A refiner elects to meet a RFG specification via the "averaging" method. Two-thirds of the way through the averaging period, his tracking of cumulative qualities shows he is just meeting the standard. For the remaining last third of the averaging period the gasoline stays within the maximum or minimum RFG limits but exceeds the averaging standard. As a result the average for the averaging period is off-spec. Ignoring the purchase of credits for oxygen or benzene standards, is the refiner liable for a daily penalty over the entire averaging period, or only the number of days in the last third of the averaging period?
Section 80.80(c) provides that the refiner would be liable for a daily penalty over the entire averaging period. Refiners, for each refinery, and importers, must elect to comply with each standard on a per-gallon or average basis at the start of each compliance period. These elections then are applicable throughout that compliance period. During the rulemaking, EPA considered whether to allow refiners and importers to declare their method of compliance on a batch-by-batch basis. This option was rejected out of EPA's concern that a batch-by-batch determination would result in exceedances of nationwide levels for regulated parameters. See 59 Fed. Reg. 7770.
Accordingly, refiners are permitted the flexibility associated with averaging to achieve compliance over the whole compliance period, including the provision to adjust averages through the use of credits only in the case of parameters for which the averaging compliance approach is selected. Moreover, once the option of using an average standard is made, a refiner may not change to the per-gallon standard for that parameter during the averaging period, and an exceedance of the average standard represents a violation of that standard for each day of the averaging period.
The maximum penalty for violations of average standards is $25,000 per violation for each day in the averaging period, plus the economic benefit or saving to the violator. EPA intends to develop a penalty policy that will be used to calculate penalties for use during the administrative phase of enforcement actions, which will take into account factors such as the gravity of the violation, the economic benefit or savings resulting from the violation, the size of the violator's business, the violator's history of compliance with the gasoline quality requirements, and actions taken to remedy the violation. (7/1/94)
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