SUPPOR TING ST AT EMENTFOR THE RENEW ABLE FUE LS ST

ANDARD (RFS2) PROGRAM (FINAL RULE) (DRAFT

– November 2012) A. JUSTIFICA

TI ON 1. Id entification of the Information Collection a. Ti tle: Renewable Fuels Standard (RFS2) Program, EP A IC R No. 2380.01,OMB Contro l Number 2060
- 0637. b. Short characterization: The Energy Policy Act (EP Act) of 2005 amended the Clean Air Act, section 21 1(o), and required the existing RFS program. The existing RFS program is referred to in this supporting statement as "RFS1". T he RFS1 program started in 2006 and was covered b y EP

A ICR No. 2242.02, OMB Control Number 2060
- 0600. Please refer to “Regulation of Fuels and Fuel Additives: Renewable Fuel Standard Program

– Notice of Proposed Rulemaking” and “Regulation of Fuels and Fu el Additives: Renewable Fuel Standard Program

– Final Rule” (both available in docket number EP A - HQ - OAR - 2005 - 0161) for a detailed discussion of the RFS1 program. The Energy Independence and Securit y Act (E IS A) of 2007 further amends the Clean Air Act, se ction 21 1(o), and has required EP A to propose new regulations for renewable fuels. The new RFS program is referred to in this supporting statement as "RFS2." Under RFS2, the volume requirement and ty pes of renewable fuels are expanded; non
- road uses are included (RFS1 only af fected motor vehicle fuel); there are additional ty

pes of waivers and special provisions for renewable fuel t ypes; and EP A has implement an EP

A - Moderating T

ransaction S ys tem (EMTS) for RINs. Additional parties will be required to reg ister, keep records, and report. Please refer to the Final Rule (available in docket number EP A - HQ - OAR - 2005 - 0161) for a detailed discussion of the RFS2 program. This supporting statement provides tables that break down reporting items by party (e.g. p roducer, importer, refiner, etc.,) and the cost related to their reporting activity . For compliance purposes, under RFS2, volumes of renewable fuel are identified through the use of renewable identification numbers (RINs) that are initially generated by t he producer of the renewable fuel. However, there are additional ty pes of RINs and the volume of RINs traded is expected to be great. The Regulatory

I mpact Analy sis (RIA), which was prepared for the Final Rule, has been placed in the public docket. The document was consulted to provide additional detailed information about the regulated universe (see Chapter 1 of the draft RI A). We also considered the actual number of reporting parties under FRS1 and similar reporting programs.2

2. Need For, and Use of, the Collection a. Authority

for the Collection Sections 1 14 and 208 of the Clean Air Act (CAA), 42 U.S.C. §§ 7414 and 7542, authorize EP

A to require recordkeeping and reporting regarding enforcement of the provisions of T itle II of the CAA. b. Practical Utility

/Uses of the Data The recordkeeping and reporting requirements of this regulation will allow EP A to monitor compliance with the RFS program. 3. Non - duplication, Consultation, and other Collection Criteria a. Non - duplication E fforts have been made to eliminate duplication in this information collection. b. Public Notice A Notice will be published in the Federal Register for comments. c. Consultations We have drawn upon our experience with RFS1 and with similar fuels regulations to develop the estimates in this supporting statement. I nterested parties may also be interested in reviewing "Chapter 1

– Industry Characterization" of the draft Regulatory Impact Anal ys is (RIA) available in the public docket. Some assumptio ns from the RIA were used for this supporting statement. d. Ef fects of Less Frequent Data Collection We have designed the reporting schedule to coincide with existing reporting deadlines applicable to many of the same parties under such programs as R FG (Reformulated Gasoline) and anti
- dumping and diesel fuel. Less frequent collection of data would make it impossible to carry out the provisions of the CAA and EI SA. e. General Guidelines This rule does not exceed any of the OMB guidelines. f. ConfidentialityWe inform respondents that they may assert claims of business confidentiality (CBI) for information they submit. Actual RINs should not be treated as confidential business information under RFS2, as they are necessary

identifiers to a ccompany renewable fuels. An y 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 with out further notice to the submitter under 40 CFR § 2.203. g. Sensitive I nformation This information collection does not require submission of any sensitive information. 4. The Respondents and the I nformation Requested

Respondents/with NAI CS and SI C Codes The respondents to this information collection fall into the following general industry categories: petroleum refineries (3241 10/291 1), eth yl alcohol manufacturers (325193/2869), other basic organic chemical manufacturing (3251 10/2869), chemical and allied products merchant wholesalers (426990/5169), petroleum bulk stations and terminals (422710/5171), petroleum and petroleum products merchant wholesalers (422720/5172), and other fuel dealers (454319/5989).

Using the terminology

associated wit h the RFS2 Rule, we have assumed the following classes of party , which are covered by

this supporting statement.

 Producers of renewable fuels  Importers  Obligated Parties  Parties who own RINs (including foreign RIN owners) 5. The Information Collected , Agency A ctivities, Collection Methodology , and In formation Management a. Agency

A ctivities

 All reports and registrations will be reviewed b y EP A for completeness and for potential violations.  Potential violations will be referred to enforcement personn el.  Registration numbers will be issued for new registrants.  Contacting reporting parties if there is a problem with their submission.4

b. Collection and Methodology and Management EP A wants to continue to receive all reports, registrations, initial re gistrations and updates. W

e anticipate receiving data in a simplified and secure fashion via the Agency 's electronic Central Data Exchange (CDX). Information claimed as CBI will be stored in appropriatel y controlled areas. c. Small Entity

Flexibility T his collection will not adversel y affect small entities. Flexibility provisions are available to small entities. d. Collection Schedule Registrations are received on a rolling basis. Updates may be sent in at any

time after initial registration. New parties may enter the regulated industry at any time, triggering registration requirements. Petitions for new renewable fuels and pathway s are also being received. 6. Estimating the Burden and Cost of Collection a. Estimating the Respondent Universe We drew upon experience implementing similar regulations among the same entities to develop estimates of the burden associated with this collection. b. Estimating the Respondent Burden and Cost Three labor categories are involved: managerial (inclu des legal and professional review), technical, and clerical. The estimates used the Bureau of Labor Statistics figures from "National Industry
- Specific Occupational Employ ment & Wa ge Estimate “Petroleum and Coal Products Manufacturing” (May 201 1), with a 3 % annual inflation factor applied to bring the values to the present. Using this method, the following wages and benefits appl y b y category : Wa ges and Benefits Managerial $67.44 per hour Te chnical $65.56 per hour Clerical $22.17 per hour Do ubling for compan y overhead bey ond wages and benefits, and for convenience, rounding up to the dollar, gives the following rates for this I CR:To tal Employ er Cost

Managerial $135.00 per hour Te chnical $131.00 per hour Clerical $ 44.00 per hour It is assumed that for each hour of activit y the mix will be about 0.1 hour managerial, 0.7 hour technical, and 0.2 hour clerical. This gives an average labor cost of $103 per hour , which will be used in this I CR. For purchased services related to attest engagements and some items of registration, we have doubled this hourly cost to $206 in order to more accuratel y reflect the cost of a certified public accountant (CP A) or licensed professional engineer's (PE) services. The estimates b y part y are indicat ed in T ables I

– V below . c. Estimating the Agency Burden and Cost EP A must generate company and facility

registration number(s) for new registrants and notify

them of these numbers, which must appear on reports. Report formats and instructions/guidance must be prepared by A gency personnel. Reports will be processed b y contractors and must be reviewed by Agency personnel. Reporting parties must be contacted if there is a problem with their submission. We have developed forms for RFS2 reporting to in clude four t ypes, rather than one t ype, of RIN unlike the RFS1 templates. W

e have provided RFS2 reporting templates as an attachment to this document. This supporting statement considers all Agency costs associated with accepting new r egistrants and new re

ports associated with RFS2, as expr essed in EP

A ICR Number 2333.02. Using the RFS1, and the RFG and anti
- dumping ICR, and other recent fuels
related ICRs as a guide in developing these initial estimates for RFS, we anticipate that RFS2 may

require the eq uivalent labor of one full time GS
- 13 technical employ ees for a total of $1 15,000, and labor costs of $54,875 in the clerical category and $19,438 in the management category

. 1 Since we are using the CDX, some costs incurred by the Agency will be tied to t he number of registrants who send us reports. Specifically , there is an annual "subscription cost" associated with the use of CDX that is passed on to the EP A program office and we estimate that registrants due to RFS2 will cost our of fice
1 These estimates are derived from "OPM Salary Table 2012
- DCB," ef fective January 2012. This table may be found at http://www .opm .gov/oca/06tables/indexGS.asp. The extreme of step 10 was assumed for all categories. W

e have assumed a half

- time GS
- 7 clerica l worker , one full
- time GS
- 13 technical w orker , and a GS
- 15 m anager w orking one
- eighth of his/her time managing this project (0.125). All values were multiplied by 1.6 (w

hich is a common factor utilized in ICRs to account for overhead costs). W e rounded the resulting dollar value to the nearest thousand. This cost is per year .6

approximately

$ 200,000 per y ear in 2013, 2015 and 2015. We anticipate $266,666 in annual contract costs related to registration and reporting activities. We anticipate IT development and testing costs at $ 600,000 divided by three y ears to yield an annual cost of $200, 000. Adding the following values results in an annual estimated Agency burden as follows: One GS - 13 technical employ ee (full time) = $ 1 15,000 One GS - 7 clerical worker (full
- time) = 54,875 One GS - 15 manager (1/8 time) = 19 ,438 Annual CDX subscription fee = 200,000 Annual contract costs = 266,666 Te sting and development= 200,000 **TOT AL**  **= $855,979**  As with all items in this supporting statement, we strongl y encourage comment on the estimate d Agency

burden and on the Agency activities associated with this proposed information collection. d. Estimating the Respondent Universe We were able to estimate the number of regulated entities drawing upon experience regulating the same or simi lar entities. e. Bottom L ine Burden Hours and Costs From the tables, we estimate the following annual totals: **TOT AL**  **NO. OF RESPONDENTS:**  **6,065 TOT**  **AL NO. OF**  **RESPONSES: 6,065**  **TOT AL**  **BURDEN HOURS: 52,095**  **TOT AL**  **COST TO RESPONDEN TS:**  **$ 8,010,130** f. Reason for Change in Burden This decrease came due to the change in the respondent universe. T wo obligated parties categories, the importers of renewable fuels and an y part y who own/intend to own RI Ns which includ e blenders, brokers and marketers dropped significantly . I mporters dropped from 360 respondents to 270 and an y party who own/intend to own RI Ns which include blenders, brokers and marketers dropped from 3000 respondents to 1650 thus lessening the reportin g burden. The number of respondents by these two parties decreased by a total of 6,638 responses and 7530 hours.g. Burden Statement The annual public reporting and recordkeeping burden for this collection of information is estimated to be 7.9 hours per response (total number of hours divided by total number of responses). Burden means the total time, ef fort, or financial resources expended by

persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency

. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and s ys tems for the purposes of collecting, validating, and verify ing information, processing and maintaining information, and disclosing and providin g information; adjust the existing way s to compl y with any previously

applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; an d transmit 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 display s a currently valid OMB control number. The OMB control numbers for EP A's reg ulations are listed in 40 CFR part 9 and 48 CFR chapter 15. To comment on the Agency 's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automat ed collection techniques, EP A has established a public docket for this I CR under Docket I D number EP A - HQ - OAR - 2005 - 0161, which is available for online viewing at www .regulations.gov,or in person viewing at the Ai r Docket in the EP A Docket Center in W

ashington, DC (EP

A/DC). The docket is located in the EP A We st Building, 1301 Constitution Av enue, NW , Room 3334, and is open from 8:30 a.m. to 4:30 p.m., Eastern Standard T ime, Monday through Friday

, excluding legal h oliday s. The telephone number for the Reading Room is (202) 566
- 1744, and the telephone number for the Air Docket is (202) 566
- 1742. Yo u may use www .regulations.gov to submit or view public comments, access the index listing of the contents of the publ ic docket, and to access those documents in the public docket that are available electronically . W hen in the sy stem, select “search,” then key in the Docket ID Number EP A - HQ - OAR - 2005 - 0161. Also, y ou can send comments to the Of fice of Information and Regu latory A ff airs, Of fice of Management and Budget, 725 17th Street, NW

, W ashington, D.C. 20503, Attention: Desk Of ficer for EP

A. Please include the EP

A Docket ID Number EP

A - HQ - OAR - 2005 - 0161 and OMB Control Number 2060
- 0637 in any correspondence.

.