0 CDA EPA420-F-94-016
December 5, 1994
RFG/Anti-Dumping
Questions and Answers
December 5,1994
Fuels and Energy Division
Office of Mobile Sources
U.S. Environmental Protection Agency
-------
RFG/Anti-Dumping Questions and Answer, December 5,1994
The following are responses to most of the questions received by the Environmental
Protection Agency (EPA) through November 21, 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 November 21,
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 Anti-Dumping Requirements
Surveys Remedial Actions
Downstream Oxygenate Blending Test Tolerances
Registration/Recordkeeping/Reporting Transition Issues
Product Transfer Documentation Importer Issues
December 5, 1994
-------
RFC GENERAL REQUIREMENTS
1. Question: Do PTDs have to accompany gasoline going to customers who receive the product
in containers of less than 550 gallons, since these customers are technically not wholesale
purchaser-consumers under the regulations?
Answer: Section 80.77 provides that on each occasion when any person transfers
custody or title to any RFG or RBOB, other than when gasoline is sold or dispensed for use in
motor vehicles at a retail outlet or wholesale purchaser-consumer facility, the transferor must
provide PTDs to the transferee. Section 80.106 of the anti-dumping regulations similarly
provides that parties must provide PTDs for the transfer of conventional gasoline. Under the
PTD provisions, retailers are not required to provide PTDs to their customers when they dispense
gasoline into the customers' motor vehicles, and wholesale purchaser-consumers are not required
to provide PTDs to their drivers when gasoline is dispensed into the wholesale purchaser-
consumer's vehicles. However, all other parties, including all distributors, are required to
provide PTDs to the transferees of the gasoline they distribute. Consequently, any distributor
who delivers gasoline to a customer's storage tank, even if the tank is less than a 550 gallon size
(and the customer is not a wholesale purchaser-consumer under the regulations), is required to
provide PTDs to the transferee. See also the replacement answer to Question 22, Section VIA.,
of the July 1, 1994 Question and Answer Document below, which discusses that RFG must be
dispensed to all consumers in RFG covered areas.
2. Question: Can bulk terminals located in covered areas receive conventional gasoline that is
intended to be distributed to non-RFG areas?
Answer: Distributors, including bulk plants, located in covered areas may receive and
distribute conventional gasoline to non-RFG areas, assuming all of the requirements of the
regulations are met, including segregation of conventional gasoline from RFG, and the product
transfer documentation statement at § 80.106(a)(l)(vii) which identifies the product as not
meeting the requirements for RFG.
3. Question: Can a refiner produce RFG or RBOB at a refinery by combining blendstocks with
RFG, RBOB, or conventional gasoline, as long as the RFG, RBOB, or conventional gasoline is
backed out of the refiner's compliance calculations?
Answer: A refiner may produce RFG or RBOB at a refinery by combining blendstocks
with previously-certified RFG (i.e., RFG that was produced at another refinery or oxygenate
blending facility, or imported by another importer), but the previously-certified RFG must be
excluded from the refiner's compliance calculations. See. § 80.65(i). RBOB may not be mixed
with any other gasoline or blendstock, with very limited exceptions. See. § 80.78(a)(7).
December 5, 1994
-------
RBOB and conventional gasoline, on the other hand, may not be used to produce RFG or
RBOB under any circumstance, because such mixtures are prohibited by §§ 80.78(a)(7) and (10),
respectively.
[Note: The following question and answer replaces Question 22, VLA., of the July 1,1994
Question and Answer document.]
VI.A.22. Question: Are any categories of gasoline users in the RFG covered areas exempt from
the requirement to use RFG instead of conventional gasoline?
Answer: Section 21 l(k)(5) of the Clean Air Act describes the scope of the requirement
to use RFG in the RFG covered areas:
(5) PROHIBITION. -- Effective beginning January 1, 1995, each
of the following shall be a violation of this section:
(A) The sale or dispensing by any person of
conventional gasoline to ultimate consumers in any
covered area.
This statutory prohibition on the sale or dispensing of conventional gasoline in RFG covered
areas is not restricted to gasoline used to fuel motor vehicles, but rather applies to all gasoline
sold or dispensed within an RFG covered area to any consumer, regardless of the use. The
prohibition, therefore, would include gasoline sold or dispensed for use in motor vehicles, boats,
construction equipment, recreational vehicles, lawn and garden equipment, etc.
As a matter of enforcement discretion, however, EPA will not enforce the requirement to
sell or dispense RFG in the case of two categories of gasoline: aviation gasoline sold or
dispensed for use in aircraft; and racing gasoline sold or dispensed for use in racing vehicles
during a sanctioned racing event. These exceptions would not apply if the aviation gasoline or
racing gasoline is used other than in an aircraft, or in a racing vehicle in conjunction with a
sanctioned racing event.
In the case of both aviation gasoline and racing gasoline, the gasoline must be clearly
designated as such, and any person selling or dispensing these categories of gasoline must take
appropriate steps to ensure the gasoline is used only in the limited circumstances described. In
addition, EPA has strict guidelines as to what constitutes a racing vehicle, and the exception for
racing gasoline applies only for gasoline used in such a vehicle. For further information on what
constitutes a racing vehicle, contact EPA's Manufacturers Operations Division at (202) 233-
9250.
December 5, 1994
-------
The rationale for the exception for aviation gasoline used to fuel aircraft is based on
safety considerations. Aviation gasoline must satisfy performance criteria that are relevant to the
safe operation of aircraft, and this safety consideration outweighs the limited adverse
environmental effect of conventional gasoline used in this manner. In addition, aircraft
emissions normally would not be confined to the covered area where the aircraft is fueled, and
could occur in significant part outside any RFG covered area. The rationale for the exception for
racing gasoline is based on the special performance requirements for true race vehicles and the
limited volumes of gasoline involved.
SURVEYS
1. Question: A prudent business approach to achieving year-averaging oxy content of RFG
above 2.1% and meeting the ROXY requirements would be to over-oxygenate with EtOH in
winter to generate ROXY credits and minimize oxy content (from MTBE, etc.) in summer to
reduce cost (still staying about 1.5% O2, of course). A survey of a market done in summer could
therefore show O2 levels at that point in time lower than 2.0% (but about 1.5%). What are the
implications on "ratchet" of the area to higher 02 levels?
Answer: Oxygen is evaluated on a year round basis under the survey. See § 80.68(c)(3).
As a result, if oxygen levels in the summer that are below 2.0 wt% are off set by oxygen levels in
the winter that are greater than 2.0 wt%, there would be no oxygen ratchet. However, there are
separate week-long VOC surveys that depend in part on oxygen levels. Failure of a simple
model VOC survey results in a ratchet of the RVP standard.
DOWNSTREAM OXYGENATE BLENDING
1. Question: Under the RFG regulations, RBOB cannot be mixed with RFG. However, normal
tank blending of oxygenates will require the presence of residual "heels" of RFG from prior
batches of RBOB and oxygenate blending, or routinely large portions of the preceding batch
impossible to completely move into a pipeline shipment prior to receipt of more RBOB. Will
EPA confirm that this mixing is not the subject of the prohibition against mixing RFG and
RBOB provided no material is transferred from the blending tank between the time of new
RBOB receipt (with oxygenate type and amount matching previous RBOB batches) and addition
of the specified type and amount of oxygenate? Testing of finished RFG for required oxygen
content and volume would be conducted in accordance with the regulations.
Answer: EPA would not treat the prohibition against mixing RFG and RBOB as having
been violated in the situation you describe as long as the volume and oxygen content of the
residual RFG from the prior batch have been accounted for by: 1) determining the volume of the
portion of RFG left in the tank prior to blending with additional RBOB and oxygenate (the
oxygen content of the residual amount will have been determined previously); 2) sampling and
testing the entire tank subsequent to blending the additional RBOB and oxygenate to determine
December 5, 1994 4
-------
its volume and oxygen content; and 3) mathematically subtracting the volume and oxygen
content of the residual from those of the entire tank to determine the new batch volume and
oxygen content.
2. Question: Must a terminal be registered as an oxygenate blender to add oxygenate to
certified RFG designated as OPRG in order to achieve the 2.7 weight % oxygen level required by
some cities during the winter months?
Answer: Under §§ 80.78(a)(6) and 80.69(f), a downstream party may add additional
oxygenate to certified OPRG RFG in order to meet the requirements of a state implemented
oxygenated gasoline program, i.e., the product must be sold within an oxygenated gasoline fuels
program area during the control period required by the applicable state regulation. Adding
oxygenate to the OPRG would make the terminal an oxygenate blender under § 80.2(mm).
Section 80.76(a) requires registration with EPA by any oxygenate blender who produces any
reformulated gasoline. If a party purchases finished and certified OPRG RFG to which it adds
oxygenate for the purpose of meeting a state implemented oxygenated gasoline program, it
would not be required to register based on that activity alone, as EPA would not consider that
"producing reformulated gasoline" under these limited circumstances.
REGISTRATION/RECORDKEEPING/REPORTING
1. Question: The territories and protectorates that are included in the CAA definition of "State"
are not per se included in the PADD definition. What are the PADD designations for the Virgin
Islands, Puerto Rico, Guam, American Samoa and the Northern Mariana Islands?
Answer: The Virgin Islands and Puerto Rico are in PADD 6; Guam, American Samoa
and the Northern Mariana Islands are in PADD 7.
PRODUCT TRANSFER DOCUMENTATION
1. Question: Section 80.77(d) requires the PTD to provide "the location of the gasoline at the
time of the transfer." In a situation where the transferor is a truck carrier, what does the term
"location" refer to?
Answer: For the PTD transferred from the terminal to the truck carrier, "the location of
the gasoline at the time of the transfer" would be the terminal. For the PTD transferred from the
truck carrier to the next party in the distribution chain, the location would be the retail outlet or
other location where the gasoline is off-loaded from the truck.
2. Question: In certain scenarios, codes are used to represent the transferees name and address
on the PTD's. For example, when a customer purchases a load of gasoline from a terminal, a
December 5, 1994 :
-------
common carrier picks up the gasoline at the rack if the customer does not maintain his own fleet
of trucks. The computer prepared BOL has all of the required PTD information on it except for
the carriers name and address (a code is used to identify the carrier). Can we continue to use
codes on the PTD to identify the transferee, in these cases?
Answer: Since the carrier would be the transferee in such a situation, the carrier's name
and address would be required to be included in the PTD information. However, EPA has
previously stated that the address of the transferor and transferee does not need to be included in
the documentation at the time of transfer, and will extend this allowance to the use of codes in
place of the names provided:
1) The normal business practice of the parties is to list only the codes of the transferor
and/or the transferee;
2) Both the transferor and the transferee know and have records of the required names
and addresses; and
3) The information is provided to EPA upon request.
3. Question: Would the following scenario require product transfer documents?
At the end of a month of gasoline transactions, the following shortages apply:
Company A owes 10,000 barrels of product to company B
Company B owes 10,000 barrels of product to company C
Company C owes 10,000 barrels of product to company A
Instead of physically shipping any fuel the companies just correct their books to show everything
is even.
Answer: EPA would not consider this a transfer of either custody or title since no
actual gasoline is represented by these "book transfers"; however, PTD's must be provided where
there is a transfer of title or custody of any volume of actual product (RFG, RBOB or
conventional gasoline).
ANTI-DUMPING REQUIREMENTS
1. Question: Is compliance with the optional complex model standards or the complex model
standards measured against a refiner's 1990 baseline, or the refiner's compliance baseline?
Answer: Under § 80.101(b)(l), compliance with the anti-dumping simple model
standards is measured in relation to a refiner's or importer's compliance baseline, which is
December 5, 1994 6
-------
calculated using the methodology specified at § 80.101(f). Under §§ 80.101(b)(2) and (3),
however, compliance with the optional complex model and complex model is measured in
relation to a refiner's or importer's 1990 baseline. This would imply that a refiner's or importer's
compliance baseline is not used in conjunction with the optional complex model or the complex
model. EPA intended, however, that the compliance baseline would be used to measure
compliance with the optional complex model and the complex model. The rationale that gave
rise to the compliance baseline that is included in the preamble to the [fill in the correct proposal]
is equally appropriate to the simple model, the optional complex model, and the complex model.
EPA intends to correct the language in §§ 80.101(b)(2) and (3) to specifically require use
of the compliance baseline in a rulemaking in the near future.
2. Question: What is the aggregated baseline when refineries with individual baseline volumes
and properties are aggregated with refineries that have the statutory baseline and no 1990
volume, such as terminals?
Answer: When a refiner aggregates refineries that have individual 1990 baselines
with refineries that do not have 1990 individual baselines, the aggregate baseline volume is the
1990 volume of the refineries which have individual 1990 baselines, and the aggregate baseline
properties is the volume weighted properties of the refineries which have individual 1990
baselines. This method of calculating the aggregate baseline volume and properties is
appropriate because refineries without individual baselines are assigned the statutory baseline,
and under § 80.101(f) any volume for a refinery (or aggregation of refineries) in excess of the
1990 volume is measured against the statutory baseline properties. Therefore, a refiner is able to
measure compliance with the anti-dumping standards using 1990 individual baselines only up to
the 1990 baseline volume regardless of how the refiner calculates the aggregation of the
baselines for refineries without 1990 individual baselines.
3. Question: When using the compliance baseline calculation at § 80.101(f)(4)(ii) for the 1995
anti-dumping averaging period, should volumes of RFG produced during 1994 and 1995 be
included in the Va term, or only RFG produced during 1995?
Answer: Only RFG, conventional gasoline, and California gasoline produced during the
1995 anti-dumping averaging period (January 1, 1995 through December 31, 1995) should be
included in the compliance baseline calculation for 1995. Therefore, any gasoline produced
before January 1, 1995 should be excluded from the 1995 compliance baseline calculation under
REMEDIAL ACTION
December 5, 1994
-------
[NOTE: The following is an update of the answer to Question 1, Section VILE., of the July
1,1994 Question and Answer document dealing with remedial actions, to expand the
remedial action option where RFG has insufficient oxygen.]
VII.E.1. Question: If reformulated gasoline is found downstream of the refinery to be off
specification, what procedures are appropriate for handling this gasoline?
Answer:
Downgrading
In a case where RFG is found to violate any downstream standard, a party may take
remedial action for the violation by reclassifying the RFG as conventional gasoline (by
"downgrading" the gasoline), and using the gasoline only outside any RFG covered area. The
downgraded gasoline must be segregated from all RFG, and the product transfer documents must
identify the gasoline as conventional gasoline. There is no requirement that such downgraded
gasoline must be included in any downstream party's anti-dumping compliance calculations,
however.
If RFG that is designated as VOC-controlled is found to violate a standard that applies
only to VOC-controlled RFG, the RFG may be downgraded to non-VOC controlled RFG, and
used outside the VOC control period.1 The VOC control period is May 1 through September 15
at facilities upstream of the retail level, and June 1 through September 15 at the retail level.
If RFG that is designated as VOC-controlled for VOC Control Region 1 is found to be
off-spec for that Region, but to meet the standards applicable to VOC Control Region 2, the
gasoline may be downgraded to VOC Control Region 2 RFG, and used only in that Region.
If the off-spec gasoline is found at a retail outlet or wholesale purchaser-consumer facility
located in an RFG covered area, all sales of gasoline from the tank must be stopped, and the
gasoline removed from the storage tank and transported to an area that is appropriate for the
downgraded classification of the gasoline.
When RFG is downgraded, the party should document the circumstances that gave rise to
the downgrading. The gasoline in question should be segregated from gasoline having the higher
classification, the product transfer documents for the gasoline in question should be changed to
the downgraded classification, and the gasoline must not be sold, dispensed, or transported in a
manner that is inconsistent with the downgraded classification.
1 The standards that apply only to VOC-controlled RFG are:
RVP under the simple model; VOC emissions performance under the
Phase I complex model; and VOC emissions performance and a
separate NOx emissions performance standard under the Phase II
complex model.
December 5, 1994 i
-------
Storage
If during the VOC control period RFG is discovered that does not meet applicable VOC
control standards, remedial action for the violation may consist of storing the gasoline in place
until the end of the VOC control season on September 16. In such a case, the gasoline must be
segregated from gasoline that meets the VOC control standards, documents associated with the
gasoline must clearly state the gasoline is not VOC-controlled, and the gasoline must be sealed to
prevent its accidental use in advance of September 16.
Blending With Additional RFG
Parties may blend additional RFG with RFG that is discovered to be off-spec a means of
remedial action for the violation, subject to certain constraints,2 to bring the mixture within all
applicable standards. In such a case, subsequent to blending the RFG must be sampled and
tested to meet all applicable RFG downstream standards.
Blending With Oxygenate
Section 80.78(a)(6) prohibits the blending of any oxygenate with RFG, except that
oxygenate may be blended with RFG that is designated as OPRG provided the RFG is used in an
oxygenated fuels program area during the oxygenated fuels control period. As a result, any
oxygenate may be blended with RFG provided the RFG is designated as OPRG and is used in an
oxy fuels program as specified in § 80.78(a)(6). In addition, only in the case of remediation for
RFG that violates a downstream standard and regardless of whether the RFG is designated as
OPRG or not-OPRG or whether the RFG is used in an oxy fuels program, oxygenate may be
blended with off-spec RFG. Whenever oxygenate blending is used as a remedial action,
subsequent to blending the RFG must be sampled and tested to meet all applicable RFG
downstream standards and requirements, including in the case of VOC-controlled RFG the RVP
or VOC emissions reduction standards and the prohibition against mixing ethanol and other
oxygenates, and the maximum oxygen content standards. Moreover, any mixture of oxygenates
in the resulting blend must conform to an approved oxygenate blend. Allowable oxygenate
mixtures are discussed in the Oxy Fuel Section of this document.
The party performing remedial oxygen blending does not need to be registered as an
oxygenate blender.
2 The constraints on fungible mixing are discussed in the
Transition Issues Section, Question 4, and preclude: the mixing
of ethanol-based VOC-controlled RFG with non-ethanol-based VOC-
controlled RFG during the period January 1 through September 15
of each year; the mixing of RFG designated as OPRG with RFG that
is not designated as OPRG; and the mixing of simple model and
complex model RFG.
December 5, 1994 (
-------
Each of the remedial actions discussed in this answer would be appropriate at all stages in
the gasoline distribution system, including pipelines and terminals, and retail outlets and
wholesale purchaser-consumer facilities. These remedial actions also would be appropriate for
use by refiners and importers who discover that RFG is off-spec subsequent to the gasoline being
shipped from the refinery or import facility.
On any occasion when a party takes remedial actions for an RFG violation, using any of
the mechanisms discussed in this answer, the party should retain documents that reflect: the
reason the party believed the gasoline to be in violation (e.g., test results); the actions taken to
correct the violation; and any actions taken to prevent future violations.
TEST TOLERANCES
1. Question: Exactly where will EPA define downstream and upstream in regards to applying
enforcement test tolerances at refineries, including terminals registered as refineries? For
example, does the enforcement test tolerance apply to RFG after it has been produced and
certified at a refinery and transferred from the blending tank to other tankage at that refinery?
Answer: The enforcement test tolerances (which are relevant only to the
"downstream standards" which are oxygen, benzene, and RVP) would apply to samples of RFG
collected subsequent to movement of the RFG from the tank in which the certification sampling
is conducted, even when these subsequent samples are collected within the refinery or import
facility where the gasoline is produced or imported. Thus, a refiner or importer may conduct a
quality assurance program of the RFG located at the refinery or import facility that previously
has been certified, and use the "downstream" enforcement test tolerances when evaluating the
quality assurance samples.
2. Question: In the Preamble to the RFG Final Rule, EPA included an initial enforcement test
tolerance for benzene of 0.21 vol%, and described a round robin testing process that would result
in a final benzene test tolerance that would be effective beginning January 1, 1996. Is the round
robin process proceeding on time, so the final benzene test tolerance will be in place by January
1, 1996?
Answer: The benzene test tolerance round robin program that is described in the
Preamble to the RFG Final Rule has not proceeded according to the schedule described there.
See. 59 FR 7764 (February 16, 1994). The difficulty has been in identifying the precise nature of
the benzene test under the Final Rule. Section 80.46(e) specifies that the benzene test method is
ASTM method D-3606-92, but this section also states that "[instrument parameters must be
adjusted to ensure complete resolution of the benzene, ethanol and methanol peaks because
ethanol and methanol may cause interference with ASTM standard method D-3603-92 when
present." The best set of modifications currently known to EPA were recently announced. See.
Test Methods Question 1 from the November 21, 1994 Question and Answer Document. EPA
December 5, 1994 10
-------
now believes the benzene round robin process may begin in the near future, because the benzene
test method issue has been resolved. Nevertheless, it will not be possible to conclude the
benzene round robin process within the time discussed in the Preamble to the RFG Final Rule.
Therefore, EPA has decided to extend applicability of the
initial benzene enforcement test tolerance (0.21 vol%) beyond January, 1996, until six months
after the date upon which EPA announces a new test tolerance to be based upon the outcome of
the pending EPA/API round robin test program.
TRANSITION ISSUES
1. Question: Consider a gasoline retailer or wholesale purchaser-consumer in an RFG covered
area who received a delivery of gasoline before December 1, 1994 (which would be conventional
gasoline), and due to the normal pattern of gasoline use could not receive another delivery of
gasoline until after January 1, 1995. The gasoline in this party's storage tank would be
conventional until the storage tank could be turned-over from gasoline deliveries of RFG that
occur subsequent to January 1, 1995. An example of a party in this situation is a marina that fills
its gasoline tank in the Fall and then closes until the Spring. Will EPA enforce the RFG
requirement at a facility such as this beginning January 1, 1995? Does EPA expect a facility
such as this to pump out its storage tanks before January 1, 1995 and replace the conventional
gasoline with RFG?
Answer: Under §§ 80.65(a) and 80.78(a)(l) retailers and wholesale purchaser-
consumers located within an RFG covered area are prohibited from selling, dispensing, or storing
gasoline that is not RFG beginning January 1, 1995. As a result, all retail outlets and wholesale
purchaser-consumer facilities, including marina retail outlets, are required to have only RFG in
their storage tanks beginning January 1, 1995.
Nevertheless, as part of any enforcement action for violation of the RFG requirements
EPA will consider the normal patterns of gasoline deliveries to a retail outlet or wholesale
purchaser-consumer. EPA will allow a retail outlet or wholesale purchaser-consumer facility to
transition from conventional gasoline to RFG subsequent to January 1, 1995 without having to
pump-out the storage tank (other than through normal gasoline usage) provided the party is able
to demonstrate that the following conditions are met:
1. No deliveries of conventional gasoline were made to the facility after November 30,
1994.
2. The party could not have turned over the gasoline in a storage tank from conventional to
RFG through deliveries of RFG prior to January 1, 1995 without pumping out the
conventional gasoline in the tank. This condition would be met, for example, in
the case of a party (such as the marina described in the question) who required a
December 5, 1994 11
-------
delivery of gasoline before December 1, 1994 and could not accept another
delivery until after January 1, 1995.
3. The party received delivery of the largest possible volume of RFG into the storage tank in
question as soon as was possible. Thus, a wholesale purchaser-consumer or
retailer who received a large delivery of conventional gasoline before December
1, 1994 should order the largest volume of RFG possible before January 1, 1995,
and should continue to transition the storage tank to RFG as quickly as possible
subsequent to January 1, 1995.
4. The pattern of gasoline deliveries into the storage tank in question is consistent with the
historical pattern of gasoline deliveries into that tank, and was not the result of a
decision to maximize the volume of conventional gasoline purchased in order to
minimize the volume of RFG purchased.
IMPORTER ISSUES
1. Question: May an importer classify imported product as GTAB when that product meets all
the EPA requirements for RFG or conventional gasoline, and take advantage of any specification
"slack" in imported gasoline through component blending under the GTAB guidance?
Answer: An imported product that meets the definition of gasoline may be
classified as GTAB by the importer if the conditions specified in the August 29, 1994 Question
and Answer document are satisfied, regardless of whether the gasoline meets the commercial or
regulatory standards for RFG or conventional gasoline when imported. As a result, imported
product that meets the definition of gasoline (i.e., meets commercial specifications for octane,
etc.) and meets all importer RFG or anti-dumping standards, may be classified as GTAB and
blended with blendstocks by the importer provided the importer meets all the GTAB conditions.
For example, in a case where the product produced using GTAB is RFG, and where the benzene
content of the imported product is less than 1.00 vol% and the importer in question is meeting
the benzene standard on a per-gallon basis, additional benzene may be blended with the imported
product up to the 1.00 vol% per gallon benzene standard for RFG.
2. Question: EPA has stated that RFG imports must be tested and certified before off-loading a
marine vessel. Must this certification occur while the vessel is docked, or may it occur while the
vessel is at anchor? If a vessel is certified while at anchor, may the gasoline be transported to
shore tanks using smaller vessels ("lightering"), with product transfer documents to document the
transfers?
Answer: Imported gasoline normally must be certified while the gasoline is on
board the marine vessel used to transport the gasoline to the United States, and the certification
sampling must be performed subsequent to the vessel's arrival in the port where the gasoline will
December 5, 1994 12
-------
be off-loaded. This sampling may not be performed while the vessel is at the foreign loading
port or at sea. Thus, certification sampling could be performed while the vessel is at anchor in
the U.S. port of entry and before the vessel actually docks at the import terminal. In the case of
harbors that may have more than one port designation for U.S. Customs purposes (e.g., the New
York harbor area), only a single certification is necessary even if the gasoline is off-loaded at
terminals located in more than one U.S. Customs "port" within that same harbor. If the ship sails
from one U.S. port to another that is not part of the same harbor (e.g., from Baltimore to New
York), separate certifications are necessary for the gasoline off-loaded in each port.
In addition, when the gasoline on a vessel has been fully certified (each vessel
compartment is certified separately, or the homogeneity of the gasoline in the vessel's
compartments is established and the vessel's gasoline is certified using a composite sample
protocol), the gasoline may be transferred to shore tanks using smaller vessels or barges
(lightered) as fully certified RFG or conventional gasoline. These lightering transfers may be to
terminals located in any harbor, and are not restricted to terminals located in the harbor where the
ship is anchored. For example, certified RFG could be transferred from a ship anchored in New
York harbor to a lightering vessel and transported to Albany, New York or Providence, Rhode
Island without separately certifying the gasoline upon arrival in Albany or Providence. In this
lightering situation transfers to a lightering vessel must meet the product transfer document
requirements.
[Note: The following is an update for the answer to Question 2 under Importer Issues from
the August 29,1994 and October 3,1994 Question and Answer Documents, to clarify the
treatment of tank bottoms in GTAB blending tanks and the baseline against which GTAB
must be measured.]
2. Question: What options are available to an importer who wishes to import product that meets
the definition of gasoline, but who wishes to further process this gasoline to meet the standards
for conventional gasoline or RFG after the gasoline arrives at the U.S. port of entry?
Answer: Under the RFG final rule an importer must include all imported product that
meets the definition of gasoline in the importer's compliance calculations for either RFG or
conventional gasoline. If this imported gasoline is then processed by blending with additional
blendstock, the subsequent blending constitutes a refinery operation for which all refiner
requirements must be met, including refinery standards, refiner sampling and testing,
independent sampling and testing in the case of RFG, record keeping, reporting, and attest
engagements. Further, the RFG or anti-dumping standards for such an operation must be met
solely on the basis of the blendstocks used, and the previously imported (and previously
accounted-for) gasoline may not be included. This is true regardless of whether the subsequent
blending-refming is conducted by the original importer of the gasoline, or by another party.
A company that is an importer may exclude gasoline imported by that company from the
company's importer compliance calculations, provided that the company uses the gasoline as a
December 5, 1994 13
-------
blendstock in a refinery operated by the company, and includes the gasoline-treated-as-
blendstock (GTAB) in the company's refinery compliance calculations. This accounting of
GTAB must occur as follows:
1) The GTAB must be included in the compliance calculations for gasoline produced
at a refinery operated by the same company that is the importer, for which
the company meets all refiner standards and requirements.
2) The importer-company may not transfer title to the GTAB to another party until
the GTAB has been used to produce gasoline and all refinery standards
and requirements have been met for the gasoline produced.
3) The refinery at which the GTAB is used to produce gasoline must be physically
located at the same terminal at which the GTAB first arrives in the U.S.
(the import facility), or at a facility to which the GTAB is directly
transported from the import facility.
4) The GTAB must be completely segregated from any other gasoline, whether
conventional or RFG, and including any gasoline tank bottoms, prior to
the point of blending, and sampling and testing, in the company's refinery
operation. The GTAB may, however, be placed into a storage tank that
contains other GTAB imported by that importer. The GTAB also may be
discharged into a tank containing finished gasoline of the same category as
the gasoline which will be produced using the GTAB (i.e., conventional
gasoline or RFG, and if RFG the same category with regard to VOC
control and OPRG) provided the blending process is performed in that
same tank.
5) The company must account for the properties and volume of gasoline produced
using GTAB in a manner that excludes the volume and properties of any
gasoline that previously has been included in any refiner's or importer's
compliance calculations. Thus, if GTAB and blendstock are combined in
a storage tank that also contains a tank bottom of gasoline, the tank
bottom-gasoline must be the same category as the gasoline which will be
produced using the GTAB i.e., conventional gasoline or RFG, and if RFG
the same category with regard to VOC control and OPRG. The gasoline
tank bottom may not be included in the company's refinery compliance
calculations for that batch of gasoline. This exclusion of previously-
accounted-for gasoline should be accomplished using the following
approach.
a) Determine the volume and properties of any tank bottom that is gasoline
before any gasoline production begins.
December 5, 1994 14
-------
b) Add the GTAB plus any blendstock to the storage tank, and completely
mix the tank.
c) Determine the volume and properties of the gasoline contained in the
storage tank after blending is complete. Mathematically subtract
the volume and properties of the tank bottom to determine the
volume and properties of the GTAB plus blendstock added, which
is reported to EPA as a batch of gasoline produced.
d) All sampling and testing, including the sampling and testing of tank
bottoms, must be carried out using the independent sampling and
testing provisions at § 80.65(f) if the gasoline being produced is
RFG.
e) In the alternative, a company that has a "blending" tank that is used only to
combine GTAB and blending components (and no gasoline is
added to the tank), may account for the gasoline produced in such a
blending tank by sampling and testing for the properties of the
batch after GTAB and blendstock are added and mixed, and
reporting the volume of gasoline shipped from that tank, at the
analyzed properties, up to the point a new blend is produced by
adding new GTAB and blendstock.
6) The finished gasoline produced using the GTAB (including the imported product
and any blendstocks blended with the GTAB) must be evaluated for
compliance using the baseline that applies to the company in its importer
capacity, and not in its refiner capacity. In a case where the gasoline being
produced using GTAB is conventional gasoline, the company should use
the importer baseline that would apply in the absence of § 80.101(f)(3).
7) The company must meet all importer sampling and testing requirements that apply
to imported gasoline for the GTAB.
8) The company must include the volume and properties of each batch of GTAB in
the quarterly importer reports to EPA, but with a notation that the batch is
not included in the importer compliance calculations because the product
is GTAB. Any GTAB that ultimately is not used in the company's
refinery operation (e.g., a tank bottom of GTAB at the conclusion of the
refinery operation), must be treated as newly imported gasoline, for which
all required sampling and testing, and record keeping must be
accomplished, and included in the company's importer compliance
calculations for the averaging period when this sampling and testing
occurs.
December 5, 1994 15
-------
9) The company must retain records that reflect the importation, sampling and
testing, and physical movement of any GTAB, and must make these
records available to the CPA or CIA attester, or to EPA, on request.
10) The company must require the CPA or CIA who conducts the company's annual
attest engagement, pursuant to § 80.65(h) and §§ 80.125 through 130, to
specifically review the accounting for each batch of GTAB, to attest that
all GTAB was included in the company's refinery compliance calculations
in accordance with the procedures specified in this Answer, and to include
the details of this review in the attest report.
December 5, 1994 16
------- |