Request for Comment on Letters Seeking a Waiver of the Renewable Fuel Standard

Gina McCarthy
August 30, 2012

[Federal Register Volume 77, Number 169 (Thursday, August 30, 2012)]
[Notices]
[Pages 52715-52716]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: C1-2012-21066]


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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2012-0632; FRL--9721-7]


Request for Comment on Letters Seeking a Waiver of the Renewable 
Fuel Standard

Correction

    Editorial Note: Notice document 12-21066 was inadvertently 
omitted from the issue of Monday, August 27, 2012. It is being 
printed in its entirety in today's issue.
AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: EPA is seeking comment on letters requesting a waiver of the 
renewable fuel standard and matters relevant to EPA's consideration of 
those requests. Governors of the States of Arkansas and North Carolina 
submitted separate requests for a waiver. Section 211(o)(7)(A) of the 
Clean Air Act allows the Administrator of the EPA to waive the national 
volume requirements of the renewable fuel standard program in whole or 
in part if implementation of those requirements would severely harm the 
economy or environment of a State, a region, or the United States, or 
if the Administrator determines that there is inadequate domestic 
supply of renewable fuel.

DATES: Comments. Written comments must be received on or before 
September 26, 2012.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2012-0632, by one of the following methods:
     www.regulations.gov: Follow the on-line instructions for 
submitting comments.
     Email: a-and-r-docket@epa.gov.
     Fax: (202) 566-1741.
     Mail: Air and Radiation Docket, Docket ID No. EPA-HQ-OAR-
2012-0632, Environmental Protection Agency, Mailcode: 6102T, 1200 
Pennsylvania Avenue NW., Washington, DC 20460. Please include a total 
of two copies.
     Hand Delivery: EPA Docket Center, Public Reading Room, EPA 
West Building, Room 3334, 1301 Constitution Avenue 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-
2012-0632. 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 FURTHER INFORMATION CONTACT: Dallas Burkholder, Office of 
Transportation and Air Quality, Environmental Protection Agency, 
National Vehicle and Fuel Emissions Laboratory, 2565 Plymouth Road, Ann 
Arbor, MI 48105; telephone number: (734) 214-4766; fax number: (734) 
214-4050; email address: burkholder.dallas@epa.gov.

SUPPLEMENTARY INFORMATION: 

I. How can I access the docket and/or submit comments?

    EPA has established a public docket for this Notice under Docket ID 
No. EPA-HQ-OAR-2012-0632 which is available for online viewing at 
www.regulations.gov, or in person viewing at the EPA/DC Docket Center 
Public Reading Room, 1301 Constitution Avenue NW., Room 3334, 
Washington, DC. The EPA/DC 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 Reading Room is 202-566-1744, and the 
telephone number for the Air and Radiation Docket is 202-566-1742.
    Use www.regulations.gov to obtain a copy of the waiver requests, 
submit or view public comments, access the index listing of the 
contents of the docket, and to access those documents in the public 
docket that are available electronically. Once in the system, select 
``search,'' then key in the docket ID number identified in this 
document.

II. Background

    The Renewable Fuel Standard (RFS) program began in 2006 pursuant to 
the Energy Policy Act of 2005 (EPAct), which added provisions in 
section 211(o) of the Clean Air Act (CAA, or ``Act''), for a renewable 
fuel program, commonly referred to as RFS1. The statutory provisions 
for the RFS program were subsequently modified through the Energy 
Independence and Security Act of 2007 (EISA), and EPA published revised 
regulatory requirements on March 26, 2010 (75 FR 14670) (referred to as 
RFS2). The transition from the RFS1 requirements of EPAct to the RFS2 
requirements of EISA generally occurred on July 1, 2010. EISA 
establishes annual national renewable fuel volumes required through 
2022 for four categories of renewable fuel: cellulosic biofuel, biomass 
based diesel, advanced biofuel, and total renewable fuel. Though EISA 
establishes a schedule of increasing national volume mandates over 
time, it also requires the Administrator to set the specific volume 
requirements for refiners and importers annually. The applicable volume 
standards under the RFS program for the 2012 compliance year were 
published in the Federal

[[Page 52716]]

Register on January 9, 2012 (77 FR 1320).
    Under the RFS program, obligated parties, typically gasoline or 
diesel refiners or importers, are required to meet specific applicable 
percentage standards to be in compliance. Renewable identification 
numbers, or RINs, are assigned by the renewable fuel producer to each 
gallon of qualifying renewable fuel and serve as a means for 
demonstrating compliance by the obligated parties. Aside from using 
sufficient current-year RINs to demonstrate compliance in a given year, 
obligated parties may also choose (a) to use available RINs from the 
prior year towards the current year's requirement, up to a 20 percent 
cap, and/or (b) to carry forward a deficit into the next compliance 
year.
    Section 211(o)(7) of the Act allows the Administrator, in 
consultation with the Secretary of Agriculture and the Secretary of 
Energy, to waive the national volume requirements of the RFS, in whole 
or in part, upon petition by one or more States, or by any party 
subject to the requirements of the RFS program. The Administrator may 
also waive the volume requirements on her own motion. A waiver may be 
issued if the Administrator determines, after public notice and 
opportunity for comment, that implementation of the RFS volume 
requirement would severely harm the economy or environment of a State, 
a region, or the United States, or that there is an inadequate domestic 
supply. If a waiver is granted, it can last no longer than one year but 
may be renewed by the Administrator after consultation with the 
Secretary of Agriculture and the Secretary of Energy.

III. What is today's action?

    Governors of the States of Arkansas and North Carolina submitted 
separate letters requesting a waiver of required volumes of renewable 
fuel under the RFS program. EPA is seeking comment on the requests and 
matters relevant to EPA's consideration of the requests. Section 211(o) 
of the Act requires the Administrator, in consultation with the 
Secretary of Agriculture and the Secretary of Energy, to approve or 
disapprove a petition for a waiver of the RFS volume requirements 
within 90 days after the date on which the petition is received by the 
Administrator.
    The Governor of Arkansas submitted a letter dated August 13, 2012 
requesting EPA ``waive an appropriate volume of renewable fuel, 
pursuant to Section 211(o)(7)'' of the Act. The letter includes 
statements regarding this year's drought, crop price increases, and 
impacts in various economic sectors, including the poultry and cattle 
sectors. The letter submitted by the Governor of North Carolina, dated 
August 14, 2012, requests that ``the applicable volume of renewable 
fuel be waived'' under the Act and also includes statements regarding 
drought conditions in the United States and economic impacts in the 
State.
    Other organizations and individuals--including among others the 
Governors of the States of Delaware and Maryland, the National Pork 
Producers Council, the Dairy Farmers of America, and various Members of 
Congress--have also submitted letters either requesting the 
Administrator utilize her authority to waive RFS volume requirements or 
expressing support for the granting of a volume waiver. All of these 
letters are available in the docket; any additional similar requests 
submitted to EPA will also be docketed and considered together with 
requests already received.
    EPA is issuing this notice to solicit comments and information on 
the waiver requests, and the views of the public on whether the 
statutory basis for a waiver of the national RFS requirements has been 
met and, if so, whether EPA should exercise its discretion to grant a 
waiver.

IV. Has EPA received RFS waiver requests in the past?

    In 2008, the Governor of the State of Texas requested a fifty 
percent waiver of the national volume requirements for the RFS. EPA 
denied Texas' waiver request because the evidence in that case did not 
support a determination that implementation of the RFS mandate during 
the time period at issue (September 1, 2008 through August 31, 2009) 
would have severely harmed the economy of a State, region, or the 
United States (73 FR 47168, August 13, 2008). EPA's 2008 denial of a 
waiver discusses the analytical approach used to make the 
determination, our legal interpretation of the relevant statutory 
language, and other information that may be useful to commenters. It 
also provides additional discussion of the types of information we 
would expect in a waiver request.
    EPA's determination in response to Texas' waiver request was 
supported by technical analysis conducted using a model developed by 
researchers at Iowa State University (ISU). The 2008 analysis evaluated 
the impact of a waiver of the volume standard by comparing the 
circumstances with and without a waiver, to identify the impact 
associated with implementation of the RFS program in the relevant time 
period. The 2008 Texas waiver determination discusses the reasons EPA 
utilized the ISU model and provides a brief description of how it 
operates.
    The 2008 Texas waiver determination was the first EPA action in 
response to a petition under 211(o)(7) of the Act, and as a result the 
2008 decision addresses a number of questions regarding the scope of 
that authority. This includes a discussion of how EPA interpreted the 
provision's language regarding severe economic harm. We encourage 
interested parties to review that discussion and provide comment on our 
interpretation in the context of the 2012 waiver requests.

V. What specific information is EPA seeking?

    EPA requests comment on any matter that might be relevant to EPA's 
review of and actions in response to the requests, specifically 
including (but not limited to) information on:
    (a) Whether compliance with the RFS would severely harm the economy 
of Arkansas, North Carolina, other States, a region, or the United 
States;
    (b) whether the relief requested will remedy the harm;
    (c) to what extent, if any, a waiver would change demand for 
ethanol and affect prices of corn, other feedstocks, feed, and food;
    (d) the amount of ethanol that is likely to be consumed in the U.S. 
during the relevant time period, based on its value to refiners for 
octane and other characteristics and other market conditions in the 
absence of the RFS volume requirements; and
    (e) if a waiver were appropriate, the amount of required renewable 
fuel volume appropriate to waive, the date on which any waiver should 
commence and end, and to which compliance years it would apply.
    Commenters should include data or specific examples in support of 
their comments in order to aid the Administrator in evaluating the 
requests for a waiver and determining what action if any is appropriate 
in light of all of the circumstances.

    Dated: August 20, 2012.
Gina McCarthy,
Assistant Administrator, Office of Air and Radiation.

    Editorial Note: Notice document 2012-21066 was inadvertently 
omitted from the issue of Monday, August 27, 2012. It is being 
printed in its entirety in today's issue.

[FR Doc. C1-2012-21066 Filed 8-29-12; 8:45 am]
BILLING CODE 1505-01-D