If a party identifies RFG that is out of spec for a downstream standard, and the party wants to bring the gasoline back into spec by blending it with other RFG or with blendstock, must the party be registered with EPA as a refiner, and must the party meet all the requirements that apply to refinery operations for this blending activity?
If RFG at a location downstream of the refinery or import facility level is found to violate a downstream standard, a violation of the RFG requirements has occurred for which various parties will be liable, and for which penalties may be assessed by EPA. Section 205 (b) of the Clean Air Act instructs that penalties for violations of the motor vehicle fuels requirements (including the RFG requirements) should take into account "action taken to remedy the violation...." As a result, penalty amounts for violations of the RFG requirements will depend, in part, on actions taken by liable parties to remedy violations. Thus, while remedial actions do not eliminate a violation, such actions normally do reduce the amount of any monetary penalty that must be paid.
In answer to Question 1 in the Remedies section (Section VII-E) of the July 1, 1994 RFG Question and Answer document, EPA described a number of remedial actions that parties may take to correct such a violation of a downstream standard. One of the remedies included in this July 1, 1994 answer was blending with additional RFG, which the party should document as specified in that answer. A party that carries out such remedial blending with RFG does not have to be a registered refiner, and need not meet the RFG refiner requirements, such as for independent sampling and testing and attest engagements. Separate refiner accounting for this type of remedial blending is not necessary because both the off-spec RFG and the blending RFG have already been included in the compliance calculations of a refiner or importer.
A party may take remedial action for a violation by blending with blendstock (a non-gasoline petroleum product), but only if the party is registered with EPA as a refiner, and meets all the refiner requirements. This is necessary because the blendstock used will constitute new RFG volume which must be accounted for. As a result, parties should register with EPA as a refiner in advance if they believe they may wish to conduct remedial blending with blendstock. If no blendstock blending occurs, there is no requirement to submit reports to EPA or meet any other refiner requirement. If the need for blendstock blending does occur, however, the party is in a position to do so.
If a party who has not registered with EPA as a refiner discovers a downstream standard violation, and the party believes blendstock blending is the most appropriate remedial action, the party should contact EPA. It may be possible in such a case for EPA to issue a refiner registration to the party in an expedited manner. The party should not ship any RFG produced through blendstock blending, however, until all refiner requirements have been met and the party has received a refiner registration number from EPA. (9/26/94)
This question and answer was posted at List of Reformulated Gasoline and Anti-Dumping Questions and Answers: July 1, 1994 through November 10, 1997 (pdf)