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ENVIRONMENTAL PROTECTION AGENCY

Environmental Protection Agency

CFR Citation: 40 CFR Part 52

EPA ID: [EPA-R05-OAR-2006-0547; FRL-8274-4]

NOTICE: RULES

ACTION: Air programs; approval and promulgation; State plans for designated facilities and pollutants:

DOCUMENT ACTION: Final rule.

SUBJECT CATEGORY: Approval and Promulgation of Air Quality Implementation Plans; Michigan; Control of Gasoline Volatility

DATES: This final rule is effective on March 2, 2007.

DOCUMENT SUMMARY: EPA is approving a State Implementation Plan (SIP) revision submitted by the State of Michigan on May 26, 2006, and July 14, 2006, establishing a lower Reid Vapor Pressure (RVP) fuel requirement for gasoline distributed in the Southeast Michigan area which includes Lenawee, Livingston, Macomb, Monroe, Oakland, St. Clair, Washtenaw, and Wayne Counties. Michigan has developed these fuel requirements to reduce emissions of volatile organic compounds (VOC) in accordance with the requirements of the Clean Air Act (CAA). EPA is approving Michigan's fuel requirements into the Michigan SIP because EPA has found that the requirements are necessary for Southeast Michigan to achieve the 8hour ozone National Ambient Air Quality Standard (NAAQS). On August 15, 2006, the EPA published a Notice of Proposed Rulemaking (NPRM) proposing to approve the SIP revision. During the comment period EPA received adverse comments from one commenter.

This document summarizes the comments received, EPA's responses, and finalizes the approval of Michigan's SIP revision to establish a RVP limit of 7.0 pounds per square inch (psi) for gasoline sold in Southeast Michigan.

SUMMARY: Michigan,

SUPPLEMENTAL INFORMATION

Throughout this document whenever ``we,'' ``us,'' or ``our'' is used, we mean EPA. This supplementary information section is arranged as follows:
I. What is the background for this action?
II. What is our response to comments received on the notice of proposed rulemaking?
III. Is this action consistent with provisions of the Energy Policy Act (EPAct)?
IV. What action is EPA taking today?
V. Statutory and Executive Order Reviews.

I. What is the background for this action?

On June 15, 2004, the EPA designated eight counties in Southeast Michigan as nonattainment for the 8hour ozone standard (DetroitAnn Arbor CMSALenawee, Livingston, Macomb, Monroe, Oakland, St. Clair, Washtenaw, and Wayne Counties). These counties were initially classified under the CAA as Moderate, but EPA later reclassified them as Marginal on September 22, 2004. See 69 FR 56697 (September 22, 2004) for further details. As part of this reclassification, the Michigan Department of Environmental Quality (MDEQ) and the Southeast Michigan Council of Governments (SEMCOG) committed to a schedule to identify and implement controls that will help the area attain by the Marginal attainment date of June 15, 2007.

To bring this area into attainment, the State is adopting and implementing a broad range of ozone control measures including control of emissions from cement manufacturing, control of emissions from the use of consumer/commercial products, and the implementation of a 7.0 psi lowRVP fuels program.

The State of Michigan submitted a SIP revision on May 26, 2006, and July 14, 2006, which included legislation establishing a lower RVP fuel requirement for gasoline distributed in the 8hour ozone nonattainment area portions of Southeast Michigan. In addition, Michigan submitted additional technical support for the SIP revision, including materials supporting the State's request to waive the CAA preemption of State fuel controls pursuant to section 211(c)(4) of the CAA. On August 15, 2006, EPA proposed approval of the State's SIP revision to establish a 7.0 psi lowRVP fuel program in the Southeast Michigan area which includes Lenawee, Livingston, Macomb, Monroe, Oakland, St. Clair, Washtenaw, and Wayne Counties. (See 71 FR 46879.) As detailed in the proposed approval, EPA found the State's demonstration sufficient to satisfy the necessity requirement of Section 211(c)(4)(C) of the CAA. In addition, EPA also proposed approval of the State's SIP revision as consistent with the provisions of the Energy Policy Act (EPAct), based on our interpretation of the EPAct provisions discussed at 71 FR 32532 (June 6, 2006).
II. What is our response to comments received on the notice of proposed rulemaking?

During the comment period we received two comment letters on the August 15, 2006, proposal. The first, from the Grand Rapids Area Chamber of Commerce, supported the proposed SIP approval and recommended that it be implemented as quickly as possible. The second, from the National Petrochemical and Refiners Association (NPRA), raised concerns regarding whether the August 15, 2006, proposal addressed all the pertinent requirements under EPAct needed to approve Michigan's fuel waiver request. NPRA's comments are addressed below.

Comment: The NPRA expressed support for EPA's fuel controls preemption review process, but commented that EPA could not approve Michigan's request for a waiver from preemption of state fuel controls, prior to finding, after public review and comment, that the proposed new fuel would not cause either supply or distribution disruptions or have an adverse impact on fuel producibility in the affected or contiguous areas. The NPRA also stated that EPA should consult with the Secretary of Energy and publish findings in the Federal Register that the proposed new fuel will not cause supply or distribution disruptions and will not have an adverse impact on fuel producibility in the affected area or in contiguous areas.

Response: In our proposed approval of Michigan's waiver of preemption to adopt a 7.0 psi RVP fuel program, we explained that the EPAct amended CAA section 211(c)(4)(C) by requiring EPA, in consultation with the Department of Energy (DOE), to determine the total number of fuels approved into all SIPs as of September 1, 2004, under section 211(c)(4)(C), and publish for public review and comment a list of such fuels, including the state and Petroleum Administration for Defense District (PADD) in which they are used. We explained that the EPAct also placed three additional restrictions on our authority to waive preemption by approving a state fuel into the SIP. Under one restriction, where our approval of a new fuel would not increase the total number of fuels approved into SIPs as of September 1, 2004, because the total number of fuels at that point is below the number of fuels approved into SIPs as of September 1, 2004, we make a finding, after consultation with the DOE, that the new fuel will not cause supply or distribution interruptions or have a significant adverse impact on fuel producibility in the affected or contiguous areas.

We further explained that, on June 6, 2006, we had discussed an interpretation of the EPAct that required EPA to identify and publish a list of the total number of fuels approved into all SIPs as of September 1, 2004, and imposed three restrictions on our ability to approve future state fuel programs into SIPs.

We also explained that, based on our June 6, 2006, interpretation of the EPAct amendments, Michigan's 7.0 psi RVP requirement for Southeast Michigan would not increase the total number of fuels approved into all SIPs, as of September 1, 2004, and was not a ``new fuel type,'' because 7.0 psi RVP is on the published draft list of fuels. We further explained that we did not need to make a finding, after consultation with DOE, on the effect of a 7.0 psi RVP fuel requirement in Southeast Michigan on fuel supply and distribution in either Southeast Michigan or the contiguous areas because the fuel was not a new fuel, and the total number of fuels approved into SIPs as of our consideration of Michigan's 7.0 psi RVP fuel was not below the number of fuels approved into SIPs as of September 1, 2004, or, in other words, below the total number of fuels on the published draft list. 71 FR 46879, 4688246883 (August 15, 2006).

At proposal, we also referenced that an April 2005 American Petroleum Institute study titled ``Potential Effects of the 8Hour Ozone Standard on Gasoline Supply, Demand and Production Costs,'' which had concluded that the petroleum industry was capable of supplying 7.0 psi RVP fuel without any fuel supply or distribution disruptions. 71 FR 46879, 4688246883.

We have now finalized the interpretation of the EPAct amendments, and published our final list of fuels, subject to a few revisions. See the final Federal Register notice
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entitled ``Boutique Fuels List'' under Section 1541(b) of the Energy Policy Act.'' 71 FR 78192 (December 28, 2006). Under this final interpretation, because the 7.0 psi RVP is not a new fuel; and the total number of fuels approved into all SIPs at this time is not below the number of fuels on the final list of fuels, we are not required to make a finding, after consultation with DOE, on the effect of Michigan's 7.0 psi RVP fuel requirement in Southeast Michigan on fuel supply and distribution in either Southeast Michigan or the contiguous areas.

Comment: The commenter emphasized that the fuel supply analysis and public comment duties outlined in the EPAct apply to this approval process because currently there are no other summer maximum 7.0 psi RVP conventional gasoline areas within hundreds of miles of Detroit and Ann Arbor.

Response: As earlier explained, under the fuel type interpretation that we have adopted, where there is a new fuel type and there is ``room'' on the fuels list, we may approve a state fuel program, after consultation with the DOE, and a finding that the state fuel will not cause either supply or distribution interruptions; or have a significant adverse impact on fuel producibility in either the affected or contiguous areas. This fuel is not a new fuel and the total number of fuels approved into all SIPs at this time is not below the number of fuels on the final list of fuels (See 71 FR 78192), therefore we do not believe that we are required to make a finding on the effect of a 7.0 psi RVP fuel requirement in Southeast Michigan on fuel supply and distribution in either Southeast Michigan or the contiguous areas. In addition, EPA consulted with DOE and they have concurred with our determination that the 7.0 psi Michigan fuel does not constitute a new boutique fuel and hence a supply study is not required.
III. Is this action consistent with provisions of the Energy Policy Act (EPAct)?

In a Federal Register notice published on June 6, 2006 (71 FR 32532), we discussed an interpretation of the EPAct provisions which was based on a fuel type interpretation. We also identified and published a draft list of the total number of fuels approved into all SIPs as of September 1, 2004, pursuant to section 211(c)(4)(C)(i). On August 15, 2006, we proposed approval of Michigan's SIP revision as consistent with our June 6, 2006, interpretation of the EPAct provisions. On December 21, 2006, EPA Administrator Stephen L. Johnson signed a Federal Register notice containing EPA's final interpretation of the EPAct provisions. The final notice was published in the Federal Register on December 28, 2006. (See 71 FR 78192.) Our approval of Michigan's 7.0 psi RVP program is consistent with EPA's final promulgated interpretation of the EPAct.

IV. What action is EPA taking today?

EPA is approving a SIP revision submitted by the State of Michigan on May 26, 2006, and July 14, 2006, establishing a 7.0 psi RVP fuel requirement for gasoline distributed in Southeast Michigan which includes Lenawee, Livingston, Macomb, Monroe, Oakland, St. Clair, Washtenaw, and Wayne Counties. EPA is approving Michigan's fuel requirements into the SIP because EPA has found that the requirements are necessary for Southeast Michigan to achieve the 8hour NAAQS for ozone. EPA's approval is consistent with the boutique fuel provisions of section 211(c)(4)(C) enacted in EPAct.
V. Statutory and Executive Order Reviews

Executive Order 12866: Regulatory Planning and Review

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a ``significant regulatory action'' and, therefore, is not subject to review by the Office of Management and Budget. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use

Because it is not a ``significant regulatory action'' under Executive Order 12866 or a ``significant regulatory action,'' this action is also not subject to Executive Order 13211, ``Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355, May 22, 2001).

Regulatory Flexibility Act

This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).

Unfunded Mandates Reform Act

Because this rule approves preexisting requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 1044).
Executive Order 13175: Consultation and Coordination With Indian Tribal Governments

This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

Executive Order 13132: Federalism

This action also does not have Federalism implications because it does not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act.
Executive Order 13045: Protection of Children From Environmental Health and Safety Risks

This rule also is not subject to Executive Order 13045 ``Protection of Children from Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997), because it is not economically significant. National Technology Transfer Advancement Act

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the state to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply.
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Paperwork Reduction Act

This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

Congressional Review Act

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a ``major rule'' as defined by 5 U.S.C. 804(2).

Under Section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by April 2, 2007. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See Section 307(b)(2).)

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Ozone, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.

Dated: January 18, 2007.
Mary A. Gade,
Regional Administrator, Region 5.
40 CFR part 52 is amended as follows:
PART 52[AMENDED]
1. The authority citation for part 52 continues to read as follows:

Authority: 42 U.S.C. 7401 et seq.
Subpart XMichigan
2. The table in Sec. 52.1170(c) entitled, ``EPA Approved Michigan Regulations'' is amended by adding a new entry in the ``State Statutes'' section after ``House Bill 5016'' titled ``House Bill 5508'' to read as follows:
Sec. 52.1170 Identification of plan.
* * * * *
(c) * * *
EPAApproved Michigan Regulations State
Michigan citation Title effective EPA approval Comments date date * * * * * * * State Statutes
* * * * * * * House Bill 5508.............. Amendment to 4/06/06 3/2/07, [Insert ................................. Motor Fuels page number Quality Act, where the Act 44 of 1984. document begins]. * * * * * * * * * * * *
[FR Doc. E71421 Filed 13007; 8:45 am]
BILLING CODE 656050P

FOR FURTHER INFORMATION CONTACT Francisco J. Acevedo, Environmental Protection Specialist, Criteria Pollutant Section, Air Programs Branch (AR18J), Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 8866061,
acevedo.francisco@epa.gov.