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07-31-2007

EPA Actions that Help Ease the Impact of Gasoline Requirements on Fuel Supply

• Market-Based Trading System- Tier 2 Vehicle & Gasoline Sulfur Program. A market-based trading system allows the refinery industry to comply with the rules more cost-effectively. Under the averaging, banking, and trading program, companies have the flexibility to reduce costs by averaging sulfur levels among different refineries, between companies, and across time.
• Small Refiner Program-Tier 2 Vehicle & Gasoline Sulfur Program. The small refiner provision gives small refiners more time to meet the standards, recognizing their financial challenges in raising capital for the sulfur control investments.
• Geographic Phase-in- Tier 2 Vehicle & Gasoline Sulfur Program. The geographic phase-in provides a slightly higher interim sulfur standard for gasoline sold in parts of the Western U.S. This program recognizes that this area is dominated by small capacity, geographically-isolated refineries that would have a more difficult time competing for engineering and construction resources to modify their refineries to meet the standards.
• Hardship Provision- Tier 2 Vehicle & Gasoline Sulfur Program. The hardship provision of the Tier 2 Sulfur rule allows refineries to apply on a case-by-case basis for additional time and flexibility to meet the sulfur standards, based on a showing of unique circumstances. Under this program, EPA has granted hardship waivers to seven refineries. While the environmental impact of these waivers is insignificant, this program has contributed to ensuring the supply of gasoline is not disrupted while these companies make the investments to achieve full compliance with the sulfur program.
• Refiner and Importer Requirements for Downstream Oxygenate Blending. EPA's enforcement office issued enforcement discretion (to be followed by a rulemaking) providing additional flexibility for facilities which blend ethanol into Reformulated Blendstock for Oxygenate Blending (RBOB) in New York & Connecticut. Current regulations require a refinery to track RBOB production to ensure a terminal blends the correct amount of ethanol with the RBOB. However, due to the complex gasoline marketplace in NY and CT, it is extremely difficult to track RBOB from the refinery where it is produced to the terminal where it is blended with ethanol. Therefore, EPA has allowed refiners of RBOB to use an alternative retail station survey system to ensure that the appropriate amount of ethanol is added downstream.
• MSAT Baseline Adjustments.The mobile source air toxics (MSAT) rule requires each refinery to maintain the toxics performance of the gasoline it produced during the baseline period 1998-2000. The rule allows EPA to adjust the toxics baseline in limited cases, where unusual and unavoidable circumstances occurred during the baseline period. EPA is granting such baseline adjustments as appropriate. These adjustments can allow for higher refinery gasoline production volumes in cases where compliance with the toxics rule is being achieved by limiting gasoline production.
• Blendstock Accounting Requirements. This rulemaking amendment eliminates the accounting and reporting requirements associated with refiners' transfer or sale of gasoline blendstocks. This will improve refiners' overall ability to produce gasoline. Refiners supported this action. The final rulemaking was completed February 11, 2002.
• VOC Adjustment Rule. EPA allowed a relaxation of the VOC performance standard for RFG using 10 volume percent ethanol in the Chicago and Milwaukee RFG areas. It reduces the summertime VOC performance standard by two percentage points (equivalent to an increase in RVP of approximately 0.3 pounds per square inch (psi). Because ethanol increases the RVP of a fuel blend, the blendstock for ethanol RFG has to be lower than for non-ethanol RFG blends. This adjustment increases the flexibility available to refiners supplying these areas. Survey data show that 100 percent of the RFG supplied to these RFG areas take advantage of this adjustment. Final rulemaking was completed on July 17, 2001.
• Previously Certified Gasoline. This rulemaking amendment allows refiners to upgrade conventional gasoline to RFG, if it meets the RFG performance standards, thereby allowing for greater flexibility in providing additional RFG when supply is tight. Refiners supported this action. Final rulemaking was completed December 28, 2001.
• Tank Turnover Testing Tolerance. This revision to current EPA enforcement guidance allows terminal operators a broader testing tolerance than currently permitted for the initial transition from winter to summer fuel. All refiners and terminal operators supported this new 2% testing tolerance. EPA's Enforcement Office issued enforcement guidance effective February 11, 2002.
• Downstream Sulfur Content Standards for Gasoline from Transmix. EPA's enforcement office issued enforcement discretion (to be followed by a rulemaking) providing additional flexibility for facilities which process or blend transmix. Transmix is a byproduct mixture of gasoline and diesel fuel generated by pipelines and terminals. Transmix processors and blenders had been required to meet refinery standards for gasoline. However, because transmix is generated and processed downstream of refineries, EPA permitted transmix processors and blenders to meet the less restrictive downstream sulfur standards for gasoline.
• California Enforcement Requirements. EPA has waived several enforcement requirements for California refiners so that they can meet federal RFG requirements by instead complying with local California requirements. This provides additional flexibility to these refiners since they will not be subject to duplicative enforcement requirements.
• Reducing Commuter Costs and Fuel Demand. Since 1970, the number of miles driven by the public has nearly tripled from more than 1 trillion miles, to almost 3 trillion miles in 2002. In many large metropolitan areas where these increases have been among the highest, long commutes, and busy schedules compound to create crowded roads, poor air quality, and increased fuel costs. To help tackle these problems, EPA and the U.S. Department of Transportation (DOT) created Best Workplaces for Commuters. This program recognizes employers that offer their employees an excellent package of commuter benefits such as transit passes, carpools and vanpools, and telework. A typical worker who switches from driving alone to using commuter benefits for mass transit can save more than $1,000 a year in transportation costs, such as gas and wear and tear, and can avoid driving 5,000 miles a year.