EPA Mobile Source Rule Update WESTAR Spring Business Meeting

EPA Mobile Source Rule UpdateEPA Mobile Source Rule UpdateWESTAR Spring Business MeetingWESTAR Spring Business Meeting

3 April 20073 April 2007

22

EPA Mobile Source Rule Update EPA Mobile Source Rule Update

Diesel locomotives and marine enginesDiesel locomotives and marine enginesOcean-going vesselsOcean-going vesselsSmall lawn & garden gasoline engines and Small lawn & garden gasoline engines and recreational gasoline marine enginesrecreational gasoline marine enginesMobile source air toxicsMobile source air toxicsRenewable fuels standardRenewable fuels standard

33

EPA’s Locomotive and Marine EPA’s Locomotive and Marine Diesel ProposalDiesel Proposal

44

Reconciling the Transportation Sector With the Environment:Reconciling the Transportation Sector With the Environment:

A Comprehensive and Collaborative ApproachA Comprehensive and Collaborative Approach

Light-duty Vehicles (1999)

Heavy-duty Vehicles (2001)

Clean Nonroad Diesel (2004)

Common Aspects--Common Aspects--

Systems approach– low sulfur fuel Systems approach– low sulfur fuel enables clean technologiesenables clean technologies

Very large environmental benefitsVery large environmental benefits

Responsive to clean air goalsResponsive to clean air goals

Highway

Farm, Industrial, ConstructionLocomotive/ Category 1

And 2 Diesel Marine Proposal

55

Locomotive & Diesel Marine - a large mobile source:Locomotive & Diesel Marine - a large mobile source:1/3 of NOx and 2/3 of diesel PM in 20301/3 of NOx and 2/3 of diesel PM in 2030

Diesel PM2.5

Total=78,000 tons/yr(diesel-fueled engines)

Mobile Source NOxTotal=4,500,000 tons/yr

66

What the Rule Covers-- LocomotivesWhat the Rule Covers-- Locomotives

Switch

Line-Haul

Passenger

Sales ~700-1200 / yearTypically rebuilt every 5-7 years

77

What the Rule Covers--What the Rule Covers--

Marine DieselsMarine Diesels

Category 1 Commercial (<5 liter/cylinder)~15,000/year (about half are aux engines)

Recreational~15,000/year

Category 2 (5 to 30 liter/cyl) <300/year

<75 hp<10,000/year

gen sets sailboats

cruisers

yachts

auxiliary power for ocean-going vessels

workboats fishing vesselspolice boats

ferries

tugboats

Great Lakes freighters

Covered in separate initiative ocean-going ships

Category 3(>30 liter/cyl)

88

Proposed Locomotive StandardsProposed Locomotive Standards

Remanufactured Locomotive StandardsRemanufactured Locomotive Standards

Newly-built Locomotive StandardsNewly-built Locomotive Standards

New Long-TermNew Long-Term

(Tier 4) Standards(Tier 4) Standards

New InterimNew Interim

(Tier 3) Standards(Tier 3) Standards

RemanufacturedRemanufactured

Tier 2Tier 2

RemanufacturedRemanufactured

Tier 0 & 1Tier 0 & 1

locomotive locomotive

groupsgroups

PM 2015PM 2015

NOx 2017NOx 2017

20122012

20020088 as available as available

2013 required2013 required

20020088 as available as available

2010 required2010 required

datedate

1.31.3

5.55.5

5.55.5

7.4 - 8.07.4 - 8.0

standardstandard

(g/hp-hr)(g/hp-hr)

80%80%

-- --

-- --

~20%~20%

reductionreduction

%%

reductionreduction

%%

standardstandard

(g/hp-hr)(g/hp-hr)

~90%~90%

50%50%

50%50%

~60%~60%

NONOxx

0.030.03

0.100.10

0.100.10

0.220.22

PMPM

99

Proposed Marine Diesel StandardsProposed Marine Diesel Standards

Existing Marine EnginesExisting Marine Engines

(requesting comment on(requesting comment on

remanufacturing stds)remanufacturing stds)

New Long-Term (Tier 4)New Long-Term (Tier 4)

Commercial >600kWCommercial >600kW

New Interim (Tier 3)New Interim (Tier 3)

0-20%0-20%

reductionreduction

1.31.3

varies byvaries by

engine sizeengine size

standardstandard

(g/hp-hr)(g/hp-hr)

~80%~80%

~20%~20%

reductionreduction

%%

reductionreduction

%%

standardstandard

(g/hp-hr)(g/hp-hr)

~90%~90%

~50%~50%

NONOxx

20-60%20-60%

reductionreduction20082008

0.030.032014-2014-20172017

varies byvaries by

engine sizeengine size2009-2009-20142014

PMPM

datedate

1010

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2005 2010 2015 2020 2025 2030 2035 2040

Base 50-State

Control 50-State

Nationwide PM Reductions From the Proposal

PM

with current standards

with proposed standards

Calendar Year

Pa

rtic

ula

te M

atte

r (a

nnu

al t

ons)

1111

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

2005 2010 2015 2020 2025 2030 2035 2040

Base 50-State

Control 50-State

NOx

Nationwide NOx Reductions From the Proposal

with current standards

with proposed standards

Calendar Year

NO

x (a

nnu

al to

ns)

1212

Proposal Annual Costs and Benefits in Proposal Annual Costs and Benefits in 20302030

3%3%Unit cost as % of typical new locomotive price Unit cost as % of typical new locomotive price

(similar for marine; varies vessel to vessel)(similar for marine; varies vessel to vessel)

765,000765,00028,00028,000Inventory reduction, tonsInventory reduction, tons

20:120:1

$12B$12B

$5560$5560

$159M$159M

PMPM NONOxx

Monetized benefitsMonetized benefits

Benefit to cost ratioBenefit to cost ratio

Cost per tonCost per ton

CostCost

$580$580

$446M$446M

1313

The Process Toward CompletionThe Process Toward Completion

Proposal signed by Administrator Johnson Proposal signed by Administrator Johnson March 1March 1

Comment period open for 90 days after Comment period open for 90 days after publication (~July 1st)publication (~July 1st)

Hearings in Seattle May 8 and Chicago May 10Hearings in Seattle May 8 and Chicago May 10

Targeting final rule before the end of the yearTargeting final rule before the end of the year

Ocean-going VesselsOcean-going Vessels

- IMO Deliberations- IMO Deliberations

- EPA OGV Rulemaking- EPA OGV Rulemaking

1515

Standards Comparison – IMO vs. Standards Comparison – IMO vs. other US mobile source categoriesother US mobile source categories

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

0 2 4 6 8 10 12 14

NOx (g/bhp-hr)

PM

(g

/bh

p-h

r)

Low Speed-Engine

Trucks 2010; Nonroad machines 2014;Future Diesel Marine Category 1 and 2 and Locomotives

Highway Trucks 1991

IMO NOx Limits

Diesel Marine (<30 liters/cylinder) 2004-2007

Typical Medium Speed-Engine

High Speed-Engine

1616

2030 US Mobile Source PM2.5 Inventory2030 US Mobile Source PM2.5 Inventory(250,000 tons total)(250,000 tons total)

Recent detailed investigation by US EPA, California, and University of Delaware scientists indicate ocean-going marine vessel PM inventories for the US are low by as much as a factor of 3 for the baseline year 2001, and by as much as a factor of 5 for 2020

Other Off-highway/Nonroad Engines

32%

Highway27%

Ocean-going Marine Vessels21%

(53,000 tons)

Locomotives, Catergory 1 & 2 Diesel Marine

20%

1717

2030 US Mobile Source NOx Inventory2030 US Mobile Source NOx Inventory(4.5 million tons total)(4.5 million tons total)

Recent detailed investigation by US EPA, California, and University of Delaware scientists indicate ocean-going marine vessel NOx inventories for the US are low by as much as a factor of 3 for the baseline year 2001, and by as much as a factor of 5 for 2020

Highway35%

Ocean-going Marine Vessels

12%(530,000 tons)

Other Off-highway/Nonroad Engines

18%

Locomotive, Category 1 and 2 Diesel Marine

35%

1818

2030 US Mobile Source SOx Inventory2030 US Mobile Source SOx Inventory(480,000 tons total)(480,000 tons total)

Highway10%

Other Off-highway/Nonroad Engines

6%

Locomotives, Catergory 1 & 2 Diesel Marine

1%

Ocean-going Marine Vessels

83%

1919

Marine Emission StandardsMarine Emission Standards

There are two sources of standards that There are two sources of standards that apply to marine diesel engines in the U.S.apply to marine diesel engines in the U.S.– International Maritime Organization (IMO)International Maritime Organization (IMO)

Annex VI to the International Convention on the Annex VI to the International Convention on the Prevention of Pollution from ShipsPrevention of Pollution from Ships

– U.S. Federal standardsU.S. Federal standards Promulgated by EPA under the Clean Air ActPromulgated by EPA under the Clean Air Act

2020

US EPA Regulation for Category 3 EnginesUS EPA Regulation for Category 3 Engines2003 US EPA Regulation: 2-part approach2003 US EPA Regulation: 2-part approach– Near term standards: Equivalent to the International Maritime Near term standards: Equivalent to the International Maritime

Organizations Tier 1 standardsOrganizations Tier 1 standards– Long-term standards: Commitment to finalize an additional tier of Long-term standards: Commitment to finalize an additional tier of

standards in the futurestandards in the future

EPA is committed to taking additional regulatory action EPA is committed to taking additional regulatory action under the Clean Air Actunder the Clean Air Act– Regulations stipulate a final rulemaking action by 4/27/07Regulations stipulate a final rulemaking action by 4/27/07

We expect to issue an advanced regulatory We expect to issue an advanced regulatory announcement within the next few monthsannouncement within the next few months

EPA is also committed to the IMO Annex VI (air EPA is also committed to the IMO Annex VI (air pollution) negotiation processpollution) negotiation process

2121

Background on IMO and US PositionsBackground on IMO and US Positions

July 2005 – IMO agreed to deliberate on potential July 2005 – IMO agreed to deliberate on potential amendments to Annex VIamendments to Annex VI

EPA, as part of the US Gov’t, has been very active on air EPA, as part of the US Gov’t, has been very active on air pollution issues at IMOpollution issues at IMO– Consistently advocated for stringent standards based on advanced Consistently advocated for stringent standards based on advanced

emission technology solutionsemission technology solutions

US Gov’t has submitted a proposal to IMO which outlines US Gov’t has submitted a proposal to IMO which outlines an approach for long-term reductions in PM, NOx and SOx an approach for long-term reductions in PM, NOx and SOx from OGVsfrom OGVs

We expect the IMO deliberations to continue into 2008We expect the IMO deliberations to continue into 2008

2222

Key Elements of the US ConceptKey Elements of the US ConceptNOx standards for new build engines > 30 l/cyl NOx standards for new build engines > 30 l/cyl (Category 3)(Category 3)

– NOx reductions for pre-2000 enginesNOx reductions for pre-2000 engines– Interim NOx standards for new engines, 2011-2015Interim NOx standards for new engines, 2011-2015– Long-term NOx standards for new engines based on advanced Long-term NOx standards for new engines based on advanced

technologies (i.e., selective catalytic reduction), 2016+technologies (i.e., selective catalytic reduction), 2016+Applicable to engines operating in defined areas, e.g., 200 miles from shore Applicable to engines operating in defined areas, e.g., 200 miles from shore for specific regionsfor specific regions

PM & SOx: PM & SOx: – Performance standard applicable to all vessels operating in defined Performance standard applicable to all vessels operating in defined

areas [x miles from shore] effective in [2011]areas [x miles from shore] effective in [2011]SOx level of [0.4] g/kW-hrSOx level of [0.4] g/kW-hrPM limit similar to existing US EPA Tier 2 diesel marine (engine-out PM limit similar to existing US EPA Tier 2 diesel marine (engine-out standards)standards)

– Compliance could be through the use of low-sulphur fuel ( ~1,000 ppm Compliance could be through the use of low-sulphur fuel ( ~1,000 ppm S) and/or the use of SOx scrubbing technologyS) and/or the use of SOx scrubbing technology

Next Steps – US position to be discussed at IMO meeting later this Next Steps – US position to be discussed at IMO meeting later this monthmonth

Small Gasoline Engines and Small Gasoline Engines and Recreational Gasoline Marine Recreational Gasoline Marine

RulemakingRulemaking

2424

EPA’s Current Small Gasoline EPA’s Current Small Gasoline Engine Standards Engine Standards

Small engines: <25 horsepower, used in lawn & garden, and Small engines: <25 horsepower, used in lawn & garden, and industrial equipment industrial equipment (e.g, mowers, chain saws, generators)(e.g, mowers, chain saws, generators)

Phase 1 standards took effect in 1997Phase 1 standards took effect in 1997– Standards represented a 33% reduction in HC+NOx from uncontrolled levels Standards represented a 33% reduction in HC+NOx from uncontrolled levels

for all enginesfor all engines

Phase 2 standards are phased-in from 2001-07Phase 2 standards are phased-in from 2001-07– Non-handheld (NHH) standards represented a 60% HC+NOx reduction Non-handheld (NHH) standards represented a 60% HC+NOx reduction

beyond Phase 1 levelsbeyond Phase 1 levelsStandards were based on 4-stroke engine improvementsStandards were based on 4-stroke engine improvements

– Handheld (HH) standards represented a 70% HC+NOx reduction beyond Handheld (HH) standards represented a 70% HC+NOx reduction beyond Phase 1 levelsPhase 1 levels

Standards were based on application of catalysts to most 2-stroke Standards were based on application of catalysts to most 2-stroke enginesengines~2/3 of new HH engines sold in the United States have catalysts currently~2/3 of new HH engines sold in the United States have catalysts currently

2525

California Tier 3 RequirementsCalifornia Tier 3 Requirements

California adopted Tier 3 standards for small California adopted Tier 3 standards for small gasoline engines gasoline engines – The reductions from the California exhaust standards The reductions from the California exhaust standards

represent a reduction of 35% from EPA’s Phase 2 represent a reduction of 35% from EPA’s Phase 2 exhaust programexhaust program

– Standards based on catalysts for non-handheld Standards based on catalysts for non-handheld productsproducts

ARB also adopted evaporative emissions ARB also adopted evaporative emissions controlscontrols– Tank, hose, and permeation controlTank, hose, and permeation control– Canister to control diurnal, running loss, and hot soak.Canister to control diurnal, running loss, and hot soak.

2626

EPA’s Plans for New Phase 3 StandardsEPA’s Plans for New Phase 3 Standards• In 2004, Congress directed EPA to propose new In 2004, Congress directed EPA to propose new

standards for spark-ignition (gasoline) engines < 50 hpstandards for spark-ignition (gasoline) engines < 50 hp

• We are pursuing new standards for the following engine We are pursuing new standards for the following engine categories:categories:

Non-Handheld Lawn/Garden Non-Handheld Lawn/Garden Handheld Lawn/GardenHandheld Lawn/GardenOutboard and Personal Watercraft (PWC) marine engines Outboard and Personal Watercraft (PWC) marine engines

Sterndrive and inboard marine enginesSterndrive and inboard marine engines

• For lawn/garden engines, we plan to adopt California’s For lawn/garden engines, we plan to adopt California’s Tier 3 standards starting with 2011-2012 model year Tier 3 standards starting with 2011-2012 model year nonhandheld enginesnonhandheld engines• Also proposing tank permeation, fuel line, and diurnal emissions Also proposing tank permeation, fuel line, and diurnal emissions

standardsstandards

2727

Gasoline Marine StandardsGasoline Marine Standards

Outboard/Personal Watercraft: adopt California standards Outboard/Personal Watercraft: adopt California standards in 2009in 2009– 65% reduction in HC+NOx65% reduction in HC+NOx

Sterndrive/Inboard: Adopt California HC+NOx standard in Sterndrive/Inboard: Adopt California HC+NOx standard in 20092009– 70% reduction in HC+NOx (catalyst forcing)70% reduction in HC+NOx (catalyst forcing)– Substantial reductions in CO emissionsSubstantial reductions in CO emissions– One manufacturer has certified for California program and is now One manufacturer has certified for California program and is now

sellingselling

Marine fuel evaporative emissions currently uncontrolledMarine fuel evaporative emissions currently uncontrolled– Proposing tank permeation, fuel line, and diurnal emissions Proposing tank permeation, fuel line, and diurnal emissions

standardsstandards

2828

Small Gasoline Engines and Gasoline MarineSmall Gasoline Engines and Gasoline MarineEstimated Impacts and Next StepsEstimated Impacts and Next Steps

2030 Annual Emission Reduction Estimates2030 Annual Emission Reduction Estimates– 630,000 tons VOC630,000 tons VOC– 98,000 tons NOx98,000 tons NOx– 6,300 tons PM6,300 tons PM

NPRM expected within a few weeksNPRM expected within a few weeks

Final rule targeted for early 2008Final rule targeted for early 2008

Mobile Source Air Toxics Mobile Source Air Toxics (MSAT 2) Final Rule(MSAT 2) Final Rule

3030

Why an MSAT2 Rule?Why an MSAT2 Rule?

Section 202(l) of the Clean Air ActSection 202(l) of the Clean Air Act– Requires standards to control toxics from Requires standards to control toxics from

motor vehicles and/or motor vehicle fuelsmotor vehicles and/or motor vehicle fuelsGreatest emissions reduction achievable with Greatest emissions reduction achievable with technology, considering cost, lead time, etc. technology, considering cost, lead time, etc.

First MSAT rule in 2001First MSAT rule in 2001– Toxic emissions standard for gasolineToxic emissions standard for gasoline– Identified data gaps, committed to researchIdentified data gaps, committed to research– Committed to additional rulemakingCommitted to additional rulemaking

MSAT 2 Final Rule Published February MSAT 2 Final Rule Published February 26, 200726, 2007

3131

MSAT2 Final Rule ElementsMSAT2 Final Rule Elements

National benzene standards for gasolineNational benzene standards for gasoline

Cold VOC exhaust standards and Cold VOC exhaust standards and evaporative standards for light-duty evaporative standards for light-duty vehiclesvehicles

Standards for portable fuel containersStandards for portable fuel containers

3232

Gasoline Benzene Content Standards Gasoline Benzene Content Standards

0.62 vol% annual average standard0.62 vol% annual average standard– 2004 average benzene content: 1 vol%2004 average benzene content: 1 vol%– Applies to each refineryApplies to each refinery– Nationwide banking and tradingNationwide banking and trading– Effective in 2011Effective in 2011

1.3 vol% maximum average1.3 vol% maximum average– Must be met with actual production (no credits)Must be met with actual production (no credits)– Effective in 2012Effective in 2012

3333

Vehicle StandardsVehicle StandardsNew cold temp hydrocarbon standardsNew cold temp hydrocarbon standards– Vehicles are certified at 75Vehicles are certified at 75ºº F, but recent data F, but recent data

show emissions sharply increase at 20show emissions sharply increase at 20ºº F F– New std. will reduce benzene, 1,3-butadiene, New std. will reduce benzene, 1,3-butadiene,

formaldehyde, etc.formaldehyde, etc.

Evaporative standardsEvaporative standards– Harmonized with CaliforniaHarmonized with California– Codifies approach manufacturers are already Codifies approach manufacturers are already

takingtaking

Phase in from 2009-2015Phase in from 2009-2015

3434

Portable Fuel Container StandardPortable Fuel Container StandardGas cans, diesel and kerosene containersGas cans, diesel and kerosene containers

Hydrocarbon standard starting in 2009Hydrocarbon standard starting in 2009

Reduces evaporation, permeation, spillageReduces evaporation, permeation, spillage– Durable permeation barriersDurable permeation barriers– Automatically closing spoutsAutomatically closing spouts– Well-sealed cansWell-sealed cans

Consistent with revised California programConsistent with revised California program

Attached garages contribute significantly to Attached garages contribute significantly to personal exposure to benzenepersonal exposure to benzene

3535

MSAT Final Rule ImpactsMSAT Final Rule ImpactsReduces MSATs by 330,000 tons in 2030Reduces MSATs by 330,000 tons in 2030– Including 61,000 tons of benzeneIncluding 61,000 tons of benzene

Toxic emissions from light-duty vehicles will be Toxic emissions from light-duty vehicles will be reduced 80% between 1999 and 2030reduced 80% between 1999 and 2030– As a result of this proposal and other standards in As a result of this proposal and other standards in

place place

Criteria pollutant co-benefitsCriteria pollutant co-benefits– 1.1 million tons of VOC reduced in 20301.1 million tons of VOC reduced in 2030

From vehicles and gas cansFrom vehicles and gas cans

– 19,000 tons of direct PM-2.5 reduced 19,000 tons of direct PM-2.5 reduced From vehiclesFrom vehicles

The Renewable Fuels The Renewable Fuels StandardStandard

3737

The RFS – The Program BasicsThe RFS – The Program Basics

The Energy Policy Act (EPAct) of 2005 specified renewable The Energy Policy Act (EPAct) of 2005 specified renewable fuel volumes fuel volumes

– 2006: 4.0 billion gallons/yr2006: 4.0 billion gallons/yr– 2007: 4.72007: 4.7– 2008: 5.42008: 5.4– 2009: 6.12009: 6.1– 2010: 6.82010: 6.8– 2011: 7.42011: 7.4– 2012: 7.52012: 7.5– 2013+: Same percent of renewables for 2012 (0.25 billion gal of 2013+: Same percent of renewables for 2012 (0.25 billion gal of

which must be cellulosic ethanol)which must be cellulosic ethanol)

Each year EPA must convert RFS into percent of gasoline Each year EPA must convert RFS into percent of gasoline production standards that apply to refiners, importers, production standards that apply to refiners, importers, gasoline blenders.gasoline blenders.

3838

Ethanol is Sweeping the NationEthanol is Sweeping the Nation

0

2

4

6

8

10

12

14

16

18

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Year

Eth

an

ol

Us

e (

Bg

al)

Per RFS Per AEO 2006 Per AEO 2007 Assum ing 100% E10

76% of all Gasoline @ E10

If 100% of all Gasoline is E10

3939

Relative Value of Different RenewablesRelative Value of Different Renewables

EPAct specifies that 1 gal of cellulosic ethanol counts as EPAct specifies that 1 gal of cellulosic ethanol counts as 2.5 gallons for compliance purposes.2.5 gallons for compliance purposes.

We proposed to base the “Equivalence Value” or credit We proposed to base the “Equivalence Value” or credit for other renewables on volumetric energy content in for other renewables on volumetric energy content in comparison to ethanol (adjusted for renewable content):comparison to ethanol (adjusted for renewable content):– Corn-ethanol: Corn-ethanol: 1.01.0– Cellulosic biomass ethanol: Cellulosic biomass ethanol: 2.52.5– Biodiesel (alkyl esters): Biodiesel (alkyl esters): 1.51.5– Renewable diesel: Renewable diesel: 1.71.7– Biobutanol: Biobutanol: 1.31.3

Sought comment on life cycle energy, petroleum, or Sought comment on life cycle energy, petroleum, or green house gas (GHG) emissions as the basis for these green house gas (GHG) emissions as the basis for these values.values.

4040

Not Pictured

AK: 0% ETOH

HI: 100% ETOH

DC: 100% ETOH

What The Country May Look Like in 2009What The Country May Look Like in 20099.6 Bgal Ethanol

100% E10

<10% E1010-50% E10

50-100% E10

4141

Emissions & Air Quality*Emissions & Air Quality*

NationwideNationwide Localized maximumLocalized maximum

COCO 1.3 - 3.6 % decrease1.3 - 3.6 % decrease N/AN/A

BenzeneBenzene 1.7 - 6.2 % decrease1.7 - 6.2 % decrease N/AN/A

NOx + VOCNOx + VOC 0.5 - 1.0 % increase0.5 - 1.0 % increase 3 - 6 % increase 3 - 6 % increase (Summer)(Summer)

OzoneOzone ~ 0.1 ppb increase~ 0.1 ppb increase 0.1 - 0.2 ppb increase0.1 - 0.2 ppb increase

Impacts will vary by region, since renewable fuel use Impacts will vary by region, since renewable fuel use varies significantlyvaries significantly

* Incremental Impacts in 2012 compared to 2004 reference case* Incremental Impacts in 2012 compared to 2004 reference case

4242

Next StepsNext StepsFRM expected out within a few weeksFRM expected out within a few weeksImplementation workshop for industryImplementation workshop for industry– Jointly sponsored by EPA, RFA, ACE, NBB, API, Jointly sponsored by EPA, RFA, ACE, NBB, API,

NPRA, etc.NPRA, etc.

Implementation – the 3 RsImplementation – the 3 Rs– Registration, Recordkeeping, ReportingRegistration, Recordkeeping, Reporting

What’s Next ?What’s Next ?– The President has already called for an expansion of The President has already called for an expansion of

the RFS programthe RFS program35 Billion gallons by 201735 Billion gallons by 2017Renewable fuels and Alternative fuelsRenewable fuels and Alternative fuels

4343

AppendixAppendix

4444

MSAT2 Final Rule –MSAT2 Final Rule –Benzene Levels Before and AfterBenzene Levels Before and After

2004 2004 BenzeneBenzene

Vol%Vol%

Benzene VolBenzene Vol% With % With

ProgramProgram

% % ReductionReduction

PADD 1PADD 1 0.670.67 0.520.52 22%22%

PADD 2 PADD 2 1.261.26 0.630.63 50%50%

PADD 3PADD 3 0.850.85 0.610.61 28%28%

PADD 4PADD 4 1.561.56 0.900.90 42%42%

PADD 5 (no CA)PADD 5 (no CA) 1.801.80 0.690.69 62%62%

TotalTotal 1.001.00 0.620.62 38%38%

4545

III

III

IV

V

Petroleum Administration forDefense Districts (PADDs)

4646

Costs of Renewable FuelsCosts of Renewable Fuels

Increases in the use of renewable fuels are expected to Increases in the use of renewable fuels are expected to add 0.3 - 1 c/gal to the cost of gasoline for the nation as add 0.3 - 1 c/gal to the cost of gasoline for the nation as a whole (at $47/bbl crude)*a whole (at $47/bbl crude)*

In the Final Rulemaking also assessing impacts onIn the Final Rulemaking also assessing impacts on– Agricultural sector economyAgricultural sector economy– Energy SecurityEnergy Security

EthanolEthanol $1.30 - 1.36 per gal$1.30 - 1.36 per gal

BiodieselBiodiesel $2.00 - 2.22 per gal$2.00 - 2.22 per gal

Production & Distribution Costs

* Incremental Impacts in 2012 compared to 2004 reference case* Incremental Impacts in 2012 compared to 2004 reference case