[Federal Register Volume 79, Number 85 (Friday, May 2, 2014)]
[Rules and Regulations]
[Pages 25025-25031]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-10135]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80
[EPA-HQ-OAR-2012-0546; FRL-9910-18-OAR]
RIN 2060-AS21
Regulation of Fuels and Fuel Additives: 2013 Cellulosic Biofuel
Standard
AGENCY: Environmental Protection Agency (EPA).
ACTION: Direct final rule.
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SUMMARY: The Environmental Protection Agency (EPA) is taking direct
final action to revise the 2013 cellulosic biofuel standard published
on August 15, 2013. This action follows from EPA having granted two
petitioners' requests for reconsideration of the 2013 cellulosic
biofuel standard. EPA granted reconsideration because one of the two
companies that EPA expected to produce cellulosic biofuel in 2013
announced soon after EPA signed its final rule that it intended to
produce substantially lower volumes of cellulosic biofuel in 2013 than
it had earlier reported to EPA. Since the cellulosic biofuel standard
was based on EPA's projection of cellulosic biofuel production in 2013,
EPA deemed this new information to be of central relevance to the rule,
warranting reconsideration. On reconsideration, EPA is directed to base
the standard on the lower of ``projected'' production of cellulosic
fuel in 2013 or the cellulosic biofuel applicable volume set forth in
the statute. Since data are available to show actual production volumes
for 2013, EPA's ``projection'' and final rule are based on actual
cellulosic biofuel production in 2013. This action only affects the
2013 cellulosic biofuel standard; all other RFS standards remain
unchanged. EPA is finalizing a revised cellulosic biofuel standard of
0.0005% for 2013.
DATES: This rule is effective on July 1, 2014 without further notice,
unless EPA receives relevant adverse comment by June 2, 2014. If EPA
receives relevant adverse comment, we will publish a timely withdrawal
of this direct final rule in the Federal Register informing the public
that this rule will not take effect.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2012-00546, by one of the following methods:
www.regulations.gov: Follow the on-line instructions for
submitting comments.
Email: [email protected].
Mail: Air and Radiation Docket and Information Center,
Environmental Protection Agency, Mailcode: 2822T, 1200 Pennsylvania
Ave. NW., Washington, DC 20460.
Hand Delivery: EPA Docket Center, EPA West Building, Room
3334, 1301 Constitution Ave. NW., Washington, DC 20460. Such deliveries
are only accepted during the Docket's normal hours of operation, and
special arrangements should be made for deliveries of boxed
information.
Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2012-0546. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
www.regulations.gov, including any personal information provided,
unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through www.regulations.gov or email. The
www.regulations.gov Web site is an ``anonymous access'' system, which
means EPA will not know your identity or contact information unless you
provide it in the body of your comment. If you send an email comment
directly to EPA without going through www.regulations.gov your email
address will be automatically captured and included as part of the
comment that is placed in the public docket and made available on the
Internet. If you submit an electronic comment, EPA recommends that you
include your name and other contact information in the body of your
comment and with any disk or CD-ROM you submit. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses. For additional
information about EPA's public docket visit the EPA Docket Center
homepage at http://www.epa.gov/epahome/dockets.htm. For additional
instructions on submitting comments, go to Section I.B of the
SUPPLEMENTARY INFORMATION section of this document.
Docket: All documents in the docket are listed in the
www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, will be publicly available only in hard copy.
Publicly available docket materials are available either electronically
in www.regulations.gov or in hard copy at the Air and Radiation Docket
and Information Center, EPA/DC, EPA West, Room 3334, 1301 Constitution
Ave. NW., Washington, DC. The Public Reading Room is open from 8:30
a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The
telephone number for the Public Reading Room is (202) 566-1744, and the
telephone number for the Air Docket is (202) 566-1742.
FOR FURTHER INFORMATION CONTACT: Julia MacAllister, Office of
Transportation and Air Quality, Assessment and Standards Division,
Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI
48105; Telephone number: 734-214-4131; Fax number: 734-214-4816; Email
address: [email protected], or the public information line for
the Office of Transportation and Air Quality; telephone number (734)
214-4333; Email address [email protected].
SUPPLEMENTARY INFORMATION:
I. Why is EPA using a direct final rule?
EPA is publishing this rule without a prior proposed rule because
we view this as a noncontroversial action. This action amends the 2013
cellulosic biofuel standard that was finalized in ``Regulation of Fuels
and Fuel Additives: 2013 Renewable Fuel Standards; Final Rule,''
(August 15, 2013; 78 FR 49794). Finalizing this adjusted 2013
cellulosic biofuel standard expeditiously will reduce regulatory
uncertainty and avoid unnecessary cost or burden for obligated parties.
Until this adjusted cellulosic biofuel standard is finalized, obligated
parties will have to comply with the current and significantly higher
2013 cellulosic biofuel standard. This would likely involve a
substantial purchase of cellulosic waiver credits, which EPA would
subsequently need to reimburse. This action follows from EPA having
granted, on January 23, 2014, requests for reconsideration of the 2013
cellulosic biofuel standard submitted by the American Petroleum
Institute and the American Fuel & Petrochemical Manufacturers. In
granting reconsideration, EPA determined that petitioners had met the
statutory criteria of section 307(d)(7)(B) of the Clean Air Act, since
petitioners had identified
[[Page 25026]]
new information of central relevance that became available after the
comment period closed but within the time period specified for parties
to seek judicial review.
In the ``Proposed Rules'' section of today's Federal Register, we
are publishing a separate document that will serve as the proposed rule
to revise the 2013 cellulosic standard if adverse comments are received
on this direct final rule. We will not institute a second comment
period on this action. Any parties interested in commenting must do so
at this time. For further information about commenting on this rule,
see the ADDRESSES section of this document.
If EPA receives relevant adverse comment or a request for a public
hearing, we will publish a timely withdrawal in the Federal Register
informing the public that this direct final rule will not take effect.
We would address all public comments in any subsequent final rule based
on the proposed rule.
II. Does this action apply to me?
Entities potentially affected by this direct final rule are those
involved with the production, distribution, and sale of transportation
fuels, including gasoline and diesel fuel or renewable fuels such as
ethanol and biodiesel. Potentially regulated categories include:
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NAICS \1\ Examples of potentially regulated
Category codes SIC \2\ codes entities
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Industry................................... 324110 2911 Petroleum Refineries.
Industry................................... 325193 2869 Ethyl alcohol manufacturing.
Industry................................... 325199 2869 Other basic organic chemical
manufacturing.
Industry................................... 424690 5169 Chemical and allied products
merchant wholesalers.
Industry................................... 424710 5171 Petroleum bulk stations and
terminals.
Industry................................... 424720 5172 Petroleum and petroleum products
merchant wholesalers.
Industry................................... 454319 5989 Other fuel dealers.
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\1\ North American Industry Classification System (NAICS).
\2\ Standard Industrial Classification (SIC) system code
This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that EPA is now aware
could potentially be regulated by this action. Other types of entities
not listed in the table could also be regulated. To determine whether
your activities would be regulated by this action, you should carefully
examine the applicability criteria in 40 CFR part 80. If you have any
questions regarding the applicability of this action to a particular
entity, consult the person listed in the preceding section.
Outline of This Preamble
I. Executive Summary
II. Assessment of the Petitions for Reconsideration of the
Cellulosic Biofuel Standard
III. Cellulosic Biofuel Volume for 2013
IV. Percentage Standards for 2013
A. Background
B. Calculation of the Cellulosic Biofuel Standard
1. How is the standard calculated?
2. Small Refineries and Small Refiners
3. Cellulosic Standard
V. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
J. Executive Order 12898: Federal Action To Address
Environmental Justice in Minority Populations and Low-Income
Populations
K. Congressional Review Act
VI. Statutory Authority
I. Executive Summary
On October 10, 2013, and October 11, 2013, the U.S. Environmental
Protection Agency (EPA) received petitions from the American Fuel &
Petrochemical Manufacturers and the American Petroleum Institute
requesting that EPA reconsider portions of the final rule entitled
Regulation of Fuels and Fuel Additives: 2013 Renewable Fuel
Standards\1\. Petitioners noted the substantial reduction (from 3-5
million gallons to 1-2 million gallons) in anticipated cellulosic
biofuel production in 2013 that was announced shortly after EPA signed
its final rule by one of two companies expected to produce cellulosic
biofuel in 2013. After review, EPA determined that the petitions for
reconsideration with regard to the 2013 cellulosic biofuel standard had
demonstrated the statutory criteria specified in Section 307(d)(7)(B)
of the Clean Air Act for the reconsideration. On January 23, 2014, the
Administrator notified petitioners that their petitions, with regard to
the 2013 cellulosic biofuel standard, had been granted and that EPA
would initiate a notice and comment rulemaking to reconsider the
standard.\2\
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\1\ 78 FR 49794 (August 15, 2013).
\2\ EPA has not yet taken action on aspects of these petitions
that relate to matters other than the 2013 cellulosic biofuel
standard.
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In this rulemaking, EPA is revising the 2013 cellulosic biofuel
standard. In reconsidering the earlier cellulosic standard, EPA is
directed to base the standard on the lower of the ``projected''
production volume of cellulosic fuel in 2013 or the cellulosic biofuel
volume target set forth in the statute. At this time, since data are
available to show actual production volumes of cellulosic for 2013, our
``projection'' is based on actual cellulosic production in 2013.
Specifically, we are calculating the volume of cellulosic biofuel to be
used in 2013 by reference to the actual number of cellulosic biofuel
renewable identification numbers (RINs) generated and reported through
the EPA Monitored Transaction System (EMTS) in 2013.
In 2013 a total of 818,517 cellulosic biofuel RINs were
generated.\3\ Of this total, 8,332 RINs were invalidly generated and
were retired.\4\ This leaves a total of 810,185 cellulosic biofuel RINs
that are available for use by obligated parties. EPA believes that the
EMTS data best represent the number of cellulosic RINs actually
produced in 2013 and are therefore an appropriate volume on which to
base the required volume of cellulosic biofuel for 2013.
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\3\ Sum of D3 RINs (422,740) and D7 RINs (395,777) generated in
2013. Data from the EMTS (last accessed February 25, 2014).
\4\ Data from the EMTS (last accessed March 19, 2014).
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[[Page 25027]]
The percentage standard for cellulosic biofuel for 2013 is shown
below in Table I-1. The specific formula we used in calculating the
cellulosic renewable fuel percentage standard is contained in the
regulations at 40 CFR 80.1405 and described in Section V of this
preamble. The percentage standard for cellulosic biofuel represents the
ratio of the renewable fuel volume we have determined should be
required for 2013 to the non-renewable gasoline and diesel volume used
in 2013, with appropriate corrections. Detailed calculations can be
found in Section IV, including a description of the 2013 gasoline and
diesel volumes used.
Table I-1--Percentage Standards for 2013
------------------------------------------------------------------------
------------------------------------------------------------------------
Cellulosic biofuel..................................... 0.0005%
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Since EPA's revised cellulosic biofuel standard for 2013 is lower
than the pre-existing standard, it is possible that some obligated
parties may have purchased more cellulosic waiver credits than will
ultimately be needed for 2013 compliance. EPA will issue a refund for
all such excess cellulosic waiver credits.
II. Assessment of the Petitions for Reconsideration of the Cellulosic
Biofuel Standard
On August 6, 2013, EPA finalized the annual standard for cellulosic
biofuel as required under the Clean Air Act Section 211(o).\5\ EPA set
the 2013 cellulosic biofuel percentage standard using the volume of
cellulosic biofuel (6 million ethanol-equivalent gallons) that EPA
expected to be produced and used in the United States in 2013. This
projection was based on expected production from two companies: INEOS
Bio (0-1 million actual gallons, 0-1 million ethanol-equivalent
gallons) and KiOR (3-4 million actual gallons, 5-6 million ethanol-
equivalent gallons. KiOR's facility is located in Columbus,
Mississippi, while INEOS Bio's facility is located in Vero Beach,
Florida.
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\5\ 78 FR 49794, August 15, 2013.
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EPA subsequently received petitions from the American Fuel &
Petrochemical Manufacturers and American Petroleum Institute, dated
October 10 and October 11, 2013, respectively, requesting that EPA
reconsider the 2013 cellulosic biofuel standard and other parts of the
rule entitled Regulation of Fuels and Fuel Additives: 2013 Renewable
Fuel Standards.
Both the American Petroleum Institute and the American Fuel &
Petrochemical Manufacturers in their petitions for reconsideration
cited a conference call held by KiOR on August 8, 2013, two days after
EPA finalized the 2013 rule, as providing new information that required
EPA to reconsider its 2013 cellulosic biofuel standard. In this
conference call, KiOR issued updated guidance on their expected volume
of cellulosic biofuel production in 2013 and KiOR lowered its
projection to 1-2 million actual gallons in 2013. This represented a
significant reduction from KiOR's previous projection of 3-5 million
actual gallons in a May 9, 2013, conference call. This updated KiOR
guidance was also lower than EPA's projected cellulosic biofuel
production from KiOR's facility of 3-4 million actual gallons, which
had been based in part on information from the earlier May 9, 2013,
conference call. KiOR's announcement on August 8, 2013, therefore
clearly represents new information that was not available during the
comment period, and which became available after the comment period had
closed but within the period for parties to seek judicial review.
EPA next considered whether the objection was of central relevance
to the outcome of the rule. EPA interprets the phrase ``of central
relevance to the outcome of the rule'' to mean that the objection
provides substantial support for the argument that the regulation
should be revised. Because we projected that only two firms would
contribute to the cellulosic biofuel volume in 2013, and because KiOR's
anticipated production reflected more than 80% of our volume
projection, KiOR's reduced production estimate for 2013 from 3-5
million actual gallons of cellulosic biofuel to 1-2 million actual
gallons of cellulosic biofuel, announced in their public conference
call on August 8, 2013, strongly indicated that the production of
cellulosic biofuel in 2013 was likely to be significantly lower than
EPA's projection.
Even if both companies produced cellulosic biofuel at the high end
of their projected production ranges after the KiOR revision (1 million
ethanol-equivalent gallons for INEOS Bio, 3 million ethanol-equivalent
gallons for KiOR) the total availability of cellulosic biofuel RINs
generated in 2013 would still be 33% lower than the EPA projection in
the final rule. Had the updated production estimate from KiOR's
conference call on August 8, 2013, been available to EPA at the time
the 2013 cellulosic biofuel standard was finalized, it is highly
probable that it would have impacted the outcome of that standard. On
these grounds, EPA determined that KiOR's updated production estimate
is of central relevance to the 2013 cellulosic biofuel standard, as it
provides substantial support for the argument that the regulation
should be revised.
Although not relevant to EPA's action on the 2013 cellulosic
standard, it should be noted that EPA does not anticipate that future
modifications to company cellulosic biofuel production estimates that
are received after the close of the comment period but within the
period for parties to seek judicial review, will necessarily be grounds
for the reconsideration of the cellulosic biofuel standard in future
years. Here, reconsideration was granted due to the substantially
reduced production estimates (from 3-5 million gallons to 1-2 million
gallons) by one of only two companies expected to produce cellulosic
biofuel in 2013. Any similar situation will be evaluated on a case-by-
case basis. As the number of facilities from which cellulosic biofuel
production increases, and as the potential production volume from each
facility increases, it becomes increasingly less likely that changes in
the production estimate from any single company will be of central
relevance to the overall cellulosic biofuel standard. The greater the
number of companies expected to produce cellulosic biofuel, the more
likely it is that a reduction in the expected volume from any single
company would either be insignificant in the context of the total
standard, or can be made up with higher production volumes from
another, or more likely several other companies.
Our decision to grant reconsideration of the 2013 cellulosic
biofuel standard has no impact on other 2013 RFS standards.
III. Cellulosic Biofuel Volume for 2013
EPA is directed by Section 211(o)(7)(D)(i) of the Clean Air Act to
base the 2013 cellulosic biofuel standard on the lower of the
``projected'' production volume of cellulosic fuel in 2013 or the 1.0
billion gallon 2013 cellulosic biofuel ``applicable volume'' set forth
in Section 211(o)(2)(B)(III) of the statute. In projecting biofuel
production for a given year, EPA must consider an estimate provided by
the Energy Information Administration (EIA), and may also consider
additional available and relevant information. API v. EPA, 706 F.3d 474
(D.C. Cir. 2013) Since EPA is now tasked with making a ``projection''
after the year has ended, we believe the most appropriate information
and data in this instance is
[[Page 25028]]
the actual cellulosic biofuel production (in ethanol-equivalent gallons
\6\) in 2013.
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\6\ More than one RIN is generated for each physical gallon of
renewable fuel that has a higher energy content than ethanol. For
example, 1.7 RINs are generated for one physical gallon of
cellulosic diesel fuel. Ethanol-equivalent gallons are used to
project cellulosic biofuel production when setting the cellulosic
biofuel standard, and RINs, generated on an ethanol-equivalent
basis, are used to comply with the standard.
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EPA tracks and publically reports the number of RINs generated in
the RFS program through the EPA Moderated Transaction System (EMTS).\7\
There are two types of RINs that may be used to satisfy a company's
cellulosic biofuel RVO: Cellulosic biofuel RINs (D3) and cellulosic
diesel RINs (D7). The total number of 2013 RINs available to satisfy
the cellulosic biofuel RVO can be calculated by adding the number of D3
and D7 RINs generated in 2013 and subtracting the number of RINs
generated in error.\8\ Using this method, the total number of valid
RINs generated and which can be used towards the cellulosic biofuel
obligation in 2013 is 810,185. This calculation for cellulosic biofuel
RINs is shown in Figure III-1 below.
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\7\ RFS2 EMTS Informational Data. See http://www.epa.gov/otaq/fuels/rfsdata/2013emts.htm (last accessed March 19, 2014).
\8\ RINs may be generated in error for reasons such as
improperly functioning flow meters, temperature volume correction
errors, clerical errors, or fraud.
Figure III-1--Valid Cellulosic RINs Generated in 2013 \9\
------------------------------------------------------------------------
------------------------------------------------------------------------
D3 RINs Generated.......................................... 422,740
D7 RINs Generated.......................................... 395,777
Total Cellulosic RINs Generated............................ 818,517
D3 RINs Generated in Error................................. 0
D7 RINs Generated in Error................................. 8,332
Total Valid Cellulosic RINs Generated in 2013.............. 810,185
------------------------------------------------------------------------
IV. Percentage Standards for 2013
A. Background
The renewable fuel standards are expressed as volume percentages
and are used by each refiner or importer to determine their Renewable
Volume Obligation (RVO). Each standard applies to the sum of all
gasoline and diesel produced or imported by an obligated party. The
applicable percentage standard is set so that if every obligated party
meets the percentages, then the amount of cellulosic biofuel used will
meet the volumes required on a nationwide basis. As discussed in
Section III, the required volume of cellulosic biofuel for 2013 is
810,185 ethanol-equivalent gallons.
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\9\ RIN numbers are from the EMTS (last accessed March 19,
2014).
Table IV.A-1--Volume for Use in Setting the Applicable Percentage
Standards for 2013 \a\
------------------------------------------------------------------------
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Cellulosic biofuel..................................... 810,185
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\a\ Due to the manner in which the percentage standards are calculated,
the volume is given in terms of ethanol-equivalent gallons
The formulas used in deriving the annual standards are typically
based in part on estimates of the volumes of gasoline and diesel fuel,
for both highway and nonroad uses, that are projected to be used in the
year in which the standard will apply. However, as discussed below, for
this rule we will use the most recent EIA estimate, published in March
2014. Producers of other transportation fuels, such as natural gas,
propane, and electricity from fossil fuels, are not subject to the
standards, and volumes of such fuels are not used in calculating the
annual standards. Since the standards apply to producers and importers
of gasoline and diesel, these are the transportation fuels used to set
the standards, and then again to determine the annual volume
obligations of an individual gasoline or diesel producer or importer.
B. Calculation of the Cellulosic Biofuel Standard
1. How is the standard calculated?
The following formula is used to calculate the four percentage
standards applicable to producers and importers of gasoline and diesel
(see Sec. 80.1405):
[GRAPHIC] [TIFF OMITTED] TR02MY14.073
Where
StdCB,i = The cellulosic biofuel standard for year i, in
percent.
RFVCB,i = Annual volume of cellulosic biofuel required by
section 211(o) of the Clean Air Act for year i, in gallons.
Gi = Amount of gasoline projected to be used in the 48
contiguous states and Hawaii, in year i, in gallons.
Di = Amount of diesel projected to be used in the 48
contiguous states and Hawaii, in year i, in gallons. This value
excludes diesel used in ocean-going vessels.
RGi = Amount of renewable fuel blended into gasoline that
is projected to be consumed in the 48 contiguous states and Hawaii,
in year i, in gallons.
RDi = Amount of renewable fuel blended into diesel that
is projected to be consumed in the 48 contiguous states and Hawaii,
in year i, in gallons.
GSi = Amount of gasoline projected to be used in Alaska
or a U.S. territory in year i if the state or territory opts-in, in
gallons.
RGSi = Amount of renewable fuel blended into gasoline
that is projected to be consumed in Alaska or a U.S. territory in
year i if the state or territory opts-in, in gallons.
DSi = Amount of diesel projected to be used in Alaska or
a U.S. territory in year i if the state or territory opts-in, in
gallons.
RDSi = Amount of renewable fuel blended into diesel that
is projected to be consumed in Alaska or a U.S. territory in year i
if the state or territory opts-in, in gallons.
GEi = Amount of gasoline projected to be produced by
exempt small refineries and small refiners in year i, in gallons, in
any year they are exempt per Sec. Sec. 80.1441 and 80.1442,
respectively. For 2013, this value is 0.12 billion gallons. See
further discussion in Section IV.B.2 below.
DEi = Amount of diesel projected to be produced by exempt
small refineries and small refiners in year i, in gallons, in any
year they are exempt per Sec. Sec. 80.1441 and 80.1442,
respectively. For 2013, this value is 0.14 billion gallons. See
further discussion in Section IV.B.2 below.
The statute requires that EIA provide EPA in October of each year
an estimate of the projected gasoline and diesel consumption in the
forthcoming calendar year (as well as additional information on
projected cellulosic biofuel and biomass diesel consumption), and EPA
is to ``determine'' the annual percentage standards ``based on'' the
information provided by EIA. This structure envisions standards enacted
prior to the compliance year. The United States Court of Appeals for
the District of Columbia Circuit recently interpreted this provision in
the context of a challenge to the 2012 cellulosic biofuel standard. API
v. EPA, 706 F.3d 474 (D.C. Cir. 2013). The Court held that the Act
``[p]lainly . . . [does not] contemplate
[[Page 25029]]
slavish adherence by EPA to the EIA estimate''; had Congress so
intended, ``it could have skipped the EPA `determination' altogether.''
Id. Instead, ``EPA [i]s entitled . . . to read the phrase `based on' as
requiring great respect but allowing deviation consistent with that
respect.'' Id. Accordingly, the Court upheld EPA's supplementation of
EIA's estimate with information EPA received from prospective biofuel
producers--including information submitted after EPA had received EIA's
estimate--for the purpose of ``determin[ing]'' the 2012 cellulosic
biofuel standard. Id.
For purposes of this rulemaking, we believe it is appropriate to
rely on EIA's most recent reports of actual gasoline and diesel
consumption in the United States in 2013 rather than previous
projections, such as their October 2012 projection. Doing so allows a
more accurate assessment of a percentage standard that will help to
ensure that the volume of cellulosic biofuel we have determined should
be used for compliance in 2013 will in fact be required. This approach
is also consistent with our use of actual cellulosic biofuel production
data for 2013, rather than projections, in deriving the cellulosic
biofuel standard. We have used EIA's March 2014 Short-Term Energy
Outlook (STEO) \10\ for the gasoline and diesel statistics. Gasoline
and diesel volumes are adjusted to account for renewable fuel contained
in the EIA projections. To estimate the ethanol and biodiesel projected
volumes for the purposes of this rule, we have used the values \11\ for
ethanol and biodiesel used in 2013 that is provided in the March 2014
STEO.
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\10\ Energy Information Administration/Short-Term Energy
Outlook--March 2014. (See http://www.eia.gov/forecasts/steo/outlook.cfm; last accessed March 14, 2014).
\11\ Energy Information Administration/Short-Term Energy
Outlook--March 2014, (See http://www.eia.gov/forecasts/steo/outlook.cfm; last accessed March 14, 2014).
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2. Small Refineries and Small Refiners
In CAA section 211(o)(9), enacted as part of the Energy Policy Act
of 2005, Congress provided a temporary exemption to small refineries
(those refineries with a crude throughput of no more than 75,000
barrels of crude per day) through December 31, 2010. In our initial
rulemaking to implement the new RFS program,\12\ we exercised our
discretion under section 211(o)(3)(B) and extended this temporary
exemption to the few remaining small refiners that met the Small
Business Administration's (SBA) definition of a small business (1,500
employees or less company-wide) but did not meet the statutory small
refinery definition as noted above.\13\ Because the Energy Independence
and Security Act of 2007 did not alter the small refinery exemption in
any way, the RFS2 program regulations maintained the exemptions for
gasoline and diesel produced by small refineries and small refiners
through 2010 (unless the exemption was waived).\14\
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\12\ 72 FR 23900, May 1, 2007.
\13\ 40 CFR 80.1141, 80.1142.
\14\ See 40 CFR 80.1441, 80.1442.
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Congress provided two ways that small refineries could receive a
temporary extension of the exemption beyond 2010. One was based on the
results of a study conducted by the Department of Energy (DOE) to
determine whether small refineries would face a disproportionate
economic hardship under the RFS program. In March of 2011, DOE
evaluated the impacts of the RFS program on small entities and
concluded that some small refineries would suffer a disproportionate
hardship.\15\ The other way that small refineries could receive a
temporary extension is based on EPA determination of disproportionate
economic hardship on a case-by-case basis in response to refiner
petitions.\16\
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\15\ ``Small Refinery Exemption Study: An Investigation into
Disproportionate Economic Hardship,'' U.S. Department of Energy,
March 2011.
\16\ 40 CFR 80.1441(e)(2), 80.1442(h).
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The regulations in 80.1405 that specify formulas for calculating
the annual renewable fuel standards require that EPA subtract from the
total volume of gasoline and diesel estimated to be produced and
imported in the compliance year the volume attributed to small
refineries and small refiners that have received exemptions from RFS
requirements for that year. Depending on the size of the exempt volume,
and rounding, this may or may not have the effect of increasing the
standard. The purpose of this aspect of the computation is to make it
more likely that the appropriate volume of renewable fuel is used by
obligated parties notwithstanding the small refinery/small refiner
exemptions. At the time the 2013 cellulosic biofuel standard was
originally promulgated on August 6, 2013, only one small refinery
exemption had been granted for the 2013 compliance year. At this time,
EPA has approved three small refinery exemptions for 2013. These three
refineries produced a combined total of approximately 820 million
gallons of gasoline and 660 million gallons of diesel fuel in 2013.
These volumes have been used in the calculations below in Section
IV.B.3.\17\
---------------------------------------------------------------------------
\17\ EPA's consideration of updated EIA data on 2013 gasoline
and diesel use in the rule establishing the 2013 annual standards,
and EPA's adjustment of that value to account for small refinery
exemptions, are currently being reviewed in Monroe v. EPA, Nos. 13-
1265, 13-1267, 13-1268 (D.C. Cir.). EPA notes that the cellulosic
biofuel standard in this rule would remain unchanged if EPA used
data provided in EIA's October 2012 letter to EPA for total gasoline
and diesel in 2013 and assumed no small refinery exemptions in
calculating the standard.
---------------------------------------------------------------------------
3. Cellulosic Standard
The values of the variables used to derive the 2013 cellulosic
biofuel standard are shown in Table IV.B.3-1.\18\ Terms not included in
this table have a value of zero.
---------------------------------------------------------------------------
\18\ To determine the 49-state values for gasoline and diesel,
the amounts of these fuels used in Alaska are subtracted from the
totals provided by the Department of Energy. The Alaska fractions
are determined from the EIA State Energy Data System (SEDS) 2012
Updates. (U.S. Gasoline Consumption (March 2014 STEO)=8.78 MMbbl/
day; U.S. Ethanol Consumption (March 2014 STEO)=0.859 MMBD; U.S.
Diesel Fuel Consumption (March 2014 STEO)=3.49 MMBD; U.S. Biodiesel
Consumption (March 2014 STEO)=0.086 MMBD; U.S. Diesel Ocean-going
vessels (AEO2013)=52.429TBtu.) Alaska Gasoline (2012SEDS)=6.499
MMbbl: Alaska Ethanol (2012 SEDS)=0.728 MMbbl; Alaska Diesel (2012
SEDS)=6.375 MMbbl: Alaska Biodiesel (Estimate based on biodiesel
production capacity per EIA)=0; Alaska Ocean-going vessels estimated
at 4.5% of U.S. vessel bunkering and applied to the U.S. ocean-going
vessel volume (information provided by EIA).
Table IV.B.3-1--Values for Terms in Calculation of the Standard
[Billion gallons]
------------------------------------------------------------------------
Term Value
------------------------------------------------------------------------
RFVCB,2014.............................................. 0.0008
G2013................................................... 134.17
D2013................................................... 53.14
RG2013.................................................. 13.14
RD2013.................................................. 1.61
GS2013.................................................. 0
RGS2013................................................. 0
DS2013.................................................. 0
RDS2013................................................. 0
GE2013.................................................. 0.82
DE2013.................................................. 0.66
------------------------------------------------------------------------
Using the volumes shown in Table IV.B.3-1, we have calculated the
percentage cellulosic biofuel standard for 2013 as shown in Table
IV.B.3-2.
Table IV.B.3-2--Percentage Standards for 2013
------------------------------------------------------------------------
------------------------------------------------------------------------
Cellulosic biofuel...................................... 0.0005%
------------------------------------------------------------------------
[[Page 25030]]
V. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review
This action is not a ``significant regulatory action'' under the
terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is
therefore not subject to review under Executive Orders 12866 and 13563
(76 FR 3821, January 21, 2011).
B. Paperwork Reduction Act
There are no new information collection requirements associated
with the standards in this rulemaking. The standards impose no new or
different reporting requirements on regulated parties. The existing
information collection requests (ICR) that apply to the RFS program are
sufficient to address the reporting requirements in the regulations.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations in 40 CFR are listed in 40 CFR part 9.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements under the Administrative
Procedures Act or any other statute unless the agency certifies that
the rule will not have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
small organizations, and small governmental jurisdictions.
For purposes of assessing the impacts of this rule on small
entities, small entity is defined as: (1) A small business as defined
by the Small Business Administration's (SBA) regulations at 13 CFR
121.201; (2) a small governmental jurisdiction that is a government of
a city, county, town, school district or special district with a
population of less than 50,000; and (3) a small organization that is
any not-for-profit enterprise which is independently owned and operated
and is not dominant in its field.
After considering the economic impacts of today's rule on small
entities, I certify that this rule will not have a significant economic
impact on a substantial number of small entities. This rule reconsiders
the annual volume requirement for cellulosic biofuel for 2013 which is
being reduced from the total of 6 million ethanol-equivalent gallons
finalized in the 2013 RFS annual rule and published on August 15, 2013
to 810,185 ethanol-equivalent gallons. The impacts of the RFS2 program
on small entities were already addressed in the RFS2 final rule
promulgated on March 26, 2010 (75 FR 14670), and this rule will not
impose any additional requirements on small entities beyond those
already analyzed.
D. Unfunded Mandates Reform Act
This action contains no Federal mandates under the provisions of
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C.
1531-1538 for State, local, or tribal governments or the private
sector. This action implements mandate(s) specifically and explicitly
set forth by the Congress in Clean Air Act section 211(o) without the
exercise of any policy discretion by EPA. Therefore, this action is not
subject to the requirements of sections 202 or 205 of the UMRA.
This action is also not subject to the requirements of section 203
of UMRA because it contains no regulatory requirements that might
significantly or uniquely affect small governments. This rule only
applies to gasoline, diesel, and renewable fuel producers, importers,
distributors and marketers and merely revises the 2013 cellulosic
biofuel standard to reflect actual production in 2013 for the RFS
program.
E. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government, as
specified in Executive Order 13132. This action revises the 2013 annual
cellulosic biofuel standard for the RFS program and only applies to
gasoline, diesel, and renewable fuel producers, importers, distributors
and marketers. Thus, Executive Order 13132 does not apply to this rule.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have tribal implications, as specified in
Executive Order 13175 (65 FR 67249, November 9, 2000). This rule will
be implemented at the Federal level and affects transportation fuel
refiners, blenders, marketers, distributors, importers, exporters, and
renewable fuel producers and importers. Tribal governments would be
affected only to the extent they purchase and use regulated fuels.
Thus, Executive Order 13175 does not apply to this action.
G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as applying
only to those regulatory actions that concern health or safety risks,
such that the analysis required under section 5-501 of the EO has the
potential to influence the regulation. This action is not subject to EO
13045 because it does not establish an environmental standard intended
to mitigate health or safety risks and because it implements specific
standards established by Congress in statutes (section 211(o) of the
Clean Air Act).
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
This action is not a ``significant energy action'' as defined in
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355
(May 22, 2001)) because it is not likely to have a significant adverse
effect on the supply, distribution, or use of energy. This action
simply revises the 2013 annual cellulosic standard for renewable fuel
under the RFS program.
I. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note)
directs EPA to use voluntary consensus standards in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standards bodies. NTTAA directs EPA to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards.
This rulemaking does not involve technical standards. Therefore,
EPA is not considering the use of any voluntary consensus standards.
[[Page 25031]]
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes
federal executive policy on environmental justice. Its main provision
directs federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the United States.
EPA has determined that this rule will not have disproportionately
high and adverse human health or environmental effects on minority or
low-income populations because it does not affect the level of
protection provided to human health or the environment. This action
does not relax the control measures on sources regulated by the RFS
regulations and therefore will not cause emissions increases from these
sources.
K. Congressional Review Act
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2).
VI. Statutory Authority
Statutory authority for this action comes from section 211 of the
Clean Air Act, 42 U.S.C. 7545.
List of Subjects in 40 CFR Part 80
Administrative practice and procedure, Air pollution control,
Diesel fuel, Environmental protection, Fuel additives, Gasoline,
Imports, Oil imports, Petroleum, Renewable fuel.
Dated: April 22, 2014.
Gina McCarthy,
Administrator.
For the reasons set forth in the preamble, 40 CFR part 80 is
amended as follows:
PART 80--REGULATION OF FUELS AND FUEL ADDITIVES
0
1. The authority citation for part 80 continues to read as follows:
Authority: 42 U.S.C. 7414, 7521, 7542, 7545, and 7601(a).
0
2. Section 80.1405 is amended by revising paragraph (a)(4)(i) to read
as follows:
Sec. 80.1405 What are the Renewable Fuel Standards?
(a) * * *
(4) * * *
(i) The value of the cellulosic biofuel standard for 2013 shall be
0.0005 percent.
* * * * *
[FR Doc. 2014-10135 Filed 5-1-14; 8:45 am]
BILLING CODE 6560-50-P