On December 28, 2006, EPA published a list of the total number of fuels approved into all SIPs, under
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section 211(c)(4)(C), as of September 1, 2004 , in the Federal Register. 71 FR 78192. The final list (known as the Boutique Fuels List) includes eight types of fuels approved into SIPs under section 211(c)(4)(C) as of September 1, 2004, but does not include CARB diesel fuel because it is not approved into California's SIP under section 211(c)(4)(C).\2\
\2\ Pursuant to section 211(c)(4)(B), California is not subject to the restriction in section 211(c)(4)(A) which triggers

applicability of section 211(c)(4)(C).

ACLPI is correct that Texas Low Emission Diesel fuel (also known as Texas LED fuel) is one of the eight types of fuels on the Boutique Fuels List. ACLPI is not correct, however, in asserting that because CARB diesel fuel is included as an approved low emission diesel fuel under the Texas LED rules, CARB diesel fuel is therefore already included among the fuels on the Boutique Fuels List. Texas LED fuel requirements allow CARB diesel fuel as a compliance option in lieu of meeting the regulatory standard for aromatic hydrocarbons and cetane number, but they also allow other compliance options that would not meet CARB diesel fuel requirements.\3\
\3\ See Summary Comparison of CA and TX Diesel Fuel Programs in the docket for this rulemaking for a table describing major features of both programs. See also description of the Texas LED fuel program in EPA rulemaking actions at 66 FR 57196 (November 14, 2001), 70 FR 17321 (April 6, 2005), 70 FR 58325 (October 6, 2005), and 73 FR 8026 (February 12, 2008).

Specifically, Texas LED fuel requirements allow four compliance options in lieu of meeting the 10% (volume) maximum aromatic hydrocarbon limit and the minimum cetane number of 48: (1) Fuel meeting CARB diesel requirements (except those for small refiners) as of January 18, 2005, including the designated equivalent limits; (2) fuel meeting the requirements of a CARB certified alternative diesel formulation (except those for small refiners) approved before January 18, 2005 to meet CARB diesel regulations in effect as of October 1, 2003; (3) fuel meeting the Texas LED requirements for alternative diesel fuel formulations; and (4) fuel meeting the requirements of an alternative emission reduction plan approved as a substitute fuel strategy that will achieve equivalent oxides of nitrogen
(NOX) emission reductions. Based on quarterly reports submitted to the Texas Commission on Environmental Quality for 2007, more than half the volume of Texas LED fuel in 2007 consists of fuel meeting compliance options (3) and (4) noted above.\4\ Compliance options (3) and (4) do not exist in CARB diesel fuel.
\4\ See July 29, 2008 Memorandum, ``Summary of total TxLED production volumes reported for 2007'' in the docket for this rulemaking. This summary indicates that 41% of TxLED fuel volume consists of fuel meeting the Alternative Emission Reduction Plan compliance option, and 11% of TxLED fuel volume consists of fuel meeting the TxLED requirements for alternative diesel fuel formulations. Fortyseven percent of TxLED fuel volume for 2007 consists of fuel meeting either the California diesel fuel standards (except those for small refiners) or the California certified alternative fuel formulations (except those for small refiners).

The Texas LED fuel program was modeled on the CARB diesel fuel program, but Texas has adapted the program to meet needs specific to the Texas ozone nonattainment areas, especially the HoustonGalveston ozone nonattainment area, for which the Texas LED fuel program is approved into the SIP. As a result, the two diesel fuel programs are similar but not equivalent, as we noted in our August 3, 2006 final rule, in response to ACLPI's comment that we had failed to account for availability of similar diesel fuel in Texas in assessing the feasibility of using CARB diesel for nonroad engines. See 71 FR at 4398182.\5\
\5\ We described two significant differences between the two types of fuel: First, Texas LED rules allow the use of substitutes for LED fuel that achieve equivalent NOX reductions but not necessarily equivalent PM reductions, and second, Texas LED rules have been amended to remove the ultra low sulfur requirement, which directly affects PM emissions, from diesel fuel, while as of September 1, 2006, there is now a 15 ppm sulfur content requirement at the retail level for CARB diesel fuel. See 71 FR at 4398182. Compliance option (4) mentioned above corresponds to the first difference noted here.

ACLPI also asserts that, because CARB diesel is already approved in California, it is also approved in the applicable PADD. This is a reference to the PADD restriction, which is mentioned above and can be found in section 211(c)(4)(C)(v)(V). Under the PADD restriction, we are allowed to approve a fuel if it is ``approved in at least one [SIP] in the applicable [PADD].'' Arizona is in PADD 5, the same PADD as California, and Texas is in PADD 3. Our approval would, however, be subject to the other restrictions listed and discussed above. Thus, our approval must not cause an increase in the number of fuel types above those approved as of September 1, 2004, i.e., there must be ``room'' on the Boutique Fuels List, and we must consult with DOE on the effect of such a fuel on fuel supply and distribution in the affected or contiguous areas. As earlier mentioned, CARB diesel is approved into the California SIP. We would therefore, not be prohibited from approving CARB fuels for states within PADD 5, if there were room on the Boutique Fuels List. At this time, however, there is no room on the list, and therefore, we are prohibited from approving CARB diesel into Arizona's SIP since it would be a different fuel type that is not already on the list. Because CARB diesel fuel and Texas LED fuel are not equivalent, as noted above, the two are not interchangeable on the Boutique Fuels List, and thus the only type of low emission diesel fuel on the Boutique Fuels List is the Texas LED fuel program. This program is approved into a SIP in PADD 3, but is not approved into a SIP in the applicable PADD, which is PADD 5. Thus, EPA is further prohibited from approving a low emission diesel fuel program into the Arizona SIP because of the PADD restriction.

B. Nonroad Engines and Equipment Exhaust

Comment 3: Since EPA relies upon its previous assessment in the August 3, 2006 final rule, ACLPI reasserts the objections raised in its comments submitted in response to that rulemaking in its letter dated August 1, 2005.

Response: As noted in the June 8, 2007 proposed rule, EPA is not changing its assessment in the August 3, 2006 final rule that requiring CARB diesel fuel for the control of nonroad engines and equipment exhaust is not currently feasible and is therefore not required as a BACM in the Maricopa County area. Except as specifically modified below, EPA is relying for this final rule on its discussion of Nonroad Engines and Equipment Exhaust in Section II.B(2) of the Agency's July 1, 2005 proposed rule, 70 FR at 3806638067. We are also relying on our responses to public comments on this issue in Section II.B of our August 3, 2006 final rule, 71 FR at 4398143983.

We note one further update to the information in footnote 7 of the August 3, 2006 final rule. There are currently thirteen, rather than six, approval letters on the Texas LED fuel program Web site \6\ providing for the use of alternative diesel fuel formulations. The second sentence in footnote 7 should now read as follows: ``Although Section 114.312(f) provides that alternative diesel fuel formulations must provide comparable or better reductions of NOX and PM, four of the thirteen alternative diesel fuel formulation approval letters to date have cited NOX reductions alone, or (in one case) reductions of NOX and
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hydrocarbons, but not PM, as the basis of approval.''
\6\ As noted in footnote 7 of the August 3, 2006 final rule, the Web site location is: http://www.tceq.state.tx.us/implementation/ air/sip/cleandiesel.html.

Comment 4: ACLPI further asserts that, with respect to EPA's concerns that nonroad diesel fuel users will refuel outside the nonattainment area to avoid paying the higher cost of CARB diesel, the Texas LED rule provides guidance for Arizona since it applies to 102 counties even though only 8 of those counties are in the Houston nonattainment area. Citing EPA's November 14, 2001 final rule approving the Texas LED rule into the SIP, ACLPI asserts that the principal reason for extending the scope of the rule to so many counties was to prevent refueling outside the nonattainment area. 66 FR 57196, 57216. ACLPI states there is no reason that a similar approach could not be adopted in Arizona.

Response: In addition to the Texas LED fuel program, EPA has approved two other state fuel programs under CAA Section 211(c)(4)(C) in which the covered area included attainment areas outside the nonattainment area for which SIP approval was sought. See 66 FR 20927 (April 26, 2001) for the Gasoline Volatility Program in Eastern and Central Texas, and 67 FR 8200 (February 22, 2002) for the Gasoline Sulfur and Volatility Program in Atlanta, Georgia. In each of these three cases, EPA's approval of the state fuel program in attainment areas was based on the State's demonstration that emission reductions attributable to the state fuel program in the attainment areas was necessary to help achieve attainment in the nonattainment area for which SIP approval was sought.

Specifically, in the case of the Texas LED fuel program, EPA noted three reasons for Texas' conclusion that requiring LED fuel in the 110 county covered area benefits the 8county Houston ozone nonattainment area. First, it will help ensure that LED fuel is used by intrastate and longhaul trucks that travel through the nonattainment area but purchase fuel in Texas outside the nonattainment area and within the covered area. Second, it will help reduce possible transport of ozone from the surrounding covered areas to the nonattainment area. Third, it will reduce the transport of NOX from the surrounding covered areas to the nonattainment area. See 66 FR at 57214 and 66 FR 36542, 36545.

ACLPI's reference to EPA's statement at 66 FR 57216 is misquoted; in this part of the November 14, 2001 final rule approving the Texas LED rule into the SIP, EPA stated that ``a principal purpose of extending the coverage of the LED rule to the 102 counties outside the 8county Houston nonattainment area is to ensure that intrastate and longhaul trucks traveling through the Houston area but refueling outside the Houston area are refueling with LED fuel.'' (Emphasis added.) Thus preventing refueling with nonLED fuel outside the Houston area was one of three reasons for the expanded scope of the covered area, as described above, but it was not ``the'' principal reason, as ACLPI mistakenly asserts.

With respect to the potential use of CARB diesel fuel for nonroad engines and equipment, the preemption of state fuel controls in CAA section 211(c)(4)(A) does not extend to fuels used solely in nonroad engines and equipment and not for use in motor vehicles. See 70 FR 38064, 38066 (July 1, 2005), 69 FR 38958, 3907273 (June 29, 2004). The choice of covered areas for a state diesel fuel program for nonroad engines and equipment might very well be affected, however, by the same kinds of reasons that would influence the design of the program if it were to include diesel fuel for onroad motor vehicles. We agree that the possible enlargement of the covered area beyond the nonattainment area is a factor Arizona could consider in evaluating the feasibility of a diesel fuel program for nonroad engines and equipment, but it is not the only factor Arizona would need to consider.

Such an enlarged program might help avoid the problem of refueling outside the Maricopa County area, but it would still face the same obstacles we have evaluated in our prior notices, i.e., the uncertainty of fuel availability and the problem of fuel segregation and storage. Additionally, we note that the geographic considerations in assessing potential refueling avoidance are different in Arizona and Texas. Population in the HoustonGalveston ozone nonattainment area is about 22% of the statewide population but represents only 3% of the State's land area. By expanding the covered area to include the DallasFort Worth and BeaumontPort Arthur ozone nonattainment areas as well as 95 nearby counties, the Texas LED fuel program covers about 79% of statewide population and 35% of the State's land area. By contrast, population in the Phoenix nonattainment area is about 60% of statewide population but only 8% of the State's land area. If a fuel program were expanded to include Pima County, which includes the next largest metropolitan area in Arizona, the population in the covered area would be about 76% of statewide population but only 16% of the State's land area. (Statistics are based on 2000 Census Bureau data).\7\ \7\ See July 30, 2008 Memorandum, ``Statistical Data for Arizona and Texas Based on 2000 Census'' in docket for this rulemaking. C. MSM Demonstration and Extension of Attainment Date

Comment 5: ACLPI states that, because EPA did not undertake a new analysis of CARB diesel as a MSM for purposes of the attainment date extension, ACLPI incorporates by reference comments it submitted ``in response to previous rulemakings, as well as the arguments and analysis set forth in the Opening and Reply briefs filed in Vigil * * * (specifically Opening Brief, pp. 2127; \8\ Reply Brief, pp. 918.)'' \8\ EPA notes that the discussion of MSM begins on p. 24 of ACLPI's Opening Brief.

Response: The Vigil Court's remand of EPA's approval of the attainment date extension is limited. The Court concluded that ``[w]e also remand the question of Arizona's eligibility for the extension, insofar as that question depends on EPA's determination regarding MSM.'' (Emphasis added.) 381 F.3d at 487. Therefore to the extent that ACLPI intends to incorporate by reference its comments and arguments on aspects of the extension other than MSM, it is precluded from raising them in this rulemaking.

While ACLPI does not specify, we assume that by ``previous rulemakings'' it is referring to EPA's proposed approvals of the serious area PM10 plan for the Maricopa County area at 65 FR 19964 (April 13, 2000) and 66 FR 50252 (October 2, 2001). ACLPI commented on these proposed actions in letters from Joy HerrCardillo to Frances Wicher, EPA Region 9, dated July 20, 2000 and November 1, 2001. EPA has previously addressed the arguments relating to MSM and the attainment date extension as it relates to MSM raised by ACLPI in its briefs and these letters. See 67 FR at 4872248725 and EPA's Response Brief in Vigil at 1012 and 3034. Discussions also relevant to these issues can be found in EPA's proposed approvals of the serious area PM10 plan for the Maricopa County area at 65 FR 19964 and 66 FR 50252.

III. Final Action

EPA is again approving the BACM demonstration in the MAG plan for the source categories of onroad and nonroad vehicle exhaust without CARB diesel. EPA has concluded that it cannot approve a CAA section 211(c)(4)(C)(i) waiver for Arizona for CARB diesel because the effect of such an approval would unlawfully increase the total
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number of fuels approved into SIPs under section 211(c)(4)(C) as of September 1, 2004. Therefore, EPA is again approving the BACM demonstration in the MAG plan for the onroad source category without CARB diesel. Because EPA has found that CARB diesel is not feasible for nonroad engines and equipment because of the uncertainties with fuel availability, storage and segregation and concerns about program effectiveness due to owners and operators fueling outside the Maricopa County area, we are again approving BACM demonstration in the MAG plan for the nonroad source category without CARB diesel. For the reasons discussed above, EPA is also again approving the MSM demonstration in the MAG plan and is confirming that we appropriately granted in 2002 and 2006 the State's request for an extension of the attainment deadline for the area from December 31, 2001 to December 31, 2006. These actions are codified at 40 CFR 52.123(j)(2), (4) and (7) and remain in effect. See 67 FR at 48739.

IV. Statutory and Executive Order Reviews

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. For this reason, 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). 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.). 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 (Pub. L. 1044).

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). 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 12898 (59 FR 7629, February 16, 1994) establishes a Federal policy for incorporating environmental justice into Federal agency actions by directing agencies to identify and address, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority and lowincome populations. Today's action will not have disproportionately high and adverse effects on any communities in the area, including minority and lowincome communities.

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.

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. 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.).

The Congressional Review Act, 5 U.S.C. section 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 October 14, 2008. 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, Intergovernmental relations, Particulate matter, Reporting and recordkeeping requirements.

Dated: August 4, 2008.
Laura Yoshii,
Acting Regional Administrator, Region IX.
[FR Doc. E818626 Filed 81308; 8:45 am]
BILLING CODE 656050P

FOR FURTHER INFORMATION CONTACT Carol Weisner, EPA Region IX, (415) 9474107, weisner.carol@epa.gov.