~         Office of Transportation                          EPA420-F-06-035
   States        and Air Quality                               May 2006
Environmental Protection  	
Agency
               Regulatory
               Announcement
               Removal of Reformulated Gasoline
               Oxygen  Content Requirement
               To provide U. S. oil refiners with greater flexibility in producing clean-
               burning gasoline, the U.S. Environmental Protection Agency (EPA) is
               removing the two percent oxygen content requirement for reformulated
               gasoline (RFG) nationwide.
               Overview
               As directed by the Energy Policy Act of 2005, EPA is amending its
               regulations to remove the oxygen content mandate for RFG as well as
               all provisions that were included in the regulations to ensure compliance
               with the mandate. The Energy Policy Act required EPA to take this action
               by May 5, 2006.

               EPA issued two Direct Final Rules (DFRs) because the Energy Policy
               Act (EPAct) provided for different compliance dates for the removal of
               the RFG oxygen requirement in California and the rest of the country.
               EPA also issued parallel Notices of Proposed Rulemaking (NPRMs),
               in case provisions of the DFRs would need to be withdrawn due to the
               receipt of adverse comments.

               The direct final rule that addressed the RFG  oxygen requirement and
               related compliance requirements for California gasoline did not draw
               adverse comment. Therefore, the rule went into effect on April 24, 2006.

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The other direct final rule, which was intended to remove the oxygen
requirement for RFG in all other parts of the country, did draw adverse
comment. Thus, the affected provisions were withdrawn, and instead
EPA is now issuing a final rule that addresses the adverse comments and
finalizes the NPRM, thereby implementing the removal of the RFG oxy-
gen mandate for the rest of the country. The final rule will become effec-
tive immediately upon publication, or May 5, 2006, whichever is later.
Effect on industry
Since refiners will now have the flexibility to produce RFG with or
without an oxygen component, refiners will be allowed to produce RFG
in the most cost-effective manner possible. Also, RFG will continue to
provide the very significant emissions reductions associated with its use
in the most severely polluted areas of the United States.

Finally, many states have banned the oxygenate MTBE (methyl tertiary-
butyl ether) because of problems associated with water contamination,
so many refiners would prefer to transition away from the use of MTBE.
This final rule allows one more avenue to refiners in the production of
RFG without the use of MTBE.
Health and Environmental Effects
The emissions benefits of the RFG program are not expected to be af-
fected as a result of this final rule.
Background

Section 211(k) of the 1990 Amendments to the Clean Air Act (CAA)
required RFG to contain oxygen in an amount that equals or exceeds 2.0
weight percent. Accordingly, EPAs current regulations require RFG re-
finers, importers and oxygenate blenders to meet a 2.0 or greater weight
percent oxygen content standard.

Last year, President Bush signed into law the Energy Policy Act, which
amended Section 211(k) of the CAA to remove the RFG oxygen require-
ment. To be consistent with the current CAA Section 211(k), this rule
modifies the RFG regulations to remove the oxygen standard in Section
80.41. It also modifies several other sections of the RFG regulations
which contain provisions designed to implement and ensure compliance
with the oxygen standard.

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RFG has been required to be used since 1995 in metropolitan areas with
the most severe air pollution and in other non-attainment areas that re-
quested the cleaner burning gasoline. Today, about 30 percent of the gas
used in the United States is RFG.
Public Participation Opportunities
EPA originally issued this rule as a Direct Final Rule and a matching
Notice of Proposed Rulemaking. However, negative comments were re-
ceived primarily from manufacturers of MTBE, thus requiring the with-
drawal of the DFR. This final rule addresses those comments and final-
izes the NPRM, thereby implementing the removal of the RFG oxygen
content requirement.
For More Information
You can access this rule and related documents on EPA's Office of Trans-
portation and Air Quality (OTAQ) EPA web site at:

    www. epa. gov/otaq/regs_rfg. htm
For more information on this rule, please contact Marilyn Bennett at:

    U.S. Environmental Protection Agency
    Office of Transportation and Air Quality (6406J)
    1200 Pennsylvania Avenue, NW
    Washington, DC 20460
    (202)343-9624
    E-mail: bennett.marilyn@epa.gov

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