[Federal Register: October 13, 2005 (Volume 70, Number 197)]
[Proposed Rules]
[Page 59690-59704]
[DOCID:fr13oc05-36]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 69

[OAR-2004-0229; FRL-7982-6]
RIN 2060-AJ72

Control of Air Pollution From Motor Vehicles and Nonroad Diesel
Engines: Alternative Low-Sulfur Diesel Fuel Transition Program for
Alaska

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing an implementation date of June 1, 2010 for
the sulfur, cetane and aromatics requirements for highway, nonroad,
locomotive and marine diesel fuel produced or imported for, distributed
to, or used in the rural areas of Alaska. As of the implementation
date, diesel fuel used in these applications would

have to meet a 15 ppm (maximum) sulfur content standard. This action
would allow full implementation of the programs for highway and nonroad
diesel fuels in Alaska while providing some limited additional leadtime
for development of any necessary changes to the fuel distribution
system in rural Alaska. This additional leadtime is appropriate given
the circumstances of the rural areas, including the expected delay in
time before use of new diesel engines requiring sulfur controlled
diesel fuel. In 2010 highway and nonroad fuel in rural Alaska would be
regulated according to the implementation schedule of fuel property
standards applicable in the rest of the U.S., providing the full
environmental benefits of these programs to rural Alaska as well.
Locomotive and marine diesel fuel used in rural areas of Alaska would
meet the 15ppm standard two years earlier than the rest of the U.S., so
that all NRLM diesel fuel in rural areas of Alaska would meet the 15ppm
standard in 2010. EPA is not proposing changes to or reopening the
diesel fuel rules as they apply to the other areas of Alaska. We have
not received any information that would warrant such action, and the
State has not requested such action. This proposal is consistent with
the State's request and comments on the NRLM rule.

DATES: Comments must be received on or before January 11, 2006.
However, since we do not plan to hold a public hearing on this proposed
rule, any requests for a public hearing must be received on or before
November 14, 2005. Requests for a public hearing must be made to the
person identified in the FOR FURTHER INFORMATION CONTACT section.

ADDRESSES: Submit your comments, identified by Docket ID No. OAR-2004-
0229, by one of the following methods:
    A. Federal eRulemaking Portal: http://www.regulations.gov. Follow

the on-line instructions for submitting comments.
    B. Agency Website: http://www.epa.gov/edocket. EDOCKET, EPA's

electronic public docket and comment system, is EPA's preferred method
for receiving comments. Follow the on-line instructions for submitting
comments.
    C. E-mail<EMAIL_ADDRESS>Attention Docket ID No. OAR-
2004-0229, Fax:<PHONE_NUMBER>.
    D. Mail: Attention Docket ID No. OAR-2004-0229, Air Docket,
Environmental Protection Agency, Mailcode: 6102T, 1200 Pennsylvania
Ave., NW., Washington, DC 20460.
    E. Hand Delivery: EPA Docket Center, (EPA/DC) EPA West, Room B102,
1301 Constitution Ave., NW., Washington, DC., Attention Docket ID No.
OAR-2004-0229. Such deliveries are only accepted during the Docket's
normal hours of operation from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. Special arrangements should be made
for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. OAR-2004-0229.
EPA's policy is that all comments received will be included in the
public docket without change and may be made available online at http://www.epa.gov/edocket
, including any personal information provided,

unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through EDOCKET, regulations.gov, or e-
mail. The EPA EDOCKET and the federal regulations.gov websites are
``anonymous access'' systems, which means EPA will not know your
identity or contact information unless you provide it in the body of
your comment. If you send an e-mail comment directly to EPA without
going through EDOCKET or regulations.gov, your e-mail address will be
automatically captured and included as part of the comment that is
placed in the public docket and made available on the Internet. If you
submit an electronic comment, EPA recommends that you include your name
and other contact information in the body of your comment and with any
disk or CD-ROM you submit. If EPA cannot read your comment due to
technical difficulties and cannot contact you for clarification, EPA
may not be able to consider your comment. Electronic files should avoid
the use of special characters, any form of encryption, and be free of
any defects or viruses. For additional information about EPA's public
docket visit EDOCKET on-line or see the Federal Register of May 31,
2002 (67 FR 38102). For additional instructions on submitting comments,
go to Unit I of the SUPPLEMENTARY INFORMATION section of this document.
    Docket: All documents in the docket are listed in the EDOCKET index
at http://www.epa.gov/edocket. Although listed in the index, some

information is not publicly available, i.e., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically in EDOCKET or in hard
copy at the HQ EPA Docket Center, Air Docket, EPA West, Room B102, 1301
Constitution Ave., NW, Washington, DC. This Docket Facility is open
from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal
holidays. The Docket telephone number is<PHONE_NUMBER>. The 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 Public
Reading Room is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: David Korotney, Assessment and
Standards Division, Office of Transportation and Air Quality,
Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI
48105; telephone number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; e-
mail address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Does This Action Apply to Me?

    You will be regulated by this action if you produce, import,
distribute, or sell diesel fuel for use in the rural areas of Alaska.
The following table gives some examples of entities that may have to
follow the regulations. But because these are only examples, you should
carefully examine the regulations in 40 CFR part 80. If you have
questions, call the person listed in the FOR FURTHER INFORMATION
CONTACT section of this preamble:

------------------------------------------------------------------------
                                                         NAICS     SIC
      Examples of potentially regulated entities         codes    codes
                                                          \a\      \b\
------------------------------------------------------------------------
Petroleum Refiners....................................    32411     2911
Petroleum Bulk Stations, Terminals,...................    42271     5171
Petroleum and Products Wholesalers....................    42272     5172
Diesel Fuel Trucking..................................    48422     4212
                                                          48423     4213
Diesel Service Stations...............................    44711    5541
                                                          44719
------------------------------------------------------------------------
\a\ North American Industry Classification System (NAICS).
\b\ Standard Industrial Classification (SIC) system code.

What Should I Consider as I Prepare My Comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through
EDOCKET, regulations.gov or e-mail. Clearly mark the part or all of the
information that you claim to be CBI. For CBI information in a disk or
CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as
CBI and then identify electronically within the disk or CD ROM the
specific information that is

claimed as CBI. In addition to one complete version of the comment that
includes information claimed as CBI, a copy of the comment that does
not contain the information claimed as CBI must be submitted for
inclusion in the public docket. If you submit the copy that does not
contain CBI on disk or CD ROM, mark the outside of the disk or CD ROM
clearly that it does not contain CBI. Information so marked will not be
disclosed except in accordance with procedures set forth in 40 CFR part
2. If you have any questions about CBI or the procedures for claiming
CBI, please consult the person identified in the FOR FURTHER
INFORMATION CONTACT section.
    2. Tips for Preparing Your Comments. When submitting comments,
remember to:
    a. Identify the rulemaking by docket number and other identifying
information (subject heading, Federal Register date and page number).
    b. Follow directions--The agency may ask you to respond to specific
questions or organize comments by referencing a Code of Federal
Regulations (CFR) part or section number.
    c. Explain why you agree or disagree; suggest alternatives and
substitute language for your requested changes.
    d. Describe any assumptions and provide any technical information
and/or data that you used.
    e. If you estimate potential costs or burdens, explain how you
arrived at your estimate in sufficient detail to allow for it to be
reproduced.
    f. Provide specific examples to illustrate your concerns, and
suggest alternatives.
    g. Explain your views as clearly as possible, avoiding the use of
profanity or personal threats.
    h. Make sure to submit your comments by the comment period deadline
identified.

How Can I Get Copies of This Document and Other Related Information?

    Docket. EPA has established an official public docket for this
action under Docket ID No. OAR-2004-0229. The official public docket
consists of the documents specifically referenced in this action, any
public comments received, and other information related to this action.
Although a part of the official docket, the public docket does not
include Confidential Business Information (CBI) or other information
whose disclosure is restricted by statute. The official public docket
is the collection of materials that is available for public viewing at
the Air Docket in the EPA Docket Center, (EPA/DC) EPA West, Room B102,
1301 Constitution Ave., NW., Washington, DC. 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<PHONE_NUMBER>, and the telephone number for the Air Docket is
(202) 566-1742.
    Electronic Access. You may access this Federal Register document
electronically through the EPA Internet under the ``Federal Register''
listings at http://www.epa.gov/fedrgstr/. An electronic version of the

public docket is available through EPA's electronic public docket and
comment system, EPA Dockets. You may use EPA Dockets at http://www.epa.gov/edocket/
 to submit or view public comments, access the

index listing of the contents of the official public docket, and to
access those documents in the public docket that are available
electronically. Once in the system, select ``search,'' then key in the
appropriate docket identification number.
    Certain types of information will not be placed in the EPA Dockets.
Information claimed as CBI and other information whose disclosure is
restricted by statute, which is not included in the official public
docket, will not be available for public viewing in EPA's electronic
public docket. EPA's policy is that copyrighted material will not be
placed in EPA's electronic public docket but will be available only in
printed, paper form in the official public docket. To the extent
feasible, publicly available docket materials will be made available in
EPA's electronic public docket. When a document is selected from the
index list in EPA Dockets, the system will identify whether the
document is available for viewing in EPA's electronic public docket.
Although not all docket materials may be available electronically, you
may still access any of the publicly available docket materials through
the docket facility identified above.
    For public commenters, it is important to note that EPA's policy is
that public comments, whether submitted electronically or in paper,
will be made available for public viewing in EPA's electronic public
docket as EPA receives them and without change, unless the comment
contains copyrighted material, CBI, or other information whose
disclosure is restricted by statute. When EPA identifies a comment
containing copyrighted material, EPA will provide a reference to that
material in the version of the comment that is placed in EPA's
electronic public docket. The entire printed comment, including the
copyrighted material, will be available in the public docket.
    Public comments submitted on computer disks that are mailed or
delivered to the docket will be transferred to EPA's electronic public
docket. Public comments that are mailed or delivered to the Docket will
be scanned and placed in EPA's electronic public docket. Where
practical, physical objects will be photographed, and the photograph
will be placed in EPA's electronic public docket along with a brief
description written by the docket staff.
    For additional information about EPA's electronic public docket
visit EPA Dockets online or see 67 FR 38102, May 31, 2002.

Outline of This Preamble

I. Background
    A. How Was Alaska Treated in the Highway Diesel Rule?
    B. How Was Alaska Treated in the NRLM Diesel Rule?
    C. Alaska's Highway Submission and Comments to NRLM Proposal
II. What Is EPA Proposing?
    A. Highway Diesel Fuel
    B. Nonroad, Locomotive, and Marine Diesel Fuel
    C. Summary of Proposed Sulfur Standards for Alaska
III. Why Are We Proposing a June 1, 2010 Effective Date for Rural
Areas of Alaska?
    A. Highway Diesel Fuel
    1. Ensure an Adequate Supply (Either Through Production or
Imports) of 15 ppm Sulfur Diesel Fuel To Meet the Demand of Any 2007
or Later Model Year Vehicles
    2. Ensure Sufficient Retail Availability of Low Sulfur Fuel for
New Vehicles in Alaska
    3. Address the Growth of Supply and Availability Over Time as
More New Vehicles Enter the Fleet
    4. Include Measures To Ensure Segregation of the 15 ppm Fuel and
Avoid Contamination and Misfueling
    5. Ensure Enforceability
    B. NRLM Diesel Fuel
IV. What is the Emissions Impact of Today's Proposal?

V. Public Participation
    A. How and to Whom Do I Submit Comments?
    B. Will There Be a Public Hearing?
VI. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Federalism
    F. Consultation and Coordination With Indian Tribal Governments
    G. Protection of Children From Environmental Health & Safety
Risks
    H. Actions that Significantly Affect Energy Supply,
Distribution, or Use
    I. National Technology Transfer and Advancement Act
VII. Statutory Provisions and Legal Authority

I. Background

A. How Was Alaska Treated in the Highway Diesel Rule?

    The nationwide implementation dates (including all of Alaska) for
highway diesel fuel at 40 CFR 80.500 et seq. (66 FR 5002, January 18,
2001) are shown in Table I.A-1.

Table IA-1.--Federal Implementation Dates for Highway Diesel Fuel 15 ppm
                                Standard
------------------------------------------------------------------------
                 Date                           Applicable parties
------------------------------------------------------------------------
June 1, 2006..........................  Refiners and importers.
July 15, 2006.........................  Downstream facilities except
                                         retailers and wholesale-
                                         purchaser consumers.
September 1, 2006.....................  Retailers and wholesale-
                                         purchaser consumers.
------------------------------------------------------------------------

    These implementation dates begin the transition of the nation to
ultra-low sulfur (15 ppm sulfur, maximum) highway diesel fuel from the
current low sulfur (500 ppm sulfur, maximum) diesel fuel.\1\ Until
2010, at least 80 percent of each refiner's production (or imports)
must meet the 15 ppm sulfur standard, with the remaining 20 percent or
less meeting the 500 ppm sulfur standard-that is, the 80/20 Temporary
Compliance Option. Exceptions are made for EPA-approved small refiners,
which may produce all their highway fuel to the 500 ppm sulfur standard
until later years, and refiners and importers that obtain early use
credits, which would allow them to produce or import more than 20
percent of their diesel fuel to the 500 ppm sulfur standard until 2010.
However, because of the sensitivity of the 2007 and later model year
highway engines and emission control systems to fuel with high sulfur
content, those engines may not be fueled with diesel fuel having a
sulfur content of greater than 15 ppm. This requires that all 500 ppm
sulfur highway diesel fuel (i.e., from the 80/20 Temporary Compliance
Option, credit-trading, or by EPA-approved small refiners) be
segregated from the 15 ppm sulfur highway diesel fuel and labeled for
use, and dispensed, only in 2006 and earlier highway vehicles and
engines.
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    \1\ Alaska was granted an exemption from the 500 ppm standard
until June 1, 2006.
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    Since the beginning of the 500 ppm highway diesel fuel program in
1993, we have granted Alaska exemptions from both the 500 ppm highway
diesel fuel sulfur standard and the nonhighway dye provisions of 40 CFR
80.29 because of its unique geographical, meteorological, air quality,
and economic factors.\2\ We granted temporary exemptions for areas of
the State served by the Federal Aid Highway System (the urban areas),
and a permanent exemption for the remaining areas (the rural areas).
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    \2\ Under Section 211(i)(4) of the Clean Air Act, the States of
Alaska and Hawaii may be exempted from the 500 ppm sulfur content
standard (and cetane, automatics and dye requirements) of Section
211(i). Copies of information regarding Alaska's petition for
exemption under Section 211(i)(4), subsequent requests by Alaska,
public comments received, and actions by EPA are available in public
docket A-96-26.
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    On December 12, 1995, Alaska submitted a petition for a permanent
exemption for all areas of the State served by the Federal Aid Highway
System, that is, those areas previously covered only by a temporary
exemption. While considering that petition, we started work on a
nationwide rule to consider more stringent highway diesel fuel
requirements for sulfur content. In our subsequent highway diesel final
rule (66 FR 5002, January 18, 2001) the highway engine emission
standards were applied fully in Alaska, and the permanent exemption for
rural Alaska from the 500 ppm sulfur standard of 40 CFR 80.29
terminates upon the implementation date of the new 15 ppm sulfur
standard in 2006. However, based on factors unique to Alaska, we
provided the State with: (1) an extension of the temporary exemption
from the 500 ppm sulfur standard in the urban areas until the
implementation date of the new 15 ppm sulfur standard for highway
diesel fuel in 2006, (2) an opportunity to request an alternative
implementation plan for the 15 ppm sulfur diesel fuel program, and (3)
a permanent exemption from the diesel fuel dye provisions. In that
rule, our goal was to establish a mechanism whereby modifications could
be made, as appropriate, for transitioning Alaska to the ultra-low
sulfur (15 ppm sulfur maximum) highway diesel fuel program in a manner
that minimizes costs while still ensuring that model year 2007 and
later highway vehicles and engines receive the 15 ppm sulfur diesel
fuel they need.

B. How Was Alaska Treated in the NRLM Diesel Rule?

    The nationwide implementation date for nonroad, locomotive, and
marine (NRLM) diesel fuel at 40 CFR 80.500 et seq. (69 FR 38958, June
29, 2004) is June 1, 2007 for refiners and importers. This
implementation date begins the first step of a two-step program of
transitioning the nation to 15 ppm sulfur NRLM diesel fuel from
uncontrolled non-highway diesel fuel. In this first step beginning in
2007, all NRLM diesel fuel produced or imported must meet the 500 ppm
sulfur standard and applicable cetane or aromatic standard. Facilities
downstream of the refiners and importers must meet the 500ppm standard
on other dates depending on their location and type of facility, as
shown below:

                Table I.B-1.--Federal Implementation Dates for NRLM Diesel Fuel 500 ppm Standard
----------------------------------------------------------------------------------------------------------------
 Implementation date for urban Alaska      Implementation date for all other
      and Northeast/Mid-Atlantic                         areas                         Applicable parties
----------------------------------------------------------------------------------------------------------------
June 1, 2007..........................  June 1, 2007                            Refiners and importers.

August 1, 2007........................  August 1, 2010                          Downstream facilities except
                                                                                retailers and wholesale-
                                                                                purchaser consumers.
October 1, 2007.......................  October 1, 2010                         Retailers and wholesale-
                                                                                purchaser consumers.
December 1, 2007......................  December 1, 2010                        All facilities including farm
                                                                                tanks and construction facility
                                                                                tanks.
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    For most of the U.S. until June 1, 2010, NRLM diesel fuel with
uncontrolled sulfur content (and uncontrolled aromatics content and
cetane index) can be produced by EPA-approved small refiners/importers
and refiners/importers using early use credits. Until 2010 there is no
restriction in the use of this NRLM diesel fuel having uncontrolled
sulfur levels in NRLM engines. However, under the regulations applying
to the nation as a whole, other diesel fuel with uncontrolled sulfur
levels (i.e., all fuel meeting the definition of heating oil) must be
segregated from the NRLM diesel fuel, dyed with a yellow marker and red
dye, and is prohibited from being used in NRLM engines and equipment.
    The NRLM rule requires that heating oil be segregated and marked
with a yellow marker and red dye to distinguish it from small refiner
or credit-using high sulfur NRLM diesel fuel (40 CFR 80.510). However,
the NRLM rule determined that a dye requirement would impose a
significant challenge to Alaska's unique distribution system. That
State's distribution system cannot easily handle another fuel type that
must be segregated, and the same transfer and storage facilities must
accommodate jet fuel that must not be contaminated by dye. Therefore
the rule exempted Alaska from the dye and marker requirements, but in
exchange precluded the use of credits and constrained the flexibility
granted to small refiners.\3\
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    \3\ For the small refiner flexibilities to be used in Alaska a
refiner must first obtain approval from the Administrator for a
compliance plan (40 CFR 80.554(a)(4)).
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    Step two of the nationwide NRLM diesel fuel program implements the
15 ppm sulfur standard for nonroad diesel fuel beginning on June 1,
2010 for refiners and importers. Locomotive and marine diesel fuel
produced or imported continues to be subject to the 500 ppm sulfur
standard until June 1, 2012. The downstream implementation dates for
this second step are shown in Tables I.B-2 and I.B-3.

                  Table I.B-2.--Federal Implementation Dates for NR Diesel Fuel 15 ppm Standard
----------------------------------------------------------------------------------------------------------------
 Implementation date for urban Alaska      Implementation date for all other
      and Northeast/Mid-Atlantic                         areas                         Applicable parties
----------------------------------------------------------------------------------------------------------------
June 1, 2010..........................  June 1, 2010..........................  Refiners and importers.
August 1, 2010........................  August 1, 2014........................  Downstream facilities except
                                                                                retailers and wholesale-
                                                                                purchaser consumers.
October 1, 2010.......................  October 1, 2014.......................  Retailers and wholesale-
                                                                                purchaser consumers.
December 1, 2010......................  December 1, 2014......................  All facilities including farm
                                                                                tanks and construction facility
                                                                                tanks.
----------------------------------------------------------------------------------------------------------------

                  Table I.B-3.--Federal Implementation Dates for LM Diesel Fuel 15 ppm Standard
----------------------------------------------------------------------------------------------------------------
 Implementation date for urban Alaska      Implementation date for all other
      and Northeast/Mid-Atlantic                         areas                         Applicable parties
----------------------------------------------------------------------------------------------------------------
June 1, 2012..........................  June 1, 2012..........................  Refiners and importers.
August 1, 2012........................  n/a...................................  Downstream facilities except
                                                                                retailers and wholesale-
                                                                                purchaser consumers.
October 1, 2012.......................  n/a...................................  Retailers and wholesale-
                                                                                purchaser consumers.
December 1, 2012......................  n/a...................................  All facilities including farm
                                                                                tanks and construction facility
                                                                                tanks.
----------------------------------------------------------------------------------------------------------------

    EPA-approved small refiners/importers and refiners/importers using
early use credits may produce or import nonroad diesel fuel that meets
the 500 ppm sulfur standard until June 1, 2014. However, the early-use
credit provisions do not apply to Alaska. In addition, because of the
sensitivity to fuel sulfur content of the 2011 and later model year
nonroad engines and emission control systems that will be certified to
the Tier 4 emission standards, those engines are prohibited from being
fueled with diesel fuel having a sulfur content greater than 15 ppm.
    Alaska submitted its suggested modification to the Agency for
highway diesel fuel in rural Alaska on June 12, 2003, after publication
of our NRLM proposal but before we had completed development of the
final NRLM rule. This Alaska submission covered only highway diesel
used in rural areas. Urban areas of Alaska were addressed in a previous
submission \4\ for highway fuel and in Alaska's comments on the NRLM
proposed rule, and in both cases the State of Alaska requested that
urban areas adhere to the federal fuel sulfur standards and
implementation schedule. The provisions for NRLM diesel fuel in urban
Alaska were finalized in the NRLM final rule, and they require that
NRLM in urban areas meet the same requirements as the contiguous 48
states.
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    \4\ Letter from Michele Brown, Commissioner, Alaska Department
of Environmental Conservation, to Jeffrey R. Holmstead, Assistant
Administrator of the EPA's Office of Air and Radiation, April 1,
2002.
---------------------------------------------------------------------------

    The NRLM final rule stated that our original proposal to
permanently exempt all NRLM diesel fuel in rural Alaska from the sulfur
content standards was inconsistent with the

action requested by the state. Under normal circumstances this would
have meant that the NRLM final rule would have included imposition of
the sulfur content standards on all NRLM diesel fuel in rural Alaska,
along with all the associated labeling, recordkeeping, and reporting
requirements. However, we deferred this action until now to coordinate
the NRLM and highway sulfur standards. Thus, the NRLM final rule
indicated that we would issue a supplemental proposal (i.e., today's
proposal) to address the comments submitted by the State for NRLM
diesel fuel in the rural areas, as well as the State's suggestion of an
alternative implementation plan for highway diesel fuel in the rural
areas. However, the NRLM final rule did require that 2011 model year
and later nonroad engines in rural areas, which will be manufactured to
operate on 15 ppm sulfur diesel fuel, must be fueled with 15 ppm diesel
fuel (40 CFR 69.51(f)).

C. Alaska's Highway Submission and Comments to NRLM Proposal

    On June 12, 2003, Alaska submitted its suggested modifications to
implementation of the highway diesel fuel sulfur standards in Alaska.
In its plan, the State indicated that the rural areas do not need the
15 ppm sulfur diesel fuel in the early stage of the highway diesel
program. (The rural areas are those areas not served by the Federal Aid
Highway System--which includes the marine highway system--as defined by
the State of Alaska.) The rural areas could use more time to plan the
switch to 15 ppm sulfur diesel fuel, and would be less impacted if we
implemented a one-step transition to 15 ppm sulfur rather than a two-
step transition which would have required a minimum of 80% of each
refinery's highway diesel to meet the 15 ppm standard in 2006, with the
remainder meeting the 500 ppm standard. The State requested that the
rural areas be exempt from the nationwide program from 2006 to 2010,
and join the nationwide program in 2010 when all highway diesel fuel
must meet the 15 ppm standard. Thus, the rural areas would switch from
uncontrolled to 15 ppm sulfur for all highway diesel fuel in 2010 along
with the rest of the nation. However, since all 2007 and later model
year highway diesel vehicles will need 15 ppm sulfur diesel fuel, fuel
meeting this standard would have to be made available in rural
communities that obtain one or more 2007 or later model year highway
vehicle prior to 2010. This approach would provide rural Alaska more
time to transition to the low sulfur fuel program in a manner that
minimizes costs while still ensuring that the 2007 and later model year
highway vehicles receive the low sulfur diesel fuel they need.
    On September 15, 2003, Alaska submitted its comments to the May 23,
2003 NRLM proposal. In those comments, Alaska asked us to bring the
NRLM diesel fuel requirements for Alaska in line with the State's
recommendations for highway diesel fuel, as described above. The State
indicated the importance of avoiding segregation of rural Alaska's fuel
stream. Since the State previously requested June 2010 to be the
deadline for conversion of highway diesel fuel in the rural areas, it
requested June 2010 to also be the deadline for conversion of all NRLM
diesel fuel in the rural areas. This request included an acceleration
of the 15 ppm standard applicable to locomotive and marine diesel fuel
produced in or imported to rural Alaska from the June 2012 date in the
final NRLM rule to June 2010.
    Although it is outside the scope of today's proposal, Alaska also
commented that in the NRLM final rule we should capture marine engines,
locomotive engines, and more engine sizes under the 15 ppm sulfur
standard, and that we should allow the State to continue to use dye-
free diesel fuel. Alaska also requested our financial and technical
assistance to perform a health study of diesel exhaust exposure in
rural Alaska because of concern about exposure to diesel exhaust from
village electric power generators.\5\
---------------------------------------------------------------------------

    \5\ In the June 29, 2004 NRLM final rule, we applied the 15 ppm
sulfur content standard to locomotive and marine diesel fuel, but
not until June 1, 2012, and we exempted Alaska from the dye and
marker requirements.
---------------------------------------------------------------------------

II. What Is EPA Proposing?

A. Highway Diesel Fuel

    We are proposing today to delay the implementation dates for the
requirements of 40 CFR 80.500 et seq. for highway diesel fuel produced
or imported for, distributed to, or used in the rural areas of Alaska.
We are proposing that the rural areas of Alaska would join the rest of
Alaska and the nation in implementing the 15 ppm sulfur content
standard for highway diesel fuel upon the implementation dates of the
nationwide program in 2010.\6\ The proposed implementation dates for
our highway diesel fuel requirements in the rural areas of Alaska are
shown in table II.A-1.
---------------------------------------------------------------------------

    \6\ Canada also requires 15 ppm sulfur highway diesel fuel
beginning June 1, 2006, and in October 2004 proposed that its NRLM
diesel fuel meet a 500 ppm limit beginning June 1, 2007, its nonroad
diesel fuel meet the 15 ppm sulfur limit beginning June 1, 2010, and
that its locomotive and marine diesel fuel meet the 15 ppm sulfur
limit beginning June 1, 2012. If finalized as proposed, the sulfur
requirements for highway and NRLM diesel fuel in Canada would be
harmonized with those of the U.S., and today's proposal would have
rural Alaska catch up to the requirements in both the U.S. and
Canada on June 1, 2010.

 Table II.A-1.--Proposed Implementation Dates for Highway Diesel Fuel 15
                      ppm Standard in Rural Alaska
------------------------------------------------------------------------
            Date                          Applicable parties
------------------------------------------------------------------------
June 1, 2010................  Refiners and importers.
August 1, 2010..............  Downstream facilities except retailers and
                               wholesale-purchaser consumers.
October 1, 2010.............  Retailers and wholesale-purchaser
                               consumers.
December 1, 2010............  All facilities including farm tanks and
                               construction facility tanks.
------------------------------------------------------------------------

    The dates shown in Table II.A-1 are slightly different than the
downstream dates that mark the end of the Temporary Compliance Option
applicable to the nation as a whole. We are proposing the above dates
for highway diesel fuel because they would be more consistent with the
downstream implementation dates associated with NRLM, as described in
Section II.B below.
    Prior to the dates shown in Table II.A-1, rural areas of Alaska
would continue to be exempt from the sulfur standards. However, because
of the sensitivity of the 2007 and later model year highway engines and
emission control systems to fuel sulfur content, we would still require
that diesel fuel used in those vehicles and engines meet the 15 ppm
sulfur content standard. This is the same refueling requirement that
applies in the 2006-2010 timeframe

for urban areas of Alaska and in all areas of the rest of the nation.
    To fully implement this transition program for rural Alaska, we are
proposing to extend the current exemption from the 500 ppm sulfur
standard of 40 CFR 80.29 until the proposed implementation dates in
2010. In the absence of this proposed extension, highway diesel fuel in
the rural areas of Alaska would be required to meet the 500 ppm sulfur
standard of 40 CFR 80.29 beginning in 2006, when the current exemption
expires, regardless of the proposed exclusion under 40 CFR 80.500 et
al. Under today's proposal, highway diesel fuel in rural Alaska could
remain at uncontrolled sulfur levels until the proposed implementation
dates in 2010.
    We are not proposing changes to the implementation schedule of the
highway diesel fuel requirements as they apply to the urban areas of
Alaska, and are not reopening the provisions of the highway
requirements previously adopted for urban areas. We have not received
any information that would warrant such reopening, and the State did
not request such a change and indicated the urban areas should be
subject to the national implementation schedule for highway diesel
fuel. We agree with the State's reasoning that urban areas of Alaska
may not only have a large number of 2007+ model year highway vehicles
in the 2006-2010 timeframe, but also that urban areas have the means
for distributing, storing, and segregating highway diesel fuel meeting
with 15 ppm sulfur standard.

B. Nonroad, Locomotive and Marine Diesel Fuel

    In the nonroad, locomotive and marine (NRLM) diesel final rule, we
covered urban Alaska along with the rest of the nation, but held off on
finalizing any provisions for rural Alaska so they could be aligned
with the provisions for the highway diesel program in rural Alaska. We
are proposing today that NRLM diesel fuel produced or imported for,
distributed to, or used in the rural areas of Alaska be subject to the
requirements of 40 CFR 80.500 et seq., but not until 2010. Thus, during
the first step of the nationwide program from June 1, 2007 until June
1, 2010, NRLM diesel fuel in rural Alaska could remain at uncontrolled
sulfur levels. Beginning June 1, 2010, nonroad diesel fuel in rural
Alaska would join the rest of Alaska and the nation in implementing the
nonroad diesel fuel requirements of 40 CFR 80.500 et seq. However, due
to the unique circumstances in rural Alaska which limit the number of
grades of diesel fuel that can be stored and distributed, we propose
that the 15 ppm standard applicable to locomotive and marine fuel (LM)
be moved forward to 2010 to be consistent with the implementation
schedule for nonroad (NR) diesel fuel. In this way, there will only be
a single grade of NRLM diesel fuel in rural areas in 2010 and 2011
instead of the two separate grades (i.e. 15 ppm and 500 ppm) that will
exist elsewhere in the U.S. The proposed initial implementation dates
for NRLM diesel fuel sulfur standards are shown in Table II.B-1. We
request comment on the delay of the NR requirements until 2010, and
also the acceleration of the LM 15 ppm sulfur standard to 2010 instead
of 2012.

Table II.B-1.--Proposed Implementation Dates for NRLM Diesel Fuel 15 ppm
                        Standard in Rural Alaska
------------------------------------------------------------------------
            Date                          Applicable parties
------------------------------------------------------------------------
June 1, 2010................  Refiners and importers.
August 1, 2010..............  Downstream facilities except retailers and
                               wholesale- purchaser consumers.
October 1, 2010.............  Retailers and wholesale-purchaser
                               consumers.
December 1, 2010............  All facilities including farm tanks and
                               construction facility tanks.
------------------------------------------------------------------------

    Since the urban areas of Alaska would follow the nationwide
schedule for sulfur standards, some LM fuel meeting only the 500 ppm
standard would be available in these areas in the 2010-2012 timeframe
when nonroad engines requiring 15 ppm fuel will be available. Due to
the potential for misfueling, 2011+ nonroad engines are prohibited from
using LM fuel meeting only the 500 ppm sulfur standard. Also, heating
oil will remain uncontrolled for sulfur content in all areas of Alaska,
and would not be permitted to be used in any 2007 or later model year
highway vehicles or engines, or in any 2011 model year nonroad engines
or equipment. Finally, in order to coordinate with engine and fuel
requirements being proposed for stationary internal combustion engines,
2011+ stationary engines will also be prohibited from using fuel above
the 15 ppm sulfur standard. All diesel fuel used in engines covered by
the stationary internal combustion engine standards will also be
subject to the requirements of 40 CFR 80.500 et seq. following the
implementation schedule applicable to NRLM fuel.
    We are not proposing changes to the implementation schedule of the
NRLM diesel fuel requirements as they apply to the urban areas of
Alaska, and are not reopening the provisions of the NRLM requirements
previously adopted for urban areas. We have not received any
information that would warrant such reopening, and the State did not
request such a change and indicated the urban areas should be subject
to the national diesel fuel implementation schedule. We agree with the
State that urban areas have the means for distributing, storing, and
segregating NRLM diesel fuel meeting the 500 ppm standard in 2006 and
the 15 ppm standard in 2010.

C. Summary of Proposed Sulfur Standards for Alaska

    Table II.C-1 shows all of the existing federal and proposed Alaskan
sulfur standards for highway and NRLM diesel fuel. Note that Alaska
must still ensure that 2007 and later highway engines and 2011 and
later nonroad engines are only fueled with fuel meeting the 15 ppm
standard.

   Table II.C-1.--Summary of Existing Federal and Proposed Alaskan Sulfur Standards for Diesel Production and
                                           Imports (Parts per Million)
----------------------------------------------------------------------------------------------------------------
               Area                     Fuel     Before 2006      2006      2007-2009    2010-2011      2012+
----------------------------------------------------------------------------------------------------------------
Federal...........................  HW.........          500   15[Dagger]   15[Dagger]           15           15
Urban Alaska......................  HW.........         none   15[Dagger]   15[Dagger]           15           15

Rural Alaska......................  HW.........         none         none         none   15[dagger]           15
-----------------------------------
Federal...........................  NR.........         none         none  500[dagger]   15[dagger]           15
Urban Alaska......................  NR.........         none         none  500[dagger]   15[dagger]           15
Rural Alaska......................  NR.........         none         none         none   15[dagger]           15
-----------------------------------
Federal...........................  LM.........         none         none  500[dagger]          500   15[dagger]
Urban Alaska......................  LM.........         none         none  500[dagger]          500   15[dagger]
Rural Alaska......................  LM.........         none         none         none   15[dagger]          15
----------------------------------------------------------------------------------------------------------------
[dagger] Refinery gate standard begins on June 1 of the first applicable year
[Dagger] Temporary Compliance Option in effect: Up to 20% of a refinery's production may exceed the 15 ppm
  standard so long as it meets the 500ppm standard, is segregated from 15ppm, and is not used in MY2007+
  engines.

III. Why Are We Proposing a June 1, 2010 Effective Date for Rural Areas
of Alaska?

    Rural Alaska represents a rather unique situation. The majority of
distillate fuel used in rural Alaska is for stationary sources such as
power generation and home heating. The State estimates that highway
vehicles consume only about one percent of the distillate fuel in the
rural areas. ``Heating oil'' consumes approximately 95 percent (about
50 percent for heating and 45 percent for electricity generation) and
marine engines consume the remaining four percent. There is no
significant consumption of other nonroad or locomotive diesel fuel in
rural Alaska. Thus, in rural Alaska, only a very small proportion of
the distillate fuel used is currently regulated for sulfur content (and
aromatics content and/or cetane index).\7\ A single grade of fuel is
generally distributed to rural Alaska. In order to ensure the fuel can
be used in the arctic conditions, the fuel is usually Jet A (which has
a pour point of -50 degrees) that has been downgraded. If the
nationwide requirements were followed, either multiple grades of arctic
grade fuel would need to be transported and stored, or a single grade
of fuel meeting the 15 ppm standard would need to be used. For multiple
fuel grades, the limited transportation and storage capabilities in
rural Alaska would force communities to build additional infrastructure
to handle the additional grades. For a single grade meeting the 15 ppm
standard, these small communities would be forced to pay a premium for
fuel that is only required for a very small number of engines in the
2006-2010 timeframe. Both approaches represent significant economic
hardship for the many rural communities consisting primarily of
subsistence economies.
---------------------------------------------------------------------------

    \7\ Personal communication from Ron King, Alaska Department of
Environmental Conservation. July 2, 2002.
---------------------------------------------------------------------------

    Our goal is to allow Alaska to transition to the low sulfur fuel
programs in a manner that minimizes costs while still ensuring that the
small number of model year 2007 and later highway vehicles and engines,
and the small number of model year 2011 and later nonroad engines and
equipment certified to the Tier 4 nonroad standards beginning with the
2011 model year, receive the 15 ppm sulfur diesel fuel they need. By
coordinating the transition of both highway and NRLM fuels to 15 ppm in
2010, rural communities can make individual decisions about retaining
only one grade of diesel fuel (e.g., ultra low) or build additional
storage tanks to handle two grades of fuel that retains space heating
and power generation production with high sulfur diesel fuel. In
addition, requiring rural areas to provide 15 ppm diesel fuel for all
NRLM applications beginning in 2010, rather than exempting them
permanently, \8\ helps those rural areas to avoid the temptation for
misfueling that may arise as the number of 2011+ engines increases and
rural communities are faced with the choice of either building
additional tankage or storing only 15 ppm fuel.
---------------------------------------------------------------------------

    \8\ The permanent exemption under the existing regulations would
still require all 2011+ nonroad engines to be fueled with 15 ppm
fuel.
---------------------------------------------------------------------------

A. Highway Diesel Fuel

    Under the highway diesel rule, at least 80 percent of a refinery's
highway diesel fuel production (except for that produced by small
refiners approved by EPA under 40 CFR 80.550-553), must meet the ultra-
low sulfur content standard (15 ppm sulfur, maximum) by 2006 (see Table
I.A-1). The remaining highway diesel fuel must meet the low sulfur
content standard (500 ppm sulfur, maximum) and may not be used in 2007
and later model year highway diesel vehicles. These nationwide
standards and deadlines apply to Alaska, including the rural areas.
Since the current fuel supply in rural Alaska is primarily high sulfur,
these nationwide requirements for highway fuel would cause the highway
fuel supply in rural Alaska to switch to the 15 ppm sulfur diesel fuel,
and possibly some to the 500 ppm sulfur diesel fuel, in 2006.
    As previously discussed, Alaska has been exempt from the sulfur and
dye provisions of 40 CFR 80.29 since the beginning of the 500 ppm
highway diesel fuel program in 1993 because of its unique geographical,
meteorological, air quality, and economic factors. The rural areas have
been permanently exempt, and the urban areas have been temporarily
exempt. When we finalized the 15 ppm sulfur content standard for
highway diesel fuel, we recognized the factors unique to Alaska and
provided the State with: (1) An extension of the temporary exemption
for the urban areas from the 500 ppm sulfur standard until the
implementation date of the new 15 ppm sulfur standard for highway
diesel fuel in 2006, (2) an opportunity to request an alternative
implementation plan for the 15 ppm sulfur diesel fuel program, and (3)
a permanent exemption from the diesel fuel dye provisions. As stated in
that rule and in today's proposal, our goal is to allow Alaska to
transition to the 15 ppm sulfur standard for highway diesel fuel in a
manner that minimizes costs while still ensuring that model year 2007
and later highway vehicles and engines receive the 15 ppm sulfur diesel
fuel they need. In its subsequent request for an alternative
implementation plan for the rural areas, the State indicated that the
rural areas will have few if any model year 2007 and later highway
vehicles in the early stage of the highway diesel program, and thus
will need little if any 15 ppm sulfur diesel fuel in this timeframe.
The State also indicated that rural areas could use

more time to plan the switch to 15 ppm sulfur diesel fuel, and would be
less impacted if we implemented a one-step transition to 15 ppm sulfur
rather than a two-step transition.
    There are about 600 highway diesel vehicles in the rural areas of
Alaska, and their average age is about 18 years. Many replacement
vehicles are typically pre-owned, and only about five to 15 new diesel
vehicles are brought into the rural areas each year.\9\ Thus, most of
the approximately 250 rural area villages may not obtain their first
2007 or later model year diesel highway vehicle for some time.
---------------------------------------------------------------------------

    \9\ Diesel vehicle registration data (12,000 pound and greater,
unladed weight) as of October 1998 provided by the State of Alaska.
---------------------------------------------------------------------------

    According to the State, the fuel storage and barge infrastructure
in rural Alaska is currently designed for one grade of diesel fuel. Jet
fuel is distributed, downgraded (and sometimes mixed with 1
diesel), sold, and used as 1 diesel because it meets arctic
specifications. This fuel is primarily high sulfur. The efficiency and
cost effectiveness of this system discourages the introduction of a
small volume of a specialty fuel, such as low or ultra-low sulfur
highway diesel fuel. However, the rural hub communities with jet
service still have to import jet fuel untainted by dye for aviation
purposes. The fuel storage tanks in the rural communities are owned and
maintained by the communities, thus, any requirement for new tankage or
additional tank maintenance will fall directly on the rural
communities, which have a subsistence economy.
    We agree with the State that a 2010 implementation date in rural
Alaska is justified. We expect only a very small demand for the 15 ppm
sulfur fuel in rural Alaska between 2006 and 2010 because of the very
small number of 2007 and later highway diesel vehicles expected to
enter the rural Alaska market during those years. Requiring the rural
areas to comply with the nationwide requirements for 15 ppm fuel \10\
during the first step of the highway program (2006-2010) would cause
significant burden on rural Alaska's distribution system and
communities without corresponding environmental benefits. We also agree
that 2010 is an appropriate time to implement a sulfur content
requirement for highway diesel fuel in the rural areas. The number of
2007 and later highway vehicles, and thus the benefits of the 15 ppm
sulfur diesel fuel will be increasing. Extending the lead time for
sulfur-controlled diesel fuel by an additional four years (from 2006 to
2010) should be adequate for the distributors and rural communities to
make decisions on the most economical way to transition to sulfur-
controlled highway diesel fuel, and to make any necessary capital
improvements. Finally, 2010 marks the points at which both the
Temporary Compliance Provision for highway diesel fuel ends and the
requirement for 15ppm nonroad diesel fuel begins. Distribution of
diesel fuel to meet demand will thus be made more efficient if the same
sulfur standards apply everywhere. As a result 2010 represents an ideal
year in which to transition rural Alaska to 15 ppm fuel in a single
step.
---------------------------------------------------------------------------

    \10\ The first step of the nationwide highway program would
require only 80% of each refinery's production to meet the 15 ppm
standard; the rest must meet a 500 ppm standard.
---------------------------------------------------------------------------

    We are not proposing to require 500 ppm sulfur highway diesel fuel
between June 1, 2006 and June 1, 2010 as a transition to 15 ppm sulfur
highway diesel fuel. Such an interim step would create the same burden
to Alaska's distribution system and rural communities as requiring 15
ppm sulfur highway diesel fuel on June 1, 2006. As discussed in more
detail below, the primary burden of requiring low sulfur highway diesel
fuel in rural Alaska is not the source of the low-sulfur diesel fuel,
or whether it meets the 500 or 15 ppm sulfur standard, but the
distribution and storage tank constraints associated with an additional
fuel type and the associated economic burden of increased fuel costs
imposed on communities having subsistence economies. If we imposed a
500 ppm sulfur content standard on June 1, 2006 as a transition to 15
ppm sulfur highway diesel fuel, rural Alaska would not get the relief
intended by today's proposal.
    As discussed in the January 18, 2001 Federal Register notice, any
revisions to the final rule for highway diesel fuel in Alaska would, at
a minimum, have to: (1) Ensure an adequate supply (either through
production or imports) of 15 ppm fuel to meet the demand of any 2007 or
later model year vehicles, (2) ensure sufficient retail availability of
low sulfur fuel for new vehicles in Alaska, (3) address the growth of
supply and availability over time as more new vehicles enter the fleet,
(4) include measures to ensure segregation of the 15 ppm fuel and avoid
contamination and misfueling, and (5) ensure enforceability. We believe
that the provisions proposed in this notice meet these criteria, as
discussed below.
1. Ensure an Adequate Supply (Either Through Production or Imports) of
15 ppm Sulfur Diesel Fuel To Meet the Demand of Any 2007 or Later Model
Year Vehicles
    Alaska has nearly 9,000 highway diesel vehicles. The fuel provided
to those vehicles in the areas served by the Federal Aid Highway
System--approximately 8,400 vehicles--must meet the requirements of the
highway rule, regardless of today's proposal. At least 80 percent of
that fuel produced or imported, except that which is produced or
imported by a small refiner having EPA approval under 40 CFR 80.550-
553, must meet the 15 ppm sulfur standard beginning June 1, 2006. The
remainder of that fuel must meet the 500 ppm sulfur standard.
    Consumption of highway diesel fuel in the rural areas is about
seven percent of highway diesel fuel consumption in Alaska (assuming
the same average vehicle consumption throughout the state). Consumption
of highway diesel fuel by the five to 15 new vehicles per year from
2007 through 2010 (for a total of 20 to 60 model year 2007 and later
vehicles by the end of 2010) will be much smaller--less than one
percent of the highway diesel fuel consumption in Alaska. Thus,
production or imports of 15 ppm sulfur diesel fuel for the model year
2007 and later highway vehicles in the rural areas until June 1, 2010
under today's proposal should not be a challenge, and is less than what
would be required under the current regulations.
    The significant challenge in the rural areas is the distribution
and storage infrastructure, which is currently designed to handle only
one type of distillate fuel. The highway diesel rule would require
changes to the distribution and storage infrastructure to handle the
additional fuel type, or a shift to 15 ppm sulfur diesel fuel for all
purposes, to occur by July 15, 2006. However, under today's proposal,
changes to the distribution and storage infrastructure, or a shift to
15 ppm sulfur diesel fuel for all purposes, would not be required to
occur in the rural areas until October 1, 2010. Thus, this proposal
would grant the rural area fuel distributors and villages four
additional years to make the necessary changes, but they would still
have to supply the required 15 ppm sulfur fuel to all 2007 and later
model year highway vehicles and engines.
    Supplying 15 ppm sulfur diesel fuel for 2007 and later model year
diesel vehicles until October 1, 2010 can be accomplished several ways.
A village not having any 2007 or later model year

diesel vehicles or engines would not have a need for the new fuel and/
or infrastructure changes until October 1, 2010. When a village obtains
one or more 2007 or later model year highway vehicles or engines, 15
ppm sulfur fuel could be shipped in 55 gallon drums, or the fuel
infrastructure can be changed to handle a second diesel fuel type, or
the village could shift to 15 ppm sulfur fuel for all purposes.
    The first option--using 55 gallon drums--would likely have
additional transportation costs for shipping the new fuel for the 2007
and later model year diesel vehicles, but the volume would be very low
(only 20 to 60 of those vehicles by the end of 2010 distributed among
the approximate 250 villages in rural Alaska). Thus, the overall
incremental cost of diesel fuel in rural Alaska would be negligible on
average.
    The second option (changing the fuel infrastructure to handle the
additional fuel type) probably has the most cost impact because the
distributors would need to split their barge deliveries into multiple
fuel types, and the villages would need to have multiple storage,
handling, and delivery systems. All of these distribution modifications
will cost money. The need to have multiple fuel types will likely
impact the consumer by increasing the cost for all fuel, not just the
15 ppm diesel.
    The third option (switching all diesel uses to 15 ppm sulfur) would
avoid any incremental transportation, storage and delivery systems
costs, but may incur the higher cost of the 15 ppm sulfur fuel for all
purposes in the villages. This probable higher fuel cost would be
imposed on heating and electricity generation, which accounts for all
but about five percent of the distillate consumption in the villages.
    Under today's proposal, it is possible that all of the above
options, or a combination of these options, might be found prior to
December 1, 2010 among the villages that need the fuel. In any case, we
believe an adequate supply of 15 ppm sulfur diesel fuel for all 2007
and later model year vehicles and engines in the rural areas should
present no significant challenge in this time period.
2. Ensure Sufficient Retail Availability of Low Sulfur Fuel for New
Vehicles in Alaska
    Sufficient retail availability \11\ is not an issue if adequate
supply is provided to rural Alaska. Fuel deliveries to rural Alaska are
made to village tank farms (typically one tank farm per village). Some
villages have no separate consumer tanks and pumps. In such cases the
villagers withdraw the fuel directly from the tank farm. In villages
having one or more optional refueling locations, those pumps are filled
directly from the village tank farm. Presumably, any fuel deliveries in
55 gallon drums would be delivered either to the village tank farm or
directly to the vehicle owners.
---------------------------------------------------------------------------

    \11\ For the purpose of this discussion concerning rural Alaska,
we assume that retail availability means availability to the end
user (e.g. diesel vehicle or engine owner/operator).
---------------------------------------------------------------------------

3. Address the Growth of Supply and Availability Over Time as More New
Vehicles Enter the Fleet
    Under today's proposal, all diesel fuel for 2007 and later model
year highway diesel vehicles and engines in the rural areas must meet
the 15 ppm sulfur standard, as it is required nationwide. As previously
discussed, the demand from 2007 and later model year diesel vehicles in
the rural areas is expected to be very low--between 20 and 60 vehicles
from late 2006 to December 1, 2010, the proposed implementation date by
which all highway diesel fuel in the rural area retail facilities would
have to meet the 15 ppm sulfur content standard. Whether the small
volume of fuel that would be needed for these vehicles prior to
December 1, 2010 is distributed and stored in 55 gallon drums, in
segregated tanks, or in village tanks from which diesel fuel for all
purposes is withdrawn, incremental increases to that small volume for a
few additional new vehicles should present no significant challenge.
4. Include Measures To Ensure Segregation of the 15 ppm Fuel and Avoid
Contamination and Misfueling
    All segregation and contamination avoidance measures that apply
nationwide to highway diesel fuel, except for the dye requirements,
would be applicable under today's proposal to any diesel fuel used in
the rural areas between 2006 and December 1, 2010 in 2007 and later
model year highway vehicles and engines. We believe that Alaska can
meet these requirements and no additional measures beyond these will be
needed. Beyond 2010, all diesel fuel meeting the 15 ppm standard must
be segregated from all other diesel fuel.
5. Ensure Enforceability
    All quality assurance measures (including testing and sampling) and
enforcement provisions that apply nationwide to highway diesel fuel,
except for the dye requirements, would be applicable under today's
proposal to any diesel fuel used in the rural areas between 2006 and
December 1, 2010 in 2007 and later model year highway vehicles and
engines. We do not believe that any additional measures beyond these
will be needed.

B. NRLM Diesel Fuel

    As discussed above, today's proposal would require 15 ppm sulfur
highway diesel fuel in retail facilities in the rural areas by December
1, 2010. In its comments on the NRLM proposal, the State also asked
that we apply the nationwide NRLM fuel requirements to the rural areas
beginning in 2010 (except for the dye and marker requirements). This
approach allows for the coordination of the highway and NRLM diesel
fuel requirements in the rural areas. Given the significant
distribution limitations in rural areas, this is a critical need.
    With one exception, today's proposal would apply the nationwide
NRLM standards and implementation deadlines to diesel fuel produced or
imported for, distributed to, or used in rural Alaska beginning June 1,
2010. The one exception is that locomotive and marine diesel fuel would
be required to meet the 15 ppm sulfur standard in 2010 instead of 2012.
    We believe that imposing the 15 ppm standard on all NRLM diesel
fuel in rural Alaska, rather than allowing the current exemption to
continue indefinitely, is both warranted and feasible. First, all NRLM
fuel in urban areas, and all highway diesel fuel, will meet the 15 ppm
standard by 2010. Given the limited ability of the distribution system
for handling multiple grades, much if not all of the NRLM diesel fuel
that would end up in the rural areas may meet the 15 ppm standard even
under the existing regulations. Second, because 2011+ nonroad engines
will represent an increasing fraction of the nonroad fleet beginning in
2010, under the existing indefinite exemption rural communities will be
faced with the decision about when their NRLM fuel should be switched
entirely to 15 ppm. There may be a temptation to misfuel 2011+ engines
in order to avoid having to make this switch. If misfueling occurs, the
environmental benefits of the 2011+ nonroad engines may be lost.
Finally, there are logistical and economic benefits for coordinating
the implementation of highway and NRLM 15 ppm sulfur standards in urban
and rural areas of Alaska and with the rest of the nation. We believe
that these benefits exceed the costs in rural Alaska.
    The NRLM final rule exempts all areas in Alaska from the red dye
and yellow marker requirements, and the

related segregation requirements that would otherwise apply for fuels
meeting the same sulfur, aromatics and/or cetane standards. Thus, in
rural Alaska prior to June 1, 2010, uncontrolled highway and non-
highway diesel fuels could continue to be commingled. Beginning June 1,
2010, the highway and NRLM diesel fuels could continue to be allowed to
be commingled if they both met the 15 ppm sulfur standard and
applicable aromatics and/or cetane standards, thus eliminating the need
for segregation. The market would determine on a case-by-case basis
whether to supply segregated or commingled distillate fuel for highway,
NR, LM, and heating oil applications.

IV. What Is the Emissions Impact of Today's Proposal?

    The flexibility offered by today's proposal would not increase
diesel emissions over current levels, but would likely result in a
delay of some sulfate emission reduction benefits in the rural areas of
Alaska until low sulfur diesel fuel becomes available to consumers in
those areas starting in 2010. The sulfate emissions of pre-2007 model
year highway vehicles and engines and of all marine engines in rural
Alaska would remain at current levels for as long as high sulfur diesel
fuel is used, but not later than December 1, 2010.
    The State of Alaska previously indicated that there are
approximately 600 diesel highway vehicles distributed throughout the
approximate 250 villages and communities. This averages to less than
three diesel vehicles per village, although the actual numbers may vary
considerably between the smallest and largest villages. We believe that
the sulfate emission reductions from the small number of pre-2007 model
year diesel highway vehicles that would be delayed until December 1,
2010 by today's proposal would be very small. The villages would
receive the full emission reduction benefits from the 2007 and later
model year diesel highway vehicles, because they would be fueled with
15 ppm sulfur diesel fuel, but their numbers will be very small.
    We do not know the number of NRLM equipment and engines in rural
Alaska. However, we do know that the consumption of distillate fuel in
the rural areas by marine engines is about four percent, and is
negligible for other nonroad and locomotive engines (if any). Thus, the
sulfate emission benefits from NRLM sources are almost entirely from
marine engines and would be delayed as long as high sulfur diesel fuel
is used, but no later than December 1, 2010. At that time, given the
distribution limitations in rural Alaska, ULSD may also be used much
more broadly in locomotive, marine, heating, and power generation
services. If this were the case, there would be significantly greater
sulfate PM benefits than strictly required.
    As in previous actions to grant Alaska exemptions from the current
500 ppm sulfur standard, we would not base any vehicle or engine recall
on emissions exceedences caused by the use of high sulfur fuel (greater
than 500 ppm sulfur for pre-2007 model year vehicles and engines;
greater than 15 ppm sulfur for 2007 and later vehicles and engines) in
rural Alaska during the period prior to the proposed implementation
dates of this notice. Our in-use testing goals are to establish whether
representative engines, when properly maintained and used, will meet
emission standards for their useful lives. These goals are consistent
with the requirements for recall outlined in Section 207(c)(1) of the
CAA. Further, manufacturers may have a reasonable basis for denying
emission related warranties where damage or failures are caused by the
use of high sulfur fuel in rural Alaska.
    The Engine Manufacturers Association commented in previous actions
to grant Alaska sulfur exemptions that the level of protection provided
to engine manufacturers falls short of what they believe is reasonable
and necessary. It asserted that the use of high sulfur diesel fuel by
an engine should raise a ``rebuttable presumption'' that the fuel has
caused the engine failure, and that EPA should have the burden of
rebutting that presumption. It also asserted that the emissions
warranty is a regulatory requirement under Section 207, that only EPA
has the authority to exclude claims based on the use of high sulfur
diesel fuel.
    We understand and concur with the manufacturers' concerns about in-
use testing of engines operated in an area exempt from fuel sulfur
requirements, or in the case of today's proposal, engines operated in
an area with an implementation date later than that of the rest of the
country. Consequently, we affirm that, for recall purposes, we would
not seek to conduct or cause the in-use testing of engines we know have
been exposed to high sulfur fuels in rural Alaska. We would likely
screen any engines used in our testing program to see if they have been
operated in rural Alaska. We believe we can readily obtain sufficient
samples of engines without testing engines operated in rural Alaska. In
reviewing the warranty concerns of the Engine Manufacturers Association
associated with previous actions to grant sulfur exemptions, we have
determined that our position regarding warranties, as previously stated
and described above, is consistent with section 207(a) and (b) of the
CAA and does not require any new or amended regulatory language to
implement.

V. Public Participation

    We request comment on all aspects of this proposal. This section
describes how you can participate in this process.

A. How and to Whom Do I Submit Comments?

    We are opening a formal comment period by publishing this document.
We will accept comments for the period indicated under DATES above. If
you have an interest in the program described in this document, we
encourage you to comment on any aspect of this rulemaking. We request
comment on various topics throughout this proposal. Your comments will
be most useful if you include appropriate and detailed supporting
rationale, data, and analysis. If you disagree with parts of the
proposed program, we encourage you to suggest and analyze alternate
approaches to meeting the air quality goals described in this proposal.
You should send all comments, except those containing proprietary
information, to our Air Docket (see ADDRESSES) before the end of the
comment period.
    You may submit comments electronically, by mail, or through hand
delivery/courier. To ensure proper receipt by EPA, identify the
appropriate docket identification number in the subject line on the
first page of your comment. Please ensure that your comments are
submitted within the specified comment period. Comments received after
the close of the comment period will be marked ``late.'' EPA is not
required to consider these late comments. Please follow the
instructions in Section I.B. Do not use EPA Dockets or e-mail to submit
CBI or information protected by statute.

B. Will There Be a Public Hearing?

    We do not plan to hold a public hearing on this proposed rule. If
you would like to request a public hearing, you must make that request
to the person identified in the FOR FURTHER INFORMATION CONTACT section
no later than 30 days after publication. If a request for public
hearing is made by this date, we will publish the date and location in
a separate Federal Register notice.

VI. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866, (58 FR 51735 (October 4, 1993)) the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to OMB review and the requirements of the
Executive Order. The Order defines ``significant regulatory action'' as
one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
    (2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
    (4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.''
    It has been determined that this rule does not meet any of the
criteria above, and thus is not a ``significant regulatory action''
under the terms of Executive Order 12866 and is therefore not subject
to OMB review.

B. Paperwork Reduction Act

    The Paperwork Reduction Act stipulates that every federal agency
must obtain approval from the Office of Management and Budget (OMB)
before collecting the same or similar information from 10 or more
members of the public. If the Environmental Protection Agency decides
to gather information, the appropriate program office must prepare an
Information Collection Request (ICR) and submit it to OMB for approval.
An ICR describes the information to be collected, gives the reason the
information is needed, and estimates the time and cost for the public
to answer the request.
    OMB has previously approved the ICRs contained in the existing
regulations at 40 CFR 80.500 et seq. and has assigned OMB control
number 2060-0308 and EPA ICR numbers 1718.03 (dyeing of tax exempt
diesel fuel), 1718.04 (motor vehicle diesel fuel), and 1718.05 (NRLM
diesel fuel). A copy of the OMB approved ICRs may be obtained from
Susan Auby, Collection Strategies Division; U.S. Environmental
Protection Agency (2822T); 1200 Pennsylvania Ave., NW., Washington, DC
20460 or by calling<PHONE_NUMBER>.
    Today's proposed rule would not establish any new requirements for
highway diesel fuel sold in Alaska, but instead would only delay the
requirements for 15ppm fuel from 2006 to 2010 in rural areas of Alaska.
Since the burden of reporting would be exactly the same in rural Alaska
after 2010 under today's proposed rule as it is under the requirements
of the final rule for highway diesel sulfur, the previously approved
ICR for highway diesel fuel still applies to rural Alaska. Thus no new
ICR or amended ICR is required for highway fuel.
    The requirements for NRLM diesel fuel in rural Alaska as proposed
in today's action are new, in that the NRLM final rule did not finalize
the sulfur standards for rural Alaska (although it did impose the
requirement that all 2011 and later engines in rural Alaska must use
diesel fuel meeting the 15ppm sulfur standard). However, these new
requirements for NRLM diesel fuel in rural Alaska do not require a new
or amended ICR. The approved ICR for the nonroad final rule (ICR number
1718.05; OMB Control Number 2060-0308) already covers all U.S. states,
including rural Alaska. For instance, this ICR made additions to the
existing fuels regulations applicable to diesel fuel, where ``diesel
fuel'' was explicitly defined as fuel sold in any state or territory of
the U.S. In addition, the product transfer documents required in the
nonroad final rule explicitly included those used to identify fuel for
use in Alaska. Finally, the calculation of total information collection
costs associated with the nonroad final rule represented maximum costs
and included all areas of Alaska. As a result the existing ICR
generated for the nonroad final rule remains applicable under the
actions being proposed in today's action.
    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 in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements under the Administrative
Procedure Act or any other statute unless the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of today's rule on small
entities, a small entity is defined as: (1) A small business that meets
the definitions based on the Small Business Administration's (SBA) size
standards; (2) a small governmental jurisdiction that is a government
of a city, county, town, school district or special district with a
population of less than 50,000; and (3) a small organization that is
any not-for-profit enterprise which is independently owned and operated
and is not dominant in its field.
    In determining whether a rule has a significant economic impact on
a substantial number of small entities, the impact of concern is any
significant adverse economic impact on small entities, since the
primary purpose of the regulatory flexibility analyses is to identify
and address regulatory alternatives ``which minimize any significant
economic impact of the proposed rule on small entities.'' 5 U.S.C. 603
and 604. Thus, an agency may certify that a rule will not have a
significant economic impact on a substantial number of small entities
if the rule relieves regulatory burden, or otherwise has a positive
economic effect on all of the small entities subject to the rule.
    Today's proposed rule applies a delayed implementation date for
ultra-low sulfur highway diesel fuel in rural Alaska compared to the
existing regulations and extends this same deadline to NRLM diesel fuel
in rural Alaska to bring those areas in line with the national
standards. Since this proposed rule would delay the 15 ppm highway
sulfur standard in rural areas, the regulatory burden is effectively
relieved in this respect. As a result this

proposed rule would not have an adverse economic impact on small
entities in rural areas which distribute, store, or using highway
diesel fuel.
    Regarding NRLM diesel fuel, the requirements in today's action are
new in that rural areas of Alaska were not covered by the 15 ppm sulfur
standard in the NRLM final rule. As stated in that rule, it was our
intention to add the 15 ppm requirement to rural Alaska at the time of
the NRLM final rule, but we deferred that action so that it could be
coordinated with our actions on highway diesel fuel in rural Alaska.
    Even though the NRLM sulfur standards proposed in this rule are
new, they do not impose a significant economic impact on a substantial
number of small entities. Within the approximately 250 rural area
villages in Alaska, their unique circumstances limit the number of
grades of diesel fuel that can be stored and distributed. The
efficiency and cost effectiveness of the rural distribution and storage
system discourages the introduction of a small volume of a specialty
fuel, such that these communities must generally choose between using a
single fuel for all diesel applications, or purchasing extra storage
and distribution equipment. The latter approach is generally more
expensive and would only be pursued if the dual storage and
distribution system would be needed long term. However, the number of
2011+ model year nonroad and marine engines in these rural communities
will increase after 2010, requiring a greater and greater proportion of
the fuel to meet the 15 ppm standard. Thus in the long term, dual
segregated storage and distribution capacity would become superfluous.
In addition, since the highway fuel used in rural areas will already be
required to meet the 15 ppm sulfur standard by 2010, many rural
communities would simply switch entirely to diesel fuel meeting the 15
ppm standard for all their diesel applications at this time to avoid
the need to install additional segregated storage and distribution
capacity. This proposal's requirement that all NRLM diesel fuel used in
rural areas meet the 15 ppm standard starting in 2010 is therefore
unlikely to create an additional economic burden for most rural areas.
    Therefore, after considering the economic impacts of today's
proposed rule on small entities, I certify that this action will not
have a significant economic impact on a substantial number of small
entities.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.L.
104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, and tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. Before promulgating an EPA rule for which a written statement
is needed, section 205 of the UMRA generally requires EPA to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, most cost-effective or least burdensome alternative
that achieves the objectives of the rule. The provisions of section 205
do not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective or least burdensome alternative if the
Administrator publishes with the final rule an explanation why that
alternative was not adopted. Before EPA establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including tribal governments, it must have developed under
section 203 of the UMRA a small government agency plan. The plan must
provide for notifying potentially affected small governments, enabling
officials of affected small governments to have meaningful and timely
input in the development of EPA regulatory proposals with significant
Federal intergovernmental mandates, and informing, educating, and
advising small governments on compliance with the regulatory
requirements.
    Today's proposal contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) for State, local, or tribal
governments or the private sector. It would impose no enforceable duty
on any State, local or tribal governments or the private sector, and
does not contain a Federal mandate that may result in expenditures of
$100 million or more for State, local, and tribal governments, in the
aggregate, or the private sector in any one year. Rather, this proposal
relieves burden by applying a delayed implementation date for ultra-low
sulfur highway, nonroad, locomotive and marine diesel fuel in rural
Alaska compared to the existing regulations and the rest of the
country. Thus, today's rule is not subject to the requirements of
sections 202 and 205 of the UMRA.

E. Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.''
``Policies that have federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
    This proposed rule does not have federalism implications. It will
not have substantial direct effects on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132. This proposed rule simply
applies a delayed implementation date for low sulfur highway diesel
fuel in the rural areas of Alaska, and provides for inclusion of rural
Alaska in the nationwide nonroad, locomotive and marine (NRLM) diesel
fuel program but with a delayed implementation date. Thus, Executive
Order 13132 does not apply to this rule. Although section 6 of
Executive Order 13132 does not apply to this rule, EPA did consult with
representatives of the State of Alaska, who spent much time getting
feedback from the rural communities about our highway and proposed NRLM
diesel fuel requirements. In fact, this proposed rule is the direct
result of, and is consistent with, State submittals to EPA of an
alternative implementation plan for low sulfur highway diesel fuel in
rural Alaska, and comments to the proposed NRLM diesel rule as it
relates to rural Alaska, as mentioned previously in this preamble.
Nevertheless, in the spirit of Executive Order 13132, and consistent
with EPA policy to promote communications between EPA and State and
local governments, EPA specifically solicits comment on this proposed
rule from State and local officials.

F. Consultation and Coordination With Indian Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by

tribal officials in the development of regulatory policies that have
tribal implications.''
    This proposed rule does not have tribal implications as specified
in Executive Order 13175. The regulations that this proposed rule
amends will be implemented at the Federal level and impose compliance
costs only on diesel fuel producers, importers, distributors, retailers
and consumers of diesel fuel. This proposed rule relates to the
standards and deadlines that apply specifically to the rural areas of
Alaska, and tribal governments in the rural areas of Alaska will be
affected only to the extent they purchase and use diesel fuel.
    Nevertheless, tribal officials were consulted by State
representatives early in the process of developing this proposed
regulation to permit them to have meaningful and timely input into its
development. State representatives spent much time getting feedback
from the rural communities, including tribal representatives, about our
highway and proposed NRLM diesel fuel requirements. That feedback was
considered in the State's submittals to EPA of an alternative
implementation plan for low sulfur highway diesel fuel in rural Alaska,
and comments to the proposed NRLM diesel rule as it relates to rural
Alaska, as mentioned previously in this preamble. EPA specifically
solicits additional comment on this proposed rule from tribal
officials.

G. Protection of Children From Environmental Health & Safety Risks

    Executive Order 13045: ``Protection of Children from Environmental
Health Risks and Safety Risks'' (62 F.R. 19885, April 23, 1997) applies
to any rule that: (1) Is determined to be ``economically significant''
as defined under E.O. 12866, and (2) concerns an environmental health
or safety risk that EPA has reason to believe may have a
disproportionate effect on children. If the regulatory action meets
both criteria, the Agency must evaluate the environmental health or
safety effects of the planned rule on children, and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the Agency.
    This proposed rule is not subject to the Executive Order because it
is not economically significant as defined in E.O. 12866, and because
the Agency does not have reason to believe the environmental health or
safety risks addressed by this action present a disproportionate risk
to children. This proposed action would affect only highway diesel fuel
sold in rural areas of Alaska which have unique meteorological
conditions and sparse populations that make environmental health and
safety risks extremely small.
    The public is invited to submit or identify peer-reviewed studies
and data, of which the agency may not be aware, that assessed results
of early life exposure to the sulfur-based emissions (primarily SO\2\)
that are proposed for regulation in today's action.

H. Actions That Significantly Affect Energy Supply, Distribution, or
Use

    This rule is not subject to Executive Order 13211, ``Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use'' (66 FR 28355 (May 22, 2001)) because it is not a
significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law No. 104-113, 12(d) (15 U.S.C. 272
note) directs EPA to use voluntary consensus standards in its
regulatory activities unless to do so would be inconsistent with
applicable law or otherwise impractical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures, and business practices) that are developed or
adopted by voluntary consensus standards bodies. The NTTAA directs EPA
to provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards. This
proposed rulemaking does not involve technical standards. Therefore,
EPA is not considering the use of any voluntary consensus standards.

VII. Statutory Provisions and Legal Authority

    Statutory authority for the proposal is found in sections 211(c)
and 211(i) of the CAA, which allow EPA to regulate fuels that either
contribute to air pollution which endangers public health or welfare or
which impair emission control equipment which is in general use or has
been in general use. 42 U.S.C. 7545 (c) and (i). Additional support for
the procedural and enforcement-related aspects of fuel controls,
including record keeping requirements, comes from sections 114(a) and
301(a) of the CAA. 42 U.S.C. 7414(a) and 7601(a).

List of Subjects in 40 CFR Part 69

    Environmental protection, Air pollution control.

    Dated: October 4, 2005.
Stephen L. Johnson,
Administrator.
    For the reasons set forth in the preamble, we propose to amend part
69 of title 40 of the Code of Federal Regulations as follows:

PART 69--SPECIAL EXEMPTIONS FROM THE REQUIREMENTS OF THE CLEAN AIR
ACT

    1. The authority citation for part 69 continues to read as follows:

    Authority: 42 U.S.C. 7545(c), (g) and (i), and 7625-1.

    2. Section 69.51 is revised to read as follows:

Sec.  69.51  Motor vehicle diesel fuel.

    (a) Definitions. (1) Areas accessible by the Federal Aid Highway
System are the geographical areas of Alaska designated by the State of
Alaska as being accessible by the Federal Aid Highway System.
    (2) Areas not accessible by the Federal Aid Highway System are all
other geographical areas of Alaska.
    (b) Diesel fuel that is designated for use only in Alaska and is
used only in Alaska, is exempt from the sulfur standard of 40 CFR
80.29(a)(1) and the dye provisions of 40 CFR 80.29(a)(3) and 80.29(b)
until the implementation dates of 40 CFR 80.500, provided that:
    (1) The fuel is segregated from nonexempt diesel fuel from the
point of such designation; and
    (2) On each occasion that any person transfers custody or title to
the fuel, except when it is dispensed at a retail outlet or wholesale
purchaser-consumer facility, the transferor must provide to the
transferee a product transfer document stating:

    ``This diesel fuel is for use only in Alaska. It is exempt from
the federal low sulfur standards applicable to highway diesel fuel
and red dye requirements applicable to non-highway diesel fuel only
if it is used in Alaska.''

    (c) Beginning on the implementation dates under 40 CFR 80.500,
motor vehicle diesel fuel that is designated for use in areas of Alaska
accessible by the Federal Aid Highway System, or is used in areas of
Alaska accessible by the Federal Aid Highway System, is subject to the
applicable provisions of 40 CFR part 80, subpart I, except as provided
under 40 CFR 69.52(c), (d), and (e) for commingled motor vehicle and
non-motor vehicle diesel fuel.
    (d) From the implementation dates of 40 CFR 80.500 until the
implementation dates specified in paragraph (e) of this section, motor
vehicle diesel fuel that is

designated for use in areas of Alaska not accessible by the Federal Aid
Highway System, and is used in areas of Alaska not accessible by the
Federal Aid Highway System, is exempt from the sulfur standard of 40
CFR 80.29(a)(1), the dye provisions of 40 CFR 80.29(a)(3) and 40 CFR
80.29(b), and the motor vehicle diesel fuel standards under 40 CFR
80.520 and associated requirements, provided that:
    (1) The exempt fuel is not used in 2007 and later model year
highway vehicles and engines,
    (2) The exempt fuel is segregated from nonexempt highway diesel
fuel from the point of such designation; and
    (3) On each occasion that any person transfers custody or title to
the exempt fuel, except when it is dispensed at a retail outlet or
wholesale purchaser-consumer facility, the transferor must provide to
the transferee a product transfer document stating:

    ``This fuel is for use only in those areas of Alaska not
accessible by the FAHS''.

    (4) The exempt fuel must meet the labeling requirements under Sec.
80.570, except the following language shall be substituted for the
language on the labels:

``HIGH SULFUR DIESEL FUEL (may be greater than 15 Sulfur ppm)

WARNING

    Federal Law prohibits use in model year 2007 and later highway
diesel vehicles and engines. Its use may damage these vehicles and
engines.''

    (e) Beginning on the following implementation dates, motor vehicle
diesel fuel that is designated for use in areas of Alaska not
accessible by the Federal Aid Highway System, or is used in areas of
Alaska not accessible by the Federal Aid Highway System, is subject to
the applicable provisions of 40 CFR part 80, subpart I, except as
provided under 40 CFR 69.52(c), (d), and (e) for commingled motor
vehicle and non-motor vehicle diesel fuel:
    (1) June 1, 2010 for diesel fuel produced or imported by any
refiner or importer,
    (2) August 1, 2010 at all downstream locations, except at retail
facilities and wholesale-purchaser consumers,
    (3) October 1, 2010 at retail facilities and wholesale-purchaser
consumers, and
    (4) December 1, 2010 at all locations.
    3. Section 69.52 is amended as follows:
    a. By adding paragraph (a)(4).
    b. By revising paragraphs (c)(1) and (c)(2).
    c. By revising paragraphs (f) and (g).
    d. By adding paragraph (h).

Sec.  69.52  Non-motor vehicle diesel fuel.

    (a) * * *
    (4) Heating oil has the meaning given in 40 CFR 80.2.
* * * * *
    (c) * * *
    (1) NRLM diesel fuel and heating oil referred to in paragraphs (b)
and (g) of this section are exempt from the red dye requirements, and
the presumptions associated with the red dye requirements, under 40 CFR
80.520(b)(2) and 80.510(d)(5), (e)(5), and (f)(5).
    (2) NRLM diesel fuel and heating oil referred to in paragraphs (b)
and (g) of this section are exempt from the marker solvent yellow 124
requirements, and the presumptions associated with the marker solvent
yellow 124 requirements, under 40 CFR 80.510(d) through (f).
* * * * *
    (f) Non-motor vehicle diesel fuel and heating oil that is intended
for use and used only in areas of Alaska not accessible by the Federal
Aid Highway System, are excluded from the applicable provisions of 40
CFR Part 80, Subpart I and 40 CFR Part 60, Subpart IIII until the
implementation dates specified in paragraph (g) of this section, except
that:
    (1) All model year 2011 and later nonroad and stationary diesel
engines and equipment must be fueled only with diesel fuel that meets
the specifications for NR fuel in 40 CFR 80.510(b) or (c);
    (2) The following language shall be added to any product transfer
document: ``This fuel is for use only in those areas of Alaska not
accessible by the FAHS;'' and
    (3) Pump labels for such fuel that does not meet the specifications
of 40 CFR 80.510(b) or 80.510(c) shall contain the following language:

``HIGH SULFUR DIESEL FUEL (may be greater than 15 Sulfur ppm)

WARNING

    Federal Law prohibits use in model year 2007 and later highway
diesel vehicles and engines, or in model year 2011 and later nonroad
diesel engines and equipment. Its use may damage these vehicles and
engines.''

    (g) NRLM standards. (1) Beginning on the following implementation
dates, NRLM diesel fuel that is used or intended for use in areas of
Alaska not accessible by the Federal Aid Highway System is subject to
the provisions of 40 CFR part 80, subpart I, except as provided in
paragraphs (c), (d), (e), and (g)(2) of this section:
    (i) June 1, 2010 or diesel fuel produced or imported by any refiner
or importer,
    (ii) August 1, 2010 at all downstream locations, except at retail
facilities and wholesale-purchaser consumers,
    (iii) October 1, 2010 at retail facilities and wholesale-purchaser
consumers, and
    (iv) December 1, 2010 at all locations.
    (2) The per-gallon sulfur content standard for all LM diesel fuel
shall be 15 ppm maximum.
    (3) Diesel fuel used in new stationary internal combustion engines
regulated under 40 CFR Part 60 Subpart IIII shall be subject to the
fuel-related provisions of that subpart beginning December 1, 2010.
    (h) Alternative labels to those specified in paragraphs (e)(3) and
(f)(2) of this section may be used as approved by the Administrator.

[FR Doc. 05-20519 Filed 10-12-05; 8:45 am]

BILLING CODE 6560-50-P