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Home > Issues > Fuels > Boutique Fuels |
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Boutique FuelsWhat's New
By November 2005 (per the Energy Policy Act of 2005), EPA was required to publish a list in the Federal Register of motor fuels in all SIPs as of September 1, 2004, by state and PADD for public review and comment. EPA published this draft list (71 FR 32532; 6/6/06) and a final list (71 FR 78192; 12/28/06). [The final list is summarized at the bottom of this page.] The Governors’ Task Force on Boutique Fuels submitted a report to President Bush with findings and recommendations on June 23, 2006. On January 5, 2007, EPA and DOE released a joint report on boutique fuels as required by section 1541(c)(6) of the Energy Policy Act of 2005. See EPA420-R-06-901, Dec. 2006.
NPRA’s members are dedicated to working cooperatively with government at all levels to ensure an adequate supply of transportation fuels. Policymakers’ actions should focus on improving energy policy in order to increase supply and strengthen the nation’s refining infrastructure. NPRA supports a consistent, flexible, fair, and transparent process to reduce uncertainty about motor fuel waiver actions by the Agency. A market that is free to respond to temporary supply/demand imbalances sends the clearest indication to stakeholders which measures are appropriate in each situation. Granting waivers that allow the use of non-compliant fuels should occur only as a last resort, with a high burden of proof placed upon those seeking a waiver. NPRA supports the EPA preemption review process and the expansion of the scope of this analysis in section 1541 of the Energy Policy Act of 2005. Clean Air Act section 211(c)(4)(C) was amended by the 2005 energy bill to make it the joint responsibility of EPA and DOE to review motor fuel control choices by states and require that both agencies consider the regional supply implications of such requests. Before granting a waiver of federal preemption, the Administrator of EPA is required, after consultation with the Secretary of Energy and after notice and comment, to find that the fuel control choice will not cause fuel supply or distribution interruptions or have a significant adverse impact on fuel producibility in the affected area or contiguous areas. NPRA strongly supports this analysis of supply-side impacts. Any attempt to limit boutique fuels must be accompanied by state preemption of new boutique fuel formulations. Otherwise, any investment to rationalize the current number of fuels will be wasted as new boutique fuels rise to replace those that are eliminated. A key principle to follow in developing boutique fuel-related policy recommendations is "first, do no harm." The doctrine of unintended consequences has significantly affected current fuel policy, contrary to the expectation of policymakers. Policymakers must be especially cautious to consider all potential impacts of new policy changes before imposing them on an industry that already faces significant challenges. On May 8, 2006, NPRA wrote Senate Environment and Public Works Committee Chairman James Inhofe (R-OK) and advocated further understanding before legislative changes on boutique fuels are considered. On May 10-11, 2006, the House Energy and Commerce Committee held a hearing on “Gasoline: Supply, Price, and Specifications;” NPRA testified and opposed reductions in the number of boutique fuels. NPRA explained its position to the Governors’ Task Force on Boutique Fuels on May 18, 2006. NPRA testified at a House Energy and Commerce Committee hearing on boutique fuels on June 7, 2006. Background The prime factor increasing the number of fuel blends throughout the nation was the Clean Air Act Amendments of 1990 provision that requires certain areas to use federal reformulated gasoline (RFG). RFG containing a 2% by weight oxygenate was required in the most heavily polluted areas of the country. Historically, the primary driver leading local areas to opt for boutique fuels was emission reduction needed to attain the 1-hour ozone NAAQS. These areas often sought to avoid RFG when considering fuel controls, due to concerns about 1) its cost, and/or 2) the presence of MTBE or ethanol. As states developed their specific State Implementation Plans (SIPS) to address their particular air quality concerns, some (who were not required to use RFG) realized that they could achieve significant reductions in air emissions by using a low-RVP conventional gasoline, while avoiding the perceived problems associated with RFG. These states usually adopted low-RVP conventional gasoline programs only after consultation with refiners, the environmental community, and other stakeholders. The new fuel requirements went into effect only after approval by EPA. As a result, areas adopted boutique fuels only when they offered comparable emissions reductions at a reduced cost to consumers, and many stakeholders and regulators were involved in the process. There are a number of federal and state gasoline specifications. The federal programs are year-round reformulated gasoline (RFG; see 40 CFR Part 80) and summer Phase II RVP (Reid vapor pressure; see 40 CFR 80.27) gasoline. There are also seasonal state regulations, including summer RVP gasoline and winter oxygenated gasoline. In addition, a few states have year-round statewide gasoline programs, such as California RFG and oxygenated gasoline in Hawaii, Minnesota, and Missouri. Furthermore, there are some local requirements, e.g., year-round Arizona Cleaner-burning Gasoline in Phoenix and winter Nevada Cleaner-burning Gasoline in Las Vegas. In addition, there are federal diesel fuel standards (see 40 CFR Part 80). There are state diesel fuel specifications that are applicable in California, Minnesota, Phoenix, and eastern/central Texas. The Energy Policy Act of 2005 (Public Law 109-58) includes a provision to reduce the proliferation of boutique fuels (see section 1541). First, EPA may temporarily waive a motor fuel or fuel additive requirement, and the Agency is required to promulgate regulations to implement waiver procedures by February 2006. EPA has yet to meet this statutory requirement. Second, EPA may not approve a motor fuel in a new SIP if that fuel would increase the total number of approved fuels as of September 1, 2004. The Agency must find, after public review and comment, that a proposed new fuel:
The Agency published a list of approved fuels as of 9/1/04 (71 FR 78192; 12/28/06). EPA cannot approve a state fuel into a SIP unless it is already in an existing SIP within that PADD (as of the date of the Agency’s consideration of the request), with the exception of summer 7.0 psi RVP gasoline. The options are: PADD Options 2 summer 7.0 psi RVP gasoline 3 summer 7.0 psi RVP gasoline 4 summer 7.0 psi RVP gasoline 5 summer 7.0 psi RVP gasoline There are 8 different fuel types approved into SIPs under Clean Air Act section 211(c)(4)(C) as of September 1, 2004: Click here for more information.
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