 
or brand name, appears at the facility where the violation is found.
    (3) Each gasoline refiner, gasoline importer, oxygenate blender, 
distributor, and reseller who manufactured, imported, sold, offered for 
sale, dispensed, supplied, offered for supply, stored, transported, or 
caused the transportation of any gasoline which is in the storage tank 
containing gasoline found to be in violation.
    (4) Each carrier who dispensed, supplied, stored, or transported 
any gasoline which is in the storage tank containing gasoline found to 
be in violation, provided that EPA demonstrates, by reasonably specific 
showings using direct or circumstantial evidence, that the carrier 
caused the violation.
    (b) For label violations under Sec.  80.1504(b), only the wholesale 
purchaser-consumer or retailer and the branded gasoline refiner or 
branded gasoline importer, if any, shall be liable.
    (c) Each partner to a joint venture, or each owner of a facility 
owned by two or more owners, is jointly and severally liable for any 
violation of this subpart that occurs at the joint venture facility or 
a facility that is owned by the joint owners, or a facility that is 
committed by the joint venture operation or any of the joint owners of 
the facility.
    (d) Any parent corporation is liable for any violations of this 
subpart that are committed by any of its solely-owned subsidiaries.


Sec.  80.1506  What penalties apply under this subpart?

    (a) Any person under Sec.  80.1505 who is liable for a violation 
under Sec.  80.1504 is subject to an administrative or civil penalty, 
as specified in sections 205 and 211(d) of the Clean Air Act, for every 
day of each such violation and the amount of economic benefit or 
savings resulting from the violation.
    (b)(1) Any violation of any requirement that pertains to the 
ethanol content of gasoline shall constitute a separate day of 
violation for each and every day such gasoline giving rise to such 
violations remains any place in the gasoline distribution system, 
beginning on the day that the gasoline that violates such requirement 
is produced or imported and distributed and/or offered for sale, and 
ending on the last day that any such gasoline is offered for sale or is 
dispensed to any ultimate consumer for use in any motor vehicle, unless 
the violation is corrected by altering the properties and 
characteristics of the gasoline giving rise to the violations and any 
mixture of gasolines that contains any of the gasoline giving rise to 
the violations such that the gasoline or mixture of gasolines has the 
properties and characteristics that would have existed if the gasoline 
giving rise to the violations had been produced or imported in 
compliance with all requirements that pertain to the ethanol content of 
gasoline.
    (2) For the purposes of this paragraph (b), the length of time the 
gasoline in question remained in the gasoline distribution system shall 
be deemed to be twenty-five days; unless the respective party or EPA 
demonstrates by reasonably specific showings, using direct or 
circumstantial evidence, that the gasoline giving rise to the 
violations remained any place in the gasoline distribution system for 
fewer than or more than twenty-five days.
    (c) Any violation of any affirmative requirement or prohibition not 
included in paragraph (b) of this section shall constitute a separate 
day of violation for each and every day such affirmative requirement is 
not properly accomplished, and/or for each and every day the prohibited 
activity continues. For those violations that may be ongoing each and 
every day the prohibited activity continues shall constitute a separate 
day of violation.


Sec.  80.1507  What are the defenses for acts prohibited under this 
subpart?

    (a) Defenses for prohibited activities.
    (1) In any case in which a gasoline refiner, gasoline importer, 
oxygenate blender, carrier, distributor, reseller, retailer, or 
wholesale purchaser-consumer would be in violation under Sec.  
80.1504(a), and (c) through (i) it shall be deemed not in violation if 
it can demonstrate:
    (i) That the violation was not committed or caused by the regulated 
party or its employee or agent;
    (ii) That product transfer documents account for all of the 
gasoline in the storage tank found in violation and indicate that the 
gasoline met relevant requirements; and
    (iii)(A) That it has conducted a quality assurance program, 
including a sampling and testing program, as described in paragraph (b) 
of this section;
    (B) A carrier may rely on the sampling and testing program carried 
out by another party, including the party that owns the gasoline in 
question, provided that the sampling and testing program is carried out 
properly.
    (2)(i) Where a violation is found at a facility which is operating 
under the corporate, trade or brand name of a refiner, that refiner 
must show, in addition to the defense elements required by paragraph 
(a)(1) of this section, that the violation was caused by:
    (A) An act in violation of law (other than the Act or this part), 
or an act of sabotage or vandalism;
    (B) The action of any reseller, distributor, oxygenate blender, 
carrier, or a retailer or wholesale purchaser-consumer supplied by any 
of these persons, in violation of a contractual undertaking imposed by 
the gasoline refiner designed to prevent such action, and despite 
periodic sampling and testing by the gasoline refiner to ensure 
compliance with such contractual obligation; or
    (C) The action of any carrier or other distributor not subject to a 
contract with the gasoline refiner but engaged by the gasoline refiner 
for transportation of gasoline, despite specification or inspection of 
procedures and equipment by the gasoline refiner which are reasonably 
calculated to prevent such action.
    (ii) In this paragraph (a), to show that the violation ``was 
caused'' by any of the specified actions the party must demonstrate by 
reasonably specific showings using direct or circumstantial evidence, 
that the violation was caused or must have been caused by another.
    (3) For label violations under Sec.  80.1504(b), the branded 
gasoline refiner or branded gasoline importer shall not be deemed 
liable if the requirements of paragraph (b)(4) of this section are met.
    (b) Quality assurance program. In order to demonstrate an 
acceptable quality assurance program for gasoline at all points in the 
gasoline distribution network, other than at retail outlets and 
wholesale purchaser-consumer facilities, a party must present evidence 
of the following in addition to other regular appropriate quality 
assurance procedures and practices.
    (1) A periodic sampling and testing program to determine if the 
gasoline

[[Page 68091]]

contains applicable maximum and/or minimum volume percent of ethanol.
    (2) That on each occasion when gasoline is found in noncompliance 
with one of the requirements referred to in paragraph (b)(1) of this 
section:
    (i) The party immediately ceases selling, offering for sale, 
dispensing, supplying, offering for supply, storing, transporting, or 
causing the transportation of the violating product; and
    (ii) The party promptly remedies the violation (such as by removing 
the violating product or adding more complying product until the 
applicable requirements are achieved).
    (3) An oversight program conducted by a carrier under paragraph 
(b)(1) of this section need not include periodic sampling and testing 
of gasoline in a tank truck operated by a common carrier, but in lieu 
of such tank truck sampling and testing the common carrier shall 
demonstrate evidence of an oversight program for monitoring compliance 
with the requirements of Sec.  80.1504 relating to the transport or 
storage of gasoline by tank truck, such as appropriate guidance to 
drivers on compliance with applicable requirements and the periodic 
review of records normally received in the ordinary course of business 
concerning gasoline quality and delivery.
    (4) The periodic sampling and testing program specified in 
paragraph (b)(1) of this section shall be deemed to have been in effect 
during the relevant time period for any party, including branded 
gasoline refiners and branded gasoline importers, if:
    (i) An EPA approved survey program under Sec.  80.1502 was in 
effect and was executed fully and properly;
    (ii) Any retailer at which a violation was discovered allowed 
survey inspectors to take samples and inspect labels; and
    (iii) For truck loading terminals and truck distributors that 
perform oxygenate blending, additional quality assurance procedures and 
practices were in place, such as regular checks to reconcile volumes of 
ethanol in inventory and regular checks of equipment for proper ethanol 
blend rates.


Sec.  80.1508  What evidence may be used to determine compliance with 
the requirements of this subpart and liability for violations of this 
subpart?

    (a) Compliance with the requirements of this subpart pertaining to 
the ethanol content of gasoline shall be determined based on the 
ethanol level of the gasoline, measured using the methodologies 
specified in Sec.  80.46(g). Any evidence or information, including the 
exclusive use of such evidence or information, may be used to establish 
the ethanol content of gasoline if the evidence or information is 
relevant to whether the ethanol content of gasoline would have been in 
compliance with the requirements of this subpart if the appropriate 
sampling and testing methodology had been correctly performed. Such 
evidence may be obtained from any source or location and may include, 
but is not limited to, test results using methods other than those 
specified in Sec.  80.46(g), business records, and commercial 
documents.
    (b) Determinations of compliance with the requirements of this 
subpart other than those pertaining to the ethanol content of gasoline, 
and determinations of liability for any violation of this subpart, may 
be based on information obtained from any source or location. Such 
information may include, but is not limited to, business records and 
commercial documents.

[FR Doc. 2010-27446 Filed 11-3-10; 8:45 am]
BILLING CODE 6560-50-P

