United States Air and Radiation EPA420-F-97-012
Environmental Protection March 1997
Agency
Office of Mobile Sources
SEPA Regulatory
Announcement
An Overview of the Baseline
Adjustment Final Rulemaking
The Environmental Protection Agency (EPA) recently promulgated the
Baseline Adjustment Final Rulemaking. This rule modifies the baseline
adjustment provisions of the December 1993 final reformulated
gasoline (RFC) and anti-dumping regulations. Specifically, this rule
provides relief in the form of baseline adjustments for refiners who meet
certain criteria and who would experience extreme economic burden
without such relief. In spite of these adjustments, the environmental
impact of this rule is negligible. Such negligible environmental impact is
commonly referred to as de minimis in the regulations.
Background
Under the Clean Air Act as amended in 199O, EPA promulgated "anti-
dumping" regulations for conventional gasoline (gasoline not certified as
reformulated gasoline). These regulations state that conventional gaso-
line cannot be more polluting than it was in 1990.
The anti-dumping regulations also include provisions for the develop-
ment of individual refinery "baselines." Specifically, an individual
refinery baseline is the set of fuel parameter values and emissions values
which represent the quality and quantity of a refiner's 1990 gasoline. A
refiner's individual baseline is the reference point against which changes
in post-1994 gasoline composition are compared. Additionally, the
regulations include provisions that allow a refiner to obtain an adjusted
baseline under certain limited circumstances.
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The
The baseline adjustment rule contains
modified requirements for obtaining one
baseline adjustment and specifies the
requirements of two new baseline adjust-
ments.
First, the rule modifies requirements for
refiners who produced a specific type of jet
fuel in 1990.
Second, the rule provides a baseline adjust-
ment for certain refiners who used ex-
tremely sweet crude oil (crude oil relatively
low in sulfur) in the production of gasoline
in 1990, and for whom such crude oil is no
longer available.
Finally, this rule establishes a baseline
adjustment for refineries that have ex-
tremely low baseline values for both sulfur
and olefins.
JP-4 Adjustment
In 1990, certain refiners produced JP-4 jet
fuel under contract with the U.S. Depart-
ment of Defense. Now, however, this fuel is
being phased out by the Defense Depart-
ment. To compensate for this change in
product demand, most producers of JP-4
are transferring the feedstocks for JP-4
production to gasoline production. These
feedstocks must be upgraded to be used in
gasoline. This upgrade, which boosts the
octane of the feedstocks, causes a subse-
quent increase in a refiner's toxic emissions
relative to its individual baseline.
For certain refiners who produced signifi-
cant quantities of JP-4 in 1990, the burden
of complying (via refinery chances or other
measures) with an individual baseline,
given the increased toxics emissions, is
severe, and could cause them to cease
operations.
The JP-4 baseline adjustment reduces the
regulatory burden of the anti-dumping
program for those refiners who produced
JP-4 jet fuel in 1990 and who meet certain
criteria. These criteria have been modified
from the original rule to allow more pro-
ducers of JP-4 to qualify for an adjustment.
Low Sulfur Crude
Adjustment
Since 1990, a few refiners, particularly
those in certain Rocky Mountain states,
have experienced dramatic increases in the
sulfur content of the crude oil available to
them. Such increases generally lead to
increases in gasoline sulfur content which,
in turn, result in increased vehicle emis-
sions. For these refiners, compliance with
their individual baselines, in the face of
increasing crude sulfur levels, could be
economically devastating.
The low sulfur crude baseline adjustment
reduces the regulatory burden of the anti-
dumping program for those refiners who
have very low baseline sulfur levels and
whose access to alternative crude supplies
is geographically limited. Other criteria
specified in the rule must also be met to
ensure that only economically distressed
refineries receive the adjustment and that
the environmental impact of allowing the
adjustments is de minimis.
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Low Sulfur Low Olefins
Adjustment
A few refiners have extremely low baseline
levels of both sulfur and olefins. Low levels
of these fuel parameters can cause compli-
ance difficulties for these refiners since
both fuel parameters affect oxides of
nitrogen (NOx) emissions. Although other
refiners may be able to offset emissions
increases from one parameter by changing
other parameters, refiners with low levels
of multiple fuel parameters, such as sulfur
and olefins, have very limited maneuver-
ability.
Compliance with the anti-dumping require-
ments depends on specific fuel parameter
test results. For very low baseline values of
fuel components, errors in lab analysis,
sample contamination, or equipment
accuracy can incorrectly result in measured
fuel parameter values which are greater
than the baseline values. Such results could
hinder a refiner's compliance with the
annual-averaged limits on sulfur and olefin
values for both the RFG and antidumping
programs.
The low sulfur and low olefins baseline
adjustment reduces the regulatory burden
of the antidumping program for those
refiners who have very low baseline values
for both sulfur and olefins. Qualifying
refiners will have more maneuverability
about their baselines and more flexibility in
regard to the annual averaging of fuel
parameters.
EPA expects a negligible environmental
impact from allowing baseline adjustments
under the criteria of this rule because only
a few refiners are expected to qualify for
the adjustments (about 16) and the amount
of gasoline they produce is small (less than
3 percent of annual U.S. production).
Estimates made using the Complex Model
(a mathematical compliance model) show
less than a 0.1 percent increase in NOx
emissions, and less than a 1 percent in-
crease in exhaust toxics emissions due to
these baseline adjustments.
For
For further information on this rulemaking,
please contact Christine Brunner at:
U.S. EPA
Office of Mobile Sources
2000 Traverwood Dr.
Ann Arbor, MI 48105
734.2 14-4287
Additional documents on this final rule and
RFG are available electronically from the
EPA Internet server at:
http://www.epa.gov/OMS/fuels.htm
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