The RFS, as defined by EISA, distinguishes between ethanol derived from corn starch (known as corn ethanol) and advanced biofuels—defined as a renewable fuel other than corn ethanol that meets certain criteria. For example, to qualify as an advanced biofuel, a biofuel must reduce lifecycle greenhouse gas emissions by at least 50 percent compared to the gasoline or diesel fuel it displaces. According to the RFS, most advanced biofuels must be produced from cellulosic materials, which can include perennial grasses, crop residue, and the branches and leaves of trees. In addition, some advanced biofuels must be produced from biomass-based diesel, which generally includes any diesel made from biomass feedstocks, such as soybeans. As shown in figure 1, the volume of corn ethanol included under the RFS is capped at 15 billion gallons by 2015 and is fixed thereafter. However, the volume of advanced biofuels continues to grow to a total of 21 billion gallons by 2022. By comparison, the U.S. transportation sector consumed about 14 million barrels of oil per day in 2009, which translates to more than 99 billion gallons of gasoline consumed for the entire year. The RFS generally requires that U.S. transportation fuels in 2022 contain 36 billion gallons of biofuels. In addition, at least 16 billion of the 36 billion gallons of biofuels must be cellulosic biofuels—including ethanol and diesel derived from cellulosic materials. However, under EISA, EPA is required to determine the projected available volume of cellulosic biofuel production for the year, and if that number is less than the volume specified in the statute, EPA must lower the standard accordingly. Pursuant to this provision, EPA has already lowered the RFS requirements for cellulosic biofuel, from 250 million gallons to 6.6 million gallons for 2011, mostly due to the small number of companies with the potential to produce cellulosic biofuel on a commercial scale. As shown in figure 2, the infrastructure used to transport petroleum fuels from refineries to wholesale terminals in the United States is different from that used to transport ethanol. Petroleum-based fuel is primarily transported from refineries to terminals by pipeline. In contrast, ethanol is transported to terminals via a combination of rail cars, tanker trucks, and barges. According to DOE estimates, there are approximately 1,050 terminals in the United States that handle gasoline and other petroleum products. At the terminals, most ethanol is currently blended as an additive in gasoline to make E10 fuel blends. A relatively small volume is also blended into a blend of between 70 percent to 83 percent ethanol (E85) and the remainder gasoline. E85 has a more limited market, primarily in the upper Midwest, and can only be used in flexible-fuel vehicles, which are vehicles that have been manufactured or modified to accept it. After blending, the fuel is moved to retail fueling locations in tanker trucks. There are approximately 159,000 retail fueling outlets in the United States, according to 2010 industry data. This total included more than 115,000 convenience stores, which sold the vast majority of all the fuel purchased in the United States, according to industry estimates; a number of large retailers that sell fuel, such as Walmart, Costco, and several grocery chains; and some very low-volume retailers, such as marinas. In terms of ownership, single-store businesses—that is, businesses that own a single retail outlet—account for about 56 percent of the convenience stores selling fuel in the United States. There are three primary supply arrangements between fuel retailers and their suppliers: Major oil owned and operated. About 1 percent (or 1,175) of convenience stores selling fuel in the United States are owned and operated by four major integrated oil companies—ExxonMobil, Chevron, BP, and Shell. Branded independent retailer. About 52 percent of retail fueling outlets are operated by independent business owners who sell fuel under the brand of one of the major oil companies or refineries (such as CITGO, Sunoco, or Marathon). These retailers sign a supply and marketing contract with their supplier to sell fuel under the brand of that supplier. Unbranded independent retailer. The remaining retail fueling outlets (about 48 percent) are operated by independent business owners who do not sell gasoline under a brand owned or controlled by a refining company. These retailers purchase gasoline from the unbranded wholesale market, which is made up of gallons not dedicated to fulfill a refiner’s contracts with branded retailers. Federal safety and environmental regulations govern the dispensing and storage of fuel at retail fueling locations. First, OSHA requires that equipment used to dispense gasoline—including hoses, nozzles, and other related aboveground components, shown in figure 3—be certified for safety by a nationally recognized testing laboratory. According to OSHA officials, OSHA recognizes 17 laboratories, although Underwriters Laboratories (UL) is the main one that currently certifies equipment sold for dispensing gasoline. In addition, under the Solid Waste Disposal Act, EPA requires that underground storage tank (UST) systems—including storage tanks, piping, pumps, and other related underground components, shown in figure 3—must be compatible with the substance stored in them to protect groundwater from releases from these systems. Historically, UL certification has been the primary method for determining the compatibility of USTs with EPA requirements. EPA also requires fuel retailers to install equipment to detect leaks from UST systems. In total, EPA regulates approximately 600,000 active USTs at about 215,000 sites in the United States. State and local governments also play a role in regulating the safety of dispensing equipment and in implementing EPA’s requirements for USTs. For example: The Occupational Safety and Health Act allows states to develop and operate their own job safety and health programs. OSHA approves and monitors state programs and plans, which must adopt and enforce standards that are at least as effective as comparable federal standards. According to OSHA officials, there are currently 21 states with approved plans covering the private sector that enforce health and safety standards over the dispensing of gasoline within their respective states. Four additional states operate approved state plans that are limited in coverage to the public sector. Various state and local fire-safety codes—which aim to protect against fires—also govern the dispensing of fuel at retail fueling outlets. While state fire marshals or state legislatures are usually responsible for developing the fire code for their respective states, some states allow local municipalities to develop their own fire codes. Fire codes normally reference or incorporate standards developed by recognized standards- development organizations, such as the National Fire Protection Association and the International Code Council. State, county, and local fire marshals are responsible for enforcing the applicable fire code within their respective jurisdictions. Local officials, such as fire marshals, typically inspect dispensing equipment for compliance with both state and local fire codes. States are largely responsible for implementing EPA’s requirements under its UST program. EPA has approved 36 states, plus the District of Columbia and Puerto Rico, to operate programs in lieu of the federal program. The remaining states have agreements with EPA to be the primary implementing agency for their programs. Typically, states rely on UL certification as the primary method for determining the compatibility of UST systems with EPA requirements. Some states also allow compatibility to be demonstrated in other ways, including through the manufacturer’s approval or a professional engineering certification. Consumers in the United States use retail fueling locations to fuel hundreds of millions of automobiles and nonroad products with gasoline engines. According to DOT data, Americans owned or operated almost 256 million automobiles, trucks, and other highway vehicles in 2008, while about 91 percent of all households owned at least 1 automobile the same year, according to U.S. Census data. Americans also owned and operated over 400 million products with nonroad engines in 2009, according to one industry association estimate. According to EPA documentation, nonroad engines are typically more basic in their engine design and control than engines and emissions control systems used in automobiles, and commonly have carbureted fuel systems and air cooling, whereby extra fuel is used in combustion to help control combustion and exhaust temperatures. According to representatives from industry associations for nonroad engines, most of the small nonroad engines manufactured today rely on older technologies and designs to keep retail costs low, and all of the small nonroad engines currently being produced are designed to perform successfully on fuel blends up to E10. According to industry representatives, while it is possible to design small nonroad engines to run on a broad range of fuels, such designs would not be cost effective and could add hundreds of dollars to the price. Existing ethanol infrastructure should be sufficient to transport the nation’s ethanol production through 2015, according to DOT officials and industry representatives, but large investments in transportation infrastructure may be needed to meet 2022 projected consumption, according to EPA documentation. One option for doing so may be to construct a dedicated ethanol pipeline, but this option presents significant challenges. According to knowledgeable DOT officials and industry representatives we met with, the existing rail, truck, and barge transportation infrastructure for shipping corn ethanol to wholesale markets should be sufficient through 2015, when the volume of corn ethanol in the RFS is effectively capped at 15 billion gallons annually. This volume represents roughly a 2.4 billion gallon increase from 2011 RFS consumption targets for corn ethanol. Specifically, for rail, which transports about 66 percent of corn ethanol to wholesale markets, several DOT officials and representatives from the Association of American Railroads told us that the addition of a few billion gallons of ethanol over the near term is not expected to have a significant impact.