United States             Air and Radiation         EPA420-F-99-015
                  Environmental Protection                         May 1999
                  Agency

                  Office of Mobile Sources
&EPA      Regulatory
                  Announcement
                   Direct Final Rule Allows Evaluation of
                   Puerto Rico Gasoline with Summer
                   Complex Model
                  The U.S. Environmental Protection Agency (EPA) issued a direct final
                  rulemaking which allows Puerto Rico gasoline, under limited
                  circumstances, to be evaluated using the summer Complex Model.
                  Currently, such gasoline is evaluated using the winter Complex Model.
                  Background
                  The anti-dumping standards of the reformulated gasoline (RFG) program
                  require refiners to produce conventional gasoline each year that is as
                  clean, with respect to exhaust toxics and oxides of nitrogen (NOx)
                  emissions, as the gasoline produced by the refiner in 1990. The exhaust
                  toxics and NOx emissions are determined using the Complex Model,
                  based on measured properties, such as sulfur and benzene content. The
                  Complex Model includes both a summer version and a winter version
                  which, for a variety of reasons, yield different emissions for a given fuel
                  composition. The summer Complex Model is used to evaluate gasoline
                  supplied to an area subject to gasoline volatility standards when these
                  standards are in effect; the winter Complex Model is used to evaluate all
                  other gasoline. Gasoline sold in areas not subject to the volatility stan-
                  dards, such as Puerto Rico, Hawaii, and Alaska, is evaluated using the
                  winter Complex Model.
                                                         > Printed on Recycled Paper

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In order to determine a refiner's compliance standard for the averaging
period, the anti-dumping provisions require the use of a specified compli-
ance baseline equation. This equation compares a refiner's conventional
gasoline production for the year with that refiner's individual baseline.
The equation includes a component which compares the emissions of a
refiner's excess volume of conventional gasoline to the annual average
statutory baseline emissions, a combination of the summer and winter
statutory baselines. As a result, the emissions of gasoline destined for
areas such as Puerto Rico are compared to that part of the compliance
baseline equation that is based in part on the summertime portion of the
statutory baseline. This means that gasoline sold in these areas is required
to be evaluated, on a batch basis, using the winter Complex Model  but is
then compared to an annual average value. This inconsistency may result
in unintended negative effects for refiners and for the environment, due to
quality changes refiners may make in their gasoline pools in order to
achieve compliance.
The current anti-dumping regulations applicable to areas not subject to
the volatility standards can negatively affect the quality of a refiner's
other gasoline, such as mainland RFG, by requiring the refiner to shift
certain production from RFG to conventional gasoline in order to comply
with the requirements for its gasoline which is destined for areas not
subject to the volatility standards. Thus the  emissions in areas which most
need clean gasoline—ozone nonattainment areas participating in the RFG
program—are artificially elevated. Conversely, areas not subject to the
volatility standards, which are likely in attainment for ozone, receive
cleaner conventional gasoline due to the unintended results of the current
anti-dumping rules.

This rule helps to provide the cleanest gasoline where it is needed most. It
is possible that areas not subject to the volatility standards could see
increases in the emissions regulated under the anti-dumping requirements.
However, this rule will allow refiners to use the most seasonally-appropri-
ate Complex Model for gasoline sold in Puerto Rico, and will not result in
an increase in emissions  from conventional gasoline compared to 1990
levels.  Thus, the goals of the anti-dumping program will be preserved.
Indeed, this adjustment simply works to restore the proper balance to the
distribution of environmental benefits under the RFG program. EPA will
need more information from other refiners before proposing to broadly
apply similar provisions  in other areas not subject to EPA's volatility
requirement.

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        on
Refiners are required to petition EPA in order to use the summer com-
plex model and modified compliance baseline equation for their Puerto
Rico gasoline.  EPA believes that refiners will submit such a petition only
if it is economically beneficial for them to do so. Most refiners that
could potentially petition EPA under this rule are operating satisfactorily
under the current requirements and are likely to be unaffected by this
action.
For
Additional documents on the RFG program are available electronically
from the EPA Internet server at:

    http://www.epa.gov/oms/fuels.htm

For further information on this direct final rule, please contact Christine
Brunner (734-214-4287) or Felicia Seals-Buchanan (734-214-4589) at:

    U.S. Environmental Protection Agency
    National Vehicle and Fuel Emissions Laboratory
    2000 Traverwood Dr.
    Ann Arbor, MI 48105

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