Department
of Energy Was hi ngton

,D C 20585 The Honorable Gina McCarthy Administrator September
16 ,2015 U.S. Environmental Protection Agency Washington

,DC 20460 Dear Ms. McCat1hy: I am writing in regard to section 211(o)(3) of the Clean Air Act, which requires the E nergy Infmmation Administration (EIA) to provide the Environmental Protection Agency (EPA) with an estimate ofthe volumes of transportation fuel, biomass-based diesel, and cellulosic biofuel projected
to be sold or introduced into commerce
in the United States during 2015 and 2016, the calendar years for which

a final rule to implement the renewable fuel standard (RFS) program
is now under consideration. EIA publishes estimates of motor gasoline, diesel

,jet fuel, and ethanol usein the monthly Shor t- Term Energy Outlook (STEO). Results that a ppearin the S e ptember 2015 STEO release are
s ummm·ized below (Table
1 ). Table 1. Projections for transpot1ation

1 fuels sold or introduced into commerce
in the United States (million barrel

s per day) Liquid Fuels

2015 2016 Motor gaso line product

s upplied 9.13 9.13 Fuel
eth anol consumption

2

0.90 0.90 Jet fuel prod uct
s upplied

1.51 1.51 Diesel consumption

3.69 J 3.77q Notes:

1 Est im ates arefo rtota
l product

s uppli ed for all uses. 2 Fuel
e thanol consumption volumes

are contained
in motor gasoline product

s upplied

. 3 This include

s approximately 130 ,00 0 banels per day used by ocean-going vessels. 4 This includes approximately 136 ,000 banel

s per day used b y ocean-going vessels. So urc es:E IA
,STEO, Se pt emb er 2015. E IA cunently es timates cellulosic liquid biofuels for transportation useat 3 million gallon sin 2015 and 10 million gallons in 2016. These

es timates are based onE IA analysis of publicly available inform

ati on (news reports

,trade publications, company websites), onsite visits and interviews regarding cellulosic liquid biofuel proj ects at various stages of development. EIA staff focused on plants producing transpm1ation fuels that are already in operation,
as well as those anticipated
to b egin production
in 2015 and 20 16 ,which are listed in Table 2. Given observed
la gs between mechanical completion and initial commercial production, EIA doe snot expect plants that have not ® Prin

l ed**h**soy In k on recycled peperreached the stattup phase by the third quatter of 2015 to produce any commercial fuels in 2015. Similarly plants that have n o t reached the startup phase
b y the third quarter of 2016 are unlikely to produce any commercial fuels in 2016. Table 2. Cellulosic biofuel plants producing transportation fuels considered
to generate RlNs Year Company Location Product Online 2013 INEOS Bio Vera Beach, FL Ethanol 2014 Quad County Galva, IA Ethanol 2015

A ben goa Hugoton

, KS Ethanol 2015 POET Emmetsburg,
lA Ethanol 2016 DuPont Nevada, lA Ethanol The cellulosic biofuel supply estimates
in this letter do not take into account the EPA direct rule expanding the definition of cellulosic biofuels to include renewable heating oil. It also does not take into account the EPA Pathway
II rule that includes biogas from landfills as a cellulosic biofuels. EIA does not track biogas, which would likely displace natural gas rather than petroleum use

, in its petroleum data and analysis program. Turning to biomass-based diesel

, EIA data indicates that sufficient domestic production capacity exists to produce

1. 7 and 1. 8 billion gallons in 2015 and 2016, respectively,

as called for in EPA's most recent proposed rulemaking. The most significant rece nt development affecting the market for biomass-based diesel is the actual and forecast decline in petroleum-based diesel prices for 2015 and 2016 relative to recent years, which has the effect of increasing the cost premium of biodiesel over petroleum-based diesel relative to the situation in recent years for which RFS requirem ents have been promulgated. T h e forecasts presented above reflect EIA'
s best judgment based on

' cunently available information, but they are inherently uncertain. To illustrate these uncertainties,

it is useful to consider changes in prior forecasts. In August 2014, for example, EIA provided EPA with fuel consumption forecasts for 2014 to suppmt consideration RFS rule for calendar year 2014. Relative
to those forecasts, current data for 2014 refl ect increases of 110,000 barrels per day
( 1.2%) for motor gasoline product supplied, 7,000 banels per day (0.8%) for fuel ethanol consumption, and 30,000 barrels per day (2

. 1 %) for jet fuel product supplied.

Page 2 of3If you ha ve any questions regarding this information, you or your staff may contact me or John Conti at (202) 586-4430 or john

. conti@eia.gov

. cc: Ms. Janet McCabe 

# ~~ Adam Sieminski Administration U.S. Energy Inf ormation Administration Acting Assistant Administrator
for Air and Radiation U.S. E nvironmental Protection Agency Mr. Christopher Grundler Director, Office of Transportation Air Quality U.S. Environmental Protection Agency Page
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