Regulation of Fuels and Fuel Additives: Renewable Fuel Standard ...

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Table VII.B.1.a-1 Estimated Ethanol Distribution Infrastructure Capital Costs ($M) Fixed Facilities Retail Terminals Relative to a 3.9 Billion Gallon per Year Reference Case Mobile Facilities Transport Trucks Barges Rail Cars 7.2 billion gallons per year 24 142 38 30 104 9.6 billion gallons per year 44 246 50 52 161 Total Capital Costs 317 542 b. Ethanol Freight Costs The DOE study contains ethanol freight costs for each of the 5 PADDs. The Energy Information Administration translated these cost estimates to a census division basis. 75 We took the EIA projections and translated them into State-by-State ethanol freight costs. In conducting this translation, we accounted for increases in the cost in transportation fuels used to ship ethanol by truck, rail, and barge. We estimate that the freight cost to transport ethanol to terminals would range from 5 cents per gallon in the Midwest, to 18 cents per gallon to the West Coast, which averages 9.2 cents per gallon of ethanol on a national basis. We estimate the total cost for producing and distributing ethanol to be between $1.30 and $1.36 per gallon of ethanol, on a nationwide average basis. This estimate includes both the capital costs to upgrade the distribution system and freight costs. 2. Biodiesel Distribution Costs The volume of biodiesel used by 2012 under the RFS is estimated at 300 million gallons per year. The 2012 baseline case against which we are estimating the cost of distributing the additional volume of biodiesel is 28 million gallons. 76 For the purposes of this analysis, we are assuming that to ensure consistent operations under cold conditions all terminals will install heated biodiesel storage tanks and biodiesel will be transported to terminals in insulated tank trucks and rail cars in the cold seasons. 77 Due to the developing nature of the biodiesel industry, specific 75 Petroleum Market Model of the National Energy Modeling System, Part 2, March 2006, DOE/EIA-059 (2006), http://tonto.eia.doe.gov/FTPROOT/modeldoc/m059(2006)-2.pdf 76 2004 baseline of 25 million gallons grown with diesel demand to 2012. 77 See section VI.C. in today’s preamble regarding the special handling requirements for biodiesel under cold conditions. - 142 -
information on biodiesel freight costs is lacking. The need to protect biodiesel from gelling during the winter may marginally increase freight costs over those for ethanol. Counterbalancing this is the likelihood that biodiesel shipping distances may be somewhat shorter due to the more geographically dispersed nature of biodiesel production facilities. In any event, the potential difference between biodiesel and ethanol freight costs is likely to be small and the cost of distributing biodiesel does not appreciably affect the results of our analysis. Therefore, we believe that estimated freight costs for ethanol of 9.2 cents per gallon adequately reflects the freight costs for biodiesel for this analysis. The capital costs associated with distribution of biodiesel will be somewhat higher per gallon than those associated with the distribution of ethanol due to the need for storage tanks, barges, tanker trucks and rail cars to be insulated and in many cases heated. We estimate that to handle the increased biodiesel volume will require a total capital cost investment of $49,813,000 which equates to about 2 cents per gallon of new biodiesel volume. We estimate the total cost for producing and distributing biodiesel to be between $2.00 and $2.22 per gallon of biodiesel, on a nationwide average basis. This estimate includes both the capital costs to upgrade the distribution system and freight costs. C. Estimated Costs to Gasoline To estimate the cost of increased use of renewable fuels, the cost savings from the phase out of MTBE and the production cost of alkylate, we developed our own spreadsheet cost model. As described above in Section VI.A, the cost analysis is conducted by comparing a base year before the Energy Act's fuel changes to a modeled year with the fuel changes. We used 2004 as the base year. We grew the 2004 gasoline demand to 2012 to create a reference case assuming that the 2004 fuel demand scenario remained the same (fuel quality remained constant). The sum of fuel changes, including the increased use of ethanol, the phase-out of MTBE and the conversion of a part of the MTBE feedstocks to alkylate, is all assumed to occur by 2012 and is compared to the 2012 reference case. This analysis considers the production cost, distribution cost as well as the cost for balancing the octane and RVP caused by these fuel changes. In addition to assessing the cost at 7.2 and 9.6 billion gallons of total ethanol use in gasoline, we considered that ethanol could be used at different levels in RFG. Instead of picking a single point for ethanol use in RFG, we assessed a range (see Section VI.A above). At the high end of the range, ethanol is used in RFG in both summer and winter. At the low end of the range, ethanol is still used in wintertime RFG, but to only a very limited extent in summertime RFG. The lower rate of ethanol use in summertime RFG may occur because the RVP increase associated with ethanol will cause refiners to incur a cost to further control the volatility of their summertime RFG. - 143 -
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The Administrator signed the follow
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Ave., NW, Washington DC. This Docke
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Table of contents: I. Background A.
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C. Requirements for Producers and I
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G. Executive Order 13045: Protectio
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The increased use of renewable fuel
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establish the applicable national v
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Today's proposal outlines the full
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enewable fuel feedstock market pric
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Unlike VOC and NOx, emissions of CO
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These renewable feedstocks are then
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5. Potential Water Quality Impacts
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enewable fuel volume which each par
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certain volume of renewable fuel. E
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est practices would have the option
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As stated, the renewable fuel stand
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enewable fuel volumes in the calcul
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For illustrative purposes, we have
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These credit provisions have meanin
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Stdi = The RFS program standard for
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gasoline. The Act is unclear on whe
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. Ethanol Made From Any Feedstock I
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generate thermal energy used to pro
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animal wastes, including poultry fa
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limit this program solely to a stra
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presence of the denaturant. For ins
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First, doing so could create an inc
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For purposes of this preamble, the
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capability for all of the small ref
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trading program, without any per ga
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obligated parties. However, there i
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particular importance for 2013 and
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have to significantly change their
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The D code would identify cellulosi
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Another case in which a RIN may not
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Section IV. In the context of demon
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equired volumes shown in Table I.B-
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We request comment on the valid lif
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e used for current year compliance.
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equirements by roughly 10 to 30 per
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4. Provisions For Exporters Of Rene
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Previous-year RINs: RINs that came
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a. Responsibilities Of Renewable Fu
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another, in electronic or paper for
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e a one-to-one correspondence betwe
Page 91 and 92: Parent batch Actual volume (gal) Ba
Page 93 and 94: should also have the right to separ
Page 95 and 96: 3. Distribution Of Separated RINs O
Page 97 and 98: obligated parties to exercise marke
Page 99 and 100: Our proposed program is designed to
Page 101 and 102: As discussed in Section III.D, it i
Page 103 and 104: additional enforcement burdens plac
Page 105 and 106: B. Requirements for Obligated Parti
Page 107 and 108: fuel and containing identifying inf
Page 109 and 110: We request comment on our proposed
Page 111 and 112: We also request comment on our prop
Page 113 and 114: The refiner or importer would be li
Page 115 and 116: Plant Feedstock Corn a Table VI.A.1
Page 117 and 118: Leading the Midwest in ethanol prod
Page 119 and 120: EPA forecasts ethanol production to
Page 121 and 122: As shown in Table VI.A.2-1 and Figu
Page 123 and 124: 3. Current Ethanol and MTBE Consump
Page 125 and 126: Oxygenate Use (Bgal) 4.5 4.0 3.5 3.
Page 127 and 128: change from the 2004 base case. 53
Page 129 and 130: per gallon to biodiesel produced fr
Page 131 and 132: ased on the assumption that the ble
Page 133 and 134: Modifications to the rail, barge, t
Page 135 and 136: other waste materials as discussed
Page 137 and 138: elatively small fraction of the tot
Page 139 and 140: production costs using prices for s
Page 141: the capital cost of making the nece
Page 145 and 146: For further details on RVP reductio
Page 147 and 148: assuming only that blending of etha
Page 149 and 150: costs). At a $70 per barrel crude o
Page 151 and 152: gasoline use scenarios will cost th
Page 153 and 154: the incentive to blend in ethanol b
Page 155 and 156: supporting this rulemaking. We hope
Page 157 and 158: We base our estimates of fuel quali
Page 159 and 160: Table VIII.A.1.b-2 Effect of MTBE a
Page 161 and 162: pre-1998 model year onroad diesel e
Page 163 and 164: 1. Primary Analysis The national em
Page 165 and 166: Table VIII.B.1-4 Annual Emissions N
Page 167 and 168: RFG due to the absence of an RVP wa
Page 169 and 170: increase in ambient ozone levels is
Page 171 and 172: developing a model of secondary org
Page 173 and 174: IX. Impacts On Fossil Fuel Consumpt
Page 175 and 176: intended to help fuel producers est
Page 177 and 178: efficiency and to reduce air emissi
Page 179 and 180: combined those displacement indexes
Page 181 and 182: 3. Displacement Indexes (DI) The di
Page 183 and 184: Table IX.C.1-1 Fossil fuel impacts
Page 185 and 186: as on the exports of agricultural p
Page 187 and 188: which may change in response to an
Page 189 and 190: X. Agricultural Sector Economic Imp
Page 191 and 192: XI. Public Participation We request
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ways to comply with any previously
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small refiner under this proposal.
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meet these criteria to be considere
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“economically significant” as d
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40 CFR Part 80 is proposed to be am
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(b) Renewable Fuel Standard for 200
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(2) The term “Renewable fuel” i
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RFStdi = Renewable Fuel Standard in
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a party’s renewable volume obliga
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(a) YYYY is the calendar year in wh
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(ii) The value for EEEEEE in an ext
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(2) A deficit is calculated accordi
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(a) (1) Any party that exports any
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(e) If a refiner is complying on an
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calendar year; however, disqualific
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§80.76, if such information has no
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(1) A summary report of the annual
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(4) Reports shall be submitted on f
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(1) Fail to acquire sufficient RINs
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(b) The following attest procedures
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(B) That the RFS-FRGAS remained seg
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EPA employees or EPA contractors, f
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(iv) Determine the date and time th
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(ii) Be licensed as a Certified Pub
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