[Federal Register Volume 78, Number 141 (Tuesday, July 23, 2013)]
[Proposed Rules]
[Pages 44075-44089]
[FR Doc No: 2013-16928]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[EPA-HQ-OAR-2013-0178; FRL--9834-3]

Notice of Data Availability Concerning Renewable Fuels Produced
From Barley Under the RFS Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of Data Availability (NODA).

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SUMMARY: This Notice provides an opportunity to comment on EPA's draft
analysis of the lifecycle greenhouse gas (GHG) emissions of ethanol
that is produced using barley as a feedstock. EPA's draft analysis
indicates that ethanol produced from barley has an estimated lifecycle
GHG emissions reduction of 47% as compared to baseline conventional
fuel when the barley ethanol is produced at a dry mill facility that
uses natural gas for all process energy, uses electricity from the
grid, and dries up to 100% of distillers grains. Such barley ethanol
would therefore meet the minimum 20% GHG emissions reduction threshold
for conventional biofuels under the Clean Air Act Renewable Fuel
Standard (RFS) program. In addition, EPA analyzed two potential options
for producing barley ethanol that would meet the 50% GHG emissions
reduction threshold for advanced biofuels. Ethanol produced from dry-
milling barley meet the advanced biofuels GHG reduction threshold if it
is produced at a facility that uses no more than 30,700 Btu of natural
gas for process energy, no more than 4,200 Btu of biomass from barley
hulls or biogas from landfills, waste treatment plants, barley hull
digesters, or waste digesters for process energy, and no more than 0.84
kWh of electricity from the grid for all electricity used at the
renewable fuel production facility, calculated on a per gallon basis.
Ethanol produced from dry-milling barley can also meet the advanced
biofuel GHG reduction threshold if the production facility uses no more
than 36,800 Btu of natural gas for process energy and also uses natural
gas for on-site production of all electricity used at the facility
other than up to 0.19 kWh of electricity from the grid, calculated on a
per gallon basis.

DATES: Comments must be received on or before August 22, 2013.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2013-0178, by one of the following methods:
     www.regulations.gov: Follow the on-line instructions for
submitting comments.
     Email<EMAIL_ADDRESS>     Mail: Air and Radiation Docket and Information Center,
Environmental Protection Agency, Mailcode: 2822T, 1200 Pennsylvania
Ave. NW., Washington, DC 20460.
     Hand Delivery: Air and Radiation Docket and Information
Center, EPA/DC, EPA West, Room 3334, 1301 Constitution Ave. NW.,
Washington, DC 20004. Such deliveries are only accepted during the
Docket's normal hours of operation, and special arrangements should be
made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2013-0178. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
www.regulations.gov, including any personal information provided,
unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through www.regulations.gov or<EMAIL_ADDRESS>The www.regulations.gov Web site is an ``anonymous
access'' system, which means EPA will not know your identity or contact
information unless you provide it in the body of your comment. If you
send an email comment directly to EPA without going through
www.regulations.gov your email address will be automatically captured
and included as part of the comment that is placed in the public docket
and made available on the Internet. If you submit an electronic
comment, EPA recommends that you include your name and other contact
information in the body of your comment and with any disk or CD-ROM you
submit. If EPA cannot read your comment due to technical difficulties
and cannot contact you for clarification, EPA may not be able to
consider your comment. Electronic files should avoid the use of special
characters, any form of encryption, and be free of any defects or
viruses. For additional information about EPA's public docket visit the
EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.
    Docket: All documents in the docket are listed in the
www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, will be publicly available only in hard copy.
Publicly available docket materials are available either electronically
in www.regulations.gov or in hard copy at the Air and Radiation Docket
and the Information Center, EPA/DC, EPA West, Room 3334, 1301
Constitution Ave. NW., Washington, DC 20004. The Public Reading Room is
open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding
legal holidays. The telephone number for the Public Reading Room is
(202) 566-1744, and the telephone number for the Air Docket is (202)
566-1742.

FOR FURTHER INFORMATION CONTACT: Christopher Ramig, Office of
Transportation and Air Quality, Transportation and Climate Division,
Environmental Protection Agency, 1200 Pennsylvania Ave. NW.,
Washington, DC 20460 (MC: 6041A); telephone number:<PHONE_NUMBER>; fax
number:<PHONE_NUMBER>; email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Outline of This Preamble

I. General Information
    A. Does this action apply to me?
    B. What should I consider as I prepare my comments for EPA?
    1. Submitting CBI
    2. Tips for Preparing Your Comments
II. Analysis of Lifecycle Greenhouse Gas Emissions for Ethanol
Produced From Barley
    A. Methodology
    1. Scope of Analysis
    2. Models Used
    3. Model Modifications
    4. Scenarios Modeled for Impacts of Increased Demand for Barley
    B. Results
    1. Agro-Economic Impacts
    2. International Land Use Change Emissions
    3. Barley Ethanol Processing
    4. Results of Lifecycle Analysis for Ethanol From Barley
(Conventional Ethanol Example)
    5. Impacts of Different Process Technology Approaches on Barley
Ethanol Lifecycle Results
    C. Consideration of Lifecycle Analysis Results
    1. Implications for Threshold Determinations
    2. Consideration of Uncertainty

I. General Information

A. Does this action apply to me?

    Entities potentially affected by this action are those involved
with the production, distribution, and sale of transportation fuels,
including gasoline and diesel fuel or renewable fuels such as biodiesel
and renewable diesel. Regulated categories include:

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              Category                NAICS \1\ Codes    SIC \2\ Codes                      Examples of potentially regulated entities
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Industry...........................            324110              2911  Petroleum Refineries.
Industry...........................            325193              2869  Ethyl alcohol manufacturing.
Industry...........................            325199              2869  Other basic organic chemical manufacturing.
Industry...........................            424690              5169  Chemical and allied products merchant wholesalers.
Industry...........................            424710              5171  Petroleum bulk stations and terminals.
Industry...........................            424720              5172  Petroleum and petroleum products merchant wholesalers.
Industry...........................            454319              5989  Other fuel dealers.
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\1\ North American Industry Classification System (NAICS).
\2\ Standard Industrial Classification (SIC) system code.

    This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to engage in activities
that may be affected by today's action. To determine whether your
activities would be affected, you should carefully examine the
applicability criteria in 40 CFR Part 80, Subpart M. If you have any
questions regarding the applicability of this action to a particular
entity, consult the person listed in the preceding section.

B. What should I consider as I prepare my comments for EPA?

1. Submitting CBI
    Do not submit this information to EPA through www.regulations.gov
or email. Clearly mark the part or all of the

information that you claim to be CBI. For CBI information in a disk or
CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as
CBI and then identify electronically within the disk or CD ROM the
specific information that is claimed as CBI. In addition to one
complete version of the comment that includes information claimed as
CBI, a copy of the comment that does not contain the information
claimed as CBI must be submitted for inclusion in the public docket.
Information so marked will not be disclosed except in accordance with
procedures set forth in 40 CFR part 2.
2. Tips for Preparing Your Comments
    When submitting comments, remember to:
     Identify the NODA by docket number and other identifying
information (subject heading, Federal Register date and page number).
     Follow directions--The agency may ask you to respond to
specific questions or organize comments by referencing a Code of
Federal Regulations (CFR) part or section number.
     Explain why you agree or disagree; suggest alternatives
and substitute language for your requested changes.
     Describe any assumptions and provide any technical
information and/or data that you used.
     If you estimate potential costs or burdens, explain how
you arrived at your estimate in sufficient detail to allow for it to be
reproduced.
     Provide specific examples to illustrate your concerns, and
suggest alternatives.
     Explain your views as clearly as possible, avoiding the
use of profanity or personal threats.
     Make sure to submit your comments by the comment period
deadline identified.

II. Analysis of Lifecycle Greenhouse Gas Emissions for Ethanol Produced
From Barley

A. Methodology

1. Scope of Analysis
    On March 26, 2010, the Environmental Protection Agency (EPA)
published changes to the Renewable Fuel Standard program regulations as
required by 2007 amendments to Section 211(o) of the Clean Air Act
(CAA). This rulemaking is commonly referred to as the ``March 2010
RFS'' rule.\1\ As part of the March 2010 RFS rule we analyzed various
biofuels production pathways to determine whether fuels produced
through those pathways meet minimum lifecycle greenhouse gas reduction
thresholds specified in the CAA for different categories of biofuel
(i.e., 60% for cellulosic biofuel, 50% for biomass-based diesel and
advanced biofuel, and 20% for other renewable fuels). The March 2010
RFS rule focused on fuels that were anticipated to contribute
relatively large volumes of renewable fuel by 2022 and thus did not
cover all fuels that either are contributing or could potentially
contribute to the program. In the preamble to the rule, EPA indicated
that it had not completed the GHG emissions analyses for several
specific biofuel production pathways but that this work would be
completed through a supplemental rulemaking process. Since the March
2010 rule was issued, we have continued to examine several additional
pathways. This Notice of Data Availability presents our draft analysis
of three pathways for producing ethanol from barley. The modeling
approach EPA used in this analysis is the same general approach used in
the final March 2010 RFS rule for lifecycle analyses of other
biofuels.\2\ The March 2010 RFS rule preamble and Regulatory Impact
Analysis (RIA) provide further discussion of our approach.
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    \1\ EPA, 2010. Renewable Fuel Standard Program (March 2010 RFS)
Regulation of Fuels and Fuel Additives: Changes to Renewable Fuel
Standard Program; Final Rule. 40 CFR Part 80, http://www.gpo.gov/fdsys/pkg/FR-2010-03-26/pdf/2010-3851.pdf.
    \2\ EPA. 2010. Renewable Fuel Standard Program (March 2010 RFS)
Regulatory Impact Analysis. EPA-420-R-10-006. http://www.epa.gov/oms/renewablefuels/420r10006.pdf.
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    EPA is seeking public comment on EPA's draft analyses of lifecycle
GHG emissions related to the production and use of ethanol from barley.
We intend to consider all of the relevant comments received prior to
taking final action that could lead to amendment of the RFS program
regulations to identify barley ethanol pathways as among those which
can be used to produce qualifying renewable fuel. In general, comments
will be considered relevant if they pertain to the lifecycle GHG
emissions of barley ethanol and especially if they provide specific
information for consideration in our modeling.
2. Models Used
    The analysis EPA has prepared for barley ethanol uses the same set
of models that was used for the final March 2010 RFS rule, including
the Forestry and Agricultural Sector Optimization Model (FASOM)
developed by Texas A&M University and the Food and Agricultural Policy
and Research Institute international models as maintained by the Center
for Agricultural and Rural Development (FAPRI-CARD) at Iowa State
University. For more information on the FASOM and FAPRI-CARD models,
refer to the March 2010 RFS rule preamble (75 FR 14670) or the March
2010 RFS Regulatory Impact Analysis (RIA).\3\ These documents are
available in the docket or online at http://www.epa.gov/otaq/fuels/renewablefuels/regulations.htm. The models require a number of inputs
and assumptions that are specific to the pathway being analyzed,
including projected yields of feedstock per acre planted, projected
fertilizer use, and energy use in feedstock processing and fuel
production. The docket includes detailed information on model inputs,
assumptions, calculations, and the results of our assessment of the
lifecycle GHG emissions performance for barley ethanol.
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    \3\ EPA. 2010. Renewable Fuel Standard Program (March 2010 RFS)
Regulatory Impact Analysis. EPA-420-R-10-006. http://www.epa.gov/oms/renewablefuels/420r10006.pdf.
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3. Model Modifications
    In the United States, barley is grown using one of two primary
cropping strategies. The majority of barley production, over 90 percent
every year since 1970, is ``spring barley''.\4\ For example, in the
2010/11 crop year, spring barley represented approximately 94 percent
of the total barley crop. Spring barley is primarily grown in the Great
Plains, Rocky Mountains, and the Pacific Northwest regions.\5\ It is
planted in the spring and harvested in the fall, as are most grains in
these regions. However, a significant minority of barley production
(between 3 percent and 5 percent since the 2000/01 crop year, and as
much as 6 percent between 1970 and 2000) comes from ``winter barley'',
which is grown in the Southeast and Mid-Atlantic regions.\6\
Historically, winter barley is ``double-cropped'' with soybeans,
meaning that the grower plants two crops, a soybean crop and a barley
crop, in one year.\7\ Farmers that utilize this double-cropping method
plant their soybean crop in the mid or late spring and harvest it in
the early fall followed soon after with a barley crop that is planted
in the fall and harvested in the early spring. Soybean acres in the
Southeast and Mid-Atlantic regions of the U.S.

that are not double-cropped with barley are generally left fallow
during the winter months.\8\ This also means that any barley that is
double-cropped with soybeans in the Southeast and Mid-Atlantic regions
of the U.S. is not replacing another double-crop practice between
soybeans and another commodity.
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    \4\ Personal communication with USDA experts.
    \5\ Personal communication with USDA experts.
    \6\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0001, Dated
June 20th, 2013 and personal communication with USDA.
    \7\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0001, Dated
June 20th, 2013 and personal communication with USDA.
    \8\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0001, Dated
June 20th, 2013 and personal communication with USDA.
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    FASOM has not previously taken the winter barley cropping strategy
into account. However, given that a portion of barley ethanol
production can come from winter barley and industry input indicates
that winter barley is likely to be a potentially significant
contributor to total barley ethanol production, it is important to
consider the full range of barley production methods available. Based
on information from industry stakeholders and USDA, FASOM modeling was
conducted assuming that all barley produced in the Mid-Atlantic and
Southeast regions of the United States is winter barley double-cropped
with soybeans and that all barley grown elsewhere is spring barley.\9\
Specifically, FASOM was updated such that all barley grown in the Mid-
Atlantic and Southeast regions of the United States was grown in
conjunction with soybean acres, rather than competing with other crops
grown during the typical ``spring'' planting season.
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    \9\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0001, Dated
June 20th, 2013.
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    Because of differences in model architecture, it was not possible
to differentiate between spring and winter barley in the FAPRI-CARD
model. However, we believe not modeling double cropping for barley in
the Southeast and Mid-Atlantic region of the U.S. in the FAPRI-CARD
model results in a conservative estimate of lifecycle GHG emissions, as
it may slightly overstate the land use change and commodity market
impacts of an increase in demand for barley ethanol.
4. Scenarios Modeled for Impacts of Increased Demand for Barley
    To assess the impacts of an increase in renewable fuel volume from
business-as-usual (what is likely to have occurred without the RFS
biofuel mandates) to levels required by the statute, we established a
control case and other cases for a number of biofuels analyzed for the
March 2010 RFS rule. The control case included a projection of
renewable fuel volumes that might be used to comply with the RFS
renewable fuel volume mandates in full. The other cases are designed
such that the only difference between a given case and the control case
is the volume of an individual biofuel, all other volumes remaining the
same. In the March 2010 RFS rule, for each individual biofuel, we
analyzed the incremental GHG emission impacts of increasing the volume
of that fuel from business as usual levels to the level of that biofuel
projected to be used in 2022, together with other biofuels, to fully
meet the CAA requirements. Rather than focus on the GHG emissions
impacts associated with a specific gallon of fuel and tracking inputs
and outputs across different lifecycle stages, we determined the
overall aggregate impacts across sectors of the economy in response to
a given volume change in the amount of biofuel produced. For this
analysis we compared impacts in the control case to the impacts in a
new ``barley ethanol'' case. Some assumptions related to barley
production and ethanol use were incorporated based on consultation with
USDA, academic experts, and industry stakeholders. However, the volume
of biofuels assumed to be produced in the control case used for
modeling barley ethanol is the same as was assumed for the March 2010
RFS rule. Specifically, the control case used for the March 2010 RFS
rule, and used for this analysis, has zero gallons of barley ethanol
production. This is compared to a ``barley ethanol'' case that does
include barley ethanol production (see paragraph below). See our
``Barley Inputs and Assumptions'' document, included in the docket for
this NODA, for further details.\10\
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    \10\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0001, Dated
June 20th, 2013.
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    For the ``barley ethanol'' case, our modeling analyzed a shock of
140 million gallons of barley ethanol in 2022 above the production
volume observed in the control case. In FASOM, this volume was divided
into 80 million gallons of ``spring barley'' ethanol and 60 million
gallons of ``winter barley'' ethanol.\11\ EPA chose this modeled volume
based upon consultations with industry stakeholders and USDA. Input
from industry stakeholders has suggested that there is interest in
utilizing both spring and winter barley as ethanol feedstock, and EPA
selected the 80/60 ratio of spring to winter barley for FASOM modeling
based on this industry input. In the FAPRI-CARD model, as stated above,
no distinction is made between winter and spring barley. For this
reason, the volume in the FAPRI-CARD model is simply represented as 140
million gallons of barley ethanol.
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    \11\ As described in the following sections, the FASOM model
projected the combined impacts on the winter/spring barley market
(e.g., by allowing the increased demand for barley ethanol to be
filled by reduced use of barley for feed, increased production of
winter or spring barley, decrease in exports). This volume
assumption did not assume that all new barley production would be
``backfilled'' at a ratio of 80/140 spring barley to 60/140 winter
barley.
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    Our volume scenario of approximately 140 million gallons in the
barley case in 2022 is based on several factors including potential
feedstock availability and other competitive uses (e.g., animal feed or
exports). Our assessment is described further in the inputs and
assumptions document that is available through the docket.\12\ Based in
part on consultation with experts at the United States Department of
Agriculture (USDA) and industry representatives, we believe that these
volumes represent a reasonable projection of how much barley ethanol
could be produced by 2022 if these pathways are approved, and are
therefore reasonable for the purposes of evaluating the impacts of
producing ethanol from barley. However, we invite comment both
regarding the assumptions made in our analysis of barley ethanol and
regarding the efficacy of any alternative assumptions that could be
utilized to model the impacts of barley ethanol production within the
FASOM and FAPRI-CARD frameworks.
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    \12\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0002, Dated
June 20th, 2013.
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    While the FASOM and FAPRI-CARD models project how much barley will
be supplied to ethanol production, it should be noted that the amount
of barley needed for ethanol production will likely come from a
combination of increased production, decreases in others uses (e.g.,
animal feed), and decreases in exports compared to the control case

B. Results

    As we did for our analysis of other renewable fuel feedstocks in
the March 2010 RFS rule, we assessed what the lifecycle GHG emissions
impacts would be from the use of additional volumes of barley for
biofuel production. The information provided in this section discusses
the outputs of the analysis using the FASOM and FAPRI-CARD agro-
economic models to determine changes in the agricultural and livestock
markets. These results from FASOM and FAPRI-CARD are then used to
determine the GHG emissions impacts due to barley feedstock production.
Finally, we include our analysis of the GHG emissions associated with
different processing pathways and how these technologies affect the
lifecycle GHG

emissions associated with barley ethanol.
1. Agro-Economic Impacts
    As demand increases for biofuel production from a particular
commodity, the supply generally comes from some mix of increased
production, decreased exports, increased imports, and decreases in
other uses of the commodity (e.g., use in animal feed or food). The
primary use for barley in the U.S. is beer malting. For example, in the
2011/12 crop year, approximately 148 million bushels of barley went to
malting, out of a total U.S. supply of 261 million bushels.\13\
However, barley must meet very high quality specifications for
characteristics including protein and starch content to be sold as
malting barley. For this reason, malting-quality barley is sold at a
premium. Barley that does not meet malting specifications is generally
sold at a discount to the feed markets. For example, over the last five
marketing years (2007/08 to 2011/12), farmers received an average price
of $4.82 per bushel for malting quality barley but only $3.78 per
bushel for non-malting quality barley.\14\ Because of this dynamic, we
expect malting to remain the highest value use, even if EPA approved an
advanced biofuels pathway for barley ethanol. To the extent that barley
is drawn from other uses for ethanol production, we expect it to come
from either the feed or export markets.\15\
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    \13\ U.S. Department of Agriculture Economic Research Service,
Feed Grains Database, http://www.ers.usda.gov/data-products/feed-grains-database.aspx#.UcMXqDvku2k (Last accessed: June 20th, 2013).
    \14\ Ibid.
    \15\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0002, Dated
June 20th, 2013.
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    In the case of barley, FASOM estimates that the aggregate response
to an increase in barley ethanol production of 140 million gallons
(requiring 3.11 billion lbs of barley) by 2022 comes from an increase
in production of barley (3.08 billion lbs). The increase in barley
production is made possible partially by shifting production of wheat
out of some barley-producing regions and partially by reducing
production of corn and hay, though other factors have some influence as
well (see Table II.B.1-1).\16\ As demand for barley for ethanol
production increases, harvested crop area in the U.S. is predicted to
increase by 824 thousand acres in 2022 (see Table II.B.1-2). The
majority of this net agricultural acre expansion occurs in Montana, a
major spring barley producer. Crop acreage in Montana is in long-term
decline, a trend that shows no signs of reversal, creating a large
stock of idle crop acres in this region.\17\ In the barley scenario,
Montana crop acres continue to decline, but this decline is smaller
than in the control case (see Table II.B.1-3).
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    \16\ Table II.B.1-1 shows that wheat production remains
virtually flat across cases. The increase in wheat acreage shown in
Table II.B.1-2 reflects the fact that increased barley demand is
forcing wheat to shift to less productive acres.
    \17\ U.S. Department of Agriculture, National Agricultural
Statistics Service, NASS Quick Stats, http://quickstats.nass.usda.gov/ (Last accessed: June 20th, 2013).
    \18\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0002, Dated
June 20th, 2013.

                Table II.B.1-1--Selected Projected Changes in Production in the U.S. in 2022 \18\
                                                [Millions of lbs]
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                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Barley..........................................................          17,512          20,594           3,082
Distillers Grains...............................................         150,669         151,527             858
Wheat...........................................................         152,214         152,218               4
Hay.............................................................          76,657          76,643             -15
Corn............................................................         888,788         887,987            -802
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               Table II.B.1-2--Projected Change in Crop Harvested Area by Crop in the U.S. in 2022
                                              [Thousands of acres]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Barley..........................................................           5,115           5,886             771
Wheat...........................................................          46,775          46,994             219
Soybeans........................................................          73,191          73,267              76
Corn............................................................          84,916          84,835             -81
Hay.............................................................          42,059          41,881            -178
Other...........................................................          59,454          59,471              17
                                                                 -----------------------------------------------
    Total*......................................................         311,511         312,335             824
----------------------------------------------------------------------------------------------------------------
*Total may differ from subtotals due to rounding.

              Table II.B.1-3--Projected Change in Crop Harvested Area by Region in the U.S. in 2022
                                              [Thousands of Acres]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Montana.........................................................           6,868           7,653             785
Other...........................................................         304,645         304,683              38
�����������������������������������������������������������������
    All*........................................................         311,511         312,335             824
----------------------------------------------------------------------------------------------------------------
*Total may differ from subtotals due to rounding.

    Looking more closely at barley production specifically, although
our barley ethanol production estimate assumes 60 million gallons from
winter barley and 80 million gallons from spring barley, the majority
of acreage expansion in all barley occurs in spring barley
(approximately 95 percent). Since there is perfect substitution between
spring and winter barley in the animal feed, malting, and export
markets, much of the spring barley being diverted to ethanol production
can be backfilled with winter barley. This does indeed happen in our
analysis; all winter barley production in the control case is shifted
from other uses (e.g., feed, exports) to ethanol production, with only
a minor increase in overall winter barley production. Therefore, all of
the additional spring barley production not only contributes to ethanol
production from spring barley, but also to the feed and export markets
that winter barley no longer contributes to in the barley case.
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    \19\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0002, Dated
June 20th, 2013.

                  Table II.B.1-4--Changes in Barley Production and Use in the U.S. in 2022 \19\
                                              [Millions of Bushels]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
                                                  Winter Barley
----------------------------------------------------------------------------------------------------------------
Production......................................................           1,236           1,389             154
Used in Biofuel Production......................................               0           1,328           1,328
----------------------------------------------------------------------------------------------------------------
                                                  Spring Barley
----------------------------------------------------------------------------------------------------------------
Production......................................................          16,277          19,205           2,958
Used in Biofuel Production......................................               0           1,780           1,780
----------------------------------------------------------------------------------------------------------------
                                                   All Barley
----------------------------------------------------------------------------------------------------------------
Production......................................................          17,512          20,594           3,082
Used in Biofuel Production......................................               0           3,108           3,108
Used in Feed....................................................           4,151           4,150              -1
Used in Food and Malting........................................          13,796          13,786              -7
Net Exports.....................................................            -435            -453             -19
----------------------------------------------------------------------------------------------------------------

    Since spring barley represents over 90 percent of annual
production, we would expect to see more expansion of this growing
practice. As Table II.B.1-5 below shows, spring barley production does
indeed expand significantly in Oregon and Montana, two major spring
barley producing regions, and to a lesser extent in the mid-tier barley
producing areas of Wyoming and California. Winter barley production
primarily expands in Virginia, which, along with Pennsylvania, is
generally the largest producer of winter barley.\20\
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    \20\ In the 2010/11 crop year, Virginia harvested 48 thousand
acres of barley out of a total of approximately 160 thousand
nationwide. Pennsylvania harvested 45 thousand acres of winter
barley. Source: U.S. Department of Agriculture Economic Research
Service, Feed Grains Database, http://www.ers.usda.gov/data-products/feed-grains-database.aspx#.UcMXqDvku2k (Last accessed: June
20th, 2013).

        Table II.B.1-5--Selected Projected Changes in Regional Barley Production in the U.S. in 2022 \21\
                                                [Millions of lbs]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Oregon..........................................................           1,457           2,834           1,376
Wyoming.........................................................             592           1,154             562
Montana.........................................................           3,748           4,276             528
Virginia........................................................             284             415             131
California......................................................             735             813              77
Rest of U.S.....................................................           8,506           8,528              22
----------------------------------------------------------------------------------------------------------------

    The FASOM model projects that direct use of barley for feed will
decline by approximately 1 million lbs as a result of demand for
ethanol production (see Table II.B.1-6). There is also a significant
influx of distillers' grains (DGs) into the feed markets as a result of
barley ethanol production. DG consumption in the domestic livestock
sector increases by 858 million lbs. This increase primarily displaces
corn and sorghum, whose use as feed declines by 477 and 178 million lbs
respectively. Hay use for feed also declines by 61 million lbs. See
Table II.B.1-6 below for further details.\22\
---------------------------------------------------------------------------

    \21\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0002, Dated
June 20th, 2013.
    \22\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0002, Dated
June 20th, 2013.
    \23\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0002, Dated
June 20th, 2013.

                 Table II.B.1-6--Selected Projected Changes in Feed Use in the U.S. in 2022 \23\
                                                [Millions of lbs]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Distillers Grains...............................................          78,171          79,028             858
Barley..........................................................           4,151           4,150              -1
Hay.............................................................         182,291         182,231             -61
Sorghum.........................................................          33,022          32,844            -178
Corn............................................................         310,627         310,150            -477
Other...........................................................         212,310         212,271             -39
                                                                 -----------------------------------------------
All Feed Use....................................................         820,571         820,675             103
----------------------------------------------------------------------------------------------------------------

    As demand for barley use in U.S. ethanol production increases, the
FAPRI-CARD model estimates that the U.S. will decrease net exports of
barley by 564 million lbs. Additionally, the U.S. will decrease exports
of corn by 798 million lbs, wheat by 79 million lbs, and soybeans by 71
million lbs. This combination of impacts on the world trade of barley,
corn, wheat, and soybeans has effects both on major importers, as well
as on other major exporters. For example, Canada, a large net exporter
of barley, increases its net barley exports by 227 million lbs; and
Brazil, a large corn exporter, increases its net corn exports by 214
million lbs. Details for other major importers and exporters of barley
and corn can be found in Table II.B.1-7 and Table II.B.1-8,
respectively.\24\
---------------------------------------------------------------------------

    \24\ The FAPRI-CARD analysis conducted for this rulemaking can
be accessed as a Memo to the Docket, EPA-HQ-OAR-2013-0178-0003,
Dated June 20th, 2013. The Control Case was previously docketed as
part of the March 2010 RFS FRM (see EPA-HQ-OAR-2005-0161-3166). See
these two documents for full net export data on all major crops.

                  Table II.B.1-7--Projected Change in Net Exports of Barley by Country in 2022
                                                [Millions of lbs]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
U.S.............................................................            -330            -893            -564
Canada..........................................................           4,486           4,713             227
Russia..........................................................           6,112           6,190              78
EU..............................................................          14,166          14,198              32
Australia.......................................................           7,308           7,338              30
Rest of World...................................................          30,281          30,084             196
----------------------------------------------------------------------------------------------------------------
Note: A country with negative Net Exports is a Net Importer.

                   Table II.B.1-8--Projected Change in Net Exports of Corn by Country in 2022
                                                [Millions of lbs]
----------------------------------------------------------------------------------------------------------------
                                                                   Control Case     Barley Case     Difference
----------------------------------------------------------------------------------------------------------------
U.S.............................................................         121,329         120,531            -798
Brazil..........................................................          23,853          24,067             214
Mexico..........................................................         -26,449         -26,266             182
China...........................................................          12,388          12,474              85
Canada..........................................................          -4,657           4,600              57
Rest of World...................................................        -125,586        -125,326             260
----------------------------------------------------------------------------------------------------------------
Note: A country with negative Net Exports is a Net Importer

    The change in trade patterns directly impacts the amount of
production and harvested crop area around the world. Harvested crop
area for barley is not only predicted to increase in the U.S., but also
in Russia (26 thousand acres), Canada (25 thousand acres) and other
parts of the world. Worldwide barley harvested area outside of the U.S.
would increase by 107 thousand acres. Similarly, the decrease in U.S.
corn and soy exports would lead to an increase of harvested acres
outside the U.S. for these crops. EPA predicts that worldwide corn
harvested area outside of the U.S. would increase by 51 thousand acres
and that soybean harvested area outside of the U.S. would increase by
10 thousand acres.
    Overall harvested crop area in other countries also increases,
particularly in Brazil. Brazil's total harvested area is predicted to
increase by 35 thousand acres by 2022. This is mostly comprised of an
increase in corn of 19 thousand acres, and an increase in soybeans of
17 thousand acres, along with minor changes in other crops. More
details on projected changes in world harvested crop area in 2022 can
be found below in Table II.B.1-9, Table II.B.1-10, Table II.B.1-11,
Table II.B.1-12, and Table II.B.1-13.\25\
---------------------------------------------------------------------------

    \25\ See our FAPRI-CARD results for full information on these
tables and our other international modeling in support of this
rulemaking. The analysis conducted for this rulemaking can be
accessed as Memo to the Docket, EPA-HQ-OAR-2013-0178-0003, and Dated
June 20th, 2013. The Control Case was previously docketed as part of
the March 2010 RFS FRM (see EPA-HQ-OAR-2005-0161-3166).

         Table II.B.1-9--Projected Change in International (Non-U.S.) Harvested Area by Country in 2022
                                              [Thousands of acres]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Brazil..........................................................         136,739         136,773              35
Africa & Middle East............................................         222,669         222,357              28
Russia..........................................................          96,920          96,940              20
India...........................................................         332,143         332,155              12
Rest of World (non-U.S.)........................................       1,237,730       1,237,746              17
International Total (non-U.S.)..................................       2,026,200       2,026,312             112
----------------------------------------------------------------------------------------------------------------

          Table II.B.1-10--Projected Change in International (Non-U.S.) Harvested Area by Crop in 2022
                                              [Thousands of acres]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Barley..........................................................         136,223         136,329             107
Corn............................................................         307,392         307,442              51
Soybeans........................................................         202,157         202,167              10
Other...........................................................       1,380,428       1,380,373             -55
International Total (non-U.S.)..................................       2,026,200       2,026,312             112
----------------------------------------------------------------------------------------------------------------

       Table II.B.1-11--Projected Change in International (Non-U.S.) Barley Harvested Area by Crop in 2022
                                              [Thousands of acres]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Russia..........................................................          24,981          25,006              26
Canada..........................................................           9,512           9,537              25
Africa & Middle East............................................          29,522          29,538              16
Australia.......................................................          10,308          10,319              11
Rest of World...................................................          61,900          61,929              29
International Total (non-U.S.)..................................         136,223         136,329             107
----------------------------------------------------------------------------------------------------------------

        Table II.B.1-12--Projected Change in International (Non-U.S.) Corn Harvested Area by Crop in 2022
                                              [Thousands of acres]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Brazil..........................................................          21,096          21,115              19
Africa & Middle East............................................          73,081          73,095              15
China...........................................................          79,471          79,479               8
India...........................................................          20,156          20,162               6
Mexico..........................................................          19,000          19,005               5
Rest of World...................................................          94,589          94,587              -3
International Total (non-U.S.)..................................         307,392         307,443              51
----------------------------------------------------------------------------------------------------------------

      Table II.B.1-13--Projected Change in International (Non-U.S.) Soybeans Harvested Area by Crop in 2022
                                              [Thousands of acres]
----------------------------------------------------------------------------------------------------------------
                                                                   Control case     Barley case     Difference
----------------------------------------------------------------------------------------------------------------
Brazil..........................................................          69,452          69,469              17
Rest of World...................................................         132,705         132,698              -7
International Total (non-U.S.)..................................         202,157         202,167              10
----------------------------------------------------------------------------------------------------------------

2. International Land Use Change Emissions
    Today's assessment of barley as an ethanol feedstock considers GHG
emissions from international land use changes related to the production
and use of barley and applies the same land use change modeling
approach used in the March 2010 RFS rule for analyses of other biofuel
pathways.
    In our analysis, GHG emissions per acre of land conversion
internationally (i.e., outside of the United States) are determined
using the emissions factors developed for the March 2010 RFS rule
following IPCC guidelines. In addition, estimated average forest carbon
stocks were updated based on a new study which uses a more robust and
higher resolution analysis. For the March 2010 RFS rule, international
forest carbon stocks were estimated from several data sources each
derived using a different methodological approach. Two new analyses on
forest carbon stock estimation were completed since the release of the
final March 2010 RFS rule, one for three continental regions

by Saatchi et al.\26\ and the other for the EU by Gallaun et al.\27\ We
have integrated this updated understanding of forest carbon stocks into
our recent pathways analyses. More detailed information on the land use
change emissions can be found in the accompanying docket.\28\
---------------------------------------------------------------------------

    \26\ Saatchi, S.S., Harris, N.L., Brown, S., Lefsky, M.,
Mitchard, E.T.A., Salas, W., Zutta, B.R., Buermann, W., Lewis, S.L.,
Hagen, S., Petrova, S., White, L., Silman, M. And Morel, A. 2011.
Benchmark map of forest carbon stocks in tropical regions across
three continents. PNAS doi: 10.1073/pnas.1019576108.
    \27\ Gallaun, H., Zanchi, G., Nabuurs, G.J., Hengeveld, G.,
Schardt, M., Verkerk, P.J. 2010. EU-wide maps of growing stock and
above-ground biomass in forests based on remote sensing and field
measurements. Forest Ecology and Management 260: 252-261.
    \28\ See Section 5, Forest Carbon Stocks in EPA-HQ-OAR-2011-
0542-0058, Attachment 9.
---------------------------------------------------------------------------

    Table II.B.2-1 includes the international land use change GHG
emissions results for the scenarios modeled, in terms of kilograms of
carbon-dioxide equivalent emissions per million British thermal units
of barley ethanol (kgCO2e/mmBtu).
---------------------------------------------------------------------------

    \29\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0006, and
Dated June 20th, 2013.

       Table II.B.2-1--International Land Use Change GHG Emissions
                            [kgCO2e/mmBtu] 29
------------------------------------------------------------------------
                           Region                              Emissions
------------------------------------------------------------------------
Brazil......................................................          17
Asia........................................................           5
Africa and Middle East......................................           2
Eastern Europe & Russia.....................................           2
India.......................................................           2
International Total (non-U.S.)..............................          26
------------------------------------------------------------------------

3. Barley Ethanol Processing
    Based on information submitted by petitioners, we expect dry
milling will be the most common process for producing ethanol from
barley. Therefore this section focuses on a lifecycle GHG emissions
analysis of several variations of the dry mill process. In the dry
milling process, the barley is ground and fermented to produce ethanol.
The remaining components (distillers grains) are then either left wet
if used in the near-term or dried for longer term use as animal feed.
    For this analysis the amount of barley used for ethanol production
as modeled by the FASOM and FAPRI-CARD models was based on yield
assumptions built into those two models. Specifically, the models
assume barley ethanol yields of 2.16 gallons (pure ethanol) per bushel
for dry mill plants (yields represent pure ethanol).
    As per the analysis done in the March 2010 RFS rule, the GHG
emission calculation from ethanol production needs to account for not
only the renewable fuel produced, but also any co-products. For barley
ethanol production, this analysis accounts for the DG co-product use
directly in the FASOM and FAPRI-CARD agricultural sector modeling
described above. DG are considered a replacement animal feed and thus
reduce the need to make up for the barley production that went into
ethanol production. Since FASOM takes the production and use of DG into
account, no further allocation was needed at the ethanol plant and all
plant emissions are accounted for there.
    Our analysis assumed hulled barley was grown and used to produce
ethanol. The hulls are abrasive and during the ethanol process they are
removed prior to further processing and conversion of the barley into
ethanol. Our modeling considered two scenarios for the barley hulls,
either they were discarded and received no co-product benefit, or they
were used beneficially as an energy source replacing some of the energy
used on-site. The results of considering the beneficial use of the
hulls as an energy source are shown below.
    Overall fuel and electricity use for barley ethanol production was
based on the energy use information for corn ethanol production from
the March 2010 RFS rule analysis. For the March 2010 RFS rule, EPA
modeled future plant energy use to represent plants that would be built
to meet requirements of increased ethanol production, as opposed to
current or historic data on energy used in ethanol production. The
energy use at dry mill ethanol plants was based on ASPEN models
developed by USDA and updated to reflect changes in technology out to
2022 as described in the March 2010 RFS rule RIA Chapter 1.
    The work done on ethanol production for the March 2010 RFS rule was
based on converting corn to ethanol. Converting barley to ethanol will
result in slightly different energy use based on differences in the
grains and how they are processed. For example, a barley plant requires
more energy than a corn plant per gallon of ethanol produced since the
starch/fiber ratio in corn is different than it is in barley. The same
ASPEN USDA models used for corn ethanol in the final rule were also
developed for barley ethanol. Based on the numbers from USDA, a barley
ethanol plant uses 1.2 times the thermal process energy of a corn
ethanol plant and 1.3 times the electrical energy per gallon of ethanol
produced.
    The GHG emissions from production of ethanol from barley were
calculated in the same way as other fuels analyzed as part of the March
2010 RFS rule. The GHG emissions were calculated by multiplying the
BTUs of the different types of energy inputs at the barley ethanol
plant by emissions factors for combustion of those fuel sources. The
emission factors for the different fuel types are the same as those
used in the March 2010 RFS rule and were based on assumed carbon
contents of the different process fuels. The emissions from producing
electricity in the U.S. were also the same as used in the March 2010
RFS rule, which were taken from GREET and represent average U.S. grid
electricity production emissions.
4. Results of Lifecycle Analysis for Ethanol From Barley (Conventional
Ethanol Example)
    Consistent with our approach for analyzing other pathways, our
analysis for barley ethanol includes a mid-point estimate as well as a
range of possible lifecycle GHG emission results based on an
uncertainty analysis conducted by the Agency (see Section II.C.2 for
further information). The graph included below (Figure II.B.4-1)
depicts the results of our analysis (including the uncertainty in our
land use change modeling) for barley ethanol produced in a plant that
uses natural gas for process energy, electricity from the grid and
produces 100% dry DG.

    Figure II.B.4-1 shows the results of our barley ethanol modeling
for this type of plant. It shows the percent difference between
lifecycle GHG emissions for 2022 barley ethanol and those for the 2005
baseline for petroleum gasoline. Lifecycle GHG emissions equivalent to
the gasoline fuel baseline are represented on the graph by the zero on
the X-axis. The midpoint of the range of results is a 47% reduction in
GHG emissions compared to the 2005 gasoline baseline.\30\ As in the
case for biofuel pathways analyzed as part of the March 2010 RFS rule,
the range of results shown in Figure II.B.4-1 is based on our
assessment of uncertainty regarding the location and types of land that
may be impacted as well as the GHG impacts associated with these land
use changes. These results, if finalized, would justify a determination
that barley ethanol would meet the 20% reduction threshold required for
the generation of conventional renewable fuel RINs.
---------------------------------------------------------------------------

    \30\ The 95% confidence interval around that midpoint results in
range of a 36% reduction to a 56% reduction compared to the 2005
gasoline fuel baseline.
[GRAPHIC] [TIFF OMITTED] TP23JY13.001

    Table II.B.4-1 breaks down by stage the lifecycle GHG emissions of
the 2005 gasoline baseline and of barley ethanol that is produced in
2022 in a dry mill plant using natural gas for process energy, grid
electricity, and drying 100% of DG.\31\ Results are included using our
mid-point estimate of land use change emissions, as well as with the
low and high end of the 95% confidence interval. Net agricultural
emissions include impacts related to changes in crop inputs, such as
fertilizer, energy used in agriculture, livestock production and other
agricultural changes in the scenarios modeled. The fuel production
stage includes emissions from ethanol production plants. Fuel and
feedstock transport includes emissions from transporting bushels of
harvested barley from the farm to ethanol production facility.
---------------------------------------------------------------------------

    \31\ Totals in the table may not sum due to rounding.

 Table II.B.4-1--Lifecycle GHG Emissions for Barley Ethanol Produced in Dry Mill Plants That Use Natural Gas for
                            Process Energy, Grid Electricity and Produce 100% Dry DG
                                                [g CO2-eq/mmBtu]
----------------------------------------------------------------------------------------------------------------
                                                                                2005 Gasoline
                             Fuel type                                      Barley ethanol           baseline
----------------------------------------------------------------------------------------------------------------
Net Agriculture (w/o land use change)..............................                       -3,975  ..............
Land Use Change, Mean (Low/High)...................................        11,290 (2,784/21,679)  ..............
Fuel Production....................................................                       39,069          19,200
Fuel and Feedstock Transport.......................................                        4,861               *
Tailpipe Emissions.................................................                          880          79,004
Total Emissions, Mean (Low/High)...................................       52,124 (43,618/62,513)          98,204
Midpoint Lifecycle GHG Percent Reduction Compared to Petroleum                               47%  ..............
 Baseline..........................................................
----------------------------------------------------------------------------------------------------------------
* Emissions included in fuel production stage.

    It should be noted that there are a number of reasons why the
estimated land use change emissions attributed to any given feedstock
may differ from those estimated for another feedstock that has been
analyzed in the past. Chief among these are differences in inputs
required for production; differences in markets for a given commodity,
and how they are impacted; and differences in regional production
patterns and the relationships to markets and other commodities in
those regions (domestically and internationally). The FASOM and FAPRI-
CARD model take all of these differences into account in our analysis.
The docket for this NODA provides more details on our key model inputs
and assumptions (e.g., crop yields, biofuel conversion yields, and
agricultural energy use). These inputs and assumptions are based on our
analysis of peer-reviewed literature and consideration of
recommendations of experts from within the barley and ethanol
industries, USDA, and academic institutions. EPA invites comment on all
aspects of its modeling of barley ethanol, including all assumptions
and modeling inputs.
5. Impacts of Different Process Technology Approaches on Barley Ethanol
Lifecycle Results
    There are a number of process technologies that could be employed
in the production of barley ethanol that would result in lower GHG
emissions than shown in the previous section for a natural gas barley
plant that uses grid electricity and produces 100% dry DG. Three
different approaches are examined here with their associated GHG
emissions.
     Production of wet DG.
     Replacement of purchased grid electricity with electricity
having a lower GHG emissions factor.
     Replacement of natural gas with lower GHG emitting fuel
source.
    One of the energy drivers of ethanol production is drying of the
DG. Plants that are located close to feedlots have the ability to
provide the co-product without drying and thus reducing their natural
gas use and associated GHG emissions. This energy use and GHG reduction
has a large enough impact on overall results in previous analyses that
in the March 2010 RFS rule we established separate pathways for corn
ethanol when the co-product DG was wet versus dry. The amount of fuel
used to dry DG is related to percent of DG that are dried, but some dry
mills can dry DG more efficiently (i.e., use less natural gas per pound
of DG dried) and/or replace the natural gas used to dry DG with lower-
GHG emitting fuel sources. As the GHG calculations related to fuel use
at processing facilities are based on the amount of fuel used times an
emission factor plus the amount of electricity used from the grid times
an emission factor, the percent of DG dried only matters to the extent
that it impacts the amount of fuel and electricity used per batch of
ethanol produced. Therefore, instead of analyzing and proposing a
pathway for barley ethanol that is based on reduced DG drying as an
option to produce fuel that qualifies as advanced biofuel (minimum 50%
GHG reduction), we are instead proposing to ascertain the amount and
types of process fuel used and the amount of grid electricity used per
gallon of barley ethanol produced that would be consistent with a 50%
GHG reduction.
    Production facilities that utilize combined heat and power (CHP)
systems can also reduce GHG emissions relative to less efficient system
configurations. CHP, also known as cogeneration, refers to industrial
processes in which waste heat from the production of electricity is
used for process energy in the renewable fuel production facility. The
most common configuration in ethanol plants, and the one considered
here, involves using the boiler to power a turbine generator unit that
produces electricity and using waste heat to produce process steam.
While the thermal energy demand for an ethanol plant using CHP
technology is slightly higher than that of a conventional plant, the
additional energy used is far less than what would be required to
produce the same amount of electricity in an offsite (central) power
plant. The increased efficiency is due to the ability of the ethanol
plant to effectively utilize the waste heat from the electricity
generation process. Since CHP technologies on natural gas plants
replace some of the purchased electricity but increase process energy
use emissions (because of increased natural gas use on-site), the net
result is a small reduction in overall emissions. The difference
between CHP and non-CHP plants is reflected in their use of different
amount of primary energy (natural gas, biogas, etc.) and the amount of
electricity used from the grid. Because the only advanced biofuel
pathways we are proposing today for the production of barley ethanol
specify maximum amounts of primary energy and grid electricity that can
be used per gallon of ethanol produced, we are not proposing a pathway
that specifies the use of CHP. However, we believe that CHP is likely
to be one of the technologies used to meet these energy and electricity
use thresholds.
    Use of an alternative fuel source to replace natural gas for
process energy can also reduce the GHG emissions of a barley ethanol
plant. As shown in the ``Supplemental Determination for Renewable Fuels
Produced Under the Final RFS2 Program From Grain Sorghum'' Published
December 17, 2012 (77 FR 242), hereafter the ``Sorghum rule,''
switching from natural gas to biogas can reduce lifecycle GHG emissions
from ethanol production. Use of such biogas would also provide a way
for barley ethanol plants to reduce their GHG emissions. We have
assumed for purposes of this NODA that biogas used for process energy
comes from landfills, waste treatment plants or waste

digesters. Such biogas is assumed to have zero upstream GHG impacts, as
discussed in the sorghum rule. Our modeling shows that even if a dry
mill plant uses grid electricity and dries 100% of its DGs, that plant
may be able to replace enough natural gas with biogas from a landfill,
waste treatment plant or waste digester to lower their GHG emissions
enough to meet a 50% lifecycle GHG reduction compared to the baseline
petroleum gasoline replaced. As such, today we are proposing two
pathways that would allow barley ethanol to qualify as advanced biofuel
if it is produced at dry mills that keep their use of natural gas and
grid electricity below certain levels, as specified below. Because the
use of biogas results in some lifecycle GHG emissions, although
significantly lower than the use of fossil-based natural gas, the
advanced biofuel pathways for barley ethanol proposed in today's NODA
specify maximum amounts of biogas that can be used in combination with
natural gas and grid electricity while still meeting the 50% lifecycle
GHG reduction threshold.
    Specific to the barley ethanol process is the possibility of using
barley hulls as an energy source. In the case of barley hulls, the
upstream CO2 emissions from the hulls are already accounted
for as part of the land use change calculations for the barley as a
renewable fuel feedstock. Furthermore, since none of the barley ethanol
emissions were allocated to the hulls, as discussed above, the
beneficial use of the hulls would not require any adjustment to the
barley lifecycle results. Therefore, similar to GHG emissions
associated with use of biogas from the sources listed above, the use of
barley hulls either directly as an energy source or in digesters
producing biogas would not result in additional CO2
emissions, and can replace the use of higher-GHG emitting sources of
energy, such as natural gas and grid electricity. Because the use of
barley hulls results in some lifecycle GHG emissions, although
significantly lower than the use of fossil-based natural gas, the
advanced biofuel pathways for barley ethanol proposed in today's NODA
specify maximum amounts of barley hulls that can be used in combination
with natural gas and grid electricity while still meeting the 50%
lifecycle GHG reduction threshold.
    The following Table II.B.5-1 shows the mean lifecycle GHG
reductions compared to the baseline petroleum fuel for a number of
different barley ethanol pathways.

  Table II.B.5-1--Lifecycle GHG Emission Reductions for Dry Mill Barley
                           Ethanol Facilities
                [% Change compared to petroleum gasoline]
------------------------------------------------------------------------
                Fuel type and technology                     % Change
------------------------------------------------------------------------
Dry mill process, using natural gas for process energy,               47
 grid electricity, and producing up to 100% dry DG......
Dry mill process using, on a per gallon basis averaged               >50
 over the number of gallons in each batch, no more than
 30,700 Btu of natural gas for process energy, no more
 than 4,200 Btu of biomass from barley hulls or biogas
 (biogas must be from landfills, waste treatment plants,
 barley hull digesters, or waste digesters) for process
 energy, and no more than 0.84 kWh of electricity from
 the grid for all electricity used at the renewable fuel
 facility...............................................
Dry mill process using no more than 36,800 Btu natural               >50
 gas for process energy calculated on a per gallon basis
 averaged over the number of gallons in each batch, and
 using natural gas for on-site production of all
 electricity used at the renewable fuel facility other
 than up to 0.19 kWh of electricity from the grid
 calculated on a per gallon basis averaged over the
 number of gallons in each batch........................
------------------------------------------------------------------------

    As stated above, the docket for this NODA provides more details on
our key modeling assumptions. EPA invites comment on all aspects of its
modeling of advanced barley ethanol configurations, including all
assumptions and modeling inputs.\32\
---------------------------------------------------------------------------

    \32\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0001, Dated
June 20th, 2013.
---------------------------------------------------------------------------

C. Consideration of Lifecycle Analysis Results

1. Implications for Threshold Determinations
    As discussed above, EPA's analysis shows that, based on the mid-
point of the range of results, ethanol produced from barley using a
variety of processing technologies has the potential to meet the 50
percent GHG emissions reduction threshold needed to qualify as an
advanced biofuel.\33\ Barley ethanol meets the 20% lifecycle GHG
emissions reduction threshold for conventional biofuels when assuming
natural gas is used as the process fuel in a dry mill plant using grid
electricity and drying 100% DG. If finalized, Table 1 to Section
80.1426 would be modified to add these new pathways. Table II.C.1-1
illustrates how these new pathways would be included in the existing
table. Data, analysis and assumptions for each of these processing
technologies are provided in the docket for this NODA. We invite
comment on all aspects of this analysis.
---------------------------------------------------------------------------

    \33\ As with our analysis showing that barley ethanol meets the
20 percent threshold to qualify as conventional biofuel, our
analysis here included a 95 percent confidence interval that
represents the uncertainty in our modeling. See Memo to the Docket,
EPA-HQ-OAR-2013-0178-0005, Dated June 20th, 2013.

 Table II.C.1-1--Proposed Applicable D Codes for Barley Ethanol Produced With Different Processing Technologies
----------------------------------------------------------------------------------------------------------------
           Fuel type                  Feedstock            Production process requirements            D-Code
----------------------------------------------------------------------------------------------------------------
Ethanol........................  Barley............  Dry mill process, using natural gas for                   6
                                                      process energy and grid electricity, and
                                                      producing up to 100% DG

Ethanol........................  Barley............  Dry mill process using, on a per gallon                   5
                                                      basis averaged over the number of gallons
                                                      in each batch, no more than 30,700 Btu of
                                                      natural gas for process energy, no more
                                                      than 4,200 Btu of biomass from barley
                                                      hulls or biogas from landfills, waste
                                                      treatment plants, barley hull digesters,
                                                      or waste digesters for process energy, and
                                                      no more than 0.84 kWh of electricity from
                                                      the grid for all electricity used at the
                                                      renewable fuel production facility.
Ethanol........................  Barley............  Dry mill process using no more than 36,800                5
                                                      Btu natural gas for process energy
                                                      calculated on a per gallon basis averaged
                                                      over the number of gallons in each batch,
                                                      and using natural gas for on-site
                                                      production of all electricity used at the
                                                      renewable fuel production facility other
                                                      than up to 0.19 kWh of electricity from
                                                      the grid calculated on a per gallon basis
                                                      averaged over the number of gallons in
                                                      each batch.
----------------------------------------------------------------------------------------------------------------

    The advanced biofuel pathways for barley ethanol proposed in Table
II.C.1-1, specify maximum amounts of different types of energy and grid
electricity that can be used for the fuel to qualify as advanced
biofuel. In the RFS March 2010 rule, EPA used a technology-based
approach for determining whether a fuel from a specific feedstock met
the lifecycle GHG emissions reduction thresholds required by CAA (o).
As outlined in Sec.  80.1426 Table 1, EPA specified the feedstock
(e.g., corn starch), fuel (e.g., ethanol), and process type (e.g., dry
mill process using natural gas and two advanced technologies in Table
2) needed to generate a conventional (D-6) RIN. Examples of advanced
corn ethanol technologies in Table 2 include membrane separation, corn
oil fractionation and combined heat and power configurations. This
technology based approach included certain assumptions about conversion
yields and energy use, and how advanced technologies could reduce
average GHG emissions. The regulations also specified a time period
over which application of advanced technologies would be averaged. For
example, the corn ethanol pathways specify that the amount of DG drying
was to be calculated on an annual basis.
    As discussed above and as was done in the sorghum rule, our
analysis finds a range of possible technologies and process
configurations for barley ethanol production that could meet a 50%
lifecycle GHG reduction. As such, instead of prescribing certain types
of technologies that producers must use to meet the thresholds, we are
proposing pathways (like we did for sorghum) that are based on the
maximum amount of different sources of energy that can be used to
produce the barley ethanol.
    This approach generates a number of questions, therefore, we
discuss and invite comment on several aspects of the proposed advanced
biofuel pathways for barley ethanol, including what energy should be
included in the calculation and how the calculation should be
conducted. Beyond the specifics of the calculations, however, is also
how compliance is to be measured and reported, along with the
associated record keeping requirements. We specifically invite comments
from producers, obligated parties, and parties that purchase and verify
RINs regarding how we should structure the regulations to attribute
energy inputs to specific batches of fuel, and from parties that
purchase and verify RINs regarding how to structure requirements that
will enable them to efficiently evaluate whether RINs generated under
the proposed pathways are valid before they purchase or verify the
validity of the RINs.
    The two advanced biofuel pathways for barley ethanol proposed in
Table II.C.1-1 specify maximum amounts of different types of energy and
grid electricity that can be used for the fuel to qualify as advanced
biofuel, calculated on a per gallon basis averaged over the number of
gallons of ethanol in each batch. A key element of this approach is the
ability of renewable fuel producers to accurately calculate each type
of energy used on a per batch basis. Evaluating ethanol on a batch-by-
batch basis allows parties to evaluate whether such requirements have
been met at the time of RIN generation. The structure of the RFS
program is already set up in several respects to consider compliance on
a batch basis for qualifying renewable fuels. Similarly, the EPA
Moderated Transaction System (EMTS) used to manage RIN transactions was
designed for batch-by-batch record-keeping, reporting and transactions.
    The main benefit of batch-by-batch compliance is that it allows
parties to know whether the requirements for the advanced biofuel
pathways are being met at the time of RIN generation. Since invalid
RINs cannot be transferred or used for compliance, EPA puts a high
priority on ensuring that any new pathways will allow parties to
evaluate the validity of RINs at the time they are generated.
    The main concern with evaluating compliance with the GHG thresholds
for barley on a batch-by-batch basis, however, is that it may allow
cherry-picking in the production of barley ethanol, allowing more
energy consumption to be associated with some fuel batches and less
with others. This might allow some barley ethanol to qualify as
advanced (D5), while over time barley ethanol production may not
otherwise meet the advanced threshold. Alternatively, evaluating
compliance on a batch-by-batch basis may result in reduced volumes of
advanced biofuel being produced if during times of abnormal operations
energy consumption spiked. The result would be batches of biofuel
produced temporarily that would not meet the lifecycle thresholds while
over the course of weeks, months, or years such aberrations would not
cause the pathway to satisfy the lifecycle performance thresholds.
    In addition, batch-by-batch compliance means that parties would
have to have the ability not only to express things like energy
consumption on a batch specific basis, but also to measure, and verify
that things like energy consumption met the requirements for each and
every batch despite operational changes and fluctuations. Energy use is
ongoing as is fuel production; however there are energy intensive
operations associated with a certain gallon of ethanol produced that
may occur on a different timeframe than ethanol production. For
example, if DG is produced from a certain gallon but then set aside and
not

dried until a later date, the energy used to dry the DG would not occur
at the same time as ethanol production. Furthermore, energy use could
be ongoing during times when no ethanol is produced. There is concern
that energy use would not be accounted for if it occurred in between
production of batches. EPA seeks comment on how renewable fuel
producers should assign energy use to each batch, and on whether the
regulations should specify the formula or allow RIN generators to
provide a plan that demonstrates and documents how a facility would
calculate energy use on a per batch basis. EPA is seeking comment on
whether the renewable fuel producer would be able to accurately track
(and account for the energy use) that is associated with any particular
batch of ethanol. While EPA is taking comment on a number of different
options in this NODA, it is our intent to codify only one approach in
the final rule.
    An alternative approach that EPA is considering calculates the
energy use per gallon over a time period instead of over the number of
gallons in each batch. For example, energy use per gallon of barley
ethanol could be calculated on a weekly, monthly, quarterly or annual
basis. This approach may make it more difficult for a party who
purchases RINs that are generated during the averaging period (e.g.,
during a particular quarter if calculations are done on a quarterly
basis) to have confidence in the validity of the RINs. One advantage of
requiring the energy use to be calculated on a quarterly basis is that
the RFS program currently requires biofuel producers to report certain
data on a quarterly basis. The quarterly reports require a more
comprehensive set of information from fuel producers than what is
currently collected on a batch-by-batch basis. As such, calculating the
energy use per gallon of barley ethanol on a quarterly or annual basis
may allow for closer alignment with the types of information that are
already reported at such intervals. The primary reason that EPA is not
proposing to use a quarterly or annual basis to calculate average
energy use per gallon of barley ethanol for the advanced pathways is
that it would not always allow parties purchasing or verifying barley
ethanol RINs to know whether the requirements for the advanced biofuel
pathways are being met at the time of RIN generation. If it was
determined at the end of the averaging period that the pathway
requirements were not met, then all RINs generated during the time
period would be invalid. We invite comment on whether a weekly,
monthly, quarterly or annual basis for calculating average energy use
per gallon would be better than the proposed batch-by-batch basis for
barley ethanol.
    Another alternative that we seek comment on is whether to calculate
average energy use per gallon as a rolling average for all gallons of
barley ethanol in the batch in question and all gallons of barley
ethanol produced at the facility during a preceding time period. If the
rolling average period was one year, this approach would average the
total amount of energy used for the current batch with the average
amount of energy used in all batches produced in the preceding 364
days. This approach would still calculate average energy use at the
time that each batch of barley ethanol was produced, so it would also
have the advantage of being well-aligned with the RFS regulations at
Sec.  80.1426. The use of a rolling average would provide the
additional benefit of smoothing out variability in energy use at barley
ethanol facilities. For example, energy use could fluctuate
significantly in the winter compared to the summer, or due to other
circumstances. A rolling average approach could allow a barley ethanol
producer who consistently maintained energy use below the maximum
levels to continue generating advanced biofuel RINs if their energy use
increased during one season or month of the year.
    Under the rolling average approach, no special requirements would
be needed for facilities that dry DG in batches as compared to
facilities that dry them continuously. This is because the rolling
average approach is designed to account for temporal variability in
energy use. For example, if a facility stockpiled and dried a large
enough batch of DG to push their energy use above the maximum levels
specified in the advanced biofuel pathways, then they would not be able
to generate RINs until their rolling average came back down to
compliant levels. This approach would provide parties who purchase RINs
with the information that they need to evaluate the validity of the
RINs before the purchase them, and would reduce the risk that the RIN
would later be found to be invalid. This illustrates one example of
where the rolling average approach may have significant advantages.
However, using a rolling average approach might create reporting
challenges if a plant is coprocessing barley with another feedstock.
For example, if the rolling average is done on a fuel-specific basis, a
producer could attempt to allocate high energy activities to the fuel
produced from the other feedstock, making energy used to produce barley
ethanol look less intensive than it actually is.
    EPA invites comment on whether the proposed advanced biofuel
pathways for barley ethanol should calculate average energy use per
gallon as a rolling average for all gallons of barley ethanol produced
at the facility during a preceding time period and whether this
approach would be preferable to other approaches. This includes comment
on methods for preventing any sort of gaming of the system under a
rolling average approach.
    EPA seeks comment on the best approach for calculating the average
energy use per gallon of ethanol for the proposed advanced biofuel
pathways for barley ethanol. The Agency asks commenters to consider the
complexity of any proposed approach, how well it fits within the
existing RFS regulations, and how well it addresses the issues (e.g.,
temporal variation in energy use) discussed above.
    EPA also seeks comment on the most appropriate way for renewable
fuel producers to track and report the energy use associated with a
batch of renewable fuel. One possible approach is for a renewable fuel
producer to take meter readings at the start and end of a batch,
documentation of which would need to be included in the recordkeeping
requirements. EPA seeks comment on the practicability of this approach,
especially considering that any drying of DG associated with a given
batch of ethanol would necessarily need to be completed by the time
energy use is calculated for a given batch. EPA is proposing to
attribute all the energy used (e.g., lights, administrative offices) at
the renewable fuel facility to the batch, for ease in tracking and
compliance purposes. EPA is also taking comment on whether there are
practical ways to limit the energy use more directly to the batch of
fuel. If all energy use should not be attributed to production of the
renewable fuel, EPA seeks comments on which equipment should be
included, and how the renewable fuel producer would be able to track
and report the energy use for renewable fuel separate from ancillary
functions. We also seek comment on whether the energy use associated
with ancillary functions significantly contributes to the GHG emissions
associated with a renewable fuel.
    EPA proposes to prohibit parties that use multiple pathways to
produce a single batch of fuel from generating RINs under the proposed
advanced barley pathways. We do not believe that it is practical to
determine if a producer meets the energy usage limitations

required by the Barley pathways if it is using multiple pathways to
produce a given batch of fuel.
    EPA also invites comment on whether, if the annual average, batch-
by-batch or rolling average approaches to compliance for the advanced
barley pathways raise significant implementation concerns that cannot
be addressed, it would be more appropriate to use the technology based
approach currently in place for corn ethanol facilities.
    EPA is also proposing a record-keeping and reporting system that
will allow eligible barley ethanol producers using the proposed
advanced biofuel pathways to demonstrate compliance with the 50% GHG
reduction threshold. The proposed record-keeping and reporting approach
will allow producers to show compliance with the new pathway by
reporting and keeping records, on an ongoing basis regarding their
process energy and electricity use and fuel production yields. The
details of EPA's proposed new pathways and potential accompanying
compliance approach (including registration, recordkeeping, and
reporting) are described in a Memo to the Docket.\34\
---------------------------------------------------------------------------

    \34\ See Memo to the Docket, EPA-HQ-OAR-2013-0178-0012.
---------------------------------------------------------------------------

2. Consideration of Uncertainty
    Because of the inherent uncertainty and the state of evolving
science regarding lifecycle analysis of biofuels, any threshold
determinations that EPA makes for barley ethanol will be based on an
approach that considers the weight of evidence currently available. For
this pathway, the evidence considered includes the mid-point estimate
as well as the range of results based on statistical uncertainty and
sensitivity analyses conducted by the Agency. EPA will weigh all of the
evidence available to it, while placing the greatest weight on the
best-estimate value for the scenarios analyzed.
    As part of our assessment of the barley ethanol pathway, we have
identified key areas of uncertainty in our analysis. Although there is
inherent uncertainty in all portions of the lifecycle modeling, we
focused our analysis on the factors that are the most uncertain and
have the biggest impact on the results. The indirect, international
emissions are the component of our analysis with the highest level of
uncertainty. The type of land that is converted internationally and the
emissions associated with this land conversion are critical issues that
have a large impact on the GHG emissions estimates.
    Our analysis of land use change GHG emissions includes an
assessment of uncertainty that focuses on two aspects of indirect land
use change--the types of land converted and the GHG emissions
associates with different types of land converted. These areas of
uncertainty were estimated statistically using the Monte Carlo analysis
methodology developed for the March 2010 RFS rule.\35\ Figure II.B.4-1
shows the results of our statistical uncertainty assessment.
---------------------------------------------------------------------------

    \35\ The Monte Carlo analysis is described in EPA (2010a),
Section <IP_ADDRESS>.8.
---------------------------------------------------------------------------

    Based on the weight of evidence considered, and putting the most
weight on our mid-point estimate results, the results of our analysis
indicate that barley ethanol would meet the minimum 20% GHG performance
threshold for qualifying renewable fuel under the RFS program when
using natural gas for all process energy, grid electricity, and drying
100% DG, and would meet the minimum 50% GHG performance threshold for
advanced biofuels under the RFS program when using technologies that
either reduce energy use or rely on low GHG-emitting energy sources.
This conclusion is supported by our midpoint estimates, our statistical
assessment of land use change uncertainty, as well as our consideration
of other areas of uncertainty.
    An additional source of uncertainty is the distribution of ethanol
production between spring and winter barley. EPA has worked to mitigate
this source of uncertainty through extensive consultation with public
and private sector barley experts and stakeholders. This consultation
led to the determination that approximately 140 million gallons of
barley ethanol production by 2022 would be a reasonable assumption, as
would the assumption that approximately 80 million gallons will come
from spring barley and approximately 60 million gallons will come from
winter barley. However, we acknowledge that there remains uncertainty
regarding how much ethanol will be produced from each of the two
regional growing practices. We also acknowledge that this pathway would
be applicable to international production. Based on our consultation of
USDA and other experts, we do not anticipate any significant
international production of barley ethanol. But that is an additional
source of potential uncertainty. We therefore invite comment regarding
the magnitude and significance of this uncertainty with regards to our
analysis, as well as potential alternative methods of accounting for
any significant uncertainty in our analytical framework.
    The docket for this NODA provides more details on all aspects of
our analysis of barley ethanol. EPA invites comment on all aspects of
its modeling of barley ethanol. We also invite comment on the
consideration of uncertainty as it relates to making GHG threshold
determinations.

    Dated: July 8, 2013.
Christopher Grundler,
Director, Office of Transportation & Air Quality.
[FR Doc. 2013-16928 Filed 7-22-13; 8:45 am]
BILLING CODE 6560-50-P