1907ss06

Supporting Statement

for

Information Collection Request

Recordkeeping and Reporting Requirements

Regarding the Sulfur Content of Motor Vehicle Gasoline, Gasoline Additives, Denatured Fuel Ethanol and Other Oxygenates, Certified Ethanol Denaturants, and Blender-Grade Pentane

Under the Tier 3 Final Rule

40 CFR Part 80, Subpart O

EPA ICR 1907.06

Office of Transportation and Air Quality

U.S. Environmental Protection Agency

1. IDENTIFICATION OF THE INFORMATION COLLECTION

1(a) Title of the Information Collection

Recordkeeping and Reporting Requirements Regarding the Sulfur Content of Motor Vehicle Gasoline, Gasoline Additives, Denatured Fuel Ethanol and Other Oxygenates, Certified Ethanol Denaturant, and Blender-Grade Pentane under the Tier 3 Final Rule; EPA ICR 1907.06.

1(b) Short Characterization/Abstract

The requirements covered under this Information Collection Request (ICR) are included in the Tier 3 Final Rule (79 FR 23414, April 28, 2014).

The scope of the recordkeeping and reporting requirements for each type of party in the gasoline, gasoline additive, oxygenate, certified ethanol denaturant, and blender-grade pentane distribution systems, and therefore the cost to that party, reflects the party's opportunity to create, control or alter the product’s sulfur content. As a result, petroleum refiners/importers, gasoline additive producers/importers, oxygenate producers/importers, certified ethanol denaturant producers/importers, and blender-grade pentane producers and importers have more significant requirements, which are necessary both for their own tracking and that of downstream parties, and for EPA enforcement. At the same time, parties downstream from the product’s production or import point, such as fuel distributors, have fewer requirements under the final rule.

The recordkeeping and reporting requirements for refiners and importers of motor vehicle gasoline under the final Tier 3 program are the same requirements that exist under the Tier 2 sulfur program.¹ The Tier 3 final rule contains new recordkeeping and reporting requirements that apply to gasoline additive manufacturers, oxygenate producers/importers, blender-grade pentane producers/importers, and produces/importers of certified ethanol denaturants that are used to produce denatured fuel ethanol. In large part these requirements are consistent with common business practices. The costs associated with the requirements are expected to be small. The allowance for blender-grade pentane to be added gasoline downstream of the refinery will provide additional flexibility to industry.

The information under this ICR will be collected by the EPA’s Compliance Division, within the Office of Transportation and Air Quality, Office of Air and Radiation, and by the EPA’s Air Enforcement Division, within the Office of Civil Enforcement, Office of Enforcement and Compliance Assurance. The information collected will be used by the EPA to evaluate compliance with the fuel quality requirements under the Tier 3 final rule. This oversight by the EPA is necessary to ensure attainment of the air quality goals of the Tier 3 program. Proprietary information may be submitted by regulated parties for demonstrating compliance with the Tier 3 standards. Confidentiality will be handled in accordance with EPA regulations at 40 CFR Part 2 and established Agency procedures.

In general terms, the recordkeeping and reporting requirements regarding the quality requirements for gasoline, gasoline additives, certified ethanol denaturants, and blender-grade pentane under the Tier 3 program consist of the following:

(1) Sampling and Testing.

Gasoline Refiners and Importers. Under the Tier 3 final rule, refiners and importers are required to test every batch of gasoline produced or imported for its sulfur content. Note that refiners and importers are already required to sample and test every batch of the reformulated gasoline (RFG) they produce under the RFG program. For the conventional gasoline (CG) portion of a refiner’s gasoline production under the Tier 3 final rule, batch sampling and testing requirements will just be a continuation of the batch sampling and testing requirements that are in place under the current Tier 2 gasoline sulfur program. Refiners and importers will also conduct quality assurance (QA) periodic sampling and testing for sulfur for defense purposes under the Tier 3 final rule.

Gasoline Additive Producers and Importers. Under the Tier 3 final rule, gasoline additive producers and importers will be required to conduct a production quality control program to ensure that the gasoline additives they produce add no more than three parts per million (ppm) to the sulfur content of finished gasoline when used at the maximum recommended treatment rate. All currently registered gasoline additives have sulfur content consistent with this requirement. We expect that periodic sampling and testing of additive production batches will be a part of such a quality control program for additive production. However, the Tier 3 final rule does not specify the frequency of additive production quality control testing. Under the current Tier 2 gasoline sulfur program, gasoline additive blenders must ensure that their actions do not cause the 95 ppm gasoline sulfur cap to be exceeded. The Tier 3 final rule continues the 95 ppm downstream gasoline sulfur cap. As a part of customary business practice, additive manufactures provide additive blenders information on the sulfur content of gasoline additives so that additive blenders can judge whether the use of a given additive will be a concern with respect to compliance with the 95 ppm gasoline sulfur cap. We expect that the additive production quality control programs that additive producers and importers currently conduct under the Tier 2 program will be sufficient to meet the Tier 3 requirements. Therefore, the Tier 3 final rule is not expected to impose an additional sampling and testing burden on gasoline additive producers and importers.

Oxygenate Producers and Importers. Under the Tier 3 final rule, producers and importers of denatured fuel ethanol (DFE) and producers of other oxygenates are required to conduct batch sampling and testing to demonstrate compliance with a 10 ppm sulfur cap. We expect that DFE will continue to be essentially the only oxygenate used in gasoline during the period covered by this ICR. The Tier 3 final rule contains provisions to allow DFE producers and importers to avoid batch testing of DFE by using product transfer documents (PTDs) that contain information on the sulfur content of the ethanol denaturants used. This is customary business practice today for DFE producers and importers to demonstrate compliance with the State of California’s 10 ppm sulfur cap for DFE. We believe that all DFE producers/importers produce DFE that is compliant with California requirements due to logistical impediments in segregating DFE used in California from DFE used outside of California. Thus, we believe that the Tier 3 final rule will not necessitate the need for additional sampling and testing by producers/importers of DFE.

Producers and Importers of Certified Ethanol Denaturants. As noted above, we expect that producers and importers of DFE will use information on the sulfur content of the ethanol denaturant used to avoid testing the sulfur content of each batch of DFE. Denaturant producers/importers currently test the batches of the denaturant they produce and provide information on sulfur content to DFE producers/importers. The Tier 3 final rule requires per batch testing of certified ethanol denaturants. We anticipate that the sampling and testing already conducted by ethanol denaturant manufactures to help support compliance with the State of California’s 10 ppm sulfur requirement will be sufficient to satisfy the sulfur testing requirements under the Tier 3 final rule.

Blenders of Butane and Other Blendstocks into Previously Certified Gasoline. Under certain circumstances, blenders who blend butane into previously certified gasoline (PCG) are allowed to comply with the current Tier 2 gasoline sulfur standards based on data from the butane producer/supplier as an alternative to testing every batch testing. Blenders who blend other blendstocks into PCG are allowed to calculate the sulfur content of the blendstock by testing the PCG before blending and the gasoline produced after blending, and subtracting the volume and sulfur content of the PGC from the volume and sulfur content of the finished blend. The Tier 3 program maintains this practice. Under the Tier 3 final rule, the downstream gasoline blending provisions that currently apply to butane will be extended to pentane. To the extent that downstream pentane blending will take place as a result of the extension of this practice, we expect that such pentane blending will supplant current butane blending. Therefore, we do not expect that additional testing of downstream gasoline blendstocks will result from the Tier 3 final rule.

Truck Importers. Under certain circumstances, an importer that imports gasoline by truck is allowed to comply with the sulfur standards based on test records from the foreign terminal. To use this option, the truck importer must conduct QA testing of the gasoline.

(2) Sample Retention. The Tier 3 final rule requires gasoline refiners and importers, producers/importers of denatured fuel ethanol or other oxygenates, and producers/importers of certified ethanol denaturants to retain sample portions from the most recent 20 samples collected or for each sample collected during the most recent 21-day period, whichever is greater, and annually certify that samples have been collected under required procedures. Gasoline refiners/importers, producers/importers, and certified ethanol denaturant producers/importers will be allowed to conduct their own testing or have the tesing done at an independent laboratory.

As the Tier 3 gasoline sulfur program is essentially a continuation of the Tier 2 gasoline sulfur program but with lower gasoline sulfur levels, we are retaining the 21-day sample requirement that currently exists in the Tier 2 program (at §§80.335 and 80.350 – sample retention and alternative sulfur standards for importers using trucks, respectively). As discussed in the Tier 2 final rule (65 FR 6809, February 10, 2000), the 21-day sample retention requirement was finalized in response to comments. The EPA finalized a 30-day retention period initially, but received comments suggesting that both the retention period and number of samples should be decreased to just three. In the final rule; however, the agency set the requirement at 20 samples and a 21-day sample retention period in order to 1) ensure that the EPA has a reasonable number of samples available for accuracy testing that represents a significant period of refining activity, and 2) address commenters’ concerns over the length of the sample retention period. We believe the retention requirement is not burdensome given the limited number of samples that must be retained; in addition, many gasoline refiners/importers, oxygenate producers/importers, and ethanol denaturant producers/importers already retain samples.

(3) Recordkeeping.

Gasoline Refiners, Importers, Distributors and Retailers. The Tier 3 final rule includes recordkeeping requirements for any party that produces, imports, sells, offers for sale, dispenses, distributes, supplies, offers for supply, stores, or transports gasoline. Such recordkeeping requirements include PTD information and sulfur sampling and testing information. Per 40 CFR 80.1653(f), records must be kept for five years. Refiners and importers will be required to keep additional information for each batch of gasoline produced or imported.

Gasoline Additive Producers, Importers, Distributors, and Bulk Additive Blenders.

The final Tier 3 program requires gasoline additive producers/importers to retain production quality control records. Every party in the gasoline additive distribution system will also be required to maintain gasoline additive PTDs except for when an additive is sold or dispensed for use in motor vehicles at a retail outlet or wholesale purchaser-consumer facility. We believe that such records are already kept by these parties to meet their affirmative defenses to presumptive liability under the Tier 2 program and as part customary business requirements. Therefore, we expect that the recordkeeping requirements under the Tier 3 final rule will not result in a significant new burden to industry.

Oxygenate Producers, Importers, Distributors, and Blenders. The Tier 3 final rule requires producers and importers of oxygenates to maintain records to demonstrate that each production batch is compliant with a 10 ppm sulfur cap. Such records will be of the results of sampling and testing on each batch of oxygenate, or in the case of DFE, could alternately be records of the calculated sulfur content of DFE batches including the PTDs from the certified ethanol denaturants used, the quality control practices for neat (not denatured) ethanol, and blending records. Producers and importers of DFE will also need to keep records to demonstrate they are compliant with the three volume percent limit on denaturant concentration in DFE. Records of the PTDs for DFE batches will also be required to be kept. DFE producers and importers currently keep there records to support their compliance with the State of California’s 10 ppm sulfur cap on DFE (five volume percent cap on denaturant concentration). The ASTM International also has a five volume percent cap on denaturant concentration, applicable throughout the U.S. We expect that DFE producers/importers currently keep the records that will be required to be kept under the Tier 3 final rule in order to meet their affirmative defenses to presumptive liability under the Tier 2 program. Therefore, we expect that the recordkeeping requirements under the Tier 3 final rule for oxygenate producers/importers will result in minimal additional burden to industry.

Producers and Importers of Certified Ethanol Denaturants. The Tier 3 final rule requires producers/importers of certified ethanol denaturants to maintain per-batch sampling and tesing records to demonstrate that the sulfur content of each production batch is compliant with the sulfur level listed on the PTD (in no case to exceed 300 ppm). Ethanol denaturant producers/importers currently maintain such records due to the State California’s requirements for DFE as discussed above. Therefore, we expect that the recordkeeping requirements under the Tier 3 final rule for oxygenate producers/importers will result in minimal additional burden to industry.

Blenders of Butane and Other Blendstocks into Previously Certified Gasoline. Under the Tier 3 final rule, blenders are required to maintain PTDs and other records to demonstrate compliance. As discussed above, the Tier 3 final rule extends the downstream gasoline blending provisions that currently apply to butane to pentane. To the extent that downstream pentane blending will take place as a result of the adoption of this extension, we expect that such pentane blending will supplant current butane blending. Therefore, we expect that the recordkeeping requirements under the Tier 3 final rule for blenders will result in minimal additional burden to industry.

(4) Registration and Reporting.

Gasoline Refiners and Importers. The Tier 3 final rule requires gasoline refiners and importers to register with the EPA and to submit an annual report which demonstrates compliance with the applicable sulfur standards and any Averaging, Banking, and Trading (ABT) credit activity.¹

Oxygenate Producers and Importers. Under the Tier 3 final rule, oxygenate producers are required to register with the EPA. DFE producers and importers are currently registered with the EPA under the RFS2 program. DFE producers/importers may satisfy the Tier 3 program registration requirement by updating their registration under the RFS2 program. Therefore, we expect that the recordkeeping requirements under the Tier 3 final rule will result in minimal additional burden on industry. The Tier 3 final rule requires annual reports from oxygenate producers/importers that contain per batch information to demonstrate compliance with the 10 ppm sulfur cap. This approach is consistent with the reporting requirements for gasoline refiners and importers. Therefore, we anticipate that this new reporting requirement for will result in a modest additional burden to oxygenate producers and importers.

Producers and Importers of Certified Ethanol Denaturants. Producers and importers of certified ethanol denaturants are required to register with the EPA as such under the Tier 3 final rule. We believe that most if not all current ethanol denaturant producers are already registered with the EPA as a refiner and that there are currently no importers of ethanol denaturant. We expect that refiners will continue to be the suppliers of ethanol denaturants because they are equipped to ensure that ethanol denaturants are compliant with the requisite quality standards. Therefore, we expect that certified ethanol manufacturers will only need to update their existing EPA registration as a refiner to indicate that they also produce certified ethanol denaturant. Therefore, we expect that the registration requirements under the Tier 3 final rule will result in minimal increased burden for ethanol denaturant producers/importers.

Producers and Importers of Blender Grade Pentane. Producers and importers of blender-grade pentane are required to register with the EPA under the Tier 3 final rule. We anticipate that the burden of this registration activity will be small.

Blenders of Butane and Other Blendstocks into Previously Certified Gasoline. The Tier 3 final rule continues the requirement under the Tier 2 program that blenders of butane and other blendstocks into PCG must register with the EPA and provide annual reports to the EPA. As discussed above, to the extent that parties take advantage of the extension of the PCG blending provisions to pentane, we expect that pentane blending will supplant current butane blending. Thus, we expect that the registration and reporting requirements under the Tier 3 final rule for pentane blenders will result in minimal additional burden to industry.

(5) Attest Requirements. The Tier 3 final rule requires refiners and importers to undergo an annual independent review (called an attest engagement) of their records which will form the basis for their annual sulfur compliance report. Attest engagements are already required under the RFG program for both RFG and CG. There will be a small incremental cost associated with including the information required under the final Tier 3 sulfur program in the annual attest engagement.

(6) ABT Credit Trading Provisions. The Tier 3 final rule’s ABT provisions will reduce the overall cost of compliance by providing refiners and importers flexibility in complying with the gasoline sulfur standards by allowing them to choose the most economical compliance strategy (investment in technology, use of credits, or both) to meet the Tier 3 average gasoline sulfur standard. As required under the current Tier 2 program, refiners and importers are required to report annually regarding the generation, transfer, and use of credits; the Tier 3 ABT program has the same annual reporting requirements and will provide a seamless transition from the Tier 2 ABT program.

(7) Small refiners/small volume refineries. Most of this ICR’s requirements for small entities are associated with alternate sulfur standards that are designed to lessen the overall burden of compliance for these entities during the phase-in of the program. Eligible participants in the small refiner/small volume refinery program are required to comply with the recordkeeping and reporting requirements that are applicable to all refiners.

2. NEED FOR AND USE OF THE COLLECTION

2(a) Need/Authority for the Collection

The Tier 3 gasoline sulfur requirements fall under the authority granted by Section 211(c)(1) of the Clean Air Act (CAA).² Under Section 211(c)(1), the EPA may adopt a fuel control if at least one of the following two criteria is met: (1) the emission products of the fuel cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare, or (2) the emission products of the fuel will significantly impair emissions control systems in general use or which will be in general use were the fuel control to be adopted.

The Tier 3 final rule is based on both of these criteria. Under the first criterion, the EPA believes that emissions products of sulfur in gasoline contribute to ozone pollution, air toxics, and PM. Under the second criterion, the EPA believes that sulfur in gasoline that will be used in Tier 3 technology vehicles will significantly impair the emissions control systems of such vehicles. The Regulatory Impact Analysis (RIA) submitted with the Tier 3 final rule includes a more detailed discussion of the EPA’s authority to set gasoline sulfur standards, including a discussion of the EPA’s conclusions related to the factors that must be considered under Section 211(c).

This supporting statement describes the recordkeeping and reporting requirements and the associated costs to various regulated parties (e.g., gasoline refiners/importers, oxygenate producers/importers, gasoline additive producers/importers, certified ethanol denaturant producers/importers, blender-grade pentane producers/importers, fuel distributors, and retailers of gasoline). These requirements will be necessary to enable the Administrator to:

(1) Identify the sources of gasoline, gasoline additives, denatured fuel ethanol and other oxygenates, certified ethanol denaturant, and gasoline blendstocks; and

(2) Ensure that these sources comply with the standards and limitations of the Tier 3 final rule.

An effective enforcement scheme is necessary to ensure that the environmental goals of the Tier 3 final rule are met, and that those complying with the requirements in good faith are not disadvantaged by non-complying parties. The Tier 3 final rule’s requirements create a significant economic incentive for noncompliance. Without the accompanying recordkeeping and reporting requirements, Congressional intent to improve air quality through the Tier 3 program will be thwarted because neither the EPA nor industry will have sufficient information to monitor compliance. Non-complying gasoline, gasoline blendstocks, gasoline additives, certified ethanol denaturants, denatured fuel ethanol and other oxygenate will likely be introduced into commerce on a widespread basis but for requirements that make it possible for the EPA to cross-check records of various entities in order to determine compliance.

Sections 114 and 208 of the CAA, 42 U.S.C. §§ 7414 and 7542, authorize the EPA to require recordkeeping and reporting regarding enforcement of the provisions of Title II of the CAA. The current regulations applicable to motor vehicle gasoline, including the regulations associated with this information collection, can be found in 40 CFR Part 80, Regulation of Fuels and Fuel Additives.

2(b) Practical Utility/Users of the Data

The EPA will use the information and test results (e.g., sulfur content and volume of each batch of gasoline) contained in the annual to evaluate the compliance of regulated parties involved in the production and importation of gasoline, gasoline blendstocks, denatured fuel ethanol and other oxygenates with the Tier 3 gasoline sulfur control requirements. These reports will also be used by the EPA to target compliance investigations. PTDs maintained by parties in the gasoline distribution system and records related to gasoline blending will be used to evaluate the compliance of regulated parties that maintain the records, and to help evaluate upstream compliance.

3. NONDUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA

3(a) Non-duplication

Efforts have been made to eliminate duplication in this information collection. Provisions included in the Tier 3 final rule will allow parties to consolidate reporting requirements and/or provide abbreviated reports where appropriate. For example, to reduce the reporting burden, reports specific to compliance with the gasoline sulfur standards and reports related to the gasoline sulfur ABT program are included in the annual reports already required to be submitted under the RFG program. Where possible, information requirements from various organizations within the Agency have been combined to minimize the submittal of duplicate information in different formats. The information in this collection is not available from another source.

To minimize the information collection burden, refiners and importers who are already registered with the Agency will not have to register again under the Tier 3 final rule.

Additionally, since California’s state gasoline sulfur requirements are as stringent as those under the Tier 3 sulfur program for most of the remainder of the nation’s gasoline, and since California has its own compliance and enforcement provisions, California gasoline is exempt from most of the requirements of the gasoline sulfur program.

3(b) Public Notice Prior to Submission to OMB

EPA will submit the ICR to OMB for review, along with the Tier 3 final rulemaking. This supporting statement is being docketed in order to permit interested parties to fully comment on it.

3(c) Consultations

The Tier 3 regulations, including the cost analysis that is reflected in this ICR, were developed based on experience with similar regulations developed in the past in close consultation with the affected industry. Collaboration with industry and other stakeholders has been a key element in developing the agencies’ rules. Throughout the development of this final rule, EPA met extensively with individual refiners, industry trade associations, and other stakeholders. Their comments have been reflected in the burden estimates discussed below.

3(d) Effect of Less Frequent Collection

The Tier 3 gasoline sulfur program requires gasoline refiners and importers and oxygenate producers and importers to submit annual reports to the Agency which demonstrate compliance with the applicable sulfur standards by the information contained within. The information contained in such reports will include information regarding the sulfur content and volume of a refinery’s or importer’s gasoline or denatured fuel ethanol or other oxygenate. Less frequent submittal of such reports will severely hinder EPA’s ability to monitor compliance, and could lead to noncompliance. Additionally, requiring less than every-batch sampling and testing, where applicable, would make the sulfur cap requirement (i.e., the per gallon maximum sulfur content) meaningless, and would likely lead to extreme excursions in gasoline sulfur content which could, in turn, affect emission control systems and lead to increased emissions. This would be an unacceptable outcome given that the final Tier 3 sulfur program is intended to lead to reduced emissions in part by compatible vehicle and fuel interaction.

3(e) General Guidelines

This information collection activity complies with 5 CFR 1320.6, except that respondents must keep certain records for longer than three years. Specifically, all parties will be required to keep PTDs and records of quality assurance programs for five years, and refiners and importers as well as denatured fuel ethanol and other oxygenate producers and importers will be required to keep their compliance records for five years. Records related to the gasoline sulfur ABT program must also be retained for five years. The information required to be retained will facilitate EPA’s identification of the source of any gasoline found to be in violation of the gasoline sulfur standards. Much of the information required under the Tier 3 final rule is already required under the current Tier 2 program, and most records are required to be kept for five years under the Tier 2 program. Therefore, the recordkeeping requirements under the Tier 3 final rule impose little additional burden. Five years is the applicable statute of limitations for the Tier 2 gasoline sulfur and other fuel programs. See 28 U.S.C. 2462.

Gasoline refiners/importers and oxygenate producers/importers must submit a limited amount of proprietary information, such as batch volume and sulfur content in their annual reports. EPA believes that requiring annual reports provides an appropriate and effective means of monitoring compliance with the standards under the sulfur program. This type of information has been collected in the past and will be safeguarded in the same manner as data required by other EPA directives. Pertinent information, whether kept by the respondent or by a contractor, is subject to auditing by EPA. Consequently, EPA officials will require voluntary entry and access to facilities.

3(f) Confidentiality

As discussed in 3(e) above, proprietary information may submitted by gasoline refiners/importers and oxygenate producers/importers for demonstrating compliance with the sulfur standards. Such information is protected in accordance with the EPA regulations at 40 CFR Part 2 and established Agency procedures.

3(g) Sensitive Questions

No questions of a sensitive nature are asked in this information collection.

4. THE RESPONDENTS AND THE INFORMATION COLLECTED

4(a) Respondents/SIC Codes

The respondents to this information collection will be:

- Refiners (both domestic and foreign refiners who manufacture gasoline for use in the U.S.)

- Importers of gasoline into the U. S.

- Gasoline distributors, carriers, wholesale purchaser-consumers, and retailers

- Users of research and development (R&D) gasoline (testing laboratories)

- Producers of gasoline additives

- Importers of gasoline additives into the U.S.

- Bulk distributors and blenders of gasoline additives

- Oxygenate producers

- Importers of oxygenate into the U.S.

- Oxygenate distributors and blenders

- Certified ethanol denaturant producers

- Importers of certified ethanol denaturant into the U.S.

- Certified ethanol denaturant distributors

- Producers of blender-grade pentane

- Importers of blender-grade pentane into the U.S.

- Distributors of blender-grade pentane

Table 4(a).1: Respondent Industry Classification Codes

Industry Category	NAICS1 Code	SIC2 Code
Petroleum refineries (including importers and butane/pentane blenders)	324110	2911
Butane and pentane manufacturers	325110	2869
Ethyl alcohol and other oxygenate manufacturing	325193	2869
Natural gas liquids extraction and fractionation	211112	1321
Other basic organic chemical manufacturing	325199	2869
Natural gas liquids pipelines, refined petroleum products pipelines.	486910	4613
Chemical and allied products merchant wholesalers	424690	5169
Manufacturers of gasoline additives	325199	2869
Petroleum bulk stations and terminals.	424710	5171
Other warehousing and storage-bulk petroleum storage	493190	4226
Gasoline Retailers and Wholesale Purchaser-Consumers	44711 44719	5541
Testing Laboratories	54138	8734

1) North American Industry Classification System

2) Standard Industrial Classification system

4(b) Information Requested

The recordkeeping and reporting requirements applicable to the regulated parties vary depending on their position in the gasoline production, blending and distribution stream and their potential to influence the sulfur content of gasoline. The regulated parties are divided into groups (and sub-groups) as indicated in the list below, based on the applicable recordkeeping and reporting requirements.

- Gasoline refiners and importers

- Additional and/or alternative requirements exist if:

- Refiner qualifies and opts to use the small-refiner provisions

- Refiner or importer participates in the gasoline sulfur ABT program

- Refiner (including parties who blend gasoline at a terminal facility) produces gasoline by blending pentane or other blendstocks into previously certified gasoline

- Users of R&D gasoline (testing laboratories)

- Denatured fuel ethanol and other oxygenate producers and importers

- Gasoline additive manufacturers

- Distributors of gasoline, gasoline blendstocks, gasoline additives, oxygenates, and certified ethanol denaturants (gasoline terminals, pipelines, rail carriers, and truckers)

- Gasoline retailers and wholesale purchaser-consumers (WPC)

- Additional requirements exist for retailers and WPCs of exempted R&D gasoline

(i) Data items, including recordkeeping requirements

The information collection requirements are categorized in the following lists according to which regulated parties they apply. Certain requirements, such as the PTD requirements, are broadly applicable to most parties who transfer gasoline, gasoline blendstocks, gasoline additives, oxygenates, and certified ethanol denaturants. These more generally applicable requirements are discussed separately from the requirements that apply only to specific groups of regulated parties. Additional and/or alternative requirements applicable to subgroups of respondents are also discussed separately. Where a regulated party is not specifically mentioned, only the most broadly applicable requirements apply.

The presence of an “*” in the following list of requirements indicates an explanatory note regarding the applicability of these requirements.

(A) Broadly-Applicable Requirements

The following requirements apply broadly to all of the regulated parties listed above. The responsibilities of fuel distributors (gasoline terminals, pipelines, and carriers) and gasoline retailers and WPCs are primarily related to compliance with the following broadly applicable requirements. Some terminal or other facility operators blend butane, pentane or other blendstocks into previously certified gasoline. These gasoline producers are considered refiners under the sulfur program, and are discussed under the requirements for refiners. Unless specifically noted, the PTD requirements listed below do not result in any new activities for fuel distributors, retailers, and WPCs.

- The Tier 3 final rule requires persons who manufacture, import, sell, offer for sale, dispense, distribute, supply, offer for supply, store, or transport gasoline, gasoline blendstocks, gasoline additives, oxygenates, or certified ethanol denaturants to provide a PTDs to accompany each transfer of the product.

Except for transfers to truck carriers, retailers and wholesale purchaser-consumers, product codes can be used on PTDs to convey the required information if such codes are clearly understood by each transferee. This allowance lessens the burden of compliance and is consistent with the requirements under the current Tier 2 gasoline sulfur program.

- Under the Tier 3 final rule, any party that is required to conduct sampling and testing for sulfur content must retain records regarding:

- The location, date, time, tank or storage tank identification for each sample collected

- The name and title of the person who collected the sample and the person who performed the testing

- The results of the test as originally printed or recorded, and any record which contains a result that is not identical to the originally printed or recorded test

- For purposes of establishing an affirmative defense to a violation, parties other than retailers or wholesale purchaser-consumers will be required to provide business records documenting the following:

- A periodic sampling and testing program designed to ensure that the gasoline meets the applicable sulfur standard

- On each occasion that the gasoline is found not to be in compliance with the applicable sulfur standard, the actions taken to stop the sale or distribution of any gasoline found not to be in compliance, and the actions taken to remedy the violation and the factors that caused the violation (such as removing the non-complying gasoline from the distribution system and taking steps to prevent future violations)

- Records will be required to be maintained for five years from the date they were create with one exception. Records related to ABT credits will be required to be kept for five years from the date of generation, except where credits are transferred. In such cases, records will be required to be kept by the transferor for five years from the date of transfer, and by the transferee for five years from the date of transfer, use or termination, whichever is later. As a result, in certain circumstances, records related to credits may be required to be maintained for longer than five years from the date of origination. This potentially longer retention time is necessary to enable the Agency to determine the legitimacy of credit transfers in the context of an enforcement action

* In most cases, this requirement does not impose an additional burden because the required records are already maintained under other 40 CFR Part 80 fuels programs, or the records are maintained as a customary business practice.

(B) Requirements Specific to Gasoline Refiners and Importers:

The following requirements apply to all refiners and importers:

- Register with the EPA by December 1, 2016 or at least 30 days in advance of producing or importing gasoline meeting the Tier 3 standards and/or participating in the ABT credit program. (40 CFR 80.1650(b))

*One-time requirement. Registration under other 40 CFR Part 80 fuel programs is sufficient to satisfy this requirement. As a result, no additional burden is expected under the Tier 3 final rule.

- Calculate the annual average sulfur level for each refinery’s gasoline production or all imported gasoline. (40 CFR 80.1603(c))

- Submit annual sulfur averaging report to the EPA for each refinery and importer by March 31 for the previous calendar year’s averaging period.

- Include the following information in the refinery or importer’s annual report: (40 CFR 80.1652(a))

- EPA refiner and refinery facility, or importer registration numbers

- Applicable annual average standard

- Total volume of gasoline produced at the refinery or imported

- Annual average gasoline sulfur content produced at the refinery or imported

- Annual average sulfur level after inclusion of any credits

- For each batch of gasoline produced or imported during the averaging period, the assigned batch number, the date the batch was produced, and the volume and sulfur content of the batch.

- Arrange to have an attest engagement report submitted to EPA by June 1 for the previous year’s annual averaging period (40 CFR 80.1667)

- The attest engagement will be required to be performed on the underlying documentation that forms the basis of any required report

- The attest engagement will be required to be prepared in accordance with established procedures

- The attest engagement will be required to be performed by an independent certified public accountant (CPA)

- Internal auditors may assist the CPA pursuant to the Standards for Attestation Engagements

(C) Additional and/or Alternate Requirements for Refiners and Importers that Participate in the ABT Credit Trading Program

The following recordkeeping and reporting requirements apply to refiners and importers who utilize the ABT credit trading provisions under the sulfur program:

- Calculate ABT credits generated (40 CFR 80.1615(b))

- Include in the refinery or importer annual sulfur compliance report (in addition to the information required for all refiners and importers) the number of credits: (40 CFR 80.1652(a))

- Carried over from the prior averaging period

- Generated

- Used

- Obtained from or transferred to another party, and the name and EPA refiner or importer registration number of the other party to the transaction

- Expired at the end of the averaging period

- Carried over to the subsequent averaging period

- Retain the following records (in addition to records required to be kept by all refiners and importers), separately by year of creation and pertaining to the number of credits: (40 CFR 80.1653 (b))

- Carried over from the prior averaging period

- Generated

- Used

- Obtained from or transferred to another party, and the name and EPA registration number of the other party to the transaction

- Expired at the end of the averaging period

- Retain records related to credits for five years from the date of generation; if transferred, the transferor must retain records for five years from the date of transfer and the transferee must retain records for five years from the date of transfer, use or termination, whichever is later

* As discussed above, these requirements could result in records being required to be retained for longer than five years in some cases.

(D) Alternative Requirements for Importers who Import Gasoline by Truck (40 CFR 80.1641)

- Importers who import gasoline into the U. S. by truck may use the test results from the foreign terminal to satisfy the sampling and testing requirements that are otherwise required if the importer fulfills the following alternative requirements:

- Obtain records from the foreign terminal at which the gasoline was loaded for importation into the U.S. which shows the sulfur content of each truck load of gasoline imported into the U.S.

- Conduct a QA program for each truck loading terminal. QA samples will be required to be taken from the truck-loading terminal for testing by the importer, or as an alternative, by an independent laboratory, to determine the sulfur content. The sampling and testing will be required to be performed using the regulatory methods. The frequency of the sampling and testing will be required to be at least one sample for each 50 of an importer’s trucks that are loaded at the terminal, or one sample per month, whichever is more frequent.

- Treat each truck load of imported gasoline as a separate batch for purposes of assigning batch numbers, maintaining records, and reporting

* These requirements only apply if the importer elects to use this alternative way of demonstrating compliance.

- For a truck importer to use the alternative sampling and testing procedures, the foreign terminal must agree to fulfill the following requirements:

- Sample and test the gasoline contained in the storage tank from which the trucks used to transport gasoline are loaded, to demonstrate that a sulfur content does not exceed the applicable per-gallon standard. This sampling and testing will be required to be performed after each receipt of gasoline into the storage tank, or immediately before each transfer of gasoline into the importer’s truck.

* These requirements apply only if the importer elects to use the alternative procedures to demonstrate compliance with the every batch sampling and testing requirement. These additional requirements are not applicable if the importer has an independent third party conduct the required testing at the foreign terminal facility. This is generally the case because of the cost savings that result for the importer as well as the foreign terminal operator. Terminal testing conducted by a third party satisfies the testing requirements that are otherwise applicable to the importer. Therefore, EPA expects that these requirements will not result in additional activities for foreign terminal operators.

(E) Alternative Requirements for Refiners, Pipelines, and Terminals that Produce Gasoline by Blending Butane, Pentane or Other Blendstocks into Previously Certified Gasoline (PCG) (40 CFR 80.1640)

- As an alternative to the every batch sampling and testing requirements, refiner-blenders who blend butane into PCG may meet the sampling and testing requirements by using sulfur test results from the butane supplier provided that the refiner-blender:

- Obtains a copy of the test results from the butane supplier which shows that the sulfur content of each load of butane in the storage tank from which the blendstock was drawn does not exceed the applicable per-gallon standard and that the tests were performed using the regulatory method

- Treats the butane as a batch (re: sulfur content and volume) for the purpose of calculating compliance with the applicable sulfur averaging standard

- Conducts a quality assurance program including sampling and testing from each butane supplier to demonstrate that butane sulfur content is below the applicable per-gallon standard. The frequency of butane sampling and testing from each supplier will be required to be one sample for every 500,000 gallons of butane received, or one sample every three months, which ever results in more frequent sampling

- As an alternative to every batch sampling and testing requirements, refiner-blenders who blend pentane into PCG may meet the sampling and testing requirements by using sulfur test results from the butane supplier provided that the refiner-blender: (40 CFR 80.85)

- Obtains a copy of the test results from the pentane supplier which shows that the sulfur content of each load of butane in the storage tank from which the blendstock was drawn does not exceed the applicable per-gallon standard and that the tests were performed using the regulatory method

- Treats the pentane as a batch (re: sulfur content and volume) for the purpose of calculating compliance with the applicable sulfur averaging standard

- Conducts a quality assurance program including sampling and testing from each pentane supplier to demonstrate that pentane sulfur content is below the applicable per-gallon standard. For commercial-grade pentane, the frequency sampling and testing from each supplier will be required to be one sample for every 350,000 gallons of pentane received, or one sample every three months, which ever results in more frequent sampling. For non-commercial-grade pentane, the frequency sampling and testing from each supplier will be required to be one sample for every 250,000 gallons of pentane received, or one sample every three months, which ever results in more frequent sampling.

- Enters into a contract with all parties who transport or store pentane for use by the refiner to assure that an adequate quality assurance program is implemented to ensure that such pentane will not be contaminated in transit to the refinery.

- As an alternative to the every batch sampling testing requirements, refiner-blenders who blend other blendstocks into PCG may: (40 CFR 1640(b))

- Sample and test the PCG for sulfur content prior to blending and subsequent to blending and calculate the volume and sulfur content of the blendstock by subtracting the volume and sulfur content of the PCG from the volume and sulfur content of the gasoline subsequent to blending, or

- If every batch of blendstock used during an averaging period has a sulfur content that is equal to or less then the applicable per-gallon standard, sample and test each batch of blendstock for volume and sulfur content when received and treat each blendstock receipt as a separate batch for purposes of compliance calculations

(F) Requirements for Gasoline Retailers and Wholesale Purchaser-Consumers: (40 CFR 80.1656 (d))

- If R&D gasoline is to be stored by a retailer or wholesale purchaser-consumer (WPC), records will be required to be kept to demonstrate that the retailer or WPC is associated with the facility that will be using the R&D gasoline. Documents associated with R&D gasoline are required to be retained for five years.

(G) Requirements for Users of R&D Gasoline. (40 CFR 80.1656)

Users of R&D gasoline must submit an application to EPA prior to initial use of the R&D gasoline. The application must contain the following:

- Statement of purpose

- Description of the R&D program, including the sulfur level of the gasoline expected to be used

- Expected start and completion dates of the R&D program

- Estimation of the number of vehicles or engines in which the fuel will be used and mileage to be accumulated

- Locations where gasoline will be stored and used

- Volume of gasoline to be used.

- Identification of the gasoline distributor or other source of the R&D gasoline

- Explanation of why sulfur-compliant gasoline cannot be used

- Provisions to ensure EPA monitoring capability

* A report will be required to be submitted to obtain an exemption for R&D gasoline under EPA’s Tier 3 final rule. The application under the Tier 3 sulfur program may be combined with the report already submitted to gain an exemption under other 40 CFR Part 80 fuel programs. Therefore, the R&D gasoline exemption application under the final Tier 3 sulfur program will not result in additional reports/applications being submitted to EPA.

- R&D gasoline will be required to be identified on PTDs as gasoline to be used only for this purpose

* This requirement already exists to establish an exemption from EPA’s Tier 2 program; hence this PTD requirement should not result in a new activity.

(H) Requirements for Gasoline Additive Manufacturers (40 CFR 80.1613)

- PTDs that state the maximum registered concentration for the additive and the corresponding maximum allowed treatment rate.

- Additive production quality control records to demonstrate that the sulfur content of each production batch is consistent with the maximum allowed treatment rate

(I) Requirements for Denatured Fuel Ethanol and Other Oxygenate Producers and Importers.

- Register with EPA prior to November 1, 2016, or at least 60 days prior to producing or importing oxygenate subject to the final Tier 3 program 10 ppm sulfur cap (40 CFR 80.1650(b)(2))

- Submit annual report to EPA for each oxygenate production and import facility by March 31 for the previous calendar year. (40 CFR 80.1652(d))

- Include the following information in the oxygenate producer or importer’s annual report: (40 CFR 80.1652(c))

- EPA oxygenate producer and oxygenate production facility, or oxygenate importer registration numbers

- Total volume of each type of oxygenate produced or imported

- Annual average gasoline sulfur content produced at the refinery or imported

- For each batch of oxygenate produced or imported during the calendar year, the assigned batch number, the date the batch was produced, and the volume and sulfur content of the batch.

- For oxygenates other than denatured fuel ethanol, the identification of the test method used to determine the sulfur content of the batch.

- For denatured fuel ethanol, either the identification of the test method used to determine the sulfur content of the batch, or the information used to calculate the sulfur content.

- PTDs with the applicable statement for either denatured fuel ethanol or oxygenates other than denatured fuel ethanol. (40 CFR 80.1651)

(J) Producers and Importers of Certified Ethanol Denaturants

- Register with EPA prior to November 1, 2016, or at least 60 days prior to producing or importing certified ethanol denaturant (40 CFR 80.1650(b)(4))

- PTDs (40 CFR 80.1651(d))

- Per-batch sulfur test records (40 CFR 80.1653(d))

(K) Producers and Importers of Blender-Grade Pentane (40 CFR 80.86)

- Register with EPA at least 30 days prior to producing or importing blender-grade pentane

- Per-batch sulfur test records on the sulfur, olefin, aromatics, and benzene content.

- For blender-commercial-grade pentane test results on the purity of the pentane

- PTDs

(ii) Respondent Activities

As noted above, much of the information needed for compliance with the recordkeeping requirements under the Tier 3 final rule is already being retained either to comply with the requirements of other 40 CFR Part 80 fuel programs or as a customary business practice. To the extent possible, information collected and reported under other 40 CFR Part 80 fuel programs such as the RFG program may also be used to demonstrate compliance with the final Tier 3 sulfur program without necessitating additional activities by the regulated parties. Only in cases where it is essential to ensure the realization of the projected benefits of the sulfur program, is the EPA requiring additional testing, recordkeeping, and reporting.

The activities arising out of the testing, recordkeeping, and reporting requirements outlined in the preceding section are listed below according to the respondent class to which they apply. Activities that apply to a broad class of respondents (such as refiners and importers) are also applicable to respondent subclasses (such as small refiners) unless otherwise noted.

The burdens and costs included in this ICR are those which are expected to be incurred during the next three years, the period of time covered by this ICR.

The following lists detail the activities of the various regulated parties:

(A) Activities of Gasoline Refiners and Importers

- Test each batch of gasoline for its sulfur content, retain samples from the most recent 20 samples collected or for each sample collected during the most recent 21 day period, whichever is greater, and retain records of the testing for five years. (40 CFR 80.1630 and 80.1631)

- Conduct a QA periodic sampling and testing program for sulfur content for defense purposes. (40 CFR 80.1663(d))

- Calculate the average annual sulfur level of each refinery, or all imported gasoline, using batch test reports. (40 CFR 80.1603)

- Submit refinery and importer annual averaging reports to EPA by the March 31 of the year following the prior year’s averaging period. (40 CFR 80.1652(a))

- Arrange to have an independent third party submit to EPA an attest engagement report by June 1 of each year for the prior calendar year averaging period. (40 CFR 80.1667)

(B) Activities of Gasoline Refiners That Utilize the Small Refiner and Small Volume Refinery Provisions: (40 CFR 80.1622)

- Notify the EPA if the small refiner or small volume refinery fails to meet the qualifying criteria.

(C) Activities of Refiners and Importers Who are Exempt from Requirements for Extreme Hardship

- Submit annual sulfur averaging reports to the EPA under the terms of the hardship application.

(D) Activities of Refiners and Importers Who Participate in the ABT Credit Trading Program

- Include in the annual sulfur report to EPA. (40 CFR 80.1652(a))

- The credits carried over from prior averaging period, generated, used, terminated, transferred or carried over to the next averaging period.

- The identity of the refiners/refineries and importers (including EPA registration numbers) involved in credit transactions.

- Retain records related to ABT credit activity.(40 CFR 80.1653(b)(2))

*These activities are required only if a refiner or importer elects to participate in the ABT credit trading program.

(E) Alternate Activities for Importers that Import Gasoline by Truck (40 CFR 80.1641)

- Use the following alternative requirements to satisfy the requirement to sample and test every batch of gasoline:

- Obtain test results from the foreign terminal at which the gasoline was loaded which shows the sulfur content of each truck load of gasoline imported into the U.S.

- Satisfy the program requirement for each truck loading terminal

*Samples from the truck-loading terminal may be taken for testing either by the importer or an independent third party. The frequency of the sampling and testing will be required to be at least one sample for each 50 of an importer’s trucks that are loaded at the terminal, or one sample per month, whichever is more frequent.

* These alternative requirements only apply if the importer elects to use this alternative way of demonstrating compliance.

(F) Alternative Activities for Refiners, Terminals, and Pipelines That Produce Gasoline by Blending Butane or Other Blendstocks into Previously Certified Gasoline

- For butane blenders, use the test results from the butane supplier to satisfy the requirement to sample and test each batch of gasoline provided that: (40 CFR 80.1640)

- The butane blender obtains a copy of the test results from the butane supplier which shows that the butane in the storage tank from which the butane was drawn does not exceed the applicable per-gallon standard.

- The butane is treated as a batch regarding sulfur content and volume for the purpose of calculating compliance with the applicable sulfur averaging standard.

- The refiner conducts a QA program including sampling and testing from each butane supplier to demonstrate that butane sulfur content does not exceed the applicable per-gallon standard. The frequency of butane sampling and testing from each supplier will be required to be one sample for every 500,000 gallons of butane received, or one sample every three months, which ever results in more frequent sampling.

- For pentane blenders, use the test results from the pentane supplier to satisfy the requirement to sample and test each batch of gasoline provided that: (40 CFR 80.85)

- The butane blender obtains a copy of the test results from the butane supplier which shows that the butane in the storage tank from which the butane was drawn does not exceed the applicable per-gallon standard.

- The pentane is treated as a batch regarding sulfur content and volume for the purpose of calculating compliance with the applicable sulfur averaging standard

- The refiner conducts a quality assurance program including sampling and testing from each pentane supplier to demonstrate that pentane sulfur content is below the applicable per-gallon standard. For commercial-grade pentane, the frequency sampling and testing from each supplier will be required to be one sample for every 350,000 gallons of pentane received, or one sample every three months, which ever results in more frequent sampling. For non-commercial-grade pentane, the frequency sampling and testing from each supplier will be required to be one sample for every 250,000 gallons of pentane received, or one sample every three months, which ever results in more frequent sampling.

- Enters into a contract with all parties who transport or store pentane for use by the refiner to assure that an adequate quality assurance program is implemented to ensure that such pentane will not be contaminated in transit to the refinery.

- For blenders who blend other blendstocks into PCG, calculate the volume and sulfur content of the blendstock by subtracting the volume and sulfur content of the PCG from the volume and sulfur content of the finished blend, or (40 CFR 1640(b))

- If every batch of blendstock used during the averaging period has a sulfur content that is equal to, or less than, the applicable per-gallon cap standard, sample and test each batch of blendstock received and treat each receipt as a separate batch for purposes of compliance calculations

(G) Activities of Pipelines and Terminals

- Conduct periodic QA assurance testing for sulfur content for defense purposes. (40 CFR 80.1663(d))

(H) Activities of Users of R&D Gasoline:

- Prior to initial use of R&D gasoline, submit an application to EPA (40 CFR 80.1656)

* As discussed above, the application for an R&D exemption under the Tier 3 final rule may be combined with the report already submitted to gain exemptions under other 40 CFR Part 80 fuel programs. This requirement, therefore, is not expected to result in additional reports or applications being submitted to EPA.

(I) Activities of Distributors, Retailers, and WPCs

- WPCs identify and keep records of any R&D gasoline. (40 CFR 80.1656(d))

*As discussed above, this activity should not result in any additional burden since the documents are kept as a customary business practice.

1. Activities of Gasoline Additive Manufacturers (40 CFR 80.1653(h))

- Maintain records of its additive production quality control activities and make records available upon request.

(J) Activities of Denatured Fuel Ethanol and Other Oxygenate Producers.

- Test each batch of denatured fuel ethanol or other oxygenate for its sulfur content, retain samples from the most recent 20 samples collected or for each sample collected during the most recent 21 day period, whichever is greater, and retain records of the testing for five years. For DFE, as an alternative to per-batch sulfur testing, the sulfur content of each batch may be calculated using PTD(s) from the denaturant(s) used, quality control records for the neat (un-denatured) ethanol used, and blend records. (40 CFR 80.1631(a))

- Conduct a QA periodic sampling and testing program for sulfur content for defense purposes. (40 CFR 80.1663(d))

- For DFE producers, conduct a periodic QA program to assure the accuracy of the denaturant blending equipment for defense purposes.

- Submit annual reports to EPA by March 31 of the year following the prior calendar year. (40 CFR 80.1652(c))

(K) Activities of Producers of Certified Ethanol Denaturants.

- Register with EPA by November 1, 2016, or 60 days prior to producing certified ethanol denaturant. (40 CFR 80.1650(e))

- Test each batch of certified ethanol denaturant for its sulfur content, retain samples from the most recent 20 samples collected or for each sample collected during the most recent 21 day period, whichever is greater, and retain records of the testing for five years. (40 CFR 80.1630(a)(2))

- Conduct a QA periodic sampling and testing program for sulfur content for defense purposes. (40 CFR 80.1663(d))

(L) Activities of Producers of Blender-Grade Pentane.

- Register with EPA 30 days prior to producing blender-grade pentane. (40 CFR 80.86)

- Test each batch of blender-grade for its sulfur, olefin, aromatics, and benzene content. Test blender-commercial-grade retain samples from the most recent 20 samples collected or for each sample collected during the most recent 21 day period, whichever is greater, and retain records of the testing for five years. (40 CFR 80.1631(a))

- Conduct a QA periodic sampling and testing program for sulfur content for defense purposes. (40 CFR 80.1663(d))

(M) Summary and Analysis of Comments Received on the Recordkeeping and

Reporting Requirements of the Tier 3 Proposed Rule

The Agency received a number of comments regarding the recordkeeping and reporting requirements of the Tier 3 proposed rule. The full summary and analysis of comments for the Tier 3 rule is located at http://www.epa.gov/otaq/documents/tier3/420r14004.pdf. Regarding gasoline additives, the Motor &Equipment Manufacturers Association commented that the proposed recordkeeping requirements for additive manufacturers were reasonable and manageable.

Regarding registration, testing, PTD, and reporting requirements, API and AFPM proposed and Flint Hills Resources and Marathon Petroleum Company agreed that batch records be part of the recordkeeping requirements for both refiners and DFE producers but that only aggregated reports be submitted to the EPA. We finalized the requirement that producers and importers of DFE and other oxygenates must submit annual reports to the EPA that include the total volume of DFE/oxygenate produced and an attestation that all batches met the proposed fuel quality requirements. The flexibilities provided in the Tier 3 rule allow DFE producers and importers to avoid testing DFE production batches, thereby avoiding substantial capital costs to comply with the Tier 3 requirements.

Regarding recordkeeping requirements, Countrymark and Small Business Refiners commented that the proposed recordkeeping requirements for denatured ethanol and other oxygenates and the proposed recordkeeping requirements for fuel producers were different but should be equivalent. Countrymark and the Small Business Refiners recommended the elimination of certain recordkeeping burden for fuel producers (specifically, the name and title of person collecting the sample and the name of the tester) and recommended the collection of certain information for oxygenate producers to maintain fuel quality and traceability. In the Tier 3 final rule, we did not eliminate the suggested recordkeeping information for fuel producers because we believe it is important for EPA’s enforcement personnel to know who did the actual sampling and testing in the event that questions arise. Regarding the additional recordkeeping requirements for oxygenate producers, we agreed with the comments that enforcement and compliance assurance would be substantially improved by requiring oxygenate producers/importers and denaturant producers/importers to maintain records regarding the location, time, storage vessel identification, other test results, test methodology used, oxygenate batch number, and oxygenate production date. Hence, the Tier 3 final rule included those requirements.

3. THE INFORMATION COLLECTED--AGENCY ACTIVITIES, COLLECTION METHODOLOGY, AND INFORMATION MANAGEMENT

5(a) Agency Activities

Agency activities associated with the annual reporting requirements of this information collection consist of the following:

1) Review submitted reports (includes associated Agency inspections and investigations);

2) Analyze requests for confidentiality and provide appropriate protection;

3) Store the data and archive according to a record retention schedule conforming to EPA policy.

Agency activities associated with the attest engagement requirements of this information collection consist of the following:

1) Review submitted reports (includes associated Agency inspections and investigations);

2) Store the report and archive according to a record retention schedule conforming to EPA policy.

5(b) Collection Methodology and Management

The collection methodology and management of the information collected is similar to the process used for other 40 CFR Part 80 fuel programs. The information should be reported electronically via a format specified by the Administrator.

When the submittal is received, EPA will review it for completeness EPA may also review respondents' records as a part of its enforcement effort to ensure the accuracy and validity of the data submitted. Non-confidential data will be made available to the public upon request.

5(c) Small Refiner/Small Volume Refinery and Temporary Relief Flexibilities

As discussed in Section 3(c) above, as part of its effort to comply with the Small Business Regulatory Enforcement Fairness Act (SBREFA) requirements, EPA met several times with small entity representatives. Additionally, EPA convened an intergovernmental panel, in accordance with the SBREFA, which also met with small entity representatives and which then made specific recommendations to EPA regarding the impact of sulfur control on small businesses. A copy of the panel’s report is available in the docket for this regulatory action. The report contains a list of the fuel industry’s participating small entity representatives, and provides a summary of their comments.

The panel’s recommendations were carefully considered by EPA in developing the Tier 3 final rule and the specific provisions for small refiners. The panel did not recommend a wholesale exemption for small refiners and small volume refineries, but rather that they be provided additional time to comply. As a result, the gasoline sulfur rule provides for less stringent sulfur standards for qualifying small refiners until 2020.

In addition, the gasoline sulfur rule provided temporary relief from the sulfur requirements for refiners who demonstrated that extreme hardship will result in the absence of such relief.

A Draft Regulatory Impact Analysis (RIA) which further discusses the measures taken to minimize the impact on small business entities is included in the docket for the gasoline sulfur rulemaking.

5(d) Collection Schedule

The collection schedule of the sulfur program reporting requirements is shown in Table 5(d).

Table 5(d). Collection Schedule

Item	Due Date
Gasoline refinery and importer annual averaging reports, including ABT information	March 31 following the previous year’s averaging period
Gasoline refiner and importer attest reports	June 1 following the previous year’s averaging period
Blender-grade pentane producer and importer annual batch reports	March 31 following the previous calendar year
Oxygenate producer and importer annual batch reports	March 31 following the previous calendar year

6. ESTIMATING THE ANNUAL BURDEN AND COST OF THE COLLECTION

6(a) Estimating Respondent Burden

The estimated hourly burdens for this ICR are contained in Tables 6(a)1 and 6(a)2. The accounting assumptions made in making the estimates of annual hourly burden and cost are summarized after the following tables on respondent hourly burdens.

Table 6(a)1: Annual Burden for Gasoline Refiners and Importers

and Denatured Fuel Ethanol and Other Oxygenate Producers

*This estimate is based on an average of 3 refineries per refiner. In reality, larger refiners may own several refineries, while smaller refiners may own only one refinery.

Table 6(a)2: Annual Burden for Gasoline Terminals, Pipelines

and Users of R&D Gasoline

Accounting Assumptions:

The discussion of the requirements under the sulfur program (Section 4(b)(i)) contains notes on the extent to which these requirements could be satisfied without necessitating additional activities by using information that is already collected and submitted to the EPA under other 40 CFR Part 80 fuel programs. This discussion helps to support the selection of the activities that were newly required under the sulfur rule (Section 4(b)(ii)), the selection of the respondent classes (Section 6(a)), and the following accounting assumptions.

Accounting Assumptions that Pertain to Labor Costs:

1) The cost of managerial time is $110/hour.

2) The cost of technical time is $96/hour.

3) The cost of clerical time is $37/hour.

An hourly equivalent rate of $74 was assumed for dependent laboratory testing and

$40 for field testing for sulfur.

Accounting Assumptions that Pertain to Activities:

These costs are similar to those used in other 40 CFR Part 80 fuel program ICRs, and are based upon Bureau of Labor Statistics figures from “Employer Costs for Employee Compensation – Table 12 – Private Industry, Manufacturing and Non-Manufacturing Industries by Occupational Group (December 2003).

1. The following assumptions were made in estimating the burden to refiners and importers and denatured fuel ethanol and other oxygenate producers of submitting annual reports to the EPA:

- There are currently about 60 refiners and 40 importers of gasoline. There were 142 operable petroleum refineries in the United States as of January 1, 2014, 108 of which produce gasoline.

- There are approximately 105 ethanol producers covering 233 domestic ethanol producing facilities registered with the EPA and another 40 companies that are registered to import ethanol.

- Preparing the report in the proper format and submitting it to the EPA will require 0.75 hour of a clerical employee’s time and 0.25 hour of a manager’s time.

- Reporting associated with ABT credit and/or allotment activity is estimated to be 0.25 hour of managerial time, 0.25 technical time, and 0.25 clerical time.

2) The following assumptions were used to estimate the additional burden for refiners and importers associated with testing the sulfur content of each batch of CG rather than testing composite samples and to estimate the burden for producers to test the sulfur content of each batch of oxygenate, and for certified ethanol denaturant manufactures to test the sulfur content of each batch of certified ethanol denaturant.

- There are approximately 64 domestic refiners that produce CG and 30 importers that import CG

- The number of additional sulfur tests required on batches of CG will be approximately 400 for each refiner and 27 for each importer.

- Denatured fuel ethanol is the only oxygenate in use during the period convered by this collection. The number of additional sulfur tests (or calculation of sulfur content) for each denatured fuel ethanol production facility and importer will be 150. DFE producers and importers will all take advantage of the calculation method in place of sampling and testing each batch.

- Calculation of the sulfur content of a DFE batch will cost a DFE producer/importer one hour of technical time at $74 and hour.

- The number of additional sulfur tests for each certified ethanol denaturant production facility and importer will be 150.

- 2/3 of refiners will perform their own sulfur testing; 1/3 will have the testing done by an independent third party laboratory.

- Importers will have testing done by an independent third party laboratory.

- A sulfur test conducted at a private laboratory will cost a refiner or importer $50 for the test itself, plus $24 for the transportation of the sample to the lab and to perform other administrative functions, for a total cost of $74/test (this assumes that the cost of the employee to transport the sample and handle the associated administrative duties is $24/hour, and it takes one hour to perform the task).

- An annual cost of the additional testing of gasoline sulfur content for refiners who conduct their own testing was calculated using the following assumptions:

- The hourly burden associated with batch reports for the additional testing for sulfur is 0.10 hour for managerial time, 0.70 hour for technical time, and 0.20 hour for clerical time. Since the average CG refiner will need to test 400 additional batches, the hourly burden for this additional testing is 400 hours.

- The annual cost of the additional testing of gasoline sulfur content for refiners and importers who use an independent third party laboratory was estimated using the following assumptions:

- Since the average CG refiner will need to test 400 additional batches, and the cost of a test conducted at a private laboratory is $74 per test, the annual cost of the additional testing for those refiners that use a private laboratory is about $30,000/year.

- Since the average importer will need to test 27 additional batches of CG per year, and the cost of a test conducted at a private laboratory is $74 per test, the annual cost of the testing for such parties is about $2,000/year.

- There are no additional costs associated with storing the CG batch samples for 30 days beyond those considered above.

3) The following assumptions were made in estimating the burden that will result from the use of the alternate provisions to satisfy the CG batch test requirement by refiners that blend blendstocks (other than butane) into previously certified gasoline:

- These alternate provisions will be used to the fullest extent possible by all refiners who blend blendstocks into previously certified gasoline, since their use will result in a significant savings in the overall cost of compliance.

- The refiner already tests each blendstock upon receipt to determine its sulfur content in order to comply with the requirements of the RFG program or as a customary business practice.

- 15 refiners blend blendstocks other than butane into CG – on average, each of these refiners produces 40 batches of gasoline by blendstock addition.

- The costs related to the use of this alternate provision will be related to performing calculations using existing data and of keeping records regarding compliance – these tasks could be accomplished using 0.5 hour of technical time and 0.50 hour of clerical time.

4) The following assumptions were made in estimating the burden associated with the use of the alternate provisions to satisfy the CG batch test requirement by refiners who blend butane or pentane into previously certified gasoline:

- Due to gasoline volatility requirements, butane is blended only during the winter season (from September 16 through February 28).

- Refiner/blenders at eight terminals, eight pipelines, and four refiners blend butane or pentane into previously-certified gasoline during the winter season.

- On average, each blender blends butane or pentane into five batches of gasoline during the winter season.

- On average, each blender is supplied butane or pentane by two suppliers

- All tests will be conducted by an independent laboratory at a cost of $74 per test

- The administrative duties associated with the alternative requirements could be accomplished using 0.50 hour of clerical time, and 0.25 hour of technical time.

5) The following additional assumptions were made in estimating the burden to refiners of participating in the small refiner/small volume refinery program:

- Administrative duties associated with recording, maintaining, and reporting the information required during the participation in the small refiner program (such as on the annual sulfur averaging report) could be accomplished with an additional 0.50 hour clerical time.

6) The following additional assumptions were made in estimating the burden to refiners who are granted temporary hardship relief:

- Administrative duties associated with recording, maintaining, and reporting the information required during the period of temporary relief (such as on the annual sulfur averaging report) could be accomplished with an additional 0.50 hour clerical time.

7) The following assumptions were made in estimating the burden associated with the use by importers that import gasoline by truck of the alternate provisions to satisfy the requirement to test every batch of CG:

- All importers that import by truck will utilize the alternate provisions, since this will result in a significant reduction in the overall cost of compliance.

- Foreign terminal operators currently have sampling and testing conducted by an independent third party as a customary business practice, and will continue to do so – this will release the terminal operator from additional activities which will otherwise be required.

- To minimize the number of tests required, samples are already drawn after the receipt of each batch of gasoline into the storage tank at the terminal as a customary business practice.

- All importers will contract with the independent third party that performs sampling and testing at the terminal(s) from which the importer receives gasoline to keep records of the required data and report it to the importer – by making this arrangement directly, the importer can demonstrate compliance with the requirement to conduct testing at the terminal facility without the need to undertake additional sampling and testing.

- On average, two importers draw gasoline from the same terminal facility for importation into the U.S. – in such cases, the importers will split the cost of the third party’s services.

- 25 percent of importers use trucks (10 importers).

- The following costs will be billed to importers by the independent third party for services related to testing conducted at one terminal: Independent third party will use an additional 1.0 hour of clerical employee time and 0.25 hour of technician time to complete the task (an additional 10 percent of this base cost could be added to account for overhead cost and to provide a profit margin).

8) The following assumptions were made in estimating the burden to refiners and importers of having an independent third party prepare an attest engagement report for submission to the EPA:

- The main cost of preparing the attest engagement will be associated with reviewing existing records on gasoline sulfur content.

- It is estimated this task will require an extra five hours of technical employee time (to account for other costs and to provide a profit margin an additional 10 percent could be added to the cost derived using the assumptions under the previous bullet).

9) The following assumptions were made in estimating the burden to refiners, terminals and pipelines who conduct periodic QA testing for sulfur for defense purposes:

- 60 pipelines and 1200 terminals will conduct downstream QA testing for sulfur in addition to many refiners (RFG refiners typically conduct downstream QA testing). Assume $40 cost per periodic test, based on availability of field test equipment. Assume 10 samples per year for QA testing per respondent.

10) The following assumptions were made in estimating the burden to terminal and pipelines that are required to test small refiner and small volume refinery batches for sulfur content:

- 60 pipelines and 1200 terminals will test two batches of small refiner/small volume refinery gasoline for sulfur annually (many terminals and pipelines will test none and others more than two). Assume cost of testing per batch is approximately $40, based on availability of field test equipment.

11) The following assumptions were made in estimating the burden to users of R&D gasoline of adding the required information to the application submitted to the EPA to obtain an exemption:

- Adding the information on why sulfur compliant gasoline could not be used will require 0.50 hours of clerical time.

- This information is already available as a customary business practice.

12) The following assumptions were made in estimating the burden to gasoline additive manufacturers to do the initial programming for PTDs:

- 1 hour of technical time and 1 hour of clerical time.

13) The following assumptions were made in estimating the burden to producers, certified ethanol denaturant, and blender-grade pentane to do the initial programming for PTDs:

- 1 hour of technical time and 1 hour of clerical time.

*Data reported to EPA under other 40 CFR Part 80 fuel programs (including the Tier 2 gasoline sulfur and RFG programs) was used in formulating these assumptions.

6(b) Estimating Respondent Costs

The estimation of the hourly managerial, technical and clerical employee pay rates for the various regulated parties as well as the accounting assumptions used are discussed in the previous section on respondent burdens. The estimated costs for the various regulated parties for this ICR are contained in Tables 6(b)1 and 6(b)2.

Table 6(b)1: Annual Costs for Gasoline Refiners and Importers,

Denatured Fuel Ethanol and Other Oxygenate Producers, Certified Ethanol Denaturant Producers, and Blender-Grade Pentane Producers

* This estimate is based on an average of 3 refineries per refiner. In reality, larger refiners may own more refineries, while smaller refiners may own only one refinery.

Table 6(b)2: Annual Costs for Gasoline Terminals, Pipelines, Truckers

and Users of R&D Gasoline

6(c) Estimating Agency Burden

Gasoline sulfur reports are handled as part of other 40 CFR Part 80 fuels reporting, including items accounted for in the reformulated gasoline (RFG) and anti-dumping ICR. This estimate is restricted only to the reporting of sulfur values to EPA. The Agency burden consists of 0.10 of a GS-13 technical worker ($161,000 including overhead), or $16,000; and 0.10 of a GS-7 clerical worker ($76,000 including overhead), or $7,600, for a total of $23,700.

6(d) Estimating the Respondent Universe and Total Burden and Costs

Gasoline Refiners and Importers:

Number of respondents (60 refiners/40 importers) 100

Number of responses: 25,766

Annual burden hours, all refiners and importers*: 26,154

Annual cost, all refiners and importers*: $2,166,088

*These burden estimates are for all collection activities performed by all refiners (see Table 6(e).1)

Gasoline Terminal and Pipeline Operators:

Number of respondents (60 pipelines/1200 terminals): 1,260

Number of responses: 15,120

Annual burden hours, all terminal/pipeline operators: 15,120

Annual cost, all terminal operators: $604,800

R&D Applications:

Number of respondents: 1

Number of responses: 1

Annual burden, all R&D gasoline users: 0.50

Annual cost, all R&D gasoline users: $19

Gasoline Additive Manufacturers

Number of respondents 1,175

Number of responses: 1,175

Annual burden hours: 2,350

Annual cost: $156,275

Denatured Fuel Ethanol and Other Oxygenate Producers

Number of respondents 105

Number of responses: 16,065

Annual burden hours: 16,590

Annual cost: $1,235,666

Certified Ethanol Denaturant Producers

Number of respondents 10

Number of responses: 151

Annual burden hours: 1,520

Annual cost: $112,330

Blender-Grade Pentane Producers

Number of respondents 10

Number of responses: 10

Annual burden hours: 10

Annual cost: $553

6(e) Bottom Line Burden Hours and Cost Tables

(i) Respondent Tally

The total annual hourly burden and cost for this ICR is estimated to be around 63 thousand hours and around $4.3 million respectively. The total number of responses for this ICR is estimated to be around 60 thousand.

Table 6(e).1: Annual Burden and Costs for Gasoline Refiners and Importers

and Denatured Fuel Ethanol and Other Oxygenate Producers

Table 6(e)2: Total Annual Burden and Cost for Gasoline Terminals, Pipelines

and Users of R&D Gasoline

(ii) Variations in the Annual Bottom Line

No annual variations in the respondent reporting/recordkeeping burden or cost over the course of this clearance period are expected.

6(f) Burden Statement

Because the universe of respondents to the sulfur program is quite diverse, there is no “typical” respondent. The annual burden is estimated to average between 12 and 500 hours per respondent, depending on the information collection requirements of the particular party. The average number of hours per response is estimated to be approximately one hour.

Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.

To comment on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collection techniques, EPA has established a public docket for this ICR under Docket ID Number EPA-HQ-OAR-2011-0135, which is available for online viewing at www.regulations.gov, or in person viewing at the Air and Radiation Docket and Information Center in the EPA Docket Center (EPA/DC), EPA West, Room 3334, 1301 Constitution Avenue, NW, Washington, D.C. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is (202) 566-1744, and the telephone number for the Air and Radiation Docket and Information Center is (202) 566-1742. An electronic version of the public docket is available at www.regulations.gov. This site can be used to submit or view public comments, access the index listing of the contents of the public docket, and to access those documents in the public docket that are available electronically. When in the system, select “search,” then key in the Docket ID Number identified above. Also, you can send comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, Washington, D.C. 20503, Attention: Desk Officer for EPA. Please include the EPA Docket ID Number EPA-HQ-OAR-2011-0135 and OMB Control Number 2060-0437 in any correspondence.

C. Attachments

Citations regarding the legal authority for the information collection requirements related to the control of gasoline sulfur content under the sulfur program are contained in the attachment. Due to the length and complex technical nature of the regulations under the sulfur program, they are not contained in the attachment. These sulfur regulations are located in subpart H of 40 CFR part 80.

Attachment

Legal Authority Citations

Clean Air Act

42 U.S.C. 7414.

Section 114: Inspection, Monitoring, and Entry

(a) For the purpose:

(i) of developing or assisting in the development of any implementation plan under Section 110 or 111(d), any standard of performance under Section 111, any emission standard under Section 112, [, or any regulation of solid waste combustion under Section 129,] [or any regulation under section 129 (relating to solid waste combustion),]1

(ii) of determining whether any person is in violation of any such standard or any requirement of such a plan, or

(iii) carrying out any provision of this Act (except a provision of title II with respect to a manufacturer of new motor vehicles or new motor vehicle engines):

(1) the Administrator may require any person who owns or operates any emission source, who manufactures emission control equipment or process equipment, who the Administrator believes may have information necessary for the purposes set forth in this subsection, or who is subject to any requirement of this Act (other than a manufacturer subject to the provisions of Section 206(c) or 208 with respect to a provision of title II) on a one-time, periodic or continuous basis to -

(A) establish and maintain such records;

(B) make such reports;

(C) install, use, and maintain such monitoring equipment, and use such audit procedures, or methods;

(D) sample such emissions (in accordance with such procedures or methods, at such locations, at such intervals, during such periods and in such manner as the Administrator shall prescribe);

(E) keep records on control equipment parameters, production variables or other indirect data when direct monitoring of emissions is impractical;

(F) submit compliance certifications in accordance with Section 114(a)(3); and

(G) provide such other information as the Administrator may reasonably require; and

(2 the Administrator or his authorized representative, upon presentation of his credentials -

(A) shall have a right of entry to, upon, or through any premises of such person or in which any records required to be maintained under paragraph (1) of this section are located, and

B) may at reasonable times have access to and copy any records, inspect any monitoring equipment and method required under paragraph (1), and sample any emissions which such person is required to sample under paragraph (1).

45 U.S.C. 7542.

Section 208: Information Collection:

(a) Manufacturers responsibility.

"Every manufacturer shall establish and maintain such records, make such reports, and provide such information as the Administrator may reasonably require to enable him to determine whether such manufacturer has acted or is acting in compliance with this part and the regulations there under and shall, upon request of an officer or employee duly designated by the Administrator, permit such officer or employee at reasonable times to have access to and copy such records."

1 65 FR 6698, February 10, 2000; OMB Control Number: 2060-0437; EPA ICR 1907.05

1 ¹The report forms for the fuels programs may be found on the fuels reporting page of the Office of Transportation and Air Quality (OTAQ) web site, http://www.epa.gov/otaq/fuels/reporting/index.htm.

2 ² We currently have regulatory requirements for conventional and reformulated gasoline adopted under Sections 211(c) and 211(k) of the Act, in addition to the “substantially similar” requirements for fuel additives of Section 211(f). These requirements directly or indirectly control sulfur levels in gasoline. See the RIA for more details.

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