```

[Federal Register Volume 78, Number 141 (Tuesday, July 23, 2013)]
[Proposed Rules]
[Pages 44075-44089]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-16928]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[EPA-HQ-OAR-2013-0178; FRL--9834-3]

Notice of Data Availability Concerning Renewable Fuels Produced 
From Barley Under the RFS Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of Data Availability (NODA).

-----------------------------------------------------------------------

SUMMARY: This Notice provides an opportunity to comment on EPA's draft 
analysis of the lifecycle greenhouse gas (GHG) emissions of ethanol 
that is produced using barley as a feedstock. EPA's draft analysis 
indicates that ethanol produced from barley has an estimated lifecycle 
GHG emissions reduction of 47% as compared to baseline conventional 
fuel when the barley ethanol is produced at a dry mill facility that 
uses natural gas for all process energy, uses electricity from the 
grid, and dries up to 100% of distillers grains. Such barley ethanol 
would therefore meet the minimum 20% GHG emissions reduction threshold 
for conventional biofuels under the Clean Air Act Renewable Fuel 
Standard (RFS) program. In addition, EPA analyzed two potential options 
for producing barley ethanol that would meet the 50% GHG emissions 
reduction threshold for advanced biofuels. Ethanol produced from dry-
milling barley meet the advanced biofuels GHG reduction threshold if it 
is produced at a facility that uses no more than 30,700 Btu of natural 
gas for process energy, no more than 4,200 Btu of biomass from barley 
hulls or biogas from landfills, waste treatment plants, barley hull 
digesters, or waste digesters for process energy, and no more than 0.84 
kWh of electricity from the grid for all electricity used at the 
renewable fuel production facility, calculated on a per gallon basis. 
Ethanol produced from dry-milling barley can also meet the advanced 
biofuel GHG reduction threshold if the production facility uses no more 
than 36,800 Btu of natural gas for process energy and also uses natural 
gas for on-site production of all electricity used at the facility 
other than up to 0.19 kWh of electricity from the grid, calculated on a 
per gallon basis.

[[Page 44076]]

DATES: Comments must be received on or before August 22, 2013.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2013-0178, by one of the following methods:
    www.regulations.gov: Follow the on-line instructions for 
submitting comments.
     Email: a-and-r-docket@epa.gov.
     Mail: Air and Radiation Docket and Information Center, 
Environmental Protection Agency, Mailcode: 2822T, 1200 Pennsylvania 
Ave. NW., Washington, DC 20460.
     Hand Delivery: Air and Radiation Docket and Information 
Center, EPA/DC, EPA West, Room 3334, 1301 Constitution Ave. NW., 
Washington, DC 20004. 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-
2013-0178. 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 a-and-r-docket@epa.gov. 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.
    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 the Information Center, EPA/DC, EPA West, Room 3334, 1301 
Constitution Ave. NW., Washington, DC 20004. 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: Christopher Ramig, Office of 
Transportation and Air Quality, Transportation and Climate Division, 
Environmental Protection Agency, 1200 Pennsylvania Ave. NW., 
Washington, DC 20460 (MC: 6041A); telephone number: 202-564-1372; fax 
number: 202-564-1177; email address: ramig.christopher@epa.gov.

SUPPLEMENTARY INFORMATION: 

Outline of This Preamble

I. General Information
    A. Does this action apply to me?
    B. What should I consider as I prepare my comments for EPA?
    1. Submitting CBI
    2. Tips for Preparing Your Comments
II. Analysis of Lifecycle Greenhouse Gas Emissions for Ethanol 
Produced From Barley
    A. Methodology
    1. Scope of Analysis
    2. Models Used
    3. Model Modifications
    4. Scenarios Modeled for Impacts of Increased Demand for Barley
    B. Results
    1. Agro-Economic Impacts
    2. International Land Use Change Emissions
    3. Barley Ethanol Processing
    4. Results of Lifecycle Analysis for Ethanol From Barley 
(Conventional Ethanol Example)
    5. Impacts of Different Process Technology Approaches on Barley 
Ethanol Lifecycle Results
    C. Consideration of Lifecycle Analysis Results
    1. Implications for Threshold Determinations
    2. Consideration of Uncertainty

I. General Information

A. Does this action apply to me?

    Entities potentially affected by this action are those involved 
with the production, distribution, and sale of transportation fuels, 
including gasoline and diesel fuel or renewable fuels such as biodiesel 
and renewable diesel. Regulated categories include:

--------------------------------------------------------------------------------------------------------------------------------------------------------
              Category                NAICS \1\ Codes    SIC \2\ Codes                      Examples of potentially regulated entities
--------------------------------------------------------------------------------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\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 engage in activities 
that may be affected by today's action. To determine whether your 
activities would be affected, you should carefully examine the 
applicability criteria in 40 CFR Part 80, Subpart M. If you have any 
questions regarding the applicability of this action to a particular 
entity, consult the person listed in the preceding section.

B. What should I consider as I prepare my comments for EPA?

1. Submitting CBI
    Do not submit this information to EPA through www.regulations.gov 
or email. Clearly mark the part or all of the

[[Page 44077]]

information that you claim to be CBI. For CBI information in a disk or 
CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as 
CBI and then identify electronically within the disk or CD ROM the 
specific information that is claimed as CBI. In addition to one 
complete version of the comment that includes information claimed as 
CBI, a copy of the comment that does not contain the information 
claimed as CBI must be submitted for inclusion in the public docket. 
Information so marked will not be disclosed except in accordance with 
procedures set forth in 40 CFR part 2.
2. Tips for Preparing Your Comments
    When submitting comments, remember to:
     Identify the NODA by docket number and other identifying 
information (subject heading, Federal Register date and page number).
     Follow directions--The agency may ask you to respond to 
specific questions or organize comments by referencing a Code of 
Federal Regulations (CFR) part or section number.
     Explain why you agree or disagree; suggest alternatives 
and substitute language for your requested changes.
     Describe any assumptions and provide any technical 
information and/or data that you used.
     If you estimate potential costs or burdens, explain how 
you arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
     Provide specific examples to illustrate your concerns, and 
suggest alternatives.
     Explain your views as clearly as possible, avoiding the 
use of profanity or personal threats.
     Make sure to submit your comments by the comment period 
deadline identified.

II. Analysis of Lifecycle Greenhouse Gas Emissions for Ethanol Produced 
From Barley

A. Methodology

1. Scope of Analysis
    On March 26, 2010, the Environmental Protection Agency (EPA) 
published changes to the Renewable Fuel Standard program regulations as 
required by 2007 amendments to Section 211(o) of the Clean Air Act 
(CAA). This rulemaking is commonly referred to as the ``March 2010 
RFS'' rule.\1\ As part of the March 2010 RFS rule we analyzed various 
biofuels production pathways to determine whether fuels produced 
through those pathways meet minimum lifecycle greenhouse gas reduction 
thresholds specified in the CAA for different categories of biofuel 
(i.e., 60% for cellulosic biofuel, 50% for biomass-based diesel and 
advanced biofuel, and 20% for other renewable fuels). The March 2010 
RFS rule focused on fuels that were anticipated to contribute 
relatively large volumes of renewable fuel by 2022 and thus did not 
cover all fuels that either are contributing or could potentially 
contribute to the program. In the preamble to the rule, EPA indicated 
that it had not completed the GHG emissions analyses for several 
specific biofuel production pathways but that this work would be 
completed through a supplemental rulemaking process. Since the March 
2010 rule was issued, we have continued to examine several additional 
pathways. This Notice of Data Availability presents our draft analysis 
of three pathways for producing ethanol from barley. The modeling 
approach EPA used in this analysis is the same general approach used in 
the final March 2010 RFS rule for lifecycle analyses of other 
biofuels.\2\ The March 2010 RFS rule preamble and Regulatory Impact 
Analysis (RIA) provide further discussion of our approach.
---------------------------------------------------------------------------

    \1\ EPA, 2010. Renewable Fuel Standard Program (March 2010 RFS) 
Regulation of Fuels and Fuel Additives: Changes to Renewable Fuel 
Standard Program; Final Rule. 40 CFR Part 80, http://www.gpo.gov/fdsys/pkg/FR-2010-03-26/pdf/2010-3851.pdf.
    \2\ EPA. 2010. Renewable Fuel Standard Program (March 2010 RFS) 
Regulatory Impact Analysis. EPA-420-R-10-006. http://www.epa.gov/oms/renewablefuels/420r10006.pdf.
---------------------------------------------------------------------------

    EPA is seeking public comment on EPA's draft analyses of lifecycle 
GHG emissions related to the production and use of ethanol from barley. 
We intend to consider all of the relevant comments received prior to 
taking final action that could lead to amendment of the RFS program 
regulations to identify barley ethanol pathways as among those which 
can be used to produce qualifying renewable fuel. In general, comments 
will be considered relevant if they pertain to the lifecycle GHG 
emissions of barley ethanol and especially if they provide specific 
information for consideration in our modeling.
2. Models Used
    The analysis EPA has prepared for barley ethanol uses the same set 
of models that was used for the final March 2010 RFS rule, including 
the Forestry and Agricultural Sector Optimization Model (FASOM) 
developed by Texas A&M University and the Food and Agricultural Policy 
and Research Institute international models as maintained by the Center 
for Agricultural and Rural Development (FAPRI-CARD) at Iowa State 
University. For more information on the FASOM and FAPRI-CARD models, 
refer to the March 2010 RFS rule preamble (75 FR 14670) or the March 
2010 RFS Regulatory Impact Analysis (RIA).\3\ These documents are 
available in the docket or online at http://www.epa.gov/otaq/fuels/renewablefuels/regulations.htm. The models require a number of inputs 
and assumptions that are specific to the pathway being analyzed, 
including projected yields of feedstock per acre planted, projected 
fertilizer use, and energy use in feedstock processing and fuel 
production. The docket includes detailed information on model inputs, 
assumptions, calculations, and the results of our assessment of the 
lifecycle GHG emissions performance for barley ethanol.
---------------------------------------------------------------------------

    \3\ EPA. 2010. Renewable Fuel Standard Program (March 2010 RFS) 
Regulatory Impact Analysis. EPA-420-R-10-006. http://www.epa.gov/oms/renewablefuels/420r10006.pdf.
---------------------------------------------------------------------------

3. Model Modifications
    In the United States, barley is grown using one of two primary 
cropping strategies. The majority of barley production, over 90 percent 
every year since 1970, is ``spring barley''.\4\ For example, in the 
2010/11 crop year, spring barley represented approximately 94 percent 
of the total barley crop. Spring barley is primarily grown in the Great 
Plains, Rocky Mountains, and the Pacific Northwest regions.\5\ It is 
planted in the spring and harvested in the fall, as are most grains in 
these regions. However, a significant minority of barley production 
(between 3 percent and 5 percent since the 2000/01 crop year, and as 
much as 6 percent between 1970 and 2000) comes from ``winter barley'', 
which is grown in the Southeast and Mid-Atlantic regions.\6\ 
Historically, winter barley is ``double-cropped'' with soybeans, 
meaning that the grower plants two crops, a soybean crop and a barley 
crop, in one year.\7\ Farmers that utilize this double-cropping method 
plant their soybean crop in the mid or late spring and harvest it in 
the early fall followed soon after with a barley crop that is planted 
in the fall and harvested in the early spring. Soybean acres in the 
Southeast and Mid-Atlantic regions of the U.S.

[[Page 44078]]

that are not double-cropped with barley are generally left fallow 
during the winter months.\8\ This also means that any barley that is 
double-cropped with soybeans in the Southeast and Mid-Atlantic regions 
of the U.S. is not replacing another double-crop practice between 
soybeans and another commodity.
---------------------------------------------------------------------------

    \4\ Personal communication with USDA experts.
    \5\ Personal communication with USDA experts.
    \6\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0001, Dated 
June 20th, 2013 and personal communication with USDA.
    \7\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0001, Dated 
June 20th, 2013 and personal communication with USDA.
    \8\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0001, Dated 
June 20th, 2013 and personal communication with USDA.
---------------------------------------------------------------------------

    FASOM has not previously taken the winter barley cropping strategy 
into account. However, given that a portion of barley ethanol 
production can come from winter barley and industry input indicates 
that winter barley is likely to be a potentially significant 
contributor to total barley ethanol production, it is important to 
consider the full range of barley production methods available. Based 
on information from industry stakeholders and USDA, FASOM modeling was 
conducted assuming that all barley produced in the Mid-Atlantic and 
Southeast regions of the United States is winter barley double-cropped 
with soybeans and that all barley grown elsewhere is spring barley.\9\ 
Specifically, FASOM was updated such that all barley grown in the Mid-
Atlantic and Southeast regions of the United States was grown in 
conjunction with soybean acres, rather than competing with other crops 
grown during the typical ``spring'' planting season.
---------------------------------------------------------------------------

    \9\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0001, Dated 
June 20th, 2013.
---------------------------------------------------------------------------

    Because of differences in model architecture, it was not possible 
to differentiate between spring and winter barley in the FAPRI-CARD 
model. However, we believe not modeling double cropping for barley in 
the Southeast and Mid-Atlantic region of the U.S. in the FAPRI-CARD 
model results in a conservative estimate of lifecycle GHG emissions, as 
it may slightly overstate the land use change and commodity market 
impacts of an increase in demand for barley ethanol.
4. Scenarios Modeled for Impacts of Increased Demand for Barley
    To assess the impacts of an increase in renewable fuel volume from 
business-as-usual (what is likely to have occurred without the RFS 
biofuel mandates) to levels required by the statute, we established a 
control case and other cases for a number of biofuels analyzed for the 
March 2010 RFS rule. The control case included a projection of 
renewable fuel volumes that might be used to comply with the RFS 
renewable fuel volume mandates in full. The other cases are designed 
such that the only difference between a given case and the control case 
is the volume of an individual biofuel, all other volumes remaining the 
same. In the March 2010 RFS rule, for each individual biofuel, we 
analyzed the incremental GHG emission impacts of increasing the volume 
of that fuel from business as usual levels to the level of that biofuel 
projected to be used in 2022, together with other biofuels, to fully 
meet the CAA requirements. Rather than focus on the GHG emissions 
impacts associated with a specific gallon of fuel and tracking inputs 
and outputs across different lifecycle stages, we determined the 
overall aggregate impacts across sectors of the economy in response to 
a given volume change in the amount of biofuel produced. For this 
analysis we compared impacts in the control case to the impacts in a 
new ``barley ethanol'' case. Some assumptions related to barley 
production and ethanol use were incorporated based on consultation with 
USDA, academic experts, and industry stakeholders. However, the volume 
of biofuels assumed to be produced in the control case used for 
modeling barley ethanol is the same as was assumed for the March 2010 
RFS rule. Specifically, the control case used for the March 2010 RFS 
rule, and used for this analysis, has zero gallons of barley ethanol 
production. This is compared to a ``barley ethanol'' case that does 
include barley ethanol production (see paragraph below). See our 
``Barley Inputs and Assumptions'' document, included in the docket for 
this NODA, for further details.\10\
---------------------------------------------------------------------------

    \10\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0001, Dated 
June 20th, 2013.
---------------------------------------------------------------------------

    For the ``barley ethanol'' case, our modeling analyzed a shock of 
140 million gallons of barley ethanol in 2022 above the production 
volume observed in the control case. In FASOM, this volume was divided 
into 80 million gallons of ``spring barley'' ethanol and 60 million 
gallons of ``winter barley'' ethanol.\11\ EPA chose this modeled volume 
based upon consultations with industry stakeholders and USDA. Input 
from industry stakeholders has suggested that there is interest in 
utilizing both spring and winter barley as ethanol feedstock, and EPA 
selected the 80/60 ratio of spring to winter barley for FASOM modeling 
based on this industry input. In the FAPRI-CARD model, as stated above, 
no distinction is made between winter and spring barley. For this 
reason, the volume in the FAPRI-CARD model is simply represented as 140 
million gallons of barley ethanol.
---------------------------------------------------------------------------

    \11\ As described in the following sections, the FASOM model 
projected the combined impacts on the winter/spring barley market 
(e.g., by allowing the increased demand for barley ethanol to be 
filled by reduced use of barley for feed, increased production of 
winter or spring barley, decrease in exports). This volume 
assumption did not assume that all new barley production would be 
``backfilled'' at a ratio of 80/140 spring barley to 60/140 winter 
barley.
---------------------------------------------------------------------------

    Our volume scenario of approximately 140 million gallons in the 
barley case in 2022 is based on several factors including potential 
feedstock availability and other competitive uses (e.g., animal feed or 
exports). Our assessment is described further in the inputs and 
assumptions document that is available through the docket.\12\ Based in 
part on consultation with experts at the United States Department of 
Agriculture (USDA) and industry representatives, we believe that these 
volumes represent a reasonable projection of how much barley ethanol 
could be produced by 2022 if these pathways are approved, and are 
therefore reasonable for the purposes of evaluating the impacts of 
producing ethanol from barley. However, we invite comment both 
regarding the assumptions made in our analysis of barley ethanol and 
regarding the efficacy of any alternative assumptions that could be 
utilized to model the impacts of barley ethanol production within the 
FASOM and FAPRI-CARD frameworks.
---------------------------------------------------------------------------

    \12\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0002, Dated 
June 20th, 2013.
---------------------------------------------------------------------------

    While the FASOM and FAPRI-CARD models project how much barley will 
be supplied to ethanol production, it should be noted that the amount 
of barley needed for ethanol production will likely come from a 
combination of increased production, decreases in others uses (e.g., 
animal feed), and decreases in exports compared to the control case

B. Results

    As we did for our analysis of other renewable fuel feedstocks in 
the March 2010 RFS rule, we assessed what the lifecycle GHG emissions 
impacts would be from the use of additional volumes of barley for 
biofuel production. The information provided in this section discusses 
the outputs of the analysis using the FASOM and FAPRI-CARD agro-
economic models to determine changes in the agricultural and livestock 
markets. These results from FASOM and FAPRI-CARD are then used to 
determine the GHG emissions impacts due to barley feedstock production. 
Finally, we include our analysis of the GHG emissions associated with 
different processing pathways and how these technologies affect the 
lifecycle GHG

[[Page 44079]]

emissions associated with barley ethanol.
1. Agro-Economic Impacts
    As demand increases for biofuel production from a particular 
commodity, the supply generally comes from some mix of increased 
production, decreased exports, increased imports, and decreases in 
other uses of the commodity (e.g., use in animal feed or food). The 
primary use for barley in the U.S. is beer malting. For example, in the 
2011/12 crop year, approximately 148 million bushels of barley went to 
malting, out of a total U.S. supply of 261 million bushels.\13\ 
However, barley must meet very high quality specifications for 
characteristics including protein and starch content to be sold as 
malting barley. For this reason, malting-quality barley is sold at a 
premium. Barley that does not meet malting specifications is generally 
sold at a discount to the feed markets. For example, over the last five 
marketing years (2007/08 to 2011/12), farmers received an average price 
of $4.82 per bushel for malting quality barley but only $3.78 per 
bushel for non-malting quality barley.\14\ Because of this dynamic, we 
expect malting to remain the highest value use, even if EPA approved an 
advanced biofuels pathway for barley ethanol. To the extent that barley 
is drawn from other uses for ethanol production, we expect it to come 
from either the feed or export markets.\15\
---------------------------------------------------------------------------

    \13\ U.S. Department of Agriculture Economic Research Service, 
Feed Grains Database, http://www.ers.usda.gov/data-products/feed-grains-database.aspx#.UcMXqDvku2k (Last accessed: June 20th, 2013).
    \14\ Ibid.
    \15\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0002, Dated 
June 20th, 2013.
---------------------------------------------------------------------------

    In the case of barley, FASOM estimates that the aggregate response 
to an increase in barley ethanol production of 140 million gallons 
(requiring 3.11 billion lbs of barley) by 2022 comes from an increase 
in production of barley (3.08 billion lbs). The increase in barley 
production is made possible partially by shifting production of wheat 
out of some barley-producing regions and partially by reducing 
production of corn and hay, though other factors have some influence as 
well (see Table II.B.1-1).\16\ As demand for barley for ethanol 
production increases, harvested crop area in the U.S. is predicted to 
increase by 824 thousand acres in 2022 (see Table II.B.1-2). The 
majority of this net agricultural acre expansion occurs in Montana, a 
major spring barley producer. Crop acreage in Montana is in long-term 
decline, a trend that shows no signs of reversal, creating a large 
stock of idle crop acres in this region.\17\ In the barley scenario, 
Montana crop acres continue to decline, but this decline is smaller 
than in the control case (see Table II.B.1-3).
---------------------------------------------------------------------------

    \16\ Table II.B.1-1 shows that wheat production remains 
virtually flat across cases. The increase in wheat acreage shown in 
Table II.B.1-2 reflects the fact that increased barley demand is 
forcing wheat to shift to less productive acres.
    \17\ U.S. Department of Agriculture, National Agricultural 
Statistics Service, NASS Quick Stats, http://quickstats.nass.usda.gov/ (Last accessed: June 20th, 2013).
    \18\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0002, Dated 
June 20th, 2013.

                Table II.B.1-1--Selected Projected Changes in Production in the U.S. in 2022 \18\
                                                [Millions of lbs]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Barley..........................................................          17,512          20,594           3,082
Distillers Grains...............................................         150,669         151,527             858
Wheat...........................................................         152,214         152,218               4
Hay.............................................................          76,657          76,643             -15
Corn............................................................         888,788         887,987            -802
----------------------------------------------------------------------------------------------------------------

               Table II.B.1-2--Projected Change in Crop Harvested Area by Crop in the U.S. in 2022
                                              [Thousands of acres]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Barley..........................................................           5,115           5,886             771
Wheat...........................................................          46,775          46,994             219
Soybeans........................................................          73,191          73,267              76
Corn............................................................          84,916          84,835             -81
Hay.............................................................          42,059          41,881            -178
Other...........................................................          59,454          59,471              17
                                                                 -----------------------------------------------
    Total*......................................................         311,511         312,335             824
----------------------------------------------------------------------------------------------------------------
*Total may differ from subtotals due to rounding.

              Table II.B.1-3--Projected Change in Crop Harvested Area by Region in the U.S. in 2022
                                              [Thousands of Acres]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Montana.........................................................           6,868           7,653             785
Other...........................................................         304,645         304,683              38
�����������������������������������������������������������������
    All*........................................................         311,511         312,335             824
----------------------------------------------------------------------------------------------------------------
*Total may differ from subtotals due to rounding.

[[Page 44080]]

    Looking more closely at barley production specifically, although 
our barley ethanol production estimate assumes 60 million gallons from 
winter barley and 80 million gallons from spring barley, the majority 
of acreage expansion in all barley occurs in spring barley 
(approximately 95 percent). Since there is perfect substitution between 
spring and winter barley in the animal feed, malting, and export 
markets, much of the spring barley being diverted to ethanol production 
can be backfilled with winter barley. This does indeed happen in our 
analysis; all winter barley production in the control case is shifted 
from other uses (e.g., feed, exports) to ethanol production, with only 
a minor increase in overall winter barley production. Therefore, all of 
the additional spring barley production not only contributes to ethanol 
production from spring barley, but also to the feed and export markets 
that winter barley no longer contributes to in the barley case.
---------------------------------------------------------------------------

    \19\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0002, Dated 
June 20th, 2013.

                  Table II.B.1-4--Changes in Barley Production and Use in the U.S. in 2022 \19\
                                              [Millions of Bushels]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
                                                  Winter Barley
----------------------------------------------------------------------------------------------------------------
Production......................................................           1,236           1,389             154
Used in Biofuel Production......................................               0           1,328           1,328
----------------------------------------------------------------------------------------------------------------
                                                  Spring Barley
----------------------------------------------------------------------------------------------------------------
Production......................................................          16,277          19,205           2,958
Used in Biofuel Production......................................               0           1,780           1,780
----------------------------------------------------------------------------------------------------------------
                                                   All Barley
----------------------------------------------------------------------------------------------------------------
Production......................................................          17,512          20,594           3,082
Used in Biofuel Production......................................               0           3,108           3,108
Used in Feed....................................................           4,151           4,150              -1
Used in Food and Malting........................................          13,796          13,786              -7
Net Exports.....................................................            -435            -453             -19
----------------------------------------------------------------------------------------------------------------

    Since spring barley represents over 90 percent of annual 
production, we would expect to see more expansion of this growing 
practice. As Table II.B.1-5 below shows, spring barley production does 
indeed expand significantly in Oregon and Montana, two major spring 
barley producing regions, and to a lesser extent in the mid-tier barley 
producing areas of Wyoming and California. Winter barley production 
primarily expands in Virginia, which, along with Pennsylvania, is 
generally the largest producer of winter barley.\20\
---------------------------------------------------------------------------

    \20\ In the 2010/11 crop year, Virginia harvested 48 thousand 
acres of barley out of a total of approximately 160 thousand 
nationwide. Pennsylvania harvested 45 thousand acres of winter 
barley. Source: U.S. Department of Agriculture Economic Research 
Service, Feed Grains Database, http://www.ers.usda.gov/data-products/feed-grains-database.aspx#.UcMXqDvku2k (Last accessed: June 
20th, 2013).

        Table II.B.1-5--Selected Projected Changes in Regional Barley Production in the U.S. in 2022 \21\
                                                [Millions of lbs]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Oregon..........................................................           1,457           2,834           1,376
Wyoming.........................................................             592           1,154             562
Montana.........................................................           3,748           4,276             528
Virginia........................................................             284             415             131
California......................................................             735             813              77
Rest of U.S.....................................................           8,506           8,528              22
----------------------------------------------------------------------------------------------------------------

    The FASOM model projects that direct use of barley for feed will 
decline by approximately 1 million lbs as a result of demand for 
ethanol production (see Table II.B.1-6). There is also a significant 
influx of distillers' grains (DGs) into the feed markets as a result of 
barley ethanol production. DG consumption in the domestic livestock 
sector increases by 858 million lbs. This increase primarily displaces 
corn and sorghum, whose use as feed declines by 477 and 178 million lbs 
respectively. Hay use for feed also declines by 61 million lbs. See 
Table II.B.1-6 below for further details.\22\
---------------------------------------------------------------------------

    \21\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0002, Dated 
June 20th, 2013.
    \22\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0002, Dated 
June 20th, 2013.
    \23\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0002, Dated 
June 20th, 2013.

[[Page 44081]]

                 Table II.B.1-6--Selected Projected Changes in Feed Use in the U.S. in 2022 \23\
                                                [Millions of lbs]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Distillers Grains...............................................          78,171          79,028             858
Barley..........................................................           4,151           4,150              -1
Hay.............................................................         182,291         182,231             -61
Sorghum.........................................................          33,022          32,844            -178
Corn............................................................         310,627         310,150            -477
Other...........................................................         212,310         212,271             -39
                                                                 -----------------------------------------------
All Feed Use....................................................         820,571         820,675             103
----------------------------------------------------------------------------------------------------------------

    As demand for barley use in U.S. ethanol production increases, the 
FAPRI-CARD model estimates that the U.S. will decrease net exports of 
barley by 564 million lbs. Additionally, the U.S. will decrease exports 
of corn by 798 million lbs, wheat by 79 million lbs, and soybeans by 71 
million lbs. This combination of impacts on the world trade of barley, 
corn, wheat, and soybeans has effects both on major importers, as well 
as on other major exporters. For example, Canada, a large net exporter 
of barley, increases its net barley exports by 227 million lbs; and 
Brazil, a large corn exporter, increases its net corn exports by 214 
million lbs. Details for other major importers and exporters of barley 
and corn can be found in Table II.B.1-7 and Table II.B.1-8, 
respectively.\24\
---------------------------------------------------------------------------

    \24\ The FAPRI-CARD analysis conducted for this rulemaking can 
be accessed as a Memo to the Docket, EPA-HQ-OAR-2013-0178-0003, 
Dated June 20th, 2013. The Control Case was previously docketed as 
part of the March 2010 RFS FRM (see EPA-HQ-OAR-2005-0161-3166). See 
these two documents for full net export data on all major crops.

                  Table II.B.1-7--Projected Change in Net Exports of Barley by Country in 2022
                                                [Millions of lbs]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
U.S.............................................................            -330            -893            -564
Canada..........................................................           4,486           4,713             227
Russia..........................................................           6,112           6,190              78
EU..............................................................          14,166          14,198              32
Australia.......................................................           7,308           7,338              30
Rest of World...................................................          30,281          30,084             196
----------------------------------------------------------------------------------------------------------------
Note: A country with negative Net Exports is a Net Importer.

                   Table II.B.1-8--Projected Change in Net Exports of Corn by Country in 2022
                                                [Millions of lbs]
----------------------------------------------------------------------------------------------------------------
                                                                   Control Case     Barley Case     Difference
----------------------------------------------------------------------------------------------------------------
U.S.............................................................         121,329         120,531            -798
Brazil..........................................................          23,853          24,067             214
Mexico..........................................................         -26,449         -26,266             182
China...........................................................          12,388          12,474              85
Canada..........................................................          -4,657           4,600              57
Rest of World...................................................        -125,586        -125,326             260
----------------------------------------------------------------------------------------------------------------
Note: A country with negative Net Exports is a Net Importer

    The change in trade patterns directly impacts the amount of 
production and harvested crop area around the world. Harvested crop 
area for barley is not only predicted to increase in the U.S., but also 
in Russia (26 thousand acres), Canada (25 thousand acres) and other 
parts of the world. Worldwide barley harvested area outside of the U.S. 
would increase by 107 thousand acres. Similarly, the decrease in U.S. 
corn and soy exports would lead to an increase of harvested acres 
outside the U.S. for these crops. EPA predicts that worldwide corn 
harvested area outside of the U.S. would increase by 51 thousand acres 
and that soybean harvested area outside of the U.S. would increase by 
10 thousand acres.
    Overall harvested crop area in other countries also increases, 
particularly in Brazil. Brazil's total harvested area is predicted to 
increase by 35 thousand acres by 2022. This is mostly comprised of an 
increase in corn of 19 thousand acres, and an increase in soybeans of 
17 thousand acres, along with minor changes in other crops. More 
details on projected changes in world harvested crop area in 2022 can 
be found below in Table II.B.1-9, Table II.B.1-10, Table II.B.1-11, 
Table II.B.1-12, and Table II.B.1-13.\25\
---------------------------------------------------------------------------

    \25\ See our FAPRI-CARD results for full information on these 
tables and our other international modeling in support of this 
rulemaking. The analysis conducted for this rulemaking can be 
accessed as Memo to the Docket, EPA-HQ-OAR-2013-0178-0003, and Dated 
June 20th, 2013. The Control Case was previously docketed as part of 
the March 2010 RFS FRM (see EPA-HQ-OAR-2005-0161-3166).

[[Page 44082]]

         Table II.B.1-9--Projected Change in International (Non-U.S.) Harvested Area by Country in 2022
                                              [Thousands of acres]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Brazil..........................................................         136,739         136,773              35
Africa & Middle East............................................         222,669         222,357              28
Russia..........................................................          96,920          96,940              20
India...........................................................         332,143         332,155              12
Rest of World (non-U.S.)........................................       1,237,730       1,237,746              17
International Total (non-U.S.)..................................       2,026,200       2,026,312             112
----------------------------------------------------------------------------------------------------------------

          Table II.B.1-10--Projected Change in International (Non-U.S.) Harvested Area by Crop in 2022
                                              [Thousands of acres]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Barley..........................................................         136,223         136,329             107
Corn............................................................         307,392         307,442              51
Soybeans........................................................         202,157         202,167              10
Other...........................................................       1,380,428       1,380,373             -55
International Total (non-U.S.)..................................       2,026,200       2,026,312             112
----------------------------------------------------------------------------------------------------------------

       Table II.B.1-11--Projected Change in International (Non-U.S.) Barley Harvested Area by Crop in 2022
                                              [Thousands of acres]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Russia..........................................................          24,981          25,006              26
Canada..........................................................           9,512           9,537              25
Africa & Middle East............................................          29,522          29,538              16
Australia.......................................................          10,308          10,319              11
Rest of World...................................................          61,900          61,929              29
International Total (non-U.S.)..................................         136,223         136,329             107
----------------------------------------------------------------------------------------------------------------

        Table II.B.1-12--Projected Change in International (Non-U.S.) Corn Harvested Area by Crop in 2022
                                              [Thousands of acres]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Brazil..........................................................          21,096          21,115              19
Africa & Middle East............................................          73,081          73,095              15
China...........................................................          79,471          79,479               8
India...........................................................          20,156          20,162               6
Mexico..........................................................          19,000          19,005               5
Rest of World...................................................          94,589          94,587              -3
International Total (non-U.S.)..................................         307,392         307,443              51
----------------------------------------------------------------------------------------------------------------

      Table II.B.1-13--Projected Change in International (Non-U.S.) Soybeans Harvested Area by Crop in 2022
                                              [Thousands of acres]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Brazil..........................................................          69,452          69,469              17
Rest of World...................................................         132,705         132,698              -7
International Total (non-U.S.)..................................         202,157         202,167              10
----------------------------------------------------------------------------------------------------------------

2. International Land Use Change Emissions
    Today's assessment of barley as an ethanol feedstock considers GHG 
emissions from international land use changes related to the production 
and use of barley and applies the same land use change modeling 
approach used in the March 2010 RFS rule for analyses of other biofuel 
pathways.
    In our analysis, GHG emissions per acre of land conversion 
internationally (i.e., outside of the United States) are determined 
using the emissions factors developed for the March 2010 RFS rule 
following IPCC guidelines. In addition, estimated average forest carbon 
stocks were updated based on a new study which uses a more robust and 
higher resolution analysis. For the March 2010 RFS rule, international 
forest carbon stocks were estimated from several data sources each 
derived using a different methodological approach. Two new analyses on 
forest carbon stock estimation were completed since the release of the 
final March 2010 RFS rule, one for three continental regions

[[Page 44083]]

by Saatchi et al.\26\ and the other for the EU by Gallaun et al.\27\ We 
have integrated this updated understanding of forest carbon stocks into 
our recent pathways analyses. More detailed information on the land use 
change emissions can be found in the accompanying docket.\28\
---------------------------------------------------------------------------

    \26\ Saatchi, S.S., Harris, N.L., Brown, S., Lefsky, M., 
Mitchard, E.T.A., Salas, W., Zutta, B.R., Buermann, W., Lewis, S.L., 
Hagen, S., Petrova, S., White, L., Silman, M. And Morel, A. 2011. 
Benchmark map of forest carbon stocks in tropical regions across 
three continents. PNAS doi: 10.1073/pnas.1019576108.
    \27\ Gallaun, H., Zanchi, G., Nabuurs, G.J., Hengeveld, G., 
Schardt, M., Verkerk, P.J. 2010. EU-wide maps of growing stock and 
above-ground biomass in forests based on remote sensing and field 
measurements. Forest Ecology and Management 260: 252-261.
    \28\ See Section 5, Forest Carbon Stocks in EPA-HQ-OAR-2011-
0542-0058, Attachment 9.
---------------------------------------------------------------------------

    Table II.B.2-1 includes the international land use change GHG 
emissions results for the scenarios modeled, in terms of kilograms of 
carbon-dioxide equivalent emissions per million British thermal units 
of barley ethanol (kgCO2e/mmBtu).
---------------------------------------------------------------------------

    \29\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0006, and 
Dated June 20th, 2013.

       Table II.B.2-1--International Land Use Change GHG Emissions
                            [kgCO2e/mmBtu] 29
------------------------------------------------------------------------
                           Region                              Emissions
------------------------------------------------------------------------
Brazil......................................................          17
Asia........................................................           5
Africa and Middle East......................................           2
Eastern Europe & Russia.....................................           2
India.......................................................           2
International Total (non-U.S.)..............................          26
------------------------------------------------------------------------

3. Barley Ethanol Processing
    Based on information submitted by petitioners, we expect dry 
milling will be the most common process for producing ethanol from 
barley. Therefore this section focuses on a lifecycle GHG emissions 
analysis of several variations of the dry mill process. In the dry 
milling process, the barley is ground and fermented to produce ethanol. 
The remaining components (distillers grains) are then either left wet 
if used in the near-term or dried for longer term use as animal feed.
    For this analysis the amount of barley used for ethanol production 
as modeled by the FASOM and FAPRI-CARD models was based on yield 
assumptions built into those two models. Specifically, the models 
assume barley ethanol yields of 2.16 gallons (pure ethanol) per bushel 
for dry mill plants (yields represent pure ethanol).
    As per the analysis done in the March 2010 RFS rule, the GHG 
emission calculation from ethanol production needs to account for not 
only the renewable fuel produced, but also any co-products. For barley 
ethanol production, this analysis accounts for the DG co-product use 
directly in the FASOM and FAPRI-CARD agricultural sector modeling 
described above. DG are considered a replacement animal feed and thus 
reduce the need to make up for the barley production that went into 
ethanol production. Since FASOM takes the production and use of DG into 
account, no further allocation was needed at the ethanol plant and all 
plant emissions are accounted for there.
    Our analysis assumed hulled barley was grown and used to produce 
ethanol. The hulls are abrasive and during the ethanol process they are 
removed prior to further processing and conversion of the barley into 
ethanol. Our modeling considered two scenarios for the barley hulls, 
either they were discarded and received no co-product benefit, or they 
were used beneficially as an energy source replacing some of the energy 
used on-site. The results of considering the beneficial use of the 
hulls as an energy source are shown below.
    Overall fuel and electricity use for barley ethanol production was 
based on the energy use information for corn ethanol production from 
the March 2010 RFS rule analysis. For the March 2010 RFS rule, EPA 
modeled future plant energy use to represent plants that would be built 
to meet requirements of increased ethanol production, as opposed to 
current or historic data on energy used in ethanol production. The 
energy use at dry mill ethanol plants was based on ASPEN models 
developed by USDA and updated to reflect changes in technology out to 
2022 as described in the March 2010 RFS rule RIA Chapter 1.
    The work done on ethanol production for the March 2010 RFS rule was 
based on converting corn to ethanol. Converting barley to ethanol will 
result in slightly different energy use based on differences in the 
grains and how they are processed. For example, a barley plant requires 
more energy than a corn plant per gallon of ethanol produced since the 
starch/fiber ratio in corn is different than it is in barley. The same 
ASPEN USDA models used for corn ethanol in the final rule were also 
developed for barley ethanol. Based on the numbers from USDA, a barley 
ethanol plant uses 1.2 times the thermal process energy of a corn 
ethanol plant and 1.3 times the electrical energy per gallon of ethanol 
produced.
    The GHG emissions from production of ethanol from barley were 
calculated in the same way as other fuels analyzed as part of the March 
2010 RFS rule. The GHG emissions were calculated by multiplying the 
BTUs of the different types of energy inputs at the barley ethanol 
plant by emissions factors for combustion of those fuel sources. The 
emission factors for the different fuel types are the same as those 
used in the March 2010 RFS rule and were based on assumed carbon 
contents of the different process fuels. The emissions from producing 
electricity in the U.S. were also the same as used in the March 2010 
RFS rule, which were taken from GREET and represent average U.S. grid 
electricity production emissions.
4. Results of Lifecycle Analysis for Ethanol From Barley (Conventional 
Ethanol Example)
    Consistent with our approach for analyzing other pathways, our 
analysis for barley ethanol includes a mid-point estimate as well as a 
range of possible lifecycle GHG emission results based on an 
uncertainty analysis conducted by the Agency (see Section II.C.2 for 
further information). The graph included below (Figure II.B.4-1) 
depicts the results of our analysis (including the uncertainty in our 
land use change modeling) for barley ethanol produced in a plant that 
uses natural gas for process energy, electricity from the grid and 
produces 100% dry DG.

[[Page 44084]]

    Figure II.B.4-1 shows the results of our barley ethanol modeling 
for this type of plant. It shows the percent difference between 
lifecycle GHG emissions for 2022 barley ethanol and those for the 2005 
baseline for petroleum gasoline. Lifecycle GHG emissions equivalent to 
the gasoline fuel baseline are represented on the graph by the zero on 
the X-axis. The midpoint of the range of results is a 47% reduction in 
GHG emissions compared to the 2005 gasoline baseline.\30\ As in the 
case for biofuel pathways analyzed as part of the March 2010 RFS rule, 
the range of results shown in Figure II.B.4-1 is based on our 
assessment of uncertainty regarding the location and types of land that 
may be impacted as well as the GHG impacts associated with these land 
use changes. These results, if finalized, would justify a determination 
that barley ethanol would meet the 20% reduction threshold required for 
the generation of conventional renewable fuel RINs.
---------------------------------------------------------------------------

    \30\ The 95% confidence interval around that midpoint results in 
range of a 36% reduction to a 56% reduction compared to the 2005 
gasoline fuel baseline.
[GRAPHIC] [TIFF OMITTED] TP23JY13.001

    Table II.B.4-1 breaks down by stage the lifecycle GHG emissions of 
the 2005 gasoline baseline and of barley ethanol that is produced in 
2022 in a dry mill plant using natural gas for process energy, grid 
electricity, and drying 100% of DG.\31\ Results are included using our 
mid-point estimate of land use change emissions, as well as with the 
low and high end of the 95% confidence interval. Net agricultural 
emissions include impacts related to changes in crop inputs, such as 
fertilizer, energy used in agriculture, livestock production and other 
agricultural changes in the scenarios modeled. The fuel production 
stage includes emissions from ethanol production plants. Fuel and 
feedstock transport includes emissions from transporting bushels of 
harvested barley from the farm to ethanol production facility.
---------------------------------------------------------------------------

    \31\ Totals in the table may not sum due to rounding.

[[Page 44085]]

 Table II.B.4-1--Lifecycle GHG Emissions for Barley Ethanol Produced in Dry Mill Plants That Use Natural Gas for
                            Process Energy, Grid Electricity and Produce 100% Dry DG
                                                [g CO2-eq/mmBtu]
----------------------------------------------------------------------------------------------------------------
                                                                                                   2005 Gasoline
                             Fuel type                                      Barley ethanol           baseline
----------------------------------------------------------------------------------------------------------------
Net Agriculture (w/o land use change)..............................                       -3,975  ..............
Land Use Change, Mean (Low/High)...................................        11,290 (2,784/21,679)  ..............
Fuel Production....................................................                       39,069          19,200
Fuel and Feedstock Transport.......................................                        4,861               *
Tailpipe Emissions.................................................                          880          79,004
Total Emissions, Mean (Low/High)...................................       52,124 (43,618/62,513)          98,204
Midpoint Lifecycle GHG Percent Reduction Compared to Petroleum                               47%  ..............
 Baseline..........................................................
----------------------------------------------------------------------------------------------------------------
* Emissions included in fuel production stage.

    It should be noted that there are a number of reasons why the 
estimated land use change emissions attributed to any given feedstock 
may differ from those estimated for another feedstock that has been 
analyzed in the past. Chief among these are differences in inputs 
required for production; differences in markets for a given commodity, 
and how they are impacted; and differences in regional production 
patterns and the relationships to markets and other commodities in 
those regions (domestically and internationally). The FASOM and FAPRI-
CARD model take all of these differences into account in our analysis. 
The docket for this NODA provides more details on our key model inputs 
and assumptions (e.g., crop yields, biofuel conversion yields, and 
agricultural energy use). These inputs and assumptions are based on our 
analysis of peer-reviewed literature and consideration of 
recommendations of experts from within the barley and ethanol 
industries, USDA, and academic institutions. EPA invites comment on all 
aspects of its modeling of barley ethanol, including all assumptions 
and modeling inputs.
5. Impacts of Different Process Technology Approaches on Barley Ethanol 
Lifecycle Results
    There are a number of process technologies that could be employed 
in the production of barley ethanol that would result in lower GHG 
emissions than shown in the previous section for a natural gas barley 
plant that uses grid electricity and produces 100% dry DG. Three 
different approaches are examined here with their associated GHG 
emissions.
     Production of wet DG.
     Replacement of purchased grid electricity with electricity 
having a lower GHG emissions factor.
     Replacement of natural gas with lower GHG emitting fuel 
source.
    One of the energy drivers of ethanol production is drying of the 
DG. Plants that are located close to feedlots have the ability to 
provide the co-product without drying and thus reducing their natural 
gas use and associated GHG emissions. This energy use and GHG reduction 
has a large enough impact on overall results in previous analyses that 
in the March 2010 RFS rule we established separate pathways for corn 
ethanol when the co-product DG was wet versus dry. The amount of fuel 
used to dry DG is related to percent of DG that are dried, but some dry 
mills can dry DG more efficiently (i.e., use less natural gas per pound 
of DG dried) and/or replace the natural gas used to dry DG with lower-
GHG emitting fuel sources. As the GHG calculations related to fuel use 
at processing facilities are based on the amount of fuel used times an 
emission factor plus the amount of electricity used from the grid times 
an emission factor, the percent of DG dried only matters to the extent 
that it impacts the amount of fuel and electricity used per batch of 
ethanol produced. Therefore, instead of analyzing and proposing a 
pathway for barley ethanol that is based on reduced DG drying as an 
option to produce fuel that qualifies as advanced biofuel (minimum 50% 
GHG reduction), we are instead proposing to ascertain the amount and 
types of process fuel used and the amount of grid electricity used per 
gallon of barley ethanol produced that would be consistent with a 50% 
GHG reduction.
    Production facilities that utilize combined heat and power (CHP) 
systems can also reduce GHG emissions relative to less efficient system 
configurations. CHP, also known as cogeneration, refers to industrial 
processes in which waste heat from the production of electricity is 
used for process energy in the renewable fuel production facility. The 
most common configuration in ethanol plants, and the one considered 
here, involves using the boiler to power a turbine generator unit that 
produces electricity and using waste heat to produce process steam. 
While the thermal energy demand for an ethanol plant using CHP 
technology is slightly higher than that of a conventional plant, the 
additional energy used is far less than what would be required to 
produce the same amount of electricity in an offsite (central) power 
plant. The increased efficiency is due to the ability of the ethanol 
plant to effectively utilize the waste heat from the electricity 
generation process. Since CHP technologies on natural gas plants 
replace some of the purchased electricity but increase process energy 
use emissions (because of increased natural gas use on-site), the net 
result is a small reduction in overall emissions. The difference 
between CHP and non-CHP plants is reflected in their use of different 
amount of primary energy (natural gas, biogas, etc.) and the amount of 
electricity used from the grid. Because the only advanced biofuel 
pathways we are proposing today for the production of barley ethanol 
specify maximum amounts of primary energy and grid electricity that can 
be used per gallon of ethanol produced, we are not proposing a pathway 
that specifies the use of CHP. However, we believe that CHP is likely 
to be one of the technologies used to meet these energy and electricity 
use thresholds.
    Use of an alternative fuel source to replace natural gas for 
process energy can also reduce the GHG emissions of a barley ethanol 
plant. As shown in the ``Supplemental Determination for Renewable Fuels 
Produced Under the Final RFS2 Program From Grain Sorghum'' Published 
December 17, 2012 (77 FR 242), hereafter the ``Sorghum rule,'' 
switching from natural gas to biogas can reduce lifecycle GHG emissions 
from ethanol production. Use of such biogas would also provide a way 
for barley ethanol plants to reduce their GHG emissions. We have 
assumed for purposes of this NODA that biogas used for process energy 
comes from landfills, waste treatment plants or waste

[[Page 44086]]

digesters. Such biogas is assumed to have zero upstream GHG impacts, as 
discussed in the sorghum rule. Our modeling shows that even if a dry 
mill plant uses grid electricity and dries 100% of its DGs, that plant 
may be able to replace enough natural gas with biogas from a landfill, 
waste treatment plant or waste digester to lower their GHG emissions 
enough to meet a 50% lifecycle GHG reduction compared to the baseline 
petroleum gasoline replaced. As such, today we are proposing two 
pathways that would allow barley ethanol to qualify as advanced biofuel 
if it is produced at dry mills that keep their use of natural gas and 
grid electricity below certain levels, as specified below. Because the 
use of biogas results in some lifecycle GHG emissions, although 
significantly lower than the use of fossil-based natural gas, the 
advanced biofuel pathways for barley ethanol proposed in today's NODA 
specify maximum amounts of biogas that can be used in combination with 
natural gas and grid electricity while still meeting the 50% lifecycle 
GHG reduction threshold.
    Specific to the barley ethanol process is the possibility of using 
barley hulls as an energy source. In the case of barley hulls, the 
upstream CO2 emissions from the hulls are already accounted 
for as part of the land use change calculations for the barley as a 
renewable fuel feedstock. Furthermore, since none of the barley ethanol 
emissions were allocated to the hulls, as discussed above, the 
beneficial use of the hulls would not require any adjustment to the 
barley lifecycle results. Therefore, similar to GHG emissions 
associated with use of biogas from the sources listed above, the use of 
barley hulls either directly as an energy source or in digesters 
producing biogas would not result in additional CO2 
emissions, and can replace the use of higher-GHG emitting sources of 
energy, such as natural gas and grid electricity. Because the use of 
barley hulls results in some lifecycle GHG emissions, although 
significantly lower than the use of fossil-based natural gas, the 
advanced biofuel pathways for barley ethanol proposed in today's NODA 
specify maximum amounts of barley hulls that can be used in combination 
with natural gas and grid electricity while still meeting the 50% 
lifecycle GHG reduction threshold.
    The following Table II.B.5-1 shows the mean lifecycle GHG 
reductions compared to the baseline petroleum fuel for a number of 
different barley ethanol pathways.

  Table II.B.5-1--Lifecycle GHG Emission Reductions for Dry Mill Barley
                           Ethanol Facilities
                [% Change compared to petroleum gasoline]
------------------------------------------------------------------------
                Fuel type and technology                     % Change
------------------------------------------------------------------------
Dry mill process, using natural gas for process energy,               47
 grid electricity, and producing up to 100% dry DG......
Dry mill process using, on a per gallon basis averaged               >50
 over the number of gallons in each batch, no more than
 30,700 Btu of natural gas for process energy, no more
 than 4,200 Btu of biomass from barley hulls or biogas
 (biogas must be from landfills, waste treatment plants,
 barley hull digesters, or waste digesters) for process
 energy, and no more than 0.84 kWh of electricity from
 the grid for all electricity used at the renewable fuel
 facility...............................................
Dry mill process using no more than 36,800 Btu natural               >50
 gas for process energy calculated on a per gallon basis
 averaged over the number of gallons in each batch, and
 using natural gas for on-site production of all
 electricity used at the renewable fuel facility other
 than up to 0.19 kWh of electricity from the grid
 calculated on a per gallon basis averaged over the
 number of gallons in each batch........................
------------------------------------------------------------------------

    As stated above, the docket for this NODA provides more details on 
our key modeling assumptions. EPA invites comment on all aspects of its 
modeling of advanced barley ethanol configurations, including all 
assumptions and modeling inputs.\32\
---------------------------------------------------------------------------

    \32\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0001, Dated 
June 20th, 2013.
---------------------------------------------------------------------------

C. Consideration of Lifecycle Analysis Results

1. Implications for Threshold Determinations
    As discussed above, EPA's analysis shows that, based on the mid-
point of the range of results, ethanol produced from barley using a 
variety of processing technologies has the potential to meet the 50 
percent GHG emissions reduction threshold needed to qualify as an 
advanced biofuel.\33\ Barley ethanol meets the 20% lifecycle GHG 
emissions reduction threshold for conventional biofuels when assuming 
natural gas is used as the process fuel in a dry mill plant using grid 
electricity and drying 100% DG. If finalized, Table 1 to Section 
80.1426 would be modified to add these new pathways. Table II.C.1-1 
illustrates how these new pathways would be included in the existing 
table. Data, analysis and assumptions for each of these processing 
technologies are provided in the docket for this NODA. We invite 
comment on all aspects of this analysis.
---------------------------------------------------------------------------

    \33\ As with our analysis showing that barley ethanol meets the 
20 percent threshold to qualify as conventional biofuel, our 
analysis here included a 95 percent confidence interval that 
represents the uncertainty in our modeling. See Memo to the Docket, 
EPA-HQ-OAR-2013-0178-0005, Dated June 20th, 2013.

 Table II.C.1-1--Proposed Applicable D Codes for Barley Ethanol Produced With Different Processing Technologies
----------------------------------------------------------------------------------------------------------------
           Fuel type                  Feedstock            Production process requirements            D-Code
----------------------------------------------------------------------------------------------------------------
Ethanol........................  Barley............  Dry mill process, using natural gas for                   6
                                                      process energy and grid electricity, and
                                                      producing up to 100% DG

[[Page 44087]]

 
Ethanol........................  Barley............  Dry mill process using, on a per gallon                   5
                                                      basis averaged over the number of gallons
                                                      in each batch, no more than 30,700 Btu of
                                                      natural gas for process energy, no more
                                                      than 4,200 Btu of biomass from barley
                                                      hulls or biogas from landfills, waste
                                                      treatment plants, barley hull digesters,
                                                      or waste digesters for process energy, and
                                                      no more than 0.84 kWh of electricity from
                                                      the grid for all electricity used at the
                                                      renewable fuel production facility.
Ethanol........................  Barley............  Dry mill process using no more than 36,800                5
                                                      Btu natural gas for process energy
                                                      calculated on a per gallon basis averaged
                                                      over the number of gallons in each batch,
                                                      and using natural gas for on-site
                                                      production of all electricity used at the
                                                      renewable fuel production facility other
                                                      than up to 0.19 kWh of electricity from
                                                      the grid calculated on a per gallon basis
                                                      averaged over the number of gallons in
                                                      each batch.
----------------------------------------------------------------------------------------------------------------

    The advanced biofuel pathways for barley ethanol proposed in Table 
II.C.1-1, specify maximum amounts of different types of energy and grid 
electricity that can be used for the fuel to qualify as advanced 
biofuel. In the RFS March 2010 rule, EPA used a technology-based 
approach for determining whether a fuel from a specific feedstock met 
the lifecycle GHG emissions reduction thresholds required by CAA (o). 
As outlined in Sec.  80.1426 Table 1, EPA specified the feedstock 
(e.g., corn starch), fuel (e.g., ethanol), and process type (e.g., dry 
mill process using natural gas and two advanced technologies in Table 
2) needed to generate a conventional (D-6) RIN. Examples of advanced 
corn ethanol technologies in Table 2 include membrane separation, corn 
oil fractionation and combined heat and power configurations. This 
technology based approach included certain assumptions about conversion 
yields and energy use, and how advanced technologies could reduce 
average GHG emissions. The regulations also specified a time period 
over which application of advanced technologies would be averaged. For 
example, the corn ethanol pathways specify that the amount of DG drying 
was to be calculated on an annual basis.
    As discussed above and as was done in the sorghum rule, our 
analysis finds a range of possible technologies and process 
configurations for barley ethanol production that could meet a 50% 
lifecycle GHG reduction. As such, instead of prescribing certain types 
of technologies that producers must use to meet the thresholds, we are 
proposing pathways (like we did for sorghum) that are based on the 
maximum amount of different sources of energy that can be used to 
produce the barley ethanol.
    This approach generates a number of questions, therefore, we 
discuss and invite comment on several aspects of the proposed advanced 
biofuel pathways for barley ethanol, including what energy should be 
included in the calculation and how the calculation should be 
conducted. Beyond the specifics of the calculations, however, is also 
how compliance is to be measured and reported, along with the 
associated record keeping requirements. We specifically invite comments 
from producers, obligated parties, and parties that purchase and verify 
RINs regarding how we should structure the regulations to attribute 
energy inputs to specific batches of fuel, and from parties that 
purchase and verify RINs regarding how to structure requirements that 
will enable them to efficiently evaluate whether RINs generated under 
the proposed pathways are valid before they purchase or verify the 
validity of the RINs.
    The two advanced biofuel pathways for barley ethanol proposed in 
Table II.C.1-1 specify maximum amounts of different types of energy and 
grid electricity that can be used for the fuel to qualify as advanced 
biofuel, calculated on a per gallon basis averaged over the number of 
gallons of ethanol in each batch. A key element of this approach is the 
ability of renewable fuel producers to accurately calculate each type 
of energy used on a per batch basis. Evaluating ethanol on a batch-by-
batch basis allows parties to evaluate whether such requirements have 
been met at the time of RIN generation. The structure of the RFS 
program is already set up in several respects to consider compliance on 
a batch basis for qualifying renewable fuels. Similarly, the EPA 
Moderated Transaction System (EMTS) used to manage RIN transactions was 
designed for batch-by-batch record-keeping, reporting and transactions.
    The main benefit of batch-by-batch compliance is that it allows 
parties to know whether the requirements for the advanced biofuel 
pathways are being met at the time of RIN generation. Since invalid 
RINs cannot be transferred or used for compliance, EPA puts a high 
priority on ensuring that any new pathways will allow parties to 
evaluate the validity of RINs at the time they are generated.
    The main concern with evaluating compliance with the GHG thresholds 
for barley on a batch-by-batch basis, however, is that it may allow 
cherry-picking in the production of barley ethanol, allowing more 
energy consumption to be associated with some fuel batches and less 
with others. This might allow some barley ethanol to qualify as 
advanced (D5), while over time barley ethanol production may not 
otherwise meet the advanced threshold. Alternatively, evaluating 
compliance on a batch-by-batch basis may result in reduced volumes of 
advanced biofuel being produced if during times of abnormal operations 
energy consumption spiked. The result would be batches of biofuel 
produced temporarily that would not meet the lifecycle thresholds while 
over the course of weeks, months, or years such aberrations would not 
cause the pathway to satisfy the lifecycle performance thresholds.
    In addition, batch-by-batch compliance means that parties would 
have to have the ability not only to express things like energy 
consumption on a batch specific basis, but also to measure, and verify 
that things like energy consumption met the requirements for each and 
every batch despite operational changes and fluctuations. Energy use is 
ongoing as is fuel production; however there are energy intensive 
operations associated with a certain gallon of ethanol produced that 
may occur on a different timeframe than ethanol production. For 
example, if DG is produced from a certain gallon but then set aside and 
not

[[Page 44088]]

dried until a later date, the energy used to dry the DG would not occur 
at the same time as ethanol production. Furthermore, energy use could 
be ongoing during times when no ethanol is produced. There is concern 
that energy use would not be accounted for if it occurred in between 
production of batches. EPA seeks comment on how renewable fuel 
producers should assign energy use to each batch, and on whether the 
regulations should specify the formula or allow RIN generators to 
provide a plan that demonstrates and documents how a facility would 
calculate energy use on a per batch basis. EPA is seeking comment on 
whether the renewable fuel producer would be able to accurately track 
(and account for the energy use) that is associated with any particular 
batch of ethanol. While EPA is taking comment on a number of different 
options in this NODA, it is our intent to codify only one approach in 
the final rule.
    An alternative approach that EPA is considering calculates the 
energy use per gallon over a time period instead of over the number of 
gallons in each batch. For example, energy use per gallon of barley 
ethanol could be calculated on a weekly, monthly, quarterly or annual 
basis. This approach may make it more difficult for a party who 
purchases RINs that are generated during the averaging period (e.g., 
during a particular quarter if calculations are done on a quarterly 
basis) to have confidence in the validity of the RINs. One advantage of 
requiring the energy use to be calculated on a quarterly basis is that 
the RFS program currently requires biofuel producers to report certain 
data on a quarterly basis. The quarterly reports require a more 
comprehensive set of information from fuel producers than what is 
currently collected on a batch-by-batch basis. As such, calculating the 
energy use per gallon of barley ethanol on a quarterly or annual basis 
may allow for closer alignment with the types of information that are 
already reported at such intervals. The primary reason that EPA is not 
proposing to use a quarterly or annual basis to calculate average 
energy use per gallon of barley ethanol for the advanced pathways is 
that it would not always allow parties purchasing or verifying barley 
ethanol RINs to know whether the requirements for the advanced biofuel 
pathways are being met at the time of RIN generation. If it was 
determined at the end of the averaging period that the pathway 
requirements were not met, then all RINs generated during the time 
period would be invalid. We invite comment on whether a weekly, 
monthly, quarterly or annual basis for calculating average energy use 
per gallon would be better than the proposed batch-by-batch basis for 
barley ethanol.
    Another alternative that we seek comment on is whether to calculate 
average energy use per gallon as a rolling average for all gallons of 
barley ethanol in the batch in question and all gallons of barley 
ethanol produced at the facility during a preceding time period. If the 
rolling average period was one year, this approach would average the 
total amount of energy used for the current batch with the average 
amount of energy used in all batches produced in the preceding 364 
days. This approach would still calculate average energy use at the 
time that each batch of barley ethanol was produced, so it would also 
have the advantage of being well-aligned with the RFS regulations at 
Sec.  80.1426. The use of a rolling average would provide the 
additional benefit of smoothing out variability in energy use at barley 
ethanol facilities. For example, energy use could fluctuate 
significantly in the winter compared to the summer, or due to other 
circumstances. A rolling average approach could allow a barley ethanol 
producer who consistently maintained energy use below the maximum 
levels to continue generating advanced biofuel RINs if their energy use 
increased during one season or month of the year.
    Under the rolling average approach, no special requirements would 
be needed for facilities that dry DG in batches as compared to 
facilities that dry them continuously. This is because the rolling 
average approach is designed to account for temporal variability in 
energy use. For example, if a facility stockpiled and dried a large 
enough batch of DG to push their energy use above the maximum levels 
specified in the advanced biofuel pathways, then they would not be able 
to generate RINs until their rolling average came back down to 
compliant levels. This approach would provide parties who purchase RINs 
with the information that they need to evaluate the validity of the 
RINs before the purchase them, and would reduce the risk that the RIN 
would later be found to be invalid. This illustrates one example of 
where the rolling average approach may have significant advantages. 
However, using a rolling average approach might create reporting 
challenges if a plant is coprocessing barley with another feedstock. 
For example, if the rolling average is done on a fuel-specific basis, a 
producer could attempt to allocate high energy activities to the fuel 
produced from the other feedstock, making energy used to produce barley 
ethanol look less intensive than it actually is.
    EPA invites comment on whether the proposed advanced biofuel 
pathways for barley ethanol should calculate average energy use per 
gallon as a rolling average for all gallons of barley ethanol produced 
at the facility during a preceding time period and whether this 
approach would be preferable to other approaches. This includes comment 
on methods for preventing any sort of gaming of the system under a 
rolling average approach.
    EPA seeks comment on the best approach for calculating the average 
energy use per gallon of ethanol for the proposed advanced biofuel 
pathways for barley ethanol. The Agency asks commenters to consider the 
complexity of any proposed approach, how well it fits within the 
existing RFS regulations, and how well it addresses the issues (e.g., 
temporal variation in energy use) discussed above.
    EPA also seeks comment on the most appropriate way for renewable 
fuel producers to track and report the energy use associated with a 
batch of renewable fuel. One possible approach is for a renewable fuel 
producer to take meter readings at the start and end of a batch, 
documentation of which would need to be included in the recordkeeping 
requirements. EPA seeks comment on the practicability of this approach, 
especially considering that any drying of DG associated with a given 
batch of ethanol would necessarily need to be completed by the time 
energy use is calculated for a given batch. EPA is proposing to 
attribute all the energy used (e.g., lights, administrative offices) at 
the renewable fuel facility to the batch, for ease in tracking and 
compliance purposes. EPA is also taking comment on whether there are 
practical ways to limit the energy use more directly to the batch of 
fuel. If all energy use should not be attributed to production of the 
renewable fuel, EPA seeks comments on which equipment should be 
included, and how the renewable fuel producer would be able to track 
and report the energy use for renewable fuel separate from ancillary 
functions. We also seek comment on whether the energy use associated 
with ancillary functions significantly contributes to the GHG emissions 
associated with a renewable fuel.
    EPA proposes to prohibit parties that use multiple pathways to 
produce a single batch of fuel from generating RINs under the proposed 
advanced barley pathways. We do not believe that it is practical to 
determine if a producer meets the energy usage limitations

[[Page 44089]]

required by the Barley pathways if it is using multiple pathways to 
produce a given batch of fuel.
    EPA also invites comment on whether, if the annual average, batch-
by-batch or rolling average approaches to compliance for the advanced 
barley pathways raise significant implementation concerns that cannot 
be addressed, it would be more appropriate to use the technology based 
approach currently in place for corn ethanol facilities.
    EPA is also proposing a record-keeping and reporting system that 
will allow eligible barley ethanol producers using the proposed 
advanced biofuel pathways to demonstrate compliance with the 50% GHG 
reduction threshold. The proposed record-keeping and reporting approach 
will allow producers to show compliance with the new pathway by 
reporting and keeping records, on an ongoing basis regarding their 
process energy and electricity use and fuel production yields. The 
details of EPA's proposed new pathways and potential accompanying 
compliance approach (including registration, recordkeeping, and 
reporting) are described in a Memo to the Docket.\34\
---------------------------------------------------------------------------

    \34\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0012.
---------------------------------------------------------------------------

2. Consideration of Uncertainty
    Because of the inherent uncertainty and the state of evolving 
science regarding lifecycle analysis of biofuels, any threshold 
determinations that EPA makes for barley ethanol will be based on an 
approach that considers the weight of evidence currently available. For 
this pathway, the evidence considered includes the mid-point estimate 
as well as the range of results based on statistical uncertainty and 
sensitivity analyses conducted by the Agency. EPA will weigh all of the 
evidence available to it, while placing the greatest weight on the 
best-estimate value for the scenarios analyzed.
    As part of our assessment of the barley ethanol pathway, we have 
identified key areas of uncertainty in our analysis. Although there is 
inherent uncertainty in all portions of the lifecycle modeling, we 
focused our analysis on the factors that are the most uncertain and 
have the biggest impact on the results. The indirect, international 
emissions are the component of our analysis with the highest level of 
uncertainty. The type of land that is converted internationally and the 
emissions associated with this land conversion are critical issues that 
have a large impact on the GHG emissions estimates.
    Our analysis of land use change GHG emissions includes an 
assessment of uncertainty that focuses on two aspects of indirect land 
use change--the types of land converted and the GHG emissions 
associates with different types of land converted. These areas of 
uncertainty were estimated statistically using the Monte Carlo analysis 
methodology developed for the March 2010 RFS rule.\35\ Figure II.B.4-1 
shows the results of our statistical uncertainty assessment.
---------------------------------------------------------------------------

    \35\ The Monte Carlo analysis is described in EPA (2010a), 
Section 2.4.4.2.8.
---------------------------------------------------------------------------

    Based on the weight of evidence considered, and putting the most 
weight on our mid-point estimate results, the results of our analysis 
indicate that barley ethanol would meet the minimum 20% GHG performance 
threshold for qualifying renewable fuel under the RFS program when 
using natural gas for all process energy, grid electricity, and drying 
100% DG, and would meet the minimum 50% GHG performance threshold for 
advanced biofuels under the RFS program when using technologies that 
either reduce energy use or rely on low GHG-emitting energy sources. 
This conclusion is supported by our midpoint estimates, our statistical 
assessment of land use change uncertainty, as well as our consideration 
of other areas of uncertainty.
    An additional source of uncertainty is the distribution of ethanol 
production between spring and winter barley. EPA has worked to mitigate 
this source of uncertainty through extensive consultation with public 
and private sector barley experts and stakeholders. This consultation 
led to the determination that approximately 140 million gallons of 
barley ethanol production by 2022 would be a reasonable assumption, as 
would the assumption that approximately 80 million gallons will come 
from spring barley and approximately 60 million gallons will come from 
winter barley. However, we acknowledge that there remains uncertainty 
regarding how much ethanol will be produced from each of the two 
regional growing practices. We also acknowledge that this pathway would 
be applicable to international production. Based on our consultation of 
USDA and other experts, we do not anticipate any significant 
international production of barley ethanol. But that is an additional 
source of potential uncertainty. We therefore invite comment regarding 
the magnitude and significance of this uncertainty with regards to our 
analysis, as well as potential alternative methods of accounting for 
any significant uncertainty in our analytical framework.
    The docket for this NODA provides more details on all aspects of 
our analysis of barley ethanol. EPA invites comment on all aspects of 
its modeling of barley ethanol. We also invite comment on the 
consideration of uncertainty as it relates to making GHG threshold 
determinations.

    Dated: July 8, 2013.
Christopher Grundler,
Director, Office of Transportation & Air Quality.
[FR Doc. 2013-16928 Filed 7-22-13; 8:45 am]
BILLING CODE 6560-50-P
```