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Honorable Lee M. Thomas
Page 9

(b) Please explain to what extent gasoline volatility affects evaporative, exhaust HC, refueling, stage I, and bulk storage and distribution emissions.

(c) Are evaporative control systems designed by auto manufacturers to meet hydrocarbon (HC) standards based on a vehicle fueled with a certification test gasoline which has a Reid Vapor Pressure (RVP) of 9.0 psi? Is it true that this level of volatility was developed by EPA in the early 1970's, but the RVP has increased due to the adding by the oil industry of butane to meet rising energy costs? When did EPA first discover this change in RVP? What is the effect of this higher volatility on approved control systems and emissions?

(d) According to a portion of a September 1985 document of the Office of Mobile Sources (OMS) entitled "Gasoline Volatility and Evaporative Hydrocarbon Control," a "Presentation to the Administrator" OMS said:

Control Approaches

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The long-term solution to the excess evaporative emission problem is to equate in-use and certification fuel RVPs.

This can be done at any RVP between 9 psi, that of the current test fuel, and 11.5 psi, that of future commercial fuel.

Equating the RVPS of the two fuels at 11.5
psi focuses all control on vehicle redesign.

Equating the RVPS of the two fuels between
9.0 psi focuses all control on fuel modifica-
tion.

Equating the RVPS of the two fuels between 9.0 and 11.5 psi focuses part of control on the vehicle and part of control on the fuel.

In-use volatility controls can be implemented
quicker than vehicle controls, due the
latter's need for the fleet to turnover.
This raises the possibility that in-use
volatility controls could be implemented in
the short term and relaxed in the long term
if vehicle control keyed to the long-term
in-use RVP are also implemented in the short

term.

Honorable Lee M. Thomas
Page 10

Please provide the full text of this document, explain its purpose, and state when this presentation was made, the result thereof, and the participants. Please provide a copy of all letters, memoranda, notes, and other documents in EPA files, including OSM and Ann Arbor, from January 1, 1984 to the present. What is the legal basis for such controls? What are the pros and cons of these control approaches? That document also states that the "basic problem is that butane costing 50 cents per gallon can essentially be sold for 90 cents per gallon by adding it to gasoline." Is that true? What does butane do for octane and fuel economy? What are the volatility impacts and concerns where there are alcohol or other blends?

(e) What is the Evaporative Index and what does it have to do with emissions? Please explain its relationship to a so-called "DuPont Waiver" and explain that waiver and its status? What did EPA require in that waiver and why? What is the relationship of these matters to Oxygenated Fuels Association? What is that Association seeking?

(f) The November 8, 1985 edition of Inside E.P.A. states that EPA "has resolved internal staff differences over a draft technical report of its Ann Arbor" office "that supports the regulation of gasoline volatility levels to reduce ozone emissions". What were those differences and how were they resolved? The article states that the revisions "have not changed EPA staff opinion that volatility controls are a more cost effective way to control ozone than a Stage 11, at the pump system.' Is that true? Please explain the basis for these views. The article then states:

EPA sources say a conference is planned on the volatility issue to give EPA Administrator Lee Thomas a "handle" on public opinion about the viability of volatility controls as part of the agency's decision on how to regulate gasoline marketing. EPA reportedly is leaning toward a move to control potentially toxic gas vapors through nationwide use of on-board automobile canisters, and is contemplating volatility controls to reduce ozone formation from auto emissions. Stage II devices could control both gas vapors and ozone, EPA sources explain, but reportedly not as cost-effectively. Nor could Stage II be implemented as quickly as volatility controls, sources say; therefore, volatility controls would be better able to ease state's troubles in meeting the 1987 air act ozone attainment standard.

Honorable Lee M. Thomas
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Sources say EPA's office of air quality planning and standards intends to push Thomas to make a decision on the gasoline marketing question shortly after the volatility conference. OAQPS is reportedly loathe to postpone a decision on the larger issue of gasoline marketing controls until after a decision can be made on volatility, despite the need to be certain of a volatility level for test fuel used in certifying the adequacy of automobile pollution controls.

Please explain the purpose of the conference and the relationship of the volatility question and its resolution to Stage II and on-board controls. Please explain the basis, if any, for EPA resolving the on-board control versus stage II control before the volatility issue is resolved. What is the proper volatility level and why for test fuel?

(g)

We are concerned about the fuel for engines problem in general from the standpoint of the interrelated concerns of fuel economy, emissions, vehicle performance, emission control device performance, including existing canisters, and other matters, including lead phasedown, and about the ability and vigilance of EPA in dealing with this important fuel issue, particularly under section 211 of the Clean Air Act. We are concerned about the extent to which the refiners and others in the oil industry may be taking actions, possibly inconsistent with section 211, that could adversely affect efforts of automakers and EPA to improve fuel economy and control emissions (while ensuring vehicle performance) and guaranteeing the effectiveness of control devices. An article in the January 27, 1986 edition of Automotive News (p. 19) calls attention to auto firms' "effort to get oil companies to provide satisfactory fuel for engines with port fuel injection." We are also concerned about the need for any auto firm to issue the enclosed "Customer Information" and the effectiveness of such a notice because of fuel-related problems that these firms cannot control. Please identify (with the cooperation of the Administrator of the National Highway Traffic Safety Administration) all these fuel problems, explain their impacts on fuel economy, emissions, etc., and indicate what EPA is doing about them.

13. The GAO report states that:

EPA "has not presented most of its costeffectiveness estimates for vehicle-refueling control options with ranges to reflect the underlying uncertainty";

Honorable Lee M. Thomas
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There are several "uncertainties" affecting
cost estimates that "were not presented as
ranges" by EPA; they "include the cost of
alternative technologies, control system
performance and durability, and the length of
implementation schedules for both options";

Unless EPA presents these uncertainties, "the
differences between competing alternatives
may be exaggerated;"

"EPA's selective presentation of uncertainty
in its automobile refueling analysis may
create misleading impressions;"

EPA presented its "Options Paper" in draft
form in July 1985 in a manner that showed
"control efficiency of onboard systems as
certain", giving the "impression that more is
known" about this prototype technology "than
about" stage II technology which is in "use
at thousands of service stations;"

GAO questions EPA's cost-effectiveness
analysis in comparing ozone reductions in
attainment and nonattainment areas; and

EPA "did not estimate the impact of a stage
II regulation for nonattainment areas only
because it did not have information on local
market conditions."

GAO recommends:

To improve EPA's cost-effectiveness analysis
used to help determine the best alternative for
controlling automobile refueling vapor emissons,
we recommend that the Administrator, Environmental
Protection Agency, direct that a range values be
provided to reflect the various uncertainties
inherent in its cost-effectiveness analysis.

What will EPA do to implement this recommendation and when will this be done? We also request the EPA respond to the GAO conclusions and comments at the end of this chapter.

We request your comments and responses on the above matters (and the GAO report) before EPA makes any decisions on the matters discussed in the report but no later than the end of next month. Please provide a copy of your reply to the GAO for its review and comment to the Subcommittee.

Honorable Lee M. Thomas

Page 13

With best wishes.

Sincerely,

Enclosures (2)

CC:

JOHN D. DINGELL

Chairman

Subcommittee on

Oversight and Investigations

Honorable James T. Broyhill, Ranking Minority Member
Subcommittee on Oversight and Investigations

Honorable Charles A. Bowsher, Comptroller General
General Accounting Office

Honorable Harry R. Van Cleve, General Counsel
General Accounting Office

Honorable Diane K. Steed, Administrator

National Highway Traffic Safety Administration

Honorable James C. Miller III, Director
Office of Management and Budget

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