[Senate Report 108-57]
[From the U.S. Government Publishing Office]
Calendar No. 119
108th Congress Report
SENATE
1st Session 108-57
======================================================================
RELIABLE FUELS ACT
_______
June 3, 2003.--Ordered to be printed
_______
Mr. Inhofe, from the Committee on Environment and Public Works,
submitted the following
R E P O R T
[to accompany S. 791]
together with
ADDITIONAL VIEWS
[Including cost estimate of the Congressional Budget Office]
The Committee on Environment and Public Works, to which was
referred a bill (S. 791) to amend the Clean Air Act to
eliminate methyl tertiary butyl ether from the United States
fuel supply, to increase production and use of renewable fuel,
and to increase the Nation's energy independence, and for other
purposes, having considered the same, reports favorably thereon
with an amendment and recommends that the bill, as amended, do
pass.
General Statement
In 1990, the Clean Air Act was amended to include the
reformulated gasoline, or RFG, program. The program was
designed to address persistent pollution from automobiles.
While tailpipe standards for automobiles are effective for new
vehicles, the RFG program added additional controls and was
able to address emissions from vehicles of all ages within the
current fleet. RFG program was required in metropolitan areas
that have the most serious air pollution levels. Although not
required to participate, some areas in the Northeast, in
Kentucky, Texas and Missouri have elected to join, or ``opt-
in,'' to the RFG program as a relatively cost-effective measure
to help combat their air pollution problems. Today, roughly 35
percent of this country's gasoline consumption is cleaner-
burning reformulated gasoline.
One element of the RFG program was the requirement that RFG
contain 2.0 percent minimum oxygen content by weight. This
provision was of assistance in the goal of making gasoline burn
cleaner, both in terms of criteria air pollutants and toxic air
emissions. The addition of oxygen to gasoline resulted in
greater supplies of fuel being available, given that the
principal oxygenate additives are not derived from crude
petroleum.
RFG blended with oxygenates has exceeded all pollution
reduction goals and substantially and cost-effectively improved
the nation's air quality. According to EPA, RFG has cut smog-
forming pollutant emissions by over 17 percent, the equivalent
of removing 64,000 tons of harmful pollution from the air we
breathe or taking 10 million vehicles off our roads. RFG has
reduced emissions of benzene, a known human carcinogen, by some
43 percent, while reducing total toxic air emissions by about
22 percent. Cleaner-burning MTBE accounts for a large part of
the overall emission reductions from RFG.
The program set a variety of content and performance
requirements, including a minimum content requirement for
oxygen and maximum allowable benzene and heavy metal quantities
in RFG. Through regulatory authority provided by the Act, EPA
chose, in 1993, to adopt performance standards for toxic air
pollutants and volatile organic compounds (VOCs) rather than
the prescriptive fuels formula allowed under Section
211(k)(3)(A). These performance standards required a 15 percent
reduction in toxic air pollutants from baseline vehicles
starting in 1995 and maintained through 1999, and required a 22
percent reduction from baseline vehicles beginning in 2000, as
part of Phase II. Phase II also requires reductions in NOx and
VOCs.
Motor vehicle emissions of carbon monoxide, volatile
organic compounds, and, most notably, toxics have been reduced
drastically in RFG areas. Refiners have produced RFG that
exceeded the statutory requirements to reduce toxic emissions,
including emissions of benzene. Recent data suggest that
refiners have achieved a 27 percent or higher reduction in
toxic air pollutants in RFG (where MTBE was used) from the 1990
baseline. A 1998 study by the Northeast States for Coordinated
Air Use Management (NESCAUM) concluded that Phase II RFG would
reduce the public cancer risk by 20 percent.
On March 29, 2001, EPA issued it's Mobile Source Air Toxics
Rule (MSAT) to limit air toxics emissions from motor fuels, as
required by Section 202(l) of the Act. It is intended to ensure
that refiners continue over-compliance with RFG and anti-
dumping requirements by maintaining their average 1998-2000
toxic emissions performance levels for RFG and conventional
gasoline. The MSAT rule commits EPA to revisiting additional
fuel and vehicle MSATs controls in a 2004 rulemaking. The
deadline in the CAAA for issuance of these regulations was June
1995.
The final MSATs rule was challenged by a number of parties.
On May 24, 2001, the States of New York and Connecticut and the
Sierra Club, Earth Justice, the Natural Resources Defense
Council and the U.S. Public Interest Research Group filed suit
against EPA, charging that the MSATs rule fails to achieve the
pollution reductions mandated by the Clean Air Act. Other
parties, including Hovensa LLC, and International Truck and
Engine Corporation have filed petitions in the United States
Court of Appeals challenging EPA's final rule on the grounds
that it is inconsistent with section 202(l) of the Act, that
EPA acted arbitrarily and capriciously in promulgating the rule
and did not adequately follow required notice and comment
rulemaking procedures. On April 25, 2003, the U.S. Court of
Appeals for the D.C. Circuit issued its decision. It denied on
the merits the claims of the environmental and State
petitioners, except for remanding to EPA on the issue of
explaining its decision not to require on-board diagnostic
equipment for new heavy-duty vehicles over 14,000 pounds.
There is no specific deadline in the Act for EPA to further
reduce toxic air pollutants from mobile sources. Section 204,
however, requires EPA to promulgate final regulations
addressing hazardous air pollutants from vehicles and fuels by
July 1, 2004, as per the MSAT rule. The Agency retains general
authority to control emissions from motor vehicles of any air
pollutant that causes or contributes to air pollution which may
reasonably be anticipated to endanger public health or welfare.
In a discussion focused on maintaining air toxics reductions
from the RFG program, EPA's Blue Ribbon Panel on Oxygenates in
Gasoline specifically recommended that EPA should explore and
implement mechanisms to achieve equivalent or improved public
results that focus on reducing those compounds that pose the
greatest risk.
The Panel recognized that the current mass-based
performance requirements in the RFG program may not adequately
account for and consider that the different exhaust components
pose differential levels of risk to public health due in large
part to their variable potency.
While the RFG program is considered a general success,
experts acknowledge that there is some uncertainty in
estimating the actual quantity of mobile source emissions. It
is difficult to verify the emission reductions associated with
the RFG program as distinct from other mobile source emission
reduction programs. In May 2000, the National Research Council
recommended that EPA make a number of improvements to the
Mobile Source Emissions Factor model (MOBILE), including
estimation of off-road vehicle emissions and incorporation of
both mobile source toxic emissions and high-emitting vehicles.
More regular revisions and updating of this model is
important for air quality planners. S. 791 requires the EPA to
expedite resolution of the current complex model which
generates important fuels-related emissions information and
provides input for the MOBILE model so that vehicle
manufacturers, fuel makers, air quality planners, and Congress
have accurate information.
Oxygenates
The CAAA required that 2 percent by weight of RFG be
oxygen. This requirement was not included in the Senate
Environment and Public Works Committee's reported version of S.
1630, the Clean Air Act Amendments of 1989. It was added on the
Senate floor after vigorous debate and was the only successful
floor amendment. Proponents of that requirement had expected
ethanol to be the oxygenate of choice for fuel providers. It
was not regarded as a mandate to use ethanol, however, even by
its sponsors. During floor debate on the measure, Senator
Daschle, a co-sponsor of the amendment, stated that the oxygen
standard was fuel neutral. (congressional Record, March 29,
1989, page S3513) Most refiners, blenders, and importers opted
to use a cheaper and more easily used oxygenate, MTBE, in many
nonattainment areas. MTBE currently is used in approximately 80
percent of RFG, while ethanol is used in slightly less than 20
percent of that fuel.
In late 1993, EPA issued final regulations implementing the
RFG program. In 1994, EPA issued another set of final rules
that revised the RFG program. The revisions included a
requirement that renewable oxygenates be used to meet 30
percent of the 2 percent oxygen content requirement in RFG. The
1994 rules were challenged by the American Petroleum Institute
and the National Petroleum Refiners Association. The DC Circuit
Court of Appeals decided that EPA lacked the authority to
impose the renewable requirement and vacated the 1994
rulemaking.
The principal benefits of oxygenates were the reduction of
carbon monoxide emissions through more complete fuel combustion
and the reduction of toxic air pollution. The oxygen content
requirement formally took effect in 1995 and is currently
satisfied by refiner use of either MTBE or ethanol. Today,
approximately four billion gallons of MTBE and 380 million
gallons of ethanol (EtOH) are consumed to meet this
requirement. Most of the ethanol is produced and consumed in
the Midwest region of the country, while MTBE use is
concentrated in the Northeastern States, Texas, and California.
Approximately 3.5 percent of ethanol and 30 percent of MTBE is
imported. In addition to use in the RFG program, ethanol and
MTBE are used to help reduce emissions in carbon monoxide (CO)
nonattainment areas as part of the wintertime oxygenated fuels
program, which began in 1992. Originally, 40 CO nonattainment
areas were required to participate in this winter fuel program.
Today 15 areas in ten States participate. Approximately 46
million gallons of MTBE and 240 million gallons of ethanol are
used each year to satisfy the oxygenate requirement of this
program.
Section 211(k)(2)(B) of the CAA provides EPA the authority
to waive the oxygen content requirement for RFG, in whole or in
part, for an ozone nonattainment area upon the determination by
the Administrator that compliance with the requirement would
prevent or interfere with the attainment of a National Ambient
Air Quality Standard (NAAQS). On April 12, 1999, California
submitted to EPA a petition requesting such a waiver. EPA
subsequently denied California's request. In providing the
States with access to this waiver authority on the condition of
meeting a relatively stringent test, and under EPA's authority
under Section 211(c)(4), Congress sought to balance the desire
for uniformity in our nation's fuel supply with the obligation
to empower States to adopt measures necessary to meet national
air quality standards.
Objectives of the Legislation
The Reliable Fuels Act, S. 791, is intended to address
existing and potential MTBE contamination.
In order to accomplish this objective, S. 791 achieves the
following items:
Authorizes $200 million from the Leaking
Underground Storage Tank (LUST) Trust Fund for State grants to
clean up MTBE and other ether gasoline additives. Also
authorizes an additional $200 million from the LUST Trust Fund
for State and Federal activities to prevent releases and
increase compliance under the UST program.
Requires EPA to phase down the use of MTBE within
4 years of enactment. However, individual States may authorize
the use of MTBE within their borders if they so desire.
Mandates the use of 5 billion gallons of
renewable fuels introduced into commerce by the year 2012.
Expands existing EPA authority to allow for
regulation of fuel additives for protection of water quality
(current law only allows for regulation to protect air
quality).
Repeals the Federal oxygen content requirement
for RFG 270 days after date of enactment.
Instructs EPA to require fuel and additive
manufacturers to conduct tests on a regular basis to determine
the health and environmental effects of new fuels and fuel
additives.
Requires EPA to study the health and
environmental impacts of using other additives as a substitute
for MTBE.
Requires EPA to release a draft fuel study within
4 years of enactment. The study must contain an analysis of the
changes in emissions of air pollutants and changes in overall
air quality due to the use of fuels and fuel additives
resulting from this bill. The final study must be published not
later than 5 years from enactment.
Allows States a more streamlined procedure for
disallowing the waiver of the Reid Vapor Pressure limitation
for ethanol-blended gasoline.
Allows Governors to opt-in both classified and
non-classified areas of the Ozone Transport Region States to
the RFG program.
Authorizes a total of $1 billion over four fiscal
years for grants to merchant MTBE producers for assisting in
the conversion to production of other fuel additives.
AREAS THAT USE REFORMULATED GASOLINE
as of May 19, 2003
Mandatory areas:
Los Angeles, CA
San Diego, CA
Hartford, CT
New York City (NY-CT-NJ)
Greater Philadelphia (PA-NJ-DE-MD)
Chicago, IL (IL-WI-IN)
Baltimore, MD
Houston, TX
Milwaukee, WI
Sacramento, CA
San Joaquin Valley, CA
Opt-In Areas:
State of Connecticut (that portion not adjacent to NYC or Hartford)
State of Delaware (that portion not part of Philadelphia area)
District of Columbia
Kentucky portion of the Cincinnati Metropolitan Area
Louisville, KY
Maryland--the DC suburbs and two other nearby counties
State of Massachusetts
St. Louis, MO
New Hampshire portion of Greater Boston
The State of New Jersey (that portion not adjacent to NYC or
Philadelphia area)
New York--Dutchess County (near NYC) and part of Essex County
(upstate)
State of Rhode Island
Texas--Dallas/Fort Worth area
Virginia--the DC suburbs, Richmond, Norfolk-Virginia Beach-Newport
News
Section-By-Section Analysis
Section 1. Short Title and Table of Contents
The bill is entitled ``The Reliable Fuels Act.''
Title I--General Provisions
Sec. 101. Renewable Content of Gasoline
Section 101 sets forth a comprehensive program to increase
the use of renewable fuels, in the United States. There are
several essential components of the program, which have been
carefully designed to achieve the overall goals. Changing any
of these essential components would undermine the objectives of
the program.
The first essential element is the overall size of the
renewable fuels mandate, and the schedule for its
implementation. To ensure that the Administrator of the
Environmental Protection Agency has adequate time to promulgate
regulations for implementation of the program, the program
begins in 2005. The program starts at 2.6 billion gallons of
renewable fuels in 2005, and escalates to 5.0 billion gallons
in 2012. Thereafter, the relative percentage of renewable fuels
required, as a percentage of gasoline in 2012, remains
constant. This phase-in schedule is essential to the success of
the program. The renewable fuels industry must be given an
opportunity to ramp-up production capacity and the petroleum
industry must be given an opportunity to make adjustments to
the refining, supply and distribution system necessary to
successfully implement the program.
The second essential element is the credit trading program.
The renewable fuels requirement is expected to be satisfied
primarily with the addition of ethanol to gasoline. Ethanol
blended gasoline cannot be transported in pipelines because of
ethanol's affinity for water. This means that the ethanol will
have to be transported separately to the terminals by rail,
truck, or barge. As the distance from the location of ethanol
manufacture to the terminal gets larger, so do the costs. In
addition, adding ethanol to gasoline increases the gasoline's
volatility. If the use of ethanol were required in low-
volatility gasoline the industry would be forced to incur the
additional costs of offsetting ethanol's impact on volatility.
The credit trading provisions allow the ethanol to be used
where it makes the most economic and environmental sense while
providing a mechanism to transfer those credits back to the
point of gasoline production or importation so that refiners,
blenders, and importers can demonstrate compliance with the
renewable fuels obligation.
The credit banking and trading provisions of the bill give
the Administrator the flexibility to design a workable program.
While refiners, blenders, and importers will ultimately be
responsible for meeting the renewable fuels obligation, the
fact is that most of the ethanol that is required under this
program will be added to gasoline at the distribution
terminals, because ethanol cannot generally be transported with
gasoline in pipelines. Under the credit banking and trading
provisions of the bill, the Administrator is required to
provide for the ``generation of an appropriate amount of
credits by any person that refines, blends, distributes or
imports gasoline that contains renewable fuels''. This would
includes the owners and operators of the distribution
terminals.
The program requires the use of renewable fuels in
gasoline. The requirement can be met by adding ethanol to
gasoline (i.e., gasohol), or through the use of alternative
fuels like 70 and 85 percent ethanol fuels (i.e., E70, E85). In
addition, ethanol made from celluosic biomass is encouraged by
counting each gallon of ethanol produced from cellulosic
biomass as if it were 1.5 gallons of corn-based ethanol. This
should encourage expansion in the cellulosic biomass ethanol
industry, which makes ethanol from feedstocks like woodchips
and switchgrass. In addition, the program allows for the
generation of credits from the use of biodiesel.
The renewable fuels obligation is an annual average
obligation for the use of renewable fuels. It is believed that
the use of ethanol to meet this requirement will be fairly
uniform throughout the year. Nevertheless, to ensure this, the
Administrator is required to assess the use of ethanol
throughout the year and in the event that less than 35 percent
is used in either the winter or summer periods, the
Administrator is directed to promulgate regulations to ensure
that at least 35 percent of the required amount is used in each
period. If the Administrator promulgates such rules, the life
of credits will be extended for an additional year.
The bill provides for waivers from the program under
certain circumstances. Upon petition by one or more States, the
bill allows the Administrator to waive the program, in whole or
in part, based on a determination that the renewable fuel
requirement would severely harm the economy or environment of a
State, region, or the U.S. in general, or based on a
determination that there is an inadequate domestic supply or
distribution capacity to meet the renewable fuel requirement.
The bill requires the Secretary of Energy to assess whether the
program requirements would likely result in significant adverse
impacts on consumers in calendar year 2005 and if so, requires
the program to be waived in calendar year 2005 to avoid any
such adverse impacts on a national, regional or State basis.
In addition, the bill exempts small refineries from
participating in the program until 2011, and requires this
exemption to be extended for not less than 2 years for any
small refinery for which compliance with the program is found
to impose a disproportionate economic hardship as determined by
a study conducted by the Secretary of Energy. In the bill,
small refineries are allowed to waive this exemption and opt-in
to the program earlier than 2011, as well as petition for an
extension of the exemption at any time.
The bill also requires that a market concentration analysis
of the ethanol production industry be performed annually by the
Federal Trade Commission (FTC) to determine whether there is
sufficient competition within the industry. There is concern
among some that insufficient competition within the industry,
particularly in combination with a federally mandated renewable
fuel program, could lead to price-setting and other anti-
competitive behavior. The FTC is to use the Herfindahl-
Hirschman Index (HHI) to measure market concentration, which is
a standard tool used by the FTC and the Department of Justice.
Any industry with an HHI score above 1800 is considered to be
highly concentrated. The committee recognizes that the HHI is
one among many indicators of possible anti-competitive
behavior.
The bill contains a safe-harbor provision regarding the
liability of manufacturers and distributors of renewable fuels
that are subject to the bill's mandate. The principle behind
this provision is simple. No one should be subject to tort
liability simply for manufacturing or selling a product that
was mandated by Congress. This provision is very limited. It
applies only to claims that a renewable fuel mandated by the
act is defective in design or manufacture. And, it applies only
so long as the applicable requirements of section 211 of the
Clean Air Act have been met. These requirements include both
compliance with requests for information about a fuel's public
health and environmental effects and compliance with any
regulations adopted by the Administrator. If these requirements
are not met, the safe harbor protection will not be available,
and liability will be determined under otherwise applicable
law.
This provision does not affect claims based on the wrongful
release of a renewable fuel into the environment. Anyone harmed
by a release of that kind would retain all the rights he has
under current law. Also, it also applies only prospectively, so
it does not affect any claims that have already been filed as
of the effective date.
Some have argued that imposition of strict product
liability is a prerequisite for appropriate remedial actions.
Congress disagrees. First, negligence theories more than
suffice to address possible remedial questions. Second, the use
and improvement of the UST program in this legislation,
provides a fair and efficient mechanism to address potential
contamination problems. Third, strict liability theories are
highly inefficient mechanisms for addressing water quality
concerns. For example, a recent report from the Council of
Economic Advisors found that using the tort system in this way
``is extremely inefficient, returning only 20 cents of the tort
cost dollar for that purpose.'' (Council of Economic Advisors,
Who Pays for Tort Liability Claims? An Economic Analysis of the
U.S. Tort Liability System, April 2002, at 9).
In Congress, we have considered liability protections in a
variety of settings, including medical care, firefighter
assistance, educational institutions, firearms, nuclear energy,
and many other areas. The point is that liability protection
makes sense when we are seeking to protect a greater principle,
such as sound public policy or fairness.
Of course, there is some uncertainty regarding the long-
term health and environmental effects of renewable fuels. A
major strength of this bill is its provision requiring EPA to
conduct studies of those effects. If those studies show that
additional regulation is necessary, the Administrator has the
authority to initiate a rulemaking. Liability protection under
the bill would depend on full compliance with any rules that
the Administrator may adopt. This balanced approach will
protect the public from adverse health and environmental
impacts from renewable fuels while not exposing manufacturers
and distributors to tort lawsuits for complying with the
renewable fuels mandate of the bill.
Some have contended that this provision would give
``polluters . . . sweeping liability exemptions for damage to
public health or the environment resulting from renewable fuels
or their use in conventional gasoline.'' Nothing could be
further from the truth. In the first place, the safe harbor
provision does not affect claims based on the wrongful release
of a renewable fuel into the environment. Those responsible for
releases to the environment receive no protection whatsoever.
Moreover, the safe harbor only applies if the maker or seller
of a renewable fuel complies with EPA regulations to protect
the public health and environment. Under this bill, the
Administrator has the authority to control or even prohibit the
sale of renewable fuels that may adversely affect air or water
quality or the public health. There is no safe harbor if the
Administrator's rules are violated.
Under existing section 211(h) of the Clean Air Act, the
Administrator was required to promulgate regulations to reduce
the volatility of conventional (i.e., non-reformulated)
gasoline by limiting its Reid vapor pressure (RVP). Reid vapor
pressure is a method for determining gasoline's volatility.
Those regulations have long since been established and they
require that during the summer high-ozone season the RVP of
conventional gasoline not exceed 9.0 pounds per square inch
(psi) in ozone attainment areas and northern ozone non-
attainment areas, and 7.8 psi in southern ozone nonattainment
areas. Section 211(h) also recognizes, however, a 1.0 psi RVP
waiver for gasoline containing 10 percent denatured anhydrous
ethanol. This means that under the Agency's regulations
gasoline containing ethanol can have an RVP of 10.0 psi in
ozone attainment areas and northern ozone nonattainment areas,
and 8.8 psi in southern ozone nonattainment areas. In addition
to the Federal RVP regulations, the Agency has also approved
numerous State RVP controls under section 211(c)(4)(C) of the
Act, upon a demonstration by the State that the RVP controls
were necessary to achieve a national ambient air quality
standard and that there were no reasonable and practicable non-
fuel measures available that would bring about timely
attainment.
The one-pound RVP waiver for ethanol blends of conventional
gasoline is important for supply reasons. Because of the
waiver, ethanol can be splash blended into finished gasoline at
the distribution terminals. In other words, because of the
waiver, the gasoline can be sold either with ethanol or without
it. In contrast, if the waiver were not allowed, special low
volatility blendstocks would be required to compensate for
ethanol's impact on gasoline volatility. This has implications
for the supply and distribution of gasoline. Without the one-
pound waiver, gasoline could be stranded if there is not
ethanol available to blend with it. Section 819(c) of the bill
contains provisions to ensure that there is adequate lead-time
and that supply considerations are taken into account.
Section 101(c) of the bill retains the one-pound RVP waiver
for ethanol blends of conventional gasoline. However, the bill
also provides States an expedited process to eliminate the one-
pound waiver in any area of a State if the State demonstrates
to the Administrator that the one-pound waiver will increase
emissions that contribute to air pollution in any area in the
State. It is the intent of this provision to require such a
demonstration for any area of the State for which the one-pound
waiver would be eliminated. In addition, while it is the intent
of this provision to establish an expedited process by which
the State can request the Administrator to eliminate the one-
pound RVP waiver, it is not the intent to expand the authority
of the Governor of a State beyond what he or she may have under
State law. Furthermore, it is expected that the supporting
documentation submitted by the Governor in support of the
notification to eliminate the one-pound waiver would include a
detailed analysis, including urban/regional airshed modeling,
of the impact of the one-pound waiver on air quality in any
area of the State where the Governor seeks to have the one-
pound waiver eliminated.
Sec. 102. Renewable Fuel
The bill requires the Administrator to conduct, with
respect to each conventional gasoline use area and each
reformulated gasoline use area in each State, a survey to
determine the market shares of various types of fuels with
ethanol or renewable fuels. The report is to be submitted to
Congress.
The bill provides limited Federal assistance for the
development of ethanol production capabilities. It is the
committee's intent that such assistance be targeted to those
areas of the country that currently has low rates of ethanol
production.
For example, the bill requires the Secretary of Energy to
establish a 10-year program to provide Federal loan guarantees
for construction of facilities that convert municipal solid
waste into fuel ethanol. The Secretary is directed to give
preference to applicants located in markets with the greatest
need for such a facility, either because of limited
availability of land for waste disposal or because of a high
level of demand for fuel ethanol due to low local production
rates of fuel ethanol.
The bill also requires the Administrator to provide grants
for the research, development, and implementation of renewable
fuel production technologies. Grant eligibility is limited to
entities located in ``RFG States,'' or States containing one or
more covered areas as defined in section 211(k)(10)(D) of the
Clean Air Act (42 U.S.C. 7411(k)(10)(D)). Eligible entities
must be academic institutions or consortia comprised of
combinations of academic institutions, industry, and government
in such States. The bill authorizes $25 million for each of
fiscal years 2004 through 2008 for the grant program.
In addition, the bill allows the Secretary of Energy to
provide grants to merchant producers of cellulosic biomass
ethanol to assist in the construction of production facilities
in the United States that use cellulosic biomass feedstocks
derived from agricultural residues or municipal solid waste.
The bill authorizes $750 million for such grants for fiscal
years 2004 through 2006.
Sec. 103. Survey of Renewable Fuels Consumption
The bill requires the Administrator to conduct and publish
a survey of renewable fuels consumption in the motor vehicle
fuels market on a monthly basis. In developing and conducting
this survey, the Administrator shall protect the
confidentiality of the responses to the survey and shall
include the bill's specified elements of the survey.
Title II--Federal Reformulated Fuels
Sec. 201. Short Title
This subtitle may be cited as the ``Federal Reformulated
Fuels Act of 2003.''
Sec. 202. Leaking Underground Storage Tanks
SUMMARY
The bill authorizes appropriations not to exceed $200
million from the Leaking Underground Storage Tank (LUST) Trust
Fund to be used for cleanup and treatment of MTBE. The bill
authorizes an additional $200 million over 6 years from the
LUST Trust Fund for EPA and States to conduct inspections,
issue orders, and bring actions under Subtitle I of the Solid
Waste Disposal Act.
DISCUSSION
In 1984, Congress enacted, as Subtitle I of the Solid Waste
Disposal Act, a comprehensive program to address the problem of
leaking underground storage tanks. Among other things, the
program required EPA to develop leak detection and prevention
standards for underground storage tanks (USTs). It authorized
the Agency to compel tank owners and operators either to take
corrective action to clean up leaking tanks and comply with
standards for USTs or to close the tanks. States have largely
taken the lead in implementing and enforcing the program
requirements, including corrective action requirements.
States receive Federal funds from the LUST Trust Fund.
Revenue for this Fund comes from a one-tenth of one cent tax on
all petroleum products. This tax generates approximately $170
million per year. The interest on the principal in the fund
generates approximately $70 million annually (roughly the
amount of annual appropriations from the LUST Trust Fund).
Amounts are appropriated each year from the Trust Fund for
the States and EPA to implement and enforce the UST corrective
action requirements; to conduct cleanups in certain limited
situations where there is no financially viable responsible
party or where a responsible party fails to undertake the
appropriate corrective action; to take corrective action in
cases of emergency; and to bring cost recovery actions against
parties to seek reimbursement of costs expended from the Fund
to clean up sites. The balance of the Trust Fund is
approximately $1.3 billion. The annual appropriation from the
Trust Fund for fiscal year 2001 was approximately $72 million.
Congress has appropriated approximately $10 million per year
from general revenues for State implementation of leak
prevention and detection programs.
In addition to the Federal LUST Trust Fund, many States
have also established funds, capitalized through State gas
taxes, fees, and other mechanisms, to pay for cleanups and to
provide assistance to tank owners in complying with other
requirements. States spend approximately $1 billion per year
from their trust funds. In recent years, however, the claims
against those funds have risen dramatically.
More than a million leaking USTs have been closed under
this program., EPA estimates that over 740,000 active USTs
contain petroleum products. Some of these tanks have leaks,
causing potential harm to human health and the environment. A
number of recent, high profile contamination cases have
highlighted this problem. MTBE has been detected at thousands
of leaking UST sites. In some cases, drinking water wells have
been closed due to these releases of MTBE. According to EPA,
States have reported more than 400,000 confirmed releases from
USTs. Cleanups have been initiated for approximately 357,000
releases and almost 242,000 cleanups have been completed. In
spite of this progress, many thousands of cleanups remain to be
completed. EPA, States, and the private sector have suggested
that lack of resources, both for cleanup and for inspections
and enforcement, have limited efforts to fully address MTBE
contamination and leaking USTs. Title 2 of this bill addresses
these concerns.
Section 2 reconfirms the authority of the Administrator and
the States to use funds from the LUST Trust Fund for the
cleanup of sites contaminated by MTBE from leaking USTs. In
addition, Section 2(a) authorizes the Administrator and the
States to conduct such cleanup activities using specifically
designated funds made available under new Section 9011(a) from
the LUST Trust Fund. In order to undertake a corrective action
under this subsection, the Administrator or a State must still
comply with the requirements of Section 9003(h)(2) of the Solid
Waste Disposal Act. States are to exercise this authority in
accordance with their cooperative agreements.
Relatively low levels of MTBE can be detected in
groundwater. The detection of MTBE, by taste and smell, can
make the water unpalatable, but not necessarily harmful. This
section amends Section 9003 of the Solid Waste Disposal Act to
clarify that the Administrator and the States may undertake
corrective actions whenever the presence of MTBE in groundwater
presents a threat to public welfare, even in situations where
the level of MTBE is not so high as to present a threat to
human health.
Section 2 amends Subtitle I of the Solid Waste Disposal Act
by creating a new Section 9010 giving States greater
flexibility in their use of LUST funds. New Section 9010
authorizes EPA and the States to use funds appropriated from
the LUST Trust Fund to conduct inspections, issue orders, or
bring actions under Subtitle I. Funding authorized under this
section is for both formal enforcement actions, such as
judicial actions and administrative orders, and related
measures to secure compliance, such as notices of violation or
warnings. This increased funding for inspections and
enforcement related activities will enable States and EPA to
secure greater compliance with UST standards. Increased
compliance will avoid future releases and resulting cleanup
costs. Funds authorized under this provision may be used for
cost recovery.
This section does not change current law on State authority
under authorized programs or Federal authority to enforce the
requirements of Subtitle I. Nor does this provision affect
EPA's authority to use other funds to enforce the UST program.
EPA receives funding from sources other than the LUST Trust
Fund to undertake inspection and enforcement related activities
for leak detection and other preventive requirements. Any LUST
Trust Fund appropriations used for such enforcement activities
by EPA are expected to supplement funds that the Agency has
been receiving, and will continue to receive, from sources
other than the LUST Trust Fund.
In addition to authorizing funding for States and EPA for
federally authorized programs, this section authorizes States
to use funds to undertake inspection and enforcement related
actions for State tank leak detection, prevention, and other
requirements through State programs with requirements that are
similar or identical to Subtitle I. State agencies currently
receive funding from EPA from sources other than the LUST Trust
Fund to undertake such activities for leak detection and other
preventive requirements. It is expected that States will
continue to receive funding from EPA from these other sources,
as well as from the LUST Trust Fund, for these activities. Any
LUST Trust Fund appropriations used for enforcement related
activities by States should supplement funds that the States
have been receiving, and will continue to receive, through
grants authorized under Section 2007(f).
Section 2 also creates a new Section 9011 to increase the
levels of authorized funding for measures related to corrective
actions and enforcement. This section authorizes appropriations
for two major and equally important activities--funding an
immediate need to address MTBE, which is currently coming from
leaking underground tanks and is creating problems in numerous
drinking water wells, and facilitating inspection and
enforcement activities to avoid similar problems being created
in the future. Section 9011(1) authorizes a one-time
appropriation of $200 million for corrective actions with
respect to MTBE. The bill authorizes substantial funding to
clean up MTBE contamination in recognition of the fact that
this problem has arisen, in part, as a result of increased use
of MTBE by refiners in an effort to meet Federal oxygenate
requirements. Section 9011(2) authorizes an additional $200
million over the period between fiscal years 2002 through 2007
to conduct inspections or issue orders or bring actions under
Subtitle I. There is broad consensus that more resources are
needed to conduct inspections to ensure that underground tanks
comply with applicable regulations and to ensure early
detection of leaks and other problems. EPA has estimated that
it would cost approximately $93 million over what is currently
appropriated for the first year, and $70 million each year
thereafter, to inspect facilities on an annual basis. A
biannual inspection schedule would cost approximately $63
million over what is currently appropriated for the first 2
years combined, and $20 million additional annually thereafter.
Sec. 203. Restriction on the Use of MTBE
SUMMARY
Section 203 restricts the use of MTBE, but allows States to
individually authorize the sale and use of MTBE within their
own borders.
DISCUSSION
While the States can authorize the sale and use of MTBE,
they cannot require its sale or use. Section 203 also clarifies
the Administrator's authority to allow trace quantities of MTBE
notwithstanding the prohibition on MTBE use. This provision
recognizes that MTBE has been used in gasoline for over 20
years, and as such will be present in trace quantities
throughout the distribution system even after its use in motor
fuels is prohibited. Recognition of such trace quantities is
also appropriate because MTBE may be generated as a trace
byproduct in the production of other gasoline components.
The bill provides for transition assistance to merchant
MTBE manufacturers. To be eligible for such assistance, the
manufacturer must be making MTBE at time of enactment through
the time that the prohibition on MTBE use takes effect. This
provision recognizes that although Congress has reconsidered
the relative value of MTBE, Congress also recognizes that MTBE
is an integral part of the fuels system as a result of the
reformulated gasoline oxygen content requirement and that lead-
time must be provided to allow the industry to transition to
substitutes. Essentially, transition assistance is premised on
the facts that: (1) MTBE is widely used because of a Federal
mandate, the oxygen content requirement; (2) MTBE has been
effective in addressing the energy and environmental concerns
that lay at the heart of a larger Federal program requiring the
use of RFG; (3) the government, as a result of the first two
points, bears great responsibility for any attendant losses
attributable to the change in legal status of MTBE; and (4)
failure to address the consequences of this change in status
may undermine any incentive for additive manufacturers to
produce new generations of additives that will be needed to
replace MTBE and to meet future energy and environmental goals.
Sec. 204. Elimination of the Oxygen Requirement for Reformulated
Gasoline
In addition to repealing the reformulated gasoline oxygen
content requirement and ensuring that the air toxics benefits
of the reformulated gasoline program are maintained, this
provision requires EPA to simplify the existing reformulated
gasoline regulations by replacing the less stringent VOC
Control Region 2 requirements with the more stringent VOC
Control Region 1 requirements. (204(d)) This change has no
effect on the VOC adjustment that currently applies to ethanol
blends of reformulated gasoline in Milwaukee and Chicago or on
the Agency's authority to expand that adjustment to other
reformulated gasoline areas.
Section 204(b). The goal of this provision is to ensure
that real world air toxic emission reduction benefits are
maintained, as recommended by EPA's Blue Ribbon Panel on
Oxygenates in Gasoline. The petroleum industry did much better
than required by law when it came to reducing toxic air
pollutant emissions from reformulated gasoline. In fact, the
industry did better in Phase I (1995-1999) of the reformulated
gasoline program than it was even required to do under the more
stringent Phase II (2000 and beyond) requirements. Concerns
were raised by the Blue Ribbon Panel that some of these real
world benefits could be lost as a result of repeal of the
reformulated gasoline oxygen mandate and phase-down in MTBE
use. This provision ensures that those real world benefits are
not lost.
To ensure that the air toxics benefits of the reformulated
gasoline program are maintained, the Administrator promulgated
the Mobile Source Air Toxics Rule (MSAT Rule) on March 29,
2001. That rule requires that refineries and importers continue
to attain the same level of air toxics performance that they
attained in 1998-2000. The more stringent standards imposed by
the rule do not apply to incremental volumes of reformulated
gasoline production, i.e., production in excess of what the
particular refinery or importer produced in 1998-2000. Gasoline
production above the baseline volumes is subject to the Phase
II reformulated gasoline standards, which require a 21.5
percent reduction in aggregate air toxics emissions reductions,
relative to 1990 baseline levels. EPA excluded these
incremental volumes from the more stringent standard because
the Agency did not want to discourage the production of
reformulated gasoline and because the incremental volume
adjustment is ``unlikely to have a material impact on air toxic
emissions from gasoline.'' 66 Fed. Reg. 17230, 17249 (March 29,
2001).
Section 204(b) of the bill improves EPA's existing rule in
two ways. The provision requires EPA to promulgate a rule
within 270 days of enactment to establish ``for each refinery
or importer (other than a refinery or importer in a State that
has received a waiver under section 209(b) with regard to
gasoline produced for use in that State), standards for toxic
air pollutants from use of the reformulated gasoline produced
or distributed by the refinery or importer that maintain the
reduction of the average annual aggregate emissions of toxic
air pollutants for reformulated gasoline produced or
distributed by the refinery or importer during calendar year
1999 and 2000 . . . .'' It is the intent of this provision that
EPA expeditiously revise the mobile source air toxics rule
promulgated on March 29, 2001, to change the baseline
provisions from 1998-2000 as in the existing rule to 1999-2000.
In addition, to ensure that the average annual aggregate
air toxic emission reduction benefits are maintained on a
regional basis, defined to be a PADD (Petroleum Administration
for Defense District), the Administrator is required to
continue to monitor average annual aggregate air toxics
emissions to ensure that the performance achieved in 1999-2000
is maintained into the future. If the Administrator determines
that average annual aggregate air toxics emission reductions
are not maintained in any PADD, relative to 1999-2000
performance, the Administrator is required to expeditiously
revise the mobile source air toxics rule to eliminate the
incremental volume exclusion in MSAT for reformulated gasoline.
Section 204(c) permits commingling at retail stations of
Reformulated Gasoline (RFG) containing ethanol and RFG that
does not contain ethanol. This provision is intended to
increase retailer flexibility during times of tight RFG
supplies by permitting them to switch between different types
of RFGs without draining their underground storage tanks, while
at the same time maintaining environmental protections inherent
in the RFG program. This provision will be included in section
211(k) of the Clean Air Act.
As a practical matter, commingling is unlikely to occur on
a regular basis. Most gasoline markets are not likely to be
supplied with various gasoline formulations. In addition, it is
undesirable for retailers to switch back and forth between
ethanol-blended and other types of gasoline due to the effects
that ethanol has on dispenser seals, and the need for more
frequent filter change-outs. However, if faced with a tight
market, a commingling allowance provides flexibility to
retailers to supply gasoline to end-users.
There is concern that widespread commingling of ethanol
with non-RVP-adjusted gasolines could increase VOC emissions.
This section requires that retailers certify that the
commingled product meet all content and emissions performance
standards for reformulated gasoline. In addition, emission
control strategies already in place would limit the amount of
VOCs that could actually escape into the environment. These
include Stage I&II vapor recovery (in nonattainment areas),
pressure/vacuum valves on tank vents, on-board refueling vapor
recovery systems, and on-board vehicle vapor controls. This
provision is not intended to authorize or allow the U.S.
Environmental Protection Agency or any other State or Federal
Government agency to require that gasoline be reformulated to
provide an adjustment to offset any potential VOC emissions
increase from retail commingling.
In addition, any party other than the retailer shall not be
subject to an enforcement action or penalties under section (d)
solely arising from the commingling of compliant gasolines by
the retailer, unless the other party caused commingling that
was not intended by the retailer or unless the other party
failed to complete the quality assurance and oversight measures
specified under current gasoline regulations.
Section 204(e) This provision expressly preserves baseline
adjustments granted previously under 40 CFR 80.915(g) of the
Mobile Source Air Toxic rule, but only to the extent they are
based on the 1999-2000 base period adopted by this Section. It
also allows the Administrator to make adjustments applicable to
the refinery specific standards that a refiner must meet under
clause (b)(2) of Section 204.
The Administrator may, but is not required, to change a
``clean gasoline producer'' baseline adjustment to reflect the
Federal MTBE ban, but may not lower a refiner's baseline to
less than the average reduction in toxic air emissions in
reformulated gasoline supplied to PADD I during the calendar
years 1999-2000.
Sec. 205. Public Health and Environmental Impacts of Fuels and Fuel
Additives
SUMMARY
The bill directs the Administrator to require tests to
determine potential public health effects of fuels or fuel
additives prior to registering fuels or fuel additives and
during their use. Studies under this provision will be
conducted on a regular basis. In addition, EPA is instructed to
study the health and environmental impacts of using ETBE and
other additives as a substitute for MTBE.
DISCUSSION
The existing law requires the Administrator to require fuel
and additive manufacturers to conduct tests to determine the
potential health and environmental effects of fuels and fuel
additives.
The Administrator should use this authority to identify and
assess any adverse public health, welfare, or environmental
effects from the use of motor vehicle fuels or fuel additives
or the combustion products of such fuels or fuel additives. The
Administrator should use the authority to assess threats to
both air pollution and water pollution in order to effectively
exercise the authority in Section 211(c) as amended by this
legislation. This provision is intended to prevent situations
such as the one presented by MTBE contamination of water
supplies.
To avoid such recurrences, the Blue Ribbon Panel on
Oxygenates in Gasoline recommended that EPA and others
accelerate ongoing research efforts into the inhalation and
ingestion health effects, air emission transformation
byproducts, and environmental behavior of all oxygenates and
other components likely to increase in the absence of MTBE.
This should include research on ethanol, alkylates, and
aromatics, as well as on gasoline compositions containing those
components.
Sec. 206. Analyses of Motor Vehicle Fuel Changes
SUMMARY
Section 206 requires the Administrator to publish an
analysis of the changes in emissions of air pollutants and air
quality due to the implementation of the provisions in S. 791.
The analysis is to examine changes in all motor vehicle fuels
and fuel additives and must attempt to identify and quantify
any increase in emissions or air pollution caused by
implementing this bill. A draft analysis is to be published
within 4 years of enactment, and a final analysis is to be
published within 5 years of enactment. The Administrator should
include in the analysis consideration of direct and evaporative
emissions, as well as combustion by-products, from the use of
these fuels and fuel additives in highway and non-road
vehicles.
Section 206 requires the Administrator to develop and
finalize an emissions model that reasonably reflects the
effects of characteristics or components of motor vehicle fuel
or emissions from vehicles in the motor vehicle fleet during
calendar year 2006.
DISCUSSION
Section 211(c) of the CAA, as amended by this legislation,
provides the Administrator with the authority to regulate,
control, or prohibit the manufacture, introduction into
commerce, offering for sale, or sale of any fuel or fuel
additive, if, in the judgment of the Administrator, the fuel or
fuel additive or emission product causes or contributes to air
pollution or water pollution that may reasonably be anticipated
to endanger the public health or welfare. The bill requires the
Administrator to exercise this authority with respect to MTBE.
The bill also adds water quality as an environmental protection
criterion in Title II of the Act.
Section 202(l) of the Act requires the Administrator to
exercise the authorities in Sections 211(c) and 202(a) and to
promulgate, and from time to time revise, regulations
containing reasonable requirements to control hazardous air
pollutants from motor vehicles and fuels. The regulations must
reflect the greatest degree of reductions achievable,
considering cost and projected available technology, and must
focus on those categories of emissions that pose the greatest
risk to human health or about which significant uncertainties
remain.
The emissions model currently used by EPA to determine
compliance in both the RFG and conventional anti-dumping
gasoline programs is called the complex model. It uses 1990
average gasoline quality and 1990 model year motor vehicle
technology as its baseline, and models how changes in gasoline
qualities change emissions of these vehicles compared to 1990
gasoline. For purposes of this provision, EPA is authorized to
update its complex model to address changes in motor vehicle
technology since 1990. The motor vehicle fleet in calendar year
2005 will be different from model year 1990 vehicles. The
updated model is expected to contain a mix of technologies
with, for example, the newer Tier 2 technology entering the
fleet.
Developing an emissions model that reflects the actual mix
of motor vehicle technologies in the fleet during calendar year
2006 allows EPA to reasonably determine the change in emissions
between 1999-2000 and 2005-2006 due to changes in gasoline, as
the 2006 calendar year fleet should still contain the kinds of
technologies found in the prior years, although with a
different mix of technologies. EPA should work with a
consortium of the automobile and oil industries and other
interested and qualified parties to design and conduct the
extensive vehicle and fuel combination testing that will be
necessary to update the complex model, as was done in
developing the current complex model.
An updated complex model may be useful for other related
applications, such as emissions modeling for State planning.
EPA could use the updated model in the RFG and conventional
gasoline programs, including future RFG rulemakings, where
doing so would not be inconsistent with the provisions of
Section 211(k).
Sec. 207. Additional Opt-In Areas Under Reformulated Gasoline Program
SUMMARY
This section of the bill provides explicit State authority
to allow non-classified areas in the Ozone Transport Region to
opt-in to the RFG program.
DISCUSSION
Currently, 17 States and the District of Columbia rely on
the RFG program as an emissions control strategy. Appendix II
provides a complete list of all RFG areas. The CAAA mandated
use of RFG in nine areas. Several States (13) have exercised
the opt-in authority of Section 211(k)(6) to require the use of
RFG. Areas that opted in to the RFG program prior to January 1,
2000, are required to use RFG until December 31, 2003. The Act
limits opt-in actions to areas that previously violated the 1-
hour ozone NAAQS and are classified according to their current
status in relation to attainment of the NAAQS. States expend
considerable resources in an effort to avoid violating the
NAAQS because of the stringent requirements imposed on
nonattainment areas by the CAA. This section allows use of the
RFG program for those areas in the Ozone Transport Region that
seek to use it as an emissions control technique in the State's
strategy for avoiding new violations of the NAAQS. Under this
provision, once the SIP revision is approved the area will be a
covered area under the Federal program.
Sec. 208. Federal Enforcement of State Fuels Requirements
SUMMARY
This provision requires EPA to enforce State fuels controls
and prohibitions approved by the Administrator under section
211(c)(4)(C) of the Act, if the State so requests.
DISCUSSION
Under section 211(c)(4)(C), EPA may approve an otherwise
preempted State fuel control or prohibition if the State
submits a revised implementation plan to the Administrator and
demonstrates that the State fuel controls or prohibitions are
necessary to achieve the national ambient air quality standard
that the State's plan implements and that there are no other
reasonable and practicable non-fuel measures available that
would bring about timely attainment. Because of the national
character of the fuels industry and the way that fuels are
distributed in fungible streams, State fuel controls and
prohibitions have long been recognized as the control of last
resort. The new provision does not change these basic
principles. The States would still be required to submit a
revised implementation plan that meets the requirements of
section 110 of the Act, including the requirement that the
controls be enforceable by the State as a practical matter.
This means that States are still required to have their own
enforcement programs if they want to impose fuel controls or
prohibitions that differ from the controls and prohibitions
imposed by EPA under section 211 of the Act. The only effect of
the new provision is that if a State meets all of the existing
requirements under section 110 and 211(c)(4), the State can
request that the Administrator take a more active role in
enforcement of those regulations.
Sec. 209. Fuel System Requirements Harmonization Study
SUMMARY
The Administrator of the Environmental Protection Agency
and the Secretary of Energy shall jointly conduct a study of
Federal, State, and local requirements concerning motor vehicle
fuels.
DISCUSSION
In the last several years, multiple unique gasoline blends
required in different parts of the country have led to reduced
fungibility in gasoline distribution systems and exacerbated
shortages when supply disruptions have occurred. Several
studies of this ``boutique fuels'' problem have identified it
as a contributing factor to increased price volatility and
market tightness. This bill takes the first step in addressing
boutique fuels by making major changes to Federal fuels
requirements: a Federal phase-out of MTBE; repeal of the RFG
oxygen content mandate; and a new Renewable Fuels Standard with
a credit banking and trading program. Section 209 takes the
next step by requiring DOE and EPA to conduct a comprehensive
study on how the various fuels requirements affect several
things, including (1) the supply of fuels available to
consumers; (2) achievement of air quality goals; (3) the fuel
distribution system; and (4) industry investment in new
capacity. The EPA and DOE are to recommend to Congress
potential changes to harmonize fuels requirements nationally
and reduce the number of specialty fuels. The report
recommendations are required to take into account the need to
provide advance notice of required modifications to refinery
and fuel distribution systems in order to ensure an adequate
supply of motor vehicle fuel in all States.
Legislative History
S. 791 was introduced by Senator Inhofe, on April 4, 2003,
and was referred to the Committee on Environment and Public
Works. The committee considered and amended the bill in a
business meeting on April 9, 2003, and ordered the bill
favorably reported, as amended by the committee, to the Senate.
During the 107th Congress, the committee favorably reported a
related bill, S. 950, the Reformulated Fuels Act, which did not
pass the Senate.
Hearings
On March 20, 2003, the Subcommittee on Clean Air, Climate
Change, and Nuclear Safety held a non-legislative hearing on
alternative fuels and fuel additives. The witnesses providing
testimony were Hon. Jeffrey R. Holmstead, Assistant
Administrator for Air and Radiation, U.S. Environmental
Protection Agency; Hon. David Garman, Assistant Secretary for
Renewable Energy, U.S. Department of Energy; Mary Hutzler,
Director, Office of Integrated Analysis and Forecasting, Energy
Information Administration; Fred Yoder, President, National
Corn Growers Association; Dr. Edward Murphy, Downstream General
Manager, American Petroleum Institute; Robert Slaughter,
President, National Petrochemical and Refiners Association;
Scott Segal, Partner, Bracewell and Patterson, L.L.P.; Rich
Wagman, First Vice Chairman of ARTBA, President of G.A. and
F.C. Wagman, York, Pennsylvania, on behalf of the American Road
and Transportation Builders Association; A. Blakeman Early,
Consultant, American Lung Association; Paul J. Granger, P.E.,
Superintendent, Plainview Water District, Plainview, New York;
and Craig Perkins, Director, Environment and Public Works
Management, Santa Monica, California.
During the 105th through the 107th Congresses, the
committee held hearings on the use of oxygenated fuels under
the requirements of the Clean Air Act.
On December 9, 1997, the Committee on Environment and
Public Works held a field hearing in Sacramento, CA on the
presence of MTBE in the nation's water supply. Testimony was
given by Nancy J. Balter, Principal, Center for Environmental
Health and Human Toxicology, and former Associate Professor of
pharmacology, Georgetown University Medical Center; Nachman
Brautbar, Professor of clinical medicine, University of
Southern California School of Medicine; Cynthia Dougherty,
Director, Office of Groundwater and Drinking Water,
Environmental Protection Agency; Stephen K. Hall, Executive
Director, Association of California Water Agencies; The
Honorable Tom Hayden, California State Senator; The Honorable
Richard Mountjoy, California State Senator; Gary Patton,
Counsel, The Planning and Conservation League; Craig Perkins,
Director of Environment and Public Works Management, City of
Santa Monica, California; Peter M. Rooney, Secretary,
California State Environmental Protection Agency; David Spath,
Chief, Drinking Water and Environmental Management Division,
California State Environmental Protection Agency; and John
Zogorski, Chief of National Synthesis on Volatile Organic
Compounds and MTBE, U.S. Geological Survey.
On September 16, 1998, the Committee on Environment and
Public Works held a hearing on S. 1576, a bill to amend the
Clean Air Act to permit the exclusive application of California
State regulations regarding reformulated gasoline in certain
areas within the State. Testimony was given by The Honorable
Brian Bilbray, U.S. Representative from the State of
California; John D. Dunlap, III, Chairman, California Air
Resources Board; Douglas A. Durante, Executive Director, Clean
Fuels Development Coalition; The Honorable Dianne Feinstein,
U.S. Senator from the State of California; Daniel S. Greenbaum,
President, Health Effects Institute; Al Jessel, Senior Fuels
Specialist, Chevron Products Company; and Ned Sullivan,
Commissioner, Maine Department of Environmental Conservation.
On October 5, 1999, the Subcommittee on Clean Air,
Wetlands, Private Property and Nuclear Safety of the Committee
on Environment and Public Works held a hearing on the Blue
Ribbon Panel findings on MTBE. Testimony was given by Robert H.
Campbell, Chairman and Chief Executive Officer, Sunoco, Inc.;
The Honorable Jake Garn, Vice Chairman, Huntsman Corporation;
Daniel S. Greenbaum, President, Health Effects Institute; and
Michael P. Kenny, Executive Officer, California Air Resources
Board.
On June 14, 2000, the Subcommittee on Clean Air, Wetlands,
Private Property and Nuclear Safety of the Committee on
Environment and Public Works held a hearing on the
environmental benefits and impacts of ethanol under the Clean
Air Act. Testimony was given by Dan Greenbaum, President,
Health Effects Institute; Blake Early, Environmental
Consultant, American Lung Association; Michael Graboski,
Director, Colorado Institute for Fuels and High Altitude Engine
Research, Colorado Department of Chemical Engineering, Colorado
School of Mines; Bob Slaughter, Director, National
Petrochemical & Refiners Association; Jack Huggins, Vice
President, Williams Energy Services; Jason Grumet, Executive
Director, Northeast States for Coordinated Air Use Management;
Stephen Gatto, President and Chief Executive Officer, BC
International; Gordon Proctor, Director, Ohio Department of
Transportation; The Honorable Charles Grassley, United States
Senator from the State of Iowa; The Honorable Tom Harkin,
United States Senator from the State of Iowa; The Honorable
Richard Durbin, United States Senator from the State of
Illinois.
On April 27, 2001, at the Media Center, Salem High School,
Salem, NH, the committee received testimony on the use of the
gasoline additive methyl tertiary butyl ether (MTBE), from
Christina Miller, homeowner, Derry NH; Hon. Arthur Klemm, New
Hampshire State Senator, Windham, NH; Robert Varney,
Commissioner, New Hampshire Department of Environmental
Services, Concord, NH; Nancy Kinner, Professor of Civil
Engineering, University of New Hampshire, Durham, NH; William
Holmberg, Biofuel Refiner, Bow, NH; Patty Aho, Executive
Director, Maine Petroleum Association, Augusta, ME.
Rollcall Votes
The Committee on Environment and Public Works met to
consider S. 791 on April 9, 2003. During consideration of the
bill, the following amendments were agreed to by voice vote: an
amendment offered by Senator Murkowski, as amended by her
second degree amendment, exempting Alaska and Hawaii from
certain ethanol provisions of the bill; an amendment offered by
Senator Clinton, modified by a second degree amendment,
relative to ethanol market concentration analysis; an amendment
offered by Senator Clinton, relative to cellulosic biomass
ethanol; an amendment offered by Senator Clinton, relative to
emissions of toxic pollutants; an amendment offered by Senator
Clinton, relative to loan guarantees for conversion of solid
waste facilities to ethanol; an amendment offered by Senator
Boxer, modified by an amendment offered by Senator Clinton,
relative to research and development of new technologies for
cellulosic biomass; an amendment offered by Senator Boxer,
relative to State and local participation in renewable fuel
reports; and three amendments offered by Sentor Boxer, relative
to health effects on children, pregnant women, and sensitive
populations. An amendment offered by Senator Boxer concerning
liability treatment of fuels and additives was defeated by 10
noes to 9 ayes. Voting against the Boxer amendment were
Senators Inhofe, Baucus, Bond, Crapo, Voinovich, Chafee,
Cornyn, Murkowski, Thomas, and Allard. Voting in favor were
Senators Jeffords, Warner, Reid, Graham, Lieberman, Boxer,
Wyden, Carper, and Clinton. The bill was ordered reported to
the Senate, as amended, by voice vote.
Regulatory Impact Statement
In compliance with section 11(b) of rule XXVI of the
Standing Rules of the Senate, the committee makes evaluation of
the regulatory impact of the reported bill.
The regulatory authority granted by this bill is structured
to streamline and make flexible the imposition of any new
requirements.
Section 101 requires the Administrator of the EPA to issue
regulations to establish a renewable fuel content requirement
applicable to all refineries, blenders, distributors and
importers of gasoline sold or introduced into commerce in the
United States, except in Alaska or Hawaii.
Under Section 203, no regulatory action is required to
effect the phaseout of MTBE, though the Administrator will need
to issue regulations to implement and enforce this phaseout.
The Administrator's existing authority to limit the use of
fuels or fuel additives is expanded by the bill to allow
consideration of water pollution effects.
Section 204 requires EPA to promulgate regulations to
establish new performance standards for toxic emissions within
270 days of enactment. In the event that refiners' toxics
reduction performance does not achieve at least the 1999-2000
average in a region, EPA must promulgate revised regulations to
assure such performance. Compliance with the performance
standards is managed through existing regulatory structures
under Section 211(k) of the CAA.
Also in section 204, EPA must revise the current RFG
regulations to ensure that northern RFG gasoline will meet the
more stringent VOC requirements of southern RFG.
The provisions in Section 207 regarding additional opt-in
areas rely entirely on existing authority and regulatory
structures for revisions and approvals of SIPs.
Mandates Assessment
In compliance with the Unfunded Mandates Reform Act of 1995
(Public Law 104-4), the committee finds that S. 791 would
impose no significant Federal intergovernmental unfunded
mandates on State, local, or tribal governments.
Cost of Legislation
Section 403 of the Congressional Budget and Impoundment
Control Act requires that a statement of the cost of the
reported bill, prepared by the Congressional Budget Office, be
included in the report. That statement follows:
U.S. Congress,
Congressional Budget Office,
Washington, DC, May 6, 2003.
Hon. James M. Inhofe, Chairman,
Committee on Environment and Public Works,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 791, the Reliable
Fuels Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Susanne S.
Mehlman (for Federal costs), who can be reached at 226-2860,
Greg Waring (for the State and local impact), who can be
reached at 225-3220, and Lauren Marks (for the private-sector
impact), who can be reached at 226-2940.
Sincerely,
Douglas Holtz-Eakin
----------
S. 791, Reliable Fuels Act, As ordered reported by the Senate Committee
on Environment and Public Works on April 9, 2003
Summary
Under S. 791, methyl tertiary butyl ether (known as MTBE),
a widely used motor fuel additive, would be banned 4 years
after enactment of the bill--except individual States could
choose to continue to allow the use of MTBE by notifying the
administrator of the Environmental Protection Agency (EPA). The
bill would eliminate a requirement under current law for motor
fuel to contain oxygenates and would require that all motor
fuels sold by a refiner, blender, or importer contain specified
amounts of renewable fuel. This renewable fuel standard would
largely be met by adding ethanol to gasoline. S. 791 also would
authorize funding for several grant programs to support
research and development of renewable fuels technology. Funding
also would be authorized for rulemaking, studies, and reports
to the Congress associated with the renewable fuels program.
The bill's mandate to use renewable fuels would affect
spending on farm support programs and also would affect motor
fuels tax receipts. CBO estimates that enacting S. 791 would
increase direct spending by about $170 million over fiscal
years 2005 and 2006 but in total would reduce direct spending
by about $2 billion over the 2005-2013 period. In addition, CBO
estimates that the bill would increase revenues by about $130
million over the 2005-2008 period and decrease revenues by $2.3
billion over the 2005-2013 period. (We estimate no impact on
direct spending or revenues before 2005.) Finally, we estimate
that implementing S. 791 would cost about $250 million in 2004
and $2.3 billion over the 2004-2008 period, subject to
appropriation of the necessary amounts.
S. 791 contains an intergovernmental mandate as defined in
the Unfunded Mandates Reform Act (UMRA). However, the mandate
would impose no duty on State, local, or tribal governments
that would result in additional spending. Therefore, the
threshold established in UMRA ($59 million in 2003, adjusted
annually for inflation) would not be exceeded.
S. 791 contains several private-sector mandates as defined
in UMRA. While CBO cannot estimate the aggregate cost of all
the mandates contained in the bill, we expect that the total
cost of private-sector mandates would exceed the annual
threshold established in UMRA ($117 million in 2003, adjusted
annually for inflation). That conclusion is primarily based
upon our analysis of the renewable fuel standard which would
impose substantial costs on the motor fuels industry in 2009,
the fifth year the standard would be in effect.
Estimated Cost to the Federal Government
The estimated budgetary impact of S. 791 is shown in Table
1. The costs of this legislation fall within budget functions
270 (energy), 300 (natural resources and environment), 350
(agriculture), 370 (commerce and housing credit), and 950
(undistributed offsetting receipts).
Basis of Estimate
For this estimate, CBO assumes that the bill will be
enacted by the end of fiscal year 2003, that the full amounts
authorized will be appropriated for each fiscal year, and that
spending will follow historical rates for ongoing or similar
activities.
Spending Subject to Appropriation
S. 791 contains several provisions that specify amounts
authorized to be appropriated for researching methods to
improve the production of renewable fuels and amounts to
correct contamination caused by MTBE. The bill also would
authorize unspecified amounts to be appropriated for the
promulgation of new rules, studies, and reports to the Congress
associated with the new renewable fuels standard established
under the bill. Assuming appropriation of the necessary
amounts, CBO estimates that implementing these provisions would
cost $249 million in 2004 and $2.3 billion over the 2004-2008
period. Major components of this estimate are described below.
TABLE 1. ESTIMATED BUDGETARY IMPACT OF S. 791
By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
2004 2005 2006 2007 2008
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Grants for MTBE Producers
Authorization Level........................ 250 250 250 250 0
Estimated Outlays.......................... 100 213 250 250 150
Grants to Producers of Cellulosic Biomass
Ethanol
Authorization Level........................ 100 250 400 0 0
Estimated Outlays.......................... 45 148 283 183 73
Center for Biomass-Based Energy
Authorization Level........................ 4 4 4 0 0
Estimated Outlays.......................... 3 4 4 1 0
Grants for Renewable Fuel Production
Authorization Level........................ 25 25 25 25 25
Estimated Outlays.......................... 11 20 24 25 25
LUST Program
Authorization Level........................ 280 30 30 30 30
Estimated Outlays.......................... 70 106 88 54 43
Loan Guarantees
Estimated Authorization Level.............. 50 0 50 0 50
Estimated Outlays.......................... 10 30 20 30 20
Clean Air Act Provisions
Estimated Authorization Level.............. 10 10 7 11 10
Estimated Outlays.......................... 10 10 7 11 10
----------------------------------------------------------------
Total Proposed Changes
Estimated Authorization Level.............. 719 569 766 316 115
Estimate Outlays........................... 249 531 676 554 321
CHANGES IN DIRECT SPENDING
Estimated Budget Authority..................... 0 81 90 -9 -122
Estimated Outlays.............................. 0 81 90 -9 -122
CHANGES IN REVENUES
Estimated Revenues............................. 0 82 47 -42 -130
----------------------------------------------------------------------------------------------------------------
NOTE: LUST = Leaking Underground Storage Tanks.
Grants to MTBE Producers. S. 791 would authorize the
appropriation of $1 billion to DOE over the 2004-2007 period
for grants to assist producers of MTBE to convert facilities to
produce alternative fuel additives instead of MTBE.
Grants to Producers of Cellulosic Biomass Ethanol. S. 791
would authorize the appropriation of $750 million to the
Department of Energy (DOE) over the 2004-2006 period for grants
to producers of cellulosic biomass ethanol (ethanol derived
from such materials as plants, grasses, fibers, municipal solid
waste, and wood residues) to build production facilities.
Center for Biomass-Based Energy. This legislation would
authorize the appropriation of $12 million over the 2004-2006
period to establish a resource center at the University of
Mississippi and the University of Oklahoma for the purpose of
developing new methods for the production of ethanol.
Research and Development Grants for Renewable Fuel
Production. S. 791 would authorize the appropriation of $125
million to EPA over the 2004-2008 period for grants to certain
academic institutions and consortia (consisting of academic
institutions, industry, State government agencies, or local
government agencies) for research and development related to
technologies for the production of renewable fuel.
LUST Program. This legislation would authorize the
appropriation of $400 million over the 2004-2008 period from
EPA's Leaking Underground Storage Tank (LUST) Trust Fund. This
funding would be used for grants to States to correct
contamination caused by MTBE and for enforcement and inspection
activities related to LUST sites.
Loan Guarantees. S. 791 would authorize DOE to issue loan
guarantees to help finance the construction of facilities for
the processing and conversion of municipal solid waste into
fuel ethanol and other commercial by-products. The development
of such facilities poses some risk mainly because the
technology that would be used to convert municipal solid waste
into fuel ethanol is new and is not well proven. Construction
of the first-of-its-kind plant for this new manufacturing
process is expected to begin sometime before the end of 2003 at
a site in Middletown, New York.
For this estimate, we expect that such plants would be
debt-financed and sponsors would recover costs through the sale
of ethanol and other recyclable materials. The projects also
would rely heavily on revenues from ``tipping fees'' (i.e.,
those fees charged by the plant to accept municipal solid
waste). According to industry experts, the solid waste industry
is highly competitive and tipping fees fluctuate over time. The
prices for ethanol and recycled glass, metal, and paper also
have histories of fluctuating widely. These factors pose some
additional credit risk for such a project.
Under credit reform procedures, funds must be appropriated
in advance to cover the subsidy cost of loan guarantees,
measured on a present-value basis. Because of the significant
level of risk associated with this type of project, the subsidy
rate costs of such loan guarantees could vary widely. At worst,
the government could absorb all of the risk, effectively
converting the loan guarantee into a grant. S. 791 does not
impose any limit on the amount of loan guarantees that could be
made by DOE. Because the technology for converting municipal
solid waste into fuel ethanol is very new and unproven, CBO
estimates that over the next 5 years, DOE would probably
provide loan guarantees for three projects with a total
construction cost of about $300 million. In addition, based on
information from DOE, CBO assumes that the department would
guarantee up to 50 percent of a project's total investment and
that DOE would only consider projects with a financial outlook
at least equivalent to those of bonds rated CCC by companies
like Standard and Poors and Moodys. Projects with this rating
typically have a cumulative default risk of more than 50
percent. Under these assumptions, CBO estimates that this
provision would result in loans being guaranteed with about a
50 percent subsidy, requiring appropriations of about $150
million over the 2004-2008 period.
Motor Fuels and Clean Air Act Provisions. This legislation
would require EPA to promulgate new rules, prepare studies for
the Congress, and implement new programs related to the
renewable content of motor fuels and air pollution resulting
from the use of motor fuels. CBO estimates that implementing
these provisions in S. 791 would cost $10 million in 2004 and
$48 million over the 2004-2008 period. Of the $48 million, more
than half would be for EPA's costs to enforce motor fuel
standards. Specifically, the bill would require that EPA
promulgate rules that require motor fuels sold by a refiner,
blender, or importer contain specified amounts of renewable
fuels. Under the bill, by 2012, gasoline sold to consumers
would be required to include, on an annual average basis, 5
billion gallons of renewable fuel.
Additionally, the bill would require the EPA to conduct
annual surveys on market shares of various renewable fuels
starting in December 2006. Such a survey could cost as much as
$4 million annually if EPA were to undertake a survey of all
retail gasoline sales. This legislation also would require EPA,
at the request of a State, to enforce the State-adopted
regulations concerning fuels requirements. State fuels programs
can vary. Some programs are seasonal, while others are more
complex where many fuel parameters are regulated. Specifically,
EPA staff would be required to travel to the affected cities,
take samples, review records, and conduct audits of refiners
and importers. Based on information from EPA, CBO estimates
that implementing this provision would require the equivalent
of an additional 22 staff, funding for their travel expenses,
and funding associated with laboratory sampling and technical
analysis, resulting in a cost of $5 million annually and $25
million over the next 5 years.
S. 791 also includes several other provisions that would
require new studies, reports to the Congress, and activities
related to banning the use of MTBE in motor fuels to be
prepared by DOE and the Federal Trade Commission.
Direct Spending and Revenues
CBO estimates that enacting S. 791 would decrease direct
spending by about $2 billion over the next 10 years and
decrease Federal revenues by about $2.3 billion over the same
period. The bill's impact on direct spending and revenues over
the 2004-2013 period is shown in Table 2.
TABLE 2. ESTIMATED IMPACT OF S. 791 ON DIRECT SPENDING AND REVENUES
Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
----------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING AND
REVENUES
Estimated Budget Authority...... 0 81 90 -9 -122 -276 -359 -434 -477 -489
Estimated Outlays............... 0 81 90 -9 -122 -276 -359 -434 -477 -489
Estimated Revenues.............. 0 82 47 -42 -130 -247 -371 -497 -579 -603
----------------------------------------------------------------------------------------------------------------
Renewable Fuels Mandate and Agriculture Support Programs.
The bill's mandate to increase the renewable content of motor
fuels would have an impact of Federal spending for farm support
programs and would change the amounts collected from Federal
motor fuels taxes.
Section 101 of the bill would require that motor fuels sold
by a refiner, blender, or importer contain specified amounts of
renewable fuel. The required volume of renewable fuel would
start at 2.6 billion gallons in 2005 and escalate to 5 billion
gallons by 2012. The bill also would amend the Clean Air Act to
eliminate the requirement for gasoline that is sold in certain
regions to contain 2 percent oxygen by weight. This provision
would lower demand for gasoline oxygenates, including ethanol.
In contrast, because S. 791 also would ban the use of MTBE 4
years after enactment, the demand for ethanol could increase.
However, under S. 791, any State may authorize the use of MTBE
by simply notifying EPA. Under this construction, it is
possible that MTBE use would not be affected by the ban.
Consequently, CBO has not explicitly included the possible
effects of a MTBE ban on the demand for ethanol, but the net
impact of the other provisions in section 101 would increase
ethanol use over the 2004-2013 period. CBO expects that most of
the fuel produced to meet the requirements under the act would
be corn-based ethanol.
Because ethanol is primarily derived from corn, demand for
corn would fall or rise with the demand for ethanol. CBO
expects that lower prices for corn during 2005 and 2006 and
higher prices for corn during the 2007-2013 period would
result. Accordingly, the costs of farm price and income
supports would slightly increase in the first few years but
fall in the later years of the estimate period. On net, CBO
estimates that spending for farm price and income supports
would decline by about $2 billion over the 2005-2013 period due
to the elimination of the oxygenate requirement for motor fuels
and the ethanol mandate.
Renewable Fuels Mandate and Revenues. Because ethanol-
blended fuels are taxed at a lower rate than gasoline, receipts
to the Highway Trust Fund from motor fuels would change when
ethanol use changes. We estimate that enacting this provision
would increase revenues in 2005 and 2006 because the mandated
level of ethanol use under the bill would be less than CBO's
projection of ethanol use under current law. Under current law,
we expect ethanol use to grow as the demand for gasoline
oxygenates increases. After 2006, the amount of ethanol use
mandated under the bill would exceed the projections in our
current-law baseline--leading to a loss of revenues. We
estimate that the provision would increase net Federal revenues
by $129 million over the 2005-2006 period and reduce them by
$2.3 billion over the 2005-2013 period.
Estimated Impact on State, Local, and Tribal Governments
S. 791 would shield manufacturers of gasoline from
liability claims based on the renewable content of their fuel.
Because this provision would limit the application of State
law, it constitutes an intergovernmental mandate as defined in
UMRA. However, the mandate would impose no duty on States that
would result in additional spending. Therefore, the threshold
established in UMRA ($59 million in 2003, adjusted annually for
inflation) would not be exceeded.
Other provisions of the bill contain no intergovernmental
mandates and would impose no direct costs on State, local, or
tribal governments. States with EPA approval to enforce clean
air standards for motor fuels would have to comply with any new
requirements, but they would do so voluntarily. In general, the
bill would benefit States by authorizing grants and amounts
from the LUST Trust Fund for a variety of activities.
Estimated Impact on the Private Sector
S. 791 contains several private-sector mandates as defined
in UMRA. While CBO cannot estimate the aggregate cost of all
the mandates contained in the bill, we expect that the total
cost of private-sector mandates would exceed the annual
threshold established in UMRA ($117 million in 2003, adjusted
annually for inflation). That conclusion is primarily based
upon our analysis of the renewable fuel standard established
under a renewable fuel program, which would impose substantial
costs on the motor fuels industry in 2009, the fifth year the
standard would be in effect. Numerous other private-sector
mandates would be imposed by additional requirements in the
renewable fuel program, a ban on the use of MTBE in motor
fuels, and through other fuel requirements.
The bill also would authorize an appropriation of $1
billion to the Department of Energy over the 2004-2007 period
for grants to assist manufacturers of MTBE to convert
facilities to produce fuel additives that would substitute for
MTBE.
Renewable Fuel Program
Renewable Fuels Standard. Section 101 would require
domestic refiners, blenders, and importers of gasoline to
ensure that gasoline sold or dispensed to consumers in the
contiguous United States contains a minimum volume of renewable
fuels. The required volume of renewable fuel would start at 2.6
billion gallons in 2005 and increase to 5 billion gallons by
2012. CBO expects that the renewable fuel requirement would be
met in 2005 and 2006 without additional costs to the motor
fuels industry. The industry would begin to experience
additional costs in 2007 as it begins to blend or purchase
greater amounts of gasoline containing ethanol or other
renewable fuel than it would in the absence of such a standard.
In the fifth year the standard would be in effect, 2009, CBO
estimates that the direct costs of the renewable fuel
requirement would rise to more than $200 million, an amount
which would exceed UMRA's annual threshold for private-sector
mandates.
Seasonal Variation in Renewable Fuel Use. Section 101 also
would direct the Energy Information Administration (EIA) to
determine if there are excessive seasonal variations in the
amount of renewable fuel blended into gasoline. Refiners might
have an incentive to use more of the annual requirement for
renewable fuel (mostly ethanol) in the winter months, when
evaporative emissions from gasoline are less of a concern.
Sharp seasonal changes in the demand for ethanol could lead to
large swings in ethanol and gasoline prices. If EIA determines
that there are excessive seasonal fluctuations, EPA would
impose regulations requiring that at least 35 percent of the
renewable fuel standard be blended into gasoline in summer
months and another 35 percent be blended in winter months. At
this time, neither EPA nor the motor fuels industry anticipate
that such requirements would be necessary. In the event that a
determination by EIA triggers additional EPA regulations, the
duty to comply with those regulations would constitute a
private-sector mandate. Information provided by industry
sources indicated that compliance would not be expensive.
Eliminate the Ethanol Waiver. Section 101 also would
authorize States to apply for an exclusion from a waiver that
under current law allows gasoline blended with ethanol to have
higher evaporative properties than gasoline blended with other
fuel additives. Gasoline blends containing ethanol evaporate
more readily at a given temperature, contributing to smog
formation. States that presently use large amounts of ethanol,
mostly located in the Midwest, would probably not request an
exclusion from the waiver. States that have trouble meeting air
quality requirements (several States in the Northeast) would
likely request an exclusion. To the extent that gasoline
blended with ethanol is currently sold in those States, the
exclusion would increase the cost of an existing private-sector
mandate on refiners who sell in the State. Refiners would incur
costs as they reduce their use of other highly evaporative
blendstocks (such as butane). Because we cannot predict what
States would opt out of the waiver, CBO has no basis to
quantify those costs; but they are not likely to be large.
Recordkeeping and Reporting Requirements. As part of the
renewable fuel program, sections 102 and 103 would require both
EPA and DOE to collect data and issue reports on the amount of
renewable fuel blending and the associated impacts of that
blending. Information provided by EPA and the motor fuels
industry indicated that the new requirements would be folded
into existing data collection procedures and that the
incremental cost of compliance would be low.
Safe Harbor. The renewable fuel standard required by the
bill would substantially increase the amount of renewable fuel
that is blended into gasoline. Section 101 would shield motor
fuel manufacturers and other persons from liability for a
defect in design or manufacture of a motor vehicle fuel
containing renewable fuel. That protection would be in effect
as long as the fuel is in compliance with other applicable
Federal requirements. The provision would impose a private-
sector mandate by limiting existing rights to seek compensation
under current law. Effective on the date of enactment, the
provision would have no impact on existing claims or court
determinations or settlements. Because of the lack of
information on both the number of claims that would be filed in
the absence of this legislation, and the associated outcomes of
those claims, CBO cannot determine the cost of this mandate.
MTBE Ban
Under the Clean Air Act Amendments of 1990, areas with poor
air quality are required to add chemicals called ``oxygenates''
to gasoline as a means of reducing certain air pollution
emissions. One of the most commonly used oxygenates is methyl
tertiary butyl ether; about 200,000 barrels of MTBE are blended
into gasoline each day in the United States. Roughly one-third
of that amount is supplied to refiners by merchant producers
and the rest is produced by the refiners themselves or
imported. In recent years, concerns have been raised about the
adverse effects on groundwater supplies from MTBE that leaks
from underground tanks, and 16 States have passed laws to
either ban or reduce the local use of MTBE.
Section 203 would ban the use of MTBE in gasoline within 4
years of the bill's enactment. At the same time, the provision
would allow any State to authorize the use of MTBE by simply
notifying EPA. That is, a nationwide ban with States opting to
continue use of MTBE may not be fundamentally different from
the current situation in which States impose their own local
bans. Therefore, it is possible that MTBE use would not be
affected by the new ban. Moreover, CBO anticipates that the
renewable fuels standard established in section 101 would, on
its own, greatly reduce--if not totally eliminate--incentives
to use MTBE.
CBO cannot determine in which States, if any, the Federal
MTBE ban would be more constraining than the renewable fuel
standard and, therefore, cannot determine the cost of the
mandate. In States where the Federal ban would be more
constraining, the ban could impose costs on refiners and
merchant producers. Gasoline refiners would need to replace
MTBE with higher-cost blendstocks, and merchant producers would
likely convert their operations to the production of less-
profitable blendstocks, such as alkylates or iso-octane. The
bill would authorize Federal transition grants to merchant
producers to convert their facilities amounting to $1 billion
over the 2004-2007 period.
Other Fuel Requirements
Increased Environmental and Public Health Testing. Section
205 would require fuel manufacturers to test their products
regularly for any environmental and public health effects of
the fuel or additive, as part of the registration process with
the EPA. Under current law, such testing occurs at the
discretion of the EPA Administrator. Based on information
provided by the EPA on the most recent round of testing, CBO
expects the cost of regular testing to be between $10 million
and $20 million every 5 years, which is the period of time over
which the EPA expects the testing to take place.
Anti-Backsliding Baseline. Section 204 would direct EPA to
establish a more stringent baseline for toxic emissions from
reformulated gasoline. The current baseline, which became
effective in 2002, is refinery specific and is based on average
1998 through 2000 reformulated gasoline parameter values. The
bill would establish a baseline that averages parameter values
only from calendar years 1999 and 2000, meaning that
reformulated gasoline will have to be slightly cleaner.
According to EPA and the refining industry, the majority of the
industry is already over-compliant with the current baseline.
CBO does expect some refineries to experience increased costs
in meeting the more stringent emission targets, but on the
whole CBO does not expect the requirement to be expensive.
Water Quality Protection Authority. Section 203 would grant
new authority to the EPA to regulate fuels and fuel additives
to protect water quality. Presently, EPA has no intention to
regulate any fuel or additive to protect water quality. Future
regulation would be based upon environmental and public health
testing. Since no information is available at this time about
the substances that are likely to be regulated in the future,
CBO cannot determine the cost of the mandate.
VOC Region Consolidation. Section 204 would consolidate the
regional regulations that limit the emissions of volatile
organic compounds (VOCs) from gasoline, effectively applying
the more stringent standards for gasoline sold in the southern
United States to that sold in the North. Meeting the more
stringent standards would impose a private-sector mandate.
While CBO expects that the mandate would raise the cost of
producing gasoline for the Northern United States, we
anticipate that refiners also would experience some savings
because the cost of distributing gasoline would fall. Without
more information about the magnitude of these offsetting
effects, CBO cannot determine the net cost of the mandate.
State Opt-in to Reformulated Gasoline (RFG) Program.
Section 207 would authorize States in the ozone transport
region (several States in the Northeast) to ask EPA to apply
the more stringent air emissions standards of the RFG program
in areas that are already in attainment of air quality
standards. CBO does not have information at this time on the
areas to which RFG program requirements could apply, and
therefore, cannot determine the cost of compliance.
Previous CBO Estimates
On April 8, 2003, CBO transmitted a cost estimate for H.R.
6, a bill to enhance energy conservation and research and
development, to provide for security and diversity in the
energy supply for the American people, and for other purposes.
That estimate provided direct spending and revenue effects for
a renewable fuels mandate that differs from the mandate under
S. 791. Under H.R. 6, CBO estimates that the renewable fuels
mandate would increase net Federal revenues by $290 million
over the 2005-2008 period and reduce them by $284 million over
the 2005-2013 period. In addition, direct spending would
decline by $167 million over the 2005-2013 period. CBO also
estimated that compliance with the renewable fuels standard in
H.R. 6 would cost the motor fuels' industry roughly $140
million in 2009. The renewable fuel standard under S. 791 ramps
up more quickly than the one under H.R. 6, which is primarily
why CBO expects that the cost of compliance with the standard
under S. 791 would be greater than that under H.R. 6.
On May 1, 2003, CBO transmitted a cost estimate for H.R.
1644, the Energy Policy Act of 2003, as ordered reported by the
House Committee on Energy and Commerce on April 8, 2003. H.R.
1644 also contains a mandate for refiners, blenders, and
importers to use renewable fuels. The amounts of renewable
fuels that would be mandated by H.R. 1644 and S. 791 are
different, and our cost estimates reflect those differences.
Estimate Prepared By: Federal Spending: Susanne S. Mehlman--EPA
and Energy Provisions; David Hull--Agriculture Subsidies;
Andrew Shaw--Federal Revenues; Greg Waring--Impact on State,
Local, and Tribal Governments; and Richard Farmer and Lauren
Marks--Impact on the Private Sector.
Estimate Approved By: Peter H. Fontaine Deputy Assistant
Director for Budget Analysis; G. Thomas Woodward Assistant
Director for Tax Analysis.
ADDITIONAL VIEWS OF SENATORS REID, JEFFORDS, BOXER AND CLINTON
We write separately here on S. 791, the Reliable Fuels Act
on 2003, to underscore the importance of ending methyl tertiary
butyl ether (MTBE) use, to explain why the committee did not
include liability exemptions for MTBE contamination, and to
urge the full Senate to reject any measure that would force
taxpayers to pay for MTBE cleanup rather than responsible
parties.
MTBE is classified as a possible human carcinogen, and when
leaked into water even in small amounts causes water to take on
the taste and smell of turpentine, rendering it undrinkable.
MTBE leaking from underground storage tanks, recreational water
craft and abandoned automobiles has lead to growing detections
of MTBE in drinking water. In fact, the U.S. Geological Survey
has estimated that MTBE may contaminate roughly one-third of
drinking water supplies nationwide. MTBE poses a different
threat to drinking water relative to the other harmful
constituents of gasoline because MTBE is more soluble, more
mobile and degrades slower than those other constituents.
Oil companies began adding MTBE to gasoline at least as
early as 1979, using 215,000 tons in that year alone. By 1986,
oil companies were adding 54,000 barrels of MTBE to gasoline
each day. By 1991, 1 year before the Clean Air Act (CAA)
oxygenate requirement went into effect, oil companies were
using more than 100,000 barrels of MTBE per day. By 1997, the
volume of MTBE production was the second highest of any
chemical in the United States. These basic facts underscore two
extremely important points about the committee's consideration
of solutions to the MTBE contamination problem.
First, proposals that simply remove the CAA oxygenate
requirement from the law without affirmatively banning MTBE
will simply not end MTBE use. As noted above, MTBE was used for
octane enhancement long before the CAA Amendments of 1990.
There is no reason to believe that it would not continued to be
used if the CAA oxygenate requirement were removed from the
law, but no ban put in place. In another example, in May 1999,
two oil companies in the San Francisco area were found to have
been adding substantial volumes of MTBE to gasoline. At the
time, that area complied with air standards and therefore the
CAA didn't require the addition of an oxygenate. Again,
companies were adding MTBE to gasoline for reasons wholly
independent of the CAA.
Second, these facts belie the oil companies' arguments that
Congress made oil companies use MTBE, and that therefore
lawsuits against oil companies should be terminated by Congress
and taxpayers should pay to clean up MTBE contamination. MTBE
was in use well before the passage of the CAA Amendments. The
CAA does not mandate the use of MTBE. And the fact that there
was any oxygenate requirement in those amendments at all was
due, in part, to oil industry lobbying.
For example, in 1989 testimony before the Senate Committee
on Environment and Public Works, an ARCO official strongly
recommended that the committee include a mandate for MTBE in
the Clean Air Act Amendments of 1990, touting MTBE's benefits
but not disclosing its devastating impact on drinking water.
Hearings Before the Subcommittee on Environmental Protection of
the Committee on Environment and Public Works on S. 1630, S.
Hrg. 101-331 at 458 (Sept. 28, 1989). Despite such lobbying,
Congress did not adopt a MTBE mandate, but rather prescribed
that reformulated gasoline contain an oxygenate without
specifying a particular product.
At the time of such lobbying, oil companies knew they were
recommending a product that would have a devastating impact on
drinking water. Indeed, where courts have heard oil industry
claims that they should not be held liable for MTBE
contaminated drinking water supplies, they have not only
rejected those claims but have found that companies acted with
malice in not disclosing the risks of using MTBE.
In fact, over a dozen communities have sued oil companies
for knowingly introducing a defective product into the
marketplace. Several oil companies recently settled one such
suit, South Tahoe Public Utility District v. Atlantic Richfield
Company, et al., for $60 million. In South Tahoe, it was
determined that oil companies were guilty of irresponsibly
manufacturing and distributing MTBE because these companies
knew it would contaminate drinking water.
It was also found by clear and convincing evidence that two
companies had acted with ``malice'' by failing to warn of the
environmental dangers of MTBE.
Together, documents and sworn testimony in South Tahoe
demonstrated that several oil companies knew as early as 1980
that MTBE posed a significant threat to the nation's drinking
water, that they promoted MTBE to the State and Federal
Governments without disclosing internal information
demonstrating that threat, and that they attempted to discredit
public scientific studies that began to demonstrate that
threat.
Documents and sworn testimony in South Tahoe also revealed
that oil company officials, showing a callous disregard for our
environment, even gave MTBE telling nicknames such as ``Most
Things Biodegrade Easier'', ``Menace Threatening our
Environment'' and ``Major Threat to Better Earnings.'' Further
the case also revealed that Shell and ARCO, the first refiners
to add MTBE to gasoline, estimated that 20 percent of all
underground storage tanks--tanks likely containing MTBE--were
leaking. Several oil companies were shown to have both
developed and promoted the concept of using reformulated
gasoline to reduce air emissions.
For example, ARCO officials testified that ``EPA did not
initiate . . . reformulated gasoline'' and that ``[T]he oil
industry brought [reformulated gasoline] forward as an
alternative to what the EPA had initially proposed.'' Documents
and sworn testimony also revealed that in 1987 an ARCO
representative testified before the Colorado Air Quality
Control Commission that MTBE would aid in reducing air
emissions but did not warn of the drinking water contamination
threat. This representative testified that he also assisted
Arizona and Nevada develop oxygenate programs that relied upon
MTBE without disclosing the danger.
In 1986, the Maine Department of Environmental Protection
issued a scientific report describing the threat posed by MTBE.
Documents and sworn testimony in South Tahoe revealed a
concerted strategy by the oil industry to discredit the article
at the same time that internal industry documents admitted the
soundness of the Maine warning. When the Maine paper prompted
EPA to issue a notice to oil companies for more information
regarding MTBE, ARCO responded in 1987 that there was little
information to suggest MTBE was a threat despite internal ARCO
documents showing the contrary.
As South Tahoe demonstrates, terminating the right of
communities to seek legal redress against oil companies for
MTBE contamination would be a grave injustice. It has not been
embraced by the committee, it should not be embraced by the
Senate and it should not become law.
Just as it is important to clarify oil industry
responsibility for MTBE contamination, it is also important to
clarify a number of mischaracterizations that appear in the
majority views on the MTBE transition program. S. 791 provides
for limited transition assistance to producers of MTBE to
mitigate fuel supply problems, such as shortages or
disruptions, that might occur as a result of the elimination of
the widespread use of that fuel additive by this legislation.
The findings section of S. 791 (section 203) notes that it is
appropriate for the Congress to provide limited transition
assistance in this fashion. Those findings were arrived at
after much discussion and debate among the various affected
parties and were first incorporated into legislation as part of
H.R. 4, as passed by the Senate in 2002 and reintroduced in S.
385.
The majority views attempt to incorrectly convey that such
assistance is premised on two additional factors that appear
nowhere in the legislation, that cannot be logically inferred
from the findings in S. 791, and that do not reflect a
committee consensus. These incorrect inferences are that,
first, the government bears ``great'' responsibility for losses
the MTBE producers experience as a result of Congress' action
to phaseout MTBE; and, second, that a failure to provide
transition assistance in light of the ban will discourage
manufacturers from supplying the market with additives that
will meet energy and environmental goals.
The findings state that the fuel industry responded to the
fuel oxygenate standard established in the CAA of 1990 by
investing in MTBE production capacity. As noted above, that
standard did not require or mandate that MTBE be produced or
that only MTBE could satisfy such a standard. Again, as noted
above, the oil industry itself lobbied for the oxygenate
requirement and wanted to use MTBE to meet it. Therefore,
Congress cannot be held responsible for voluntary industry
decisions to make or not to make investments in MTBE.
It logically follows that without such responsibility,
there certainly is no compensation due to such manufacturers
when Congress determines that such a fuel additive is
detrimental to water quality protection and must be eliminated
from widespread use in gasoline. Given the history of the CAA
oxygenate requirement it is impossible to maintain otherwise.
The majority views appears to seek to set a precedent that
would require Congress to provide compensation for any parties
that choose to invest in manufacturing a product based on their
interpretation of congressional intent and its effect on their
product. That is not supported by the text of S. 791.
Finally, the majority views' inference that the transition
program reflects the committee view that companies will not
invest in fuel additives absent compensation is erroneous and
not supported by S. 791. Additive manufacturers are free to
enter the market for the production of additives to replace
MTBE. The legislation indicates that Congress is concerned
about the impact on the fuel supply of eliminating MTBE, as
stated in section 203, and has provided the transition
assistance to address that issue.
Congress ``failure'' to compensate MTBE producers for
manufacturing a product which many within the industry knew
would pollute drinking water will not affect a business
decision by additive manufacturers to supply the additive
market. This is particularly true once the modifications in S.
791 to the CAA are made to ensure future water quality
protection by improving testing of fuels and fuel additives
environmental and public health impacts. Oil companies and
other additive manufacturers have their own responsibility to
place products in commerce that do not have ill effects on the
environment and public health.
As noted above, several companies maliciously failed to
discharge this responsibility when it came to MTBE.
The first hearing of this committee on MTBE was chaired by
Senator Boxer in December 1997, after Santa Monica lost the
majority of its drinking water to contamination caused by a
then little known fuel additive. Since Senator Boxer's first
call to ban MTBE now over 5 years ago, this committee has
conducted scores of hearings, considered alternate legislative
approaches and ultimately approved various versions of
legislation similar to S. 791.
Such legislation approved by this committee has
consistently called for MTBE's phase-out. It has also
consistently rejected terminating the right of communities
affected by MTBE to seek redress against oil companies in
court. As consideration of S. 791 moves to the full Senate,
these two principles that have guided committee consideration
of the MTBE issue must remain in tact if the MTBE problem is to
be truly and equitably solved.
ADDITIONAL VIEWS OF SENATOR BARBARA BOXER
I write separately here to strongly oppose the ``safe
harbor'' provision in S. 791, The Reliable Fuels Act of 2003,
which creates broad liability exemptions for renewable fuels. I
also oppose the special exemption from the ethanol requirements
for two States--Alaska and Hawaii--at the expense of others.
Under the renewable fuels mandate in S. 791, ethanol will
be the most commonly used renewable fuel for the foreseeable
future. Ethanol is a high-octane, water-free alcohol that has
been used in gasoline in the United States since 1979 when it
was introduced to enhance oxygen content in fuels.
Section (p) of S. 791 contains a ``safe harbor'' liability
waiver for all renewable fuels, renewable fuel additives, and
any motor vehicle fuel containing renewable fuel. This language
waives all product liability design defect claims, including
failure to warn. Any claim that has not been filed by the date
of enactment of this section will be forever barred. Compliance
with laws and regulations is not necessary for receiving the
liability waiver, except for limited compliance with
requirements under the Clean Air Act.
This liability exemption is particularly dangerous because
there are many unanswered questions about ethanol. It is true
that ethanol does not have the same toxic chemicals in it as
other fuels and fuel additives. It also helps reduce the
production of carbon monoxide when fuel is burned. These are
real benefits.
However, ethanol also increases the formation of nitrogen
oxides, which leads to increases in smog. According to EPA's
1999 Blue Ribbon Panel Report on Oxygenates in Gasoline,
ethanol is extremely soluble in water and would spread if
leaked into the environment. It may further spread plumes of
benzene, toluene, ethyl benzene, and xylene because ethanol may
inhibit the breakdown of these toxic materials. In addition,
there are several studies demonstrating that ethanol increases
the size and migration of benzene plumes. Researchers say that
more groundwater wells will experience contamination from
methyl tertiary butyl ether (MTBE) and benzene, a known
carcinogen, if ethanol leaks into water supplies. There are
also questions about the impact of ethanol on sensitive
populations, such as children.
More study is needed. The Blue Ribbon Panel Report makes
this point in the section entitled ``Recommendations for
Evaluating and Learning from Experience:"
The introduction of reformulated gasoline has had
substantial air quality benefits, but has at the same time
raised significant issues about questions that should be asked
before widespread introduction of a new broadly used product.
The unanticipated effects of reformulated gasoline on
groundwater highlight the importance of exploring the potential
for adverse effects in all media (air, soil, and water), and on
human and ecosystem health.
Questions surrounding ethanol's effects on public health
and the environment should be answered before Congress grants a
broad waiver from liability for its harmful effects. We should
err on the side of caution, and we should err on the side on
protecting taxpayers.
If ethanol harms public health or the environment, the
liability exemption in this bill would shift the burden to the
taxpayer in the event of a contamination of drinking water
supplies, which could leave many communities with cleanup costs
beyond their ability to pay. Polluters, not taxpayers or
victims of pollution, should pay for harm to pubic health and
the environment.
Supporters of this liability exemption argue that immunity
from product liability design defect claims is not so broad,
that it only protects polluters from one type of lawsuit. But,
they are ignoring the fact that product defect claims are the
clearest way to hold accountable those manufacturers (here,
primarily the refiners) whose products cause injury to public
health or the environment. Litigation in California involving
drinking water contamination by MTBE, agricultural chemicals
(i.e. DBCP), dry cleaning compounds (perc), and others all rest
on claims that products were defective in design.
In a landmark case decided in April 2002, a San Francisco
jury found that based on the theory that MTBE is a ``defective
product,'' several major oil companies are legally responsible
for the environmental harm to Lake Tahoe's groundwater. The
jury also found that many of these same oil companies acted
with ``malice'' because they were aware of the dangers but
withheld the information. The oil companies knew of the risks
MTBE posed. They also knew there were alternatives to MTBE.
Yet, they chose to use MTBE and not to warn anyone else of the
risks. The defendants settled the case shortly after the jury
verdicts were announced. Costs are expected to exceed $45
million to clean up the Lake Tahoe contamination.
What would have happened if defective product claims could
not have been made in Tahoe? Basically, Lake Tahoe and its
citizens could have been forced to bear the cleanup costs,
while the polluters got off scot-free. The type of behavior
that occurred in Lake Tahoe on the part of polluters is exactly
what S. 791 seeks to shield from liability. Exempting polluters
from a defective product claim is hardly a narrow exemption. It
risks letting the polluters off the hook for their wrongdoing
entirely and shifting the costs of pollution to the taxpayers.
The taxpayers are not responsible for the pollution; the
companies are. Taxpayers should not foot the bill; the
polluters should. Not surprisingly, South Tahoe Public Utility
District opposes the liability exemption for ethanol in this
bill, asking that the burden of cleanups not be shifted to
taxpayers.
Supporters of this exemption also argue that negligence
claims are an adequate substitute for product liability design
defect claims. While negligence and design defect liability are
related legal theories, they are different. And negligence
alone is inadequate to protect a community from harm.
Negligence liability focuses on the defendants' conduct. In
other words, it focuses on the conduct of the individuals hired
by the oil companies. Design defect liability focuses on the
product.
To establish negligence, a public water agency would have
to show that each defendant knew (or reasonably should have
known) of the risk posed by the product, and that the defendant
acted unreasonably in failing to eliminate the risk. Customary
practice in an industry--such as commonly using a fuel additive
without any warning--and the reasonableness of that practice is
relevant as a defense in a negligence action. This makes it
difficult for an injured party to recover.
In contrast, an injured public water agency can establish
design defect liability in one of two ways. First, a product is
defective where the jury finds that the risk of danger inherent
in the challenged design outweighs the benefit of such design.
Second, even if a product is flawlessly designed or produced,
it may still be defective if the manufacturer provides
inadequate warnings or use instructions. A failure to warn
claim arises only for risks that the manufacturer either knew
about or that were knowable in light of generally recognized
and prevailing best scientific knowledge available at the time
of the product's manufacture and distribution.
Courts impose strict liability for design defects based on
strong public policy considerations. The costs of injuries
caused by defective products should be borne by the
manufacturers of those products, rather than by innocent
injured parties. This policy is especially strong where the
injury occurs to innocent bystanders, like public water
suppliers, who derive no economic benefit from the defective
product.
Supporters of the liability exemption also argue that it is
necessary because the bill is mandating the use of ethanol. Yet
Congress regularly mandates that manufacturers meet a variety
of guidelines and requirements, but does not in so doing exempt
all manufacturers from State and Federal product liability
design defect laws. When gasoline leaks today, there is no
loophole; the polluter pays, despite the fact that Congress
regulates gasoline. Congress mandated the installation of air
bags in automobiles, but did not say to those manufacturers
that they would not be liable for damages caused should their
products be defective. We should not give a free pass to
ethanol.
Finally, supporters of the liability loophole claim that
ethanol is safe and no one needs to worry about the liability
exemption. If they are not worried, they do not need an
exemption and should not oppose striking it from the bill.
Ethanol should be subject to liability standards as strong
as any other fuel additive. We should not shift the burden of
cleaning up problems caused by ethanol to our communities. The
polluter should pay. No public policy would be served by
immunizing refiners and chemical companies from responsibility
for knowingly putting the drinking water resources of the
Nation at risk and neglecting to tell anyone.
The ``safe harbor'' liability waiver for renewable fuels is
opposed by a wide variety of local and State governments, water
utilities, and public health, consumer and environmental
organizations. These include the Association of Metropolitan
Water Agencies and American Water Works Association--which
together represent water systems serving approximately 180
million Americans across the country--Association of California
Water Agencies, National Association of Water Companies, South
Tahoe Public Utility District and city of Santa Monica--two
cities with firsthand knowledge of the devastating effects that
groundwater contamination can have on communities--American
Lung Association, American Public Health Association, Cahaba
River Society, California Clean Water Action, Citizens for a
Future New Hampshire, Citizen's Environmental Coalition, Clean
Water Action, Consumer Federation of America, Environmental
Defense, Ecology Center, Environmental Working Group, , Friends
of the Earth, League of Conservation Voters, Mono Lake
Committee, National Sludge Alliance, Natural Resources Defense
Council, New Jersey Coalition Against Toxics, New Jersey
Environmental Federation, Physicians for Social Responsibility,
Rivers Unlimited, Sierra Club, Spring Lake Park Groundwater
Guardians, and U.S. Public Interest Research Group.
I am also opposed to the amendment added during Committee
consideration of the bill to exempt from the ethanol mandate
two States, Alaska and Hawaii. We have had no explanation of
why an exemption is needed for Alaska and Hawaii and not for
other States except some vague claims that the transportation
costs will be too high and that these areas do not need ethanol
to meet Clean Air Act requirements. However, these same
arguments apply to many areas of the county, including my State
of California. My State also will face high shipping and
transportation costs. Also, as noted in EPA's 1999 Blue Ribbon
Panel Report on Oxygenates in Gasoline, California does not
need ethanol to meet its Clean Air Act requirements.
It has also been argued that the waiver is needed because
Alaska and Hawaii do not need as much ethanol as they will be
required to use. Again, the same argument can be made for other
States. And when those States have raised this concern, the
authors of the bill respond by pointing out that the bill gives
States credits that they can sell to other States that may need
them, thus generating revenue for their States. If this
argument is good for some States, it should also be good for
all States.
If the costs of implementation and the need for ethanol in
a State are to be factors in determining whether the mandate
should apply, they should be factors in making a similar
determination for all States, not just two. Further, although
Alaska and Hawaii would no longer be required to use renewable
fuels under this provision, the amount of the national mandate
has not decreased accordingly. The mandate in this bill was
designed taking all States into account, including Alaska and
Hawaii. Now that Alaska and Hawaii are exempt from the mandate,
other States will be forced to use greater amounts of ethanol
to meet the overall renewable fuels requirements.
This is an unfair and unnecessary exemption for two States,
and I oppose it.
ADDITIONAL VIEWS OF SENATOR CORNYN
These views are submitted to express certain concerns about
S. 791, the Reliable Fuels Act of 2003, as approved by the
Senate Committee on Environment and Public Works. I believe
that S. 791 will hamper our national energy supply and will
diminish the benefits of the reformulated gasoline program to
improve air quality.
IMPORTANCE OF A STRONG NATIONAL ENERGY POLICY AND IMPEDIMENTS OF S. 791
I am proud to hail from the State of Texas, a State long
known for its contributions to a strong national energy policy.
Without our domestic producers, the United States would be even
more dependent on foreign oil, much of it coming from very
unstable regions of the World. Given the state of current
events in Iraq, the strike in Venezuela, and an unusually cold
winter, the need for aggressive development of domestic
resources is very clear. Oil prices reached a peak of nearly
$40 a barrel and continue to hover at a 2-year high. Prices for
gasoline and heating oil reached average all time highs in some
portions of the country because we have become too dependent of
foreign imports and easy victims for circumstances beyond our
control.
As we see our dependence of foreign oil imports increase,
the United States has also experienced a decline in refining
capacity at home. This decline is a direct result of
overburdening government regulations that make it too expensive
for small refiners to stay in business or that force refiners
to consolidate even further thereby eliminating refining
capacity. According to testimony we heard from the National
Petrochemical Refiners Association's President Bob Slaughter in
the Senate Subcommittee on Clean Air, Climate Change, and
Nuclear Safety, current U.S. refiners are running at 95 percent
capacity and will be unlikely to meet future demands at this
level.
It is quite apparent that the United States lacks the
ability to produce sufficient volumes of motor fuels to meet
current demand. For this reason, I am concerned that S. 791
could further complicate the situation, increase prices for the
driving consumer, and reduce air quality.
SECTION 203--RESTRICTIONS ON THE USE OF MTBE
I have grave concerns that this Congress is proposing to
eliminate a successful fuel additive from U.S. commerce.
Findings simply do not exist to justify a ban. There is a
perception that such an action is necessary to protect water
supplies from contamination. Nothing could be further from the
truth. In reality, the major threat to water supplies comes
from all of the components of gasoline (many of which present
much more significant threats to human health than MTBE) that
leak from underground storage tanks. The solution to this
problem is not to ban one component of gasoline, but to ensure
that underground storage tanks do not leak. By choosing to ban
MTBE for political reasons, the Congress is avoiding the real
problem that threatens water supplies. In addition, it was the
U.S. Congress that essentially mandated the use of MTBE when it
passed the 1990 Clean Air Act that established a 2wt. percent
oxygenate requirement for gasoline. While Congress did not
specifically designate MTBE as the oxygenate refiners would be
required to use, it was well known at the time that MTBE was
the most economical and efficient fuel additive in the
marketplace for refiners to use to meet the Federal
requirements.
Supply and Price Implications
In addition to being the most used oxygenate to meet the
1990 Clean Air Act requirements; MTBE serves to extend the U.S.
gasoline supply by three to 4 percent. Further, MTBE extends
the reformulated gasoline (RFG) pool by 10 to 13 percent.
Removing MTBE from commerce will create a dramatic energy
shortfall leading to gasoline price increases between four and
ten cents per gallon nationwide. According to a recent U.S.
Energy Information Administration study, price increases could
be even more drastic in New York, New Jersey and California. A
three to 4 percent gasoline supply reduction equals the output
of five medium-sized United States refineries, or the
equivalent of 400,000 bpd. This amount is equal to or greater
than gasoline supplied to the U.S. marketplace from Iraq or
Venezuela and is equivalent to the gasoline that could be
supplied by ANWR.
Air Quality
By every measure, clean-burning RFG blended with MTBE has
exceeded all pollution reduction goals, substantially and cost
effectively improving the nation's air quality. MTBE is used in
85 percent of all RFG and the remaining 15 percent of RFG uses
ethanol, primarily in the Midwest. RFG is currently required by
the 1990 Clean Air Act to reduce smog-forming pollutant
emissions by 25 percent, air toxic emissions by 20 percent, and
nitrogen oxide emissions by four to 7 percent.
Data collected by refiners, EPA, automakers, and others
clearly shows that RFG-primarily because of the use of MTBE-has
actually surpassed all emission reduction requirements. Use of
RFG with MTBE has resulted in emissions benefits of 13 percent
above requirements for air toxics; 13 percent more than
required for VOCs; and an additional 8 percent in NOx
reductions. Further, RFG with MTBE has reduced emissions of
benzene, a known human carcinogen, by 43 percent.
In 1998, a study by the Northeast States found that RFG
with MTBE substantially reduced ``the relative cancer risk
associated with gasoline vapors and automobile exhaust compared
to conventional gasoline,'' concluding that today's RFG reduces
cancer risk by 20 percent over conventional gasoline.\1\
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\1\Northeast States for Coordinated Air Use Management, Relative
Cancer Risk of Reformulated Gasoline and Conventional Gasoline Sold in
the Northeast, August 1998.
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Ban on MTBE is Unprecedented and Arbitrary
EPA, State health agencies, international health
organizations, and leading research universities have studied
the health effects associated with MTBE use in gasoline. The
overwhelming majority of scientific evaluations from government
and world-renowned independent health organizations have not
indentified any health-related risks to humans from the
intended use of MTBE in gasoline. Furthermore, MTBE does not
accumulate in the body, and it has not been shown to impair
fertility, or damage a developing fetus or the genetic
structure of cells. Additional studies confirm that MTBE
reduces toxic air pollutions such as benzene; reduces carbon
monoxide and greenhouse gas emissions; and substantially
surpasses all Clean Air Act requirements for the reduction of
smog-forming compounds.
Like most chemicals, MTBE has the ability to cause some
injury at extremely high dosages. Extensive research indicates
that the MTBE doses required to produce illness in laboratory
animals are thousands of times greater than those to which
humans could conceivably be exposed to in the real world.
The issues surrounding MTBE are very scientific and complex
in nature. I believe it would be in poor choice for this
Congress to use politics to ban a product that has done much to
reduce air pollution in the United States. Instead, if the
Federal Government wishes to regulate MTBE, it should be left
to the Federal agencies who have extensive knowledge of the
science behind MTBE and those agencies should work closely with
industry and the public to solicit input on how to best proceed
with the use of MTBE in the gasoline supply.
Global Implications
Other industrialized nations have also looked at MTBE and
have formed opinions and policies completely different than
those currently proposed by this committee.
A European Union study/risk assessment on MTBE was released
in 2002. This study commissioned by the European Union and
conducted by the Finnish Environment Institute began in 1997
and was carried out in two stages. All known data on the health
and environmental effects of MTBE, together with the potential
for exposure, were evaluated in order to determine the overall
risk, and the findings set out in a Risk Assessment Report. The
EU considered all available scientific and technical
information, based on more than 20 years of MTBE usage and
research, and concluded that MTBE is not expected to have any
harmful impact on human health or the environment.\2\ The study
also concluded that proper management of underground storage
tanks (USTs) would appropriately address any risk to the
environment posed by MTBE in gasoline. Indeed, future European
Union fuels specifications, recognizing the benefits of MTBE
toward improving air quality, will likely increase usage of
that product in the EU.
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\2\European Union, Risk Assessment and Risk Reduction Strategy, EC
Council Regulation No. 793/93, Official Journal (4 December L319).
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Accordingly, Europe and other U.S. trade partners are
likely to have concerns with a U.S. ban, which would terminate
their current large volume of exports to the United States of
MTBE, gasoline containing MTBE, and methanol used to produce
MTBE. These trade partners can be expected to argue that the
ban is a more burdensome restriction on trade in these
commodities than is necessary and that it amounts to no more
than thinly disguised protectionism for ethanol. These
allegations, in turn, can be expected to exacerbate ongoing
severe criticism of other recent U.S. trade measures--
particularly those relating to steel and softwood lumber--where
Europe, Canada, and others have characterized U.S. actions as
protectionist and extreme.
Water Contamination and Underground Storage Tanks
I was pleased with the work completed by the Senate
Committee on Environment and Public Works on passing meaningful
legislation, S. 195, to improve the Federal Underground Storage
Tank (UST) program. I believe this was a positive step in
addressing the real problem of gasoline leaking from USTs and
polluting drinking water supplies-not MTBE. Because of the
unpleasant odor and taste MTBE can have, it has been easier for
local and State water agencies to detect MTBE contamination in
water sources. However, MTBE should be a precursor to gasoline
contamination instead of the scapegoat because of the other
ingredients contained in gasoline are much more harmful and are
known carcinogens such as benzene and formaldehyde.
MTBE detections have been found to be at concentrations
below five parts per billion (ppbs), well below the EPA
Consumer Advisory recommendation of 20 to 40 ppbs to avoid
unpleasant odor and taste. In fact, in California, where MTBE
concentrations were once among the highest, the California
Department of Health Services determined that the MTBE
contamination rate has declined and appears to have stabilized
for public water supply wells. This claim has also been
supported by testimony from the U.S. Geological Society (USGS)
before the House Subcommittee on the Environment and Hazardous
Material. I look forward to working with the Chairman of the
Committee and the sponsor of the bill, Senator Chafee, to
passing this important legislation.
LACK OF LIABILITY PROTECTION EXTENDED TO MTBE PRODUCERS
As I mentioned in mark up, I believe a major flaw in this
legislation is the fact that this committee is extending
liability relief to one product--ethanol--and not another
product--MTBE.
The context in which we are denying liability protection to
MTBE producers makes this situation even more disturbing. In
1990, Congress set out to encourage clean air by passing the
1990 Clean Air Act Amendments. Included in this landmark
legislation was a particular fuel standard. Congress knew that
MTBE would be widely used to satisfy the standard. As a result,
manufacturers produced and marketed MTBE to satisfy the
congressional standard. Now, manufacturers face crippling
lawsuits solely because they produced a product that Congress
encouraged them to produce. Because MTBE manufacturers complied
with the requirements of a federally mandated program, MTBE
should at a minimum receive the equivalent legal treatment as
ethanol.
It is only fair that any fuel producer who responds to a
congressional mandate should be protected against legal action
based upon the use of that mandated product. No one should be
penalized for obeying the law. The government bears the
responsibility for MTBE liability. Failure to address this
issue only serves to undermine any incentive for additive
manufacturers to produce new generations of additives that will
be needed to replace MTBE and to meet future energy and
environmental goals. There is a precedent for the Federal
Government to address liability concerns when the government
has required a product or process. In the case of nuclear
facilities the Federal Government's role is limited to
licensing and approving facilities. Regardless of this limited
role, specific caps have been enacted to limit economic damages
arising from liability. In another instance, the Federal
Government required that a flame retardant, TRIS, be used in
children's sleepwear. TRIS was subsequently banned after
learning the retardant was carcinogenic. The Federal Government
limited liability and set up a settlement fund to deal with
claims made by companies that manufactured TRIS.
Product liability makes the product manufacturer strictly
liable for placing an unreasonably dangerous product into the
market. The purpose of product liability is to deter unwanted
behavior, but such liability cannot deter behavior when the
government mandates the product. A narrowly tailored safe
harbor provision does not interfere with the ability of
plaintiffs to obtain relief for truly negligent behavior that
result in diminished value of resources.
Changes in Existing Law
In compliance with section 12 of rule XXVI of the Standing
Rules of the Senate, changes in existing law made by the bill
as reported are shown as follows: Existing law proposed to be
omitted is enclosed in [black brackets], new matter is printed
in italic, existing law in which no change is proposed is shown
in roman:
THE CLEAN AIR ACT \1\
TITLE I--AIR POLLUTION PREVENTION AND CONTROL
Part A--Air Quality and Emission Limitations
findings and purposes
Sec. 101. (a) The Congress finds--
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\1\ The Clean Air Act (42 U.S.C. 7401-7626) consists of Public Law
159 (July 14, 1955; 69 Stat. 322) and the amendments made by subsequent
enactments.
* * * * * * *
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TITLE I--AIR POLLUTION PREVENTION AND CONTROL
Part A--Air Quality and Emission Limitations
Sec. 101. Findings and purposes.
Sec. 102. Cooperative activities and uniform laws.
Sec. 103. Research, investigation, training, and other activities.
Sec. 104. Research relating to fuels and vehicles.
Sec. 105. Grants for support of air pollution planning and control
programs.
Sec. 106. Interstate air quality agencies or commissions.
Sec. 107. Air quality control regions.
Sec. 108. Air quality criteria and control techniques.
Sec. 109. National ambient air quality standards.
Sec. 110. Implementation plans.
Sec. 111. Standards of performance for new stationary sources.
Sec. 112. Hazardous air pollutants.
Sec. 113. Federal Enforcement.
Sec. 114. Inspections, monitoring, and entry.
Sec. 115. International air pollution.
Sec. 116. Retention of state authority.
Sec. 117. President's air quality advisory board and advisory
committees.
Sec. 118. Control of pollution from federal facilities.
Sec. 119. Primary nonferrous smelter orders.
Sec. 120. Noncompliance penalty.
Sec. 121. Consultation.
Sec. 122. Listing of certain unregulated pollutants.
Sec. 123. Stack heights.
Sec. 124. Assurance of adequacy of state plans.
Sec. 125. Measures to prevent economic disruption or unemployment.
Sec. 126. Interstate pollution abatement.
Sec. 127. Public notification.
Sec. 128. State boards.
Sec. 129. Solid waste combustion.
Sec. 130. Emission factors.
Sec. 131. Land use authority.
Part B--Ozone Protection
[Secs. 150 through 159 Repealed]
Part C--Prevention of Significant Deterioration of Air Quality
subpart 1
Sec. 160. Purposes.
Sec. 161. Plan requirements.
Sec. 162. Initial classifications.
Sec. 163. Increments and ceilings.
Sec. 164. Area redesignation.
Sec. 165. Preconstruction requirements.
Sec. 166. Other pollutants.
Sec. 167. Enforcement.
Sec. 168. Period before plan approval.
Sec. 169. Definitions.
\1\ This table of contents is not part of the Clean Air Act but is
included herein for the convenience of the users of this publication.
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Subpart 2
Sec. 169A. Visibility protection for Federal class I areas.
Sec. 169B. Visibility.
Part D--Plan Requirements for Nonattainment Areas
subpart 1--nonattainment areas in general
Sec. 171. Definitions.
Sec. 172. Nonattainment plan provisions in general.
Sec. 173. Permit requirements.
Sec. 174. Planning procedures.
Sec. 175. Environmental Protection Agency grants.
Sec. 175A. Maintenance plans.
Sec. 176. Limitation on certain Federal assistance.
Sec. 176A. Interstate transport commissions.
Sec. 177. New motor vehicle emission standards in nonattainment areas.
Sec. 178. Guidance documents.
Sec. 179. Sanctions and consequences of failure to attain.
Sec. 179B. International border areas.
subpart 2--additional provisions for ozone nonattainment areas
Sec. 181. Classifications and attainment dates.
Sec. 182. Plan submissions and requirements.
Sec. 183. Federal ozone measures.
Sec. 184. Control of interstate ozone air pollution.
Sec. 185. Enforcement for Severe and Extreme ozone nonattainment areas
for failure to attain.
Sec. 185A. Transitional areas.
Sec. 185B. NOx and VOC study.
subpart 3--additional provisions for carbon monoxide nonattainment
areas
Sec. 186. Classifications and attainment dates.
Sec. 187. Plan submissions and requirements.
subpart 4--additional provisions for particulate matter nonattainment
areas
Sec. 188. Classifications and attainment dates.
Sec. 189. Plan provisions and schedules for plan submissions.
Sec. 190. Issuance of RACM and BACM guidance.
subpart 5--additional provisions for areas designated nonattainment
for sulfur oxides, nitrogen dioxide, or lead
Sec. 191. Plan submission deadlines.
Sec. 192. Attainment dates.
subpart 6--savings provisions
Sec. 193. General savings clause.
TITLE II--EMISSION STANDARDS FOR MOVING SOURCES
Sec. 201. Short title.
Part A--Motor Vehicle Emission and Fuel Standards
Sec. 202. Establishment of standards.
Sec. 203. Prohibited acts.
Sec. 204. Injunction proceedings.
Sec. 205. Civil penalties.
Sec. 206. Motor vehicle and motor vehicle engine compliance testing and
certification.
Sec. 207. Compliance by vehicles and engines in actual use.
Sec. 208. Information collection.
Sec. 209. State standards.
Sec. 210. State grants.
Sec. 211. Regulation of fuels.
Sec. 212. Renewable fuels.
Sec. 213. Fuel economy improvement from new motor vehicles.
Sec. 214. Study of particulate emissions from motor vehicles.
Sec. 215. High altitude performance adjustments.
Sec. 216. Definitions for part A.
Sec. 217. Motor vehicle compliance program fees.
Sec. 218. Prohibition on production of engines requiring leaded
gasoline.
Sec. 219. Urban bus standards.
Part B--Aircraft Emission Standards
Sec. 231. Establishment of standards.
Sec. 232. Enforcement of standards.
Sec. 233. State standards and controls.
Sec. 234. Definitions.
Part C--Clean Fuel Vehicles
Sec. 241. Definitions.
Sec. 242. Requirements applicable to clean fuel vehicles.
Sec. 243. Standards for light-duty clean fuel vehicles.
Sec. 244. Administration and enforcement as per California standards.
Sec. 245. Standards for heavy-duty clean-fuel vehicles (gvwr above 8,500
up to 26,000 lbs).
Sec. 246. Centrally fueled fleets.
Sec. 247. Vehicle conversions.
Sec. 248. Federal agency fleets.
Sec. 249. California pilot test program.
Sec. 250. General provisions.
TITLE III--GENERAL
Sec. 301. Administration.
Sec. 302. Definitions.
Sec. 303. Emergency powers.
Sec. 304. Citizen suits.
Sec. 305. Representation in litigation.
Sec. 306. Federal procurement.
Sec. 307. General provisions relating to administrative proceedings and
judicial review.
Sec. 308. Mandatory licensing.
Sec. 309. Policy review.
Sec. 310. Other authority not affected.
Sec. 311. Records and audit.
Sec. 312. Economic impact analyses.
[Sec. 313. Repealed]
Sec. 314. Labor standards.
Sec. 315. Separability.
Sec. 316. Sewage treatment grants.
Sec. 317. Short title.
Sec. 317.\1\ Economic impact assessment.
[Sec. 318. Repealed]
Sec. 319. Air quality monitoring.
Sec. 320. Standardized air quality modeling.
Sec. 321. Employment effects.
Sec. 322. Employee protection.
Sec. 323. Cost of emission control for certain vapor recovery to be
borne by owner of retail outlet.
Sec. 324. Vapor recovery for small business marketers of petroleum
products.
Sec. 325. Exemptions for certain territories.
Sec. 326. Construction of certain clauses.
Sec. 327. Authorization of appropriations.
Sec. 328. Air pollution from outer continental shelf activities.
\1\ There are two sections numbered 317. This section should be numbered
318.
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regulation of fuels
Sec. 211. (a) The Administrator may by regulation
designate any fuel or fuel additive (including any fuel or fuel
additive used exclusively in nonroad engines or nonroad
vehicles) and, after such date or dates as may be prescribed by
him, no manufacturer or processor of any such fuel or additive
may sell, offer for sale, or introduce into commerce such fuel
or additive unless the Administrator has registered such fuel
or additive in accordance with subsection (b) of this section.
(b)(1) For the purpose of registration of fuels and fuel
additives, the Administrator shall require--
(A) the manufacturer of any fuel to notify him as
to the commercial identifying name and manufacturer of
any additive contained in such fuel; the range of
concentration of any additive in the fuel; and the
purpose-in-use of any such additive; and
(B) the manufacturer of any additive to notify him
as to the chemical composition of such additive.
(2) For the purpose of registration of fuels and fuel
additives, the Administrator [may also] shall, on a regular
basis require the manufacturer of any fuel or fuel additive--
[(A) to conduct tests to determine potential public
health effects of such fuel or additive (including, but
not limited to, carcinogenic, teratogenic, or mutagenic
effects), and]
(A) to conduct tests to determine potential
public health and environmental effects of the
fuel or additive (including carcinogenic,
teratogenic, or mutagenic effects); and
(B) to furnish the description of any analytical
technique that can be used to detect and measure any
additive in such fuel, the recommended range of
concentration of such additive, and the recommended
purpose-in-use of such additive, and such other
information as is reasonable and necessary to determine
the emissions resulting from the use of the fuel or
additive contained in such fuel, the effect of such
fuel or additive on the emission control performance of
any vehicle, vehicle engine, nonroad engine or nonroad
vehicle, or the extent to which such emissions affect
the public health or welfare.
Tests under subparagraph (A) shall be conducted in conformity
with test procedures and protocols established by the
Administrator. The results of such tests shall not be
considered confidential.
(3) Upon compliance with the provisions of this
subsection, including assurances that the Administrator will
receive changes in the information required, the Administrator
shall register such fuel or fuel additive.
(4) Study on certain fuel additives and
blendstocks.--
(A) In general.--Not later than 2 years
after the date of enactment of this paragraph,
the Administrator shall--
(i) conduct a study on the effects
on public health (including the effects
on children, pregnant women, minority
or low-income communities, and other
sensitive populations), air quality,
and water resources of increased use
of, and the feasibility of using as
substitutes for methyl tertiary butyl
ether in gasoline--
(I) ethyl tertiary butyl
ether;
(II) tertiary amyl methyl
ether;
(III) di-isopropyl ether;
(IV) tertiary butyl
alcohol;
(V) other ethers and heavy
alcohols, as determined by then
Administrator;
(VI) ethanol;
(VII) iso-octane; and
(VIII) alkylates; and
(ii) conduct a study on the effects
on public health (including the effects
on children, pregnant women, minority
or low-income communities, and other
sensitive populations), air quality,
and water resources of the adjustment
for ethanol-blended reformulated
gasoline to the volatile organic
compounds performance requirements that
are applicable under paragraphs (1) and
(3) of section 211(k); and
(iii) submit to the Committee on
Environment and Public Works of the
Senate and the Committee on Energy and
Commerce of the House of
Representatives a report describing the
results of the studies under clauses
(i) and (ii).
(B) Contracts for study.--In carrying out
this paragraph, the Administrator may enter
into 1 or more contracts with nongovernmental
entities such as--
(i) the national energy laboratories; and
(ii) institutions of higher education (as
defined in section 101 of the Higher Education
Act of 1965 (20 U.S.C. 1001)).
(c)(1) The Administrator may, from time to time on the
basis of information obtained under subsection (b) of this
section or other information available to him, by regulation,
control or prohibit the manufacture, introduction into
commerce, offering for sale, or sale of any fuel or fuel
additive for use in a motor vehicle, motor vehicle engine, or
nonroad engine or nonroad vehicle (A) if in the judgment of the
Administrator any fuel or fuel additive or emission product of
such fuel or fuel additive causes, or contributes, to [air
pollution which] air pollution, or water pollution, that may
reasonably be anticipated to endanger the public health or
welfare, or (B) if emission products of such fuel or fuel
additive will impair to a significant degree the performance of
any emission control device or system which is in general use,
or which the Administrator finds has been developed to a point
where in a reasonable time it would be in general use were such
regulation to be promulgated.
(2)(A) No fuel, class of fuels, or fuel additive may be
controlled or prohibited by the Administrator pursuant to
clause (A) of paragraph (1) except after consideration of all
relevant medical and scientific evidence available to him,
including consideration of other technologically or
economically feasible means of achieving emission standards
under section 202.
(B) No fuel or fuel additive may be controlled or
prohibited by the Administrator pursuant to clause (B) of
paragraph (1) except after consideration of available
scientific and economic data, including a cost benefit analysis
comparing emission control devices or systems which are or will
be in general use and require the proposed control or
prohibition with emission control devices or systems which are
or will be in general use and do not require the proposed
control or prohibition. On request of a manufacturer of motor
vehicles, motor vehicle engines, fuels, or fuel additives
submitted within 10 days of notice of proposed rulemaking, the
Administrator shall hold a public hearing and publish findings
with respect to any matter he is required to consider under
this subparagraph. Such findings shall be published at the time
of promulgation of final regulations.
(C) No fuel or fuel additive may be prohibited by the
Administrator under paragraph (1) unless he finds, and
publishes such finding, that in his judgment such prohibition
will not cause the use of any other fuel or fuel additive which
will produce emissions which will endanger the public health or
welfare to the same or greater degree than the use of the fuel
or fuel additive proposed to be prohibited.
(3)(A) For the purpose of obtaining evidence and data to
carry out paragraph (2), the Administrator may require the
manufacturer of any motor vehicle or motor vehicle engine to
furnish any information which has been developed concerning the
emissions from motor vehicles resulting from the use of any
fuel or fuel additive, or the effect of such use on the
performance of any emission control device or system.
(B) In obtaining information under subparagraph (A),
section 307 (a) (relating to subpenas) shall be applicable.
(4)(A) Except as otherwise provided in subparagraph (B)
or (C), no State (or political subdivision thereof) may
prescribe or attempt to enforce, for the purposes of motor
vehicle emission control, any control or prohibition respecting
any characteristic or component of a fuel or fuel additive in a
motor vehicle or motor vehicle engine--
(i) if the Administrator has found that no control
or prohibition of the characteristic or component of a
fuel or fuel additive under paragraph (1) is necessary
and has published his finding in the Federal Register,
or
(ii) if the Administrator has prescribed under
paragraph (1) a control or prohibition applicable to
such characteristic or component of a fuel or fuel
additive, unless State prohibition or control is
identical to the prohibition or control prescribed by
the Administrator.
(B) Any State for which application of section 209(a) has
at any time been waived under section 209(b) may at any time
prescribe and enforce, for the purpose of motor vehicle
emission control or water quality protection, a control or
prohibition respecting any fuel or fuel additive.
[(C) A State]
(C) Authority of state to control fuels and
fuel additives for reasons of necessity.--
(i) In general.--A State may
prescribe and enforce, for purposes of
motor vehicle emission control, a
control or prohibition respecting the
use of a fuel or fuel additive in a
motor vehicle or motor vehicle engine
if an applicable implementation plan
for such State under section 110 so
provides. The Administrator may approve
such provision in an implementation
plan, or promulgate an implementation
plan containing such a provision, only
if he finds that the State control or
prohibition is necessary to achieve the
national primary or secondary ambient
air quality standard which the plan
implements. The Administrator may find
that a State control or prohibition is
necessary to achieve that standard if
no other measures that would bring
about timely attainment exist, or if
other measures exist and are
technically possible to implement, but
are unreasonable or impracticable. The
Administrator may make a finding of
necessity under this subparagraph even
if the plan for the area does not
contain an approved demonstration of
timely attainment.
(ii) Enforcement by the
administrator.--In any case in which a
State prescribes and enforces a control
or prohibition under clause (i), the
Administrator, at the request of the
State, shall enforce the control or
prohibition as if the control or
prohibition had been adopted under the
other provisions of this section.
(5) Restrictions on use of mtbe.--
(A) In general.--Subject to subparagraph
(E), not later than 4 years after the date of
enactment of this paragraph, the use of methyl
tertiary butyl ether in motor vehicle fuel in
any State other than a State described in
subparagraph (C) is prohibited.
(B) Regulations.--The Administrator shall
promulgate regulations to effect the
prohibition in subparagraph (A).
(C) States that authorize use.--A State
described in this subparagraph is a State that
submits to the Administrator a notice that the
State authorizes use of methyl tertiary butyl
ether in motor vehicle fuel sold or used in the
State.
(D) Publication of notice.--The
Administrator shall publish in the Federal
Register each notice submitted by a State under
subparagraph (C).
(E) Trace quantities.--In carrying out
subparagraph (A), the Administrator may allow
trace quantities of methyl tertiary butyl
ether, not to exceed 0.5 percent by volume, to
be present in motor vehicle fuel in cases that
the Administrator determines to be appropriate.
(6) MTBE merchant producer conversion assistance.--
(A) In general.--
(i) Grants.--The Secretary of
Energy, in consultation with the
Administrator, may make grants to
merchant producers of methyl tertiary
butyl ether in the United States to
assist the producers in the conversion
of eligible production facilities
described in subparagraph (C) to the
production of--
(i) iso-octane or alkylates, unless
the Administrator, in consultation with
the Secretary of Energy, determines
that transition assistance for the
production of iso-octane or alkylates
is inconsistent with the criteria
specified in subparagraph (B); and
(ii) any other fuel additive that
meets the criteria specified in
subparagraph (B).
(B) Criteria.--The criteria referred to in
subparagraph (A) are that--
(i) use of the fuel additive is
consistent with this subsection;
(ii) the Administrator has not
determined that the fuel additive may
reasonably be anticipated to endanger
public health or the environment;
(iii) the fuel additive has been
registered and tested, or is being
tested, in accordance with the
requirements of this section; and
(iv) the fuel additive will
contribute to replacing quantities of
motor vehicle fuel rendered unavailable
as a result of paragraph (5).
(C) Eligible production facilities.--A
production facility shall be eligible to
receive a grant under this paragraph if the
production facility--
(i) is located in the United
States; and
(ii) produced methyl tertiary butyl
ether for consumption in nonattainment
areas during the period--
(I) beginning on the date
of enactment of this paragraph;
and
(II) ending on the
effective date of the
prohibition on the use of
methyl tertiary butyl ether
under paragraph (5).
(D) Authorization of appropriations.--There
is authorized to be appropriated to carry out
this paragraph $250,000,000 for each of fiscal
years 2004 through 2007.
(d) Penalties and Injunctions.--
(1) Civil penalties.--Any person who violates
subsection (a), (f), (g), (k), (l), (m), [or (n)] (n),
or (o) of this section or the regulations prescribed
under subsection (c), (h), (i), (k), (l), (m), [or (n)]
(n), or (o) of this section or who fails to furnish any
information or conduct any tests required by the
Administrator under subsection (b) of this section
shall be liable to the United States for a civil
penalty of not more than the sum of $25,000 for every
day of such violation and the amount of economic
benefit or savings resulting from the violation. Any
violation with respect to a regulation prescribed under
subsection (c), (k), (l), [or (m)] (m), or (o) of this
section which establishes a regulatory standard based
upon a multiday averaging period shall constitute a
separate day of violation for each and every day in the
averaging period. Civil penalties shall be assessed in
accordance with subsections (b) and (c) of section 205.
(2) Injunctive authority.--The district courts of
the United States shall have jurisdiction to restrain
violations of subsections (a), (f), (g), (k), (l), (m),
[and (n)] (n), and (o) of this section and of the
regulations prescribed under subsections (c), (h), (i),
(k), (l), (m), [and (n)] (n), and (o) of this section,
to award other appropriate relief, and to compel the
furnishing of information and the conduct of tests
required by the Administrator under subsection (b) of
this section. Actions to restrain such violations and
compel such actions shall be brought by and in the name
of the United States. In any such action, subpoenas for
witnesses who are required to attend a district court
in any district may run into any other district.
(e)(1) Not later than one year after the date of
enactment of this subsection and after notice and opportunity
for a public hearing, the Administrator shall promulgate
regulations which implement the authority under subsection
(b)(2) (A) and (B) with respect to each fuel or fuel additive
which is registered on the date of promulgation of such
regulations and with respect to each fuel or fuel additive for
which an application for registration is filed thereafter.
(2) Regulations under subsection (b) to carry out this
subsection shall require that the requisite information be
provided to the Administrator by each such manufacturer--
(A) prior to registration, in the case of any fuel
or fuel additive which is not registered on the date of
promulgation of such regulations; or
(B) not later than three years after the date of
promulgation of such regulations, in the case of any
fuel or fuel additive which is registered on such date.
(3) In promulgating such regulations, the Administrator
may--
(A) exempt any small business (as defined in such
regulations) from or defer or modify the requirements
of, such regulations with respect to any such small
business;
(B) provide for cost-sharing with respect to the
testing of any fuel or fuel additive which is
manufactured or processed by two or more persons or
otherwise provide for shared responsibility to meet the
requirements of this section without duplication; or
(C) exempt any person from such regulations with
respect to a particular fuel or fuel additive upon a
finding that any additional testing of such fuel or
fuel additive would be duplicative of adequate existing
testing.
(f)(1)(A) Effective upon March 31, 1977, it shall be
unlawful for any manufacturer of any fuel or fuel additive to
first introduce into commerce, or to increase the concentration
in use of, any fuel or fuel additive for general use in light
duty motor vehicles manufactured after model year 1974 which is
not substantially similar to any fuel or fuel additive utilized
in the certification of any model year 1975, or subsequent
model year, vehicle or engine under section 206.
(B) Effective upon the date of the enactment of the Clean
Air Act Amendments of 1990, it shall be unlawful for any
manufacturer of any fuel or fuel additive to first introduce
into commerce, or to increase the concentration in use of, any
fuel or fuel additive for use by any person in motor vehicles
manufactured after model year 1974 which is not substantially
similar to any fuel or fuel additive utilized in the
certification of any model year 1975, or subsequent model year,
vehicle or engine under section 206.
(2) Effective November 30, 1977, it shall be unlawful for
any manufacturer of any fuel to introduce into commerce any
gasoline which contains a concentration of manganese in excess
of .0625 grams per gallon of fuel, except as otherwise provided
pursuant to a waiver under paragraph (4).
(3) Any manufacturer of any fuel or fuel additive which
prior to March 31, 1977, and after January 1, 1974, first
introduced into commerce or increased the concentration in use
of a fuel or fuel additive that would otherwise have been
prohibited under paragraph (1)(A) if introduced on or after
March 31, 1977 shall, not later than September 15, 1978, cease
to distribute such fuel or fuel additive in commerce. During
the period beginning 180 days after the date of the enactment
of this subsection and before September 15, 1978, the
Administrator shall prohibit, or restrict the concentration of
any fuel additive which he determines will cause or contribute
to the failure of an emission control device or system (over
the useful life of any vehicle in which such device or system
is used) to achieve compliance by the vehicle with the emission
standards with respect to which it has been certified under
section 206.
(4) The Administrator, upon application of any
manufacturer of any fuel or fuel additive, may waive the
prohibitions established under paragraph (1) or (3) of this
subsection or the limitation specified in paragraph (2) of this
subsection, if he determines that the applicant has established
that such fuel or fuel additive or a specified concentration
thereof, and the emission products of such fuel or additive or
specified concentration thereof, will not cause or contribute
to a failure of any emission control device or system (over the
useful life of any vehicle in which such device or system is
used) to achieve compliance by the vehicle with the emission
standards with respect to which it has been certified pursuant
to section 206. If the Administrator has not acted to grant or
deny an application under this paragraph within one hundred and
eighty days of receipt of such application, the waiver
authorized by this paragraph shall be treated as granted.
(5) No action of the Administrator under this section may
be stayed by any court pending judicial review of such action.
(g) Misfueling.--(1) No person shall introduce, or cause or
allow the introduction of, leaded gasoline into any motor
vehicle which is labeled ``unleaded gasoline only,'' which is
equipped with a gasoline tank filler inlet designed for the
introduction of unleaded gasoline, which is a 1990 or later
model year motor vehicle, or which such person knows or should
know is a vehicle designed solely for the use of unleaded
gasoline.
(2) Beginning October 1, 1993, no person shall introduce or
cause or allow the introduction into any motor vehicle of
diesel fuel which such person knows or should know contains a
concentration of sulfur in excess of 0.05 percent (by weight)
or which fails to meet a cetane index minimum of 40 or such
equivalent alternative aromatic level as prescribed by the
Administrator under subsection (i)(2).
(h) Reid Vapor Pressure Requirements.--
(1) Prohibition.--Not later than 6 months after the
date of the enactment of the Clean Air Act Amendments
of 1990, the Administrator shall promulgate regulations
making it unlawful for any person during the high ozone
season (as defined by the Administrator) to sell, offer
for sale, dispense, supply, offer for supply,
transport, or introduce into commerce gasoline with a
Reid Vapor Pressure in excess of 9.0 pounds per square
inch (psi). Such regulations shall also establish more
stringent Reid Vapor Pressure standards in a
nonattainment area as the Administrator finds necessary
to generally achieve comparable evaporative emissions
(on a per-vehicle basis) in nonattainment areas, taking
into consideration the enforceability of such
standards, the need of an area for emission control,
and economic factors.
(2) Attainment areas.--The regulations under this
subsection shall not make it unlawful for any person to
sell, offer for supply, transport, or introduce into
commerce gasoline with a Reid Vapor Pressure of 9.0
pounds per square inch (psi) or lower in any area
designated under section 107 as an attainment area.
Notwithstanding the preceding sentence, the
Administrator may impose a Reid vapor pressure
requirement lower than 9.0 pounds per square inch (psi)
in any area, formerly an ozone nonattainment area,
which has been redesignated as an attainment area.
(3) Effective date; enforcement.--The regulations
under this subsection shall provide that the
requirements of this subsection shall take effect not
later than the high ozone season for 1992, and shall
include such provisions as the Administrator determines
are necessary to implement and enforce the requirements
of this subsection.
(4) Ethanol waiver.--For fuel blends containing
gasoline and 10 percent denatured anhydrous ethanol,
the Reid vapor pressure limitation under this
subsection shall be one pound per square inch (psi)
greater than the applicable Reid vapor pressure
limitations established under paragraph (1); Provided,
however, That a distributor, blender, marketer,
reseller, carrier, retailer, or wholesale purchaser-
consumer shall be deemed to be in full compliance with
the provisions of this subsection and the regulations
promulgated thereunder if it can demonstrate (by
showing receipt of a certification or other evidence
acceptable to the Administrator) that--
(A) the gasoline portion of the blend
complies with the Reid vapor pressure
limitations promulgated pursuant to this
subsection;
(B) the ethanol portion of the blend does
not exceed its waiver condition under
subsection (f)(4); and
(C) no additional alcohol or other additive
has been added to increase the Reid Vapor
Pressure of the ethanol portion of the blend.
(5) Exclusion from ethanol waiver.--
(A) Promulgation of regulations.--Upon
notification, accompanied by supporting
documentation, from the Governor of a State
that the Reid vapor pressure limitation
established by paragraph (4) will increase
emissions that contribute to air pollution in
any area in the State, the Administrator shall,
by regulation, apply, in lieu of the Reid vapor
pressure limitation established by paragraph
(4), the Reid vapor pressure limitation
established by paragraph (1) to all fuel blends
containing gasoline and 10 percent denatured
anhydrous ethanol that are sold, offered for
sale, dispensed, supplied, offered for supply,
transported, or introduced into commerce in the
area during the high ozone season.
(B) Deadline for promulgation.--The
Administrator shall promulgate regulations
under subparagraph (A) not later than 90 days
after the date of receipt of a notification
from a Governor under that subparagraph.
(C) Effective date.--
(i) In general.--With respect to an
area in a State for which the Governor
submits a notification under
subparagraph (A), the regulations under
that subparagraph shall take effect on
the later of--
(I) the first day of the
first high ozone season for the
area that begins after the date
of receipt of the notification;
or
(II) 1 year after the date
of receipt of the notification.
(ii) Extension of effective date
based on determination of insufficient
supply.--
(I) In general.--If, after
receipt of a notification with
respect to an area from a
Governor of a State under
subparagraph (A), the
Administrator determines, on
the Administrator's own motion
or on petition of any person
and after consultation with the
Secretary of Energy, that the
promulgation of regulations
described in subparagraph (A)
would result in an insufficient
supply of gasoline in the
State, the Administrator, by
regulation--
(aa) shall extend
the effective date of
the regulations under
clause (i) with respect
to the area for not
more than 1 year; and
(bb) may renew the
extension under item
(aa) for 2 additional
periods, each of which
shall not exceed 1
year.
(II) Deadline for action on
petitions.--The Administrator
shall act on any petition
submitted under subclause (I)
not later than 180 days after
the date of receipt of the
petition.
[(5)] (6) Areas covered.--The provisions of this
subsection shall apply only to the 48 contiguous States
and the District of Columbia.
(i) Sulfur Content Requirements for Diesel Fuel.--(1)
Effective October 1, 1993, no person shall manufacture, sell,
supply, offer for sale or supply, dispense, transport, or
introduce into commerce motor vehicle diesel fuel which
contains a concentration of sulfur in excess of 0.05 percent
(by weight) or which fails to meet a cetane index minimum of
40.
(2) Not later than 12 months after the date of the
enactment of the Clean Air Act Amendments of 1990, the
Administrator shall promulgate regulations to implement and
enforce the requirements of paragraph (1). The Administrator
may require manufacturers and importers of diesel fuel not
intended for use in motor vehicles to dye such fuel in a
particular manner in order to segregate it from motor vehicle
diesel fuel. The Administrator may establish an equivalent
alternative aromatic level to the cetane index specification in
paragraph (1).
(3) The sulfur content of fuel required to be used in the
certification of 1991 through 1993 model year heavy-duty diesel
vehicles and engines shall be 0.10 percent (by weight). The
sulfur content and cetane index minimum of fuel required to be
used in the certification of 1994 and later model year heavy-
duty diesel vehicles and engines shall comply with the
regulations promulgated under paragraph (2).
(4) The States of Alaska and Hawaii may be exempted from
the requirements of this subsection in the same manner as
provided in section 324. \1\ The Administrator shall take final
action on any petition filed under section 324 \1\ or this
paragraph for an exemption from the requirements of this
subsection, within 12 months from the date of the petition.
---------------------------------------------------------------------------
\1\ So in original. Probably should refer to section ``325''.
---------------------------------------------------------------------------
(j) Lead Substitute Gasoline Additives.--(1) After the date
of the enactment of the Clean Air Act Amendments of 1990, any
person proposing to register any gasoline additive under
subsection (a) or to use any previously registered additive as
a lead substitute may also elect to register the additive as a
lead substitute gasoline additive for reducing valve seat wear
by providing the Administrator with such relevant information
regarding product identity and composition as the Administrator
deems necessary for carrying out the responsibilities of
paragraph (2) of this subsection (in addition to other
information which may be required under subsection (b)).
(2) In addition to the other testing which may be required
under subsection (b), in the case of the lead substitute
gasoline additives referred to in paragraph (1), the
Administrator shall develop and publish a test procedure to
determine the additives' effectiveness in reducing valve seat
wear and the additives' tendencies to produce engine deposits
and other adverse side effects. The test procedures shall be
developed in cooperation with the Secretary of Agriculture and
with the input of additive manufacturers, engine and engine
components manufacturers, and other interested persons. The
Administrator shall enter into arrangements with an independent
laboratory to conduct tests of each additive using the test
procedures developed and published pursuant to this paragraph.
The Administrator shall publish the results of the tests by
company and additive name in the Federal Register along with,
for comparison purposes, the results of applying the same test
procedures to gasoline containing 0.1 gram of lead per gallon
in lieu of the lead substitute gasoline additive. The
Administrator shall not rank or otherwise rate the lead
substitute additives. Test procedures shall be established
within 1 year after the date of the enactment of the Clean Air
Act Amendments of 1990. Additives shall be tested within 18
months of the date of the enactment of the Clean Air Act
Amendments of 1990 or 6 months after the lead substitute
additives are identified to the Administrator, whichever is
later.
(3) The Administrator may impose a user fee to recover the
costs of testing of any fuel additive referred to in this
subsection. The fee shall be paid by the person proposing to
register the fuel additive concerned. Such fee shall not exceed
$20,000 for a single fuel additive.
(4) There are authorized to be appropriated to the
Administrator not more than $1,000,000 for the second full
fiscal year after the date of the enactment of the Clean Air
Act Amendments of 1990 to establish test procedures and conduct
engine tests as provided in this subsection. Not more than
$500,000 per year is authorized to be appropriated for each of
the 5 subsequent fiscal years.
(5) Any fees collected under this subsection shall be
deposited in a special fund in the United States Treasury for
licensing and other services which thereafter shall be
available for appropriation, to remain available until
expended, to carry out the Agency's activities for which the
fees were collected.
(k) Reformulated Gasoline for Conventional Vehicles.--
(1) EPA regulations.--[Within 1 year after the
enactment of the Clean Air Act Amendments of 1990
(A) In general.--Not later than November
15, 1991, the Administrator shall promulgate
regulations under this section establishing
requirements for reformulated 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.
(B) Maintenance of toxic air pollutant
emissions reductions from reformulated
gasoline.--
(i) Definition of padd.--In this
subparagraph the term `PADD' means a
Petroleum Administration for Defense
District.
(ii) Regulations concerning
emissions of toxic air pollutants.--Not
later than 270 days after the date of
enactment of this subparagraph, the
Administrator shall establish by
regulation, for each refinery or
importer (other than a refiner or
importer in a State that has received a
waiver under section 209(b) with
respect to gasoline produced for use in
that State), standards for toxic air
pollutants from use of the reformulated
gasoline produced or distributed by the
refiner or importer that maintain the
reduction of the average annual
aggregate emissions of toxic air
pollutants for reformulated gasoline
produced or distributed by the refiner
or importer during calendar years 1999
and 2000 (as determined on the basis of
data collected by the Administrator
with respect to the refiner or
importer).
(iii) Standards applicable to
specific refineries or importers.--
(I) Applicability of
standards.--For any calendar
year, the standards applicable
to a refiner or importer under
clause (ii) shall apply to the
quantity of gasoline produced
or distributed by the refiner
or importer in the calendar
year only to the extent that
the quantity is less than or
equal to the average annual
quantity of reformulated
gasoline produced or
distributed by the refiner or
importer during calendar years
1999 and 2000.
(II) Applicability of other
standards.--For any calendar
year, the quantity of gasoline
produced or distributed by a
refiner or importer that is in
excess of the quantity subject
to subclause (I) shall be
subject to standards for
emissions of toxic air
pollutants promulgated under
subparagraph (A) and paragraph
(3)(B).
(iv) Credit program.--The
Administrator shall provide for the
granting and use of credits for
emissions of toxic air pollutants in
the same manner as provided in
paragraph (7).
(v) Regional protection of toxics
reduction baselines.--
(I) In general.--Not later
than 60 days after the date of
enactment of this subparagraph,
and not later than April 1 of
each calendar year that begins
after that date of enactment,
the Administrator shall publish
in the Federal Register a
report that specifies, with
respect to the previous
calendar year--
(aa) the quantity
of reformulated
gasoline produced that
is in excess of the
average annual quantity
of reformulated
gasoline produced in
1999 and 2000; and
(bb) the reduction
of the average annual
aggregate emissions of
toxic air pollutants in
each PADD, based on
retail survey data or
data from other
appropriate sources.
(II) Effect of failure to
maintain aggregate toxics
reductions.--If, in any
calendar year, the reduction of
the average annual aggregate
emissions of toxic air
pollutants in a PADD fails to
meet or exceed the reduction of
the average annual aggregate
emissions of toxic air
pollutants in the PADD in
calendar years 1999 and 2000,
the Administrator, not later
than 90 days after the date of
publication of the report for
the calendar year under
subclause (I), shall--
(aa) identify, to
the maximum extent
practicable, the
reasons for the
failure, including the
sources, volumes, and
characteristics of
reformulated gasoline
that contributed to the
failure; and
(bb) promulgate
revisions to the
regulations promulgated
under clause (ii), to
take effect not earlier
than 180 days but not
later than 270 days
after the date of
promulgation, to
provide that,
notwithstanding clause
(iii)(II), all
reformulated gasoline
produced or distributed
at each refiner or
importer shall meet the
standards applicable
under clause (iii)(I)
beginning not later
than April 1 of the
calendar year following
publication of the
report under subclause
(I) and in each
calendar year
thereafter.
(vi) Regulations to control
hazardous air pollutants from motor
vehicles and motor vehicle fuels.--Not
later than July 1, 2004, the
Administrator shall promulgate final
regulations to control hazardous air
pollutants from motor vehicles and
motor vehicle fuels, as provided for in
section 80.1045 of title 40, Code of
Federal Regulations (as in effect on
the date of enactment of this
subparagraph).
(2) General requirements.--The regulations referred
to in paragraph (1) shall require that reformulated
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 reformulated 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) Oxygen content.--The oxygen content of
the gasoline shall equal or exceed 2.0 percent
by weight (subject to a testing tolerance
established by the Administrator) except as
otherwise required by this Act. The
Administrator may waive, in whole or in part,
the application of this subparagraph for any
ozone nonattainment area upon a determination
by the Administrator that compliance with such
requirement would prevent or interfere with the
attainment by the area of a national primary
ambient air quality standard.
(C) Benzene content.--The benzene content
of the gasoline shall not exceed 1.0 percent by
volume.
(D) 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.
(A) Formula.--
(i) Benzene.--The benzene content
of the reformulated gasoline shall not
exceed 1.0 percent by volume.
(ii) Aromatics.--The aromatic
hydrocarbon content of the reformulated
gasoline shall not exceed 25 percent by
volume.
(iii) Lead.--The reformulated
gasoline shall have no lead content.
(iv) Detergents.--The reformulated
gasoline shall contain additives to
prevent the accumulation of deposits in
engines or vehicle fuel supply systems.
(v) Oxygen content.--The oxygen
content of the reformulated gasoline
shall equal or exceed 2.0 percent by
weight (subject to a testing tolerance
established by the Administrator)
except as otherwise required by this
Act.
(B) Performance standard.--
(i) VOC emissions.--During the high
ozone season (as defined by the
Administrator), the aggregate emissions
of ozone forming volatile organic
compounds from baseline vehicles when
using the reformulated gasoline shall
be 15 percent below the aggregate
emissions of ozone forming volatile
organic compounds 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 VOC emissions. 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.
(ii) Toxics.--During the entire
year, the aggregate emissions of toxic
air pollutants from baseline vehicles
when using the reformulated 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
reformulated 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 reformulated gasoline
meeting the applicable requirements of
paragraph (3).
(C) EPA determination of emissions level.--
Within 1 year after the enactment of the Clean
Air Act Amendments of 1990, 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,
within 1 year after the enactment of the Clean
Air Act Amendments of 1990, 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 beginning January 1,
1995, 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
reformulated 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 reformulated 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]
(6) Opt-in areas.--
(A) Classified areas.--
(i) In general.--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, not later than
January 1, 1995, or 1 year after such
application is received, whichever is
later. The Administrator shall publish
such application in the Federal
Register upon receipt.
[(B) If]
(ii) Effect of insufficient
domestic capacity to produce
reformulated gasoline.--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)] clause (i) 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] this
subparagraph 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.
(B) Ozone transport region.--
(i) Application of prohibition.--
(I) In general.--On
application of the Governor of
a State in the ozone transport
region established by section
184(a), the Administrator, not
later than 180 days after the
date of receipt of the
application, shall apply the
prohibition specified in
paragraph (5) to any area in
the State (other than an area
classified as a marginal,
moderate, serious, or severe
ozone nonattainment area under
subpart 2 of part D of title I)
unless the Administrator
determines under clause (iii)
that there is insufficient
capacity to supply reformulated
gasoline.
(II) Publication of
application.--As soon as
practicable after the date of
receipt of an application under
subclause (I), the
Administrator shall publish the
application in the Federal
Register.
(ii) Period of applicability.--
Under clause (i), the prohibition
specified in paragraph (5) shall apply
in a State--
(I) commencing as soon as
practicable but not later than
2 years after the date of
approval by the Administrator
of the application of the
Governor of the State; and
(II) ending not earlier
than 4 years after the
commencement date determined
under subclause (I).
(iii) Extension of commencement
date based on insufficient capacity.--
(I) In general.--If, after
receipt of an application from
a Governor of a State under
clause (i), 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 capacity to
supply reformulated gasoline,
the Administrator, by
regulation--
(aa) shall extend
the commencement date
with respect to the
State under clause
(ii)(I) for not more
than 1 year; and
(bb) may renew the
extension under item
(aa) for 2 additional
periods, each of which
shall not exceed 1
year.
(II) Deadline for action on
petitions.--The Administrator
shall act on any petition
submitted under subclause (I)
not later than 180 days after
the date of receipt of the
petition.
(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 oxygen content (by weight) that
exceeds the minimum oxygen content specified in
paragraph (2);
(ii) has an aromatic hydrocarbon content
(by volume) that is less than the maximum
aromatic hydrocarbon content required to comply
with paragraph (3); or
(iii) 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 gasoline oxygen content (by
weight) for the nonattainment area (taking into
account all gasoline sold for use in
conventional gasoline-fueled vehicles in the
nonattainment area) lower than the average
gasoline oxygen content (by weight) that would
occur in the absence of using any such credits.
(iii) 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.--Within 1 year after the
enactment of the Clean Air Act Amendments of
1990, 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
reformulated 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. Such regulations shall take effect
beginning January 1, 1995.
(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
API Gravity........................... 57.4
Sulfur, ppm........................... 339
Benzene, %............................ 1.53
RVP, psi.............................. 8.7
Octane, R+M/2......................... 87.3
IBP, F................................ 91
10%, F................................ 128
50%, F................................ 218
90%, F................................ 330
End Point, F.......................... 415
Aromatics, %.......................... 32.0
Olefins, %............................ 9.2
Saturates, %.......................... 58.8
(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
1,3 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) \1\ Reformulated gasoline.--The term
``reformulated gasoline'' means any gasoline which is
certified by the Administrator under this section as
complying with this subsection.
---------------------------------------------------------------------------
\1\ So in original. Subparagraphs (E) and (F) should be indented.
---------------------------------------------------------------------------
(F) \1\ Conventional gasoline.--The term
``conventional gasoline'' means any gasoline which does
not meet specifications set by a certification under
this subsection.
(11) Commingling.--The regulations under paragraph
(1) shall permit the commingling at a retail station of
reformulated gasoline containing ethanol and
reformulated gasoline that does not contain ethanol if,
each time such commingling occurs--
(A) the retailer notifies the Administrator
before the commingling, identifying the exact
location of the retail station and the specific
tank in which the commingling will take place;
and
(B) the retailer certifies that the
reformulated gasoline resulting from the
commingling will meet all applicable
requirements for reformulated gasoline,
including content and emission performance
standards.
(l) Detergents.--Effective beginning January 1, 1995, no
person may sell or dispense to an ultimate consumer in the
United States, and no refiner or marketer may directly or
indirectly sell or dispense to persons who sell or dispense to
ultimate consumers in the United States any gasoline which does
not contain additives to prevent the accumulation of deposits
in engines or fuel supply systems. Not later than 2 years after
the date of the enactment of the Clean Air Act Amendments of
1990, the Administrator shall promulgate a rule establishing
specifications for such additives.
(m) Oxygenated Fuels.--
(1) Plan revisions for co nonattainment areas.--(A)
Each State in which there is located all or part of an
area which is designated under title I as a
nonattainment area for carbon monoxide and which has a
carbon monoxide design value of 9.5 parts per million
(ppm) or above based on data for the 2-year period of
1988 and 1989 and calculated according to the most
recent interpretation methodology issued by the
Administrator prior to the enactment of the Clean Air
Act Amendments of 1990 shall submit to the
Administrator a State implementation plan revision
under section 110 and part D of title I for such area
which shall contain the provisions specified under this
subsection regarding oxygenated gasoline.
(B) A plan revision which contains such provisions
shall also be submitted by each State in which there is
located any area which, for any 2-year period after
1989 has a carbon monoxide design value of 9.5 ppm or
above. The revision shall be submitted within 18 months
after such 2-year period.
(2) Oxygenated gasoline in co nonattainment
areas.--Each plan revision under this subsection shall
contain provisions to require that any gasoline sold,
or dispensed, to the ultimate consumer in the carbon
monoxide nonattainment area or sold or dispensed
directly or indirectly by fuel refiners or marketers to
persons who sell or dispense to ultimate consumers, in
the larger of--
(A) the Consolidated Metropolitan
Statistical Area (CMSA) in which the area is
located, or
(B) if the area is not located in a CMSA,
the Metropolitan Statistical Area in which the
area is located,
be blended, during the portion of the year in which the
area is prone to high ambient concentrations of carbon
monoxide to contain not less than 2.7 percent oxygen by
weight (subject to a testing tolerance established by
the Administrator). The portion of the year in which
the area is prone to high ambient concentrations of
carbon monoxide shall be as determined by the
Administrator, but shall not be less than 4 months. At
the request of a State with respect to any area
designated as nonattainment for carbon monoxide, the
Administrator may reduce the period specified in the
preceding sentence if the State can demonstrate that
because of meteorological conditions, a reduced period
will assure that there will be no exceedances of the
carbon monoxide standard outside of such reduced
period. For areas with a carbon monoxide design value
of 9.5 ppm or more \1\ of the date of enactment of the
Clean Air Act Amendments of 1990, the revision shall
provide that such requirement shall take effect no
later than November 1, 1992, (or at such other date
during 1992 as the Administrator establishes under the
preceding provisions of this paragraph). For other
areas, the revision shall provide that such requirement
shall take effect no later than November 1 of the third
year after the last year of the applicable 2-year
period referred to in paragraph (1) (or at such other
date during such third year as the Administrator
establishes under the preceding provisions of this
paragraph) and shall include a program for
implementation and enforcement of the requirement
consistent with guidance to be issued by the
Administrator.
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\1\ Probably should add the word ``as'' before ``of''.
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(3) Waivers.--(A) The Administrator shall waive, in
whole or in part, the requirements of paragraph (2)
upon a demonstration by the State to the satisfaction
of the Administrator that the use of oxygenated
gasoline would prevent or interfere with the attainment
by the area of a national primary ambient air quality
standard (or a State or local ambient air quality
standard) for any air pollutant other than carbon
monoxide.
(B) The Administrator shall, upon demonstration by
the State satisfactory to the Administrator, waive the
requirement of paragraph (2) where the Administrator
determines that mobile sources of carbon monoxide do
not contribute significantly to carbon monoxide levels
in an area.
(C)(i) Any person may petition the Administrator to
make a finding that there is, or is likely to be, for
any area, an inadequate domestic supply of, or
distribution capacity for, oxygenated gasoline meeting
the requirements of paragraph (2) or fuel additives
(oxygenates) necessary to meet such requirements. The
Administrator shall act on such petition within 6
months after receipt of the petition.
(ii) If the Administrator determines, in response
to a petition under clause (i), that there is an
inadequate supply or capacity described in clause (i),
the Administrator shall delay the effective date of
paragraph (2) for 1 year. Upon petition, the
Administrator may extend such effective date for one
additional year. No partial delay or lesser waiver may
be granted under this clause.
(iii) In granting waivers under this subparagraph
the Administrator shall consider distribution capacity
separately from the adequacy of domestic supply and
shall grant such waivers in such manner as will assure
that, if supplies of oxygenated gasoline are limited,
areas having the highest design value for carbon
monoxide will have a priority in obtaining oxygenated
gasoline which meets the requirements of paragraph (2).
(iv) As used in this subparagraph, the term
distribution capacity includes capacity for
transportation, storage, and blending.
(4) Fuel dispensing systems.--Any person selling
oxygenated gasoline at retail pursuant to this
subsection shall be required under regulations
promulgated by the Administrator to label the fuel
dispensing system with a notice that the gasoline is
oxygenated and will reduce the carbon monoxide
emissions from the motor vehicle.
(5) Guidelines for credit.--The Administrator shall
promulgate guidelines, within 9 months after the date
of the enactment of the Clean Air Act Amendments of
1990, allowing the use of marketable oxygen credits
from gasolines during that portion of the year
specified in paragraph (2) with higher oxygen content
than required to offset the sale or use of gasoline
with a lower oxygen content than required. No credits
may be transferred between nonattainment areas.
(6) Attainment areas.--Nothing in this subsection
shall be interpreted as requiring an oxygenated
gasoline program in an area which is in attainment for
carbon monoxide, except that in a carbon monoxide
nonattainment area which is redesignated as attainment
for carbon monoxide, the requirements of this
subsection shall remain in effect to the extent such
program is necessary to maintain such standard
thereafter in the area.
(7) Failure to attain co standard.--If the
Administrator determines under section 186(b)(2) that
the national primary ambient air quality standard for
carbon monoxide has not been attained in a Serious Area
by the applicable attainment date, the State shall
submit a plan revision for the area within 9 months
after the date of such determination. The plan revision
shall provide that the minimum oxygen content of
gasoline referred to in paragraph (2) shall be 3.1
percent by weight unless such requirement is waived in
accordance with the provisions of this subsection.
(n) Prohibition on Leaded Gasoline for Highway Use.--After
December 31, 1995, it shall be unlawful for any person to sell,
offer for sale, supply, offer for supply, dispense, transport,
or introduce into commerce, for use as fuel in any motor
vehicle (as defined in section 219(2)) \1\ any gasoline which
contains lead or lead additives.
---------------------------------------------------------------------------
\1\ Reference should probably be to section 216(2). See section 220
of Public Law 101-549.
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(o) Renewable Fuel Program.--
(1) Definitions.--In this section:
(A) Cellulosic biomass ethanol.--The term
`cellulosic biomass ethanol' means ethanol
derived from any lignocellulosic or
hemicellulosic matter that is available on a
renewable or recurring basis, including--
(i) dedicated energy crops and
trees;
(ii) wood and wood residues;
(iii) plants;
(iv) grasses;
(v) agricultural residues;
(vi) fibers;
(vii) animal wastes and other waste
materials; and
(viii) municipal solid waste.
(B) Renewable fuel.--
(i) In general.--The term
`renewable fuel' means motor vehicle
fuel that--
(I)(aa) is produced from
grain, starch, oilseeds, or
other biomass; or
(bb) is natural gas
produced from a biogas source,
including a landfill, sewage
waste treatment plant, feedlot,
or other place where decaying
organic material is found; and
(II) is used to replace or
reduce the quantity of fossil
fuel present in a fuel mixture
used to operate a motor
vehicle.
(ii) Inclusion.--The term
`renewable fuel' includes--
(I) cellulosic biomass
ethanol; and
(II) biodiesel (as defined
in section 312(f) of the Energy
Policy Act of 1992 (42 U.S.C.
13220(f))).
(C) Small refinery.--The term `small
refinery' means a refinery for which the
average aggregate daily crude oil throughput
for a calendar year (as determined by dividing
the aggregate throughput for the calendar year
by the number of days in the calendar year)
does not exceed 75,000 barrels.
(2) Renewable fuel program.--
(A) Regulations.--
(i) In general.--Not later than 1
year after the date of enactment of
this paragraph, the Administrator shall
promulgate regulations to ensure that
gasoline sold or introduced into
commerce in the United States (except
in Alaska and Hawaii), on an annual
average basis, contains the applicable
volume of renewable fuel determined in
accordance with subparagraph (B).
(ii) Provisions of regulations.--
Regardless of the date of promulgation,
the regulations promulgated under
clause (i)--
(I) shall contain
compliance provisions
applicable to refineries,
blenders, distributors, and
importers, as appropriate, to
ensure that the requirements of
this paragraph are met; but
(II) shall not--
(aa) restrict cases
in which renewable fuel
may be used; or
(bb) impose any
per-gallon obligation
for the use of
renewable fuel.
(iii) Requirement in case of
failure to promulgate regulations.--If
the Administrator does not promulgate
regulations under clause (i), the
percentage of renewable fuel in
gasoline sold or dispensed to consumers
in the United States, on a volume
basis, shall be 1.8 percent for
calendar year 2005.
(B) Applicable volume.--
(i) Calendar years 2005 through
2012.--For the purpose of subparagraph
(A), the applicable volume for any of
calendar years 2005 through 2012 shall
be determined in accordance with the
following table:
Applicable volume of
``Calendar year: renewable fuel
(in billions of gallons):
2005...................................................... 2.6
2006...................................................... 2.9
2007...................................................... 3.2
2008...................................................... 3.5
2009...................................................... 3.9
2010...................................................... 4.3
2011...................................................... 4.7
2012...................................................... 5.0.
(ii) Calendar year 2013 and
thereafter.--For the purpose of
subparagraph (A), the applicable volume
for calendar year 2013 and each
calendar year thereafter shall be equal
to the product obtained by
multiplying--
(I) the number of gallons
of gasoline that the
Administrator estimates will be
sold or introduced into
commerce in the calendar year;
and
(II) the ratio that--
(aa) 5,000,000,000
gallons of renewable
fuel; bears to
(bb) the number of
gallons of gasoline
sold or introduced into
commerce in calendar
year 2012.
(3) Applicable percentages.--
(A) Provision of estimate of volumes of
gasoline sales.--Not later than October 31 of
each of calendar years 2003 through 2011, the
Administrator of the Energy Information
Administration shall provide to the
Administrator of the Environmental Protection
Agency an estimate of the volumes of gasoline
sold or introduced into commerce in the United
States during the following calendar year.
(B) Determination of applicable
percentages.--
(i) In general.--Not later than
November 30 of each of calendar years
2005 through 2012, based on the
estimate provided under subparagraph
(A), the Administrator of the
Environmental Protection Agency shall
determine and publish in the Federal
Register, with respect to the following
calendar year, the renewable fuel
obligation that ensures that the
requirements of paragraph (2) are met.
(ii) Required elements.--The
renewable fuel obligation determined
for a calendar year under clause (i)
shall--
(I) be applicable to
refineries, blenders, and
importers, as appropriate;
(II) be expressed in terms
of a volume percentage of
gasoline; and
(III) subject to
subparagraph (C)(i), consist of
a single applicable percentage
that applies to all categories
of persons specified in
subclause (I).
(C) Adjustments.--In determining the
applicable percentage for a calendar year, the
Administrator shall make adjustments--
(i) to prevent the imposition of
redundant obligations on any person
specified in subparagraph (B)(ii)(I);
and
(ii) to account for the use of
renewable fuel during the previous
calendar year by small refineries that
are exempt under paragraph (9).
(4) Cellulosic biomass ethanol.--For the purpose of
paragraph (2), 1 gallon of cellulosic biomass ethanol
shall be considered to be the equivalent of 1.5 gallons
of renewable fuel.
(5) Credit program.--
(A) In general.--The regulations
promulgated under paragraph (2)(A) shall
provide--
(i) for the generation of an
appropriate amount of credits by any
person that refines, blends, or imports
gasoline that contains a quantity of
renewable fuel that is greater than the
quantity required under paragraph (2);
(ii) for the generation of an
appropriate amount of credits for
biodiesel; and
(iii) for the generation of credits
by small refineries in accordance with
paragraph (9)(C).
(B) Use of credits.--A person that
generates credits under subparagraph (A) may
use the credits, or transfer all or a portion
of the credits to another person, for the
purpose of complying with paragraph (2).
(C) Duration of credits.--A credit
generated under this paragraph shall be valid
to show compliance--
(i) subject to clause (ii), for the
calendar year in which the credit was
generated or the following calendar
year; or
(ii) if the Administrator
promulgates regulations under paragraph
(6), for the calendar year in which the
credit was generated or any of the
following 2 calendar years.
(D) Inability to generate or purchase
sufficient credits.--The regulations
promulgated under paragraph (2)(A) shall
include provisions allowing any person that is
unable to generate or purchase sufficient
credits to meet the requirements of paragraph
(2) to carry forward a renewable fuel deficit
on condition that the person, in the calendar
year following the year in which the renewable
fuel deficit is created--
(i) achieves compliance with the
renewable fuel requirement under
paragraph (2); and
(ii) generates or purchases
additional renewable fuel credits to
offset the renewable fuel deficit of
the previous year.
(6) Seasonal variations in renewable fuel use.--
(A) Study.--For each of calendar years 2005
through 2012, the Administrator of the Energy
Information Administration shall conduct a
study of renewable fuel blending to determine
whether there are excessive seasonal variations
in the use of renewable fuel.
(B) Regulation of excessive seasonal
variations.--If, for any calendar year, the
Administrator of the Energy Information
Administration, based on the study under
subparagraph (A), makes the determinations
specified in subparagraph (C), the
Administrator of the Environmental Protection
Agency shall promulgate regulations to ensure
that 35 percent or more of the quantity of
renewable fuel necessary to meet the
requirements of paragraph (2) is used during
each of the 2 periods specified in subparagraph
(D) of each subsequent calendar year.
(C) Determinations.--The determinations
referred to in subparagraph (B) are that--
(i) less than 35 percent of the
quantity of renewable fuel necessary to
meet the requirements of paragraph (2)
has been used during 1 of the 2 periods
specified in subparagraph (D) of the
calendar year; and
(ii) a pattern of excessive
seasonal variation described in clause
(i) will continue in subsequent
calendar years.
(D) Periods.--The 2 periods referred to in
this paragraph are--
(i) April through September; and
(ii) January through March and
October through December.
(E) Exclusion.--Renewable fuel blended or
consumed in calendar year 2005 in a State that
has received a waiver under section 209(b)
shall not be included in the study under
subparagraph (A).
(7) Waivers.--
(A) In general.--The Administrator, in
consultation with the Secretary of Agriculture
and the Secretary of Energy, may waive the
requirements of paragraph (2) in whole or in
part on petition by 1 or more States by
reducing the national quantity of renewable
fuel required under paragraph (2)--
(i) based on a determination by the
Administrator, after public notice and
opportunity for comment, that
implementation of the requirement would
severely harm the economy or
environment of a State, a region, or
the United States; or
(ii) based on a determination by
the Administrator, after public notice
and opportunity for comment, that there
is an inadequate domestic supply or
distribution capacity to meet the
requirement.
(B) Petitions for waivers.--The
Administrator, in consultation with the
Secretary of Agriculture and the Secretary of
Energy, shall approve or disapprove a State
petition for a waiver of the requirements of
paragraph (2) within 90 days after the date on
which the petition is received by the
Administrator.
(C) Termination of waivers.--A waiver
granted under subparagraph (A) shall terminate
after 1 year, but may be renewed by the
Administrator after consultation with the
Secretary of Agriculture and the Secretary of
Energy.
(8) Study and waiver for initial year of program.--
(A) In general.--Not later than 180 days
after the date of enactment of this paragraph,
the Secretary of Energy shall conduct for the
Administrator a study assessing whether the
renewable fuel requirement under paragraph (2)
will likely result in significant adverse
impacts on consumers in 2005, on a national,
regional, or State basis.
(B) Required evaluations.--The study shall
evaluate renewable fuel--
(i) supplies and prices;
(ii) blendstock supplies; and
(iii) supply and distribution
system capabilities.
(C) Recommendations by the secretary.--
Based on the results of the study, the
Secretary of Energy shall make specific
recommendations to the Administrator concerning
waiver of the requirements of paragraph (2), in
whole or in part, to prevent any adverse
impacts described in subparagraph (A).
(D) Waiver.--
(i) In general.--Not later than 270
days after the date of enactment of
this paragraph, the Administrator
shall, if and to the extent recommended
by the Secretary of Energy under
subparagraph (C), waive, in whole or in
part, the renewable fuel requirement
under paragraph (2) by reducing the
national quantity of renewable fuel
required under paragraph (2) in
calendar 2005.
(ii) No effect on waiver
authority.--Clause (i) does not limit
the authority of the Administrator to
waive the requirements of paragraph (2)
in whole, or in part, under paragraph
(7).
(9) Small refineries.--
(A) Temporary exemption.--
(i) In general.--The requirements
of paragraph (2) shall not apply to
small refineries until calendar year
2011.
(ii) Extension of exemption.--
(I) Study by secretary of
energy.--Not later than
December 31, 2007, the
Secretary of Energy shall
conduct for the Administrator a
study to determine whether
compliance with the
requirements of paragraph (2)
would impose a disproportionate
economic hardship on small
refineries.
(II) Extension of
exemption.--In the case of a
small refinery that the
Secretary of Energy determines
under subclause (I) would be
subject to a disproportionate
economic hardship if required
to comply with paragraph (2),
the Administrator shall extend
the exemption under clause (i)
for the small refinery for a
period of not less than 2
additional years.
(B) Petitions based on disproportionate
economic hardship.--
(i) Extension of exemption.--A
small refinery may at any time petition
the Administrator for an extension of
the exemption under subparagraph (A)
for the reason of disproportionate
economic hardship.
(ii) Evaluation of petitions.--In
evaluating a petition under clause (i),
the Administrator, in consultation with
the Secretary of Energy, shall consider
the findings of the study under
subparagraph (A)(ii) and other economic
factors.
(iii) Deadline for action on
petitions.--The Administrator shall act
on any petition submitted by a small
refinery for a hardship exemption not
later than 90 days after the date of
receipt of the petition.
(C) Credit program.--If a small refinery
notifies the Administrator that the small
refinery waives the exemption under
subparagraph (A), the regulations promulgated
under paragraph (2)(A) shall provide for the
generation of credits by the small refinery
under paragraph (5) beginning in the calendar
year following the date of notification.
(D) Opt-in for small refineries.--A small
refinery shall be subject to the requirements
of paragraph (2) if the small refinery notifies
the Administrator that the small refinery
waives the exemption under subparagraph (A).
(10) Ethanol market concentration analysis.--
(A) Analysis.--
(i) In general.--Not later than 180
days after the date of enactment of
this paragraph, and annually
thereafter, the Federal Trade
Commission shall perform a market
concentration analysis of the ethanol
production industry using the
Herfindahl-Hirschman Index to determine
whether there is sufficient competition
among industry participants to avoid
price-setting and other anticompetitive
behavior.
(ii) Scoring.--For the purpose of
scoring under clause (i) using the
Herfindahl-Hirschman Index, all
marketing arrangements among industry
participants shall be considered.
(B) Report.--Not later than December 1,
2004, and annually thereafter, the Federal
Trade Commission shall submit to Congress and
the Administrator a report on the results of
the market concentration analysis performed
under subparagraph (A)(i).
(p) Renewable Fuel Safe Harbor.--
(1) In general.--
(A) Safe harbor.--Notwithstanding any other
provision of Federal or State law, no renewable
fuel (as defined in subsection (o)(1)) used or
intended to be used as a motor vehicle fuel,
nor any motor vehicle fuel containing renewable
fuel, shall be deemed to be defective in design
or manufacture by reason of the fact that the
fuel is, or contains, renewable fuel, if--
(i) the fuel does not violate a
control or prohibition imposed by the
Administrator under this section; and
(ii) the manufacturer of the fuel
is in compliance with all requests for
information under subsection (b).
(B) Safe harbor not applicable.--In any
case in which subparagraph (A) does not apply
to a quantity of fuel, the existence of a
design defect or manufacturing defect with
respect to the fuel shall be determined under
otherwise applicable law.
(2) Exception.--This subsection does not apply to
ethers.
(3) Applicability.--This subsection applies with
respect to all claims filed on or after the date of
enactment of this subsection.
(q) Analyses of Motor Vehicle Fuel Changes and Emissions
Model.--
(1) Anti-backsliding analysis.--
(A) Draft analysis.--Not later than 4 years
after the date of enactment of this paragraph,
the Administrator shall publish for public
comment a draft analysis of the changes in
emissions of air pollutants and air quality due
to the use of motor vehicle fuel and fuel
additives resulting from implementation of the
amendments made by the Reliable Fuels Act.
(B) Final analysis.--After providing a
reasonable opportunity for comment but not
later than 5 years after the date of enactment
of this paragraph, the Administrator shall
publish the analysis in final form.
(2) Emissions model.--For the purposes of this
subsection, as soon as the necessary data are
available, the Administrator shall develop and finalize
an emissions model that reasonably reflects the effects
of gasoline characteristics or components on emissions
from vehicles in the motor vehicle fleet during
calendar year 2006.
(r) [(o)] Fuel and Fuel Additive Importers and
Importation.--For the purposes of this section, the term
``manufacturer'' includes an importer and the term
``manufacture'' includes importation.
SEC. 212. RENEWABLE FUEL.
(a) Definitions.--In this section:
(1) Municipal solid waste.--The term ``municipal
solid waste'' has the meaning given the term ``solid
waste'' in section 1004 of the Solid Waste Disposal Act
(42 U.S.C. 6903).
(2) RFG state.--The term ``RFG State'' means a
State in which is located 1 or more covered areas (as
defined in section 211(k)(10)(D)).
(3) Secretary.--The term ``Secretary'' means the
Secretary of Energy.
(b) Survey of Renewable Fuel Market.--
(1) Survey and report.--Not later than December 1,
2006, and annually thereafter, the Administrator
shall--
(A) conduct, with respect to each
conventional gasoline use area and each
reformulated gasoline use area in each State, a
survey to determine the market shares of--
(i) conventional gasoline
containing ethanol;
(ii) reformulated gasoline
containing ethanol;
(iii) conventional gasoline
containing renewable fuel; and
(iv) reformulated gasoline
containing renewable fuel; and
(B) submit to Congress, and make publicly
available, a report on the results of the
survey under subparagraph (A).
(2) Recordkeeping and reporting requirements.--
(A) In general.--The Administrator may
require any refiner, blender, or importer to
keep such records and make such reports as are
necessary to ensure that the survey conducted
under paragraph (1) is accurate.
(B) Reliance on existing requirements.--To
avoid duplicative requirements, in carrying out
subparagraph (A), the Administrator shall rely,
to the maximum extent practicable, on reporting
and recordkeeping requirements in effect on the
date of enactment of this section.
(3) Confidentiality.--Activities carried out under
this subsection shall be conducted in a manner designed
to protect confidentiality of individual responses.
(c) Commercial Byproducts From Municipal Solid Waste Loan
Guarantee Program.--
(1) Establishment of program.--The Secretary shall
establish a program to provide guarantees of loans by
private institutions for the construction of facilities
for the processing and conversion of municipal solid
waste into fuel ethanol and other commercial
byproducts.
(2) Requirements.--The Secretary may provide a loan
guarantee under paragraph (1) to an applicant if--
(A) without a loan guarantee, credit is not
available to the applicant under reasonable
terms or conditions sufficient to finance the
construction of a facility described in
paragraph (1);
(B) the prospective earning power of the
applicant and the character and value of the
security pledged provide a reasonable assurance
of repayment of the loan to be guaranteed in
accordance with the terms of the loan; and
(C) the loan bears interest at a rate
determined by the Secretary to be reasonable,
taking into account the current average yield
on outstanding obligations of the United States
with remaining periods of maturity comparable
to the maturity of the loan.
(4) Criteria.--In selecting recipients of loan
guarantees from among applicants, the Secretary shall
give preference to proposals that--
(A) meet all applicable Federal and State
permitting requirements;
(B) are most likely to be successful; and
(C) are located in local markets that have
the greatest need for the facility because of--
(i) the limited availability of
land for waste disposal; or
(ii) a high level of demand for
fuel ethanol or other commercial
byproducts of the facility.
(5) Maturity.--A loan guaranteed under paragraph
(1) shall have a maturity of not more than 20 years.
(6) Terms and conditions.--The loan agreement for a
loan guaranteed under paragraph (1) shall provide that
no provision of the loan agreement may be amended or
waived without the consent of the Secretary.
(7) Assurance of repayment.--The Secretary shall
require that an applicant for a loan guarantee under
paragraph (1) provide an assurance of repayment in the
form of a performance bond, insurance, collateral, or
other means acceptable to the Secretary in an amount
equal to not less than 20 percent of the amount of the
loan.
(8) Guarantee fee.--The recipient of a loan
guarantee under paragraph (1) shall pay the Secretary
an amount determined by the Secretary to be sufficient
to cover the administrative costs of the Secretary
relating to the loan guarantee.
(9) Full faith and credit.--
(A) In general.--The full faith and credit
the United States is pledged to the payment of
all guarantees made under this subsection.
(B) Conclusive evidence.--Any guarantee
made by the Secretary under this subsection
shall be conclusive evidence of the eligibility
of the loan for the guarantee with respect to
principal and interest.
(C) Validity.--The validity of the
guarantee shall be incontestable in the hands
of a holder of the guaranteed loan.
(10) Reports.--Until each guaranteed loan under
this subsection has been repaid in full, the Secretary
shall annually submit to Congress a report on the
activities of the Secretary under this subsection.
(11) Authorization of appropriations.--There are
authorized to be appropriated such sums as are
necessary to carry out this subsection.
(12) Termination of authority.--The authority of
the Secretary to issue a new loan guarantee under
paragraph (1) terminates on the date that is 10 years
after the date of enactment of this section.
(d) Authorization of Appropriations for Resource Center.--
There is authorized to be appropriated, for a resource center
to further develop bioconversion technology using low-cost
biomass for the production of ethanol at the Center for
Biomass-Based Energy at the University of Mississippi and the
University of Oklahoma, $4,000,000 for each of fiscal years
2004 through 2006.
(e) Renewable Fuel Production Research and Development
Grants.--
(1) In general.--The Administrator shall provide
grants for the research into, and development and
implementation of, renewable fuel production
technologies in RFG States with low rates of ethanol
production, including low rates of production of
cellulosic biomass ethanol.
(2) Eligibility.--
(A) In general.--The entities eligible to
receive a grant under this subsection are
academic institutions in RFG States, and
consortia made up of combinations of academic
institutions, industry, State government
agencies, or local government agencies in RFG
States, that have proven experience and
capabilities with relevant technologies.
(B) Application.--To be eligible to receive
a grant under this subsection, an eligible
entity shall submit to the Administrator an
application in such manner and form, and
accompanied by such information, as the
Administrator may specify.
(4) Authorization of appropriations.--There is
authorized to be appropriated to carry out this
subsection $25,000,000 for each of fiscal years 2004
through 2008.
(f) Cellulosic Biomass Ethanol Conversion Assistance--
(1) In general.--The Secretary may provide grants
to merchant producers of cellulosic biomass ethanol in
the United States to assist the producers in building
eligible production facilities described in paragraph
(2) for the production of cellulosic biomass ethanol.
(2) Eligible production facilities.--A production
facility shall be eligible to receive a grant under
this subsection if the production facility--
(A) is located in the United States; and
(B) uses cellulosic biomass feedstocks
derived from agricultural residues or municipal
solid waste.
(3) Authorization of appropriations.--There is
authorized to be appropriated to carry out this
subsection--
(A) $100,000,000 for fiscal year 2004;
(B) $250,000,000 for fiscal year 2005; and
(C) $400,000000 for fiscal year 2006.
* * * * * * *
----------
SOLID WASTE DISPOSAL ACT 1
[As Amended Through P.L. 106-580, Dec. 29, 2000]
TITLE II--SOLID WASTE DISPOSAL
Subtitle A--General Provisions
short title and table of contents
Sec. 1001. This title (hereinafter in this title referred
to as ``this Act''), together with the following table of
contents, may be cited as the ``Solid Waste Disposal Act'':
---------------------------------------------------------------------------
1 The Solid Waste Disposal Act (42 U.S.C. 6901-6992k)
consists of title II of Public Law 89-272 and the amendments made by
subsequent enactments. This Act is popularly referred to as the
Resource Conservation and Recovery Act, after the short title of the
law that amended the Solid Waste Disposal Act in its entirety in 1976
(P.L. 94-580).
---------------------------------------------------------------------------
Subtitle A--General Provisions
Sec. 1001. Short title and table of contents.
Sec. 1002. Congressional findings.
Sec. 1003. Objectives.
Sec. 1004. Definitions.
Sec. 1005. Governmental cooperation.
Sec. 1006. Application of Act and integration with other Acts.
Sec. 1007. Financial disclosure.
Sec. 1008. Solid waste management information and guidelines.
Subtitle B--Office of Solid Waste; Authorities of the Administrator
Sec. 2001. Office of Solid Waste and Interagency Coordinating Committee.
Sec. 2002. Authorities of Administrator.
Sec. 2003. Resource recovery and conservation panels.
Sec. 2004. Grants for discarded tire disposal.
Sec. 2005. Labeling of certain oil.
Sec. 2006. Annual report.
Sec. 2007. General authorization.
Sec. 2008. Office of Ombudsman.
Subtitle C--Hazardous Waste Management
Sec. 3001. Identification and listing of hazardous waste.
Sec. 3002. Standards applicable to generators of hazardous waste.
Sec. 3003. Standards applicable to transporters of hazardous waste.
Sec. 3004. Standards applicable to owners and operators of hazardous
waste treatment, storage, and disposal facilities.
Sec. 3005. Permits for treatment, storage, or disposal of hazardous
waste.
Sec. 3006. Authorized State hazardous waste programs.
Sec. 3007. Inspections.
Sec. 3008. Federal enforcement.
Sec. 3009. Retention of State authority.
Sec. 3010. Effective date.
Sec. 3011. Authorization of assistance to States.
Sec. 3012. Hazardous waste site inventory.
Sec. 3013. Monitoring, analysis, and testing.
Sec. 3014. Restrictions on recycled oil.
Sec. 3015. Expansion during interim status.
Sec. 3016. Inventory of Federal Agency hazardous waste facilities.
Sec. 3017. Export of hazardous waste.
Sec. 3018. Domestic sewage.
Sec. 3019. Exposure information and health assessments.
Sec. 3020. Interim control of hazardous waste injection.
Sec. 3021. Mixed waste inventory reports and plan.
Sec. 3022. Public vessels.
Sec. 3023. Federally owned treatment works.
Subtitle D--State or Regional Solid Waste Plans
Sec. 4001. Objectives of subtitle.
Sec. 4002. Federal guidelines for plans.
Sec. 4003. Minimum requirements for approval of plans.
Sec. 4004. Criteria for sanitary landfills; sanitary landfills required
for all disposal.
Sec. 4005. Upgrading of open dumps.
Sec. 4006. Procedure for development and implementation of State plan.
Sec. 4007. Approval of State plan; Federal assistance.
Sec. 4008. Federal assistance.
Sec. 4009. Rural communities assistance.
Sec. 4010. Adequacy of certain guidelines and criteria.
Subtitle E--Duties of the Secretary of Commerce in Resource and Recovery
Sec. 5001. Functions.
Sec. 5002. Development of specifications for secondary materials.
Sec. 5003. Development of markets for recovered materials.
Sec. 5004. Technology promotion.
Sec. 5005. Nondiscrimination requirement.
Sec. 5006. Authorization of appropriations.
Subtitle F--Federal Responsibilities
Sec. 6001. Application of Federal, State, and local law to Federal
facilities.
Sec. 6002. Federal procurement.
Sec. 6003. Cooperation with Environmental Protection Agency.
Sec. 6004. Applicability of solid waste disposal guidelines to executive
agencies.
Subtitle G--Miscellaneous Provisions
Sec. 7001. Employee protection.
Sec. 7002. Citizen suits.
Sec. 7003. Imminent hazard.
Sec. 7004. Petition for regulations; public participation.
Sec. 7005. Separability.
Sec. 7006. Judicial review.
Sec. 7007. Grants or contracts for training projects.
Sec. 7008. Payments.
Sec. 7009. Labor standards.
Sec. 7010. Law enforcement authority.
Subtitle H--Research, Development, Demonstration, and Information
Sec. 8001. Research, demonstrations, training, and other activities.
Sec. 8002. Special studies; plans for research, development, and
demonstrations.
Sec. 8003. Coordination, collection, and dissemination of information.
Sec. 8004. Full-scale demonstration facilities.
Sec. 8005. Special study and demonstration projects on recovery of
useful energy and materials.
Sec. 8006. Grants for resource recovery systems and improved solid waste
disposal facilities.
Sec. 8007. Authorization of appropriations.
Subtitle I--Regulation of Underground Storage Tanks
Sec. 9001. Definitions.
Sec. 9002. Notification.
Sec. 9003. Release detection, prevention, and correction regulations.
Sec. 9004. Approval of State programs.
Sec. 9005. Inspections, monitoring, and testing.
Sec. 9006. Federal enforcement.
Sec. 9007. Federal facilities.
Sec. 9008. State authority.
Sec. 9009. Study of underground storage tanks.
[Sec. 9010. Authorization of appropriations.]
Sec. 9010. Release prevention and compliance.
Sec. 9011. Authorization of appropriations.
Subtitle J--Demonstration Medical Waste Tracking Program
Sec. 11001. Scope of demonstration program for medical waste.
Sec. 11002. Listing of medical wastes.
Sec. 11003. Tracking of medical waste.
Sec. 11004. Inspections.
Sec. 11005. Enforcement.
Sec. 11006. Federal facilities.
Sec. 11007. Relationship to State law.
Sec. 11008. Health impact report.
Sec. 11009. General provisions.
Sec. 11010. Effective date.
Sec. 11011. Authorization of appropriations.
* * * * * * *
Subtitle I--Regulation of Underground Storage Tanks
definitions and exemptions
Sec. 9001. For the purposes of this subtitle--
(1) The term ``underground storage tank'' means any
one or combination of tanks (including underground
pipes connected thereto) which is used to contain an
accumulation of regulated substances, and the volume of
which (including the volume of the underground pipes
connected thereto) is 10 per centum or more beneath the
surface of the ground. Such term does not include any--
(A) farm or residential tank of 1,100
gallons or less capacity used for storing motor
fuel for noncommercial purposes,
(B) tank used for storing heating oil for
consumptive use on the premises where stored,
(C) septic tank,
(D) pipeline facility (including gathering
lines)--
(i) which is regulated under
chapter 601 of title 49, United States
Code, or
(ii) which is an intrastate
pipeline facility regulated under State
laws as provided in chapter 601 of
title 49, United States Code,
and which is determined by the Secretary to be
connected to a pipeline or to be operated or
intended to be capable of operating at pipeline
pressure or as an integral part of a pipeline,
(E) surface impoundment, pit, pond, or
lagoon,
(F) storm water or waste water collection
system,
(G) flow-through process tank,
(H) liquid trap or associated gathering
lines directly related to oil or gas production
and gathering operations, or
(I) storage tank situated in an underground
area (such as a basement, cellar, mineworking,
drift, shaft, or tunnel) if the storage tank is
situated upon or above the surface of the
floor.
The term ``underground storage tank'' shall not include
any pipes connected to any tank which is described in
subparagraphs (A) through (I).
(2) The term ``regulated substance'' means--
(A) any substance defined in section
101(14) of the Comprehensive Environmental
Response, Compensation, and Liability Act of
1980 (but not including any substance regulated
as a hazardous waste under subtitle C), and
(B) petroleum.
(3) The term ``owner'' means--
(A) in the case of an underground storage
tank in use on the date of enactment of the
Hazardous and Solid Waste Amendments of 1984,
or brought into use after that date, any person
who owns an underground storage tank used for
the storage, use, or dispensing of regulated
[sustances] substances, and
(B) in the case of any underground storage
tank in use before the date of enactment of the
Hazardous and Solid Waste Amendments of 1984,
but no longer in use on the date of enactment
of such Amendments, any person who owned such
tank immediately before the discontinuation of
its use.
(4) The term ``operator'' means any person in
control of, or having responsibility for, the daily
operation of the underground storage tank.
(5) The term ``release'' means any spilling,
leaking, emitting, discharging, escaping, leaching, or
disposing from an underground storage tank into ground
water, surface water or subsurface soils.
(6) The term ``person'' has the same meaning as
provided in section 1004(15), except that such term
includes a consortium, a joint venture, and a
commercial entity, and the United States Government.
(7) The term ``nonoperational storage tank'' means
any underground storage tank in which regulated
substances will not be deposited or from which
regulated substances will not be dispensed after the
date of the enactment of the Hazardous and Solid Waste
Amendments of 1984.
(8) The term ``petroleum'' means petroleum,
including crude oil or any fraction thereof which is
liquid at standard conditions of temperature and
pressure (60 degrees Fahrenheit and 14.7 pounds per
square inch absolute).
* * * * * * *
release detection, prevention, and correction regulations
Sec. 9003. (a) Regulations.--The Administrator, after
notice and opportunity for public comment, and at least three
months before the effective dates specified in subsection (f),
shall promulgate release detection, prevention, and correction
regulations applicable to all owners and operators of
underground storage tanks, as may be necessary to protect human
health and the environment.
* * * * * * *
(f) Effective Dates.--(1) Regulations issued pursuant to
[subsection (c) and (d) of this section] subsections (c) and
(d), and standards issued pursuant to subsection (e) of this
section, for underground storage tanks containing regulated
substances defined in section 9001(2)(B) (petroleum, including
crude oil or any fraction thereof which is liquid at standard
conditions of temperature and pressure) shall be effective not
later than thirty months after the date of enactment of the
Hazardous and Solid Waste Amendments of 1984.
* * * * * * *
* * * * * * *
(h) EPA Response Program for Petroleum.--
(1) Before regulations.--Before the effective date
of regulations under subsection (c), the Administrator
(or a State pursuant to paragraph (7)) is authorized
to--
(A) require the owner or operator of an
underground storage tank to undertake
corrective action with respect to any release
of petroleum when the Administrator (or the
State) determines that such corrective action
will be done properly and promptly by the owner
or operator of the underground storage tank
from which the release occurs; or
(B) undertake corrective action with
respect to any release of petroleum into the
environment from an underground storage tank if
such action is necessary, in the judgment of
the Administrator (or the State), to protect
human health and the environment.
The corrective action undertaken or required by this
paragraph shall be such as may be necessary to protect
human health and the environment. The Administrator
shall use funds in the Leaking Underground Storage Tank
Trust Fund for payment of costs incurred for corrective
action under subparagraph (B), enforcement action under
subparagraph (A), and cost recovery under paragraph (6)
of this subsection. Subject to the priority
requirements of paragraph (3), the Administrator (or
the State) shall give priority in undertaking such
actions under subparagraph (B) to cases where the
Administrator (or the State) cannot identify a solvent
owner or operator of the tank who will undertake action
properly.
(2) After regulations.--Following the effective
date of regulations under subsection (c), all actions
or orders of the Administrator (or a State pursuant to
paragraph (7)) described in paragraph (1) of this
subsection shall be in conformity with such
regulations. Following such effective date, the
Administrator (or the State) may undertake corrective
action with respect to any release of petroleum into
the environment from an underground storage tank only
if such action is necessary, in the judgment of the
Administrator (or the State), to protect human health
and the environment and one or more of the following
situations exists:
(A) No person can be found, within 90 days
or such shorter period as may be necessary to
protect human health and the environment, who
is--
(i) an owner or operator of the
tank concerned,
(ii) subject to such corrective
action regulations, and
(iii) capable of carrying out such
corrective action properly.
(B) A situation exists which requires
prompt action by the Administrator (or the
State) under this paragraph to protect human
health and the environment.
(C) Corrective action costs at a facility
exceed the amount of coverage required by the
Administrator pursuant to the provisions of
subsections (c) and (d)(5) of this section and,
considering the class or category of
underground storage tank from which the release
occurred, expenditures from the Leaking
Underground Storage Tank Trust Fund are
necessary to assure an effective corrective
action.
(D) The owner or operator of the tank has
failed or refused to comply with an order of
the Administrator under this subsection or
section 9006 or with the order of a State under
this subsection to comply with the corrective
action regulations.
(3) Priority of corrective actions.--The
Administrator (or a State pursuant to paragraph (7))
shall give priority in undertaking corrective actions
under this subsection, and in issuing orders requiring
owners or operators to undertake such actions, to
releases of petroleum from underground storage tanks
which pose the greatest threat to human health and the
environment.
(4) Corrective action orders.--The Administrator is
authorized to issue orders to the owner or operator of
an underground storage tank to carry out subparagraph
(A) of paragraph (1) or to carry out regulations issued
under subsection (c)(4). A State acting pursuant to
paragraph (7) of this subsection is authorized to carry
out subparagraph (A) of paragraph (1) only until the
State's program is approved by the Administrator under
section 9004 of this subtitle. Such orders shall be
issued and enforced in the same manner and subject to
the same requirements as orders under section 9006.
(5) Allowable corrective actions.--The corrective
actions undertaken by the Administrator (or a State
pursuant to paragraph (7)) under paragraph (1) or (2)
may include temporary or permanent relocation of
residents and alternative household water supplies. In
connection with the performance of any corrective
action under paragraph (1) or (2), the Administrator
may undertake an exposure assessment as defined in
paragraph (10) of this subsection or provide for such
an assessment in a cooperative agreement with a State
pursuant to paragraph (7) of this subsection. The costs
of any such assessment may be treated as corrective
action for purposes of paragraph (6), relating to cost
recovery.
(6) Recovery of costs.--
(A) In general.--Whenever costs have been
incurred by the Administrator, or by a State
pursuant to paragraph (7), for undertaking
corrective action or enforcement action with
respect to the release of petroleum from an
underground storage tank, the owner or operator
of such tank shall be liable to the
Administrator or the State for such costs. The
liability under this paragraph shall be
construed to be the standard of liability which
obtains under section 311 of the Federal Water
Pollution Control Act.
(B) Recovery.--In determining the equities
for seeking the recovery of costs under
subparagraph (A), the Administrator (or a State
pursuant to paragraph (7) of this subsection)
may consider the amount of financial
responsibility required to be maintained under
subsections (c) and (d)(5) of this section and
the factors considered in establishing such
amount under subsection (d)(5).
(C) Effect on liability.--
(i) No transfers of liability.--No
indemnification, hold harmless, or
similar agreement or conveyance shall
be effective to transfer from the owner
or operator of any underground storage
tank or from any person who may be
liable for a release or threat of
release under this subsection, to any
other person the liability imposed
under this subsection. Nothing in this
subsection shall bar any agreement to
insure, hold harmless, or indemnify a
party to such agreement for any
liability under this section.
(ii) No bar to cause of action.--
Nothing in this subsection, including
the provisions of clause (i) of this
subparagraph, shall bar a cause of
action that an owner or operator or any
other person subject to liability under
this section, or a guarantor, has or
would have, by reason of subrogation or
otherwise against any person.
(D) Facility.--For purposes of this
paragraph, the term ``facility'' means, with
respect to any owner or operator, all
underground storage tanks used for the storage
of petroleum which are owned or operated by
such owner or operator and located on a single
parcel of property (or on any contiguous or
adjacent property).
(7) State authorities.--
(A) General.--A State may exercise the
authorities in [paragraphs (1) and (2) of this
subsection] paragraphs (1), (2), and (12),
subject to the terms and conditions of
paragraphs (3), (5), (9), (10), and (11), and
including the authorities of paragraphs (4),
(6), and (8) of this subsection and section
9010 if--
(i) the Administrator determines
that the State has the capabilities to
carry out effective corrective actions
and enforcement activities; and
(ii) the Administrator enters into
a cooperative agreement with the State
setting out the actions to be
undertaken by the State.
The Administrator may provide funds from the
Leaking Underground Storage Tank Trust Fund for
the reasonable costs of the State's actions
under the cooperative agreement.
(B) Cost share.--Following the effective
date of the regulations under subsection (c) of
this section, the State shall pay 10 per centum
of the cost of corrective actions undertaken
either by the Administrator or by the State
under a cooperative agreement, except that the
Administrator may take corrective action at a
facility where immediate action is necessary to
respond to an imminent and substantial
endangerment to human health or the environment
if the State fails to pay the cost share.
(8) Emergency procurement powers.--Notwithstanding
any other provision of law, the Administrator may
authorize the use of such emergency procurement powers
as he deems necessary.
(9) Definition of owner or operator.--
(A) In general.--As used in this subtitle,
the terms ``owner'' and ``operator'' do not
include a person that, without participating in
the management of an underground storage tank
and otherwise not engaged in petroleum
production, refining, or marketing, holds
indicia of ownership primarily to protect the
person's security interest.
(B) Security interest holders.--The
provisions regarding holders of security
interests in subparagraphs (E) through (G) of
section 101(20) and the provisions regarding
fiduciaries at section 107(n) of the
Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 shall
apply in determining a person's liability as an
owner or operator of an underground storage
tank for the purposes of this subtitle.
(C) Effect on rule.--Nothing in
subparagraph (B) shall be construed as
modifying or affecting the final rule issued by
the Administrator on September 7, 1995 (60 Fed.
Reg. 46,692), or as limiting the authority of
the Administrator to amend the final rule, in
accordance with applicable law. The final rule
in effect on the date of enactment of this
subparagraph shall prevail over any
inconsistent provision regarding holders of
security interests in subparagraphs (E) through
(G) of section 101(20) or any inconsistent
provision regarding fiduciaries in section
107(n) of the Comprehensive Environmental
Response, Compensation, and Liability Act of
1980. Any amendment to the final rule shall be
consistent with the provisions regarding
holders of security interests in subparagraphs
(E) through (G) of section 101(20) and the
provisions regarding fiduciaries in section
107(n) of the Comprehensive Environmental
Response, Compensation, and Liability Act of
1980. This subparagraph does not preclude
judicial review of any amendment of the final
rule made after the date of enactment of this
subparagraph.
(10) Definition of exposure assessment.--As used in
this subsection, the term ``exposure assessment'' means
an assessment to determine the extent of exposure of,
or potential for exposure of, individuals to petroleum
from a release from an underground storage tank based
on such factors as the nature and extent of
contamination and the existence of or potential for
pathways of human exposure (including ground or surface
water contamination, air emissions, and food chain
contamination), the size of the community within the
likely pathways of exposure, and the comparison of
expected human exposure levels to the short-term and
long-term health effects associated with identified
contaminants and any available recommended exposure or
tolerance limits for such contaminants. Such assessment
shall not delay corrective action to abate immediate
hazards or reduce exposure.
(11) Facilities without financial responsibility.--
At any facility where the owner or operator has failed
to maintain evidence of financial responsibility in
amounts at least equal to the amounts established by
subsection (d)(5)(A) of this section (or a lesser
amount if such amount is applicable to such facility as
a result of subsection (d)(5)(B) of this section) for
whatever reason the Administrator shall expend no
monies from the Leaking Underground Storage Tank Trust
Fund to clean up releases at such facility pursuant to
the provisions of paragraph (1) or (2) of this
subsection. At such facilities the Administrator shall
use the authorities provided in subparagraph (A) of
paragraph (1) and paragraph (4) of this subsection and
section 9006 of this subtitle to order corrective
action to clean up such releases. States acting
pursuant to paragraph (7) of this subsection shall use
the authorities provided in subparagraph (A) of
paragraph (1) and paragraph (4) of this subsection to
order corrective action to clean up such releases.
Notwithstanding the provisions of this paragraph, the
Administrator may use monies from the fund to take the
corrective actions authorized by paragraph (5) of this
subsection to protect human health at such facilities
and shall seek full recovery of the costs of all such
actions pursuant to the provisions of paragraph (6)(A)
of this subsection and without consideration of the
factors in paragraph (6)(B) of this subsection. Nothing
in this paragraph shall prevent the Administrator (or a
State pursuant to paragraph (7) of this subsection)
from taking corrective action at a facility where there
is no solvent owner or operator or where immediate
action is necessary to respond to an imminent and
substantial endangerment of human health or the
environment.
(12) Remediation of contamination from ether fuel
additives.--
(A) In general.--The Administrator and the
States may use funds made available under
section 9013(1) to carry out corrective actions
with respect to a release of methyl tertiary
butyl ether or other ether fuel additive that
presents a threat to human health, welfare, or
the environment.
(B) Applicable authority.--Subparagraph (A)
shall be carried out--
(i) in accordance with paragraph
(2), except that a release with respect
to which a corrective action is carried
out under subparagraph (A) shall not be
required to be from an underground
storage tank; and
(ii) in the case of a State, in
accordance with a cooperative agreement
entered into by the Administrator and
the State under paragraph (7).
* * * * * * *
approval of state programs
Sec. 9004. (a) Elements of State Program.--Beginning 30
months after the date of enactment of the Hazardous and Solid
Waste Amendments of 1984, any State may, submit an underground
storage tank release detection, prevention, and correction
program for review and approval by the Administrator. The
program may cover tanks used to store regulated substances
[referred to in 9001(2) (A) or (B) or both] referred to in
subparagraph (A) or (B), or both, of section 9001(2). A State
program may be approved by the Administrator under this section
only if the State demonstrates that the State program includes
the following requirements and standards and provides for
adequate enforcement of compliance with such requirements and
standards--
* * * * * * *
Sec. 9005. (a) Furnishing Information.--For the purposes
of developing or assisting in the development of any
regulation, conducting any [study taking] study, taking any
corrective action, or enforcing the provisions of this
subtitle, any owner or operator of an underground storage tank
(or any tank subject to study under section 9009 that is used
for storing regulated substances) shall, upon request of any
officer, employee or representative of the Environmental
Protection Agency, duly designated by the Administrator, or
upon request of any duly designated officer, employee, or
representative of a State acting parsuant to subsection (h)(7)
of section 9003 or with an approved program, furnish
information relating to such tanks, their associated equipment,
their contents, conduct monitoring or testing, permit such
officer at all reasonable times to have access to, and to copy
all records relating to such tanks and permit such officer to
have access for corrective action. For the purposes of
developing or assisting in the development of any regulation,
conducting any study, taking corrective action, or enforcing
the provisions of this subtitle, such officers, employees, or
representatives are authorized--
(1) to enter at reasonable times any establishment
or other place where an underground storage tank is
located;
(2) to inspect and obtain samples from any person
of any regulated substances contained in such tank;
(3) to conduct monitoring or testing of the tanks,
associated equipment, contents, or surrounding soils,
air, surface water or ground water, and
(4) to take corrective action.
Each such inspection shall be commenced and completed with
reasonable promptness.
(b) Confidentiality.--(1) Any records, reports, or
information obtained from any persons under this section shall
be available to the public, except that upon a showing
satisfactory to the Administrator (or the State, as the case
may be) by any person that records, reports, or information, or
a particular part thereof, to which the Administrator (or the
State, as the case may be) or any officer, employee, or
representative thereof has access under this section if made
public, would divulge information entitled to protection under
section 1905 of title 18 of the United States Code, such
information or particular portion thereof shall be considered
confidential in accordance with the purposes of that section,
except that such record, report, document, or information may
be disclosed to other officers, employees, or authorized
representatives of the United States concerned with carrying
out this Act, or when [relevent] relevant in any proceeding
under this Act.
(2) Any person not subject to the provisions of section
1905 of title 18 of the United States Code who knowingly and
willfully divulges or discloses any information entitled to
protection under this subsection shall, upon conviction, be
subject to a fine of not more than $5,000 or to imprisonment
not to exceed one year, or both.
(3) In submitting data under this subtitle, a person
required to provide such data may--
(A) designate the data which such person believes
is entitled to protection under this subsection, and
(B) submit such designated data separately from
other data submitted under this subtitle.
A designation under this paragraph shall be made in writing and
in such manner as the Administrator may prescribe.
(4) Notwithstanding any limitation contained in this
section or any other provision of law, all information reported
to, or otherwise obtained, by the Administrator (or any
representative of the Administrator) under this Act shall be
made available, upon written request of any duly authorized
committee of the Congress, to such committee (including
records, reports, or information obtained by representatives of
the [Evironmental] Environmental Protection Agency).
* * * * * * *
[authorization of appropriations
[Sec. 9010. For authorization of appropriations to carry
out this subtitle, see section 2007(g).]
SEC. 9010. RELEASE PREVENTION AND COMPLIANCE.
Funds made available under section 9013(2) from the Leaking
Underground Storage Tank Trust Fund may be used for conducting
inspections, or for issuing orders or bringing actions under
this subtitle--
(1) by a State (pursuant to section 9003(h)(7))
acting under--
(A) a program approved under section 9004;
or
(B) State requirements regulating
underground storage tanks that are similar or
identical to this subtitle, as determined by
the Administrator; and
(2) by the Administrator, acting under this
subtitle or a State program approved under section
9004.
SEC. 9011. AUTHORIZATION OF APPROPRIATIONS.
In addition to amounts made available under section
2007(f), there are authorized to be appropriated from the
Leaking Underground Storage Tank Trust Fund, notwithstanding
section 9508(c)(1) of the Internal Revenue Code of 1986--
(1) to carry out section 9003(h)(12), $200,000,000
for fiscal year 2003, to remain available until
expended; and
(2) to carry out section 9010--
(A) $50,000,000 for fiscal year 2003; and
(B) $30,000,000 for each of fiscal years
2004 through 2008.
* * * * * * *
UNITED STATES CODE
TITLE 42--THE PUBLIC HEALTH AND WELFARE
CHAPTER 84--DEPARTMENT OF ENERGY
SUBCHAPTER II--ESTABLISHMENT OF DEPARTMENT
SEC. 7135. ENERGY INFORMATION ADMINISTRATION
(a) Establishment; appointment of Administrator;
compensation; qualifications; duties.--
* * * * * * *
(l) Data collection.--In order to improve the ability to
evaluate the effectiveness of the Nation's energy efficiency
policies and programs, the Administrator shall, in carrying out
the data collection provisions of subsections (i) and (k) of
this section, consider--
(1) expanding the survey instruments to include
questions regarding participation in Government and
utility conservation programs;
(2) expanding fuel-use surveys in order to provide
greater detail on energy use by user subgroups; and
(3) expanding the scope of data collection on
energy efficiency and load-management programs,
including the effects of building construction
practices such as those designed to obtain peak load
shifting.
(m) Survey of Renewable Fuels Consumption.--
(1) In general.--In order to improve the ability to
evaluate the effectiveness of the Nation's renewable
fuels mandate, the Administrator shall conduct and
publish the results of a survey of renewable fuels
consumption in the motor vehicle fuels market in the
United States monthly, and in a manner designed to
protect the confidentiality of individual responses.
(2) Elements of survey.--In conducting the survey,
the Administrator shall collect information
retrospectively to 1998, on a national basis and a
regional basis, including--
(A) the quantity of renewable fuels
produced;
(B) the cost of production;
(C) the cost of blending and marketing;
(D) the quantity of renewable fuels
blended;
(E) the quantity of renewable fuels
imported; and
(F) market price data.
* * * * * * *