HR 3596 IH
To amend the Clean Air Act requirements relating to gasoline to prevent future supply shortages and price spikes in the gasoline market, and for other purposes.
December 20, 2001
Mr. RYAN of Wisconsin (for himself and Mr. GREEN of Wisconsin) introduced the following bill; which was referred to the Committee on Energy and Commerce
To amend the Clean Air Act requirements relating to gasoline to prevent future supply shortages and price spikes in the gasoline market, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. FINDINGS.
Congress finds the following:
(1) The President's National Energy Policy Development (NEPD) Group recommended that the Environmental Protection Agency (EPA) study the environmental benefits of State boutique fuels and methods to increase the flexibility of the fuel distribution infrastructure and the gasoline market liquidity.
(2) Seasonal price spikes, particularly in the Midwest, can be attributed to the number of boutique fuels and the lack of fungibility, especially when there is a disruption in the refining or pipeline system.
(3) According to the EPA Study of Boutique Fuels released October 24, 2001, a reduction of the number of boutique fuels may moderate the price spikes that occur with the transition of winter to summer grade reformulated gasoline (RFG).
(4) The propagation of boutique fuels may occur in the future as a result of State laws banning the use of MTBE, an oxygenated gasoline additive.
(5) Refiners argue that without any restrictions on States, boutique fuels will continue to proliferate.
(6) Stakeholders have acknowledged that fewer fuel types would simplify gasoline distribution and therefore ease the potential for local supply disruptions and resulting price volatility without disrupting gasoline supply, air quality benefits, or prices.
(7) The EPA study examined several options, one of which would create a menu of three fuels for States to choose from (conventional gasoline, low-RVP, or a new Federal clean burning gas), including a new national renewable fuel requirement.
(8) The EPA study found that this option is the least costly of all the options presented and would increase gasoline production capacity, giving the best balance among gasoline cost, distribution, and supply, and air quality.
SEC. 2. BOUTIQUE FUELS.
(a) REDUCING THE PROLIFERATION OF BOUTIQUE FUELS- (1) Section 211(c)(4) of such Act (42 U.S.C. 7545(c)(4)) is amended by adding the following at the end thereof:
`(D) In the case of gasoline, in addition to the requirements of subparagraph (C), after the enactment of this subparagraph, the Administrator may approve a provision described in subparagraph (C) in an implementation plan only if the Administrator finds that the control or prohibition in the applicable implementation plan requires the use of either of the following:
`(i) Federal clean burning fuel meeting the requirements of subsection (k).
`(ii) Low RVP gasoline meeting the requirements of subsection (h)(6).
`(E) In the case of implementation plan provisions approved under subparagraph (C) on or before the date of the enactment of this subparagraph, such provisions may remain in effect after the date 4 years after the enactment of this subparagraph only if the State has, within 6 months after the enactment of this subparagraph, reevaluated the provisions and established to the satisfaction of the Administrator that the benefits of such provisions in terms of air quality improvement, consistent supply, production costs and stable prices for gasoline exceed the benefits of modifying such provisions to require the use of Federal clean burning fuel meeting the requirements of subsection (k) or low RVP gasoline meeting the requirements of subsection (h)(6) (whichever requires a Reid Vapor Pressure closest to the Reid Vapor Pressure required by the plan provisions prior to modification).'.
(2) By striking `engine--' in subparagraph (A) of section 211(c)(4) of the Clean Air Act and all that follows down through the end of such subparagraph and inserting `engine.'.
(3) By striking `, for the purposes of motor vehicle emission control,' in subparagraph (A) of section 211(c)(4) of the Clean Air Act.
(b) LOW RVP GAS OPTION- Section 211(h) of the Clean Air Act (42 U.S.C. 7545(h)) is amended by adding the following new paragraph at the end thereof:
`(6) LOW RVP GASOLINE- The Administrator shall promulgate regulations providing for a gasoline blend for the high ozone season (as determined by the Administrator) having a Reid Vapor Pressure of 7.8 pounds per square inch (psi). The Administrator shall approve State plan provisions submitted under subsection (c)(4)(C) and (D) for ozone nonattainment areas in both northern and southern areas of the nation (other than covered areas under subsection (k)) that require gasoline to meet the requirements of the regulations under this paragraph.'.
(c) FEDERAL CLEAN BURNING GAS- (1) Section 211(k) of the Clean Air Act is amended to read as follows:
`(k) FEDERAL CLEAN BURNING GAS-
`(1) EPA REGULATIONS- The Administrator shall promulgate regulations under this section establishing requirements for Federal clean burning gasoline to be used in gasoline-fueled vehicles in specified nonattainment areas. Such regulations shall require the greatest reduction in emissions of ozone forming volatile organic compounds (during the high ozone season) and emissions of toxic air pollutants (during the entire year) achievable through the reformulation of conventional gasoline, taking into consideration the cost of achieving such emission reductions, any nonair-quality and other air-quality related health and environmental impacts and energy requirements.
`(2) GENERAL REQUIREMENTS- The regulations referred to in paragraph (1) shall require that Federal clean burning gasoline comply with paragraph (3) and with each of the following requirements (subject to paragraph (7)):
`(A) NOX EMISSIONS- The emissions of oxides of nitrogen (NOX) from baseline vehicles when using the Federal clean burning gasoline shall be no greater than the level of such emissions from such vehicles when using baseline gasoline. If the Administrator determines that compliance with the limitation on emissions of oxides of nitrogen under the preceding sentence is technically infeasible, considering the other requirements applicable under this subsection to such gasoline, the Administrator may, as appropriate to ensure compliance with this subparagraph, adjust (or waive entirely), any other requirements of this paragraph (including the oxygen content requirement contained in subparagraph (B)) or any requirements applicable under paragraph (3)(A).
`(B) BENZENE CONTENT- The benzene content of the gasoline shall not exceed 1.0 percent by volume.
`(C) HEAVY METALS- The gasoline shall have no heavy metals, including lead or manganese. The Administrator may waive the prohibition contained in this subparagraph for a heavy metal (other than lead) if the Administrator determines that addition of the heavy metal to the gasoline will not increase, on an aggregate mass or cancer-risk basis, toxic air pollutant emissions from motor vehicles.
`(3) MORE STRINGENT OF FORMULA OR PERFORMANCE STANDARDS- The regulations referred to in paragraph (1) shall require compliance with the more stringent of either the requirements set forth in subparagraph (A) or the requirements of subparagraph (B) of this paragraph. For purposes of determining the more stringent provision, clause (i) and clause (ii) of subparagraph (B) shall be considered independently.
`(i) BENZENE- The benzene content of the Federal clean burning gasoline shall not exceed 1.0 percent by volume.
`(ii) AROMATICS- The aromatic hydrocarbon content of the Federal clean burning gasoline shall not exceed 25 percent by volume.
`(iii) LEAD- The Federal clean burning gasoline shall have no lead content.
`(iv) DETERGENTS- The Federal clean burning gasoline shall contain additives to prevent the accumulation of deposits in engines or vehicle fuel supply systems.
`(v) REID VAPOR PRESSURE- The Reid Vapor Pressure of the gasoline shall not exceed 6.8 pounds per square inch (psi) for the high ozone season (as determined by the Administrator).
`(B) PERFORMANCE STANDARD-
`(i) VOC EMISSIONS- During the high ozone season (as defined by the Administrator), the Reid Vapor Pressure of the gasoline shall not exceed 6.8 pounds per square inch (psi).
`(ii) TOXICS- During the entire year, the aggregate emissions of toxic air pollutants from baseline vehicles when using the Federal clean burning gasoline shall be 15 percent below the aggregate emissions of toxic air pollutants from such vehicles when using baseline gasoline. Effective in calendar year 2000 and thereafter, 25 percent shall be substituted for 15 percent in applying this clause, except that the Administrator may adjust such 25 percent requirement to provide for a lesser or greater reduction based on technological feasibility, considering the cost of achieving such reductions in toxic air pollutants. No such adjustment shall provide for less than a 20 percent reduction below the aggregate emissions of such air pollutants from such vehicles when using baseline gasoline. The reductions required under this clause shall be on a mass basis.
Any reduction greater than a specific percentage reduction required under this subparagraph shall be
treated as satisfying such percentage reduction requirement.
`(4) CERTIFICATION PROCEDURES-
`(A) REGULATIONS- The regulations under this subsection shall include procedures under which the Administrator shall certify Federal clean burning gasoline as complying with the requirements established pursuant to this subsection. Under such regulations, the Administrator shall establish procedures for any person to petition the Administrator to certify a fuel formulation, or slate of fuel formulations. Such procedures shall further require that the Administrator shall approve or deny such petition within 180 days of receipt. If the Administrator fails to act within such 180-day period, the fuel shall be deemed certified until the Administrator completes action on the petition.
`(B) CERTIFICATION; EQUIVALENCY- The Administrator shall certify a fuel formulation or slate of fuel formulations as complying with this subsection if such fuel or fuels--
`(i) comply with the requirements of paragraph (2), and
`(ii) achieve equivalent or greater reductions in emissions of ozone forming volatile organic compounds and emissions of toxic air pollutants than are achieved by a Federal clean burning gasoline meeting the applicable requirements of paragraph (3).
`(C) EPA DETERMINATION OF EMISSIONS LEVEL- The Administrator shall determine the level of emissions of ozone forming volatile organic compounds and emissions of toxic air pollutants emitted by baseline vehicles when operating on baseline gasoline. For purposes of this subsection, the Administrator shall, by rule, determine appropriate measures of, and methodology for, ascertaining the emissions of air pollutants (including calculations, equipment, and testing tolerances).
`(5) PROHIBITION- Effective on the date 4 years after the enactment of this paragraph, each of the following shall be a violation of this subsection:
`(A) The sale or dispensing by any person of conventional gasoline to ultimate consumers in any covered area.
`(B) The sale or dispensing by any refiner, blender, importer, or marketer of conventional gasoline for resale in any covered area, without (i) segregating such gasoline from Federal clean burning gasoline, and (ii) clearly marking such conventional gasoline as `conventional gasoline, not for sale to ultimate consumer in a covered area'.
Any refiner, blender, importer or marketer who purchases property segregated and marked conventional gasoline, and thereafter labels, represents, or wholesales such gasoline as Federal clean burning gasoline shall also be in violation of this subsection. The Administrator may impose sampling, testing, and recordkeeping requirements upon any refiner, blender, importer, or marketer to prevent violations of this section.
`(6) OPT-IN AREAS- (A) Upon the application of the Governor of a State, the Administrator shall apply the prohibition set forth in paragraph (5) in any area in the State classified under subpart 2 of part D of title I as a Marginal, Moderate, Serious, or Severe Area (without regard to whether or not the 1980 population of the area exceeds 250,000). In any such case, the Administrator shall establish an effective date for such prohibition as he deems appropriate, 1 year after such application is received. The Administrator shall publish such application in the Federal Register upon receipt.
`(B) If the Administrator determines, on the Administrator's own motion or on petition of any person, after consultation with the Secretary of Energy, that there is insufficient domestic capacity to produce gasoline certified under this subsection, the Administrator shall, by rule, extend the effective date of such prohibition in Marginal, Moderate, Serious, or Severe Areas referred to in subparagraph (A) for one additional year, and may, by rule, renew such extension for 2 additional one-year periods. The Administrator shall act on any petition submitted under this paragraph within 6 months after receipt of the petition. The Administrator shall issue such extensions for areas with a lower ozone classification before issuing any such extension for areas with a higher classification.
`(7) CREDITS- (A) The regulations promulgated under this subsection shall provide for the granting of an appropriate amount of credits to a
person who refines, blends, or imports and certifies a gasoline or slate of gasoline that--
`(i) has an aromatic hydrocarbon content (by volume) that is less than the maximum aromatic hydrocarbon content required to comply with paragraph (3); or
`(ii) has a benzene content (by volume) that is less than the maximum benzene content specified in paragraph (2).
`(B) The regulations described in subparagraph (A) shall also provide that a person who is granted credits may use such credits, or transfer all or a portion of such credits to another person for use within the same nonattainment area, for the purpose of complying with this subsection.
`(C) The regulations promulgated under subparagraphs (A) and (B) shall ensure the enforcement of the requirements for the issuance, application, and transfer of the credits. Such regulations shall prohibit the granting or transfer of such credits for use with respect to any gasoline in a nonattainment area, to the extent the use of such credits would result in any of the following:
`(i) An average gasoline aromatic hydrocarbon content (by volume) for the nonattainment (taking into account all gasoline sold for use in conventional gasoline-fueled vehicles in the nonattainment area) higher than the average fuel aromatic hydrocarbon content (by volume) that would occur in the absence of using any such credits.
`(ii) An average benzene content (by volume) for the nonattainment area (taking into account all gasoline sold for use in conventional gasoline-fueled vehicles in the nonattainment area) higher than the average benzene content (by volume) that would occur in the absence of using any such credits.
`(8) ANTI-DUMPING RULES-
`(A) IN GENERAL- The Administrator shall promulgate regulations applicable to each refiner, blender, or importer of gasoline ensuring that gasoline sold or introduced into commerce by such refiner, blender, or importer (other than Federal clean burning gasoline subject to the requirements of paragraph (1)) does not result in average per gallon emissions (measured on a mass basis) of (i) volatile organic compounds, (ii) oxides of nitrogen, (iii) carbon monoxide, and (iv) toxic air pollutants in excess of such emissions of such pollutants attributable to gasoline sold or introduced into commerce in calendar year 1990 by that refiner, blender, or importer.
`(B) ADJUSTMENTS- In evaluating compliance with the requirements of subparagraph (A), the Administrator shall make appropriate adjustments to insure that no credit is provided for improvement in motor vehicle emissions control in motor vehicles sold after the calendar year 1990.
`(C) COMPLIANCE DETERMINED FOR EACH POLLUTANT INDEPENDENTLY- In determining whether there is an increase in emissions in violation of the prohibition contained in subparagraph (A) the Administrator shall consider an increase in each air pollutant referred to in clauses (i) through (iv) as a separate violation of such prohibition, except that the Administrator shall promulgate regulations to provide that any increase in emissions of oxides of nitrogen resulting from adding oxygenates to gasoline may be offset by an equivalent or greater reduction (on a mass basis) in emissions of volatile organic compounds, carbon monoxide, or toxic air pollutants, or any combination of the foregoing.
`(D) COMPLIANCE PERIOD- The Administrator shall promulgate an appropriate compliance period or appropriate compliance periods to be used for assessing compliance with the prohibition contained in subparagraph (A).
`(E) BASELINE FOR DETERMINING COMPLIANCE- If the Administrator determines that no adequate and reliable data exists regarding the composition of gasoline sold or introduced into commerce by a refiner, blender, or importer in calendar year 1990, for such refiner, blender, or importer, baseline gasoline shall be substituted for such 1990 gasoline in determining compliance with subparagraph (A).
`(9) EMISSIONS FROM ENTIRE VEHICLE- In applying the requirements of this subsection, the Administrator shall take into account emissions from the entire motor vehicle, including evaporative, running, refueling, and exhaust emissions.
`(10) DEFINITIONS- For purposes of this subsection--
`(A) BASELINE VEHICLES- The term `baseline vehicles' mean representative model year 1990 vehicles.
`(B) BASELINE GASOLINE-
`(i) SUMMERTIME- The term `baseline gasoline' means in the case of gasoline sold during the high ozone period (as defined by the Administrator) a gasoline which meets the following specifications:
BASELINE GASOLINE FUEL PROPERTIES
End Point, F
`(ii) WINTERTIME- The Administrator shall establish the specifications of `baseline gasoline' for gasoline sold at times other than the high ozone period (as defined by the Administrator). Such specifications shall be the specifications of 1990 industry average gasoline sold during such period.
`(C) TOXIC AIR POLLUTANTS- The term `toxic air pollutants' means the aggregate emissions of the following: Benzene, 3 Butadiene,
Polycyclic organic matter (POM), Acetaldehyde, Formaldehyde.
`(D) COVERED AREA- The 9 ozone nonattainment areas having a 1980 population in excess of 250,000 and having the highest ozone design value during the period 1987 through 1989 shall be `covered areas' for purposes of this subsection. Effective one year after the reclassification of any ozone nonattainment area as a Severe ozone nonattainment area under section 181(b), such Severe area shall also be a `covered area' for purposes of this subsection.
`(E) FEDERAL CLEAN BURNING GASOLINE- The term `Federal clean burning gasoline' means any gasoline which is certified by the Administrator under this section as complying with this subsection.
`(F) CONVENTIONAL GASOLINE- The term `conventional gasoline' means any gasoline which does not meet specifications set by a certification under this subsection and which is not low RVP gasoline meeting the requirements of section 211(h)(6).'.
(2) The Clean Air Act is amended by striking the term `reformulated gasoline' in each place it appears and inserting in lieu thereof `Federal clean burning fuel'.
(3) Except for purposes of section 211(v)(4)(D)(i) of the Clean Air Act, as added by subsection (a) of this section, the amendments made by this subsection shall take effect on the date 4 years after the enactment of this Act. For purposes of such section 211(v)(4)(D)(i), the amendments made by this subsection shall take effect on the date of the enactment of this Act.
SEC. 3. REPEAL OF OXYGEN CONTENT REQUIREMENT FOR CERTAIN REFORMULATED GASOLINE.
Effective January 1, 2003, sections 211(k)(2)(B), and 211(k)(3)(A)(v), and 211(k)(7)(A)(i) of the Clean Air Act are repealed.
SEC. 4. ELIMINATION OF MTBE.
Section 211(f) of the Clean Air Act (42 U.S.C.7545(f)) is amended by adding the following new paragraph after paragraph (5):
`(6) After January 1, 2006, it shall be unlawful for any manufacturer of any fuel to introduce into commerce any gasoline which contains methyl tertiary butyl ether (MTBE).'.
SEC. 5. RENEWABLE FUELS CONTENT OF GASOLINE.
Title II of the Clean Air Act is amended by adding the following new section after section 211:
`SEC. 212. RENEWABLE FUELS CONTENT OF GASOLINE.
`(a) DEFINITIONS- In this section:
`(1) BIOMASS- The term `biomass' means lignocellulosic or hemicellulosic matter that is available on a renewable basis, including dedicated energy crops and trees, wood and wood residues, plants, grasses, agricultural commodities and residues, fibers; and animal waste, municipal solid waste, and other waste.
`(2) RENEWABLE FUEL- The term `renewable fuel' means fuel that--
`(A) is ethanol or any other liquid fuel produced from biomass; and
`(B) is used to reduce the quantity of fossil fuel present in gasoline used to operate a motor vehicle.
`(3) ADMINISTRATOR- The term `Administrator' means the Administrator of the Environmental Protection Agency.
`(b) RENEWABLE FUEL PROGRAM-
`(1) IN GENERAL- The gasoline sold or introduced into commerce in the United States in the calendar year 2003 or any calendar year thereafter by a refiner, blender, or importer for use in motor vehicles shall, on an average annual basis, be comprised of a quantity of renewable fuel that is not less than the applicable percentage by volume for the annual period.
`(2) APPLICABLE PERCENTAGE-
`(A) IN GENERAL- For the purposes of paragraph (1), the applicable percentage for any calendar year shall be determined in accordance with the following schedule, unless modified under subparagraph (B):
`(B) ADJUSTMENTS TO APPLICABLE PERCENTAGE- On petition submitted by a State, the Administrator, in consultation with the Secretary of Energy and the Secretary of Agriculture, may lower the applicable percentage specified in subparagraph (A) for one calendar year with respect to gasoline sold or introduced into commerce in the State, if the Administrator, after public notice and opportunity for comment, determines that during the calendar year there is
likely to be an inadequate domestic supply or distribution capacity in the State to meet the applicable percentage specified in subparagraph (A) for the calendar year.
`(C) PETITIONS FOR ADJUSTMENT-
`(i) SUBMISSION- A State shall submit a petition under subparagraph (B) not later than April 1 of the year preceding the calendar year for which the adjustment is sought.
`(ii) ACTION ON PETITIONS- The Administrator, in consultation with the Secretary of Energy and the Secretary of Agriculture, shall approve or deny a State petition before the beginning of the calendar year.
`(c) CREDIT PROGRAM-
`(1) IN GENERAL- Not later than 6 months after the date of enactment of this Act, the Administrator, in consultation with the Secretary of Energy and the Secretary of Agriculture, shall promulgate regulations providing for the generation of an appropriate amount of credits by a person that refines, blends, or imports gasoline that contains, on an annual average basis, a quantity of renewable fuel that is greater than the quantity required for that annual period under subsection (b).
`(2) USE OF CREDITS- A person that generates credits under paragraph (1) may use the credits, hold the credits for later use, or transfer all or a portion of the credits to another person, for the purpose of complying with subsection (b).
`(3) INABILITY TO PURCHASE SUFFICIENT CREDITS- The regulations under paragraph (1) shall include provisions allowing a refiner, blender, or importer that is unable to purchase sufficient credits to meet the requirements of subsection (b) to enter into an enforceable agreement to generate or purchase sufficient credits to make up for any deficiency within a period of time specified in the agreement.
`(4) TESTING; REPORTS- The regulations under paragraph (1) may include provisions requiring a refiner, blender, or importer--
`(A) to conduct tests to ascertain the composition of fuels for the purpose of compliance with subsection (b); and
`(B) to submit to the Administrator periodic reports on the composition of the fuels refined, blended, or imported.
`(d) CIVIL PENALTIES AND ENFORCEMENT-
`(1) CIVIL PENALTIES-
`(A) IN GENERAL- The Administrator may impose against a person that fails to comply with subsection (b) or with a regulation under subsection (c) a civil penalty in the amount of--
`(i) not more than $25,000 for each day of the failure to comply; plus
`(ii) the amount of economic benefit realized by the person as a result of the failure to comply.
`(B) AVERAGING PERIOD- Any failure to comply with respect to a regulation under subsection (c) for any calendar year shall constitute a separate day of failure of compliance for each day of such year.
`(2) ENFORCEMENT- The Administrator may bring a civil action in United States district court for--
`(A) an order enjoining a failure to comply with subsection (b) or with a regulation under subsection (c); and
`(B) other appropriate relief.
`(e) CONGRESSIONAL SUPPORT FOR ETHANOL- It is the sense of the Congress that it is in the national interest to support the promotion of ethanol as the primary renewable fuel to be used for purposes of satisfying the requirements of this section.'.
SEC. 6. STUDY OF EFFECT ON AIR QUALITY.
Within 7 years after the enactment of this Act, the Administrator of the Environmental Protection Agency shall complete and publish a study of the changes in the emissions of any air pollutant and in air quality attributable to the amendments made by this Act.