this option for two reasons.  First, the proposed provision lacked clear
guidance on when alternative methods should be used (e.g., on the size
of an underestimate that would justify use of an alternative method) and
on how they should be developed.  Second, the proposed provision was
redundant with the new provision that permits reporters to estimate
missing data using a related parameter and the historical relationship
between the related parameter and the missing parameter.  This new
option provides reporters with flexibility in substituting for missing
data in the event that a secondary mass measurement is not available,
but sets out general guidance on how to select the substitute data.

3.  Summary of Comments and Responses

This section contains a brief summary of major comments and responses.
A large number of comments on suppliers of industrial GHGs were received
covering numerous topics.  Responses to significant comments received
can be found in the comment response document for suppliers“Mandatory
Greenhouse Gas Reporting Rule: EPA’s Response to Public Comments,
Subpart OO: Suppliers of industrialIndustrial GHGs in the docket
(EPA-HQ-OAR-2008-508-XXX)..”

Definition of Source Category

Comment:  EPA received a number of comments regarding the proposed
definition of “fluorinated greenhouse gas.”  Several commenters
argued that the proposed definition was too broad because it would
include nonvolatile materials that could not be emitted to the
atmosphere and materials for which GWPs had not been calculated.  One
commenter suggested establishing a lower vapor pressure limit for
fluorinated GHGs (heat transfer fluids) of 400 Pa (0.004 bar, or 3three
mm Hg absolute) at 25 C.  Some commenters expressed the concern that the
lack of GWPs for some covered compounds would lead to incomplete or
inconsistent reporting because facilities would assign their own GWPs to
compounds for which GWPs were not provided in Table A-1 of 40 CFR part
98, subpart OOA.

Some commenters recommended that EPA address these concerns by requiring
reporting of only those fluorinated compounds listed in Table A-1 of 40
CFR part 98, subpart OO.A.  However, one of these commenters noted that
the list in A-1 is incomplete and inconsistent, excluding for example,
some high-GWP compounds whose low-GWP alternatives are included.  This
commenter recommended that EPA establish a “visible and participative
process” to add other compounds as appropriate to Table A-1 of 40 CFR
part 98, subpart A.

Response:  In today’s final rule, EPA is modifying the proposed
definition of fluorinated greenhouse gasGHG by adding an exemption for
“substances with a vapor pressure of less than 1 one mm of Hg absolute
at 25 degrees C.”  This modification ensures that non-volatile
fluorocarbons such as fluoropolymers are excluded from reporting
requirements, while requiring reporting of fluorocarbons (as well as SF6
and NF3) that could reasonably be expected to be emitted to the
atmosphere.

As noted by several commenters, this definition would require reporting
of some fluorocarbons to which GWPs have not been assigned in either
IPCC or World Meteorological Organization (WMO) Scientific Assessments
(i.e., fluorocarbons for which Table A-1 of 40 CFR part 98, subpart OOA
does not provide GWPs).  However, the lack of GWPs for some
fluorocarbons will not impede reporting because EPA is requiring
reporting of production and other quantities in tons of chemical rather
than in tons of CO2e.  For purposes of determining whether or not the
25,000 metric ton CO2e import or export threshold is exceeded, EPA is
requiring facilities to include only substances whose GWPs appear in
Table A-1 of 40 CFR part 98, subpart A.

EPA believes that this approach is prudent and appropriate.  As
acknowledged by commenters, Table A-1 of 40 CFR part 98, subpart OOA is
not a complete listing of current or potential fluorinated GHGs; the
IPCC and WMO lists on which it is based reflect only the facts that the
listed materials have been synthesized, their atmospheric properties
investigated, the results published, and the publications found by the
IPCC and WMO Assessment authors.  Table A-1 is known to omit some
existing fluorinated GHGs and it unavoidably omits future fluorinated
GHGs that have not yet been synthesized.  Given the radiative properties
of the carbon-fluorine bond, any fluorocarbon emitted into the
atmosphere may have a significant GWP.  This is true even for some
fluorocarbons with lifetimes of less than one year, including, for
example, HFE-356pcc3, with a lifetime of four months and a 100-year GWP
of 110.

Reporting of fluorocarbons that do not appear in Table A-1 of 40 CFR
part 98, subpart OOA will provide valuable information on the full range
of volatile fluorocarbons entering U.S. commerce.  This information can
be used to assess the overall volume and importance of compounds for
which GWPs have not been evaluated and to help identify which compounds
should have their GWPs evaluated first.  In addition, once GWPs have
been identified for these compounds, historical reports in tons of
chemical can be converted into CO2e.  Without a comprehensive reporting
requirement, such historical information could be lost.  Ultimately, all
of this information can be used to inform policy decisions regarding the
appropriate type and scope of emission reduction measures for these
gases.  Considering the modest cost of reporting production, import, and
export of such compounds, the potential value of this information
justifies a comprehensive definition of fluorinated GHG.

EPA agrees with commenters who noted that Table A-1 of 40 CFR part 98,
subpart OOA should be periodically updated through a visible and
participative process.  EPA anticipates that as GWPs are evaluated or
re-evaluated by the scientific community, the Agency will update Table
A-1 of 40 CFR part 98, subpart A through notice and comment rulemaking.
EPA may also, through rulemaking, establish a more proactive process for
ensuring that GWPs are appropriately evaluated or re-evaluated.

Comment:  EPA received comments both supporting and opposing a
requirement to report imports of fluorinated GHGs contained in equipment
and foams.  Commenters supporting such a requirement noted that these
imports comprised a significant fraction of U.S. consumption of
fluorinated GHGs, that excluding these imports from reporting would put
domestic manufacturers at a disadvantage and lead to leakage of
manufacturing and increased emissions of GHGs, and that the burden of
reporting these imports would be low, since there are relatively few
importers and the reported information is easily accessible.  Commenters
opposing such a requirement stated that the benefit of reporting would
be small because pre-charged equipment and foams are “hermetically
sealed systems that essentially emit no GHGs,” while the cost would be
high due to the large number of importers.

Response:  EPA did not propose to require reporting of fluorinated GHGs
contained in imported products because EPA was concerned that the
administrative burden of such a requirement could be considerable, while
the quantities imported in at least some types of products could be
small.  However, in the proposal EPA acknowledged that the quantities of
fluorinated GHGs imported in pre-charged equipment and foams appeared
significant, and that ascertaining the identity and quantity of
fluorinated GHGs in these products might be relatively straightforward.
EPA is continuing to research these issues, and is deferring the final
decision on whether to include imports of equipment and foams containing
fluorinated GHGs to a later rulemaking.

Monitoring and QA/QC Requirements

Comment:  Several commenters stated that facilities could not meet the
proposed accuracy, precision, and frequency requirements for their
measurements of production, transformation, and destruction using
existing equipment and practices.  These commenters stated that they
would need to expend significant funds (millions of dollars in some
cases) and time to install Coriolis flowmeters in multiple streams and
to implement daily sampling protocols to analyze the contents of these
streams.  One commenter requested that EPA revise its precision and
accuracy requirements to one percent for measurements of mass.  Other
commenters argued that instead of establishing strict accuracy,
precision, and frequency requirements for measuring production, EPA
should permit facilities to use existing measurement instruments and
practices, such as NIST Handbook 44 and the trial HFC reporting program
patterned on EPA’s reporting requirements for ozone-depleting
substances.

Response:  Given the limited amount of time before 2010 data collection
must begin, EPA agrees that it is appropriate to ease the accuracy and
precision requirements proposed for measuring production,
transformation, and destruction.  EPA is therefore revising these
requirements in the final rule.  EPA is also permitting facilities
flexibility in the frequency of measurements and calibration of
measurement devices.

This approach will permit facilities to begin measuring their
production, transformation, and destruction for purposes of the rule
beginning in January, 2010, using their current practices and equipment.
 However, EPA is planning to revisit the precision and accuracy
requirements for industrial gas supply as we review public comments and
perform analyses related to proposed 40 CFR part 98, subpart L
(fluorinated gas production), which is not included in today’s final
rule.  This is because the accuracy and precision with which production
facilities track production, transformation, and destruction can have a
profound influence on the accuracy and precision of these facilities’
fluorinated GHG emission estimates.  For one method of monitoring F-GHG
emissions under consideration, a one percent relative error in
production mass measurements could result in a much higher relative
error in the emissions estimate, e.g., over 90 percent at an emission
rate of 1.5 percent.  For other methods of monitoring F-GHG emissions,
however, a one percent relative error in production mass measurements
would not lead to large errors in emission estimates.  For both 40 CFR
part 98, subpart OO and 40 CFR part 98, subpart L, EPA’s goal is to
optimize methods of data collection to ensure data accuracy while
considering industry burden.

PP.  Suppliers of Carbon Dioxide (CO2)

1.  Summary of the Final Rule

Source Category Definition.  Under the rule, suppliers of CO2 consist of
the following:

Facilities with production process units that capture and supply CO2 for
commercial applications or that capture and maintain custody of a CO2
stream in order to sequester or otherwise inject it underground.

Facilities with CO2 production wells that extract a CO2 stream for the
purpose of supplying CO2 for commercial applications.

Importers of bulk CO2, if total combined imports of CO2 and other GHGs
exceed 25,000 metric tons of CO2 equivalent (CO2e) per year.

Exporters of bulk CO2, if total combined exports of CO2 and other GHGs
exceed 25,000 metric tons CO2e per year.

This source category is focused on upstream supply. It does not cover:
storage of CO2 above ground or in geologic formations; use of CO2 in
enhanced oil and gas recovery; transportation or distribution of CO2; or
purification, compression, on-site use of CO2 captured on site, or
processing of CO2.  This source category does not include CO2 imported
or exported in equipment, such as fire estinguishers.

Suppliers of CO2 that meet the applicability criteria in the General
Provisions (40 CFR 98.2) summarized in Section II.A of this preamble
must submit GHG reports.

GHGs to Report.  Suppliers of CO2 must report the mass of CO2 in a
stream captured from production process units and extracted from
production wells, and the mass of CO2 in containers that is imported and
exported.

GHG Emissions Calculation and Monitoring.  While this source category is
focused on upstream supply of CO2, EPA recognizes that all CO2 supplied
to the economy does not necessarily result in an emission.  There are a
variety of downstream applications for CO2 - some applications are
emissive and some are non-emissive.  Under this rulemaking, a CO2
supplier facility must calculate the mass of CO2 supplied quarterly by
measuring the mass or volumetric flow of gas and multiplying by the CO2
concentration, and density in the case a volumetric flow meter is used,
of the gas or liquid, as specified below.  EPA requires quarterly
monitoring because EPA has concluded that the CO2 concentration of the
stream varies throughout the year, and a quarterly concentration number
multiplied by a quarterly volume will generate more accurate calculation
of CO2 supply than annual measurements.  EPA requires these quarterly
numbers to be reported or that EPA can electronically verify the
calculations.  The CO2 supplier must also provide information on the
downstream CO2 application, if known.  Reporters must use the following
methodologies, as applicable, for calculating CO2 supplied:

For suppliers that make measurements with mass flow meters, calculate
quarterly for each meter the total mass of CO2 in a CO2 stream in metric
tons captured or extracted, prior to any subsequent purification,
processing, or compressing, according to Equation PP-1 of 40 CFR 98.423.
 Measure mass flow and concentration in accordance with 40 CFR 98.424.

For suppliers that make measurements with volumetric flow meters,
calculate quarterly for each meter the total mass of CO2 in a CO2 stream
in metric tons captured, prior to any subsequent purification,
processing, or compressing, according to Equation PP-2 of 40 CFR 98.423.
 Measure volumetric flow, concentration and density in accordance with
40 CFR 98.424.

For suppliers that have multiple flow meters, aggregate data at the
facility level according to methods specified in Equation PP-3 in 40 CFR
98.423.

Importers or exporters that import or export CO2 in containers must
calculate the total mass of CO2 supplied in metric tons, prior to any
subsequent purification, processing, or compressing, according to
equation PP-4 of 40 CFR 98.423.  Use weigh bills, scales, or load cells
to measure the mass of CO2 imported or exported in containers.

Data Reporting.  In addition to the information required to be reported
by the General Provisions (40 CFR 98.3(c)) and summarized in Section
II.A of this preamble, reporters must submit additional data that are
used to calculate CO2 supply.  A list of the specific data to be
reported for this source category is contained in 40 CFR 98.426.

Recordkeeping.  In addition to the records required by the General
Provisions (40 CFR 98.3(g)) and summarized in Section II.A of this
preamble, reporters must keep records of additional data used to
calculate CO2 supply.  A list of specific records that must be retained
for this source category is included in 40 CFR 98.427.

2.  Summary of Major Changes Since Proposal

The major changes since proposal are identified in the following list.
The rationale for these and any other significant changes can be found
below or in the comment response document for“Mandatory Greenhouse Gas
Reporting Rule: EPA’s Response to Public Comments, Subpart PP:
Suppliers of CO2.Carbon Dioxide.”

We developedadded equations and quality assurance QArequirements to
allow reporters to determine CO2 quantity using mass flow meters,
volumetric flow meters, weigh bills, scales, or load cells, as
appropriate.  These additions supplement the propose equations and
quality assurance requirements to determine CO2 quantity using mass flow
meters.

We revised the reporting procedures for missing data in 40 CFR 98.425 to
allow for use of either data from the prior quarterly reported data or
prior annual reported data. .  Facilities must use quarterly values as
substitute data as can no longer use annual average values.  We added
missing data procedures to allow for more quarterly data points to be
used, as appropriate. EPA concluded that quarterly missing data values
will generate more accurate estimates than annual average values.

To improve the emissions verification process, we reorganized and
updated 40 CFR 98.426.  We moved some data elements from section40 CFR
98.427 to section40 CFR 98.426, and added some data elements that a
reporter must already use to calculate GHGs as specified in section40
CFR 98.423 to section40 CFR 98.426 for clarity.  We also introduced new
data reporting requirements, such as volumes of propane odorized, as a
result of comments received.

We revised the reporting and calculation procedures to require
facilities using flow meters to determine annual mass for every flow
meter used. To aggregate data at the facility level for CO2 being
captured in production wells or production process units, we have added
Equation PP-3.

To decrease unnecessary sampling burden, we have removed the requirement
of quarterly concentration sampling for importers and exporters that use
containers of CO2.

3.  Summary of Comments and Responses

This section contains a brief summary of major comments and responses. A
large number of comments on suppliers of CO2 were received covering
numerous topics.  Responses to significant comments received can be
found in the comment response document for suppliers“Mandatory
Greenhouse Gas Reporting Rule: EPA’s Response to Public Comments,
Subpart PP: Suppliers of CO2 in the docket
(EPA-HQ-OAR-2008-508-XXX).Carbon Dioxide.”

Definition of Source Category

Comment:  EPA received many comments about how we defined the source
category in this Subpart.  One group of comments stated that the CO2
supplied to the economy should not be characterized as an emission.
Some in this group of comments specified that much of the supplied CO2
is stored at enhanced oil recovery (EOR) sites, which are “closed
systems”, rather than emitted.  In general, these same commenters
stated that any CO2 reporting requirements placed by EPA on industry
should be placed on downstream CO2 users, such as EOR facilities, rather
than CO2 suppliers and should be for actual emissions only.  Other
comments echoed that EPA needs to collect data from recipients of
supplied CO2 such as EOR sites.  This group pressed upon EPA the need to
collect not only data on actual emissions but also data on injection,
production, and geologic sequestration of CO2.  Some of the benefits
cited for collecting such comprehensive data include: assisting in
ensuring no more than negligible releases at a facility if it is
properly sited, designed, and permitted; achieving full public
accountability of CO2 geologic sequestration effectiveness; and tracking
the CO2 throughout the entire carbon dioxide capture and sequestration
(CCS) chain for the purposes of adjusting CO2 emissions reported or
assigning offsets.  Along those lines, some commenters urged EPA to rely
on or expand the existing underground injection control (UIC )program to
deal with CCS.

Response:  EPA did not intend to characterize all CO2 supplied to the
economy as emissions and recognizes that there are a variety of
applications for CO2, both emissive and non-emissive.  CO2 supplied to
the economy would result in an emission if the CO2 were used in an
application which would ultimately result in release of the CO2 to the
atmosphere.  EPA is also collecting information from upstream suppliers
in other subparts of this rulemaking such as natural gas supply and
petroleum product supply.

EPA recognizes that, in order to determine whether or not supplied CO2
has been or will be released to the atmosphere (e.g. emitted), the
Agency needs information on the downstream CO2 end-use.  In today's
today’s final rulemaking, CO2 suppliers must provide information on
the downstream CO2 application, if known.  EPA believes information on
the end-use will provide some idea of the amounts of CO2 which are
emitted.  Where that end-use is geologic sequestration (at EOR or other
types of facilities), EPA will need additional information on the amount
of CO2 that is permanently and securely sequestered and on the
monitoring and verification methodologies applied.  With respect to EOR,
the geology of an oil and gas reservoir can create a good barrier to
trap CO2 underground.  Because these formations effectively stored oil
or gas for hundreds of thousands to millions of years, it is believed
that they can be used to store injected CO2 for long periods of time.
However, EPA also recognizes that the requirements to identify a
suitable GS site extend beyond geophysical trapping parameters alone and
include: the evaluation and appropriate management of potential leakage
pathways, appropriate rate and pressure of injection, appropriate
monitoring, and other such features. While some amount of CO2 injected
into oil and gas reservoirs for EOR purposes will be trapped in the
subsurface, these and other site-specific elements influence the amount
of CO2 securely sequestered and the potential for release of CO2 during
EOR operations.

Given the comments in support of downstream data collection,
particularly with respect to EOR systems and CO2 geologic sequestration
(at EOR or other types of facilities), EPA plans to issue a new proposal
on geologic sequestration and will consider how to address emissions and
sequestration at active EOR facilities.  EPA will take action on this
issue in the near future with the goal that data collection for these
types of facilities can begin as quickly as possible.  EPA will seek
comment on monitoring, reporting, and verification methodologies which
can be used to determine the amount of CO2 emitted and geologically
sequestered at active EOR facilities and geologic sequestration sites
where CO2 is injected (for long-term storage) into saline aquifers, oil
and gas reservoirs, or other geologic formations.  Furthermore, as
stated in Section III.W of this preamble, EPA plans to take additional
time to consider alternatives to data collection procedures and
methodologies in the proposed 40 CFR part 98, subpart W and will
consider inclusion of GHG reporting from other sectors of the oil and
gas industry besides those proposed for reporting in proposed 40 CFR
part 98, subpart W.  EOR surface facility operations may be part of
those considerations.  The data reported under follow-onsubsequent
regulatory actions and the data reported under today’s rulemaking will
together enable EPA to understand the amount of CO2 supplied, emitted,
and sequestered in the U.S., to carry out a wide variety of CAA
provisions.  The options that we will have considered and the resulting
recommended approaches will be further fleshed out through a notice and
comment process.  See the next comment response for a discussion of why
EPA still needs to collect CO2 supplier data in today’s rulemaking
even though a new rulemaking on sequestration is planned.

In response to comments that EPA should rely on or expand the UIC
program to address emissions of CO2, that issue is outside the scope of
this rulemaking.  However, EPA agrees that the UIC program and EPA’s
authority under the Safe Drinking Water Act (SDWA) will provide a
foundation for ensuring safe and effective containment of CO2.  However,
SDWA is focused on permitting sites for protection of ground and
drinking water.  It is not ; the new proposal discussed above will be
designed to monitor, track, or quantify air emissions and the the UIC
program’s recent geologic sequestration proposal (FR 43492-43541) did
not specifically outline new geologic sequestration requirements for EOR
sites (Note:address issues related to the CAA. EPA did receive comments
that the proposed requirements should be expanded to active EOR
operations and is currently evaluating that issue).

It is EPA’s strong intentionintends to harmonize CCS requirements
across relevant statutory or other programs in order to minimize any
redundancy and any burden on reporters.  The reporting requirements in
today’s rulemaking for CO2 suppliers and the reporting requirements in
new rulemaking for CO2 geologic sequestration sites will complement each
other and together they can be harmonized with reporting requirements
under the UIC proposed rulemaking.  In a new CAA rulemaking on geologic
sequestration reporting, EPA will rely on UIC permit requirements to the
maximum extent possible.  EPA will seek comment on these issues and will
also endeavor to issue a geologic sequestration GHG reporting rule in
the same time frame as it has planned for the stand-alone UIC GS
rulemaking.

Comment:  EPA received comments requesting information on how CO2 supply
will assist EPA in developing future climate policy.  Commenters stated
that they do not believe CO2 supply data will provide EPA with useful
information. Commenters stated that data collection from CO2 suppliers
does not fit within EPA’s mandate from Congress to measure upstream
emissions only as appropriate.

Response:  As discussed in Sections I.C and II.Q of this preamble, EPA
is collecting data from CO2 suppliers in today’s rule to carry out a
wide variety of CAA provisions, as authorized broadly under CAA Sections
114 and 208.  For example, EPA needs to collect this data will enable
EPA to evaluate the appropriate action to take under section 103
regarding non-regulatory strategies for pollution prevention and
information could.  It will also be used to inform developmentevaluation
of possible CAA regulations under CAA Section 111 regarding New Source
Performance Standards. regulation of the supplier and/or recipient of
the CO2  Data on CO2 supply to the economy will allow EPA to make a well
informed decision about whether and how to use the CAA to regulate
facilities that capture, sequester, or otherwise receive CO2 as an
end-user.

Though CO2 capture and geologic sequestration are occurring now on a
relatively small scale, CCS is expected to play a major role in
mitigating greenhouse gasGHG emissions from a wide variety of stationary
sources.  According to the Inventory of U.S. Greenhouse Gas Emissions
and Sinks: 1990-2007 (EPA, April 2009), stationary sources contributed
67% percent of the total CO2 emissions from fossil fuel combustion in
2007.    The 500 largest stationary sources account for 82% of the
United States’ annual CO2 emissions.  These 500 stationary sources
represent a wide variety of sectors amenable to CO2 capture; electric
power plants (existing and new), natural gas processing facilities,
petroleum refineries, iron & steel foundries, ethylene plants, hydrogen
production facilities, ammonia refineries, ethanol production
facilities, ethylene oxide plants, and cement kilns.  Furthermore, 95%
percent of thesethe 500 largest stationary sources are within 50 miles
of a candidate CO2 reservoir.

With this rule, EPA will begin building capacity to track the growth in
CO2 supply and learn about its disposition throughout the economy. EPA
has concluded that we need data now from CO2 suppliers - both industrial
facilities and CO2 production wells – in order to effectively track
how the supply sources will change over time. For example, we will need
to track if and by how much CO2 captured from industrial facilities will
offset or displace CO2 produced from natural formations. Even after EPA
begins collecting data on CO2 geologic sequestration under the proposed
new rulemaking (discussed above), EPA will continue to need data from
CO2 suppliers in order to track any CO2 that is not sequestered.

Comment:  EPA received some comments asking whether a specific situation
results in coverage under Subpart40 CFR part 98, subpart PP, and some
comments requesting that their specific situation be exempt from
coverage.  For example, one commenter asked whether a facility
separating CO2 that is not supplied to downstream customers is a covered
facility.  Another asked that a pulp and paper mill that transfers a CO2
stream to an adjacent facility by pipeline be exempt from Subpart40 CFR
part 98, subpart PP.  Several commenters requested clarification on
specific scenarios such as taking ownership of an already separated CO2
stream for further processing, separating CO2 for their own use, and
operating versus owning the separation unit.  Another commenter
requested that ethanol plants and other facilities capturing CO2 from
biomass be exempt from Subpart PP.

Response:  EPA did not intend for Subpart40 CFR part 98, subpart PP to
cover facilities that take ownership of a CO2 stream that has already
been separated and removed from a manufacturing process or that has
already been extracted from CO2 production wells in order to do any of
the following: store it in above ground storage of CO2; transport or
distribute it via pipelines, vessels, motor carriers, or other means;
purify, compress, or process it; or sell it to other commercial
applications.  In the final rule, we clarified that Subpart40 CFR part
98, subpart PP covers facilities that own or operate the equipment that
physically separates and removes CO2 from an industrial or manufacturing
process or physically extracts CO2 from production wells because we
concluded that the entity with first touch of the CO2 supply was the
most logical point of coverage.  We wanted to prevent double-counting
minimize any unnecessary duplicative reporting of the same CO2 by being
as specific as possible about who in the supply chain is responsible for
reporting it.

We did not intend for this source category to include facilities that
capture CO2 for further processing or use within the fence line of the
facility (e.g., for their own use).  EPA proposed that Subpart40 CFR
part 98, subpart PP only cover CO2 that is captured or extracted for
purposes of sequestration or supply to other facilities for commercial
applications because we concluded that CO2 captured and used on-site is
equivalent to an intermediary step in production rather than an actual
supply of CO2.

Comment:  EPA received a comment requesting that ethanol plants and
other facilities capturing CO2 from biomass be exempt from Subpart PP.

Response:  A long standing accountinginventory convention adopted by the
IPCC, the UNFCCC, the US GHG Inventory, and many other reporting
programs was applied to the proposed rule where is separate treatment of
emissions of CO2 from the combustion of renewable biomass and
biomass-based fuels are distinguished from emission emissions of CO2
from the combustion of fossil-based products.  As a resultIn national
inventories, emissions from the combustion of biomass-based fuels are
accounted for at the time of feedstock harvest, collection, or disposal,
notas part of a comprehensive system-wide tracking of carbon dioxide
emissions and sequestration in the land-use, land-use change and
forestry sector and the agriculture sector, rather than at the point of
fuel combustion.  In Consistent with this approach, in the proposed and
final rule, downstream emitters must only consider non-biogenic
emissions when conducting a threshold analysis but; however, downstream
emitters must report both biogenic and non-biogenic emissions once they
trigger the reporting threshold.  However, this convention only applies
to CO2 from the combustion of renewable fuel and only applies for the
threshold analysis.   because data on non-biogenic emissions is useful
and informative.

For the final rule, EPA has decided not to apply the same logicapproach
to suppliers of CO2.  We have not established a threshold in Subpart PP
because we  We have concluded that data on capture of biogenic CO2 would
be useful and informative because biogenic CO2 can potentially be stored
in GS sites, or displace fossil CO2 applications.  We need a full
picture of the CO2 being supplied into the economy.  Though CO2 capture
and sequestration are is occurring now on a relatively small scale, it
is expected to play a major role in mitigating greenhouse gasGHG
emissions and therefore EPA needs to assess.  Therefore information on
all potential sources of CO2 for sequestration.  Therefore is necessary
for a complete picture.  Thus, a facility that captures CO2 from biomass
and otherwise meets the applicability test is covered under Subpart40
CFR part 98, subpart PP and is required to report all CO2 supplied along
with the percentage of that supply that is biomass-based.

Monitoring and QA/QC Requirements

Comment:  A large number of commenters requested that volumetric flow
meters be allowed for purposes of calculating CO2 supply in place of or
in addition to mass flow meters.  These comments indicated that mass
flow meters are not in operation at many covered facilities, and the
cost to comply with such an equipment requirement would be unnecessarily
high.  Some commenters suggested that reporters should be allowed to use
sales contracts to determine quantity of CO2 as long as the CBI is
protected.  Some commenters indicated that CO2 liquefaction and
purification facilities do not operate flow meters for the course of
usual business.  One of these also commented that importers and
exporters of CO2 do not operate flow meters for the course of usual
business if they handle the product in containers and requested
consideration of this incongruity.

Response:  As a result of these comments, EPA added two equations to the
methodology section of Subpart40 CFR part 98, subpart PP in today’s
rule in order to ensure that all covered CO2 can be reported,
irrespective of technical or physical conditions.  Therefore, a reporter
that measures CO2 in a stream using a volumetric flow meter may use this
volumetric flow meter to determine quantity rather than having to
purchase and install a mass flow meter. EPA has concluded that providing
this additional methodology reduces the burden on reporters without
compromising the quality of data received by the agency.  In addition, a
reporter that imports or exports CO2 in containers may use weigh bills,
scales, or load cells to determine quantity because applying a mass flow
meter would be technically impossible.  EPA has concluded that providing
this additional methodology reduces the burden on reporters without
compromising the quality of data received by the agency.

The final rule does not require reporting from facilities that liquefy
or purify CO2 that has already been separated or removed from a
manufacturing process or already extracted from production wells.
Therefore we did not give consideration to the types of equipment in
operation at such facilities.

Finally, the rule does not allow reporters to use sales contracts to
determine quantity because EPA has concluded that reporters capturing or
extracting CO2 already operate mass or volumetric flow meters, or
already determine quantities of CO2 imported or exported in containers
using weigh bills, scales, or load cells.  EPA has concluded that mass
and volumetric flow meters provide more accurate data than sales
contracts.

IV.  Mobile Sources

A.  Summary of Requirements of the Final Rule

For manufacturers of engines used in mobile sources outside of the
light-duty sector, this rule includes new requirements for reporting
emission rates of GHGs.  Mobile source engine manufacturers have been
measuring CO2 emission rates from their products for many years as a
part of normal business practices and existing criteria pollutant
emission certification programs, but they have not consistently reported
these values to EPA.  This final rule requires manufacturers to
consistently measure and report CO2 for all engines beginning with model
year 2011 and other GHGs in subsequent model years.  Manufacturers
meeting the definitions of “small business” or “small volume
manufacturer” under EPA’s existing mobile source emissions
regulations will generally be exempt from any new GHG reporting
requirements.

In addition to CO2, most manufacturers will now be required to report on
two other major GHGs emitted by mobile sources, nitrous oxide (N2O) and
methane (CH4).  Although most current engines have relatively low
emission rates of these GHGs compared to CO2, these compounds have
global warming potentials significantly higher than CO2.  It is
important that EPA improve its understanding of these emissions from
today’s engines and monitor trends over time.  The broad base of
emission data that will begin to accrue from requirements in this rule
will support emissions modeling by EPA and others, and will help guide
future GHG policy.

Emissions of N2O are related to catalytic treatment of engine exhaust,
specifically aftertreatment of NOx emissions.  Therefore, we will
require that manufacturers begin to measure and report N2O emissions,
but only for engine models that incorporate NOx aftertreatment
technology (as shown in Table IV-1 below of this preamble).  The program
will not require N2O reporting before model year 2013, and the
requirements will only apply to new engines equipped with NOx
aftertreatment technology.  (Manufacturers of some engine categories
have employed aftertreatment for many years to meet NOx standards; for
other engine categories, manufacturers are unlikely to introduce NOx
aftertreatment technologies for some years to come.)

Emissions of CH4 are a part of overall hydrocarbon emissions from mobile
sources.  Because CH4 is not very reactive in the atmosphere, EPA has
often excluded CH4 from mobile source hydrocarbon regulations since it
has not traditionally been a major determinant of ozone formation.  The
new reporting requirements are necessary to evaluate the magnitude of
mobile source CH4 emissions from a GHG (rather than ozone precursor)
perspective.

As described above, we are finalizing manufacturer reporting
requirements for N2O and CH4 emission rates in order to understand
current emissions of these GHGs and to monitor potential changes as
technologies and policies change in the future.  However, we believe
that manufacturers may be able to provide alternative test data (and/or
other information including engineering judgments based on test data)
that would give EPA a reasonable basis for estimating the likely N2O and
CH4 emission rates for each certified engine family.  Therefore, we are
including a provision in this final rule that would allow a manufacturer
the opportunity to provide such alternative information in lieu of N2O
and/or CH4 test data for each engine family.

In assessing such alternative information, EPA would consider how well
the information provided by the manufacturer allows EPA to reasonably
anticipate the emission performance of each of the manufacturer’s
engines.  For example, we expect that in most cases a manufacturer
wishing to omit engine testing will provide EPA with N2O test data from
relevant testing programs (by such sources as industry collaboratives
and/or from the suppliers of the catalytic NOx aftertreatment systems
they are using on an engine.  We would expect the manufacturer to also
include an explanation of the manufacturer’s engineering judgment as
to why the data should apply to the engine family in question.  For CH4
emissions, our primary concern is the potential for unusually high
emissions from natural gas fueled engines.  Thus, we expect that in most
cases a manufacturer of such an engine will provide test data on similar
engines with similar catalyst systems for hydrocarbon control (with an
explanation of their engineering judgment as to why the data should
apply to that engine family).

The reporting requirements related to C3 marine engines and turbofan and
turbojet aircraft engines differ from other engine categories.  As with
other manufacturers, C3 marine engine and aircraft engine manufacturers
will report CO2 emission rates beginning in 2011 (for aircraft engines,
they will report CO2 separately for each mode of the landing and
take-off (LTO) cycle used in the certification test, as well as the
entire LTO cycle).  For aircraft engine manufacturers, however, the
reporting requirements will apply not just to engines introduced in that
year, but for all engines still in production.  (This should not require
manufacturers to conduct any new testing, only to report existing data.)
 We are not requiring manufacturers of C3 marine engines and aircraft
engines to measure or report N2O or CH4 emission rates because of unique
aspects of their industries and technologies.

C3 marine engines are very large and manufacturers generally test them
as they are installed into ships rather than in a laboratory setting.
For this reason, we have determined that requiring the addition of new
N2O and CH4 measurement equipment for C3 engines would not be practical,
and, as proposed, are not requiring such reporting in this rule.

Since aircraft engine manufacturers are unlikely to employ NOx after
treatment devices in the foreseeable future, we did not propose
requiring N2O reporting from aircraft engines and are not finalizing any
requirements in this final rule.  We are not finalizing our proposed
requirement that aircraft engine manufacturers measure and report CH4,
as we learned that aircraft jet turbine engines have been shown to
consume CH4 from the ambient air during the dominant operating modes.
However, unlike NOx emissions from most mobile sources, NOx emissions
from aircraft have been shown to make a potential contribution to
climate change.  For this reason, we are requiring that aircraft engine
manufacturers report the NOx emission data for the LTO modes and the
overall LTO cycle for all engine models currently in production, and for
new engines as they are introduced.  Manufacturers are already measuring
NOx as part of current criteria pollutant certification requirements.
NOx emissions rate data from LTO modes will support modeling of overall
NOx emissions from aircraft.

For all engine categories, when a manufacturer certifies the engine in
one year and then carries over the certification to subsequent years,
EPA will not require re-testing of that engine model for reporting
purposes.

As proposed, we are not including any requirements for mobile source
fleet operators or stateState and local governments to report in-use
travel activity or other emissions-related data in this final rule.

Table IV-1 below of this preamble shows the basic reporting requirements
we are finalizing in this notice for each engine category.  We discuss
in more detail how these reporting requirements will apply to
manufacturers of each engine category in the comment response document
for mobile sources (EPA-HQ-OAR-2008-508-XXX) associated with this final
rule.“Mandatory Greenhouse Gas Reporting Rule: EPA’s Response to
Public Comments, Motor Vehicle and Engine Manufacturing.”

Table IV-1:  First Model Year for GHG Reporting Requirements

Engine Category	CO2	N2Oa	CH4

Highway Heavy-Duty (engine and vehicle)	2011	2013 or NOx AT 	2012

Nonroad Diesel	2011	2013 or NOx AT 	2012

Marine Diesel (other than C3)	2011	2013 or NOx AT 	2012

C3 Marine	2011	None	None

Locomotives	2011	2013 or NOx AT 	2012

Small Spark-Ignition	2011	2013 or NOx AT 	2012

Large Spark-Ignition	2011	2013 or NOx AT 	2012

Marine Spark-Ignition	2011	2013 or NOx AT	2012

Snowmobiles	2011	2013 or NOx AT	2012

Highway Motorcycles	2011	2013 or NOx AT	2012

Off Highway Motorcycles/ATVs	2011	2013 or NOx AT	2012

Aircraftb	2011	None	None

a N2O reporting for new engines begins in 2013 or when the manufacturer
introduces NOx aftertreatment technology, whichever is later.

b Applies to all turbofan and turbojet engines in production in 2011
with a rated output greater than 26.7 kilonewtons.  Reporting of NOx
also required.

B.  Summary of Major Changes Since Proposal

The major changes since proposal are identified in the following list.
The rationale for these and any other significant changes can be found
below or in the comment response document for mobile sources
(EPA-HQ-OAR-2008-508-XXX).“Mandatory Greenhouse Gas Reporting Rule:
EPA’s Response to Public Comments, Motor Vehicle and Engine
Manufacturers.”

We are not finalizing the proposed requirements related to light-duty
vehicles (including light-duty trucks and medium-duty passenger
vehicles).  EPA expects to propose a comprehensive light-duty GHG
emission control program commencing in MY 2012 (see Notice of Upcoming
Joint Rulemaking to Establish Vehicle GHG Emissions and CAFÉ Standards,
74 FR 24007 (May 22, 2009)), which is likely to contain monitoring,
reporting and GHG data retention requirements that would supersede any
reporting requirements established in this rule.  Eliminating light-duty
reporting requirements from this final rule will avoid issues of
inconsistency and duplication.

We have revised our proposal that all engine manufacturers measure and
report N2O for all of their engines, and instead will require N2O
reporting only for engines that use NOx exhaust aftertreatment
technology.

We have delayed the proposed MY 2011 start year for N2O reporting until
MY 2013, and later for categories where the manufacturer has not applied
NOx aftertreatment technology.

We have added additional emission test methods that manufacturers can
choose for measuring N2O, to assure that an appropriate method is
available for any foreseeable circumstance (including the need to
measure very low N2O emission rates).

The final rule incorporates an opportunity for a manufacturer to provide
EPA with appropriate alternative information in lieu of N2O and/or CH4
testing, as described above.

We have added one year of lead time to the proposed start year for
reporting of CH4 emissions, until 2012.

We are not finalizing our proposal to require reporting of CH4 for
aircraft engines because, for the dominant operating modes, jet engines
may consume CH4 in the air.

We are finalizing a requirement that we took comment on in the proposal
to have aircraft engine manufacturers report NOx emissions data they
already collect, since, at altitude, NOx emissions from aircraft have
been shown to make a potential contribution to climate change.

Since aircraft engines are not certified every year (there is no annual
certification as is the case with other mobile sources), we have removed
references to “model year” in the regulations and revised them to
reflect the change to a January 1, 2011 start date for reporting CO2 and
NOx emissions.

C.  Summary of Comments and Responses

This section contains a brief summary of major comments and responses.
A large number of comments on mobile source were received covering
numerous topics.  Responses to significant comments received can be
found in the comment response document for mobile sources
(EPA-HQ-OAR-2008-508-XXX).“Mandatory Greenhouse Gas Reporting Rule:
EPA’s Response to Public Comments, Motor Vehicle and Engine
Manufacturers.”

Comment:  Light-duty vehicle manufacturers and their trade organizations
raised several concerns about the timing and nature of the reporting
requirements.

Response:  We agree in part with these comments. However, more
fundamentally, we have concluded that the likelihood of GHG emission
regulations affecting light-duty vehicles (including light-duty trucks
and medium-duty passenger vehicles) in the near future argues for
consolidating any new GHG reporting requirements into that upcoming
rule.  Therefore, we have elected to not finalize the proposed
requirements relating to these vehicles at this time, and expect to
incorporate similar provisions in a proposed rule on GHG standards for
light-duty vehicles in the coming monthsnear future.

Comment:  Engine manufacturers and their trade organizations challenged
the proposed rule in several ways.  In general, they questioned the need
for the data to be reported; expressed concern that the proposed timing
of the requirements, especially for N2O and CH4, was too aggressive; and
commented that the proposed test procedure for N2O was not adequate.

Response:  We still conclude that there is significant value to
collecting CO2, N2O, and CH4 emissions rate data on the broad range of
mobile sources being produced.  As stated earlier, the domestic and
international attention to GHGs and their effects will only grow, and
the ability for EPA and the public to understand and monitor emissions
from mobile sources will be increasingly important as policies relating
to GHGs are considered.  Collecting emissions rate data from engine
manufacturers on their new engines can improve modeling of emissions for
the entire mobile source sector since current modeling relies on
assumptions about N2O and CH4 emissions based on a limited number of
field surveys.  The data from this rule will also help EPA track
emissions impacts from changes in technologies and policies over time.

For N2O and CH4, we agree that revisions in the proposed provisions are
warranted.  We have limited the reporting requirements for N2O to
engines equipped with NOx aftertreatment technology as a way to reduce
the reporting burden on engine manufacturers without significantly
diminishing the amount of information we receive. As discussed earlier,
emissions of N2O are related to catalytic treatment of engine exhaust,
specifically aftertreatment of NOx emissions, and we have concluded that
collecting N2O emissions data from engines without NOx aftertreatment
technology would provide marginal value to the agency.  We expanded the
number of approved test methods for N2O measurement since we learned
from comments and our own technical research that our proposed test
methods for N2O were not appropriate for every foreseeable circumstance,
including measurement of very low levels of N2O.  We also extended the
lead time available to manufacturers before N2O and CH4 reporting is
required.  We are providing this flexibility based on our conclusion
that we can reduce the burden of purchasing and installing the required
CH4 and N2O emissions rate measurement equipment by extending the lead
time, without significantly diminishing the amount of information we
receive.  Finally, as described above, the final rule includes an
opportunity for a manufacturer to provide EPA with appropriate
alternative information in lieu of N2O and/or CH4 testing.

Comment:  States and environmental organizations were generally
supportive of the proposed reporting requirements, although some argued
for earlier implementation, in 2010.

Response:  We believe that the lead times we are finalizing for each GHG
and for each engine category represent the earliest feasible timing,
taking into consideration existing test capabilities and past
experience, or the lack thereof.

Comment:  Aircraft engine manufacturers commented that reporting of CO2
emissions from each mode of the LTO cycle used in the emission
certification test, as proposed, is acceptable as long as existing
methods for CO2 are retained.  In particular, commenters noted that
reporting would result in minimal burden as long as CO2 is calculated
utilizing the engine fuel mass flow rate measurements, which are
currently part of the test procedure requirements for the LTO cycle.
However, an industry trade association expressed concern that reporting
CO2 from the LTO cycle is unjustified because LTO measurements do not
include CO2 emissions from an entire aircraft flight, which is affected
by the propulsion system, drag, etc.

Response:  We determined that calculating aircraft engine CO2 emissions
from fuel mass flow rate flow measurements is an appropriate method for
reporting CO2 emissions.  Therefore, for turbofan and turbojet engines
of rated output greater than 26.7 kilonewtons, we are finalizing that
manufacturers record and report CO2 separately for each mode of the LTO
cycle used in the certification test, as well as the entire LTO cycle,
according to the existing measurement criteria for CO2 or alternatively
by calculations of CO2 from fuel mass flow rate flow measurements or,
alternatively, according to the measurement criteria for CO2 in
Appendices 3 and 5 to ICAO Annex 16, volume II.  Comprehensive and
consistent reporting of LTO CO2 emissions, along with knowledge of
aircraft aerodynamic performance, will support modeling of full-flight
CO2 emissions and help us to better understand overall contributions to
global warming from aircraft operations.

Comment:  Aircraft engine manufacturers raised two major issues related
to our proposed CH4 reporting.  First, in response to EPA’s request
for comment on the degree to which engine manufacturers now have the
needed equipment in their certification test cells to measure CH4,
manufacturers replied that test stands are not currently equipped to
measure CH4, and thus, they would incur additional costs to measure CH4.
 Second, manufacturers noted that aircraft jet turbine engines have been
shown to be consumers of CH4 from the ambient air during the dominant
operating modes (CH4 is emitted at aircraft engine idle operation, but
at higher power modes aircraft engines usually consume CH4.  Over the
range of engine operating modes -- including cruise -- aircraft engines
are typically net consumers of CH4).

Response:  Given that aircraft engines are likely net consumers of CH4
and that manufacturers do not currently collect CH4 data as part of
existing test procedures, we are not requiring CH4 to be measured and
reported at this time.

Comment:  We received several responses to our request for comment on
whether to require aircraft engine manufacturers to report NOx emissions
in the four LTO test modes and for the overall LTO cycle.  Manufacturers
commented that NOx emissions do not need to be reported directly to EPA,
since this information is already voluntarily reported to the
International Civil Aviation Organization (ICAO) and provided to the
Federal Aviation Administration (FAA), and redundancy of reporting is
unnecessary.  Environmental organizations commented that EPA should
require manufacturers to report NOx since they currently do not report
the data to EPA.  In addition, environmental organizations commented
that NOx at high altitude can contribute to global warming.

Response:  In this final rule, we are requiring that engine
manufacturers of turbofan and turbojet engines of rated output greater
than 26.7 kilonewtons record and report NOx emissions in the four LTO
test modes and for the overall LTO cycles.  As discussed in the proposal
and earlier in this final rule, NOx from aircraft have been shown to
make a potential contribution to climate change at high altitude.  As
required in 40 CFR 87, manufacturers must already measure and record NOx
emissions in each of the four LTO test modes in order to comply with the
LTO NOx emission standard (for the entire LTO cycle). These data are not
currently reported to EPA for public consideration as is the case with
all other mobile sources. Manufacturers voluntarily report the data to
ICAO, but there is no assurance that EPA will receive this information.
Likewise, the information provided to FAA is not readily accessible to
EPA, and it is not of the detail provided to ICAO.  Comprehensive and
consistent reporting of LTO NOx emissions rate data will support
modeling of overall NOx emissions from aircraft and help us to better
understand overall contributions to global warming from aircraft
operations.

V.  Collection, Management, and Dissemination of GHG Emissions Data.

This section of the preamble describes the general processes by which
EPA intends to collect, manage, and disseminate data under the GHG
reporting rule. Section A contains a brief description of the provisions
in the final rule concerning these processes, and Section B summarizes
public comments and responses on data collection, management, and
dissemination.

Major changes since proposal include revisions in 40 CFR 98.4 that
provide flexibility for designated representatives to delegate their
responsibility to agents, and to submit revisions to the certificate of
representation within 90 days of a change in owners or operators (rather
than 30 days).  In addition, the final rule includes a requirement that
the designated representative submit the certificate of representation
at least 60 days before the deadline of the facility or supplier’s
initial GHG report.  The rationale for these and any other significant
changes can be found in sectionSection V.B of this preamble or in the
comment response document.“Mandatory Greenhouse Gas Reporting Rule:
EPA’s Response to Public Comments, Designated Representative, and Data
Collection, Reporting, Management, and Dissemination.”

A.  Summary of Data Collection, Management and Dissemination for the
Final Rule

1.  Designated Representatives, Alternate Designated Representatives,
and Agents

Each covered facility orand each supplier must identify one and only one
designated representative who is responsible for certifying, signing,
and submitting all submissions to EPA.  A designated representative must
certify and sign a submission, in accordance with the final rule, before
it is considered a complete submission.

The designated representative also serves as a single point of contact
for EPA to provide information about the program or a submission or to
ask questions about a submission.  Those reportersfacilities submitting
any other emission report under 40 CFR part 75, for example, ARP
facilities, must use the same designated representative for certifying,
signing and submitting all submissions and reports under this rule.

Each covered facility or supplier may also identify one alternate
designated representatives to act in lieu of the designated
representative.  The alternate designated representative can perform the
same duties as the designated representative, but the designated
representative is responsible for ensuring the appropriate information
is submitted to EPA by the timelines specified in the rule.

A designated representative or alternate designated representative may
delegate the submission of information to one or more “agents”.  The
agent can make electronic submissions to EPA, but is not allowed to
certify or sign a submission.  By delegating to an agent the ability of
to make electronic submissions to EPA, a designated representative or
alternate designated representative agrees that a submission to EPA by
the agent is deemed to be a submission that is certified, signed, and
submitted by such designated representative or alternate designated
representative.

2.  Certificate of Representation

A designated representative must submit a certificate of representation
that identifies the owners and operators of the facility or supplier,
the designated representative, any alternate designated representatives,
and other information as specified in 40 CFR 98.4.  EPA will establish
an electronic data reporting system that provides for the submission of
initial, as well as subsequently signed, certificates of representation.

In order to ensure sufficient processing time before a facility or
supplier’s initial GHG report under this part, EPA is requiring that
the designated representative submit a certificate of representation at
least 60 days before the deadline for the initial GHG report.

3.  Data Collection

Methods.  If a reporting entity already reports GHG emissions data to an
existing EPA program, the Agency will make efforts to minimize any
additional burden on the reporter when developing the reporting system
for the final rule.  Some existing programs, however, have data
collection and reporting requirements that are inconsistent with the
requirements for the mandatory GHG reporting rule.  When it is not
feasible to adapt an existing program to collect the appropriate GHG
data and supplemental data, EPA will require reporters to submit the
data required by the mandatory GHG reporting rule to the new data
reporting system for this rule.  Such reporters would also continue to
submit data to the existing reporting systems for other applicable
programs as required by those programs.

Reporters may fall into one or more categories:

(1)  Reporters that use existing data collection and reporting methods
and will not be required to report separately to the new data reporting
system for the GHG reporting rule.

(2)  Reporters that use existing data collection and reporting methods
but will be required to report the data separately to the new data
reporting system for the GHG reporting rule.

(3)  Reporters that are not currently required to collect and report GHG
emissions data to EPA and will be required to report using the new data
reporting system for the mandatory GHG reporting rule.

For categories (2) and (3), EPA is developing a new system for reporters
to submit the required data.  The detailed data elements that must be
reported are specified in the rule.  In general, reporters using this
new system must report annually to the Agency according to the schedule
specified in 40 CFR 98.3(b).

Data Submission.  The Designated Representative (described in 40 CFR
98.4) must use an electronic signature device (for example, a personal
identification number (PIN) or password) to submit a report.  If the
Designated Representative holds an electronic signature device that is
currently used for valid electronic signatures accepted under another
Agency program, we intend to design the new reporting system to also
accept valid electronic signatures executed with that device where
feasible.  (See 40 CFR 3.10 and the definitions of "electronic signature
device" and "valid electronic signature" under 40 CFR 3.3.)

Unique Identifiers for Facilities and Units.  The Agency’s reporting
format for a given reporting year could make use of several ID codes –
unique codes for a unit or facility.  To ensure proper matching between
databases, e.g., EPA-assigned facility ID codes and the Office of
Regulatory Information Systems (ORIS) (DOE) ID code, and consistency
from one reporting year to the next, we plan for the reporting system to
provide each facility with a unique identification code to be specified
by the Administrator.

Reporting Emissions in a Single Unit of Measure.  To maintain
consistency with existing State-level and Federal-level greenhouse
gasGHG programs in the U.S. and internationally, all emission
measurements must be reported in the SI, also referred to as metric
units.  Data used in calculations and supplemental data for QA could
still be submitted in English weights and measures (e.g., mmBtu/hr) but
the specific units of measure must be included in the data submission.
All emissions data must be submitted to the Agency in kilogramskg or
metric tons per unit of time.

Conversion of Emissions to CO2e.  Reporters must submit the quantity of
each applicable GHG emitted (or other metric such as quantities supplied
for industrial GHG suppliers) in two forms.  The data will be in the
form of quantity of the gas emitted (e.g., metric tons of N2O) per unit
of time and CO2e emissions per unit of time.

Delegation of Authority to State Agencies to Collect GHG Data.
Reporters must submit the emissions data and supplemental data directly
to EPA.  At this time, EPA does not intend to delegate the authority to
collect data to State or local agencies.

Submission Method.  All entities covered by this rule must report in an
electronic format to be specified by the Administrator.  The electronic
format, which will reflect the underlying electronic data reporting
system, will be developed prior to the first reporting date.  By
specifying in the rule text the exact information that must be reported
but not specifying the exact reporting format, EPA informs reporters
about exactly what information they must report and has flexibility to
modify the electronic reporting format and electronic data reporting
system in a timely manner based on implementation experience and new
technology.  EPA has used this approach successfully in existing
programs, such as the ARP and the Title VI Stratospheric Ozone
Protection Program, facilitating the deployment of new reporting formats
and reporting systems that take advantage of technologies such as,
eXtensible Markup Language (XML), and reducereducing the burden on
reporters and the Agency.  The electronic reports submitted under this
rule are subject to the provisions of 40 CFR part 3, specifying EPA
systems to which electronic submissions must be made and the
requirements for valid electronic signatures.

4.  Data Management

QA Procedures.  The new reporting system will include automated checks
for data completeness, data quality, and data consistency.  Such
automated checks are used for many other Agency programs (e.g., ARP.)

Providing Feedback to Reporters.  EPA has established a variety of
mechanisms under existing programs to provide feedback to reporters who
have submitted data to the Agency.  EPA will consider the approaches
used by other programs (e.g., electronic confirmations, results of QA
checks) and develop appropriate mechanisms to provide feedback to
reporters for the GHG reporting rule when we develop the electronic data
reporting system.  Regardless of data collection system specifics, the
goal is to ensure appropriate transparency and timeliness when providing
feedback to reporters who submitted data.

5.  Data Dissemination

Public Access to Emissions Data.  The Agency plans to publish data
submitted or collected under this rulemaking through EPA'sEPA’s Web
site, reports, and other formats (e.g., XML), with the exception of any
confidential business information (CBI) data.  For further discussion of
CBI, see sectionSection II.R of this preamble.

EPA will disseminate data after the reporting deadline.  The Agency
recognizes the high level of public interest in this data and plans to
disclose it in a timely manner, while also assuring completeness and
accuracy.

Sharing Emission Data with Other Agencies.  There are a growing number
of programs at the State, Tribe, Territory, and local level that require
emission sources in their respective jurisdictions to monitor and report
GHG emissions.  In order to be consistent with and supportive of these
programs and to reduce burden on reporters and program agencies, EPA
plans to share emissions data, with the exception of any CBI data, with
relevant agencies or approved entities using, where practical, common
data exchange standards and infrastructure.

B.  Summary of Comments and Responses on Collection, Management, and
Dissemination of GHG Emissions Data

This section contains a brief summary of major comments and responses.
A large number of comments on data collection, management, and
dissemination were received covering numerous topics.  Responses to
significant comments received can be found in the comment response
document for data collection and management in the docket
(EPA-HQ-OAR-2008-508-XXX).Responses to significant comments received can
be found in “Mandatory Greenhouse Gas Reporting Rule: EPA’s Response
to Public Comments, Designated Representative and Data Collection,
Reporting, Management, and Dissemination.”

1.  Designated Representatives, Alternative Designated Representatives,
and Agents

Designated Representatives.

Comment:  Several commenters requested that EPA use the ARP definition
for designated representatives to maintain consistency across the two
EPA programs and provide more flexibility regarding who can be a
designated representative.  Other commenters requested that EPA use the
responsible official definition from Title V or senior management
official from TRI to maintain consistency with those programs.  Other
commenters raised concerns over the employment status of designated
representatives.

Comment:  A commenter noted that rule language was inconsistent in
defining the relationships between designated representatives,
facilities and suppliers, and owners and operators.

Response:  EPA agrees that owners and operators should have more
flexibility to identify a designated representative, including
third-party representatives. EPA is striking the language requiring the
designated representative to be a person responsible for the overall
operation of the facility or supplier.  At this timeFurther, EPA is not
proposing to requirerequiring the use of a responsible official or
senior management official because either approach would be more
restrictive than the designated representative definition of the final
rule.  EPA believes that the proposed rule was neutral with respect to
the employment status of the designated representative.  The final rule
provides flexibility for the owners and operators to choose any
individual, employee or non-employee, to represent them.  EPA modified
the rule to clarify that each facility and each supplier shall have one
and only designated representative and that the designated
representative must be authorized by binding agreement of the owners and
operators.

Agents.

Comment:  Several commenters requested that EPA allow designated
representatives and alternate designated representatives the option of
delegating their responsibility to prepare and submit reports to EPA to
a preparer or agent.  Commenters also stated that the designated
representative requirement is inconsistent with Title V reporting.

Response:  EPA agrees that it is beneficial to give the designated
representatives and alternate designated representatives’ flexibility
concerning who prepares the reports that they are responsible for
submitting.  The final rule does not specify who must prepare reports,
but only specifies who must certify, sign, and submit them. EPA also
agrees that flexibility should be provided concerning who actually
submits the reports, similar to the flexibility provided in the ARP.
This flexibility was implied in the provision in the proposed rule that
reports be submitted “in a format specified by the Administrator,”
which format has included, in other programs such as the ARP, the
ability to use agents.  However, EPA decided to make this flexibility
explicit by including in the final rule provisions allowing and setting
requirements for agents selected by designated representatives or
alternate designated representatives.  The structure of designated
representative, alternate designated representative and agent fits a
wide range of circumstances from large companies to small, including
those accustomed to reporting under Title V.

Certification Statement.

Comment:  Several commenters described the self-certification procedures
in the proposed rule as too restrictive or suggested that the rule
should be consistent with requirements of the Title V or TRI program.
For example, the rule’s requirement that the designated representative
certify that they have “personally examined” the data should be
replaced by the Title V requirement that a responsible official certify
that they have made a “reasonable inquiry” as to the accuracy of the
data.

Response:  EPA believes that the high level of public interest in the
data collected under this rule, as well as its importance to future
policy, warrants establishment, by rule pursuant to CAA Sections 114,
208, and 301(a)(1), of a high standard for data quality and consistency
and a high level of accountability for reported data, which will help
ensure that the data quality and consistency standard is met.  The
certification requirements set forth in this rule are similar to the ARP
(Title IV).  EPA has successfully implemented a system allowing agents
in the ARP for over a decade.this approach in the ARP and found that it
provides a high degree of both data quality and consistency and
accountability.

2.  Certificate of representationRepresentation.

Comment:  One commenter requested that EPA designate a deadline for the
submission of the certificate of representation to ensure sufficient
time to process the submissions.

Response:  EPA agrees that it will need an earlier deadline for
submitting certificates of representation is advisable to provide
additional lead time to process the certificates and, if necessary,
verify identities and resolve issues. Because any delay in processing a
certificate of representation could delay the submission of data, EPA is
requiring that the designated representative submit the initial
certificate of representation at least 60 days prior to the deadline for
a facility or supplier’s initial GHG report.

Comment: Several commenters noted that a certificate of representation
for each facility and supplier is burdensome either due to timing with
the annual report, the need to maintain current information, or
ambiguities as to whether the certificate is complete.  Commenters also
requested that reporters be allowed more than 30 days to submit a
revised certificate of representation in the event of a change in
operators or owners.

Comment:  Several commenters requested that EPA provide an electronic
system for submitting and processing certificates of representation.

Response:  EPA believes the proposed reporting rule required electronic
reporting of the certificate of representation.  To clarify this
requirement, EPA has explicitly stateddoes not agree that certificates
of representation, are unnecessary or overly burdensome or that there
should be any uncertainty as well as annual GHG reports, must be
submitted electronicallyto whether a certificate of representation is
complete.  The information required on the certificate of representation
is listed in the rule and should be well known to the owners and
operators of the facility or supplier.  It is the responsibility of the
individual submitting the certificate to ensure its completeness.  This
certificate of representation has been used successfully for over a
decade in the ARP.

To minimize burden, the electronic data reporting system will provide
the means to electronically submit both the initial and any subsequent
certificate of representation.  EPA agrees that reporters should be
allowed more time to update changes in owners or operators but does not
agree that doing so in the annual report is sufficient.  The designated
representative is the primary point of contact between the owners and
operators and the EPA.  However, the owners and operators are ultimately
responsible for compliance with the requirements of reporting rule, and
it is therefore essential that the information in the certificate of
representation be timely and accurate in the event EPA finds it
necessary to contact the owners and operators of the facility or
supplier during periods in between the submission dates of the annual
reports, for example, to perform an audit.  The final rule allows
reporters up to 90 days to submit a revised certificate of
representation when a change in owners or operators occurs.  In
addition, EPA modified both the owner definition and rule to clarify
that the certificate of representation does not need to list persons
whose legal or equitable title to or leasehold interest in a facility or
supplier arises solely because they are limited partners in a
partnership with legal or equitable title to, a leasehold interest in,
or control of, the facility or supplier.

3.  Data collection Methods

Comment:  Several commenters requested that EPA use current emission
inventory reporting programs (e.g., NEI) to handle data collection or to
sunset the GHG reporting rule, and instead use such programs, after five
years.

Response:  EPA is requiring electronic reports to be submitted directly
to EPA using a new data reporting system for the GHG reporting rule.
The rationale for the decision to report directly to EPA is contained in
Sections II.N (emissions verification) and VI.B (compliance and
enforcement) of this preamble.  EPA recognizes the value of integrating
the GHG data reported under this rule with other emission reporting
programs.  NEI, for example, plans to incorporate the GHG emissions data
from this collection, as feasible, where facilities report to both
programs.

Comment:  Commenters requested that the design of the new data system be
modeled on existing electronic reporting programs, incorporate measures
to handle system errors, and provide opportunities for testing and user
training.

Response:  EPA agrees that a national electronic emissions database
should be the basis for receiving GHG data, and that the ARP database
provides a useful model for a future GHG emissions database.  Data would
be provided to EPA electronically to reduce the burden on the reporters
and EPA, and to increase the accuracy of the reported emissions, among
other reasons.  The issue of transmission failures and transmission
errors will be addressed in the development of the electronic reporting
system.  EPA agrees that is it important for data reporters to be able
to confirm that their data were accepted by the system and to compare
the data in the system to the data that they reported to ensure it was
accurately incorporated into the database.  The new data system will
meet Agency requirements for security and hosting.  EPA acknowledges
comments supporting a “user friendly” reporting system.  EPA plans
to follow well known design practices within the constraints of
security, accessibility and Agency design requirements.

EPA agrees with commenters on the need for testing and user training.
We will continue the outreach effort undertaken during this rulemaking
to encourage stakeholder participation in ‘beta’ testing and
training opportunities.

Unique Identifiers for Facilities and Units

Comment:  Several commenters requested that EPA assign and track
corporate identifiers for reporting facilities to facilitate
corporate-level analysis of emission data. Commenters also requested
that EPA publish a list of identifiers for all EPA programs that a
covered facility may report to.

Response:  EPA is collecting owner and operator information through the
Certificate of Representation (40 CFR 98.4).  At this time, EPA is not
proposing to assign unique identifiers to the owners and operators
because of the complexity of ownership structures (including percentage
shares of owners, subsidiaries, holding companies, and limited liability
partnerships) that can be used in the multiplicity of industrial and
commercial sectors required to report emission data under this rule.
Although as explained earlier in the preamble, we are exploring options
for adding additional data elements to the reports, such as name of
parent company and NAICS code(s), to allow easier aggregation of
facility-level data to the corporate level under this program.  EPA
expects to subject any additional requests to notice and comment
rulemaking.

EPA’s Facility Registry System (FRS) links EPA program identification
numbers under onea unique facility record.  The FRS database is publicly
available to queries from the EPA.GOV webWeb site under the Envirofacts
Data Warehouse home page:    HYPERLINK
"http://www.epa.gov/enviro/html/fii/fii_query_java.html"
http://www.epa.gov/enviro/html/fii/fii_query_java.html . Descriptive
information about FRS can be found at:    HYPERLINK
"http://www.epa.gov/enviro/html/fii/index.html"
http://www.epa.gov/enviro/html/fii/index.html .  FRS may be searched by
program identification, facility name or geographic location.  The
Agency will continue to make FRS and all program identification numbers
readily available and will include the facilities reporting under this
rule in the FRS collection of program ID’s once public release of the
data is authorized.

Submission Method

Comment:  Several commenters requested that EPA specify the format of
the data collection methods and subject it to public comment before
finalizing the rule.  These commenters indicated that without the
details of the data collection methods it was not possible to evaluate
the GHG reporting rule, including implementation costs and reporting
burden.

Response:  The final rule requires reports to be submitted “in a
format specified by the Administrator.”  EPA is thereby retaining the
flexibility to specify the electronic format, and the underlying
electronic reporting system reflected in the format, after promulgation
of this final rule but well before the first reporting deadline and, if
necessary, to change the electronic format and electronic reporting
system based on implementation experience and new technology.  Several
other reporting programs (e.g., ARP) use a similar approach where the
specific electronic reporting system is not included within the rule or
subjected to formal notice and comment.  The relevant subparts of the
proposed GHG reporting rule specified the data elements that each entity
must report, and therefore parties could evaluate the reporting burden
and costs under the proposed rule and had an opportunity to comment on
that aspect of the proposed rule.  In addition, before specifying the
electronic format and underlying electronic reporting system, EPA will
conduct outreach and provide opportunities for stakeholder feedback on
the specific reporting format and reporting system.

Comment:  Several commenters requested that EPA provide alternative
methods to report emission data, including paper submissions, scanned
documents, and direct data upload.

Response:  EPA is requiring electronic reporting of the GHG and
supplemental data to increase the accuracy and timeliness of the
reported emission data and is not providing options for paper
submissions or scanned documents.GHG reports.  Requiring electronic
submission of data allows EPA to conduct electronic QA testing of all
such data when it is received and to provide electronic feedback to the
reporters almost instantaneously.  This gives reporters the opportunity
to correct any errors, or to provide explanations of potentially
problematic data, within a short time frame, thereby increasing the
accuracy and timeliness of the data.  Moreover, electronically submitted
data can be readily sorted and analyzed by EPA and members of the
public.  In contrast, submission of hardcopy data (whether in paper or
scanned documents) would make audit and correction, as well as sorting
and analysis, of the data much more cumbersome, inefficient, and time
consuming.  Indeed, particularly in light of the large number of
facilities and suppliers that will be reporting and the large amounts of
reported data that will be received as a result, the ability to audit
and analyze the data received in hardcopy format would likely be
significantly limited.  This would adversely affect the usefulness, as
well as the accuracy and timeliness of the data.

In requiring electronic data submission, EPA will provide a Web-based
reporting system to guide reporters through the data entry, emission
calculation, and submission process.  This reporting system will conform
with to EPA information technology standards and 40 CFR part 3.  In
addition, EPA will provide a mechanism for reporters to submit data
files directly to EPA using a standard format (e.g., XML) to be
prescribed by the Administrator before the first reporting date.  To
reduce the burden on reporters and reduce errors, EPA will conduct
outreach and training for reporters on the reporting format and
underlying reporting systems.  EPA will also provide a hotline to answer
questions about the program and reporting format and reporting systems.
EPA expects that most reporters affected by this rule are already
familiar with Web-based or electronic reporting systems through other
EPA programs.

Delegation of Authority to State Agencies to Collect GHG Data

Comment:  Several commenters requested that EPA delegate rule
implementation, including data collection, to State and local agencies.
These commenters indicated that several States already have GHG
reporting requirements and have systems in place to collect and verify
this data, and suggested that delegation of the rule could help reduce
inconsistency or duplication of effort between State programs and this
Federal mandatory GHG reporting rule.  Other commenters supported
requiring facilities to submit data directly to EPA, without delegation
of data collection to State and local agencies, in order to provide
national consistency.

Response:  EPA is requiring electronic reports to be submitted directly
to EPA, and is not delegating data collection to State and local
agencies.  The rationale for this decision is provided in Section VI.B
of this preamble.

5.  Data Dissemination

Public Access to Emissions Data.

Comment:  Several commenters supported EPA’s proposal to make the data
submitted under the reporting rule available to the public. Some
requested that data be published real time, while others requested the
data be released in a timely manner.

Response:  With the exception of CBI, EPA intends to make data submitted
under this program available to the public in a timely manner after the
reports have been submitted and EPA has completed QA/QC of the data.  To
that end, EPA intends to establish a new reporting system that will
accept electronic submissions of GHG emissions and supporting data and
facilitate EPA’s verification of the submissions.  EPA plans to
provide public access to the data by posting electronic data on a webWeb
site in a timely manner after the reporting deadline.  This level of
transparency is important to public participation in future policy
development and for building public confidence in the quality of the
data collected.

Sharing Emissions Data with Other Agencies.

Comment:  Some commenters stressed that electronic data reporting
systems need to be consistent and inter-operable and allow data exchange
between TCR, State rules, NEI, ARP, other stakeholders and EPA.

Response:  EPA will continue to coordinate with other Federal, State,
and regional programs and will make efforts to facilitate data exchange
when designing the data reporting systems system that will be used for
the GHG reporting rule.  EPA staff is working with the Exchange Network,
which includes States, other EPA programs and TCR, on a data exchange
standard for GHG reporting.    EPA intends to employ inter-operable data
exchange standards.  EPA intends to design and manage the GHG data
collection to take advantage of existing efforts on data exchange
standards and to work with stakeholder groups to promote the easy
exchange and sharing of the data collected under this rule.  For
example, EPA is extending the Consolidated Emissions Reporting Schema
(CERS), currently in use by the EPA’s NEI program, to support data
reporting and publication under this rule.  EPA also intends to use
existing tools, such as FRS and SRS, to ensure data consistency.

To the extent possible, EPA will consider existing reporting systems and
work with those programs and systems to develop a reporting scheme that
facilitates data exchange.  EPA anticipates that this coordination will
reduce the burden of reporting for both reporters and government
agencies.  However, as explained in Section II.O of this preamble, the
various reporting programs do not have identical data needs and
requirements.  Therefore, at this time, it is not possible for companies
reporting under State and Federal rules and voluntary programs to file a
single report that will satisfy all reporting requirements.

Comment:  Commenters requested that the data system utilize common
standards, such as XML and geographic identifiers, and provide
descriptive text wherever codes or abbreviations are used.

Response:  EPA agrees that publishing the results of this data
collection using common, standards-based schemas and formats will
promote the exchange of data between EPA, States and other entities.
The published results will include the latitude and longitude of
facilities as well as help text with definitions of codes and
abbreviations.

VI.  Compliance and Enforcement

This section of the preamble generally describes the compliance
assistance and enforcement activities EPA intends to implement for the
GHG reporting rule and summarizes public comments and responses on
compliance assistance, role of the States, and enforcement.

A.  Compliance and Enforcement Summary

1.  Compliance Assistance

EPA plans to conduct an active outreach and technical assistance program
following publication of the final rule.  The primary audience is
potentially affected industries.  We intend to develop implementation
and outreach materials and training to help potential reporters
understand whether the rule applies to them and explain the reporting
requirements and timetables.  The program particularly will target
industrial, commercial, and institutional sectors that do not routinely
deal with air pollution regulations.

Compliance materials will be tailored to the needs of various sectors.
These materials might include, for example, fact sheets, information
sheets, plain English guides, frequently asked question and answer
documents, applicability tools, monitoring and recordkeeping checklists,
and training on rule requirements and the electronic reporting system.
We also expect to implement a compliance assistance e-mail and telephone
hotline for answering questions and providing technical assistance.
Note that while EPA plans to issue compliance assistance materials,
reporters should always consult the final rule to resolve any
ambiguities or questions.

2.  Role of the States

While EPA does not intend to formally delegate data collection and
enforcement of the GHG reporting rule to State agencies, the States can
play a vital role in compliance EPA will likely enlist State assistance,
when it is available, for outreach and compliance assistance with the
final rule.  (However, State and local agencies will not be required to
provide EPA any assistance with these activities, given State and local
agency resource constraints and priorities.).  State and local air
pollution control agencies routinely interact with many of the sources
that would report under this rule.  Further, several States have
experience implementing State mandatory GHG reporting and reduction
programs.  Therefore, we plan to work with those State and local
agenciesagencies that are able to assist EPA to define their important
role in communicating the requirements of the rule and providing
compliance assistance.  In concert with their routine inspection and
other compliance and enforcement activities for other CAA programs,
State and local agencies may also be able to assist with educating
facilities and assuring compliance at facilities subject to this rule.

3.  Enforcement

Facilities or suppliers that fail to monitor or report GHG emissions,
quantities supplied, or other data elements according to the
requirements of the applicable rule subparts could potentially be
subject to enforcement action by EPA under CAA sections 113 and 203-205.
 The CAA provides for several levels of enforcement that include
administrative, civil, and criminal penalties.  The CAA allows for
injunctive relief to compel compliance and civil and administrative
penalties of up to $37,500 per day per violation.

Actions (or inactions) that could ultimately be considered violations
include but are not limited to the following:

Failure to report GHG emissions (for suppliers, the emissions that would
result from combustion or use of the products they supply).

Failure to collect data needed to calculate GHG emissions.

Failure to continuously monitor and test as required.  Note that merely
filling in missing data as specified does not excuse a failure to
perform the monitoring or testing.

Failure to calculate GHG emissions according to the methodology(s)
specified in the rule.

Failure to keep required records needed to verify reported GHG
emissions.

Falsification of reports.

B.  Summary of Public Comments and Responses on Compliance and
Enforcement

This section contains a brief summary of major comments and responses.
A large number of comments on compliance and enforcement were received
covering numerous topics.  Responses to significant comments received
can be found in the comment response document for compliance“Mandatory
Greenhouse Gas Reporting Rule: EPA’s Response to Public Comments,
Compliance and enforcement in the docket
(EPA-HQ-OAR-2008-508-XXX).Enforcement.”

1.  Role of States in compliance and enforcement

Comment:  Several commenters requested that EPA delegate rule
implementation, including data collection, emissions verification, and
enforcement of the rule to State and local agencies.  These commenters
indicated that several States already have GHG reporting requirements
and have systems in place to collect and verify these data, and they
suggested that delegation of the rule could help reduce inconsistency or
duplication of effort between State programs and this Federal mandatory
GHG reporting rule.  However the majority of commenters, including
industry, environmental organizations, and many public citizens
supported requiring facilities to submit data directly to EPA, without
delegation of data collection or emissions verification to State and
local agencies, in order to provide national consistency.

Response:  Section 114(b) of the CAA allows EPA to delegate to States
the authority to implement and enforce Federal rules.  At this time,
however, EPA does not propose to formally delegate implementation of the
rule (such as data collection and enforcement activities) to State and
local agencies, as discussed in sectionSection II.O of this preamble.
The goal of data collection under this rule is to establish a
consistent, verified, national data set that is available to EPA,
States, other agencies, policy makers, and the public for use in
developing and implementing future GHG policies and reduction programs.
To meet these data consistency and timeliness constraints, and to serve
policy objectives, it is most efficient to have the data submitted
directly into one central EPA system and have centralized emissions data
verification.  Direct reporting to EPA will also help us better
understand and address common compliance problems that may arise from
the GHG reporting rule.

EPA recognizes that several States already have mandatory GHG reporting
programs that are broader in scope, in a more advanced state of
development, and have different policy objectives than this rulemaking.
These are important programs that not only led the way in reporting of
GHG emissions before the Federal government acted but also have
catalyzed important GHG reductions.

As discussed in sectionSection II.O of this preamble, we are committed
to working with States and other groups (e.g, TCR, Environmental Council
of the States (ECOS)) to develop electronic reporting tools that can
both collect and share data in an efficient and timely manner.  At this
time, EPA is in the process of developing the reporting format and tools
and therefore has not specified the exact reporting format, other than
it will be electronic, in order to maintain flexibility to modify the
reporting format and tools in a timely manner.  To the extent possible,
EPA will work with existing reporting programs and systems to develop a
reporting scheme that minimizes the burden on sources.

While EPA is not delegating authority to the States, we will work with
States as we develop rule implementation plans to determine appropriate
implementation roles, such as assisting with outreach efforts and site
visits to audit facility reports.  For related comments and responses,
please see the following sections of this preamble: II.N (verification
approach), II.O (role of States) and II.R (CBI).

2.  Enforcement

Comment:  Some commenters suggested that States should be allowed to
participate in the enforcement of the GHG reporting rule, perhaps
through delegated enforcement authority.

Response:  EPA welcomes States’ interest in helping EPA enforce this
or any other Federal rule and we will work with States to determine
appropriate roles as described above.  We do not plan to delegate the
enforcement of this rule in the same sense that we do under other CAA
programs such as the NESHAP program in which, for example, notices may
be sent only to the delegated States.  If a State would like the
authority to enforce this rule, then the State may adopt the provisions
of this GHG reporting rule into State laws or regulations by reference.
This would make the provisions enforceable as a matter of State law
which can be enforced in a State court.

Comment:  Some commenters stated that they should be able to petition
EPA to enforce against violators where they have evidence of or suspect
violations.

Response:  EPA welcomes any tips from citizens about suspected
violations of this or any rule through our tips webWeb site,   HYPERLINK
"http://www.epa.gov/tips"  www.epa.gov/tips .  However, we are not
including a formal petition process in the rule because such a process
was not proposed.  We do not favor a formal petition process because a
formal petition is not necessary for us to investigate concerns raised
by citizens and such a process might take extra time or divert resources
from other priorities.

Comment:  Some commenters stated that a flexible enforcement policy is
needed.  They noted that the proposed rule cited the CAA for the
authority for the GHG reporting rule and stated that a violation of the
reporting rule is a violation of the CAA and subject to maximum daily
penalties allowed under the CAA.  However, the commenters were concerned
that the maximum penalty should not be applied in most cases and argued
that there are many instances when a less severe action is appropriate.

Response:  EPA agrees with the commenters that flexibility is needed in
enforcing the rule.  The penalty cited in the proposal preamble and rule
is a statutory maximum, and would not be applied in every case.  EPA’s
objective with the reporting rule is to collect accurate GHG data in a
timely manner.  In order to achieve that objective, EPA will generally
work with sources that must submit GHG reports in order to facilitate
compliance and provide the needed data to EPA.  The CAA allows EPA
discretion to pursue a variety of informal and formal actions in order
to achieve compliance.  While EPA is committed to working with reporters
to ensure accuracy, this does not relieve reporters from their
obligation to report data that are complete, accurate, and in accordance
with the requirements of this rule.

In many instances, based on past enforcement experience, less punitive
enforcement actions are exhausted before more punitive fines and
penalties are imposed on a non-complying source.  These less punitive
actions may include a warning to the source that it is in non-compliance
along with advice on what needs to be done to comply and a request for
response from the facility.  Initial actions may also include a formal
legal notification from the EPA that defines the violation, provides
evidence, and requires (orders) corrective actions by specific dates.
The EPA enforcement office always uses discretion and takes
case-specific circumstances into account when determining the
appropriate actions to address violations of CAA rules.  We will
continue to do so in enforcing the reporting rule, and we are not laying
out a specific enforcement policy or hierarchy in order to maintain the
necessary flexibility.

VII.  Economic Impacts on the Rule

This section of the preamble examines the costs and economic impacts of
the GHG reporting rule, including the estimated costs and benefits of
the rule, and the estimated economic impacts of the rule on affected
entities, including estimated impacts on small entities.  Complete
detail of the economic impacts of the proposedfinal rule can be found in
the text of the Regulatory Impact Analysis (RIA) for the final rule
(EPA-HQ-OAR-2008-0318-XXX0508).

This section also contains a brief summary of major comments and
responses.  A large number of comments on economic impacts of the rule
were received covering numerous topics.  Responses to significant
comments received can be found in the comment response document for
economic impacts in“Mandatory Greenhouse Gas Reporting Rule: EPA’s
Response to Public Comments, Cost and Economic Impacts of the docket
(EPA-HQ-OAR-2008-508-XXX).Rule.”

A.  How were compliance costs estimated?

1.  Summary of Method Used to Estimate Compliance Costs

EPA estimated costs of complying with the rule for reporting process
emissions of GHGs in each affected industrial facility, as well as
emissions from stationary combustion sources at industrial facilities
and other facilities, GHG and supply data from fuel suppliers and
industrial gas suppliers, and GHG data for mobile sources.  2006 is the
representative year of the analysis in that the annual costs were
estimated using the 2006 population of emitting sources.  EPA used
available industry and EPA data to characterize conditions at affected
sources.  Incremental monitoring, recordkeeping, and reporting
activities were then identified for each type of facility and the
associated costs were estimated.

The costs of complying with the rule will vary from one facility to
another, depending on the types of emissions, the number of affected
sources at the facility, existing monitoring, recordkeeping, and
reporting activities at the facility, etc.  The costs include labor
costs for performing the monitoring, recordkeeping, and reporting
activities necessary to comply with the rule.  For some facilities,
costs include costs to monitor, record, and report emissions of GHGs
from production processes and from stationary combustion units.  For
other facilities, the only emissions of GHGs are from stationary
combustion.  EPA’s estimated costs of compliance are discussed in
greater detail below:

Labor Costs.  The costs of complying with and administering this rule
include time of managers, technical, and administrative staff in both
the private sector and the public sector.  Staff hours are estimated for
activities, including:

Monitoring (private): staff hours to operate and maintain emissions
monitoring systems.

Reporting (private): staff hours to gather and process available data
and reporting it to EPA through electronic systems.

Assuring and releasing data (public): staff hours to quality assure,
analyze, and release reports.

Staff activities and associated labor costs will potentially vary over
time.  Thus, cost estimates are developed for start-up and first-time
reporting, and subsequent reporting.  Wage rates to monetize staff time
are obtained from the Bureau of Labor Statistics (BLS).

Equipment Costs.  Equipment costs include both the initial purchase
price of monitoring equipment and any facility/process modification that
may be required.  For example, the cost estimation method for mobile
sources involves upstream measurement by the vehicle manufacturers.
This may require an upgrade to their test equipment and facility.  Based
on expert judgment, the engineering costs analyses annualized capital
equipment costs with appropriate lifetime and interest rate assumptions.
 Cost recovery periods and interest rates vary by industry, but
typically, one-time capital costs are amortized over a 10-year cost
recovery period at a rate of 7seven percent.

2.  Summary of Comments and Responses

Comment:  A majority of the comments received on the compliance costs of
the reporting rule focused on facility level costs for monitoring and
reporting.  Commenters noted that noted that costs estimated for a
representative facility may differ from actual facility level costs.
Some commenters specifically referred to the costs associated with
installing and maintaining capital equipment.  Other commenters noted
that some source categories had higher estimated compliance costs than
others.  Several commenters expressed confusion over how combustion
related monitoring costs are added to process related monitoring costs.

Response:  EPA recognizes that the costs presented for facilities
represent costs that would be incurred by a representative facility, and
may not reflect the costs that would be incurred by each individual
facility in each industry because facilities affected by each subpart
vary.

Nevertheless, after reviewing the comments received, EPA has determined
that its analysis provides a reasonable characterization of costs for
facilities affected by each subpart and that its documentation provides
adequate documentation of how the costs were estimated.  As described in
the next section, EPA collected and evaluated cost data from multiple
sources, and weighed the analysis prepared at proposal against the input
received through public comments.  In any analysis of this type, there
will be variations in costs among facilities, and after thoroughly
reviewing the available information, we have concluded that the costs
developed for this rule appropriately reflect a “representative
facility” in the sector.

The costs facing facilities in some sectors include not only process
costs but additional costs associated with other subparts of the rule.
While these costs are presented individually in Section 4 of the RIA for
the final rule, where these conditions apply the costs are summed across
applicable subparts and compared to revenues in the economic and small
entity impact analyses.

B.  What are the costs of the rule?

1.  Summary of Costs

For the cost analysis, EPA gathered existing data from EPA, industry
trade associations, States, and publicly available data sources (e.g.,
labor rates from the BLS) to characterize the processes, sources,
sectors, facilities, and companies/entities affected. EPA also
considered cost data submitted in public comments on the proposed rule,
as further discussed in Section VII.B.2 of this preamble.  Costs were
estimated on a per entity basis and then weighted by the number of
entities affected at the 25,000 metric tons CO2e threshold.

To develop the costs for the rule, EPA estimated the number of affected
facilities in each source category, the number and types of combustion
units at each facility, the number and types of production processes
that emit GHGs, process inputs and outputs (especially for monitoring
procedures that involve a carbon mass balance), and the measurements
that are already being made for reasons not associated with the rule (to
allow only the incremental costs to be estimated).  Many of the affected
source categories, especially those that are the largest emitters of
GHGs (e.g., electric utilities, industrial boilers, petroleum
refineries, cement plants, iron and steel production, pulp and paper)
are subject to national emission standards and we use data generated in
the development of these standards to estimate the number of sources
affected by the reporting rule.

Other components of the cost analysis included estimates of labor hours
to perform specific activities, cost of labor, and cost of monitoring
equipment.  Estimates of labor hours were based on previous analyses of
the costs of monitoring, reporting, and recordkeeping for other rules;
information from the industry characterization on the number of units or
process inputs and outputs to be monitored; and engineering judgment by
industry and EPA industry experts and engineers.  Labor costs were taken
from the BLS and adjusted to account for overhead.  Monitoring costs
were generally based on cost algorithms or approaches that had been
previously developed, reviewed, accepted as adequate, and used
specifically to estimate the costs associated with various types of
measurements and monitoring.

A detailed engineering analysis was conducted for each subpart of the
rule to develop unique unit costs.  This analysis is documented in the
RIA for the final rule.  The TSDs for each source category provide a
discussion of the applicable measurement technologies and any existing
programs and practices.  The comment response documentsappropriate
volume of “Mandatory Greenhouse Gas Reporting Rule: EPA’s Response
to Public Comments” for each source category provide responses to any
public comments on these source category engineering and cost analyses.
Section 4 of the RIA for the final rule contains a description of the
engineering cost analysis.

Table VII-1 of this preamble presents by subpart:  the number of
entities, the downstream emissions covered, the first year capital costs
and the first year annualized costs of the rule.  EPA estimates that the
total national annualized cost for the first year is $132 million, and
the total national annualized cost for subsequent years is $89 million
(2006$).  Of these costs, roughly 13 percent fall upon the public sector
for program administration in the first year, while 87 percent fall upon
the private sector.  General stationary combustion sources, which are
widely distributed throughout the economy, are estimated to incur
approximately 26 percent of costs in the first year; other sectors
incurring relatively large shares of costs are pulp and paper
manufacturing (9% percent) and vehicle and engine manufacturers (9%
percent).

The threshold, in large part, determines the number of entities required
to report GHG emissions and hence the costs of the rule.  The number of
entities excluded increases with higher thresholds.  Table VII-2 of this
preamble provides the cost-effectiveness analysis for various thresholds
examined.  Two metrics are used to evaluate the cost-effectiveness of
the emissions threshold.  The first is the average cost per metric ton
of emissions reported ($/metric ton CO2e).  The second metric for
evaluating the threshold option is the incremental cost of reporting
emissions.  The incremental cost is calculated as the additional
(incremental) cost per metric ton starting with the least stringent
option and moving successively from one threshold option to the next.
For more information about the first year capital costs (unamortized),
project lifetime and the amortized (annualized) costs for each subpart,
please refer to section 4 of the RIA for the final rule and the RIA cost
appendix.  Not all subparts require capital expenditures but those that
do are clearly documented in the RIA for the final rule.

Table VII-1.  Estimated Covered Entities, Emissions and Costs by Subpart
(2006$)

Subpart	Number Covered of Entities	Downstream Emissions	First Year
Capital Costs	First Year Total Annualized Costs2

(Million

of MtCO2e)	Share	(Million)	Share	(Million)	Share

Subpart A —General Provisions	0	0.0	0%	$0.0 	0%	$0.0 	0%

Subpart B — Reserved	0	0.0	0%	$0.0 	0%	$0.0 	0%

Subpart C —General Stationary Fuel Combustion Sources	3,000	220.0	6%
$10.5 	27%	$25.8 	20%

Subpart D —Electricity Generation	1,108	2262.0	59%	$0.0 	0%	$3.3 	2%

Subpart E —Adipic Acid Production	4	9.3	0%	$0.0 	0%	$0.1 	0%

Subpart F —Aluminum Production	14	6.4	0%	$0.0 	0%	$0.2 	0%

Subpart G —Ammonia Manufacturing	23	12.9	0%	$0.0 	0%	$0.4 	0%

Subpart H —Cement Production	107	86.8	2%	$5.4 	14%	$6.8 	5%

Subpart K —Ferroalloy Production	9	2.3	0%	$0.0 	0%	$0.1 	0%

Subpart N —Glass Production	55	2.2	0%	$0.0 	0%	$0.5 	0%

Subpart O —HCFC-22 Production	3	13.8	0%	$0.0 	0%	$0.0 	0%

Subpart P —Hydrogen Production	41	15.0	0%	$0.0 	0%	$0.4 	0%

Subpart Q —Iron and Steel Production	121	85.0	2%	$0.0 	0%	$3.7 	3%

Subpart R —Lead Production	13	0.8	0%	$0.0 	0%	$0.1 	0%

Subpart S —Lime Manufacturing	89	25.4	1%	$4.9 	12%	$5.3 	4%

Subpart U —Miscellaneous Uses of Carbonates	0	0.0	0%	$0.0 	0%	$0.0 	0%

Subpart V —Nitric Acid Production	45	17.7	0%	$0.2 	1%	$0.9 	1%

Subpart X —Petrochemical Production	80	54.4	1%	$0.0 	0%	$2.2 	2%

Subpart Y —Petroleum Refineries	150	204.7	5%	$1.6 	4%	$6.1 	5%

Subpart Z —Phosphoric Acid Production	14	3.8	0%	$0.8 	2%	$0.8 	1%

Subpart AA —Pulp and Paper Manufacturing	425	57.7	2%	$14.8 	37%	$8.6
7%

Subpart BB —Silicon Carbide Production	1	0.1	0%	$0.0 	0%	$0.0 	0%

Subpart CC —Soda Ash Manufacturing	5	3.1	0%	$0.0 	0%	$0.1 	0%

Subpart EE —Titanium Dioxide Production	8	3.7	0%	$0.0 	0%	$0.1 	0%

Subpart GG —Zinc Production	5	0.8	0%	$0.0 	0%	$0.1 	0%

Subpart HH —Landfills	2,551	91.1	2%	$1.3 	3%	$12.4 	9%

Subpart JJ —Manure Management	107	4.5	0%	$0.0 	0%	$0.3 	0%

Subpart LL -Suppliers of Coal  & Subpart MM —Suppliers of Petroleum
Products	315	0.0	0%	$0.0 	0%	$3.7 	3%

Subpart NN —Suppliers of Natural Gas and Natural Gas Liquids	1,502	0.0
0%	$0.0 	0%	$6.8 	5%

Subpart OO —Suppliers of Industrial Greenhouse Gases	167	643.4	17%
$0.0 	0%	$0.5 	0%

Subpart PP —Suppliers of Carbon Dioxide (CO2)	13	0.0	0%	$0.0 	0%	$0.0
0%

Subpart QQ - Motor Vehicle and Engine Manufacturers	317	NA	NA	$0.0 	0%
$8.6 	7%

Coverage Determination Costs for Non-Reporters	NA	NA	NA	NA	NA	$17.2 	13%

Private Sector, Total	10,152	3,827	100%	$39.6 	100%	$115.0 	87%

Public Sector, Total	NA	NA	NA	NA	NA	$17.0 	13%

Total	10,152	3,827	100%	$39.6 	100%	$132.0 	100%

1 Emissions from upstream facilities are excluded from these estimates
to avoid double counting.

2 Total costs include labor and capital costs incurred in the first
year. Capital Costs are annualized using appropriate equipment lifetime
and interest rate (see additional details in RIA section 4 of the RIA
for the final rule).

Table VII-2.  Threshold Cost-Effectiveness Analysis (2006$)

Threshold (tons CO2e)	Facilities Required to Report	Total Costs

(million $2006)	Downstream Emissions Reported (MtCO2e/

year)	Percentage of Total Downstream Emissions Reported	Average
Reporting Cost ($2006/ton)	Incremental Cost ($/metric ton)

100,000	6,269	$89 	3,738	53%	$0.02 	 --

25,000	10,152	$132 	3,827	54%	$0.03 	$0.49

10,000	16,718	$160 	3,861	55%	$0.04 	$0.83

1,000	54,229	$398 	3,926	56%	$0.10 	$3.67

* Cost per metric ton relative to the selected option.

Note: Does not include emissions for Motor Vehicle and Engine
Manufacturers (Subpart QQ).

Table VII-3 of this preamble presents costs broken out by upstream and
downstream sources.  Upstream sources include the fuel suppliers and
industrial GHG suppliers.  Downstream suppliers include combustion
sources, industrial processes, and biological processes.  Most upstream
facilities (e.g., refineries) are also direct emitters of GHGs and are
included in the downstream side of the table.  As shown in Table VII-3
of this preamble, over 99 percent of industrial processes emissions are
covered at the 25,000 metric tons CO2e threshold for a cost of
approximately $36 million.  However, it should be noted that due to data
limitations the coverage estimates for upstream and downstream source
categories are approximations.

Table VII-3.  Upstream versus Downstream Costs

Upstream1 	Downstream2,3,4

Source Category	#Reporters	Emissions Coverage (%)10	First Year Cost

(millions)	Source Category	#Reporters2	Emissions Coverage3,7,10

(%)	First Year Cost3

(millions)

Coal Supply 	0	0%	$0.00 	Coal5,6 Combustion	N/A	99.0%	N/A

Petroleum Supply	315	100%	$3.66 	Petroleum5 Combustion9	N/A	20.0%	N/A

Natural Gas Supply	1,502	68%	$6.76 	Natural Gas5 Combustion	N/A	23.0%
N/A

Sub Total Combustion	4,108	N/A	$29.04

Industrial Gas Supply	167	100%	$0.52 	Industrial Gas Consumption	17	14%
$0.24

	Industrial Processes	1,068	99.6%	$36.2

	Fugitive Emissions (coal, oil and gas)	0	0%	$0.00

	Biological Processes	2,658	58%	$12.77

	Vehicle8 and Engine Manufacturers	317	80%	$8.61

Notes

1   Most upstream facilities (e.g., refineries) are also direct emitters
of greenhouse gases, and are included in the downstream side of the
table.

2  Estimating the total number of downstream reporters by summing the
rows will result in double-counting because some facilities are included
in more than one row due to multiple types of emissions (e.g.,
facilities that burn fossil fuel and have process/fugitive/biological
emissions will be included in each downstream category).

3   The coverage and costs for downstream reporters apply to the
specific source category, i.e., the fixed costs are not
“double-counted” in both stationary combustion and industrial
processes for the same facility.

4   The thresholds used to determine covered facilities are additive,
i.e., all of the source categories located at a facility (e.g.,
stationary combustion and process emissions) are added together to
determine whether a facility meets the threshold (e.g., 25,000 metric
tons of CO2e/yr).

5   Estimates for the number of reporters and total cost for downstream
stationary combustion do not distinguish between fuels.  National level
data on the number of reporters could be estimated.  However, estimating
the number of reporters by fuel was not possible because a single
facility can combust multiple fuels.  For these reasons there is not a
reliable estimate of the total of the emissions coverage from the
downstream stationary combustion.

6   Approximately 90 percent of downstream coal combustion emissions are
already reported to EPA through requirements for electricity generating
units under the Acid Rain ProgramARP.

7   Due to data limitations, the coverage for downstream sources for
fuel and industrial gas consumption in this table does not take into
account thresholds.  Assuming full emissions coverage for each source
slightly over-states the actual coverage that will result from this
rule.  To estimate total emissions coverage downstream, by fuel, we
added total emissions resulting from the respective fuel combusted in
the industrial and electricity generation sectors and divided that by
total national GHG emissions from the combustion of that fuel.

8  The percent of coverage here is percentage of total heavy-duty
highway vehicles and engines, motorcycles, and nonroad engine sales
covered by manufacturer reporting in this proposal rather than emissions
coverage.  The “threshold” for mobile sources is based on
manufacturer size rather than total emissions.  In this rule, all
heavy-duty highway and nonroad vehicle and engine manufacturers, except
those that meet EPA’s definition of “small business” or “small
volume manufacturers”, would report emissions rates of  CO2, CH4, and
N2O from the products they supply.  This source category is neither
upstream nor downstream, but is included in the downstream column for
illustrative purposes.

9 The emissions coverage for petroleum combustion includes combustion of
fuel by transportation sources as well as other uses of petroleum (e.g.,
home heating oil).  It cannot be broken out by transportation versus
other uses as there are difficulties associated with tracking which
products from petroleum refiners are used for transportation fuel and
which were not.  We know that although refiners make these designations
for the products leaving their gate, the actual end use can and does
change in the market.  For example, designated transportation fuel can
always be used as home heating oil.

10  Emissions coverage from the combustion of fossil fuels upstream
represents CO2 emissions only.  It is not possible to estimate nitrous
oxide and methane emissions without knowing where and how the fuel is
combusted.  In the case of downstream emissions from stationary
combustion of fossil fuels, nitrous oxide and methane emissions are
included in the emissions coverage estimate.  They represent
approximately 1one percent of the total emissions.

2.  Summary of Comments and Responses

Comment:  EPA received comments on source specific cost data reflected
in the engineering cost analysis presented in section 4 of the
Regulatory Impact Analysis (RIA) for the proposed rule
(EPA–HQ–OAR–2008–0318–002).  Some commenters asked EPA to not
overly burden entities that may be required to report and to balance
reporting costs with the need for accurate reporting of GHG emissions.

Additional comments received questioned EPA’s estimate of the costs
associated with third party verification, as well as the estimated
burden to the Federal government for self certification with EPA
verification.

Response:  EPA considered all relevant comments regarding source
specific cost data developed in the engineering cost analysis and used
in the Regulatory Impact Analysis (RIA). for the proposed rule.  In some
cases, we revised our cost estimates, and in some cases we revised
monitoring and reporting requirements in ways which reduced burden.
Please see source specific comments and responses in Section III of this
preamble and the associated comment response documentsrelevant volume of
“Mandatory Greenhouse Gas Reporting Rule: EPA’s Response to Public
Comments”.

EPA believes the selected option for the mandatory GHG reporting rule
strikes a balance between impacts on small entities, consistency with
other programs, costs incurred by the reporting entities, and emissions
coverage.  Section 5 of the Final Regulatory Impact Analysis
(RIA)(DOCKET NUMBER)  for the final rule provides cost comparisons for
each alternative evaluated.

In evaluating the costs of self certification with EPA verification and
third party verification, EPA conducted a thorough review of relevant
cost information available.  EPA also considered cost data submitted in
public comments on the proposed rule.  EPA’s review of verification
costs included examining estimated Agency costs for other EPA based
reporting programs, as well as a study conducted by the California Air
Resources Board (CARB).  The results of EPA’s review of verification
costs can be found in the Memo on Verification Costs [DOCKET #].in the
docket.  The final rule retains self-certification with EPA
verification.  EPA’s estimated cost for verification activities is $7
million per year.  Additional comments and responses on third party
verification can be found in Section II.N of this preamble.  Section
5.1.6 of the Final Regulatory Impact Analysis (DOCKET #)RIA for the
final rule contains the full economic analysis of verification costs and
options.

C.  What are the economic impacts of the rule?

1.  Summary of Economic Impacts

EPA prepared an economic impact analysis to evaluate the impacts of the
rule on affected industries and economic sectors.  In evaluating the
various reporting options considered, EPA conducted a cost-effectiveness
analysis, comparing the cost per metric ton of GHG emissions across
reporting options.  EPA used this information to identify the preferred
options described in today’s rule.

To estimate the economic impacts of the rule, EPA first conducted a
screening assessment, comparing the estimated total annualized
compliance costs by industry, where industry is defined in terms of
North American Industry Classification System (NAICS) code, with
industry average revenues.  Overall national costs of the rule are
significant because there are a large number of affected entities, but
per-entity costs are low.  Average cost-to-sales ratios for
establishments in affected NAICS codes are uniformly less than 0.8
percent.

These low average cost-to-sales ratios indicate that the rule is
unlikely to result in significant changes in firms’ production
decisions or other behavioral changes, and thus unlikely to result in
significant changes in prices or quantities in affected markets.  Thus,
EPA followed its Guidelines for Preparing Economic Analyses (EPA, 2002,
p.124-125) and used the engineering cost estimates to measure the social
cost of the rule, rather than modeling market responses and using the
resulting measures of social cost.  Table VII-4 of this preamble
summarizes cost-to-sales ratios for affected industries.

Table VII-4.  Estimated Cost-To-Sales Ratios for Affected Entities

NAICS	NAICS Description	Average Cost Per Entity ($1,000/entity)	Average
Entity Cost-to-Sales Ratio1

211	Oil and Gas Extraction	$2 	<0.1%

221	SF6 from Electrical Systems	$5 	<0.1%

322	Pulp & Paper Manufacturing	$20 	<0.1%

324	Petroleum and Coal Products	$21 	<0.1%

325	Chemical Manufacturing	$14 	<0.1%

327	Cement & Other Mineral Production	$50 	0.8%

331	Primary Metal Manufacturing	$26 	<0.1%

486	Oil & Natural Gas Transportation	$4 	<0.1%

562	Waste Management and Remediation Services	$5 	0.2%

325199	Adipic Acid	$24 	<0.1%

325311	Ammonia	$17 	<0.1%

327310	Cement	$63 	0.2%

331112	Ferroalloys	$9 	<0.1%

3272	Glass	$8 	<0.1%

325120	Hydrogen Production	$3 	<0.1%

331112	Iron and Steel 	$30 	<0.1%

3314	Lead Production	$10 	<0.1%

327410	Lime Manufacturing	$60 	0.4%

325311	Nitric Acid	$20 	<0.1%

324110	Petrochemical	$27 	<0.1%

325312	Phosphoric Acid	$60 	<0.1%

322110	Pulp and Paper	$20 	<0.1%

324110	Refineries	$41 	<0.1%

327910	Silicon Carbide	$10 	<0.1%

3251	Soda Ash Manufacturing	$16 	<0.1%

325188	Titanium Dioxide	$10 	<0.1%

3314	Zinc Production	$13 	<0.1%

1This ratio reflects first year costs.  Subsequent year costs will be
slightly lower because they do not include initial start-up activities.

2.  Summary of Comments and Responses

Comment:  EPA received a number of comments on the overall economic
impacts of the proposed rule.  Some commenters stated that the economic
impacts are understated as costs will not be passed on to consumers from
reporters. Other commenters stated that large increases in operating
costs resulting from mandatory reporting of GHGs would lead facilities
to close or move offshore.

Response:  As described previously, EPA conducted a thorough analysis of
available information and reviewed comments submitted on this issue, and
we have determined that this analysis provides a reasonable
characterization of costs for facilities in each subpart and that the
documentation provides adequate explanation of how the costs were
estimated.  Our economic impact analysis has been conducted without
taking into account the fact that some share of costs may be passed on
to customers of each affected sector.  Instead, facilities’ annualized
costs were compared to sales for entities in the sector, overall and for
small entities. Even when all costs are absorbed by the facility, the
costs represent less than 1one percent of sales and thus are not
expected to result in significant hardship for affected firms.

D.  What are the impacts of the rule on small businesses?

1.  Summary of Impacts on Small Businesses

As required by the RFA and Small Business Regulatory Enforcement and
Fairness ACT (SBREFA), EPA assessed the potential impacts of the rule on
small entities (small businesses, governments, and non-profit
organizations).  (See Section VIII.C of this preamble for definitions of
small entities.)

EPA has determined the selected thresholds maximize the rule coverage
with 81 to 86 percent of U.S.  GHG emissions reported by approximately
10,152 reporters, while keeping reporting burden to a minimum and
excluding small emitters.  Furthermore, many industry stakeholders that
EPA met with expressed support for a 25,000 metric ton CO2e threshold
because it sufficiently captures the majority of GHG emissions in the
U.S., while excluding smaller facilities and sources.  For small
facilities that are covered by the rule, EPA has included simplified
emission estimation methods in the rule where feasible (e.g., stationary
combustion equipment under a certain rating can use a simplified
calculation approach as opposed to more rigorous direct monitoring) to
keep the burden of reporting as low as possible.  We received many
comments related to monitoring and reporting requirements in specific
source categories, and made many changes in response to reduce burden on
reporters.  For information on these issues, refer to the discussion of
each source category in this preamble and the associated comment
response documents.relevant volume of “Mandatory Greenhouse Gas
Reporting Rule: EPA’s Response to Public Comments.”  For further
detail on the rationale for excluding small entities through threshold