Summer 2009 Reid Vapor Pressure (RVP) Regulatory Requirements

RVP Regulations-Violations Subject to Fines up to $37,500 Per Day - Immediate Action Requested

This is to remind you of the U.S. Environmental Protection Agency (EPA) summer volatility regulatory compliance season and certain state low vapor pressure programs for conventional gasoline.The U.S. EPA gasoline volatility regulations establish the maximum allowable Reid Vapor Pressure (RVP) for gasoline in various geographical areas during the summer season. The regulations prohibit refiners, importers, distributors, resellers, carriers, retailers, and wholesale purchaser-consumers from storing, selling, or dispensing conventional gasoline with an RVP greater than 7.8 psi in certain areas in Southern states June 1 through September 15. Under these federal regulations, all other areas in the continental U.S. are required to meet a 9.0 psi RVP conventional gasoline standard or are part of a designated Reformulated Gasoline (RFG) area. If you purchase RFG from Marathon, consult the  RFG Regulatory Requirements section. In addition to federal regulations, some states have established state-specific low RVP programs. State low RVP program requirements within Marathon’s marketing territory are outlined in this letter

This information relates to summer requirements for RVP in conventional gasoline. A list of counties in Marathon’s marketing area that will be limited to 7.8 psi RVP or lower (if mandated by a state-specific low RVP program) gasoline is included in Attachment I. Although reasonable precautions have been taken to ensure the completeness of the list for states in which Marathon sells gasoline, you are encouraged to consult the November 6, 1991, Federal Register (56 FR 56694) and any subsequent updates for a complete listing..

Marathon will offer both a 7.8 and a 9.0 psi RVP gasoline in many geographical markets where it is required by federal regulation, as well as a 7.8 psi or a 7.0 psi RVP gasoline in markets where it is required by state regulation. The low RVP conventional gasoline products available at Marathon-owned terminals are listed in Attachment II. A list of terminals where Marathon supplies low RVP conventional gasoline under an exchange or terminaling agreement is in Attachment III.

FEDERAL (U.S. EPA) LOW VAPOR PRESSURE PROGRAM

No later than May 1,Marathon terminals will offer gasoline that meets the 9.0 psi RVP standard. By mid-May, we plan to have gasoline that meets the 7.8 psi RVP standard at locations supplying retail outlets governed by a June 1 compliance deadline. This should provide you sufficient time to turn your tank inventory over and have 7.8 or 9.0 psi RVP gasoline in your retail outlet tanks for sale or use by June 1. You are responsible for assuring your tank turnover at the retail level is sufficient to meet the deadline..

We anticipate continued U.S. EPA scrutiny of 9.0 psi RVP gasoline purchases during the summer gasoline volatility season (June 1 to September 15). The U.S. EPA is expected to use terminal bill of lading documents to trace the destination of 9.0 psi RVP gasoline lifted from the terminals located in or near the geographical areas where only 7.8 psi RVP gasoline may be marketed. The U.S. EPA also intends to continue its compliance monitoring program, which includes samplng and testing at retail stations and other locations. Penalties may be imposed by the U.S. EPA for non-complying fuels.

You are encouraged to review the gasoline volatility regulations Title 40 Code of Federal Regulations Part 80 with your attorney to understand your compliance obligations.

If you or your carrier splash-blend ethanol and gasoline, the RVP regulations provide a 1 psi waiver for ethanol blends provided that:

1. the base gasoline meets the applicable RVP standard;
2. the blend contains between 9 and 10 percent ethanol by volume, excluding the denaturing agent; and
3. no additional alcohol or other additive or component has been added to increase the volatility of the ethanol portion of the blend.

If ethanol-blended gasoline is mixed with straight gasoline during the RVP control season and the ethanol content of the mixture drops below 9 percent, you will lose the 1 psi waiver.. Since it takes less than four percent ethanol to add a full 1 psi to the vapor pressure, the absence of the waiver would cause this product to violate the RVP standard.

Violations of the gasoline RVP regulations are subject to fines under the U.S. Clean Air Act of up to $37,500 per day of violation, plus any economic benefit derived from the violation. If the EPA finds a violation at any point in the gasoline distribution network, there is a regulatory “presumption” of liability for that party and all parties upstream of where the violation was found

STATE LOW VAPOR PRESSURE PROGRAMS

The following programs are state-specific and will be enforced by the individual states. Marathon plans to have gasoline by mid-May that meets the state 7.8 psi RVP or 7.0 psi RVP standard at locations supplying retail outlets governed by a June 1 compliance deadline. This should provide you sufficient time to turn your tank inventory over and have 7.0, 7.8, or 9.0 psi RVP gasoline in your retail outlet tanks for sale or use by the June 1 compliance deadline. .

Alabama 7.0 RVP (Birmingham area)

The state of Alabama has implemented a low vapor pressure program where gasoline with a maximum RVP of 7.0 psi is required from June 1 through September 15. The covered area is the Birmingham area. (See Attachment I.)

Georgia 7.0 RVP 30 ppm max. Average Sulfur (Atlanta area and surrounding counties)

The state of Georgia has implemented a low vapor pressure program where gasoline with a maximum RVP of 7.0 psi and a maximum average sulfur content of 30 ppm is required from June 1 through September 15. The covered area is the Atlanta metro area (13 counties) and surrounding (32 counties) for a total of 45 counties. (See Attachment I.)

Indiana 7.8 RVP (Louisville area)

The state of Indiana has implemented a low vapor pressure program where gasoline with a maximum RVP of 7.8 psi is required from June 1 through September 15 at retail. Federal RFG is a complying substitute for the 7.8 RVP under Indiana regulations. The Indiana regulations still say 7.8 RVP gasoline is required May 1 for terminals; however, the state has stated they will not enforce the 7.8 RVP standard until June 1 for both terminals and retail outlet tanks. The covered area is Clark and Floyd counties, Indiana. (See Attachment I.)

Michigan 7.0 RVP (Detroit area)

The state of Michigan has implemented a low vapor pressure program where gasoline with a maximum RVP of 7.0 psi is required from June 1 through September 15. Federal RFG is a complying substitute for the 7.0 RVP under Michigan regulations. The covered area is the Detroit metro area. (See Attachment I.)

Ohio 7.8 RVP (Cincinnati/Dayton area)

The state of Ohio has implemented a low vapor pressure program where gasoline with a maximum RVP of 7.8 psi is required from June 1 through September 15. Federal RFG is a complying substitute for the 7.8 RVP under Oho regulations. The covered area is the Cincinnati/Dayton area. (See Attachment I.)

Pennsylvania 7.8 RVP (Pittsburgh area)

The state of Pennsylvania has implemented a low vapor pressure program where gasoline with a maximum RVP of 7.8 psi is required from May 1 through September 15 dispensed from terminals, and June 1 through September 15 for retail. The covered area is the Midland/Indianola area. RVP extensions for ethanol blends are NOT allowed. (See Attachment I.)

The Alabama, Georgia, Indiana, Illinois, Michigan and Ohio state low vapor pressure programs allow a 1 psi waiver for ethanol blends that qualify for the 1 psi waiver under federal regulations.

MARATHON’S PRACTICES DESIGNED TO FACILITATE YOUR REGULATORY COMPLIANCE

Marathon terminals will implement the practices listed below to facilitate your compliance with the gasoline volatility regulations in ozone non-attainment areas. However, it is your responsibility to ensure compliance by taking actions necessary to prevent miss-delivery of non-compliance RVP gasoline into a control area.

1. Marathon-owned terminals will clearly identify at the loading rack whether the product is 7.0, 7.8 or 9.0 psi RVP.
2. A county map and control area listing, identifying where only 7.0 or 7.8 psi RVP gasoline may be stored, sold, or dispensed, will be displayed in a prominent place for carriers’ use.
3. Bills of lading will identify the gasoline “RVP”. Bills of lading for 9.0 psi RVP gasoline will contain the following message: 
   

   “Product not to be marketed in 7.0 or 7.8 RVP control area.” 
   

4. Bills of lading for 7.8 psi RVP gasoline dispersed within 200 miles of the Atlanta and Birmingham control areas will contain the following message:
   

“Product not to be marketed in 7.0 RVP control area.” 


5. Bills of lading for gasoline suitable for use in the 45 county Atlanta control area will contain the following, "GA-LS-A", followed by either "RVP 9.0 Max." or "RVP 7.0 Max.", depending on vapor pressure. Bills of lading labeled with: "EPA-CONV", are NOT suitable for use in the Atlanta control area.
   
6. Marathon will review bills of lading on a random basis to ensure that the documents do not indicate 9.0 psi RVP gasoline going to an ozone non-attainment area where only 7.0 or 7.8 psi RVP gasoline may be marketed, or 7.8 psi RVP gasoline going to an ozone non-attainment area where only 7.0 psi RVP gasoline may be marketed, or gasoline not suitable for the Atlanta control area has gone to this control area. Customers will be contacted whenever we identify your miss-delivery. Marathon will request that you take corrective action to place the product in compliance or take the product off the market.
7. Marathon has established procedures for any customer who has a site-specific destination located within a 7.0 or 7.8 psi RVP control area, or the Atlanta control area. For federal and most state low RVP programs, these procedures will allow loading of all authorized products year-round, with the exception that the 9.0 psi RVP gasolines will not be allowed to be loaded from May 15 through and including September 15 and 7.8 psi RVP gasolines will not be allowed to be loaded for 7.0 psi RVP destinations from May 15 through and including September 15. Products not suitable for the Atlanta 45 county control area will not be allowed to be loaded for these destinations.
   

Marathon will request that its exchange and terminaling locations implement the above practices However, you and your carrier have the responsibility to prevent miss-delivery of non-compliant product into a control area.

We anticipate that other suppliers will implement similar oversight practices. We appreciate your comments on methods we can adopt to assist you in assuring compliance and avoiding violations and resulting U.S. EPA or state enforcement action against you.

U.S. EPA’s gasoline volatility regulations can be found in the Code of Federal Regulations (40 CFR Part 80). Additional information concerning these federal regulations also can be found in the following Federal Register volumes: 

You can direct questions concerning the federal regulations to (or obtain a free copy of the U.S. EPA’s RVP Question and Answer documents from): 

Director, Field Operations and Support Division (EN-397F)
U.S. EPA
401 M Street, S.W.
Washington D.C. 20460

We have implemented practices to facilitate your compliance with the gasoline volatility regulations. However, you will have to comply with the regulations in order to prevent a U.S. EPA or state enforcement action against your company.