0 CDA EPA420-F-94-010
October 17, 1994
RFG/Anti-Dumping
Questions and Answers
October 17, 1994
Fuels and Energy Division
Office of Mobile Sources
U.S. Environmental Protection Agency
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RFG/ANTI-DUMPING QUESTIONS AND ANSWERS, OCTOBER 17,1994
The following are responses to most of the questions received by the Environmental
Protection Agency (EPA) through October 3, 1994, concerning the manner in which the EPA
intends to implement and assure compliance with the reformulated gasoline and anti-dumping
regulations at 40 CFR Part 80. This document was prepared by EPA's Office of Air and
Radiation, Office of Mobile Sources, and Office of Enforcement and Compliance Assurance,
Office of Regulatory Enforcement, Air Enforcement Division.
Regulated parties may use this document to aid in achieving compliance with the
reformulated gasoline (RFG) and anti-dumping regulations. However, this document does not in
any way alter the requirements of these regulations. While the answers provided in this
document represent the Agency's interpretation and general plans for implementation of the
regulations at this time, some of the responses may change as additional information becomes
available or as the Agency further considers certain issues.
This guidance document does not establish or change legal rights or obligations. It does
not establish binding rules or requirements and is not fully determinative of the issues addressed.
Agency decisions in any particular case will be made applying the law and regulations on the
basis of specific facts and actual action.
While we have attempted to include answers to all questions received by October 3, 1994,
the necessity for policy decisions and/or resource constraints may have prevented the inclusion
of certain questions. Questions not answered in this document will be answered in a subsequent
document. Questions that merely require a justification of the regulations, or that have
previously been answered or discussed either in a previous Question and Answer document or
the Preamble to the regulations have been omitted.
Topics Covered
RFG General Requirements
Downstream Oxygenate Blending
Renewable Oxygenates Program
Regi strati on/Recordkeeping/Reporting
Product Transfer Documentation
California Enforcement Exemption
Anti-Dumping Requirements
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RFC GENERAL REQUIREMENTS
1. Question: Can you blend normal butane and natural gasoline, whose composition cleaner
than RFG, and certify it as RFG?
Answer: A party who produces RFG by combining blendstocks is a refiner under the
RFG regulations, and is subject to all RFG standards and requirements. See the answer to
Question 7, Section IX.B., of the July 1, 1994 Question and Answer document. As a result, a
party who combines normal butane and natural gasoline could certify the resulting product as
RFG, provided the gasoline meets all RFG standards and the party meets the other refiner
requirements, including those involving sampling and testing, independent sampling and testing,
recordkeeping, reporting, and independent audits.
DOWNSTREAM OXYGENATE BLENDING
1. Question: The answer to Question 10, Section VI.F., of the July 1, 1994 Question and
Answer document states that RFG produced by adding oxygenate to RBOB in the compartment
of a truck is one batch and that each compartment must be given a different batch number. Isn't
this answer inconsistent with
§ 80.69(c), which states, "other than a truck delivering gasoline to retail outlets or wholesale
purchaser consumer facilities?" This section indicates that the retail delivery trucks are not
included in the same class as storage tanks. Also, neither
§ 80.69(d) nor § 80.69(e) require designation of compartments or even truck loads as separate
batches and only sampling and oversight are required under § 80.69(e).
Answer: EPA's response in the July 1, 1994 Question and Answer document does not
alter the requirements of the reformulated gasoline regulations. The term "batch" is used
consistently and appropriately with regard to the regulations. The truck batch numbering
requirement discussed in Question 10, Section VI.F., of the July 1, 1994 Question and Answer
document applies to truck oxygenate blenders who meet the oxygen standard on average in
accordance with § 80.69(b)(4). See also Question 26, Section VI.H. of the July 1, 1994 Question
and Answer document for further discussion of this issue.
2. Question: If RBOB and oxygenate are blended upstream from the truck in an oxygenate
blending facility, which of these parties would be considered an oxygenate blender and have the
associated regulatory requirements:
A. Terminal owner (if different than operator)
B. Terminal operator (not product owner)
C. Product owner (in tankage)
D. Customer-exchange partner (ownership transfers at rack spiller)
E. Truck owner (common carrier)
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Answer: An oxygenate blender is defined at § 80.2(mm) as "any person who owns,
leases, operates, controls, or supervises an oxygenate blending facility, or who owns or controls
the blendstock or gasoline used or the gasoline produced at an oxygenate blending facility." An
oxygenate blending facility is defined at § 80.2(11) as "any facility (including a truck) at which
oxygenate is added to gasoline or blendstock, and at which the quality or quantity of gasoline is
not altered in any other manner except for the addition of deposit control additives." Therefore,
in the scenario described above, where the gasoline is blended by the terminal upstream from the
truck, the terminal would be the oxygenate blending facility and both the owner and operator of
the terminal facility would be oxygenate blenders under the regulations. The product owner also
would be an oxygenate blender. The customer-exchange partner would be an oxygenate blender
if ownership of the product is transferred to him immediately upon blending as the product enters
the truck. In this scenario, the customer-exchange partner would own the gasoline at the point
where sampling and testing would normally occur, and, therefore, would be in a position to
ensure that this is accomplished. The truck owner would not be an oxygenate blender where the
truck driver exercises no control over the blending operation, and the truck is not an oxygenate
blending facility. The truck owner, however, would be a common carrier under the regulations,
subject to carrier liability and defenses.
3. Question: A company wishes to blend RFG containing ethanol with RFG containing an
ether, such as MTBE. May this blending occur during the VOC-controlled season? During the
non-VOC-controlled season?
Answer: Under § 80.78(a)(8), and as explained in the answer to Prohibitions Question 1
in the September 26, 1994 Question and Answer Document, RFG may not contain a mixture of
ethanol and any other oxygenate during the VOC control season (June 1 through September 15 at
the retail level). This precludes mixing ethanol-based RFG with RFG containing other
oxygenate during the VOC control season and during the period retail tanks are being blended to
meet the VOC control standards in advance of June 1.
In fact, § 80.78(a)(8) prohibits mixing VOC controlled RFG containing ethanol with any VOC
controlled RFG containing any other oxygenate between January 1 and September 15.
Outside the VOC control season, RFG is subject to the oxygen maximum standard of 3.5
weight % oxygen. In addition, all gasoline, including RFG, is subject to the substantially similar
requirements, which prohibits gasoline from containing mixtures of ethanol and other oxygenates
where the total oxygen content is greater than 2.7 weight %. The substantially similar restriction
(unlike the § 80.78(a)(8) prohibition) is not violated at the retail level, however, if an
impermissible mixture results from deliveries to the retail outlet of different gasolines each
containing legal types and amounts of oxygenate.
4. Question: Must oxygenate be added to RBOB downstream of the refinery?
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Answer: Yes. Oxygenate must be added to RBOB in the proper type and amount
regardless of where it is sold. Specifically, section 80.77(a)(7) prohibits any person from
combining RBOB with any other gasoline, blendstock, or oxygenate except oxygenate of the
type and amount specified for the RBOB type or with other RBOB that has the same
requirements related to oxygenate type and amount.
Furthermore, the RFG regulations contain other relevant and specific prohibitions on the
transfer and blending of RBOB. Section 80.69(a) requires that refiners and importers only
transfer RBOB to downstream oxygenate blenders who are registered with EPA under the RFG
program or, if to an intermediate owner, with the restriction that such owner transfer the RBOB
only to a registered blender. Section 80.69(b) requires downstream oxygenate blenders to add
oxygenate in the proper type and amount to all gasoline designated as RBOB.
RENEWABLE OXYGENATES PROGRAM
1. Question: What constitutes a renewable oxygenate?
Answer: EPA's reformulated gasoline regulations define the class of oxygenates which
qualify under the renewable oxygenate requirements. In general, an oxygenate is considered
renewable if it is "derived from non-fossil fuel feedstocks," or is an ether that is produced using
an oxygenate that is renewable. [40 C.F.R. Section 80.83(a)(l)] An oxygenate is considered
derived from non-fossil fuel feedstocks only if it is (1) derived from a source other than
petroleum, coal, natural gas, or peat, or (2) derived from a product produced using these fossil
fuels, if certain conditions have been met such as substantial transformation of the fossil fuel;
production, sale, and use of the product for a use other than energy generation; and later
treatment as a waste product. [40 C.F.R. Section 80.83(a)(5)(i) and (ii)]
The basic purpose of the renewable oxygenate program is to promote the use of
oxygenates produced from an energy source other than fossil fuels, thus leading to reductions in
the overall use of fossil fuels in the production of reformulated gasoline. The above definition of
renewable oxygenate was fashioned to meet this basic purpose. With this in mind, EPA believes
that an oxygenate is renewable under §80.83(a) only if all of the fuel feedstocks from which it is
derived are from sources other than petroleum, coal, natural gas, or peat. There are two
regulatory exceptions to this. One involves ethers, which are considered renewable if they are
produced using a renewable oxygenate, even if fossil fuel feedstocks are also used in
transforming the renewable oxygenate into an ether form. For example, a renewable ether could
be produced from a renewable alcohol and the fossil-based iso-butylene. This exception is
permitted because the same amount of renewable alcohol is used regardless of whether it is
blended directly, or first transformed into an ether. The second exception involves use of
products such as waste automobile tires or landfill gas as a fuel feedstock, if all of the conditions
of section 80.83(a)(5)(ii) are met. This exception is permitted because it relies on post-consumer
recycled materials to produce the oxygenate, and in so doing displaces the use of fossil fuels for
oxygenate production.
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This interpretation will best promote the purpose of the renewable oxygenate program
because it emphasizes the use of renewable sources of energy to replace fossil fuels. Treating
oxygenates as renewable only if all of the fuel feedstocks from which it is produced are non-
fossil fuel (except as provided in the two cases noted above) will tend to maximize the impact of
this program on the increased the use of renewable sources of energy, and will avoid the
administrative problems of establishing and enforcing a minimum required amount of non-fossil
fuel feedstocks.
2. Question: What constitutes a non-fossil fuel feedstock?
Answer: For the purposes of the renewable oxygenate program, and in keeping with the
goal of promoting reductions in fossil fuel use in reformulated gasoline, non-fossil fuel
feedstocks are those other than petroleum, coal, natural gas, and peat, and which contribute
materially to the energy content of the resulting oxygenate. Based on these provisions, the use of
compounds or mixtures such as carbon dioxide (CO2), water, or air, regardless of their source,
are not considered to be fuel feedstocks (either fossil or non-fossil) under §80.83(a) for the
purposes of producing renewable oxygenates. Regardless of the source (refinery processes,
ethanol production processes, or others), CO2, water, or air do not provide any appreciable
energy to the resulting oxygenate.
For example, in the case of methanol produced from waste CO2 and hydrogen, all of the
energy in the methanol would be derived from the hydrogen. Unless the hydrogen itself were
produced from renewable resources, the production of methanol in this manner could never save
fossil energy and merely transforms nonoxygenated fossil energy into an oxygenated form. If,
however, the hydrogen were produced from a non-fossil fuel source (e.g., via electrolysis), the
methanol produced using waste CO2 would qualify as a renewable oxygenate.
Similarly, although the oxygen for higher alcohols [such as tertiary butyl alcohol (TEA)
and tertiary amyl alcohol (TAA)] which are co-products of the ETBE production process comes
from water, the water has no energy value and thus, like CO2, does not constitute a fuel feedstock
under §80.83(a). The energy value of the higher alcohols produced in this manner comes from
iso-olefins, which originate from fossil feedstocks. Hence, higher alcohols coproduced with
ETBE in this manner would not count as renewable oxygenates. If the iso-olefins were
renewable, however, then the higher alcohols would be considered renewable. (In any case,
however, they would count towards the minimum oxygen content for reformulated gasoline; see
the next question for further detail.)
3. Question: What is the maximum allowable ethanol content of gasoline as it leaves the
refinery, and how does unreacted ethanol in ETBE count towards the ROXY requirements?
What is the maximum allowable level of co-produced TEA and TAA in reformulated and
conventional gasoline?
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Answer: Under section 21 l(f) of the Clean Air Act, fuels and fuel additives are
prohibited from use if they are not "substantially similar" to certification fuels. EPA has
interpreted "substantially similar" for unleaded gasoline at 56 FR 5352 (February 11, 1991).
These provisions permit the use of oxygenates (other than methanol) up to 2.7 weight percent
oxygen. The Act also allows the Administrator to waive the "substantially similar" prohibition
under certain circumstances. Ethanol has been granted a waiver to allow up to 10 volume
percent ethanol in unleaded gasoline. However, at ethanol levels covered by the waiver, but
higher than the 2.7% oxygen limit under the "substantially similar" definition, other oxygenates
cannot be purposefully added. (For example, a blend of ethanol and ETBE at 2.8 weight percent
oxygen is not allowed.) In addition, under the simple model, RFG can have a maximum oxygen
content of 2.7 weight percent in the case of RFG that is VOC-controlled and 3.5 weight percent
in the case of RFG that is not VOC-controlled.
Beyond these restrictions, there are no other provisions concerning "unreacted" ethanol or
"coproduced" alcohols which enter the fuel upon the addition of ETBE. Hence, unreacted
ethanol would count towards the minimum RFG and OPRG oxygen requirements. To the extent
that the higher alcohols are not produced from renewable feedstocks, they would not count
towards the ROXY requirements, although they would count towards the minimum oxygen
requirements.
EPA's regulations provide that unreacted ethanol would only count as a renewable
oxygenate in the winter months [see 40 CFR 80.83(a)(2)]. This is because the problems
associated with the use of ethanol blends (e.g., commingling), which were the basis for the
winter-only requirement, would still be present with the use of even small volumes of ethanol
combined with other oxygenates. The reader is reminded that only refiners and importers can
claim credits for the use of renewable oxygenates; blenders are not eligible under the provisions
of the renewable oxygenate requirement.
4. Question: May a party who complies with the RFG oxygen standard on a per gallon basis
comply with the ROXY standard on an "averaging" basis? May such a party buy, sell, generate,
and/or trade ROXY credits?
Answer: Yes, to both parts of the question. The ROXY standard is an averaging
standard and all parties must show compliance on a calendar year average basis. All refiners and
importers of RFG are required to comply with the ROXY standard, and may buy, sell, generate,
and/or trade ROXY credits, provided the applicable provisions regarding RFG credit trading and
the legitimacy of credits are met. Refiners and importers do not have to specifically designate
that the ROXY standard will be met on average.
5. Question: Explain why downstream oxygenate blending of ROXY can only be counted by
the refiner via transfer of oxygen credits?
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Answer: The intent of § 80.83(b)(3)(ii) is to make clear that the oxygen standard may be
met by a refiner through oxygenate (or renewable oxygenate) blended by downstream blenders
only through the transfer of oxygen credits. This must be distinguished from ROXY credit
generation.
Specifically, renewable oxygenate properly blended by the downstream oxygenate
blender will "automatically" result in ROXY that the refiner or importer may include in his
ROXY compliance calculations. The amount of ROXY credit a refiner or importer can claim
depends on whether they assume the amount specified in § 80.83(c) or whether they meet the
contractual oversight and other requirements of § 80.83(e), and can, therefore, claim the actual
amount of ROXY. (Refiners and importers may generate and use ROXY credits, but
downstream blenders may not.) In order to count that same renewable oxygenate in the refiner's
oxygen compliance calculations, the downstream oxygenate blender must average, generate
credits, and transfer those oxygen credits to the refiner. (Downstream blenders may generate
oxygen, but not ROXY, credits.)
6. Question: May renewable oxygen credits be generated through reformulated gasoline sold in
conventional gasoline areas?
Answer: As explained in greater detail in the preamble to the final ROXY regulation,
EPA intended and expected that the 15%/30% renewable requirement would be met with the sale
of RFG in designated reformulated gasoline areas (with some reasonable spillover anticipated).
This would tend to maximize the new use of renewables. EPA did not intend to give credit to
renewable use in conventional areas that would otherwise be using renewables, and in fact, the
one year phase-in was designed to minimize disruption to current and future markets for
renewables. While the regulations do not prohibit the sale of RFG outside the covered areas,
EPA did not expect this to affect the expected use of ROXY in RFG covered areas.
This regulatory intent would not be achieved if ROXY credit generation was to happen in
existing conventional fuels markets using renewables and not in the new RFG markets as
intended under the regulation.
EPA plans to monitor the use of ROXY in RFG closely and if it finds that the intent of
the ROXY program is not being met, it may take further action (which may include, among other
measures, the imposition of stringent tracking requirements) to ensure that the full benefits of the
ROXY program are realized in RFG areas.
REGISTRATION/RECORDKEEPING/REPORTING
1. Question: Does a company that produces RFG have to register all oxygenate blending
facilities or just those that produce RFG? All import locations or just those that import RFG?
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Answer: Registration is required only for oxygenate blending facilities at which RFG is
produced, and not for oxygenate blending facilities where oxygenate is blended with
conventional gasoline only. If an oxygenate blender decides to blend RBOB with oxygenates to
produce RFG at a facility that has not previously been registered, the facility must be registered
three months prior to blending.
2. Question: In a situation where an importer leases tankage from another company, e.g., from
a for-hire terminal, who must register such import facility, the company that owns the terminal,
the importer that leases the tankage, or both?
Answer: Under § 80.2(r), an importer is defined as "a person who imports gasoline or
gasoline blending stocks or components from a foreign country into the United States...."
Accordingly, it is the importer of the gasoline, and not the owner of the terminal from whom the
importer leases tankage, who must register under § 80.76.
PRODUCT TRANSFER DOCUMENTATION
1. Question: After a batch of gasoline is certified as RFG, it is given a batch number. How far
"downstream" does the batch number follow the material? If a batch is commingled in a terminal
with other compatible material belonging to a variety of terminalling customers, does the batch
lose its batch number at that time?
Answer: There are no requirements to identify the batch number in the transfer
documentation. Once the batch is commingled with other RFG, the refineries' batch numbers are
no longer useful to identify the resulting fungible RFG.
2. Question: As a trading company actively involved in gasoline blending and classified as a
"refiner" under EPA regulations, will blendstock accounting and/or transfer documents be
required should a purchased blendstock be resold to a true refiner or other blender? If so, will the
transfer document from the original supplier be forwarded or a new original be required?
Answer: Under §§ 80.102(a)(l) and (e)(2)(i), blendstock tracking and accounting only
involves blendstock that is produced or imported by the refiner or importer. As a result, a
company that purchases blendstock that has been produced or imported by another refiner or
importer, and who resells that blendstock, would not have to track or account for that blendstock.
If the purchased blendstock was produced by a refiner who is required to account for
blendstocks under § 80.102(e)(2), however, § 80.102(e)(2)(ii) requires the blendstock to be
accompanied by product transfer documents that identify the blendstock as having previously
been accounted for, using the language specified under § 80.106(b). In addition, under
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§ 80.106(b), all transfers of such a blendstock must include the language specified in that
subsection. As a result, a trading company in receipt of "accounted for" blendstock must include
the § 80.106(b) language if this blendstock is transferred to anyone else.
3. Question: Section 80.77 states that product transfer documents should include the name and
address of the transferor and transferee. In the interest of keeping the PTD's as a single
document, would it be permissible to retain the addresses of the transferees in a permanent file
and not print them on the PTD's? We believe it would be in the best interest of the EPA and the
industry to maintain all PTD information within a single document and the addition of the
addresses may make it difficult to meet both EPA and Department of Transportation
requirements on a single page.
Answer: Under § 80.77(a) and (b), the product transfer documents for each transfer of
title or custody must include both the name and address of the transferor and the transferee.
However, EPA will consider this requirement to be met in a case where only the names of the
transferor and/or the transferee are listed in the documents that are provided at the time of the
transfer of title or custody, provided:
1) The normal business practice of the parties is to list only the names of the transferor
and/or the transferee;
2) Both the transferor and the transferee know and have records of the required
addresses; and
3) The addresses are provided to EPA upon request.
4. Question: Would it be permissible, as discussed in Question 2, Section VI.I, of the July
1, 1994 Question and Answer document, to send a manual to downstream parties detailing the
minimum and maximum values and requirements of each standardized product code (including
different product codes for the difference minimum and maximum standards that would apply in
the event of "ratcheted" standards), provided that the actual pipeline ticket contained all the
verbiage required by
§ 80.106(a)(l)(vi) for conventional gasoline and § 80.106(b) for blendstock? Question 4 in the
PTD section of the August 29, 1994 Question and Answer document seems to put this in doubt.
Could you please clarify the point for us?
Answer: It would be permissible to use codes to represent all required PTD information
except for the statements required under § 80.106(a)(l)(vii) and (b) for conventional gasoline and
certain conventional blendstocks. The response to Question 4 of the Product Transfer Document
section in the August 29, 1994 Question & Answer document is intended to specify that codes
may not be used as a substitute for the language required by these sections. But see the updated
answer to Question 2, Section VI.I, of the July 1, 1994 Question and Answer document below,
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regarding the use of product codes where the information is transferred electronically using
electronic data interchange (EDI) for transfers of title.
5. Question: When a party lifts gasoline on exchange at a terminal, there is usually both a
transfer of custody (to the carrier) and a transfer of title (to the exchange partner). If all required
PTD information is given to the carrier through a bill of lading, is it also necessary to provide a
separate PTD to the exchange partner? If so, does a single PTD suffice when the exchange
partner utilizes its own truck as opposed to common carrier trucks?
Answer: The transferor must provide PTD information to both the transferee of custody
and the transferee of title. As a result, the required PTD information must be provided to both
the carrier (the transferee of custody) and the exchange partner (the transferee of title). If the
exchange partner is receiving both custody and title of the fuel (when utilizing their own trucks
as opposed to common carrier trucks), the PTD information would only have to be provided to
the exchange partner a single time.
6. Question: Does EPA make any distinction in terms of timeliness between PTD's which
memorialize a transfer of title as opposed to those which memorialize a transfer of custody? For
example, exchange statements detailing liftings by an exchange partner ordinarily are prepared
only after the close of each month's business. Would such statements meet the PTD
requirements if they contain all required PTD information?
Answer: Section 80.77 does not distinguish between transfers of custody and transfers of
title. Nevertheless, EPA believes the two situations may be different in terms of the timing
necessary for PTD information. In the case of transfers of custody, the PTD information should
be transferred before, during, or immediately following the actual transfer because the transferee
will have custody of the gasoline in question and must know how to handle it.
In the case of transfer of title, on the other hand, the transferee may choose to rely on the
custody transferee to properly handle the gasoline (e.g., where the custody transferee is a
common carrier pipeline.) In such a situation, the PTD requirements may be satisfied if the title
transferee receives the required information as part of the transfer of the normal business
documents used to memorialize the title transfer. This would be true even if the normal business
practice is to provide title transfer documents only at the close of each month's business.
In the event the custody transferee's handling of the gasoline results in a violation of the
RFG standards, however, the owner of the gasoline (the title transferee) would be presumed
liable for the violation, and it would be no defense that this owner had not received the required
PTD information.
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7. Question: Where is it required in the regulations that the PTD's for RFG must designate
the finished gasoline as meeting the oxygenate standard on the per-gallon or average? Would it
not be sufficient to infer the average standards from the listings of min/max's on the PTD? This
requirement is not found in § 80.77.
Answer: The PTD requirements for RFG do not require that gasoline be designated as
meeting the standards, including the oxygenate standard, per-gallon or average. Section 80.77
does require that PTD information include the minimum and maximum downstream standards
with which the RFG complies. The downstream standards are the same regardless of whether the
RFG has been certified as meeting standards per-gallon or on average. The downstream
minimum/maximum standards must be included in the PTD information because these standards
are subject to change with regard to specific covered areas in the event of a standard "rachet" as a
result of a gasoline quality survey failure under
§ 80.68.
8. Question: We interpret the requirement to include a refiner or blender's registration
number on the transfer document to apply on transfers where the refiner or blender is the
transferor, but not when the transferee. Please confirm that when a pipeline transfers product to a
terminal that is owned by a company registered as a refiner or blender, but the terminal is strictly
a distributor, that the registration number of the refiner or blender does not have to be on the
PTD. Also please confirm that, for receipts from refineries, the required number is the
company's registration number, not the facility ID.
Answer: Section 80.77(j) requires that the PTD's contain the registration number of both
the transferor and transferee, if they are refiners, importers or oxygenate blenders. Accordingly,
if a terminal belonging to a refiner or blender is receiving RFG, the refiner's or blender's
company registration number should be included in the PTD information. Basically, if either the
transferor or transferee is covered under a company registration number, then that company's
registration number (not the facility ID) should be included in the documentation.
9. Question: Section 80.78(a)(8) prohibits "any person" from combining any VOC-controlled
RFG produced using ethanol with any VOC-controlled RFG using any other oxygenate between
January 1 and September 15. There is no exclusion from this prohibition for retail outlets or
wholesale purchaser-consumer facilities as there is for certain other mixing prohibitions. How is
the retail outlet expected to be aware that it is receiving a shipment of gasoline that cannot be
commingled with gasoline produced using a different oxygenate?
Answer: The RFG regulations were amended on July 20, 1994, to include a product
transfer documentation requirement, found in 80.77(g)(3), requiring the "identification of VOC-
controlled reformulated gasoline or RBOB as gasoline or RBOB which contains ethanol, or
which does not contain ethanol." This requirement will result in retailers having the necessary
information to determine the type of oxygenate used in the gasoline.
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10. Question: Unlike the PTD requirements for RFG and RBOB contained in § 80.77, the PTD
requirements for conventional gasoline contained in § 80.106 do not indicate that PTD's are not
required when gasoline is sold or dispensed for use in motor vehicles at a retail outlet or
wholesale purchaser-consumer facility. Does this mean that retail stations that provide
conventional gasoline must provide PTD's to their customers?
Answer: PTD's are not required when conventional gasoline is sold or dispensed for use
in motor vehicles at a retail outlet or wholesale purchaser-consumer facility. EPA intends to
amend the regulations to reflect this.
[Note: The following is an update for the answer to Question 2, Section VI.L, of the July 1,
1994 Question and Answer document, to revise the interpretation of the requirement to
include product transfer document language where the required PTD information is
included in an electronic data interchange transmission.]
2. Question: Will product codes, such as are currently in use by pipelines, or fuel descriptions
(simple, complex, RBOB), in place of minimums and maximums, be sufficient for compliance
with the product transfer document requirements?
Answer: The use of product codes would satisfy the product transfer document
requirements of §§ 80.77 and 80.106, provided that: 1) these codes reflect all the information
required in these sections, including the applicable minimum and maximum standards; 2) these
codes are standardized throughout the distribution system in which they are used; and 3) each
downstream party is given sufficient information to know the full meaning of the product codes.
In the case of a violation where a downstream party has not, in fact, been given the information
necessary to know the meaning of the product codes, the product transfer document requirements
of §§ 80.77 and 80.106 will not have been met.
A party may use product codes in the manner described to meet some of the transfer
document requirements, and use plain English notations to meet other requirements.
In the case of transfers of title (as opposed to transfers of custody), where the information
is being transferred electronically using electronic data interchange (EDI), and where product
codes are used to meet the product transfer information, the specific language regarding
conventional gasoline at
§ 80.106(a)(l)(vi), and regarding certain blendstock at
§ 80.106(b), may be reflected as product codes and need not be recited verbatim. In all other
cases, however, product codes may not be used to meet the requirements for specific language
under §§ 80.106(a)(l(vi) and (b).
CALIFORNIA ENFORCEMENT EXEMPTION
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1. Question: If a California refinery is producing all of its gasoline to CARB specifications but
ships a small portion (<5%) to Nevada and Arizona, does that portion have to be recorded and
reported as conventional gasoline? The additional recordkeeping and reporting would appear to
be a totally wasted effort since gasoline meeting CARB specs will be substantially better in all
respects than baseline gasoline.
Answer: Under § 80.81(b)(2), California gasoline (and no other gasoline) is exempt
from certain RFG and anti-dumping requirements, such as the requirement to use the test
methods specified under § 80.46. California gasoline is defined in
§ 80.81(a)(2) as "any gasoline that is sold, intended for sale, or made available for sale as a motor
vehicle fuel in the State of California...." As a result, gasoline that does not meet this definition
would be subject to all federal requirements, including reporting, recordkeeping and testing
requirements. For example, gasoline that is produced in California but is sold or intended for
sale outside the State would have to meet all requirements that apply to gasoline produced in the
remainder of the country. These requirements apply regardless of whether the gasoline in
question is used in an RFG covered area outside California and is classified as RFG, or if the
gasoline is not used in an RFG covered area and is classified as conventional gasoline.
ANTI-DUMPING REQUIREMENTS
1. Question: For conventional gasolines, the annual compliance report is based on all gasolines.
Can one monthly composite be made up of all grades of gasolines and all seasons produced in
that month, rather than one composite for each grade and season when compliance is
demonstrated with the simple model? the complex?
Answer: For the criteria for using composite samples for compliance calculations, see §
2. Question: The preamble to the final rule states that "oxygenate added to a refiner's or
importer's gasoline or blendstock downstream of the refinery or import facility may be included
in the refiner's or importer's compliance calculations only if the refiner or importer is able to
demonstrate with certainty that the oxygenate has been added to that party's gasoline." The
preamble further states that "as a result of the complexities inherent in tracking gasoline through
the fungible distribution system, EPA believes in most cases it will be impracticable for refiners
or importers to effectively monitor downstream oxygenate blending with gasoline that is shipped
fungibly, and as a result the refiner or importer normally would be precluded from the oxygenate
in compliance calculations".
The scenario in question is:
o a refiner ships conventional gasoline produced by the refiner through a common-
carrier pipeline;
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o batch shipments allow for tracking of the refiner's gasoline within the pipeline;
o shipments are received into the refiner's storage;
o these receipts might be commingled fungibly with conventional gasoline
produced by another refiner;
o oxygenate is added at the rack into all of the fungible gasoline.
a) Can the refiner gain oxygen credits for anti-dumping compliance for a prorata share of
the oxygenate added to all gasoline, on the basis of the proportion of gasoline blended that was
produced by the refiner?
b) Is the refiner's ability to gain oxygen credits impacted, in any way, by the
configuration of the common-carrier pipeline (e.g. breakout tanks, batch versus open-stock
system, etc.)?
c) Is the refiner's ability to gain oxygen credits impacted, in anyway by the configuration
of the refiner's storage (e.g., dedicated versus community, etc.)?
d) Could the accounting be done on a monthly basis, or would the refiner have to track
the ratio of gasoline produced by the refiner versus that produced by another refiner after each
batch?
Answer: a) Yes, provided there is sufficient documentation to calculate the proportion of
gasoline produced by the refiner, and, all other requirements of §80.101(d)(4)(ii) are met.
b) The configuration would have to be such that the refiner could, indeed, track
the proportion of gasoline used in the oxygenate blend that was produced by the refiner.
c) Same as b).
d) The refiner would have to track the ratio of its gasoline to that produced by
another refiner for each batch of oxygenate blend produced.
3. Question: Section 80.101(d)(3) states that "Any refiner for each refinery, or any importer,
shall include in its compliance calculations. . . any gasoline blending stock produced or imported
during the averaging period which becomes conventional gasoline solely upon the addition of an
oxygenate." Should the volume reported to the EPA be the blendstock volume or the volume
after the addition of the oxygenate (blendstock + oxygenate)?
Answer: Under § 80.101(d)(3), the refiner or importer must include in its compliance
calculations the volume of gasoline blending stock that was used in the production of
conventional gasoline produced solely upon the addition of oxygenate, and not the volume of
gasoline after the addition of the oxygenate. However, under § 80.101(d)(4)(i), the refiner or
importer should separately include in its compliance calculations the oxygen added by the refiner
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or importer. For gasoline produced downstream of the refinery or import facility, if all of the
requirements of § 80.101(d)(4)(ii) are met, the refiner or importer may separately include in its
compliance calculations the volume of oxygenate that was added to produce the gasoline
downstream.
4. Question: If a refiner elects to use composite sampling and testing as provided for in the
regulations, may the refiner use composite sampling for one parameter and perform the required
tests for the other relevant properties?
Answer: Section 80.101(i) requires refiners to separately sample each batch of gasoline
and blendstocks that are included in anti-dumping compliance calculations, and either separately
analyze each sample, or under § 80.101(i)(2), analyze a volume-weighted composite of the
samples collected up to a one month period. It would be appropriate to separately analyze the
individual batch samples for certain parameters, and to analyze composite samples for those
same batches for other parameters. If this approach is used, however, each batch should be
reported separately to EPA, by using the individual batch analyses for those parameters
separately analyzed and assigning the composite analysis result for composite parameters to all
batches included in the composite sample.
5. Question: For a conventional gasoline refiner that has oxygenate added downstream of the
refinery, what sampling frequency and test methods must be used?
Answer: For a refiner of blending stock to include in its compliance calculations the
oxygenate used in blending conventional gasoline where the downstream blending was
conducted by a person other than the refiner, § 80.101(d)(4)(ii)((B)(2) requires (among other
things), that the refiner conduct "periodic sampling and testing of the gasoline produced
subsequent to oxygenate blending." The frequency and test methods are not specified in the
regulations. However, for any quality assurance testing program under the RFG and anti-
dumping regulations, if test methods other than the regulatory test methods are used, adequate
correlation to the regulatory test methods must be demonstrated. The frequency of testing under
any quality assurance program will depend upon the nature of the specific operation, taking into
account all factors, such as prior testing results and opportunity for violations to occur. For
further discussion of the what constitutes adequate periodic sampling and testing for a quality
assurance program, see Question 11, VII.B., of the July 1, 1994 Question and Answer document.
6. Question: Assume that a marketer/supplier has conventional gasoline inventory in a fungible
pipeline/terminal system in a non-RFG area. Effective January 1, 1995, does this company have
any responsibility for the quality of that inventory? Responsibility for product brought in after
January 1, 1995? What does the company need to put in its contract with a refinery/trader or
collect from a refinery/trader to comply with the anti-dumping regulations? What kind, if any,
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quality assurance program would be required? Would the answers be different if a segregated
tank is involved?
Answer: Beginning January 1, 1995, all conventional gasoline must meet the PTD
requirements. If the conventional gasoline was produced before January 1, 1995, the refiner may
not have initiated the PTDs, but the downstream party nevertheless must include the required
information when title or custody is transferred. Whether the marketer/supplier has conventional
gasoline in a fungible pipeline/terminal or in segregated tankage, it would have to ensure that the
conventional gasoline is not delivered into a reform area. The company does not need to have
anything in its contract with respect to anti-dumping, unless it is blending oxygenate that would
be counted by the refiner. See requirements under § 80.101(d)(4). Quality assurance would
include checking PTD's for refiner reform/conventional designation and ensuring that
conventional gasoline is not delivered into any RFG covered area.
7. Question: In the case of a refiner whose conventional gasoline is blended with oxygenate
downstream of the refinery, and where the refiner includes this oxygenate in its anti-dumping
compliance calculations, what options are available to the refiner for defining the volume and
properties of this oxygenate. In particular, must the refiner report each occasion when the
oxygenate is blended (each truck in the case of splash blending), or may the refiner report the
total volume and properties of oxygenate used over a larger period of time?
Answer: Under § 80.101(d)(4)(ii)(A), a refiner may include in its refinery anti-dumping
compliance calculations the oxygenate added downstream to gasoline produced at that refinery, if
the oxygenate is added by the refiner. In addition, under § 80.101(d)(4)(ii)(B), the refiner may
include oxygenate added downstream to the refinery's gasoline by someone else provided the
refiner: 1) has a contract with that oxygenate blender that specifies appropriate oxygenate
blending procedures; 2) monitors the oxygenate blending operation through periodic audits
designed to assess the overall volume and type of oxygenate used; 3) conducts periodic sampling
and testing of the gasoline produced; and 4) conducts periodic inspections to ensure the
contractual requirements are being met. Under § 80.104(a)(2)(x) refiners are required to
maintain records of the oversight required by § 80.101(d)(4)(ii)(B).
Section 80.101(i) requires refiners to separately sample each batch of gasoline and
blendstocks that are included in anti-dumping compliance calculations, and either separately
analyze each sample, or under § 80.101(i)(2) analyze a volume-weighted composite of the
samples collected during up to a one month period. These sampling and analysis requirements
thus apply to oxygenate added downstream to a refiner's gasoline where the refiner includes the
oxygenate in its compliance calculations.
In the case of compliance under the complex model, the calculation method necessary to
include blendstocks in anti-dumping compliance calculations are described in the Preamble to the
RFG Final Rule, 59 FR 7806 (February 16, 1994). This calculation method would apply to
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downstream-blended oxygenate that included in a refiner's compliance calculations under the
complex model.
A refiner may include in its refinery compliance calculations the oxygenate added
downstream to that refinery's gasoline without separately sampling each batch of oxygenate
blended, provided the refiner meets the following requirements:
1. The refiner must comply with the downstream oxygenate blending oversight
requirements specified under § 80.101(d)(4)(ii), and the recordkeeping required by
§80.104(a)(2)(x).
2. The refiner's oversight must demonstrate the type and amount of oxygenate that is
blended with gasoline produced at the refinery.
3. Each type of oxygenate blended must be reported separately.
4. The oxygenate blended during a maximum of one month may be reported as a single
batch.
8. Question: In the case of oxygenate added downstream to a refinery's gasoline, what
assumptions can the refiner make about the composition of ethanol? Is the refiner required to
test the ethanol for its relevant properties?
Answer: Refiners who include in refinery compliance calculations the ethanol added
downstream to the refinery's gasoline may assume that denatured ethanol is used, and that the
denaturant comprises 5 vol% of the denatured ethanol. Such a refiner may assume that the
remaining 95 vol% of the denatured ethanol is pure ethanol, with the normal properties for that
product. The refiner may include the 95 vol% ethanol in its compliance calculations, but not the
5 vol% denaturant. These assumptions would not be appropriate in a case where a refiner learns
through its oversight program, or otherwise knows or should know, that these assumptions are
inaccurate with regard to a specific oxygenate blending operation.
A refiner may use a different vol% ethanol in its compliance calculations, and may
include the volume and properties of denaturant, where the refiner has data to establish the actual
volume and properties of the ethanol and denaturant used.
9. Question: In the case of a company that did not import applicable blendstocks from 1990
through 1994, but begins to do so in 1995, must the company report those blendstocks as an
importer in accordance with the requirements of § 80.102? Does the answer change if the
company also is a domestic refiner, and uses the imported blendstocks to produce conventional
gasoline?
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Answer: Section 80.102 requires refiners and importers to track the volume of certain
blendstocks that are produced or imported (blendstock tracking), and under certain circumstances
to include in anti-dumping compliance calculations all blendstocks produced or imported
(blendstock accounting). Under § 80.102(f)(l)(i), however, neither blendstock tracking nor
accounting is required for refiners or importers who have a baseline that is less stringent than the
statutory baseline for the parameter or emissions performance in issue.
If the company described in the question has an importer baseline that is less stringent
than the statutory baseline, therefore, the company may import any types of blendstocks in any
volumes without constraint imposed by the RFG or anti-dumping regulations. If, on the other
hand, this company has an importer baseline that is equal to or more stringent than the statutory
baseline, the company would be subject to blendstock tracking (and blendstock accounting where
required) in its importer capacity. These answers remain the same regardless of whether the
company sells the blendstock following import, or uses the blendstock to produce gasoline at a
refinery operated by the company.
10. Question: Please explain the differences in blendstock tracking or blendstock accounting if
a refinery's blendstock-to-gasoline ratio is less than 3%, is between 3% and 10%, and is greater
than 10%. May a refiner require a blendstock recipient to account for blendstocks instead of the
refiner?
Answer: Section 80.102 requires refiners and importers to track the volume of certain
blendstocks that are produced or imported (blendstock tracking), and under certain circumstances
to include in anti-dumping compliance calculations all blendstocks produced or imported
(blendstock accounting). Blendstock accounting is triggered by a comparison of: a) the
blendstock-to-gasoline ratios for the annual anti-dumping averaging periods; to b) the
blendstock-to-gasoline ratios for the baseline period (1990 through 1993). Thus, blendstock
accounting is required only when a refinery's blendstock-to-gasoline ratios beginning in 1995 are
large in comparison to that refinery's baseline ratios, and not based on the magnitude of the
refinery's averaging period blendstock-to-gasoline ratios taken alone. A single exception to this
general principal, under § 80.102(f)(l)(ii), applies when a refinery's averaging period blendstock-
to-gasoline ratio is 3% or less, in which case blendstock accounting is not required regardless of
the comparison to the baseline blendstock-to-gasoline ratio.
In every case where blendstock accounting is required, under § 80.102(e)(2)(i) the refiner
or importer is required to include all blendstocks produced or imported in anti-dumping
compliance calculations. In every case where a refiner or importer is required to account for
blendstocks, the refiner or importer must meet this requirement, and it may not be passed to
recipients of the blendstock. On the other hand, in every case where blendstock accounting is not
triggered by § 80.102(e)(2)(i), the refiner or importer may not include the blendstocks in
compliance calculations, and the downstream parties who use the blendstock to produce gasoline
must always include the blendstock in their compliance calculations.
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