Document ID: EPA-HQ-OAR-2015-0092-0003
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2015-07-14T04:00Z

June 12, 2015
Karl Simon, Director 
Transportation and Climate Division
Office of Transportation & Air Quality
U.S. Environmental Protection Agency
1200 Pennsylvania Ave., NW 
Washington, D.C. 20460

Dear Director Simon:
In support of the petition for approval of a Renewable Fuel Standard (RFS) pathway for cottonseed oil, the National Cottonseed Products Association (NCPA) is submitting this information on the volumes of biomass-based diesel that would likely be produced in the United States if such a pathway were provided.  
As discussed over the past several years since we first submitted our petition, it is difficult to estimate the volumes of biomass-based diesel that would be produced from cottonseed oil due to the number of variables involved.  The factors that will impact the volumes produced include the price of cottonseed oil relative the price of other biomass-based diesel feedstocks and the transportation costs to source the cottonseed oil versus that of other feedstocks. Other factors include the price of petroleum diesel and overall biomass-based diesel market and demand factors, such as the final RFS volume requirements, the status of the biodiesel tax credit, and levels of imports of biomass-based diesel, particularly from Argentina where they have the potential to substantially increase their imports to the United States depending on market conditions, transportation costs, and RFS compliance factors.  
Based on the information and resources available to us, the NCPA estimates that the volumes of biomass-based diesel that will be produced using cottonseed oil in the near future will be relatively low, ranging from 3 million gallons to 30 million gallons. This view is based on the higher cost of cottonseed oil (see attachment), the lack of biodiesel production facilities co-located with cottonseed oil processing facilities as there are with soy and canola.  A list of cottonseed oil processing facilities is included on the last page. 
For perspective, the volumes of biodiesel produced from canola oil in 2013-2014 ranged from approximately 80-130 million gallons and canola oil was typically priced lower than cottonseed oil during this time and there is at least one large biodiesel production facility co-located with a canola crushing facility. Furthermore, rather than provide blanket approval of the NCPA cottonseed petition, EPA has indicated it intends to require individual biodiesel producers to submit a separate, specific petition to obtain approval for the use of cottonseed oil for RFS eligible biomass-based diesel, and this will also likely depress the amount of cottonseed oil biodiesel production. 
The NCPA would like to reiterate that the relatively small amount of biodiesel that will likely be produced from cottonseed oil will make it unlikely that any significant indirect effects will occur as a result of EPA approval of a cottonseed oil RFS pathway.  As stated and supported in our initial petition, cottonseed oil is a by-product of cotton and cottonseed and the utilization of cottonseed oil will not drive or significantly impact cotton demand or production.  
Again, the NCPA bases our views on the volumes of biomass-based diesel that will be produced from cottonseed oil on the current and estimated near-term price relationships of cottonseed oil and other RFS approved vegetable oil feedstocks, the capacity of biodiesel production facilities that are in close proximity to cottonseed oil processing facilities, and other market, policy and RFS program factors. 
We hope that this information is helpful to EPA in its consideration of a cottonseed oil pathway.  If there is additional information or input the NCPA can provide, please let us know. 

Sincerely,

Ben Morgan
Executive Vice President

Cottonseed Oil Processing Facilities:

  Archer Daniels Midland Company
Locations: Valdosta, Georgia; Memphis, TN; Lubbock, TX; Richmond, TX 

 Valley Coop Oil Mill (co-located with biodiesel facility with 3 million gallon capacity)
Location: Harlingen, TX 
 Planters Cotton Oil
Location: Pine Bluff, AR
 Hartsville Oil Mill
Location: Darlington, SC
 Producers Co-op Oil Mill
Location: Oklahoma City, OK
 Delta Oil Mill
Locations: Jonestown, MS; Greenwood, MS
 PYCO Industries, Inc.
Location: Lubbock, TX
 J. G. Boswell Company
Location: Corcoran, CA