Comments on U.S. Environmental Protection Agency Proposed Rule, "Control of Air Pollution from Motor Vehicles: Tier 3 Motor Vehicle Emission and Fuel Standards," RIN 2060-AQ86

   1) Gauging fuel consumption impacts - Suggest EPA assess the overall change to fuel economy within vehicle category.  Did the State of California conduct a similar analysis in support of its LEV III rulemaking?  If so, suggest incorporating by reference, since this proposal discusses essentially the same vehicle/technology/stringency combinations.

We are not projecting any impacts on fuel economy to result from the Tier 3 proposal, although the sulfur reduction may enable lean-burn gasoline technology as another option for manufacturers to use to meet more stringent greenhouse gas and fuel economy standards.

         a. How much will the high oxygen content of the new fuel affect fuel consumption? The Tier 3 proposal is not changing the oxygen content of in-use fuel, and as such will have no impact on in-use fuel economy.  The new certification fuel means a priori lower fuel economy than that of the higher energy-density current certification fuel.  This is solely an issue for certification testing, not in-use fuel economy, which is driven by the quality of fuel actually used by consumers.  As discussed in section IV.D.4 of the preamble, the calculation procedure for determining fuel economy for CAFE purposes already adjusts for changes in the energy content of a test fuel, so the change in energy content associated with the change in test fuel specifications should not impact fuel economy for CAFE purposes.  If there are other aspects of the calculation procedure that need updating, EPA would address that as part of a separate later action.
         b. What additional exhaust control equipment weight will be added to achieve the new emissions limits and what will be the fuel economy penalty be compared to the baseline?  As discussed in Preamble Section IV.A.5.d, our technical assessment of the technologies needed to achieve the proposed standards include changes within the catalyst, engine calibrations, and reduced thermal mass will be the primary technologies manufacturers will use to meet the proposed standards.  None of these technologies will have a significant impact on vehicle weight or fuel economy. (Reduced thermal mass will actually reduce vehicle weight, though the impact is expected to be very small.)
            
   2) Refinery compliance costs and sulfur disposal 

         a. What assumptions has EPA made concerning the by-product use of the sulfur removed from the refinery process?  Elemental sulfur market remains relatively soft, so refiners may be tempted to back the sulfur down to heavier refined grades (a common practice over time) rather than extract it.  
         b. Is the only feasible receptacle for this heating oil?  As the recent stringent limits on hoteling emissions in U.S. ports and sulfur control for nonroad diesel have essentially eliminated bunker fuel, the old standby of bygone days, and "red" diesel as candidates.  How did EPA consider the opportunity costs of not being able to use the higher sulfur fuel in these previously available markets?  Please describe the assumptions used, relative differences in value of products, and markets where EPA expects these products to now be used.   As discussed in section VII.B. of the preamble, EPA has projected that Tier 3 will be met through additional hydrotreating of gasoline.  This would result in a very small incremental increase in the amount of elemental sulfur removed by refineries from petroleum fuels and would be sold into the existing market for sulfur.  Due to expansion of the distillate market and contraction of the gasoline market, some refiners are already choosing to undercut the heavy end of their gasoline into diesel fuel, kerosene, and heating oil.  While we have not been able to model it on a refinery-by-refinery basis for the proposal, expansion of this practice in the future would ease the cost of compliance with both the Tier 3 and ultra-low sulfur diesel standards.  This practice would also increase the supply of diesel fuel, which would help supply diesel fuel to ocean going vessels in the emission control areas (ECAs) in lieu of residual fuel.
         c. With respect to increased stringency of gasoline sulfur limits, refiners were already producing or preparing to produce ultra-low sulfur gasoline for the California market; however, this sulfur reduction will not be without added cost in order to comply nationwide.  As discussed in section VII.B. of the preamble, we fully analyze and assess the added cost associated with the Tier 3 sulfur standard.  This includes estimating the compliance costs for gasoline produced by California refineries for sale outside of California.
            
   3) In what respects is the Tier 3 rule not aligned with the CARB LEV III rule? 
         a. Will auto manufacturers be required to perform additional test procedures for the Tier 3 rule, that are not required under LEV III? If so, what are the costs to auto manufacturers of purchasing the equipment and/or running the tests that are required under Tier 3 but not required under LEV III? 
         We have worked extensively with CARB and the auto manufacturers to harmonize the Tier 3 proposal and the LEV III programs.  As a result, we and the automakers believe that we have developed Tier 3 in such a way as to allow manufacturers to design and test one vehicle for sale nationwide.  There are some differences between Tier 3 and LEV III, and these are highlighted in Section IV of the preamble.  These include, for example, historical differences carried over to Tier 3, such as our need in a national program for 20 degree F and high altitude testing vs CARB's need for 50 degree F testing.   The Tier 3 proposal accounts for costs associated with additional test burden resulting from Tier 3.  We don't expect Tier 3 to require new tests that are not otherwise required by LEV III, except for the evaporative leak test, which California has already stated it intends to adopt after Tier 3 is finalized.

   4) How does EPA account for the increased costs to manufacturers and consumers for repairing emissions control systems? As manufacturers are forced to add more intricate technologies to achieve more stringent emissions standards, the likelihood and frequency of problems that would require repair would presumably increase as well. Where does EPA address this issue in the rule?  Discussion of the costs projected for the Tier 3 standards is contained in Section VII.A of the preamble.  

The technologies we expect to be added or changed to comply with the proposed standards should not require any additional maintenance beyond that already required.  In other words, none of the technologies are expected to deteriorate more rapidly than today and, in fact, we would expect them to become more durable.  A key aspect of the Tier 3 standards is requiring more focus on extended durability (e.g., the 150,000 mile useful life standards and the evaporative leak test). Hence, if anything, we would expect manufacturers to increase maintenance intervals rather than decrease them.  For the Tier 3 technologies, we can see no technology that would incur higher maintenance costs. 

We do not agree that the new technologies required to comply with the proposed Tier 3 standards would increase the likelihood and frequency of problems that would require repair.  Vehicles are far more complex today than only 10 years ago yet are more reliable and durable.  In the 2012 final rule establishing light-duty vehicle greenhouse gas emissions and CAFE standards for 2017 and later, we looked at the issue of repair costs and have a lengthy write-up of our findings in Section 5.2.2.2 of EPA's final RIA.



   5) Certification fuel revisions  -  Will EPA explain the rationale for the proposed change to the specifications of vehicle emission/fuel economy certification fuel?  As discussed in Section IV.D. of the preamble, in-use gasoline has changed significantly since the certification test fuel specifications were established.  Section 206(h) of the CAA requires that EPA revise the regulations as necessary "to insure that vehicles are tested under circumstances which reflect the actual current driving conditions under which motor vehicles are used, including conditions related to fuel, temperature, acceleration, and altitude." The table below highlights key changes to the certification fuel specs:

                     Proposed Gasoline Emissions Test Fuel
                                   Property
                                     Unit
                                 SPECIFICATION
                           ASTM Reference Procedure


                                    General
                                    Testing
                            Low-Temperature Testing
                             High Altitude Testing

Antiknock Index (R+M)/2
                                       -
                                  87.0 - 88.4
                                 87.0 Minimum
D2699-11 and D2700-11
Sensitivity (R-M)
                                       -
                                  7.5 Minimum

Dry Vapor Pressure Equivalent (DVPE)
                                   kPa (psi)
                                   60.0-63.4
                                   (8.7-9.2)
                                  77.2-81.4 
                                  (11.2-11.8)
                                   52.4-55.2
                                   (7.6-8.0)
D5191-10b
Distillation
                                                                 10% evaporated
                                   °C (°F)
                                     49-60
                                   (120-140)
                                     43-54
                                   (110-130)
                                     49-60
                                   (120-140)
D86-10a
                                                                 50% evaporated
                                   °C (°F)
                                77-88 (170-190)

                                                                 90% evaporated
                                   °C (°F)
                               154-166 (310-330)

                                                 Evaporated final boiling point
                                   °C (°F)
                               193-216 (380-420)

Residue
                                  Milliliter
                                  2.0 Maximum

Total Aromatic Hydrocarbons
                                    vol. %
                                   19.5-24.5
D5769-10
                                                         C6 Aromatics (benzene)
                                    vol. %
                                    0.6-0.8

                                                         C7 Aromatics (toluene)
                                    vol. %
                                    4.4-5.5

                                                                   C8 Aromatics
                                    vol. %
                                    5.5-6.9

                                                                   C9 Aromatics
                                    vol. %
                                    5.0-6.2

                                                                 C10+ Aromatics
                                    vol. %
                                    4.0-5.0

Olefins
                                     mass %
                                    4.5-11.5
D6550-10
Ethanol
                                    vol. %
                                   14.6-15.0
D5599-00 (Reapproved 2010)
Total Content of Oxygenates Other than Ethanol
                                    vol. %
                                  0.1 Maximum

Sulfur
                                     mg/kg
                                   8.0-11.0
D2622-10, D5453-09 or D7039-07
Lead
                                    g/liter
                                0.0026 Maximum
D3237-06
Phosphorus
                                    g/liter
                                0.0013 Maximum
D3231-11
Copper Corrosion
                                       -
                                 No. 1 Maximum
D130-10
Solvent-Washed Gum Content
                                   mg/100 ml
                                  3.0 Maximum
D381-09
Oxidation Stability
                                    Minute
                                 1,000 Minimum
D525-05

   6) Ethanol by % volume - Will EPA explain the rationale for jumping from the expected choice of a 10%-by-volume ethanol fuel, now common throughout the U.S., to E15?  This is explained in Section IV.D. of the preamble.  We do not change certification test fuel parameters often due to the level of effort involved in such a new regulation.  Thus, it is important for us to be forward looking with respect to the fuel anticipated to be in-use during the years the Tier 3 vehicle standards will be in effect (MY2017-2025 and later).  Knowing that E15 has been shown to be less likely to volatilize its gasoline blendstock than E10, how does EPA anticipate this impacting ozone or other emissions?  The volatility of the certification test fuel as listed above is the same as that for the current certification test fuel.  Thus, this will have no impact on emissions during vehicle certification.  In-use emissions are a function of what fuels are actually used by consumers.  Has EPA conducted a sensitivity analysis to see what the implications on vehicle emissions and air quality impacts are for using E10 versus E15?  An assessment of the in-use emission impacts of E15 compared to E10 was performed as part of the E15 waiver decisions (January 26, 2011, 76 FR 4662).  What does EPA project concerning the penetration of E15 in gasoline blendstock?  Is there a particular date by which EPA expects E15 to be commonly used like E10 is today?  Please explain.  For the purposes of establishing a reference case for the analysis of the emission impacts of Tier 3, EPA projected E15 penetration rates over time as shown in chapter 7 of the RIA.  

   7) Will EPA also explain why aromatics and olefin percentages are adjusted?  Is it in anticipation of higher oxygenate content and/or octane rating?  Please explain.  As explained in RIA Chapter 3, these changes are to reflect the levels of these parameters in today's in-use gasoline as well as their expected continued decline with the expanded blending of ethanol in the future.


   8) Will EPA explain under what circumstances vehicle manufacturers may request approval for an alternative certification fuel such as a high-octane 30 percent ethanol by volume (E30) blend for vehicles?  This is detailed in 40 CFR 86.113 of the regulations.  The vehicles must be designed to run on such fuels and not on the primary certification test fuels.

Responses to comments directly inserted in the preamble:

      A. Pages 18-19: EPA may want to reconsider proposing E15 as the certification fuel given the significant number of issues that face early market acceptance for E15.  Proposing E10 as the certification fuel and seeking comment on E15 may be more appropriate given that almost all gasoline is now E10 and the issues concerning vehicle warranties, refueling station compatibility for E15 blends, the gasoline blendstock production, transportation and refueling infrastructure limitations, potential refueling retail resistance to eliminating higher margin products (mid-grade and premium E10) for potentially lower margin E15 grade of fuel with significant investment of new refueling equipment and tanks.  As discussed above, our reasons for this change in test fuel are explained in Section IV.D. of the preamble.  We do not change certification test fuel parameters often due to the level of effort involved in such a new regulation.  Thus, it is important for us to be forward looking with respect to the fuel anticipated to be in-use during the years the Tier 3 vehicle standards will be in effect (MY2017 and later).   We are aware of the challenges facing E15, and we will carefully consider what to finalize, with the benefit of public comment.  In addition, it is impractical to make the suggested change in the proposal.  For example, were we to change our proposal to E10, we would then also likely have to consider raising the certification test fuel RVP to 10 psi in order to reflect the in-use volatility of E10.  This would have significant impacts on the stringency of the evaporative emissions standards that we have harmonized with CARB and coordinated with the vehicle manufacturers.  We have added language to the proposal's discussion (in Section IV.D) to ensure that it is clear and robust enough to encourage public comment and allow us to finalize either E10 or E15 cert fuel.
      B. Page 121:  Why does EPA calculate that manufacturers opting to certify vehicles for a 120,000 mile useful life would have to meet 0.85 of the standard for a certification to a 150,000 mile useful life? Isn't the proper ratio 0.80?
         To establish an equivalent standard at 120k useful life vs. a 150k useful life, we looked at relative emission control system deterioration rates for Tier 1 and Tier 2 vehicles based on Inspection and Maintenance (I/M) data.  This data was used to project the relative deterioration rates for Tier 3 vehicles.  The final ratio between the two useful life projections was determined to be 0.85.  
         Page 216:  Note the proposed specifications do not align with alternative fuel specifications in 49 USC Section 32901. Definitions
(a) General. - In this chapter - 
     (1) "alternative fuel" means - 
(D) except as provided in subsection (b) of this section, a mixture containing at least 85 percent of methanol, denatured ethanol, and other alcohols by volume with gasoline or other fuels; 
(2) "alternative fueled automobile" means an automobile that is a - (A) dedicated automobile; or (B) dual fueled automobile. 
(8) "dedicated automobile" means an automobile that operates only on alternative fuel. 
(9) "dual fueled automobile" means an automobile that - (A) is capable of operating on alternative fuel.... 

This should be reconciled. Note that the DOT has authority to change the specification, but has not revised the specification yet.
49 USC Section 32901. Definitions 
(b) Authority To Change Percentage. - The Secretary may prescribe regulations changing the percentage referred to in subsection (a)(1)(D) of this section to not less than 70 percent because of requirements relating to cold start, safety, or vehicle functions.

Our current regulations require that the manufacturers certify FFVs on E0 and E85.  The E85 is produced using denatured ethanol, resulting in an ethanol concentration of E83.  In the Tier 3 proposal we are merely being more explicit on the rest of the chemical makeup of this fuel and providing a blending tolerance for the ethanol concentration.  Thus, our use of a concentration less than 85 percent is not new with the Tier 3 proposal.  Furthermore, we specifically selected the level of 83 percent to be consistent with ASTM specifications for in-use fuel for use in FFVs, which has an ethanol concentration ranging from 51% to 83%.  Since the CAA requires that we certify the emission performance of vehicles under circumstances which reflect the actual current driving conditions under which motor vehicles are used, including conditions related to fuel, it is only appropriate that we not require them to be tested at ethanol levels higher than that experienced in-use.  Nevertheless, it is also clear that the definition in 49 USC Section 32901 (a)(2)(9) only requires that the vehicle be "capable" of operating on the alternative fuel.  Even though we only require that the emissions testing for FFVs be performed on ethanol levels up to 83 percent, that does not mean that the vehicles are not capable of operating on 85 percent and therefore fully qualify with the definition of Alternative fueled automobile.
D.	Page 218:  While NHTSA establishes the fuel economy standards for the CAFE program, EPA is responsible for vehicle testing and compliance calculations.  We have revised to say "While NHTSA establishes the fuel economy standards for the CAFE program, EPA is responsible for vehicle testing and calculation of fuel economy values used by manufacturers for compliance with the CAFE standards."
E.	Page 241:  As such, it can be is less costly per gallon for some larger refineries to get down to 10 ppm than for smaller refineries, as discussed in Chapter 5 of the draft RIA.  We accept these edits.
F.	Page 271:  Same as C., above and same response
G.	Page 273:  Same as C., above and same response 

   
