STATEMENT FOR THE RECORD MARGO T. OGE
STATEMENT FOR THE RECORD
MARGO T. OGE
DIRECTOR OF OFFICE OF MOBILE SOURCES
OFFICE OF AIR AND RADIATION
U.S. ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
September 16, 1998
Thank you, Mr. Chairman and Members of the Committee, for the
invitation to provide a statement for the record for today's hearing.
I am pleased to have this opportunity to share with the Committee
the environmental benefits of the reformulated gasoline or RFG
program, and to address issues raised by S. 1576, introduced by
Senator Feinstein (D-CA).
S. 1576 would potentially exempt California gasoline in the federal
RFG areas from the federal RFG requirements, including the 2.0%
oxygen Clean Air Act (CAA) requirement. The bill states that California
fuel requirements would apply in lieu of the federal requirements
under section 211(k) of the CAA "if [state] rules will achieve
equivalent or greater emission reductions than would result from
the application of the requirements" under the federal RFG program
with regard to the aggregate mass of emissions of toxics and ozone-forming
compounds.
An understanding of the history of the federal RFG program is
important in order to put our views on S. 1576 in perspective.
As you know, the Clean Air Act Amendments of 1990 included a number
of requirements to lower the emissions from motor vehicles, including
several fuels programs. The Clean Air Act achieved a delicate
balance of vehicle and fuel emissions control programs only after
extensive deliberations. The RFG requirements also emerged from
the melding of several Congressional goals, including air quality
improvements, enhanced energy security by extending the gasoline
supply through the use of oxygenates, and encouraging the use
of renewable energy sources.
In 1991, EPA established a broad-based advisory committee to
reach a consensus on the many issues involved in developing proposed
rules for the reformulated gasoline program. This committee successfully
reached a historic "Agreement in Principle" or "Reg-Neg" agreement
on August 16, 1991. Representatives of federal and state governments,
various affected industries, and environmental groups signed on
to key aspects of the programs. This agreement has resulted in
a cost-effective, highly successful program. One needs to be very
cautious about initiating changes to the RFG program that could
upset the balance of previous agreements that have led to the
significant emissions reductions we are seeing today. Before any
changes are made to the Clean Air Act, it is critical to assess
the implications and consequences for the RFG and other air quality
control programs.
The federal reformulated gasoline program introduced cleaner
gasoline in January 1995 primarily to help reduce ozone levels.
Unhealthful ozone levels are still of significant concern in this
country, with over 60 areas still in nonattainment of the current
ozone standard, and more expected to exceed the newly established,
8-hour ozone standard. RFG is a cost-effective way to reduce ozone
precursors such as volatile organic compounds (VOCs) and oxides
of nitrogen (NOx), when compared to other air quality measures.
Phase II RFG, beginning in the year 2000, will reduce VOCs at
an estimated average cost of $450 to $600 per ton and NOx at $3,500
to $4,000 per ton in 1997 dollars. The federal RFG program is
required in ten metropolitan areas which have the most serious
ozone pollution levels. Three of these metropolitan areas are
in California. Although not required to participate, areas in
the Northeast, in Kentucky, Texas and Arizona that exceed the
air quality standards for ozone elected to join, or "opt-in" to
the RFG program as a cost-effective measure to help combat their
pollution problems. At this time, approximately 30% of this country's
gasoline consumption is reformulated gasoline.
The RFG program reduces ground level ozone and toxic pollutants
from vehicle tailpipe and evaporative emissions. The RFG program
requires that gasoline contain 2.0 percent minimum oxygen content
by weight. The first phase of the RFG program, from 1995 through
1999, is reducing emissions of ozone-forming volatile organic
compounds and toxics by 15%, and beginning in 1998, NOx by 1.5%.
This is equivalent to taking more than 7 million vehicles off
the road. In the year 2000, the second phase of the RFG program
will achieve even greater benefits: a 27% reduction in VOCs, 22%
reduction in toxics, and 7% reduction in oxides of nitrogen emissions
that also contribute to the formation of urban smog.
We are often asked what "real world" evidence we have that the
program is working. We have analyzed data on the gasoline actually
produced by refiners since the program began in 1995, and found
that the RFG, on average, exceeded the requirements. Most notably,
toxics reductions were about twice that required, with about a
30% reduction versus a 15% requirement.
Ambient monitoring data from the first year of the RFG program
also shows strong signs that RFG is working. Benzene levels in
gasoline, which are controlled by RFG and are considered to be
a strong indicator of motor vehicle emissions impact on air quality,
showed the most dramatic declines with a median reduction of 38%.
RFG areas also showed significant decreases in other vehicle-related
VOC concentrations. EPA will continue to analyze ambient VOC and
toxics data further and evaluate evidence of the environmental
impacts of RFG.
In light of the VOC, NOx, and air toxics reductions provided
by RFG, the Governor of Missouri has recently requested to opt-in
St. Louis to the federal RFG program by June 1, 1999. The Governor
has also indicated that he plans to request that RFG be supplied
to Kansas City in the year 2000.
S. 1576 raises the question of equivalency between California
and federal RFG and that raises complex scientific and /legal
issues. In order to make a determination on the equivalency of
the fuels, EPA would need to assess input from a wide variety
of interested parties through a notice and comment rulemaking
process.
As I mentioned before, there are three federal RFG areas in California.
Under the Clean Air Act, California has unique authority to establish
state requirements that control fuel and fuel additives for the
purpose of motor vehicle emission control. The CAA allows California
to specify an oxygenate or the level of oxygen content (e.g.,
no oxygen) where federal RFG is not required. In the federal RFG
areas (Sacramento, Los Angeles, and San Diego), however, the gasoline
must still contain a minimum of 2.0% oxygen. (Note that this does
not preclude refiners supplying these areas with RFG that meets
the stricter CA standards). The Agency provided California an
exemption from a number of federal Phase I RFG enforcement requirements.
The enforcement exemptions have gone a long way to ensure that
California refiners meeting California RFG requirements are not
faced with overlapping and/or duplicate enforcement requirements.
This was based on a comparison of California's RFG program with
the federal Phase 1 program.
Oxygenates help to reduce emissions of ozone precursors, air
toxics, carbon monoxide, and particulate matter by diluting or
displacing gasoline components such as olefins, aromatics, and
sulfur and by altering distillation properties such as T50 and
T90. Oxygenates also increase octane without the need to invest
in refinery capital improvements, and can extend the gasoline
supply through displacement of some gasoline components.
For many refiners, if oxygenates were not used to produce RFG,
levels of aromatics or olefins may have to be increased to provide
octane. Both aromatics and olefins contribute to NOx and toxics
formation, so refiners would have greater difficulty in meeting
the RFG performance standards. Some level of oxygenate has historically
been used by many refiners for octane purposes. Because the use
of oxygenates by a refiner is often influenced by the volume of
RFG produced, the amount of premium gasoline produced, refinery
capability to produce other high octane blendstocks, and the price
of purchased oxygenates, it would be important to ask individual
refiners how they would meet RFG standards without the use of
oxygenates.
It should be noted that California refiners producing California
RFG for markets outside of federal RFG areas (e.g., San Francisco)
are still using high levels of oxygenates (around 1.5% by weight
or 8.25% by volume MTBE) to meet summer California RFG standards
(i.e., standards that do not include an oxygen requirement). We
have no reason to believe that the use of oxygenates would decline
substantially if the requirement were eliminated. This was recently
confirmed by a Department of Energy (DOE) analysis. As noted in
DOE's statement, "if no oxygenates were required, two-thirds or
more of the MTBE volume now used by east coast refiners in Phase
II RFG would still be utilized." Again, one needs to be cautious
about changing the program's requirements where the benefit of
doing so is not clear.
EPA, like many others, is concerned about drinking water contamination
in California by the oxygenate, methyl tertiary-butyl ether (MTBE),
which is used in California RFG. MTBE has been detected in ground
and surface water in various areas throughout the country which,
in some incidences, are a source of drinking water. For the most
part, detections in ground water and surface water have been quite
low (below 20 parts per billion, the lower end of EPA's December
1997 MTBE drinking water advisory for taste and odor). For instance,
the California Department of Health Services requires public drinking
water systems to monitor their sources of water (e.g., wells,
surface water bodies) for MTBE. As of August 1998, 0.5% of the
groundwater and 2.8% of the surface water sources sampled have
detected MTBE above 5 ppb, the state's proposed secondary standard
for taste and odor. MTBE detections at high concentrations in
groundwater, such as those experienced in Santa Monica, result
primarily from leaking underground fuel storage tanks, and possibly
from distribution facilities.
These leaks are unacceptable regardless of whether or not MTBE
is present in the gasoline. The Agency's underground storage tank
(UST) program is expected to substantially reduce future leaks
of all fuels and its additives, including MTBE from underground
fuel storage tanks. All USTs installed after December 1988 must
meet EPA regulations for preventing leaks and spills. All USTs
that were installed prior to December 1988 must be upgraded, closed,
or replaced to meet these requirements by December 1998. In addition
to regulations for preventing leaks, the EPA regulations have
required leak detection methods to be in place for all USTs since
1993. For the upcoming 1998 deadline, EPA recently issued its
enforcement strategy which reinforced that after December 1998,
it will be illegal to operate UST systems that are not equipped
to protect against corrosion, spills and overfills. If EPA finds
them in violation, the owners/operators will be subject to monetary
penalties ($11,000 per day) for each violation throughout their
period of non-compliance. Thus, EPA, state agencies and the fuels
industry need to continue to work together to take appropriate
measures to prevent fuel leaks from underground tanks and appropriately
remediate those leaks that have already occurred. S. 1576 would
not deal with concerns about fuel leaks from underground storage
tanks, since oxygenates will continue to be used by refiners to
meet emission standards and for octane purposes.
In conclusion, EPA strongly supports the reformulated gasoline
program, given the substantial benefits of this program in reducing
ozone precursors and toxics. We believe that oxygenates provide
a valuable tool to refiners in meeting the emissions reduction
requirements and replacing octane lost in the reformulation process
(e.g., sulfur, olefin and aromatic reductions). Given the complex
and far-reaching issues that S. 1576 raises that have not yet
been addressed, and the potential negative impacts of revisiting
Clean Air Act provisions, EPA cannot support the bill at this
time.
Thank you for the opportunity to discuss this important issue.