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

II. Overview Of The Proposal
Today's action describes our proposed requirements for the RFS program, as well
as a preliminary assessment of the environmental and economic impacts of the nation’s
transition to greater use of renewable fuels. This section provides an overview of our
proposal and renewable fuel impacts assessment. Sections III through V provide the
details of the proposed structure of the program, while Sections VI through X describe
our preliminary assessment of the impacts on emissions, air quality, fossil fuel use, and
cost resulting from expanded renewable fuel use.
A. Impacts Of Increased Reliance On Renewable Fuels
In a typical major rulemaking, EPA would conduct a full assessment of the
economic and environmental impacts of the program. However, as discussed in Section
I.A., the replacement of MTBE with ethanol and the extremely favorable economics for
renewable fuels brought on by the rise in crude oil prices are causing renewable fuel use
to far exceed the RFS requirements. This makes an assessment of the program of limited
if any utility, given that it is not currently driving real world impacts and future
projections by the Energy Information Administration indicate that this favorable
condition will continue. Consequently, it is of greater relevance and interest to assess the
impacts of this larger increase in renewable use and the related changes occurring to
gasoline. For this reason we have carried out an assessment of the economic and
environmental impacts of the broader changes in fuel quality resulting from our nation's
transition to greater utilization of renewable fuels, as opposed to an assessment of the
RFS program itself.
In summary, depending on the volume of renewable fuel assumed to be used in
2012 (7.5 to 9.9 billion gallons), we estimate that this transition to renewable fuels will
reduce petroleum consumption by 2.3 to 3.9 billion gallons or approximately 1.0 to 1.6
percent of the petroleum that would otherwise be used by the transportation sector.
Carbon monoxide emissions from gasoline powered vehicles and equipment will be
reduced by 1.3 to 3.6 percent while emissions of benzene (a mobile source air toxic) will
be reduced by 1.7 to 6.2 percent. At the same time, other emissions may increase.
Nationwide, we estimate between a 28,000 and 97,000 ton increase in VOC + NOx
emissions. However, the effects will vary significantly by region with some major areas
like New York City, Chicago and Los Angeles experiencing no increase while other areas
may see an increase in VOC emissions from 3 to 5 percent and an increase in NOx
emissions from 4 to 6 percent from gasoline powered vehicles and equipment.
Furthermore, the use of renewable fuel will reduce CO2 equivalent greenhouse gas
emissions by 9 to 14 million tons, about 0.4 to 0.6 percent of the anticipated greenhouse
gas emissions from the transportation sector in the United States in 2012. On average,
we estimate the cost of this increase in renewable fuel to range from 0.3 cents per gallon
to 1 cent per gallon of gasoline for the nation as a whole. We anticipate additional
impacts that we intend to evaluate as part of the final rulemaking, including changes in
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