[Federal Register Volume 72, Number 227 (Tuesday, November 27, 2007)]
[Notices]
[Pages 66171-66173]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-23095]


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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2006-0340; FRL-8499-5]


Renewable Fuel Standard Under Section 211(o) of the Clean Air Act 
as Amended by the Energy Policy Act of 2005

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: Section 211(o) of the Clean Air Act (the Act), as amended by 
the Energy Policy Act of 2005, requires the Administrator of the 
Environmental Protection Agency (EPA) to annually determine a renewable 
fuel standard (RFS) which is applicable to refiners, importers and 
certain blenders of gasoline, and publish the standard in the Federal 
Register by November 30 of each year. On the basis of this standard, 
each obligated party determines the volume of renewable fuel that it 
must ensure is consumed as motor vehicle fuel. This standard is 
calculated as a percentage, by dividing the amount of renewable fuel 
that the Act requires to be blended into gasoline for a given year by 
the amount of gasoline expected to be used during that year, including 
certain adjustments specified by the Act. In this notice we are 
publishing an RFS of 4.66% for 2008.

FOR FURTHER INFORMATION CONTACT: Chris McKenna, Environmental 
Protection Agency, MC 6406J, 1200 Pennsylvania Ave., NW., Washington, 
DC 20460; telephone number: 202-343-9037; fax number: 202-343-2801; e-
mail address: [email protected].

SUPPLEMENTARY INFORMATION:

I. Calculation of the 2008 RFS

A. Background

    The preamble to the final rulemaking for the Renewable Fuel 
Standard Program included a projected RFS for 2008 of 4.63%. 72 FR 
23912 (May 1, 2007). In today's notice we are again using the 
calculational procedure from the final rulemaking to calculate the 2008 
RFS. However, since some projections and assumptions used in the final 
rulemaking to calculate the projected 2008 RFS have changed, today's 
notice includes a recalculated and final 2008 RFS using the most 
recently available information. Since the RFS rule established clear 
legal criteria for deriving the standard (including specification of 
the formula used in today's notice, and all data sources), EPA is 
simply applying facts to pre-established law in issuing the final 2008 
RFS standard. EPA is advising the

[[Page 66172]]

regulated community of the revised standard through a Federal Register 
Notice, without prior notice and comment, in accordance with the Clean 
Air Act and EPA regulations.
    The 2008 RFS is calculated by dividing the volume of renewable 
fuels required by the Act to be blended into gasoline in 2008, by the 
volume of gasoline projected by the Energy Information Administration 
(EIA) to be consumed in 2008 (including certain adjustments specified 
by the Act). The following equation from the final RFS Program 
regulations summarizes all of the variables that must be considered in 
the calculation.
[GRAPHIC] [TIFF OMITTED] TN27NO07.004

Where:

RFStdi = Renewable Fuel Standard in year i, in percent
RFVi = Annual volume of renewable fuels required by 
section 211(o)(2)(B) of the Act for year i, in gallons
Gi = Amount of gasoline projected to be used in the 48 
contiguous states, in year i, in gallons
Ri = Amount of renewable fuel blended into gasoline that 
is projected to be consumed in the 48 contiguous states, in year i, 
in gallons
GSi = Amount of gasoline projected to be used in Alaska, 
Hawaii, or a U.S. territory in year i if the state or territory 
opts-in, in gallons
RSi = Amount of renewable fuel blended into gasoline that 
is projected to be consumed in Alaska, Hawaii, 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 
(through 2010 only unless exemption extended under Sec. Sec.  
211(o)(9)(A)(ii) or (B)).
Celli = Beginning in 2013, the amount of renewable fuel 
that is required to come from cellulosic sources, in year i, in 
gallons (250,000,000 gallons minimum)

B. Data Sources for 2008 RFS Calculation

    The following discussion describes the sources of data for the 
variables in the above equation. For ease of calculation, this 
discussion regroups the terms (Gi - Ri) + 
(GSi - RSi) in the denominator of the above 
equation into the terms (Gi + GSi) - 
(Ri + RSi).
Calculation of (RFVi - Celli), Total Amount of 
Renewable Fuels From Non-cellulosic Sources That Must Be Blended Into 
Gasoline in 2008
    The Act requires 5.4 billion gallons of renewable fuels to be 
blended into gasoline in 2008. Because there is no cellulosic volume 
requirement in the Act until 2013, the amount of renewable fuel that 
the Act requires to be produced from cellulosic sources in 2008 
(Celli) is zero. Thus the total amount of renewable fuels 
from non-cellulosic sources that must be blended into gasoline in 2008 
is 5.4 billion gallons.
Calculation of (Gi + GSi), Total Amount of 
Gasoline Projected To Be Used in the 48 Contiguous States Plus Opt-in 
States/Territories, in Year i, in Gallons
    The Act requires the Administrator of the EIA by October 31 of each 
year to provide EPA with an estimate of the volumes of gasoline 
projected to be sold or introduced into commerce in the United States 
for the following year. During the development of the RFS Program, EIA 
informed EPA that the projected gasoline consumption in ``Table 4a: 
U.S. Petroleum Supply, Consumption, and Inventories'' (formerly ``Table 
5a. U.S. Petroleum Supply and Demand: Base Case'') of the October issue 
of the monthly Short-Term Energy Outlook (STEO) should be used to 
calculate the RFS for the coming year. The October 2007 STEO projects 
that an average of 9.42 million barrels/day of gasoline will be 
consumed in all of the United States in 2008. Multiplying this average 
consumption rate by 366 days (2008 is a leap year) produces a total 
consumption of 144.80 billion gallons of gasoline in 2008.
    Only one non-contiguous state or territory has petitioned EPA to 
opt into the RFS Program beginning in 2008. Hawaii petitioned EPA on 
June 22, 2007 to opt into the RFS program, and EPA approved their 
request.\1\ Thus, Alaska is the only one of the 50 states that is not 
included in the RFS Program.
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    \1\ Letter to the Honorable Laura Lingle, Governor of Hawaii, 
from Stephen Johnson of EPA dated July 30, 2007.
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    In order to calculate gasoline consumption in the 48 contiguous 
states plus Hawaii, we subtracted Alaska's projected gasoline 
consumption from the projected nationwide gasoline consumption of 
144.80 billion gallons. Alaska's projected gasoline consumption was 
calculated by multiplying the projected nationwide gasoline consumption 
in 2008 by the ratio of Alaska's gasoline consumption in 2006 to the 
total U.S. consumption in 2006, based on Table 48, ``Prime Supplier 
Sales Volumes of Motor Gasoline by Grade Formulation, PAD District, and 
State'' gasoline data from EIA's Petroleum Marketing Annual 2006 (the 
final rulemaking used data from Petroleum Marketing Annual 2005). 
According to EIA, Prime Supplier data reflects where gasoline is used, 
rather than where it is produced.\2\ Alaska's projected gasoline 
consumption in 2008 is 0.30 billion gallons. Subtracting this 
consumption from the projected nationwide consumption of 144.80 billion 
gallons in 2008 produces a total consumption of 144.50 billion gallons 
of gasoline in 2008 in the 48 contiguous states plus Hawaii.
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    \2\ Energy Information Administration, Petroleum Marketing 
Annual 2006, Explanatory Notes, Relationship of Refiner and Prime 
Supplier Sales Volumes (p. 382).
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Calculation of (Ri + RSi), Total Amount of 
Renewable Fuel Blended Into Gasoline That Is Projected To Be Consumed 
in the 48 Contiguous States Plus Opt-in States/Territories, in Year i, 
in Gallons
    The projected gasoline consumption in the October 2007 STEO 
includes renewable fuel that is blended into gasoline. This volume of 
renewable fuel must be subtracted from the total volume of gasoline in 
order to calculate the total consumption of non-renewable gasoline. In 
Table 8 of the October 2007 STEO, EIA estimates that 0.755 quadrillion 
Btu of ethanol will be used as transportation fuel in all of the United 
States in 2008. Dividing this energy usage by the high heating value of 
ethanol (3.539 million Btu/barrel), and multiplying by 42 gallons/
barrel produces a total ethanol usage of 8.96 billion gallons 
nationwide in 2008.
    Since Hawaii has opted in, but Alaska has not opted in, to the RFS 
program for 2008, Alaska's renewable fuels consumption must be 
subtracted from the nationwide renewable fuels consumption to calculate 
renewable consumption in the 48 contiguous states plus Hawaii. In 
Chapter 2 of the Regulatory Impact Analysis for the RFS program 
rulemaking, EPA estimated that ethanol consumption in Alaska would be 
negligible prior to 2012. Thus, we project renewable fuels consumption 
in

[[Page 66173]]

the 48 contiguous states plus Hawaii to be 8.96 billion gallons in 
2008.\3\
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    \3\ Table 2.2-21 ``2012 Forecasted Ethanol Consumption by 
State,'' Regulatory Impact Analysis: Renewable Fuel Standard 
Program, April 2007.
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Calculation of GEi, Amount of Gasoline Projected To Be 
Produced by Exempt Small Refineries and Small Refiners in Year i, in 
Gallons \4\
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    \4\ Through 2010 only, unless the exemption is extended under 
211(o)(9(A)(ii) or (B) of the Act.
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    In the final rulemaking, we stated that we would estimate the 
combined small refinery and small refiner gasoline volume using a 
constant percentage of national consumption. Using information from 
gasoline batch reports submitted to EPA, EIA data and input from the 
California Air Resources Board regarding California small refiners, we 
estimated this percentage to be 13.5%.\5\ Multiplying the projected 
nationwide consumption of gasoline in 2008 (144.80 billion gallons) by 
13.5% results in a total projected production of 19.55 billion gallons 
of gasoline from small refiners and small refineries in 2008.
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    \5\ ``Calculation of the Small Refiner/Small Refinery Fraction 
for the Renewable Fuel Program,'' memo to the docket from Christine 
Brunner, ASD, OTAQ, EPA, September 2006.
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Calculation of RFStdi, Renewable Fuel Standard in Year i, in 
Percent
    Substituting all of the terms calculated above into the equation 
for RFStdi results in the following RFS for 2008,
[GRAPHIC] [TIFF OMITTED] TN27NO07.005

    Therefore, the RFS for 2008 is 4.66%. This is the standard 
referenced in 40 CFR 80.1105(b) through (d) and which obligated parties 
apply to determine their renewable volume obligation under 40 CFR 
80.1107.

    Dated: November 20, 2007.
Stephen L. Johnson,
Administrator.
 [FR Doc. E7-23095 Filed 11-26-07; 8:45 am]
BILLING CODE 6560-50-P