EPA is proposing - Petroleum Equipment Institute

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J. Executive Order 12898: Federal Actions to Address Environmental Justice inMinority Populations and Low-Income PopulationsXIII.Statutory Authority14
I. IntroductionThe current Renewable Fuel Standard program (RFS1) was originally adopted byEPA to implement the provisions of the Energy Policy Act of 2005 (EPAct), which addedsection 211(o) to the Clean Air Act (CAA). With the passage of the EnergyIndependence and Security Act of 2007 (EISA), Congress recently made severalimportant revisions to these renewable fuel requirements. This Notice proposes to revisethe RFS program regulations to implement these EISA provisions. The proposedchanges would apply starting January 1, 2010. For the remainder of 2009, the currentRFS1 regulations would apply. However, in anticipation of the biomass-based dieselstandard proposed for 2010, obligated parties may find it in their best interest to planaccordingly in 2009.A. Renewable Fuels and the Transportation SectorFor the past several years, U.S. renewable fuel use has been rapidly increasingfor a number of reasons. In the early 1990’s, certain oxygenated gasoline fuel programsrequired by the CAA amendments of 1990 established new market opportunities forrenewable fuels, primarily ethanol. At the same time, growing concern over U.S.dependence on foreign sources of crude placed increasing focus on renewable fuels as areplacement for petroleum-based fuels. More recently, several state bans on the use ofmethyl tertiary butyl ether (MTBE) in gasoline resulted in a large, sudden increase indemand for ethanol. Perhaps the largest impact on renewable fuel demand, however, hasbeen the dramatic increase in the cost of crude oil. In the last few years, both crude oilprices and crude oil price forecasts have increased dramatically, which have resulted in alarge economic incentive for the increased development and use of renewable fuels.In 2005, Congress introduced a new approach to supporting renewable fuels.EPAct established a major new federal renewable fuel volume mandate. EPAct requireda ramp up to 7.5 billion gallons of renewable fuel as motor vehicle fuel by 2012 and setannual volume targets for each year leading up to 2012. For 2013 and beyond, EPA wasdirected to establish the annual required renewable fuel volumes, but at a percentage levelno less than that required for 2012. While the market forces described above ultimatelycaused renewable fuel use to far exceed the EPAct mandates, this program providedcertainty that at least a minimum amount of renewable fuel would be used in the U.S.transportation market, which in turn provided assurance for investment in productioncapacity.The subsequent passage of EISA made significant changes to both the structureand the magnitude of the renewable fuel program. The renewable fuel programestablished by EISA, hereafter referred to as RFS2, mandates the use of 36 billion gallonsof renewable fuel by 2022. This is nearly a five-fold increase over the highest volumespecified by EPAct and constitutes a 10-year extension of the scheduled productionramp-up period provided for in that legislation. It is clear that the volumes required byEISA will push the market to new levels—far beyond what current market conditions15
Page 1 and 2: The Administrator signed the follow
Page 3 and 4: DATES: Comments must be received on
Page 5 and 6: Category NAICS 1CodesIndustryIndust
Page 7 and 8: 3. Renewable Fuel Exempt from 20 Pe
Page 9 and 10: E. Concept for EPA Moderated Transa
Page 11 and 12: F. Total GHG Emission ReductionsG.
Page 13: XI.C. Additional Water Issues1. Che
Page 17 and 18: analyzed the lifecycle GHG impacts
Page 19 and 20: II.Overview of the Proposed Program
Page 21 and 22: iofuel or biomass-based diesel is a
Page 23 and 24: For other renewable fuels, EISA mak
Page 25 and 26: of important trends in agricultural
Page 27 and 28: not been assessed to participate in
Page 29 and 30: finalized. Rather, the current RFS1
Page 31 and 32: However, for the 2010 compliance ye
Page 33 and 34: In a similar fashion, while we reco
Page 36 and 37: for the final rule, along with impa
Page 38 and 39: Table II.B.3-1 RFS2 “Less Sensiti
Page 40 and 41: the leading problems facing our nat
Page 42 and 43: II.B.5-1 summarizes the changes in
Page 44 and 45: the RFS program and minimizing the
Page 46 and 47: gasoline or diesel that the renewab
Page 48 and 49: Section III.B.4 of this preamble ou
Page 50 and 51: “Advanced biofuel” also may be
Page 52 and 53: must therefore specify whether or n
Page 54 and 55: sugarcane sugar has been estimated
Page 56 and 57: Air Act, served this purpose. (40 C
Page 58 and 59: enewable fuels produced by the faci
Page 60 and 61: limit the initial grandfathering on
Page 62 and 63: value of the modifications exceeds
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(2) Expiration date of 15 years for
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would be 15 years from the time the
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a. Definitions of TermsEISA’s des
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Therefore, we believe that there ma
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option, and specifically request co
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specify in the regulations a time p
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propose to adopt the definition of
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iv.Biomass Obtained from Certain Ar
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The effect of adding EISA's definit
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and a concurrent increase in the pr
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We also examined third-party organi
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their feedstock does not meet the d
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definition of renewable biomass, bu
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producers would also be delayed. Du
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enewable fuel for which RINs were g
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Under the existing RFS1 program, pr
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already. However, the foreign renew
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2. All liquid renewable fuels would
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The same amount of petroleum energy
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ethanol made from corn stover or sw
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For RFS2 we are proposing a similar
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Our proposed approach to foreign pr
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describe its feedstock(s), fuel typ
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amount of the different types of fe
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energy in the fossil feedstock. Jus
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Under our proposed approach, the pr
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will not replace or supersede other
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1. Calculation of Standardsa. How W
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enewable fuel use in the equations
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GE i =DE i =The amount of gasoline
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No adjustment was made for small re
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fuel for 2009. As described in Sect
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approach would also require that we
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Similarly, the combination of the 0
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The above discussion assumes that t
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As discussed above in Section II.A.
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lendstocks and unfinished fuels as
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In 2009, the RFS1 regulations will
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4. Alternative Approach to Designat
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approach to RIN distribution as des
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the resulting expansion in the numb
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enewable fuel with gasoline or dies
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than they needed, another company m
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emaining obligated parties to purch
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Monthly Reporting ScheduleMonth Cov
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information (e.g. the average price
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determination about the adequacy of
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IV.What Other Program Changes Have
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a. Extension of Existing RFS1 Tempo
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and a consideration of EPA’s ongo
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enewable fuel per year. We also req
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higher volume requirements. However
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transaction report is to document R
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oth the buyer and the seller upon c
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damage to the vehicle. 45 We antici
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Table V.A.1-1 AEO 2007 Reference Ca
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Table V.A.2-1 Control Case Projecte
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European market with diesel fuel an
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The economic competitiveness of cel
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production of RD is currently under
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Butanol is another potential motor
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is not limited due to environmental
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and less than half a percent is pro
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Since the majority of ethanol is ma
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Table V.B.1-4 Potential Industry Ex
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Table V.B.1-6 Projected Near-Term C
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cellulosic diesel plant in addition
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To date, the majority of cellulosic
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Increased public interest, governme
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Company or Organization NameTable V
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energy intensity of ethanol product
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today and which incurs a fee for it
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Sustainable removal rates for agric
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could be available for producing bi
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In addition to estimating the exten
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Table V.B.2-5 Projected Cellulosic
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Ethanol imports have traditionally
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consumption estimates. The most cur
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From there, we looked at 2006-2007
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Table V.B.4-1U.S. Biodiesel Capacit
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processed with petroleum (thus proh
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number of companies and universitie
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transport by pipeline. However, the
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USDA estimated that in 2005 approxi
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volumes also tend to be smaller tha
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We intend to incorporate the result
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Given the broad importance to the U
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classified as hazardous liquids. Th
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producing E85, and whether we shoul
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lower energy density of ethanol. Th
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eing consumed by today’s vehicle
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The maximum amount of ethanol our c
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There are a number of states promot
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According to a recent online fuel p
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to gasoline) by 2012. This number w
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directs the Administrator of EPA to
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egulations including those pertaini
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may be that certain vehicles and en
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had pumps dispensing both leaded an
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Prior to and after 1981, several wa
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contain up to 2.7% by weight oxygen
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marketplace. In addition, the subst
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States and also those that occur in
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changes in agricultural commodity p
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1. Scenario DescriptionTo quantify
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the refinery, the production of gas
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for uncertainty in our estimates, i
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Currently, no single model can capt
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conversions. Winrock has used 2001-
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can relatively accurately capture e
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working with Colorado State Univers
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We are also addressing GHG emission
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increasing productivity on existing
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iii.What Type of Land is ConvertedI
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come from grassland, 45% of that la
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changes in particular in other coun
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diesel. In simulating land use chan
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enefits may be small compared to th
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decreased, it is likely that renewa
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assessing the stream of GHG benefit
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the reduction in GHG emissions. 295
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Therefore, lower discount rates suc
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appropriately reflects the uneven r
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combustion of biomass fuel source a
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marginal displacement approach and,
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a. Corn EthanolTable VI.C.1-1 prese
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local market is available such as a
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Table VI.C.1-3 Corn Ethanol Lifecyc
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will not significantly impact other
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In addition, FASOM predicts that sw
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International Land UseChange 2,474,
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Assessments are made in comparison
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D. ThresholdsEISA established GHG t
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The lifecycle analyses that we cond
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2. Assignments for Pathways Subject
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3. Assignments for Additional Pathw
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the land use impacts could signific
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would need to use a minimum of 48%
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generic renewable fuel. Therefore,
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EthanolEthanolBiodiesel (monoalkyl
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As stated earlier, there may be oth
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• We estimate the largest overall
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coupled with the MAGICC (Model for
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The results in Table VI.G.2-1 and F
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VII.How Would the Proposal Impact C
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PM2.5 14,321 0.4% 11,452 0.3% 5,376
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The fuel production and distributio
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As shown in Tables VII.C-1 and VII.
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1. Current Levels of PM 2.5 , Ozone
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known and well-established tool and
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Ground-level ozone pollution is typ
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effects from exposure to the class
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increased proliferation of bone mar
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The IARC has classified “alcoholi
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diesel exhaust compared with evapor
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in these areas. For more informatio
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concrete and limestone. Particles c
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379
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Table VIII.A.1-1a Projected 2022 Br
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ethanol plants in the U.S. Likewise
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operations, or is available from mi
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must be sorted at the facility. Thi
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install secondary storage. We assum
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Thermochemical or gasification unit
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Table VIII.A.1-3 Biochemical Cellul
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pathway in our analysis and based o
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there could also be cost and effici
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Table VIII.A.1-6 Average Imported E
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unit at a refinery and 33% at rende
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investment environment and to 2006
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Table VIII.B.1-1 Estimated Ethanol
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assumed to be filled first from loc
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diesel fuel at $53/bbl crude oil, a
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estimated first, compared to the co
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Table VIII.D.2-2 Total Projected U.
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IX.Economic Impacts and Benefits of
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Biofuel Reference Case Control Case
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production of 90 million tons of co
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Changes to the global commodity tra
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it consumed. This compares roughly
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economy for 2022. The U.S. net expo
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soliciting comments on how to incor
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U.S. military costs are excluded fr
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estimates, and a consistent set of
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3%, and 7%, where 2% and 3% are con
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enefit and cost estimates, and the
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estimates. We are also interested i
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Though EPA is characterizing the ch
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Endpoint Pollutant Study Study Popu
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Nitrogen and SulfateDeposition Welf
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thirty-five industries of the U.S.
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Tile drainage is another important
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Alexander, et al. 524 modeled the s
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BGY for 2015 to 2022. These volumes
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2. Ethanol ProductionThere are thre
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3. Biodiesel PlantsBiodiesel plants
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XI.Public ParticipationWe request c
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You may find the following suggesti
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or for a Federal agency. This inclu
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sources of petroleum, increase dome
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on small businesses as a result of
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The RFS1 program regulations provid
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small refinery study, specifically
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accountable process to ensure “me
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XIII. Statutory AuthorityStatutory
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80.1452 What are the reporting requ
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Combined heat and power (CHP), also
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applicable air permits issued by th
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for calendar year 2006 (as determin
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RFV AB,i =RFV RF,i =G i =D i =RG i
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GV i =DV i =The non-renewable gasol
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D x = Volume of batch x of diesel p
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§§ 80.1417-80.1424 [Reserved]§ 8
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(iii) Foreign producers may generat
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Non-esterrenewabledieselCellulosicg
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V s,RF = Standardized volume of the
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V RIN = EV * V sWhere:V RIN = RIN v
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(∑RINNUM) BBD,i = Sum of all owne
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(iii)(iv)RINs generated in 2008 or
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(d) Any batch-RIN can be divided by
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RVO BBD,i = The Renewable Volume Ob
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(a)(b)Renewable fuel blenders who h
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(3) The waiver must be sent to EPA
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fuel standards of §80.1405 and the
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(3) The number of RINs expected to
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(1) Any producer of renewable fuel
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(c) Beginning January 1, 2010, any
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(viii) The total current-year RINs
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(i) The submitting party’s name.(
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(4) The date of the transfer.(5) Wh
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(e)provided by the Bureau of Labor
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(A)(B)(C)(ii)(iii)(iv)(v)The obliga
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(4) Independent Third Party Enginee
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(i) Designation of the transportati
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(4) United States substantive and p
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prepared by the foreign refiner as
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(6) In order to complete the requir
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(i) The foreign producer, containin
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(8) In any case where RFS-FRRF prod
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(6) Any United States importer shal
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“I hereby certify: (1) That I hav
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G = the total of the number of gall
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Pursuant to Clean Air Act section 1
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