
[Federal Register Volume 77, Number 95 (Wednesday, May 16, 2012)]
[Rules and Regulations]
[Pages 28772-28782]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-11846]



[[Page 28772]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 51

[EPA-HQ-OAR-2010-1076; FRL-9671-3]
RIN 2060-AQ97


Air Quality: Widespread Use for Onboard Refueling Vapor Recovery 
and Stage II Waiver

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The EPA has determined that onboard refueling vapor recovery 
(ORVR) technology is in widespread use throughout the motor vehicle 
fleet for purposes of controlling motor vehicle refueling emissions, 
and, therefore, by this action, the EPA is waiving the requirement for 
states to implement Stage II gasoline vapor recovery systems at 
gasoline dispensing facilities in nonattainment areas classified as 
Serious and above for the ozone national ambient air quality standards 
(NAAQS). This finding will be effective as noted below in the DATES 
section. After the effective date of this notice, a state previously 
required to implement a Stage II program may take appropriate action to 
remove the program from its State Implementation Plan (SIP). Phasing 
out the use of Stage II systems may lead to long-term cost savings for 
gas station owners and operators while air quality protections are 
maintained.

DATES: This rule is effective on May 16, 2012.

ADDRESSES: The EPA has established a docket for this rule, identified 
by Docket ID No. EPA-HQ-OAR-2010-1076. All documents in the docket are 
listed in www.regulations.gov. Although listed in the index, some 
information is not publicly available, i.e., confidential business 
information or other information whose disclosure is restricted by 
statute. Certain other material, such as copyrighted material, is not 
placed on the Internet and will be publicly available only in hard copy 
form. Publicly available docket materials are available either 
electronically in www.regulations.gov or in hard copy at the Air and 
Radiation Docket and Information Center, EPA Headquarters Library, Room 
Number 3334 in the EPA West Building, located at 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.

FOR FURTHER INFORMATION CONTACT: Mr. Lynn Dail, Office of Air Quality 
Planning and Standards, Air Quality Policy Division, Mail code C539-01, 
Research Triangle Park, NC 27711, telephone (919) 541-2363; fax number: 
919-541-0824; email address: dail.lynn@epa.gov.

SUPPLEMENTARY INFORMATION:

I. Purpose of Regulatory Action

    Since 1990, Stage II gasoline vapor recovery systems have been a 
required emissions control measure in Serious, Severe, and Extreme 
ozone nonattainment areas. Beginning with model year 1998, ORVR 
equipment has been phased in for new vehicles, and has been a required 
control on nearly all new highway vehicles since 2006. Over time, non-
ORVR vehicles will continue to be replaced with ORVR vehicles. Stage II 
and ORVR emission control systems are redundant, and the EPA has 
determined that emission reductions from ORVR are essentially equal to 
and will soon surpass the emission reductions achieved by Stage II 
alone. In this action, the EPA is eliminating the largely redundant 
Stage II requirement in order to ensure that refueling vapor control 
regulations are beneficial without being unnecessarily burdensome to 
American business. This action allows, but does not require, states to 
discontinue Stage II vapor recovery programs.

II. Summary of the Major Provisions of This Final Rule

    Clean Air Act (CAA) section 202(a)(6) provides discretionary 
authority to the EPA Administrator to, by rule, revise or waive the 
section 182(b)(3) Stage II requirement for Serious, Severe and Extreme 
ozone nonattainment areas after the Administrator determines that ORVR 
is in widespread use throughout the motor vehicle fleet. Based on 
criteria that the EPA proposed last year (76 FR 41731, July 15, 2011), 
the EPA is determining that ORVR is in widespread use. As of the 
effective date of today's action, states that are implementing 
mandatory Stage II programs under section 182(b)(3) of the CAA may 
submit revisions to their SIPs to remove this program.
    The EPA will also be issuing non-binding guidance on developing and 
submitting approvable SIP revisions.\1\ This guidance will address SIP 
requirements for states in the Ozone Transport Region (OTR), which are 
separately required under section 184(b)(2) of the CAA to adopt and 
implement control measures capable of achieving emissions reductions 
comparable to those achievable by Stage II. The EPA is updating its 
guidance for estimating what Stage II comparable emissions reductions 
could be, in light of the ORVR widespread use determination. The EPA 
now expects Stage II comparable emissions reductions to be 
substantially less than what was estimated in the past before ORVR use 
became widespread. Therefore, the EPA encourages states to consult the 
updated guidance before submitting a SIP revision removing Stage II 
controls.
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    \1\ ``Phasing Out Stage II Gasoline Refueling Vapor Recovery 
Programs: Guidance on Satisfying Requirements of Clean Air Act 
Sections 110([ell]), 193, and 184(b)(2) (tentative title).'' U.S. 
EPA Office of Air and Radiation, forthcoming. This guidance will 
provide the EPA's recommendations for states to consider when 
developing SIP revisions following today's rulemaking. Unlike the 
final rule, the guidance is not final agency action, and is not 
binding on or enforceable against any person. Consequently, it is 
subject to possible revision without additional rulemaking. In 
addition, the approaches suggested in the guidance (or in any 
changes thereto) will not represent final agency action unless and 
until the EPA takes a final SIP approval or disapproval action 
implementing those approaches.
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III. Costs and Benefits

    The primary purpose of this final rule is to promulgate a 
determination that ORVR is in widespread use as permitted in section 
202(a)(6) of the CAA. In this final rule, EPA is exercising the 
authority provided by section 202(a)(6) of the CAA to, by rule, revise 
or waive the section 182(b)(3) Stage II requirement for Serious, 
Severe, and Extreme ozone nonattainment areas after the Administrator 
determines that ORVR is in widespread use throughout the motor vehicle 
fleet. This in turn gives states that were required to implement Stage 
II vapor recovery under section 182(b)(3) of the CAA the option to 
submit for the EPA's review and approval revised ozone SIPs that will 
remove this requirement. The EPA projects that during 2013-2015, 
gasoline-dispensing facilities (GDFs) in up to 19 states and the 
District of Columbia could seek to decommission and remove Stage II 
systems from their dispensers. There are about 30,600 GDFs with Stage 
II in these 20 areas. If the states submit and EPA approves SIP 
revisions to remove Stage II systems from these GDFs, the EPA projects 
savings of about $10.2 million in the first year, $40.5 million in the 
second year, and $70.9 million in the third year. Long-term savings are 
projected to be about $91 million per year, compared to the current use 
of Stage II systems in these areas. No significant emission

[[Page 28773]]

increases or decreases are expected from this action.

IV. General Information

A. Does this action apply to me?

    Entities directly affected by this action include states (typically 
state air pollution control agencies) and, in some cases, local 
governments that develop air pollution control rules that apply to 
areas classified as Serious and above for nonattainment of the ozone 
NAAQS. Individuals and companies that operate gasoline dispensing 
facilities may be indirectly affected by virtue of state action in SIPs 
that implement provisions resulting from final rulemaking on this 
action; many of these sources are in the following groups:

------------------------------------------------------------------------
                                                  SIC
                Industry group                    \a\       NAICS \b\
------------------------------------------------------------------------
Gasoline stations.............................    5541    447110, 447190
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\a\ Standard Industrial Classification.
\b\ North American Industry Classification System.

B. Where can I get a copy of this document and other related 
information?

    In addition to being available in the docket, an electronic copy of 
this notice will be posted at http://www.epa.gov/air/ozonepollution/actions.html#impl under ``recent actions.''

C. How is this notice organized?

    The information presented in this preamble is organized as follows.

I. Purpose of Regulatory Action
II. Summary of the Major Provisions of This Final Rule
III. Costs and Benefits
IV. General Information
    A. Does this action apply to me?
    B. Where can I get a copy of this document and other related 
information?
    C. How is this notice organized?
V. Background
    A. What requirements for Stage II gasoline vapor recovery apply 
for ozone nonattainment areas?
    B. Stage II Vapor Recovery Systems
    C. Onboard Refueling Vapor Recovery (ORVR) Systems
    D. Compatibility Between Some Vapor Recovery Systems
    E. Proposed Rule to Determine Widespread Use of ORVR
VI. This Action
    A. Analytical Rationale for Final Rule
    B. Updated Analysis of Widespread Use
    C. Widespread Use Date
    D. Implementation of the Rule Provisions
    E. Implementation of Rule Revisions in the Ozone Transport 
Region
    F. Comments on Other Waiver Implementation Issues
VII. Estimated Cost
VIII. Statutory and Executive Order Reviews
    A. Executive Orders 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions 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
    K. Congressional Review Act
IX. Statutory Authority

V. Background

A. What requirements for Stage II gasoline vapor recovery apply in 
ozone nonattainment areas?

    The requirements in the 1990 CAA Amendments regarding Stage II 
vapor recovery are contained in Title I: Provisions for Attainment and 
Maintenance of National Ambient Air Quality Standards. Under CAA 
section 182(b)(3), Stage II gasoline vapor recovery systems are 
required to be used at higher throughput GDFs located in Serious, 
Severe, and Extreme nonattainment areas for ozone.\2\ States were 
required to adopt a Stage II program into their SIPs, and the controls 
were to be installed according to specified deadlines following state 
rule adoption.\3\ Since the early 1990s, Stage 2 gasoline vapor 
controls have provided substantial emissions reductions and have 
contributed to improved air quality over time.
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    \2\ Originally, the section 182(b)(3) Stage II requirement also 
applied in all Moderate ozone nonattainment areas. However, under 
section 202(a)(6) of the CAA, 42 U.S.C. 7521(a)(6), the requirements 
of section 182(b)(3) no longer apply in Moderate ozone nonattainment 
areas after the EPA promulgated ORVR standards on April 6, 1994, 59 
FR 16262, codified at 40 CFR parts 86 (including 86.098-8), 88 and 
600. Under implementation rules issued in 2002 for the 1997 8-hour 
ozone standard, the EPA retained the Stage II-related requirements 
under section 182(b)(3) as they applied for the now-revoked 1-hour 
ozone standard. 40 CFR 51.900(f)(5) and 40 CFR 51.916(a).
    \3\ This requirement only applies to facilities that sell more 
than a specified number of gallons per month and is set forth in 
sections 182(b)(3)(A)-(C) and 324(a)-(c). Section 182(b)(3)(B) has 
the following effective date requirements for implementation of 
Stage II after the adoption date by a state of a Stage II rule: 6 
months after adoption of the state rule, for GDFs built after the 
enactment date (which for newly designated areas would be the 
designation date); 1 year after adoption date, for gas stations 
pumping at least 100,000 gal/month based on average monthly sales 
over 2-year period before adoption date; 2 years after adoption, for 
all others.
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B. Stage II Vapor Recovery Systems

    When a gasoline-powered automobile or other vehicle is brought into 
a GDF to be refueled, the empty portion of the fuel tank on the vehicle 
contains gasoline vapors. When liquid gasoline is pumped into the 
partially empty gas tank, gasoline vapors are forced out of the tank 
and fill pipe as the tank fills with liquid gasoline. Where air 
pollution control technology is not used, these vapors are emitted into 
the ambient air. In the atmosphere, these vapors can react with 
sunlight, nitrogen oxides and other volatile organic compounds to form 
ozone.
    There are two basic technical approaches to Stage II vapor 
recovery: A ``balance'' system, and a vacuum assist system. A balance 
type Stage II control system has a rubber boot around the gasoline 
nozzle spout that fits snugly up to a vehicle's gasoline fill pipe 
during refueling of the vehicle. With a balance system, when gasoline 
in the underground storage tank (UST) is pumped into a vehicle, a 
positive pressure differential is created between the vehicle tank and 
the UST. This pressure differential draws the gasoline vapors from the 
vehicle fill pipe through the rubber boot and the concentric hoses and 
underground piping into the UST. This is known as a balance system 
because gasoline vapors from the vehicle tank flow into the UST tank to 
balance pressures. About 30 percent of Stage II GDFs nationwide use the 
balance type Stage II system.
    The vacuum assist system is the other primary type of Stage II 
system currently in operation. This type of Stage II system uses a 
vacuum pump on the vapor return line to help draw vapors from the 
vehicle fill pipe into the UST. An advantage of this type of system is 
that the rubber boot around the nozzle can be smaller and lighter (or 
not used at all) and still draw the vapors into the vapor return hose. 
This makes for an easier-to-handle nozzle, which is popular with 
customers. About 70 percent of Stage II GDFs nationwide use the vacuum 
assist approach.
    New Stage II equipment is normally required to achieve 95 percent 
control effectiveness at certification. However, studies have shown 
that in-use control efficiency depends on the proper installation, 
operation, and maintenance of the control equipment at the GDF.\4\

[[Page 28774]]

Damaged, missing, or improperly operating components or systems can 
significantly degrade the control effectiveness of a Stage II system.
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    \4\ The Petroleum Equipment Institute has published recommended 
installation practices (PEI/RP300-93) and most states require 
inspection, testing, and evaluation before a system is commissioned 
for use.
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    In-use effectiveness ultimately depends on the consistency of 
inspections, follow-up review by state agencies, and actions by 
operators to perform inspections and field tests and conduct 
maintenance in a correct and timely manner. The EPA's early guidance 
for Stage II discussed expected training, inspection, and testing 
criteria, and most states have adopted and supplemented these criteria 
as deemed necessary for balance and vacuum assist systems.\5\ In some 
cases, states have strictly followed the EPA guidance but other states 
have required a lesser level of inspection and enforcement efforts. 
Past EPA studies have estimated Stage II in-use efficiencies of 92 
percent with semi-annual inspections, 86 percent with annual 
inspections and 62 percent with minimal or less frequent state 
inspections.\6\ The in-use effectiveness of Stage II control systems 
may vary from state to state, and may vary over time within any state 
or nonattainment area because the in-use efficiency of Stage II vapor 
recovery systems depends heavily on the ongoing maintenance and 
oversight by GDF owners/operators and the state/local agencies.
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    \5\ ``Enforcement Guidance for Stage II Vehicle Refueling 
Control Programs,'' U.S. EPA, Office of Air and Radiation, Office of 
Mobile Sources, December 1991.
    \6\ ``Technical Guidance--Stage II Vapor Recovery Systems for 
Control of Vehicle Refueling at Gasoline Dispensing Facilities 
Volume I: Chapters,'' EPA-450/3-91-022a, November 1991. This study 
is a composite of multiple studies.
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C. Onboard Refueling Vapor Recovery (ORVR) Systems

    In addition to Stage II controls, the 1990 CAA Amendments required 
another method of controlling emissions from dispensing gasoline. 
Section 202(a)(6) of the CAA requires an onboard system of capturing 
vehicle-refueling emissions, commonly referred to as an ORVR system.\7\ 
ORVR consists of an activated carbon canister installed on the vehicle 
into which vapors are routed from the vehicle fuel tank during 
refueling. There the vapors are captured by the activated carbon in the 
canister. To prevent the vapors from escaping through the fill pipe 
opening, the vehicle employs a seal in the fill pipe which allows 
liquid gasoline to enter but blocks vapor escape. In most cases, these 
are ``liquid seals'' created by the incoming liquid gasoline slightly 
backing near the bottom of the fill pipe. When the engine is started, 
the vapors are purged from the activated carbon and into the engine 
where they are burned as fuel.
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    \7\ Unlike Stage II, which is a requirement only in ozone 
nonattainment areas, ORVR requirements apply to vehicles everywhere. 
More detail on ORVR is available at http://www.epa.gov/otaq/orvr.htm.
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    The EPA promulgated ORVR standards on April 6, 1994 (59 FR 16262). 
Section 202(a)(6) of the CAA required that the EPA's ORVR standards 
apply to light-duty vehicles manufactured beginning in the fourth model 
year after the model year in which the standards were promulgated, and 
that ORVR systems provide a minimum evaporative emission capture 
efficiency of 95 percent.
    Automobile manufacturers began installing ORVR on new passenger 
cars in 1998 when 40 percent of new cars were required to have ORVR. 
The regulation required the percentage of new cars with ORVR increase 
to 80 percent in 1999 and 100 percent in 2000. The regulation also 
required that ORVR for light duty trucks and vans (<6000 pounds (lbs) 
gross vehicle weight rating (GVWR)) was to be phased-in during 2001 
with 40 percent of such new vehicles required to have ORVR in 2001, 80 
percent in 2002 and 100 percent in 2003. New heavier light-duty trucks 
(6001-8500 lbs GVWR) were required to have 40 percent with ORVR by 
2004, 80 percent by 2005 and 100 percent by 2006. New trucks up to 
10,000 lbs GVWR manufactured as a complete chassis were all required to 
have ORVR by 2006.\8\ Complete vehicle chassis for heavy-duty gasoline 
vehicles between 10,001 and 14,000 lbs GVWR (Class 3) are very similar 
to those between 8,501 and 10,000 lbs GVWR. For model consistency 
purposes, manufacturers began installing ORVR on Class 3 complete 
chassis in 2006 as well. So, after 2006, essentially all new gasoline-
powered vehicles less than 14,000 lbs GVWR are ORVR-equipped.
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    \8\ The EPA promulgated ORVR standards for light duty vehicles 
and trucks on April 6, 1994, 59 FR 16262, codified at 40CFR parts 86 
(including 86.098-8), 88 and 600.
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    ORVR does not apply to all vehicles, but those not covered by the 
ORVR requirement comprise a small percentage of the gasoline-powered 
highway vehicle fleet (approximately 1.5 percent of gasoline 
consumption). The EPA estimates that by the end of 2012, more than 
71percent of vehicles currently on the road will have ORVR.\9\ This 
percentage will increase over time as older cars and trucks are 
replaced by new models. However, under the current regulatory 
construct, motorcycles and heavy-duty gasoline vehicles not 
manufactured as a complete chassis are not required to install ORVR, so 
it is likely that there will be some very small percentage of gasoline 
refueling emissions not captured by ORVR controls.
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    \9\ See EPA Memorandum ``Onboard Refueling Vapor Recovery 
Widespread Use Assessment.'' A copy of this memorandum is located in 
the docket for this action EPA-HQ-OAR-2010-1076.
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    Even prior to the EPA's adoption of ORVR requirements, in 1993 EPA 
adopted Onboard Diagnostic (OBD) System requirements for passenger cars 
and light trucks, and eventually did so for heavy-duty gasoline 
vehicles up to 14,000 lbs GVWR.\10\ These systems are designed to 
monitor the in-use performance of various vehicle emission control 
systems and components, including protocols for finding problems in the 
purge systems and large and small vapor leaks in ORVR/evaporative 
emission controls.\11\ OBD II systems were phased in for these vehicle 
classes over the period from 1994-1996 for lighter vehicles and 2005-
2007 for heavy-duty gasoline vehicles, so, during the same time frame 
that manufacturers were implementing ORVR into their vehicles, they 
already had implemented or were implementing OBD II systems.
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    \10\ See Federal Register at 58 FR 9468 published February 19, 
1993, and subsequent amendments and the latest OBD regulations at 40 
CFR part 86.1806-05 for program requirements in various years.
    \11\ ORVR systems are basically a subset of evaporative emission 
systems because they share the same vapor lines, purge valves, purge 
lines, and activated carbon canister.
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    In 2000, the EPA published a report addressing the effectiveness of 
OBD II control systems.\12\ This study concluded that enhanced 
evaporative and ORVR emission control systems are durable and low 
emitting relative to the FTP (Federal Test Procedure) enhanced 
evaporative emission standards, and that OBD II evaporative emissions 
checks are a suitable replacement for functional evaporative emission 
tests in state inspection and maintenance (I/M) programs. OBD system 
codes are interrogated and evaluated in a 30-vehicle emission I/M 
program. A recent EPA review of OBD data gathered from I/M programs 
from five states \13\ indicated relatively few vehicles had any 
evaporative system-related OBD codes that would indicate a potential

[[Page 28775]]

problem with the vapor management system.
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    \12\ ``Effectiveness of OBD II Evaporative Emission Monitors--30 
Vehicle Study,'' EPA 420-R-00-018, October 2000.
    \13\ See EPA Memorandum, ``Review of Frequency of Evaporative 
System Related OBD Codes for Five State I/M Programs.'' A copy of 
this memorandum is located in the docket for this action EPA-HQ-OAR-
2010-1076.
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    Based on emissions tests of over 1,100 in-use ORVR-equipped 
vehicles, EPA concluded that the average in-use efficiency of ORVR is 
98 percent. The legal requirement for ORVR is 95 percent efficiency. 
Thus, the actual reported control achieved in practice is greater than 
the statutorily required level of control.

D. Compatibility Between Some Vapor Recovery Systems

    Even though the per-vehicle vapor recovery efficiency of ORVR 
exceeds that of Stage II, Stage II vapor recovery systems have provided 
valuable reductions in ozone precursors and air toxics as ORVR has been 
phased into the motor vehicle fleet. In fact, overall refueling 
emissions from vehicle fuel tanks are minimized by having both ORVR and 
Stage II in place, but the incremental gain from retaining Stage II 
decreases relatively quickly as ORVR penetration surpasses 75 percent 
of dispensed gasoline. Please see Table 2 below. This occurs not only 
because of a decreasing amount of gasoline being dispensed to non-ORVR 
equipped vehicles, but also because differences in operational design 
characteristics between ORVR and vacuum assist Stage II systems may in 
some cases cause a reduction in the overall control system efficiency 
compared to what could have been achieved relative to the individual 
control efficiencies of either ORVR or Stage II emissions from the 
vehicle fuel tank. The problem arises because the ORVR canister 
captures the gasoline vapor emissions from the motor vehicle fuel tank 
rather than the vapors being drawn off by the vacuum assist Stage II 
system. This occurs because the fill pipe seal blocks the vapor from 
reaching the Stage II nozzle. Thus, instead of drawing vapor-laden air 
from the vehicle fuel tank into the underground storage tank (UST), the 
vacuum pump of the Stage II system draws mostly fresh air into the UST. 
This fresh air causes gasoline in the UST to evaporate inside the UST 
and creates an internal increase in UST pressure. As the proportion of 
ORVR vehicles increases, the amount of fresh air, void of gasoline 
vapors, pumped into the UST also increases. Even with pressure/vacuum 
valves in place this eventually leads to gasoline vapors being forced 
out of the UST vent pipe into the ambient air. These new UST vent-stack 
emissions detract from the overall recovery efficiency at the GDF. As 
discussed in the proposed rule, the level of these UST vent stack 
emissions varies based on several factors but can result in a net 1 to 
10 percent decrease in overall control efficiency of vehicle fuel tank 
emissions at any given GDF.\14\ The decrease in efficiency varies 
depending on the vacuum assist technology design (including the use of 
a mini-boot for the nozzle and the ratio of volume of air drawn into 
the UST compared to the volume of gasoline dispensed (A/L) ratio), the 
gasoline Reid vapor pressure, the air and gasoline temperatures, and 
the fraction of throughput dispensed to ORVR vehicles. There are 
various technologies that address these UST vent-stack emissions and 
can extend the utility of Stage II to further minimize the overall 
control of gasoline vapor emissions at the GDF. These technologies 
include nozzles that sense when fresh air is being drawn into the UST 
and stop or reduce the air flow. These ORVR-compatible nozzles are now 
required in California and Texas. Another solution is the addition of 
processors on the UST vent pipe that capture or destroy the gasoline 
vapor emissions from the vent pipe. A number of these systems were 
presented in comments on the proposed rule. While they may have merit, 
installing these technologies adds to the expense of the control 
systems.
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    \14\ See EPA Memorandum ``Onboard Refueling Vapor Recovery 
Widespread Use Assessment.'' A copy of this memorandum is located in 
the docket for this action EPA-HQ-OAR-2010-1076. The level of these 
UST vent stack emissions varies based on several factors; EPA 
estimates a 5.4 to 6.4 percentage point decrease in Stage II control 
efficiency in the 2011-2015 time frame at GDFs employing non-ORVR 
compatible vacuum assist Stage II nozzles. The decrease in 
efficiency varies depending on the vacuum assist technology design 
(including the use of a mini-boot for the nozzle and the ratio of 
volume of air drawn into the UST compared to the volume of gasoline 
dispensed (A/L) ratio), the gasoline Reid vapor pressure, the air 
and gasoline temperatures, and the fraction of throughput dispensed 
to ORVR vehicles. The values will increase over time as the fraction 
of total gasoline dispensed to ORVR vehicles at Stage II GDFs 
increases.
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E. Proposed Rule To Determine Widespread Use of ORVR

    Section 202(a)(6) of the CAA provides discretionary authority to 
the EPA Administrator to, by rule, revise or waive the section 
182(b)(3) Stage II requirement for Serious, Severe, and Extreme ozone 
nonattainment areas after the Administrator determines that ORVR is in 
widespread use throughout the motor vehicle fleet. The percentage of 
non-ORVR vehicles and the percentage of gasoline dispensed to those 
vehicles grow smaller each year as these older vehicles wear out and 
are replaced by new ORVR-equipped models. Given the predictable nature 
of this trend, the EPA proposed a date for ORVR widespread use.
    In the Notice of Proposed Rulemaking (NPRM) (76 FR 41731, July 15, 
2011), the EPA proposed that ORVR widespread use will occur at the mid-
point in the 2013 calendar year, relying upon certain criteria outlined 
in the proposed rule. This date was also proposed as the effective date 
for the waiver of the CAA section 182(b)(3) Stage II requirements for 
Serious, Severe and Extreme ozone nonattainment areas.
    The EPA used two basic approaches in determining when ORVR would be 
in widespread use in the motor vehicle fleet. Both approaches focused 
on the penetration of ORVR-equipped vehicles in the gasoline-powered 
highway motor vehicle fleet. The first proposed approach focused on the 
volume of gasoline that is dispensed into vehicles equipped with ORVR, 
and compared the emissions reductions achieved by ORVR alone to the 
reductions that can be achieved by Stage II controls alone. The second 
approach focused on the fraction of highway motor gasoline dispensed to 
ORVR-equipped vehicles.
    In the proposal, the EPA included Table 1 (republished below). This 
work was based on outputs from EPA's MOVES 2010 motor vehicle emissions 
model, which showed information related to the penetration of ORVR in 
the national motor vehicle fleet projected to 2020. These model outputs 
have been updated for the final rule to be consistent with the latest 
public release of the model (MOVES 2010a) since that is the version of 
the model states would use in any future inventory assessment work 
related to refueling emissions control. Overall, ORVR efficiency was 
shown in column 5 of Table 1 and was determined by multiplying the 
fraction of gasoline dispensed into ORVR-equipped vehicles by ORVR's 98 
percent in-use control efficiency.

[[Page 28776]]



        Table 1--Projected Penetration of ORVR in the National Vehicle Fleet by Year--Based on MOVES 2010
----------------------------------------------------------------------------------------------------------------
                                           Vehicle                               Gasoline
            Calendar year                 population      VMT  Percentage       dispensed       ORVR Efficiency
                                          percentage                            percentage         percentage
1                                                     2                  3                  4                  5
----------------------------------------------------------------------------------------------------------------
2006................................               39.5               48.7               46.2               45.3
2007................................               45.3               54.9               52.5               51.5
2008................................               50.1               60.0               57.6               56.4
2009................................               54.3               64.5               62.1               60.9
2010................................               59.0               69.3               66.9               65.6
2011................................               63.6               73.9               71.5               70.1
2012................................               67.9               78.0               75.6               74.1
2013................................               71.7               81.6               79.3               77.7
2014................................               75.2               84.6               82.6               80.9
2015................................               78.4               87.2               85.3               83.6
2016................................               81.2               89.4               87.7               85.9
2017................................               83.6               91.2               89.7               87.9
2018................................               85.6               92.7               91.3               89.5
2019................................               87.5               93.9               92.7               90.8
2020................................               89.0               94.9               93.9               92.0
----------------------------------------------------------------------------------------------------------------
See EPA Memorandum ``Onboard Refueling Vapor Recovery Widespread Use Assessment'' in the docket (number EPA-HQ-
  OAR-2010-1076) addressing details on issues related to values in this table.
Note: In this table, the columns have the following meaning.
1. Calendar year that corresponds to the percentages in the row associated with the year.
2. Percentage of the gasoline-powered highway vehicle fleet that have ORVR.
3. Percentage of vehicle miles traveled (VMT) by vehicles equipped with ORVR.
4. Amount of gasoline dispensed into ORVR-equipped vehicles as a percentage of all gasoline dispensed to highway
  motor vehicles.
5. Percentage from the same row in column 4 multiplied by 0.98.

    In the proposal, the EPA estimated that ORVR would need to achieve 
in-use emission reductions of about 77.4 percent to be equivalent to 
the amount of control Stage II alone would achieve. This estimate was 
based on the in-use control efficiency of Stage II systems and 
exemptions for Stage II for lower throughput GDFs. In the NPRM, the EPA 
assumed that in areas where basic Stage II systems are used the control 
efficiency of Stage II gasoline vapor control systems is 86 percent. 
The use of this value depends on the assumption that daily and annual 
inspections, periodic testing, and appropriate maintenance are 
conducted in a correct and timely manner. In addressing comments, we 
have stated that this efficiency could be nearer to 60% if inspections 
testing and maintenance are not conducted and there is minimal 
enforcement.\15\
---------------------------------------------------------------------------

    \15\ See, ``Determination of Widespread Use of Onboard Refueling 
Vapor Recovery (ORVR) and Waiver of Stage II Vapor Recovery 
Requirements: Summary of Public Comments and Responses.'' March 
2012. Document contained in docket EPA-HQ-OAR-2010-1076.
---------------------------------------------------------------------------

    In the NPRM, the EPA estimated that the percentage of gasoline 
dispensed in an area that is covered by Stage II controls is 90 
percent. Multiplying the estimated efficiency of Stage II systems (86 
percent) by the estimated fraction of gasoline dispensed in 
nonattainment areas from Stage II-equipped gasoline pumps yielded an 
estimate of the area-wide control efficiency of Stage II programs of 
77.4 percent (0.90 x 0.86 = 0.774 or 77.4 percent) for emissions 
displaced from vehicle fuel tanks. 16 17 Table 1 indicated 
this level of ORVR control efficiency is expected to be achieved during 
calendar year 2013.
---------------------------------------------------------------------------

    \16\ See section 4.4.3 (especially Figure 4-14 and Table 4-4) in 
``Technical Guidance--Stage II Vapor Recovery Systems for Control of 
Vehicle Refueling Emissions at Gasoline Dispensing Facilities, 
Volume I: Chapters,'' EPA-450/3-91-022a, November 1991. A copy of 
this document is located in the docket for this action EPA-HQ-OAR-
2010-1076. This is based on annual enforcement inspections and on 
allowable exemptions of 10,000/50,000 gallons per month as described 
in section 324(a) of the CAA. The EPA recognizes that these two 
values vary by state and that in some cases actual in-use 
efficiencies, prescribed exemption levels, or both may be either 
higher or lower.
    \17\ AP-42, The EPA's emission factors document, identifies 
three sources of refueling emissions: Displacement, spillage, and 
breathing losses. In the EPA Memorandum ``Onboard Refueling Vapor 
Recovery Widespread Use Assessment'' (available in the public 
docket), the EPA determined that for separate Stage II and ORVR 
refueling events, spillage and breathing loss emission rates are 
similar. Thus, this analysis focuses on differences in controlled 
displacement emissions. Compatibility effects related to ORVR and 
Stage II vacuum assist systems are addressed separately.
---------------------------------------------------------------------------

    In the second approach for estimating when ORVR is in widespread 
use, we also observed from Table 1 that by the end of calendar year 
2012 more than 75 percent of gasoline will be dispensed into ORVR-
equipped vehicles. As discussed in the NPRM, the EPA believed that this 
percentage of ORVR coverage (>=75 percent) is substantial enough to 
inherently be viewed as ``widespread'' under any ordinary understanding 
of that term. Furthermore, in Table 1, the percentage of VMT by ORVR-
equipped vehicles (column 3) and the amount of gasoline dispensed into 
ORVR-equipped vehicles (column 4) reached or exceeded 75 percent 
between the end of year 2011 and end of 2012. The EPA believed this 
provided further support for establishing a widespread use date after 
the end of calendar year 2012. Based on the dates derived from these 
two basic approaches, the EPA proposed to determine that ORVR will be 
in widespread use by June 30, 2013, or the midpoint of calendar year 
2013.

VI. This Action

A. Analytical Rationale for Final Rule

    Section 202(a)(6) of the CAA provides discretionary authority to 
the EPA Administrator to, by rule, revise or waive the section 
182(b)(3) Stage II requirement after the Administrator determines that 
ORVR is in widespread use throughout the motor vehicle fleet. As 
discussed in the NPRM, the EPA has broad discretion in how it defines 
widespread use and the manner in which any final determination is 
implemented. In our review of the public comments received on the 
proposal, no commenter indicated that a widespread use determination 
was inappropriate or took issue with the EPA's two-pronged analytical 
approach. We have integrated responses to many comments throughout the 
preamble to

[[Page 28777]]

this final rule. A more detailed set of responses is in a document 
titled, ``Determination of Widespread Use of Onboard Refueling Vapor 
Recovery (ORVR) and Waiver of Stage II Vapor Recovery, Summary of 
Public Comments and Responses'' that can be found in the docket, EPA-
HQ-OAR-2010-1076.
    The analytical approaches used by the EPA to determine the 
widespread use date are influenced by several key input parameters that 
affect the estimates of the emission reduction benefits of Stage II 
alone versus the benefits of ORVR alone and the phase-in of ORVR-
equipped vehicles. We received several comments on the assumptions and 
parameters used by the EPA in the NPRM, and in some cases we have 
updated the information used in calculations that support the final 
rule, as discussed in the following paragraphs.
1. ORVR Parameters
     ORVR efficiency. The EPA used an in-use control efficiency 
of ORVR of 98 percent in the proposal. This was based on the testing of 
1,160 vehicles drawn from the field. EPA has updated its analysis to 
include an additional 478 refueling emission test results for ORVR-
equipped vehicles that were conducted in calendar years 2010 and 2011. 
The data set, which now includes over 1,600 vehicle tests for vehicles 
from model years 2000-2010 with mileages ranging from 10,000 to over 
100,000, continues to support the conclusion that the 98 percent in-use 
efficiency values remain appropriate.\18\
---------------------------------------------------------------------------

    \18\ See the EPA memorandum ``Updated ORVR In-Use Efficiency.'' 
A copy of this memorandum is located in the docket for this action 
EPA-HQ-OAR-2010-1076.
---------------------------------------------------------------------------

     Modeling program inputs. The NPRM relied on EPA's MOVES 
2010 model for estimating ORVR vehicle fleet penetration, VMT by ORVR 
vehicles, and gallons of gasoline dispensed to ORVR vehicles. Since the 
development of the NPRM, the EPA has publicly released MOVES 2010a. The 
updated model incorporates many improvements. Those relevant here 
include updates in ORVR vehicle sales, sales projections, scrappage, 
fleet mix, annual VMT, and fuel efficiency. The EPA believes that the 
modeling undertaken to determine the widespread use date for the final 
rule should employ the EPA's latest MOVES modeling program because it 
contains updated information that bears on the subject of this 
rulemaking, and because the EPA expects states to also use it in any 
state-specific demonstrations supporting future SIP revisions, 
including revisions that seek to remove Stage II programs.
2. Stage II Parameters
     Stage II efficiency. The EPA used an in-use control 
efficiency of 86 percent for Stage II in the proposal. As discussed 
above, Stage II control efficiency depends on inspection, testing, and 
maintenance by GDF owner/operators, and inspection and enforcement by 
state/local agencies. Typical values range from 62 percent to 86 
percent. The public comments referred the EPA to additional reported 
information directly related to in-use effectiveness of Stage II vapor 
recovery.\19\ The reports indicate that for balance and vacuum-assist 
type Stage II systems in use in many states today, the in-use 
effectiveness of Stage II is typically near 70 percent. Nonetheless, 
the EPA has elected to retain the use of an 86 percent efficiency value 
in the analyses supporting the final rule. This is because many state 
programs have included the maintenance and inspection provisions 
recommended by EPA to achieve this level of efficiency in their initial 
SIPs that originally incorporated Stage II controls.\20\ Current in-use 
efficiency values may well be lower based on the performance of the 
Stage II technology itself or for other reasons related to maintenance 
and enforcement. We are not rejecting the additional information from 
commenters or the possibility that Stage II efficiency may be lower in 
some states or nonattainment areas. However, the EPA believes these 
issues are best examined in the SIP review process. If real in-use 
efficiency across all existing Stage II programs is, in fact, lower 
than 86 percent, the EPA's final analysis overestimates the length of 
time required for emissions reductions from ORVR alone to eclipse the 
reductions that can be achieved by Stage II alone.
---------------------------------------------------------------------------

    \19\ See ``Draft Vapor Recovery Test Report,'' April 1999 by 
CARB and CAPCOA (now cleared for public use), and ``Performance of 
Balance Vapor Recovery Systems at Gasoline Dispensing Facilities'', 
prepared by the San Diego Air Pollution Control District, May 18, 
2000. Both reports are available in the public docket.
    \20\ The EPA report, ``Enforcement Guidance for Stage II Vehicle 
Refueling Control Programs,'' U.S. EPA, Office of Air and Radiation, 
Office of Mobile Sources, December 1991, provides basic EPA guidance 
on what a state SIP and accompanying regulations should include to 
achieve high efficiency.
---------------------------------------------------------------------------

     Stage II exemption rate. In sections 182(b)(3) and 324 of 
the CAA, Congress permitted exemptions from Stage II controls for GDFs 
of less than 10,000 gallons/month (privates) and 50,000 gallons/month 
(independent small business marketers). The EPA analysis indicated that 
these GDF throughput values exempted about 10 percent of annual 
throughput in any given area. Some states included more strict 
exemption rates, most commonly 10,000 gallons per month (3 percent of 
throughput) for both privates and independent small business marketers. 
A few other states' exemption provisions used values that fell within 
or outside this range.\21\ Of the 21 states and the District of 
Columbia with areas classified as Serious, Severe, or Extreme for ozone 
and/or within the Ozone Transport Region, the plurality incorporated 
exemption provisions in their state regulations, which exempted about 
10 percent of throughput.\22\ Therefore, we believe it remains 
reasonable to use that value within this analysis.
---------------------------------------------------------------------------

    \21\ There are a few states that limit Stage II exemptions to 
only GDFs with less than 10,000 gpm throughput, which would exempt 
about three to five percent of area-wide throughput.
    \22\ See the EPA memorandum ``Summary of Stage II Exemption 
Program Values.'' A copy of this memorandum is located in the docket 
for this action in EPA-HQ-OAR-2010-1076.
---------------------------------------------------------------------------

     Compatibility factor for vacuum assist Stage II systems. 
The EPA discussed the compatibility factor at length in the NPRM and 
provided relevant materials in the docket. Several commenters asked 
that the EPA provide guidance on how the compatibility factor should be 
incorporated into any similar analysis conducted by a state for 
purposes of future SIP revisions involving Stage II programs. The 
magnitude of the compatibility factor for any given area varies 
depending on ORVR penetration, fraction of vacuum assist nozzles 
relative to balance nozzles, and excess A/L for vacuum assist nozzles. 
Two states have adopted measures to reduce this effect through the use 
of ORVR-compatible nozzles and one state prohibits vacuum assist 
nozzles completely. Due to these significant variables, the EPA is 
electing not to include the compatibility factor in the widespread use 
date determination analysis, but will provide the guidance requested by 
the commenters for use in making future SIP revisions. To the extent 
that compatibility emissions across all existing Stage II programs as a 
whole are significant, the EPA's final analysis overestimates the 
length of time required for emissions reductions from ORVR alone to 
eclipse the reductions that can be achieved by Stage II alone.

B. Updated Analysis of Widespread Use

    As discussed previously, the EPA has used two approaches for 
determining

[[Page 28778]]

when ORVR is in widespread use on a nationwide basis. After reviewing 
our methodology and reviewing the related comments on the NPRM, we are 
retaining three of the four basic analytical input parameters and 
updating one. The in-use ORVR efficiency, the in-use Stage II 
efficiency, and the Stage II exemption rate parameters are the same as 
in the NPRM. However, we have updated the modeling program inputs as 
discussed previously, and the results are reflected in Table 2.

      Table 2--Projected Penetration of ORVR in the National Vehicle Fleet by Year--Based on MOVES 2010(a)
----------------------------------------------------------------------------------------------------------------
                                           Vehicle                               Gasoline
        End of calendar year              population      VMT  Percentage       dispensed       ORVR  Efficiency
                                          percentage                            percentage         percentage
1                                                     2                  3                  4                  5
----------------------------------------------------------------------------------------------------------------
2006................................               42.6               51.2               49.2               48.2
2007................................               48.4               57.3               55.5               54.4
2008................................               53.3               62.3               60.5               59.2
2009................................               57.7               66.8               64.8               63.5
2010................................               62.4               71.6               69.5               68.1
2011................................               67.1               76.0               73.9               72.4
2012................................               71.4               80.0               77.7               76.1
2013................................               75.3               83.4               81.0               79.4
2014................................               78.7               86.3               84.0               82.3
2015................................               81.8               88.8               86.5               84.8
2016................................               84.5               90.9               88.6               86.8
2017................................               86.8               92.5               90.3               88.5
2018................................               88.8               93.9               91.9               90.0
2019................................               90.5               95.0               93.2               91.3
2020................................               92.0               95.9               94.3               92.4
----------------------------------------------------------------------------------------------------------------
See EPA Memorandum ``Onboard Refueling Vapor Recovery Widespread Use Assessment'' in the docket (number EPA-HQ-
  OAR-2010-1076) addressing details on issues related to values in this table.
Note: In this table, the columns have the following meaning.
1. Calendar year that corresponds to the percentages in the row associated with the year.
2. Percentage of the gasoline-powered highway vehicle fleet that have ORVR.
3. Percentage of vehicle miles traveled (VMT) by vehicles equipped with ORVR.
4. Amount of gasoline dispensed into ORVR-equipped vehicles as a percentage of all gasoline dispensed to highway
  motor vehicles.
5. Percentage from the same row in column 4 multiplied by 0.98.

    The results in Table 2 are applied in the context of the two basic 
analytical approaches used in the NPRM for supporting the final date 
associated with the EPA's widespread use determination. First, using 
the analysis based on equal reductions for Stage II and ORVR, the 77.4 
percent in-use emission reduction efficiency for ORVR will occur in May 
2013 (See column 5 of Table 2). Second, 75 percent of gasoline will be 
dispensed to ORVR-equipped vehicles by April 2012 (See column 4 of 
Table 2).

C. Widespread Use Date

    The updated analysis indicates that the two benchmarks will occur 
about a year apart, and that one benchmark of April 2012 has already 
passed. At the time of the NPRM, both of the benchmark dates for the 
ORVR widespread use determination were in the future, many months after 
the EPA's expected final action. Thus, given the basic merits of both 
approaches, the EPA believed it was reasonable to propose a date 
between the dates associated with the two analytical approaches.
    The EPA's updated analysis presents a somewhat different picture. 
The April 2012 benchmark date has already passed, and the May 2013 
benchmark date is less than 1 year away. We believe it is reasonable 
for the EPA Administrator to determine that ORVR is in widespread use 
in the motor vehicle fleet as of the date this final action is 
published in the Federal Register because this final rule is being 
promulgated within the window bounded by the two benchmark dates 
derived from the updated analyses.
    As discussed previously in this notice and in the NPRM, the EPA has 
discretion in setting the widespread use date. It is evident from the 
public comments on the NPRM from states and members of the regulated 
industry, and from recent state actions, that there is a desire to 
curtail Stage II installations at newly constructed GDFs, and to 
initiate an orderly phase-out of Stage II controls at existing 
GDFs.\23\ Since one of the two analytical benchmark dates (April 2012) 
has passed, and we expect in most cases the second analytical benchmark 
date (May 2013) will have passed by the time the EPA is able to 
complete approvals of SIP revisions removing Stage II programs and pass 
any revised regulations, then in response to comments asking us to 
expedite the ORVR widespread use finding, the EPA Administrator is 
determining that ORVR is in widespread use in the motor vehicle fleet 
as of May 16, 2012. Accordingly, as of May 16, 2012 the requirement to 
implement a Stage II emissions control program under section 182(b)(3) 
of the CAA is waived.
---------------------------------------------------------------------------

    \23\ For example, in November 2011, New Hampshire put new 
regulations in place that eliminate the need for new GDFs to install 
Stage II, allows current GDFs with Stage II to decommission the 
systems, and requires all systems to be decommissioned by December 
22, 2015. In May of 2011, New York issued an enforcement discretion 
directive which curtailed the need for new stations to install Stage 
II and permitted current installations to be decommissioned. These 
actions remain under review of EPA.
---------------------------------------------------------------------------

D. Implementation of the Rule Provisions

    In this final action, the ORVR widespread use determination and 
waiver of the section 182(b)(3) requirement applies to the entire 
country. This includes areas that are now classified as Serious or 
above for ozone nonattainment, as well as those that may be classified 
or reclassified as Serious or above in the future.
    In the NPRM, we indicated that states could potentially demonstrate 
that ORVR was in widespread use in specific areas sooner than the 
general, national date. Such a provision is no longer

[[Page 28779]]

needed because today's action provides for a nationwide determination 
of widespread use effective on May 16, 2012.
    As stated in this final action and as pointed out by several 
commenters, the ORVR widespread use determination and section 182(b)(3) 
waiver determination does not obligate states to remove any existing 
Stage II vapor recovery requirements. It is possible that a state would 
determine it beneficial to continue implementation of a Stage II 
program. For example, in an area where ORVR-equipped fleet penetration 
is considerably less than the national average, or where Stage II 
exemptions are significantly more restrictive than the national 
assumptions used in this analysis, a state may determine that it would 
not be appropriate to modify its program immediately, but that it would 
be more appropriate to do so at a later date. In assessing whether and 
how to phase out Stage II requirements, states are encouraged to 
review, and as needed revise the area-specific assumptions about taking 
into consideration their inspection and enforcement resource 
commitments as well as ORVR/vacuum-assist Stage II compatibility.
    A state that chooses to remove the program must submit a SIP 
revision requesting EPA to approve such action and provide, as 
appropriate, a demonstration that the SIP revision is consistent with 
CAA section 110(1), and in some cases consistent with CAA section 193. 
The EPA will provide additional guidance on conducting assessments to 
support Stage II-related SIP revisions.\24\ The EPA encourages states 
to review this guidance and consult with the EPA Regional Offices on 
developing SIP revisions seeking EPA approval for phasing out existing 
Stage II programs in a manner that ensures air quality protections are 
maintained.
---------------------------------------------------------------------------

    \24\ ``Phasing Out Stage II Gasoline Refueling Vapor Recovery 
Programs: Guidance on Satisfying Requirements of Clean Air Act 
Sections 110(l), 193, and 184(b)(2) (tentative title).'' U.S. EPA 
Office of Air and Radiation, forthcoming.
---------------------------------------------------------------------------

    Section 110(l) precludes the Administrator from approving a SIP 
revision if it would interfere with applicable CAA requirements 
(including, but not limited to, attainment and maintenance of the ozone 
NAAQS and achieving reasonable further progress). A state may 
demonstrate through analysis that removing a Stage II program in an 
area as of a specific date will not result in an emissions increase in 
the area, or that the small and ever-declining increase is offset by 
other simultaneous changes in the implementation plan. However, a state 
may find that by removing Stage II requirements, they are reducing the 
overall level of emissions reductions they have previously applied 
toward meeting CAA rate of progress (ROP) or reasonable further 
progress (RFP) requirements, or demonstrating attainment. If so, the 
state should explain how removing Stage II controls in the area would 
not interfere with attaining and maintaining the ozone NAAQS in the 
area. In such circumstances, it is possible that additional emissions 
reductions from other measures may be needed to offset the removal of 
Stage II.
    If EPA has approved a state's adoption of Stage II requirements 
into a SIP before November 15, 1990, section 193 would also apply. 
Section 193 provides that removal of an emissions control program 
cannot result in any emissions increase unless the increase is offset. 
Section 193 only applies if an area is nonattainment for the standard.
    State and local agencies should also consider any transportation 
conformity impacts related to removing Stage II if emissions reductions 
from Stage II are included in a SIP-approved on-road motor vehicle 
emissions budget. States may need to adjust conformity budgets or the 
components of the budget if removing Stage II requirements would alter 
expected air quality benefits.
    In previous memoranda, the EPA provided guidance to states on 
removing Stage II at refueling facilities dedicated to certain segments 
of the motor vehicle fleet (e.g., new automobile assembly plants, 
rental car facilities, E85 dispensing pumps, and corporate fleet 
facilities). In these specific cases where all or nearly all of the 
vehicles being refueled are ORVR-equipped, the EPA could conservatively 
conclude that widespread use of ORVR had occurred in these fleets.\25\
---------------------------------------------------------------------------

    \25\ ``Removal of Stage II Vapor Recovery in Situation where 
Widespread Use of Onboard Refueling Vapor Recovery is 
Demonstrated,'' from Stephen D. Page and Margo Tsirigotis Oge, EPA, 
December 12, 2006.
---------------------------------------------------------------------------

E. Implementation of Rule Provisions in the Ozone Transport Region

    States and the District of Columbia in the OTR in the northeastern 
U.S. are also subject to a separate Stage II-related requirement. Under 
section 184(b)(2) of the CAA (42 U.S.C. 7511c(b)(2)), all areas in the 
OTR, both attainment and nonattainment areas, must implement control 
measures capable of achieving emissions reductions comparable to those 
achievable through Stage II controls. The CAA does not contain specific 
provisions giving authority to the EPA Administrator to waive this 
independent requirement. The section 184(b)(2) requirement does not 
impose Stage II per se, but rather is a requirement that OTR states 
achieve an amount of emissions reductions comparable to the amount that 
Stage II would achieve. Moreover, section 202(a)(6), in allowing for a 
waiver of the section 182(b)(3) Stage II requirement for nonattainment 
areas, does not refer to the independent section 184(b)(2) 
requirements. Therefore, the section 184(b)(2) Stage II-related 
requirement for the OTR will continue to remain in place even after the 
ORVR widespread use determination and section 182(b)(3) waiver 
effective date.
    In the mid-1990s, the EPA issued guidance on estimating what levels 
of emissions reductions would be ``comparable'' to those reductions 
achieved by Stage II.\26\ In response, most OTR states simply adopted 
Stage II programs rather than identify other measures that got the same 
degree of emissions reductions. Given the continued penetration of 
ORVR-equipped vehicles into the overall vehicle fleet, Stage II-
comparable emissions are significantly less than in the past, and 
continue to decline. Accordingly, the EPA is issuing updated guidance 
on determining ``comparable measures.'' States in the OTR should refer 
to that guidance if preparing a SIP revision to remove Stage II 
programs in areas of the OTR.\27\
---------------------------------------------------------------------------

    \26\ ``Stage II Comparability Study for the Northeast Ozone 
Transport Region,'' (EPA-452/R-94-011; January 1995).
    \27\ ``Phasing Out Stage II Gasoline Refueling Vapor Recovery 
Programs: Guidance on Satisfying Requirements of Clean Air Act 
Sections 110(l), 193, and 184(b)(2) (tentative title).'' U.S. EPA 
Office of Air and Radiation, forthcoming.
---------------------------------------------------------------------------

    Commenters on the NPRM urged the EPA to revise its previous 
interpretation of section 184(b)(2) to permit ORVR to be recognized as 
a Stage II comparable emission reduction measure. This issue is not 
within the scope of this rulemaking, and EPS is not taking final agency 
action implementing section 184(b)(2) or an interpretation thereof. 
However, for informational purposes, we point out that simply treating 
the ORVR requirements under section 202(a)(6) as a comparable measure 
that an OTR SIP must additionally contain would arguably render the 
184(b)(2) requirement a nullity, which could be an impermissible 
statutory interpretation. If commenters wish to further address this 
issue, we ask that they raise their concerns in any future SIP actions 
under section 184(b)(2) regarding OTR states that may affect them. In 
addition, we note that the expected level of emissions reductions

[[Page 28780]]

that Stage II programs can obtain has changed significantly in the past 
15 years with ORVR-equipped vehicles phasing in at the rate of 3-4 
percent of the fleet each calendar year. Therefore, the EPA is issuing 
updated guidance on estimating the emissions reductions needed to be 
comparable to those achievable through Stage II controls. 
Theoretically, comparable measures could in some areas mean no 
additional control beyond ORVR is required if Stage II is achieving no 
additional emission reduction benefit in the area, or has reached a 
point of providing only a declining de minimis benefit.

F. Comments on Other Waiver Implementation Issues

    Numerous commenters on the NPRM urged the EPA to adopt provisions 
in the final rule that would exempt new gasoline dispensing facilities 
with construction occurring between the final rule publication and the 
effective Stage II waiver date from installing Stage II equipment. The 
timing issue is now largely moot since widespread use is deemed to have 
occurred on the effective date of this action. However, under the CAA, 
states adopt state-specific or area-specific rules, which are then 
submitted to the EPA for approval into the SIP. These rules are 
independently enforceable under state law, and also become federally 
enforceable when the EPA approves them into the SIP. The EPA cannot 
unilaterally change legally-adopted state statutes or rules or 
otherwise revise an approved SIP that was not erroneously approved. The 
EPA's only authority to establish requirements that would apply in lieu 
of approved SIPs is its authority under CAA section 110(c) to 
promulgate a Federal Implementation Plan (FIP). To trigger FIP 
authority, the EPA must first determine that a state has failed to 
submit a required SIP or that the state's SIP must be disapproved. The 
circumstances of this ORVR widespread use finding and waiver of the 
section 182(b)(3) Stage II requirement to do not present either of 
those situations. According to requirements established by the CAA that 
are applicable here, states will need to develop and submit SIP 
revisions to the EPA in order to change or eliminate SIP-approved state 
rules that set forth the compliance dates for newly constructed GDFs.
    Commenters also urged EPA to simply allow states to eliminate all 
active Stage II programs from certain nonattainment areas after the 
widespread use date, without requiring SIP revisions from states. While 
the EPA has discretion to determine the widespread use date, the EPA 
cannot simply nullify states' rules that are binding and enforceable 
under state law. In order to change the federal enforceability of SIPs, 
states must go through the SIP revision process, and the EPA can 
approve the SIP revision only if the provisions of section 110(l) and 
any other applicable requirements, such as the requirements of section 
193 and the comparable measures requirement for OTR states, are 
satisfied. Today's final rule takes no action in implementing CAA 
sections 110(l), 193, or 184(b)(2), and any future final actions 
regarding ``comparable measures'' SIPs will be fact-specific in 
response to individual state submissions. Also, subsequent to the 
effective waiver date of the section 182(b)(3) Stage II requirements, 
areas currently implementing the EPA-approved Stage II programs in 
their SIPs as a result of obligations under the 1-hour or 1997 8-hour 
ozone NAAQS, would be required to continue implementing these programs 
until the EPA approves a SIP revision adopted under state law removing 
the requirement from the state's ozone implementation plan.

VII. Estimated Cost

    As part of the NPRM, the EPA conducted an initial assessment of the 
costs and savings to gasoline dispensing facility owners related to 
this proposed action. The report titled, ``Draft Regulatory Support 
Document, Decommissioning Stage II Vapor Recovery, Financial Benefits 
and Costs,'' is available in the public docket for this action. The 
report examines the initial costs and savings to facility owners 
incurred in the decommissioning of Stage II vapor recovery systems, as 
well as changes in recurring costs associated with above ground 
hardware maintenance, operations, and administrative tasks. The EPA 
received no substantive comment on the draft report, other than a 
concern that the savings identified therein may not come to pass as 
quickly as envisioned in the draft report if the EPA does not provide 
updated guidance on comparable measures for the OTR states. We intend 
to address this concern by issuing separate guidance for the 
states.\28\ EPA will post this action at the following web site 
address: http://www.epa.gov/glo/actions.html.
---------------------------------------------------------------------------

    \28\ ``Phasing Out Stage II Gasoline Refueling Vapor Recovery 
Programs: Guidance on Satisfying Requirements of Clean Air Act 
Sections 110(l ), 193, and 184(b)(2) (tentative title).'' U.S. EPA 
Office of Air and Radiation, forthcoming.
---------------------------------------------------------------------------

    As part of the re-analysis following the NPRM, the EPA reviewed the 
input values used for the proposal draft. Most input values were 
confirmed as reasonable and representative but it was concluded that 
two of the values should be updated. These include: (1) The pre-tax 
price of gasoline used in the foregone vapor recovery savings 
calculation, which increased from $2.30 in 2010 to $3.04 in 2011 
(average price per gallon), and (2) the number of Stage II facilities 
potentially affected by SIP revisions removing Stage II requirements in 
non-California Serious, Severe and Extreme ozone nonattainment areas 
which increased from 26,900 to 30,600 in 19 states and the District of 
Columbia. As discussed in our final regulatory support document, the 
EPA estimates recurring cost savings of about $3,000 per year for a 
typical gasoline dispensing facility, and an annual nationwide savings 
of up to $91 million if Stage II is phased out of the approximately 
30,600 dispensing facilities outside of California that are required to 
have Stage II vapor recovery systems under section 182(b)(3) of the 
CAA.\29\ This analysis assumes that Stage II is removed from GDFs over 
a three year time frame in an equal number each year. What actually 
occurs will depend on actions by the individual states. If the states 
submit and EPA approves SIP revisions to remove Stage II systems from 
these GDFs, the EPA projects savings of about $10.2 million in the 
first year, $40.5 million in the second year, and $70.9 million in the 
third year. Long term savings are projected to be about $91 million per 
year, compared to the current use of Stage II systems in these areas.
---------------------------------------------------------------------------

    \29\ See ``Final Regulatory Support Document, Decommissioning 
Stage II Vapor Recovery, Financial Benefits and Costs,'' available 
in public docket, EPA-HQ-OAR-2010-1076.
---------------------------------------------------------------------------

VIII. Statutory and Executive Order Reviews

A. Executive Orders 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), 
this action is a ``significant regulatory action'' because it raises 
novel legal or policy issues arising out of legal mandates. 
Accordingly, the EPA submitted this action to the Office of Management 
and Budget (OMB) for review under Executive Orders 12866 and 13563 (76 
FR 3821, January 21, 2011) and any changes made in response to OMB 
recommendations have been documented in the docket for this action.

[[Page 28781]]

B. Paperwork Reduction Act

    This action does not impose an information collection burden under 
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. 
Burden is defined at 5 CFR 1320.3(b). It does not contain any 
recordkeeping or reporting requirements.

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 this action on small 
entities, small entity is defined as: (1) A small business as defined 
in 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 this action on small 
entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. This rule 
will not impose any new requirements on small entities. Rather, it 
provides criteria for reducing existing regulatory requirements on 
gasoline dispensing facilities, some of which may qualify as small 
businesses.

D. Unfunded Mandates Reform Act

    This action contains no federal mandates under the provisions of 
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 
1531-1538 for state, local, or tribal governments or the private 
sector. The action imposes no enforceable duty on any state, local or 
tribal governments, or the private sector. Therefore, this action is 
not subject to the requirements of sections 202 and 205 of the UMRA.
    This action 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 
addresses the removal of a requirement regarding gasoline vapor 
recovery equipment, but does not impose any obligations to remove these 
programs.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132. This action does not impose any new 
mandates on state or local governments. Thus, Executive Order 13132 
does not apply to this rule.

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

    This action does not have tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000). It will not have 
substantial direct effects on tribal governments, on the relationship 
between the federal government and Indian tribes, or on the 
distribution of power and responsibilities between the federal 
government and Indian tribes, as specified in Executive Order 13175. 
Thus, Executive Order 13175 does not apply to this rule.

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

    The EPA interprets Executive Order 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 Executive Order has the potential to influence the regulation. This 
action is not subject to Executive Order 13045 because it does not 
establish an environmental standard intended to mitigate health or 
safety risks.

H. Executive Order 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. It does not impose additional costs on 
gasoline distribution, but rather promises to lower operating and 
maintenance costs for gasoline dispensing facilities by facilitating 
removal of redundant gasoline refueling vapor controls.

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. The NTTAA directs EPA 
to provide Congress, through OMB, explanations when the Agency decides 
not to use available and applicable voluntary consensus standards.
    This rulemaking does not involve technical standards. Therefore, 
EPA is not considering the use of any voluntary consensus standards.

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

    Executive Order 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.
    The EPA has determined that this final rule will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it does not 
directly affect the level of protection provided to human health or the 
environment under the EPA's NAAQS for ozone. This action proposes to 
waive the requirement for states to adopt largely redundant Stage II 
programs, based on a determination of widespread use of ORVR in the 
motor vehicle fleet.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the

[[Page 28782]]

Congress and to the Comptroller General of the United States. The EPA 
will submit a report containing this rule and other required 
information to the U.S. Senate, the U.S. House of Representatives and 
the Comptroller General of the United States prior to publication of 
the rule in the Federal Register. A major rule cannot take effect until 
60 days after it is published in the Federal Register. This action is 
not a ``major rule'' as defined by 5 U.S.C. 804(2). This rule will be 
effective upon publication in the Federal Register.

IX. Statutory Authority

    The statutory authority for this action is provided by the CAA, as 
amended (42 U.S.C. 7401, et seq.); relevant provisions of the CAA 
include, but are not limited to sections 182(b)(3), 202(a)(6), 
301(a)(1), and 307(b), and 307(d)(42 U.S.C. 7511a(b)(3), 7521(a)(6), 
7601(a)(1), 7607(b), and 7607(d)).

List of Subjects in 40 CFR Part 51

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Ozone, Particulate matter, Volatile organic 
compounds.

    Dated: May 9, 2012.
Lisa P. Jackson,
Administrator.

    For reasons set forth in the preamble, part 51 of chapter I of 
title 40 of the Code of Federal Regulations is amended as follows:

PART 51--REQUIREMENTS FOR PREPARATION, ADOPTION, AND SUBMITTAL OF 
IMPLEMENTATION PLANS.

0
1. The authority citation for part 51 continues to read as follows:

    Authority:  23 U.S.C. 101; 42 U.S.C. 7401-7671q.

Subpart G--[Amended]

0
2. Section 51.126 is added to read as follows:


Sec.  51.126  Determination of widespread use of ORVR and waiver of CAA 
section 182(b)(3) Stage II gasoline vapor recovery requirements.

    (a) Pursuant to section 202(a)(6) of the Clean Air Act, the 
Administrator has determined that, effective May 16, 2012, onboard 
refueling vapor recovery (ORVR) systems are in widespread use in the 
motor vehicle fleet within the United States.
    (b) Effective May 16, 2012, the Administrator waives the 
requirement of Clean Air Act section 182(b)(3) for Stage II vapor 
recovery systems in ozone nonattainment areas regardless of 
classification. States must submit and receive EPA approval of a 
revision to their approved State Implementation Plans before removing 
Stage II requirements that are contained therein.

[FR Doc. 2012-11846 Filed 5-15-12; 8:45 am]
BILLING CODE 6560-50-P


