## Environment & Resources Division

Date May 31, 2011
To Jeremy Arling, EPA/OAP/SPD
From Albert Acquaye, Abt Associates Subject Analysis of a Major U.S. Methyl Bromide Supply Disruption: The Potential Role of Imports 

### This memorandum presents the results of our analysis to update the estimate of necessary domestic methyl bromide inventories in the event of a major domestic supply disruption. Based on our update of the prior analysis we project that 105 to 429 MT (10 to 42 percent of annual 2012 demand) would be required in case of a major domestic supply disruption. We update the following data from the 2010 analysis in order to obtain new estimates for 2012: 1) U.S. consumption of critical use methyl bromide is updated from 2011 to 2012. The 2011 number, from the 21 st 

### Meeting of the Parties to the Montreal Protocol, is updated with the amount authorized for U.S. consumption at the 22 nd 

### Meeting of the Parties 1



### . The updated amount for 2012 is 1,023 MT.
2) Annual critical stock allowance (CSA) allocations and expenditures are updated for 2010 and added for 2011 (Table 1). Expended CSA for 2010, which had been projected based on a ratio of 70 percent expended-to-allocated CSA, is updated with the observed figure of 613 MT. CSA allocation for 2011 – 482 MT – is added. Expended CSA for 2011 is projected using the 70 percent ratio, thus projecting an expenditure of 337 MT in 2011.

1 Report of the 22 nd Meeting of the Parties available at: http://ozone.unep.org/Meeting_Documents/mop/22mop/MOP-22-9E.pdf 

# m em o r andum2 Table 1: Annual CSA Allocations and Expenditures Year Allocated CSA (MT) Expended CSA (MT) a Expended CSA to Allocated CSA 2006 1,136 784 69% 2007 1,915 922 48% 2008 1,730 1,047 61% 2009 1,919 1,127 b 59% 2010 1,028 613 60% 2011 482 337 (Projected) 70% (Projected) a) Source: Methyl Bromide Accounting Frameworks, 2006, 2007, 2008, and 2009. Available at: http://www.regulations.gov/search/Regs/home.html#docketDetail?R=EPA-HQ-OAR-2009-0351 b) According to the accounting framework, 1,135 MT of CSAs were used. Reports received after the Framework was submitted to UNEP indicate that 1,127 MT were used. 

### 3) Annual estimates of methyl bromide used for non-critical purposes are updated for 2010 and added for 2011 (Table 2). The 2010 amount, which was previously projected based on historical data, is updated with the actual amount used (647 MT). Use in 2011 is projected as 773 MT, using an un-weighted average of use in the preceding five years. Table 2: Annual Non-Critical Use of Pre-Phaseout Inventory Year Non-Critical Uses (MT) 2006 1,249 2007 561 2008 1,139 2009 267 2010 647 2011 773 (Projected) Source: Methyl Bromide Accounting Frameworks, 2006, 2007, 2008, and 2009. Available at: http://www.regulations.gov/search/Regs/home.html#docketDetail?R=EPA-HQ-OAR-2009-0351 

### 4) Based on the updates discussed in 2) and 3), the projection of pre-phaseout inventory of methyl bromide is updated from January 1, 2011 to January 1, 2012 (Table 3). Table 3: Projected Methyl Bromide Pre-Phaseout Inventory on January 1, 2012 Projection Amount (MT) Pre-Phaseout Inventory (January 1, 2010) 3,063 Total Draw Down 2,370 CSAs expended in 2010 613 Non-critical uses in 2010 647 CSAs likely to have been expended in 2011 337 Non-critical uses in 2011 773 Pre-Phaseout Inventory (January 1, 2012) 693



### 5) Quarterly production of critical use methyl bromide in the United States is added for 2009 and 2010.3 

### The following assumptions are retained from the previous analysis: 1) Foreign production of methyl bromide would be sufficient to meet U.S. critical use needs (as well as the rest of worldwide demand) should U.S. methyl bromide production be shut down.
2) Given the availability and capacity of methyl bromide shipping containers and shipping logistics, it would take 15 weeks for the first shipment of methyl bromide to reach the United States following a domestic production failure. Using these assumptions and updated data and adopting the method used for the previous analysis, we update the estimate of necessary domestic methyl bromide inventories during the 15-week period in which the U.S. would be without newly produced or imported methyl bromide, in the event of a major loss of domestic production capacity. We use the data on seasonal production of critical use methyl bromide from 2005 to 2010 to calculate the average proportion of methyl bromide produced per week in each quarter. The average proportion of methyl bromide produced per week in each quarter is multiplied by the allocated amount of critical use methyl bromide consumption in the U.S. in 2012 (1,023 MT) and 15 weeks to compute the average 15-week demand for methyl bromide in 2012. Depending on the time of year in which a disruption occurs, domestic inventory requirements are expected to fall between 105 and 429 MT. If a supply disruption occurs in the fourth quarter of the year, the inventory requirement is expected to be at the lower end of this range. If the disruption occurs in the first quarter, the inventory requirement is expected to be at the higher end of the range. For a disruption during the second or third quarters, the required inventories would fall between the two extremes. Using the updated domestic consumption figure of 1,023 MT and the pre-phaseout inventory projection in Table 3 

### , we express this range as a function of the two extremes (Table 4).
Table 4: Domestic Methyl Bromide Inventory Requirements

Absolute Amount Percent of 2012 Demand Percent of PrePhaseout Inventory Remaining in 2012 Domestic methyl bromide inventory requirement 105 - 429 MT 10 - 42 % 15 - 62 %