X-/EPA
   U"i>iMi CUMCS         Office of Transportation                            EPA420-F-05-020
   En^;onn-en:alP,-ot«:,on  and Air Quality                                 May 2005
                   Program
                   Update
                    EPA  Upholds  Reformulated Gas
                    Requirement in California,
                    New York,  and  Connecticut
                   The U.S. Environmental Protection Agency (EPA) is denying requests
                   from California, New York, and Connecticut for a waiver from the
                   oxygen content requirement in reformulated gasoline (RFG).
                   EPA's Decision
                   On June 2,2005, EPA denied requests made by the states of California,
                   Connecticut and New York for a waiver of the oxygen content requirement of
                   the RFG program. The Clean Air Act includes specific guidelines for when
                   EPA may grant a waiver from the Congressional mandate that RFG contain
                   oxygen. States must provide to EPA clear evidence that the oxygen content
                   requirement will prevent or interfere with their ability to meet the National
                   Ambient Air Quality Standards (NAAQS). EPA determined that the petitions
                   submitted by California, Connecticut and New York fail to meet the waiver
                   requirements outlined in the Clean Air Act.

                   Congress established the RFG program to improve air quality in some of our
                   nation's most polluted urban areas, enhance energy security by extending
                   gasoline supply through the use of oxygenates, and encourage the use of
                   domestically-produced, renewable energy sources. RFG has been used since
                   1995 and continues to be a highly effective strategy to reduce harmful emis-
                   sions from motor vehicles that cause ozone, commonly called smog.

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                The Clean Air Act specifies thatRFG contain 2 percent oxygen by weight.
                The law does not specify which oxygenate must be used and most refiners use
                either MTBE (methyl tertiary butyl ether) or ethanol. RFG sold in California,
                New York and Connecticut, however, contains only ethanol, since each state
                has banned the use of MTBE due to water contamination concerns.

                The Administration supports efforts by Congress to remove the oxygen
                requirement from the RFG program and replace it with a flexible, national
                renewable fuels program. This legislation would provide California, Connecti-
                cut, New York and other RFG areas the relief they are seeking through these
                waiver requests without compromising the air quality benefits of clean fuel.
                Background
California      In 1999, the State of California requested a waiver from the oxygen
                content requirement for RFG in California covered areas. The Agency
                denied California's original request in 2001, finding that the State had
                not clearly demonstrated what impact a waiver would have on the
                NAAQS for ozone.

                California contested EPA's 2001 denial, and the Court of Appeals for the
                Ninth Circuit overturned EPA's decision and instructed the Agency to review
                the impact of the oxygen content requirement on the State's ability to attain the
                NAAQS for particulate matter.

                In response to concerns over groundwater contamination, California has
                banned the use of MTBE in gasoline sold in California since January 1,2004.
                With the ban in place, refiners supplying California now use ethanol to meet
                the oxygen requirement of RFG

                EPAreviewed additional information submitted by California. While EPA
                agrees with California's claim that an oxygen content waiver would lead to a
                decrease in certain vehicle emissions that contribute to the formation of smog
                and parti culate matter, the Agency concluded that the overall impact on
                emissions is slight. With a waiver, total volatile organic compounds (VOC)
                and nitrogen oxide (NOx) emissions are likely to decrease while carbon
                monoxide (CO) emissions are likely to increase.

                In addition to this analysis, EPA evaluated whether the absence of these
                emission reductions (i.e., continuation of the oxygenate requirement) would
                prevent or interfere with the State's ability to attain the ozone and parti culate
                matter standards under the Clean Air Act. EPA evaluated this by looking at
                whether a waiver would lead to earlier attainment of the NAAQ S.

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               In each of the areas required to use federal RFG in California-San Diego,
               South Coast, San Joaquin Valley, and Sacramento—the State has either
               proj ected attainment with the applicable NAAQ S by the approved attainment
               date, or is developing an emission reduction plan to achieve attainment. In no
               case has the state relied upon or shown that a waiver of the RFG oxygen
               content requirement would lead to earlier attainment of the NAAQS. EPA
               therefore determined that the State has not clearly demonstrated that the
               oxygen content requirement prevents or interferes with California's
               ability to attain the NAAQS or prevent attainment by the regulatory deadline.

               Because Congress established other goals for the RFG program, EPA also
               considered the following factors in its decision to deny the State's petition: the
               relationship between the RFG oxygen content requirement and energy security
               concerns, and benefits to the rural and agricultural economies. The Agency
               concluded that California's use of ethanol as an oxygenate contributes to the
               U. S. goals of reducing dependence on foreign oil and supporting rural and
               agricultural economies.

Connecticut   On September 29, 2004, the Connecticut Department of Environmental
               Protection (DEP) requested that EPA grant Connecticut a waiver from the
               oxygen content requirement. RFG is used statewide in Connecticut.

               In response to concerns over groundwater contamination, Connecticut has
               banned the use of MTBE since January 1,2004. Since that time, refiners
               supplying Connecticut have used ethanol to meet the oxygen requirement of
               RFG Connecticut claimed that the oxygen content requirement causes in-
               creased air pollution that interferes with the State's ability to meet the NAAQS
               for ozone and particulate matter. Specifically, DEP asserted that the use of
               ethanol increases emissions of NOx and VOC during the summer ozone
               season relative to emissions prior to the ban of MTBE in Connecticut State.

               EPAis denying Connecticut's waiver request because the State did not submit
               the technical data necessary for the Agency to determine what impact the
               waiver would have on emissions and air quality. Without this information, EPA
               could not evaluate whether the oxygen content requirement prevents or
               interferes with attainment of the smog or parti culate matter standards.

New York     On January 6,2003, New York Department of Environmental Conservation
               (DEC) requested a waiver from the oxygen content requirement for RFG in
               the New York City area.

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In response to concerns over groundwater contamination, New York has
prohibited the use of MTBE in gasoline sold in New York state since January
1,2004. With the ban in place, refiners supplying New York are now using
ethanol to meet the oxygen requirement of RFG New York has claimed that
the oxygen content requirement causes increased air pollution that interferes
with the State's ability to meet the NAAQS for ozone. Specifically, DEC has
stated that the use of ethanol increases NOx and VOC emissions, relative to
emissions prior to the ban of MTBE in New York State.

In April 2003, EPA notified New York DEC that its submission lacked
the necessary technical supporting documentation for EPA to review the
request. A subsequent submission by the state did not provide the neces-
sary data.

EPAis denying New York's waiver request because the State did not submit
the technical data necessary for the Agency to determine what impact the
waiver would have on emissions and air quality. Without this information, EPA
could not evaluate whether the oxygen content requirement prevents or
interferes with attainment of the smog or paniculate matter standards.

New York's RFG area is made up the Counties of Bronx, Kings, Nassau,
New York, Orange, Putnam, Queens, Richmond, Rockland, Suffolk, and
Westchester.
Health Benefits of Reformulated Gasoline
The RFG program is a highly effective strategy to reduce harmful emissions
from motor vehicles that cause ozone, commonly called smog. Smog is formed
when VOCs, NOx, and other pollutants such as CO react in the presence of
sunlight. RFG also reduces emissions of toxic air pollutants such as benzene, a
known human carcinogen, by about 24,000 tons per year in RFG areas.
Today, roughly 75 million Americans are breathing cleaner air because of RFG.
For  More Information
You can access documents related to EPA's determination on the Office of
Transportation and Air Quality (OTAQ) Web site at:

    www.epa.gov/otaq/rfg_regs.htm

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