Document ID: EPA-HQ-OAR-2017-0655-0091
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2018-08-02T04:00Z

Response to Comments 
Introduction
This document, together with the preamble to the final rule titled Renewable Fuel Standard Program: Grain Sorghum Oil Pathway, contains EPA's response to all significant comments for the final rule. This document includes responses to two sets of comments:
 Comments on the definition of corn oil extraction proposed in the November 16, 2016 Renewable Enhancement and Growth Support proposed rule (the "November 2016 REGS proposed rule") (81 FR 80828)
 Comments received in response to the December 27, 2017 Renewable Fuel Standard Program: Grain Sorghum Oil Pathway proposed rule (the "December 2017 distillers sorghum oil proposed rule") (82 FR 61205)
We received 21 comments on the December 2017 distillers sorghum oil proposed rule. Of these, 16 comments supported the rulemaking. Two of the comments raised concerns about EPA's evaluation of the livestock sector impacts, one of these comments requested additional analysis of environmental impacts from the production of distillers sorghum oil, and the other three comments did not discuss the proposed pathways for distillers sorghum oil.
We received 17 comments on the November 2016 REGS proposed rule that addressed the proposed changes to the definition of corn oil extraction. Four of the comments supported the revisions. Seven of the commenters supported the proposed definition and recommended revisions. None of the comments opposed the proposed definitional changes, but six of the comments said that EPA's proposed definition was too restrictive, because it did not include corn oil from wet milling and/or fractionation.  
Due to overlap in the topics addressed in the comments on the two proposed rules, for flow and readability, the comments and responses below are organized by topic, not by the proposed rule they addressed.
Summary and Analysis of Comments
Definition of corn oil
Comment: One commenter on the November 2016 REGS proposed rule recommended using the term "distillers corn oil" as that term is better understood in the industry, and USDA reporting, to reference corn oil from dry mills (EPA-HQ-OAR-2016-0041-0282).
Response: Based on this comment, we are using the term distillers corn oil in the regulations at 40 CFR 80.1401, because it is better understood in the industry and thus enhances the clarity of the regulations. For example, the USDA National Daily Ethanol Report uses the term "Distillers corn oil" and says "Distillers corn oil is intended for animal feed or biofuel and is not Generally Regarded As Safe (GRAS) for human consumption. It may also be referred to as inedible crude corn oil or crude corn oil."
Comment: Four commenters on the November 2016 REGS proposed rule supported EPA's proposed revision to the definition of corn oil extraction (EPA-HQ-OAR-2016-0041-0231, 0296, 0307, 0313). They said the proposed changes were needed to update the definition based on technological changes in the industry, and to provide a level playing field for new oil extraction methods. 
Response: Based on these comments, EPA believes it is appropriate to update our treatment of the feedstock previously listed as "non-food grade corn oil" in Table 1 to 40 CFR 80.1426. In this rule, we are changing references to "non-food grade corn oil" to "distillers corn oil" in Table 1 to 40 CFR 80.1426, and we are adding a new definition for "distillers corn oil" in 40 CFR 80.1401. These changes accomplish the goals supported by the commenters. These changes are discussed in section IV of the preamble.
Comment: Four comments (EPA-HQ-OAR-2017-0655-0034, 0039, 0028, 0038) on the December 2017 distillers sorghum oil proposed rule supported finalizing an expanded definition of non-food grade corn oil in the distillers sorghum oil rulemaking. 
Response: Based on these comments, EPA believes it is appropriate, in this rule, to replace references to non-food grade corn oil with distillers corn oil and finalize a new definition for distillers corn oil. See section IV of the preamble.
Commingling of grain sorghum oil and non-food grade corn oil
Comment: Three commenters (EPA-HQ-OAR-2017-0655-0039, 0038, 0028) on the December 2017 distillers sorghum oil proposed rule asked EPA to clarify that a mix of non-food grade corn oil and grain sorghum oil could be considered an acceptable feedstock for RIN-generating renewable fuels.
Response: In response to these comments, EPA provides clarification about the use of commingled sorghum and corn oil within the Renewable Fuel Standard in section III.A of the preamble and adds commingled distillers corn and sorghum oil to rows F and H of Table 1 to 40 CFR 80.1426. 
Human food use
Comment: One commenter on the 2017 distillers sorghum oil proposed rule (EPA-HQ-OAR-2017-0655-0039) asked for clarification that the phrase, "rendered unfit for food uses..." in the definitions of corn and sorghum oil means unfit for human food uses, not animal (feed) uses, and requested that EPA insert the term "human" immediately before the term "food," so that the new definition reads "... rendered unfit for human food uses..."
Two commenters on the November 2016 REGS proposed rule requested that EPA clarify the proposed definition of corn oil extraction by stating that "the oil is rendered unfit for human food uses without further refining" (EPA-HQ-OAR-2016-0041-0266 and 0277).
Response: Based on these comments, we are revising the proposed definition to say, "the oil is unfit for human food use without further refining." This approach is intended to clarify that the oil is unfit for human food use (but may be fit for animal consumption). We also believe that removing the word "rendered" removes potential confusion about how to interpret the definition. The term "rendered" in this specific context could be misconstrued as meaning that, for the oil to qualify, someone had to purposely alter the corn oil with the intent of making it unfit for human food use. In actuality, the corn oil is left unfit for human food uses as a result of corn processing decisions that are most often not primarily motivated by how they will affect the oil contained in the corn.  See section III.A of the preamble. 
Comment: One commenter (EPA-HQ-OAR-2017-0655-0039) on the 2017 distillers sorghum oil proposed rule also recommended that based on U.S. Food and Drug Administration (FDA) guidance EPA modify the term "non-food grade corn oil" in pathways F and H in Table 1 to 40 CFR 80.1426 to "Non-human food grade corn oil."
Response: After consulting with the FDA, we do not believe that altering the definition is appropriate for two reasons. First, the proposed terminology would not align with the terminology covered in the Association of American Feed Control Officials (AAFCO) 33.2 for "corn oil" and thereby cause confusion for the biofuel industry. Second, altering the definition in this manner could lead to a feed- grade product and a potentially lesser grade product with an unknown composition to enter into the feed market to which the FDA Center for Veterinary Medicine Compliance office expressed concern. Therefore, we are not altering the name of the feedstock to "non-human food grade corn oil." Instead, we are using the term "distillers corn oil" and defined it to include only corn oil "unfit for human food use without further refining."
Comment: Three commenters on the November 2016 REGS proposed rule stated that the phrase "oil is rendered unfit" is unnecessary since all corn oil obtained from extraction is unfit for food uses (EPA-HQ-OAR-2016-0041-0282, 0300 and 0311). 
Response: We believe it is appropriate to include the phrase "oil is unfit" in the definitions of distillers corn oil and sorghum oil. Our original proposal to revise the definition of corn oil extraction was based on technological changes within the industry, and there may be additional changes in the future that could result in the ability to extract food-grade oil downstream of when corn or grain sorghum is ground at a dry mill plant. In this case, we believe a separate evaluation would be required for fuel produced from such oil, because the GHG emission associated of diverting oil used for human food consumption to biofuel production may be substantially different than the GHG emissions associated with using oil that is unfit for human food consumption.
Including extraction at butanol and other non-ethanol production facilities
Comment: Four commenters on the 2016 REGS proposed rule said that EPA should expand the definition of corn oil extraction even further to include corn oil recovered at butanol plants, because the dry mill process for butanol is very similar to those for dry mill ethanol with respect to conversion of corn to liquefied mash and recovery of distillers grains and thin stillage (EPA-HQ-OAR-2016-0041-0243, 0246, 0267, 0286).
Response: Based on these comments, we believe it is appropriate for distillers corn oil to include corn oil extracted at any point downstream of when a dry mill butanol plant grinds the corn, provided the corn is converted to butanol. We believe it is appropriate to include dry mill butanol plants based on their similarity with dry mill ethanol plants. 
For purposes of evaluating the livestock sector impacts associated with corn oil extracted from DGS generated from corn butanol production ("corn butanol DGS"), the key factor to consider is how corn butanol DGS compare to corn ethanol DGS. Based on available information, we have found no reason to believe that extracting oil from corn butanol DGS would result in significantly different livestock sector impacts than extraction oil from corn ethanol DGS.      
Corn ethanol and butanol are both produced through fermentation of corn starch glucose, with the rest of the corn kernel ending up in the DGS co-product. On average, corn ethanol and butanol are expected to have similar fuel yields on a volumetric basis, and DGS yields on a mass basis. The March 2010 RFS rule and 2016 Gevo petition determination both assumed that one bushel of corn produced 2.71 gallons of ethanol or butanol and 17 pounds of DGS. 
Although there is limited data comparing the nutritional value of DGS produced from corn ethanol and corn butanol production, available information indicates they are very similar. A 2007 lifecycle assessment of corn-based butanol conducted by Argonne National Laboratory, which formed the basis for the butanol analysis in the GREET model, found that dried DGS (DDGS) generated from corn butanol production has similar protein by weight as DDGS generated from corn ethanol production, and assumed similar overall nutritional value per pound. More recently, a July 2015 petition from Gevo Inc., submitted to EPA under claims of Confidential Business Information (CBI), supports the conclusion that corn butanol DGS would meet the same industry standard specifications as corn ethanol DGS, and thus could be marketed as the same product.
The available information, summarized above, supports the inclusion of oil extracted from corn butanol DGS in the definition of distillers corn oil at 40 CFR 80.1401. Commenters did not provide any information or data that would support a different finding.
Comment: One commenter (EPA-HQ-OAR-2017-0655-0039) on the 2016 REGS proposed rule requested that the definition of distillers sorghum oil be expanded to include the oil recovered from grain sorghum that is converted to butanol.
Response: Based on these comments, we believe it is appropriate for the definition of distillers sorghum oil at 40 CFR 80.1401 to include oil recovered from grain sorghum converted to butanol. Explained above are our reasons for including oil extracted from corn butanol DGS. While data on sorghum butanol is extremely limited, for the same reasons described above for why corn butanol and ethanol DGS are expected to be compositionally similar, sorghum butanol and ethanol DGS are also likely to be compositionally similar. Significant aspects of our distillers sorghum oil evaluation are based on extension of data from the corn ethanol industry. We believe it is also appropriate to extend our comparison of corn ethanol and butanol DGS, described above, to grain sorghum butanol and ethanol DGS. As in the case of corn, grain sorghum butanol and ethanol are both produced through fermentation of grain sorghum glucose, with the rest of the grain sorghum ending up in the DGS co-product. The 2015 petition submitted by Gevo under claims of CBI pertained to both corn starch and grain sorghum feedstock, and supported the conclusion that grain sorghum butanol DGS would meet the same industry standards as grain sorghum ethanol DGS, and thus could be marketed as the same product. The available information, summarized above, supports our inclusion of oil extracted from grain sorghum butanol DGS. Commenters did not provide any information or data that would support a different finding.
Comment: Two comments (EPA-HQ-OAR-2017-0655-0039 and EPA-HQ-OAR-2016-0041-0267) on the 2016 REGS proposed rule and the 2017 distillers sorghum oil proposed rule requested that the definitions of distillers corn oil and distillers sorghum oil be expanded to include oil recovered from corn or grain sorghum that is converted to any renewable fuel (not limited to ethanol or butanol).
Response: We do not believe it is appropriate, at this time, to include oil recovered from corn or grain sorghum converted to any renewable fuel (not restricted to ethanol or butanol). EPA does not have information about what other types of fuel production facilities may extract corn or grain sorghum oil that is not suitable for human consumption. Without information about the types of renewable fuel or coproducts produced from prospective facilities using the corn or grain sorghum feedstock, we are not able to assess the GHG impacts that may be associated with such oil extraction. We believe that oil that fits this description would be more properly evaluated through the petition process at 40 CFR 80.1416, because in that case we would receive the data needed to complete a lifecycle GHG analysis of the requested pathways.
Oil extracted at wet mills or by fractionation
Comment: Five commenters on the 2016 REGS proposed rule suggested that EPA should expand the definition of corn oil extraction to include corn oil from wet milling. These commenters stated that all corn oil meets the requirements of the RFS program and thus should be eligible feedstocks under the program. 
Response: We do not believe it is appropriate to include corn oil from wet mills in this rulemaking, as such oil is commonly marketed for human food consumption. See preamble section IV for more discussion.
Comment: Four commenters on the 2016 REGS proposed rule requested that EPA expand the definition of corn oil extraction to include corn oil extracted after corn fractionation (EPA-HQ-OAR-2016-0041-0278, 0282, 0300 and 0311). These commenters stated that the fractionation process can be set up at a dry grind ethanol plant and the resulting extracted corn oil will still meet all the requirements for corn oil extraction.
Response: We do not believe it is appropriate to include corn oil recovered through fractionation in this rulemaking, as such oil is commonly extracted for sale as a product for human food consumption. See preamble section IV for our response.
Oil recovered by a third party
Comment: One commenter on the 2016 REGS proposed rule requested that EPA clarify the proposed definition of corn oil extraction to state that the distillers grains resulting from the dry mill operation that must be marketable as animal feed include those that have been subjected to further oil recovery by a dry mill or third party (EPA-HQ-OAR-2016-0041-0260). 
Response: EPA does not believe any revisions are needed to clarify this point. The proposed and final definitions say that the oil may be extracted "at any point downstream of when a dry mill ethanol plant grinds the corn...." We believe "at any point downstream" is sufficiently clear and includes extraction by either a dry mill or a third party, and it would not be helpful to add examples or further text in the regulations to clarify this point. The REGS proposed rule preamble elaborated on how we interpret this part of the definition: "Further, it would also include recovery of corn oil by a third-party from DGS produced by a dry mill corn ethanol plant" (81 FR 80900). That interpretation also applies to the definition of distillers corn oil finalized in this rule.
Comment: Three commenters on the 2016 REGS proposed rule stated that EPA's proposed addition of the phrase "at any point downstream" is inconsistent with its proposed approach for biointermediates and should be clarified (EPA-HQ-OAR-2016-0041-0282, 0300 and 0311). 
Response: We do not believe further clarification is needed in this rule. Based on paragraph (5) of the biointermediates definition in the 2016 REGS proposed rule, a biointermediate would be a feedstock material that is "substantially altered from the feedstock listed in the approved pathway that the biointermediate producer and renewable fuel producer are using to convert renewable biomass to renewable fuel." As a result of this action finalizing the grain sorghum oil pathway and definition of distillers corn oil, distillers corn and sorghum oil will be listed in Table 1 to 40 CFR 80.1426, so that these oils are the feedstocks and unless they are "substantially altered" (see 2016 REGS proposed rule for discussion of that phrase) after they are recovered and before they are delivered to the renewable fuel producer, they would not be biointermediates based on the proposed definition. Thus, the approach in this rule does not approve a feedstock that would be treated differently under the biointermediates approach in the 2016 REGS proposed rule.  See preamble section IV for more information.
Lifecycle analysis:
Comments: EPA received two comments (EPA-HQ-OAR-2017-0655-0041, 0042) on the 2017 distillers sorghum oil proposed rule asking EPA to consider the GHG displacement emissions associated with mass loss of DGS and decreased volume of vegetable oil because of oil extraction. Additionally, the commenters asked EPA to consider the GHG impacts of reduced-oil DGS marketed to livestock beyond dairy cattle.
      
Response: Based on these comments, EPA has conducted additional analysis to include these additional GHG impacts into our lifecycle analysis. See section III.B.1 of our preamble for a discussion of our updated analysis.

Comment: One commenter on the 2016 REGS proposed rule said they oppose corn-based biofuels from qualifying for advanced RINs, but largely agree with the Agency's reasoning in broadening the definition of extracted corn oil. They also said, "should the amount of resulting animal feed be reduced, that would require a new analysis to consider impacts on land-use, emissions and food prices." (EPA-HQ-OAR-2016-0041-0296)
Response: Regarding the commenter's general opposition to "corn-based" biofuels qualifying as advanced biofuel, we note that CAA 211(o)(B) says, "The term `advanced biofuel' means renewable fuel, other than ethanol derived from corn starch...." Our interpretation is that the reference to "starch" in the statute means that fuel produced from the non-starch components of corn may qualify as advanced biofuel, provided all other applicable definitional and regulatory criteria are satisfied.
With respect to the request to do a new analysis for corn oil, EPA believes such an analysis is unnecessary. The term "distillers corn oil" is replacing "non-food grade corn oil" in Table 1 to 40 CFR 80.1426, for pathways that were already approved as meeting the 50% lifecycle GHG reduction threshold in 2010. Revisiting EPA's prior determination that these pathways satisfy the 50% GHG reduction threshold is outside the scope of this rule, and the commenter did not provide sufficient data/information to warrant us to revisit that decision. In the 2016 REGS proposed rule we said, "we believe that the precise timing and method of corn oil extraction is not relevant for GHG reductions to be accomplished pursuant to pathways F and H, provided that: (1) The corn is converted to ethanol; (2) The corn oil is extracted at a point in the dry mill ethanol production process that renders it unfit for food uses without further refining; and (3) The resulting DGS from the dry mill operation is marketable as animal feed." We continue to believe the above statement is correct, because, based on the analyses conducted for the March 2010 RFS rule and this rule approving distillers sorghum oil, the means and location of oil recovery tend contribute a very small share of the lifecycle GHG emissions associated with the production and use of the finished biofuel, even when conservative assumptions are used. Given the similarities between distillers corn and sorghum oil (e.g., recovered at the same facilities using same machinery and processes, similar impact on DGS nutritional value), the finding in this rule that certain biofuels produced from distillers sorghum oil meets the 50% GHG reduction threshold, even taking into consideration the possibility of livestock feed substitution, provides further support for EPA's approval of the same fuels produced from distillers corn oil for advanced biofuel RINs. 
Environmental Assessment and Available Information
Comments: EPA received one comment (EPA-HQ-OAR-2017-0655-0042) on the 2017 distillers sorghum oil proposed rule asking the EPA to not move forward with its pathway determination if it determined that the "`information currently available' is inadequate to support a full analysis."

Response:  As with all lifecycle analyses, certain assumptions must be made based on the best available science. For new or niche fuels, information may be limited, as in the case of sorghum oil. The best available science for some assumptions were based on expert judgement by the U.S. Department of Agriculture, with whom we have extensively consulted on this analysis. Therefore, we believe we have conducted a sufficient lifecycle analysis for sorghum oil biofuels.

It is important to note that the purpose of lifecycle assessment under the RFS program is not to precisely estimate lifecycle GHG emissions associated with particular biofuels, but instead to determine whether or not the fuels satisfy specified lifecycle GHG emissions reductions thresholds in comparison to baseline fuels to qualify as one or more of the four types of renewable fuel specified in the statute. Where there are a range of possible outcomes and the fuel satisfies the GHG reduction requirements when "conservative" assumptions are used, then a more precise quantification of the matter is not required for purposes of a pathway determination.

Comments: 
EPA received one comment (EPA-HQ-OAR-2017-0655-0042) on the 2017 distillers sorghum oil proposed rule asking the EPA to "evaluate the impacts of water and air quality and biodiversity that would result from an increase in the production of other feed crops such as corn and soybeans to backfill for lost DGS."

Response: EPA has not performed the evaluation requested by the commenter.  Under the Clean Air Act, a lifecycle analysis is used to determine whether a fuel meets the necessary GHG reductions required to be considered a renewable fuel or one of the subsets of renewable fuel. EPA's lifecycle analyses are used to assess the overall GHG impacts of a fuel throughout each stage of its production and use. Lifecycle analysis includes an assessment of emissions related to the full fuel lifecycle, including feedstock production, feedstock transportation, fuel production, fuel transportation and distribution, and tailpipe emissions. Per the CAA definition of lifecycle GHG emissions, EPA's lifecycle analyses also include an assessment of significant indirect emissions, such as indirect emissions from land use changes and agricultural sector impacts.  For purposes of the lifecycle GHG analysis of distillers sorghum oil, we conservatively assumed that 1.2 lbs of corn could be substituted as feed for each pound of distillers sorghum oil.   For further explanation about EPA's lack of discretion to consider extra-statutory environmental impacts unrelated to lifecycle GHG emissions when making pathway determinations and why EPA does not believe this rule should be treated as the cause of any individual environmental harm, see the discussion below. 
The Energy Independence and Security Act (2007) states that the impact of the production and use of renewable fuels on the environment, including on air quality, climate change, conversion of wetlands, ecosystems, wildlife habitat, water quality, and water supply is to be considered in determining the fuel volumes for the program in years following 2022. The impact of renewable fuels on these environmental outcomes are also to be considered in a triannual report to Congress. Pursuant to this requirement, the EPA released its second Triennial Report to Congress this summer (EPA/600/R-18/195, 2018).
Endangered Species Act
Comments: EPA received one comment (EPA-HQ-OAR-2017-0655-0042) on the 2017 distillers sorghum oil proposed rule asking the EPA to "fulfill its Endangered Species Act Section 7 duties by consulting with wildlife agencies [...] to ensure that any loss of habitat, including modification or pollution resulting from land use changes associated with the increased production of sorghum-oil based biofuels, does not jeopardize the continued existence of any federally-listed endangered and threatened species or cause the destruction or adverse modification of designated critical habitat."
Response: 
EPA received the above comment on the proposed distillers sorghum oil rule suggesting that EPA is required to enter into consultation with the U.S. Fish and Wildlife Service and/or the National Marine Fisheries Service (together, "the Services") regarding the rule under Section 7(a)(2) of the Endangered Species Act (ESA).  EPA disagrees that consultation with the Services is required for today's rule because the EPA lacks discretion to consider impacts to threatened and endangered species or critical habitat in determining what fuels qualify as advanced biofuel or biomass-based diesel under the RFS program, and because, even if it had such discretion, today's rule will have no effect on threatened or endangered species or their critical habitat.
Section 7(a)(2) of the ESA requires federal agencies, in consultation with one or both of the Services (depending on the species at issue), to ensure that actions they authorize, fund, or carry out are not likely to jeopardize the continued existence of federally listed endangered or threatened species or result in the destruction or adverse modification of designated critical habitat of such species.   16 U.S.C. 1536(a)(2).   Under relevant implementing regulations and case law, section 7(a)(2) applies only to actions where there is discretionary federal involvement or control.  50 CFR 402.03; National Ass'n of Home Builders v. Defenders of Wildlife, 127 S. Ct. 2518 (2007). Further, under the relevant regulations consultation is required only for actions that "may affect" listed species or designated critical habitat.  50 CFR 402.14.   Consultation is not required where the action has no effect on such species or habitat.   It is the federal agency taking the action that evaluates the action and determines whether consultation is required.   See 51 FR 19926, 19949 (June 3, 1986).   Effects of an action include both the direct and indirect effects that will be added to the environmental baseline.   50 CFR 402.02.   Direct effects are the direct or immediate effects of an action on a listed species or its habitat.  Indirect effects are those that are "caused by" the proposed action and are "later in time, but still are reasonably certain to occur."   Id.  Thus, to trigger the consultation requirement, there must be discretionary federal involvement or control, and either a "direct effect" or an "indirect effect" that is both "caused by" the federal action and "reasonably certain to occur."  
Lack of Discretion.  In National Ass'n of Home Builders v. Defenders of Wildlife, 127 S. Ct. 2518 (2007) (Defenders of Wildlife), the Supreme Court evaluated a claim that EPA was required to engage in Section 7 consultation in the context of its approval of a state permitting program under the Clean Water Act (CWA).   In that case, the Court held that when a Federal agency is required by statute to undertake a particular action without taking into account species impacts, there is no relevant agency discretion, and thus the requirements of ESA Section 7(a)(2) do not apply.   Id.  at 2536. With regard to EPA's transfer of CWA permitting authority to a State, the relevant CWA provision specified that EPA ``shall approve'' a state permitting program if a list of CWA statutory criteria are met. The Court found that the relevant CWA program approval criteria did not include consideration of endangered or threatened species, and stated that ``[n]othing in the text of [the relevant CWA provision] authorizes EPA to consider the protection of threatened or endangered species as an end in itself when evaluating [an] application'' to transfer a permitting program to a State. Id. at 2537. Accordingly, the Court held that the CWA required EPA to approve the state's permitting program if the statutory criteria were met; those criteria did not include the consideration of ESA-protected species; and thus, consistent with 50 CFR 402.03, the nondiscretionary action to transfer CWA permitting authority to the state did not trigger ESA Section 7 consultation requirements.
Similar to the CWA program approval provision at issue in Defenders of Wildlife, the Clean Air Act requires EPA to develop a regulatory program to ensure that the Act's renewable fuel blending requirements are achieved, 42 USC 7545(2)(A)(i), and contains detailed provisions specifying the parameters of fuels that qualify under this regulatory program.  None of those provisions provide EPA the discretion to modify its evaluation of potential qualifying fuels based on consideration of impacts to threatened or endangered species.   Of relevance here, the Act includes detailed definitions of the terms "advanced biofuel" and "biomass-based diesel," and those definitions do not allow for consideration of impacts to threatened or endangered species.   "Advanced biofuel" is defined as "renewable fuel, other than ethanol derived from corn starch, that has lifecycle greenhouse gas emissions, as determined by the Administrator, after notice and opportunity for comment, that are at least 50 percent less than baseline lifecycle greenhouse gas emissions."  42 USC 7545(o)(1)(B).  This definition includes defined terms within it, including the terms "renewable fuel," ("[f]uel that is produced from renewable biomass and that is used to replace or reduce the quantity of fossil fuel present in a transportation fuel"), "baseline lifecycle greenhouse gas emissions" ("average lifecycle greenhouse gas emissions... . for gasoline or diesel... . sold or distributed as transportation fuel in 2005"), and "lifecycle greenhouse gas emissions," defined as follows:

      The term "lifecycle greenhouse gas emissions" means the aggregate quantity of greenhouse gas emissions (including direct emissions and significant indirect emissions such as significant emissions from land use changes), as determined by the Administrator, related to the full fuel lifecycle, including all stages of fuel and feedstock production and distribution, from feedstock generation or extraction through the distribution and delivery and use of the finished fuel to the ultimate consumer, where the mass values for all greenhouse gases are adjusted to account for their relative global warming potential."  
      
42 USC 7545(o)(1)(J), (H).  Thus, in determining if a fuel qualifies as "advanced biofuel," EPA must consider whether it meets the definition of "renewable fuel,"  -  that is, whether it is made from "renewable biomass" as defined in the statute, and is "used to replace or reduce the quantity of fossil fuel present in transportation fuel."  EPA must also consider whether a fuel is made from corn starch, and whether it satisfies the requirement that it achieve a fifty percent lifecycle greenhouse gas emissions reduction as compared to baseline lifecycle greenhouse gas emissions.  These factors represent the full range of considerations that EPA is authorized to consider in determining whether a fuel qualifies as advanced biofuel; it follows that EPA is not authorized to consider impacts to threatened or endangered species in determining what fuels qualify as advanced biofuels under the Act.   In light of this carefully constrained statutory scheme, EPA is without authority to alter its rule based on listed species considerations and is under no obligation to consult with the Services under Section 7(a) of the ESA with respect to the advanced biofuel pathways established in today's rule that utilize sorghum oil feedstock, or the amendments to the existing advanced biofuel rules related to the use of non-food grade corn oil (now referred to as distillers corn oil) as feedstock. EPA has no discretion to tailor these rules to reflect consideration of impacts to threatened or endangered species, or their critical habitat, so consultation is not required.  

The same is true with respect to the pathways approved in today's rule for the production of biomass based diesel from sorghum oil, and the amendments to the existing rule allowing the production of biomass-based diesel from non-food grade corn oil (now referred to as distillers corn oil). The term biomass-based diesel is defined in the statute as:
      
      ... renewable fuel that is biodiesel as defined in section 1322(f) of this title and that has lifecycle greenhouse gas emissions... that are at least 50 percent less than the baseline lifecycle greenhouse gas emissions.   Notwithstanding the preceding sentence, renewable fuel derived from co-processing biomass with a petroleum feedstock shall be advanced biofuel if it meets the requirements of [42 USC 7545(o)(1)(B)], but is not biomass-based diesel.
      
42 USC 7545(o)(1)(D).  The term "biodiesel" is defined in 42 USC 1322(f) to mean "... a diesel fuel substitute produced from nonpetroleum renewable resources that meets the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 211 of the Clean Air Act [42 USCS § 7545] and "includes biodiesel derived from--
(i)  animal wastes, including poultry fats and poultry wastes, and other waste materials; or
(ii)  municipal solid waste and sludges and oils derived from wastewater and the treatment of wastewater."  Thus, in evaluating whether a fuel qualifies as biomass based diesel, EPA is authorized to consider only whether the fuel meets the definition of renewable fuel (made from renewable biomass and used to replace or reduce the quantity of fossil fuel present in a transportation fuel), whether it provides a qualifying lifecycle greenhouse gas reduction as compared to baseline petroleum fuel, whether the biomass is co-processed with petroleum feedstocks, and whether it meets the registration requirements for fuels and fuel additives established via rulemaking by EPA. EPA has no discretion to tailor rules identifying qualifying biomass-based diesel to reflect additional considerations not identified in the statute, such as impacts to threatened or endangered species.  As a result, EPA is not required to consult with the Services under ESA Section 7 in establishing such rules.
    
No Effect.   Even if EPA had discretion to consider impacts to threatened or endangered species in the context of adopting rules identifying pathways for the production of qualifying advanced biofuel and biomass-based diesel which, as described above, it does not, consultation with the Services regarding today's final rule would not be required since the rule will have no effect on threatened or endangered species or the critical habitat of such species.  

First, there are no "direct effects" from today's rule. The rule simply allows independent third parties an opportunity to make qualifying renewable fuel using the new or amended pathways. It does not require this result. The rule has no immediate on-the-ground direct effects of any sort; it does not mandate that any renewable fuel be produced from distillers sorghum oil or distillers corn oil; and it does not dictate the location for the production of crops that could, depending on the future decisions of third parties, be used to produce the grain sorghum and corn feedstocks used in dry mill ethanol facilities. It also does not dictate or control the location of dry mill ethanol facilities or the biofuel production facilities that could potentially use distillers corn oil or distillers sorghum oil in renewable fuel production.  Thus, the rule does not have any direct effect on any threatened or endangered species or their critical habitat.

Under the Services' regulations, an indirect effect on threatened or endangered species or their critical habitat must be caused by the action, be later in time, and be reasonably certain to occur. There are no such indirect effects associated with today's rule, since impacts to threatened or endangered species, or their critical habitat, are not reasonably certain to occur as a result of this rule and, similarly, any impacts that could in theory occur would be too remotely associated with today's rule to be "caused" by it.  
The EPA issues annual standards under the RFS program that specify the percentage of transportation fuel used in the continental U.S. and Hawaii that must be comprised of renewable fuel. The standards are implemented on an annual average and nationwide basis. The types of renewable fuels that can be used to satisfy the requirements are generally broadly defined, and can be made from a variety of feedstocks and processes located in the United States or abroad. There is, for example, no specific requirement under the RFS program for the use of advanced biofuel or biomass-based diesel made from grain sorghum oil or corn oil.  In fact, the vast majority of these fuel types are made either from waste oils, fats and greases, or soy oil. There are also multiple types of renewable fuels that can be used to satisfy RFS requirements.  For example, advanced biofuels can include fuels such as ethanol derived from sugarcane, biodiesel, renewable diesel, butanol, compressed natural gas, and liquefied natural gas. Decisions on what type of feedstock to use for biofuel production, where such feedstocks are grown, the types and volumes of agricultural inputs such as fertilizer or pesticide to use in growing the feedstocks, and what types of renewable fuel will ultimately be produced, are made by third parties whose activities are not required by EPA's renewable fuel standards rules or its rules identifying acceptable pathways for renewable fuel production.  The decisions of these third parties are likely influenced by a number of considerations that are likely to be at least as important, and in sum are likely to be more important, than EPA determinations regarding acceptable RFS renewable fuel production pathways.  
While a significant proportion of the corn and sorghum crops in the U.S. are used as feedstock to produce ethanol (and associated distillers grains and oils), approximately two-thirds of the production of each crop is used for other purposes.  Thus, at this time, it  is not reasonably certain that any specific alleged effects on endangered or threatened species or critical habitats can be attributed to the use of corn and sorghum for ethanol production, and in particular to distillers oil production, as compared to uses of corn and sorghum for other purposes.   Furthermore, ethanol is by far the most widely used biofuel in the U.S., and its use not only satisfies RFS and other state renewable fuel requirements, but also provides an important low-cost source of octane for gasoline as well as gasoline volume. Almost all gasoline in the U.S. now contains ethanol, which is generally blended downstream of refineries at terminals.  The refineries themselves produce sub-octane gasoline blendstocks (referred to as blendstocks for oxygenate blending, or BOBs) that cannot be sold as gasoline without the subsequent addition of ethanol at downstream locations such as terminals. This practice began in the 1990s in reformulated gasoline areas, and quickly expanded beginning in 2006 into conventional gasoline areas as several factors, including the rising prices for crude oil relative to corn, caused ethanol to become the preferred source of octane for gasoline. The gasoline refining and distribution system, driven by the favorable blending economics of ethanol over the last dozen years, has invested heavily to fully transform itself to rely on the use of ethanol. Refiners have modified their process units and operations to produce BOBs instead of finished gasoline. Pipelines likewise have shifted their physical assets and operations to distribute these BOBs instead of finished gasoline. Terminals across the country have all been modified to receive and store shipments of ethanol and blend it into these BOBs. Consequently, the blending of 10% ethanol into gasoline in the U.S. is now firmly entrenched. To reverse course and go back to refining and distributing ethanol-free finished gasoline would require a market wide shift that would then take years and likely billions of dollars to implement. This would require a significant economic driver over a sustained period. Given the current economic advantage of blending ethanol as E10, and the forecasts of crude oil and corn prices, there is no apparent economic driver either at present or on the horizon that would change this market dynamic. [,] Because of these considerations, it is likely that even if EPA completely waived RFS requirements (or suspended all approved RFS pathways for ethanol production), the market would continue to demand essentially the same volumes of ethanol for use as a gasoline octane enhancer and source of fuel supply. These findings are similar to those we made in response to petitions for a waiver of the 2012 and 2013 RFS standards on the basis of severe economic harm associated with a drought, where we concluded that in all likelihood the RFS standards in the latter part of 2012 and early part of 2013 would not drive ethanol use. The volume of ethanol sales in 2012 was only slightly lower than it was in 2017  -  the last full year for which data is available (see Figure 1 below). 
                                   Figure 1
        Historical Pool-wide Average Ethanol Concentration of Gasoline
                                       

                                   Figure 2
                      Annual U.S. Biofuel Export Volumes
                                       
We also note that, as depicted in Figure 2, above, U.S. ethanol producers have exported substantial volumes of ethanol to overseas markets, even as use of this biofuel in the U.S. has increased.  If EPA were to completely waive RFS requirements (or suspend the effectiveness of ethanol production pathways), we would expect that domestic use of ethanol in the U.S. might decrease slightly (primarily as a result of decreased sales of higher level ethanol blends such as E15 of E85), but we also believe that it is likely that ethanol producers would seek to make use of their past investments to continue to produce the same volume of ethanol and would simply shift sales to overseas markets to accomplish this objective. This would likely lead to comparable production of distillers corn oil and distillers sorghum oil  -  either for use in biofuel production for domestic or foreign markets (note biodiesel exports in Figure 2), or as a component of animal feed. The result would be comparable impacts associated with corn and sorghum production as may occur through implementation of the RFS program, including today's rule identifying pathways for renewable fuel production from distillers corn oil and distillers sorghum oil.    
EPA discussed the potential for large-scale corn cultivation, including cultivation for biofuels markets, to have adverse environmental impacts in its recent report to Congress. However, there remains substantial uncertainty about associating biofuel demand at the national or regional level with any particular quantity or location of corn cultivation. Furthermore, for the reasons discussed in this response, distinguishing the impact of the RFS standards from general demand for biofuels adds substantial additional uncertainty to the attribution of any adverse environmental impacts, and there is even less basis to associate the changes in this rulemaking with any particular impacts. Given the broad range of drivers of ethanol production and corn and sorghum plantings in the U.S., it is highly unlikely today's rule could bend current trends or market forces such that it will "cause" indirect effects on listed species or critical habitat. Ethanol production is the key economic consideration for dry mill ethanol plants. DGS, distillers corn oil and distillers sorghum oil are all byproducts of the process of ethanol production. The ability to use extracted distillers corn oil or distillers sorghum oil as a feedstock to produce additional biofuels is a peripheral economic consideration for the production of ethanol at dry mill ethanol plants. Furthermore, the potential environmental impacts we assessed in the context of today's rule related to the substitution of corn for oil removed from sorghum DGS are not reasonably certain to occur. As explained in section III.B.1 in the preamble to today's rule, we conservatively assumed for the purpose of responding to comments on our GHG analysis that any loss of nutritional value and/or mass associated with de-oiling sorghum DGS would be compensated with corn substitutes. However, we have not determined that such substitution will or is reasonably certain to occur. Further, it is not possible to know where, when, and how any additional increment of planting would occur such that we could predict any potential impacts on species or critical habitat with reasonable certainty.     
In sum, taking into account the multiple attribution issues discussed above, we do not believe it could be reasonably argued that any individual environmental harm, including any theoretical harm to particular threatened or endangered species or their habitat, will be "caused" by today's rule or be reasonably certain to occur.  Thus, consultation under Section 7(a)(2) of the ESA is not required.