1 INFORMATION COLLEC TION REQUEST (ICR)

OMB-83 SUPPORTING STATEMENT

ENVIRONMENTAL PROTECTION AGENCY

OFFICE OF AIR & RADIATION

A. JUSTIFICATION

1. Identification of the Information Collection

a. Title: Recordkeeping and Reporting fo r Amended Heating Oil Definition under
the Renewable Fuels Standard

EPA Number: 2462.01

b. Short characterization:

With this proposed information collec tion request (ICR), th e Office of Air and Radiation (OAR) is seeking permission to re quire certain recordk eeping and reporting in
connection with an amendment to the definiti on of “heating oil” unde r the renewable fuel standard (RFS2) program. The recordkeepi ng and reporting change s are expected to affect 11 non-Federal respondents, including ten producers and one importer.

EPA is issuing a direct final rule to amend the definition of heating oil in 40 CFR 80.1401 in the RFS2 program, under section 211(o) of the Clean Air Act. This amendment will expand the scope of renewable fuels that can generate Renewable Identification Numbers (RINs) as heating oil to include fuel oil produced from qualifying renewable biomass that will be used to generate heat to warm buildings or other facilities where people live, work, recreate, or conduct othe r activities. Fuel o ils used to generate process heat, power, or other functions will not be included in the amended definition. Producers or importers of fuel oil that meets the amended definition of heating oil will be allowed to generate RINs, providing that the fuel oil meets the other requirements specified in the RFS regulations. This amendm ent will not modify or limit fuel included in the current definition of heating oil at §80.2 (ccc). The direct final rule does include new recordkeeping and reporting items applicab le to producers or importers of fuel oil
that meet the amended definition. These are described below.

It is useful for parties commenting on this proposed ICR to review the existing, approved RFS2 information collections relate d to the RFS2 program, as identified by OMB Approval Number and expiration date:

 Renewable Fuels Standard Program: Petition and Registration, OMB Approval Number 2060-0637, Expires 03/31/20132  Renewable Fuels Standard, OMB Approval Number 2060-0640, Expires
7/31/2012

2. Need For, and Use of, the Collection

a. Authority for the Collection

Sections 114 and 208 of the Clean Air Act (CAA), 42 U.S.C. §§ 7414 and 7542, authorize EPA to require recordkeeping a nd reporting regarding enforcement of the provisions of Title II of the CAA. The relevant regulations are in 40 CFR Part 80, Regulation of Fuels and Fuel Additives.

b. Practical Utility/Uses of the Data

The information collected via registra tions and reports is used by EPA to determine compliance with the RFS2 program . Records retained by regulated parties support compliance information submitted to EPA.

3. Non-duplication, Consultation, and other Collection Criteria

a. Non-duplication

Efforts have been made to eliminate duplication in this information collection. Where possible, information requirements from various organizations within the Agency
have been combined to minimize the subm ittal of duplicate information in different
formats. The information in this collecti on will not be available from another source.

b. Public Notice

EPA will submit the ICR to OMB for revi ew, along with the direct final rule. This supporting statement is being docketed in order to permit interested parties to fully comment upon the costs associated w ith the direct final rule.

c. Consultations

EPA is providing an opportunity for no tice and comment regarding this proposed ICR. To date, we are aware of only one pr oducer who would be subj ect to this direct finale rule. However, we reasonably antic ipate that other RIN generators may also choose to engage in activities that may make them subject to the proposed ICR for this rule. We encourage all interested parties to provide us with comments as to our burden
estimates.

d. Effects of Less Frequent Data Collection3 The frequency of response is controlled by the submitter of the information.

e. General Guidelines

This rule does not exceed any of the OMB guidelines.

f. Confidentiality

EPA informs respondents that they may a ssert claims of business confidentiality for any or all of the information they submit. Information claimed as confidential will be
treated in accordance with 40 CFR Part 2 and established Agency procedures.
Information that is received without a claim of confidentiality may be made available to the public without further notice to the submitter under 40 CFR § 2.203.

g. Sensitive Information

Individual reporting data may be claime d as sensitive and will be treated as
confidential information in accordance with the procedures outline in 40 CFR Part 2.

4. The Respondents and the Information Requested

The parties subject to RFS2 information collections fall into the following general industry categories: petroleum refineri es (324110/2911), ethyl alcohol manufacturers (325193/2869), other basic organic chemical manufacturing (325110/2869), chemical and allied products merchant wholesalers (426990/5169), petroleum bulk stations and terminals (422710/5171), petroleum and petr oleum products merc hant wholesalers (422720/5172), and other fu el dealers (454319/5989).

Using the terminology associated with the RFS2 Final Rule and associated ICRs, we have assumed the following classes of party would have new recordkeeping and reporting covered by this supporting statement. The total universe of parties is derived from the existing approved RFS2 ICRs, cited above.

 Producers of renewable fuels - we anti cipate that 10 of 1,010 producers, or .01%, will engage in activiti es that will make them subject to new information collection requirements outlined in this proposed ICR.

 Importers - we anticipate that one of the approximately 120 importers will engage in activities that will make them subject to this ICR.

b. Information Requested

i. Registration4 For the purpose of registration, EPA is requiring producers of the expanded fuel oil types to submit to EPA all existing cont racts with their prospective clients for specified quantities of fuel oi l that the prospective client intends to purchase from the producer for the purpose of heating homes or buildings. The submission of the contracts will help EPA to verify the potential volumes the producer is requesting to register under the program for RIN generation. EPA recogni zes that the producer may not have all contracts set up prior to registra tion that will equate to the fa cility’s permitted capacity or actual peak capacity as define d in §80.1401 of the rule that is currently used by EPA to establish a facility’s baseline volume for registration purposes. EPA also recognizes that it will not be practical for program impl ementation to require these producers to continually submit new and revise d contracts for every client to the EPA, and for EPA to continually update the producer’s registered baseline volume based on these contracts to reflect every gallon of fuel oil produced up to the facility’s perm itted capacity or actual peak capacity. Therefore, EPA is allowing th e producer of the expanded fuel oil types to establish their facility’s baseline volume in the same manner as all other producers under the RFS program, e.g., based on the facility’s permitted capacity or actual peak capacity. However, we are also adopting additional re quirements for the submission of contracts executed prior to registration, as a means to veri fy the initial volumes that will be sold for heating purposes as defined in paragraph (2) of the amended definiti on of heating oil. EPA is also requiring submissions of new and revised contracts that are executed after registration on an annual basis as part of th e producer’s update to their registration. Additionally, we are adopting new recordk eeping, PTD and reporting requirements
discussed below that will be used as a mean s for verification of the remaining gallons up to the facility’s registered baseline volume. The registration require ments are detailed in the registration section in §80.1450(b)(1)(ix).

ii. Recordkeeping, Product Transfer Documents and Reporting

For the purpose of continued verifica tion after registration, EPA is adopting additional requirements for recordkeepi ng in §80.1454(b)(6) and (7), PTDs in §80.1453(d) and reporting requirements in §80.1451( b)(1)(ii)(T) for the expanded fuel oil
types.

The recordkeeping, PTD and reporting requi rements will ensure that the expanded fuel oil types that are used to generate RINs are actually used in a qualifying application. The regulations will require contracts between the fuel oil producer and the final end user for the legal transfer of title of a specific volume of fuel oil that is designated for use, and is actually used, only for the purpose of heati ng interior spaces of homes or buildings to
control ambient climate for human comfort. For instance, the additional recordkeeping requirements will stipulate that the producer of fuel oils maintain documents associated with each gallon of fuel oil that is under contract for sale and is sold to all of its clients, and affidavits from the client stipulating that they are using the fu el oil for purposes of heating interior spaces of bu ildings where people live, wo rk, recreate, or conduct other
activities to control ambient climate for hum an comfort. Additionally, producers are required to maintain all documents and reco rds submitted for registration and registration5 updates as part of the producer’s recordkeep ing requirements for the expanded fuel oil types they register for RIN generation. EPA believes the producer’s maintenance of these records will help to substantia te continued tracking and veri fication that the end use of the fuel oil is in compliance with the stipulat ions of the expanded definition of heating
oil. The additional PTD requirement stipul ates that the PTD used to transfer ownership of the renewable fuel must cont ain the statement: “This volume of renewable fuel is designated and intended to be used to heat interior spaces of homes or buildings. Do not use for any other purpose.” EPA believes that this PTD requirement would help to ensure that each gallon of fuel oil that is tr ansferred from the producer to the end user is used for qualifying purposes under the expanded definition of heating oil.

The additional reporting requirements will stipulate that the producer of fuel oils report to EPA the total quantity of the fuel oils produced and sold to all its clients for qualifying purposes and the total volume produ ced or sold that di d not qualify for RIN generation, including an explana tion of why these volumes of fuel oil did not qualify and to what entity were the volumes eventually sold. EPA believes the additional requirement to report the total gallons sold by the producers of fuel oils as well as the total gallons produced or sold that did not qua lify for RIN generation will enable EPA to verify that the producers are producing and selling RIN-generating fuel oil that falls within their allowable volume that is register ed under the program and that it is used in a qualified application.

5. The Information Collected, Agency Activities, Collection Methodology, and Information Management

a. Agency Activities

 All reported registration and complian ce reports will be reviewed by EPA.

 EPA may discuss information received with parties or request further
information.

 The data will be stored.

b. Collection and Methodology and Management

Because of the subjective (i.e., produ ce specific) nature of the additional information requested, there can be no sta ndard forms. However, EPA’s regulations guide the regulated parties in what to submit and retain. PT Ds are standard formats and are customary business practice w ithin the fuel industry.

c. Small Entity Flexibility

This collection will not adversely affect sm all entities. We expect this proposed ICR to affect very few parties, who elect to produce fuel subjected to the amended definition of heating oil.6 d. Collection Schedule

The collection schedule is dr iven by the party. Therefore it is best described as “infrequent” or “episodic.”

6. Estimating the Burden and Cost of Collection

a. We drew upon experience implementi ng similar regulations among the same entities to develop estimates of the burden associated with this collection. As described above, we anticipate that 10 producers of renewable fuel and one producer may be subject to the proposed reco rdkeeping and reporting.

b. Three labor categories are involved: managerial (inc ludes legal and professional review), technical, and clerical. The estimates use the Bureau of La bor Statistics figures from "Employer Costs for Employee Comp ensation - Table 12 - Private Industry, Manufacturing, and Non-Manufacturing Indus tries by Occupational Group” (December 2003), with a 3% annual inflation factor applied to bring the va lues to the present. Using this method, the following wages and benefits apply by category:

Wages and Benefits

Managerial $53.87 per hour Technical $35.29 per hour Clerical $24.56 per hour

Doubling for company overhead beyond wages and benefits, and for convenience, rounding up to the dollar, gi ves the following rates for this proposed ICR:

Total Employer Cost

Managerial $108 per hour Technical $71 per hour Clerical $49 per hour

It is assumed that for each hour of activity the mix will be about 0.1 hour managerial, 0.7 hour technical, and 0.2 hour cler ical. This gives an averag e labor cost of $71 per hour,

which will be used in this ICR. We estimate the following burden:7 Table I – Detailed Estimates –RIN Generators (10 producers, one importer) of Renewable Fuel Meeting the Ame nded Heating Oil Definition; broken down by party.

a. PRODUCERS

Collection Activity Total
Number
of Respondents Number
of Responses

per Respondent Total
Number
of Responses (AllRespondents) Hours

Per Response Total

Hours (AllRespondents) Total

Cost $ (All Respon-dents)

New registration activity - provision of existing contracts
to EPA under 80.1450(b)(1)(ix)(A 10 1 10 4 40 $2840

New registration activity – provision
of affidavit from the producer under 80.1450(b)(1)(ix)(B) 10 1 10 4 40 $2840

New registration activity – provision
of affidavit from the
end user under 80.1450(b)(1)(ix)(C) 10 1 10 4 40 $2840

New registration activity – provision
of list of clients under 80.1450(b)(1)(ix)(D) 10 1 10 4 40 $2840

New registration activity – provision
of analysis/specification for fuel by producer
under 80.1450(b)(1)(ix)(E) 10 1 10 4 40 $2840

Affixing of required
statement for use on PTDs (note: codes 10 12 (assumes 3

customers 120 .08 (5
minutes

per 9.6 $6818 are not appropriate,
since statement must appear) under
80.1453 and 4 quarterly shipments

per respondent) response)

Retention of records related to registration under 80.1454(b)(6) 10 12 (assumes a monthly filing schedule) 120 1 120 $8520

Retention of records related to contracts, clients, certificate of analysis, under 80.1454(b)(7) 10 12 (assumes a monthly filing schedule) 120 1 120 $8520

TOTAL 410 449.6 $31921.00

b. IMPORTERS

Collection Activity Total
Number
of Respondents Number of Responses

per Respondent Total
Number
of Responses (AllRespondents) Hours

Per Response Total

Hours (AllRespondents) Total

Cost $ (All Respon-dents)

New registration activity - provision of existing contracts
to EPA under 80.1450(b)(1)(ix)(A 1 1 1 4 4 $284

New registration activity – provision
of affidavit from the producer under 80.1450(b)(1)(ix)(B) 1 1 1 4 4 $284

New registration activity – provision
of affidavit from the
end user under 80.1450(b)(1)(ix)(C) 1 1 1 4 4 $284

New registration activity – provision 1 1 1 4 4 $2849 of list of clients under 80.1450(b)(1)(ix)(D) New registration activity – provision
of analysis/specification for fuel by producer
under 80.1450(b)(1)(ix)(E) 1 1 1 4 4 $284

Affixing of required
statement for use on PTDs (note: codes are not appropriate,
since statement must appear) under
80.1453 1 12 (assumes 3

customers
and 4 quarterly shipments

per respondent) 12 .08 (5
minutes

per response) 0.96 $68

Retention of records related to registration under 80.1454(b)(6) 1 12 12 (assumes a monthly filing schedule) 1 12 $852

Retention of records related to contracts, clients, certificate of analysis, under 80.1454(b)(7) 1 12 12 (assumes a monthly filing schedule) 1 12 $852

TOTAL 41 44.96 $3192.00

c. Estimating the Agency Burden and Cost

The Agency burden consists of 0.05 of one GS-13 engineer (estimated at $161,000 including overhead to review/respond/st ore data, for a total of $8,050.

d. Estimating the Respondent Universe

We were able to estimate the number of regulated entities drawing upon experience regulating the same entities.

e. Bottom Line Annual Burden Hours and Costs

We estimate a total annual burden for al l RIN generators (10 producers plus one importer) of 495 hours and $35,145. There are a total of 11 respondents. Therefore, there is an annual burden per respondent of 45 hours and $2869 per respondent. Note that figures have been rounded up to the next whole hour or dollar.10 f. Reason for Change in Burden

This is a new information collection.

g. Burden Statement

We estimate an annual reporting burden of 21 hours per respondent and an annual recordkeeping burden of 24 hours, yielding a total per respondent burden of 45 hours. The respondents for this info rmation collection are RIN generators, of whom ten are assumed to be producers and one is assumed to be an importer, as described above.

Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or di sclose or provide information to or for a Federal agency.
This includes the time needed to review th e instructions; develop, acquire, install, and utilize technology and systems for the purpos e of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete a nd review the collection of information; and
transit or otherwise disclose the information.

An Agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.

Interested parties are urged to comment on the Agency's need for this information collection, the accuracy of th e provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collect ion technique.

To comment on the Agency's need for this information, the accuracy of the provided burden estimates, and any sugge sted methods for minimizing respondent burden, EPA has established a public docket for this rule, which includes this ICR. Submit any comments related to the ICR to EPA and OMB. Send comments to OMB at the Office of Information and Regulatory A ffairs, Office of Management and Budget, 725 17th Street, NW, Washington, DC 20503, Attent ion: Desk Office for EPA. Since OMB is required to make a decision concer ning the ICR between 30 and 60 days after publication in the Federal Register, a comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication. The final rule will respond to any OMB or public comments on the informa tion collection require ments contained in this proposal.

Part B of the Supporting Statement11 This part of the supporting statement is not applicable.