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

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Table VI.B.1-2 U.S. Production Capacity History α 2001 2002 2003 2004 2005 2006 Plants 9 11 16 22 45 53 Capacity (million gal/yr) 50 54 85 157 290 354 α Capacity Data based on surveys conducted around the month of September for most years, though the 2006 information is based on survey conducted in January 2006 56 2. Expected Growth in U.S. Biodiesel Production/Consumption In addition to the 53 biodiesel plants already in production, as of early 2006, there were an additional 50 plants and 8 plant expansions in the construction phase, which when completed would increase total biodiesel production capacity to over one billion gallons per year. Most of these plants should be completed by early 2007. There were also 36 more plants in various stages of the preconstruction phase (i.e. raising equity, permitting, conceptual design, buying equipment) with a capacity of 755 million gallons/year. As shown in Table VI.B.2-1 if all of this capacity came to fruition, U.S. biodiesel capacity would exceed 1.8 billion gallons. Table VI.B.2-1 Projected Biodiesel Production Capacity Existing Plants Construction Phase Pre-Construction Phase Number of plants 53 58 36 Total Plant Capacity, MM Gallon/year 354 714 754.7 For cost and emission analysis purposes, three biodiesel usage cases were considered: a 2004 base case, a 2012 reference case, and a 2012 control case. The 2004 base case was formed based on historical biodiesel usage (25 million gallons as summarized in Table VI.B.1.1). The reference case was computed by taking the 2004 base case and growing it out to 2012 in a manner consistent with the growth of gasoline. 57 The resulting 2012 reference case consisted of approximately 28 million gallons of biodiesel. Finally, for the 2012 control case, forecasted biodiesel use was assumed to be 300 million gallons based on EIA’s AEO 2006 report (rounded value from Table VI.B.1.1). Unlike forecasted ethanol use, biodiesel use was assumed to be constant at 300 million gallons under both the statutory and higher projected renewable fuel consumption scenarios described in VI.A.4. EIA's projection is 56 From Presentation” Biodiesel Production Capacity”, by Leland Tong, National Biodiesel Conference and Expo, February 7, 2006. 57 EIA Annual Energy Outlook 2006, Table 1 - 130 -
ased on the assumption that the blender's tax credit is not renewed beyond 2008. If the tax credit is renewed, the projection for biodiesel demand would increase. C. Feasibility of the RFS Program Volume Obligations This section examines whether there are any feasibility issues associated with the meeting the minimum renewable fuel requirements of the Energy Act. Issues are examined with respect to renewable production capacity, cellulosic ethanol production capacity, and distribution system capability. Land resource requirements are discussed in Chapter 7 of the RIA. 1. Production Capacity of Ethanol and Biodiesel As shown in sections VI.A. and VI.B., increases in renewable fuel production capacity are already proceeding at a pace significantly faster than required to meet the 2012 mandate in the Act of 7.5 billion gallons. The combination of ethanol and biodiesel plants in existence and planned or under construction is expected to provide a total renewable fuel production capacity of over 9.6 billion gallons by the end of 2012. Production capacity is expected to continue to increase in response to strong demand. We estimate that this will require a maximum of 2,100 construction workers and 90 engineers on a monthly basis through 2012. 2. Production Capacity of Cellulosic Ethanol Beginning in 2013, a minimum of 250 million gallons per year of cellulosic ethanol must be used in gasoline. The Act’s definition of cellulosic, however, includes corn based ethanol as long as greater than 90% of the process energy was derived from animal wastes or other waste materials. As discussed in section VI.A. above, we believe that of the ethanol plants currently in existence, under construction, or in the final stages of planning there is likely to be more than 250 million gallons per year of ethanol produced from plants which meet these alternative definitions for cellulosic ethanol. However, this is not to say that ethanol produced from cellulose will not be part of the renewable supply by 2012. As far as we know there is currently only one demonstration-level cellulosic ethanol plant in operation in North America; it produces 1 million gallons of ethanol per year (Iogen a privately held company, based in Ottawa, Ontario, Canada). However, the technology used to produce ethanol from cellulosic feedstocks continues to improve. With the grants made available through the Energy Act, we expect several cellulosic process plants will be constructed and an ever increasing effort will naturally be made to find better, more efficient ways to produce cellulosic ethanol. - 131 -
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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.
Page 79 and 80: equirements by roughly 10 to 30 per
Page 81 and 82: 4. Provisions For Exporters Of Rene
Page 83 and 84: Previous-year RINs: RINs that came
Page 85 and 86: a. Responsibilities Of Renewable Fu
Page 87 and 88: another, in electronic or paper for
Page 89 and 90: 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: per gallon to biodiesel produced fr
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 and 142: the capital cost of making the nece
Page 143 and 144: information on biodiesel freight co
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
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3. Displacement Indexes (DI) The di
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Table IX.C.1-1 Fossil fuel impacts
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as on the exports of agricultural p
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which may change in response to an
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X. Agricultural Sector Economic Imp
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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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