May 21, 2009

MEMORANDUM

TO: 			Air Docket EPA-HQ-OAR-2005-0161

SUBJECT:	Domestic Agricultural Sector Impacts from the Forest and
Agricultural Sector Optimization Model (FASOM)

This memorandum accompanies two spreadsheets in the docket that provide
more detailed results from the FASOM model.  FASOM results were used to
estimate the domestic agricultural sector impacts for the Notice of
Proposed Rulemaking (NPRM).

Several scenarios were run using the FASOM model to determine the
agricultural impacts of the NPRM.  The economic impacts reported in the
preamble and NPRM are based on the Control Case scenario relative to the
Reference Case scenario included in the Excel spreadsheet entitled
"FASOM Economic Impacts."  In addition, we conducted sensitivity
analyses on several key assumptions, including the number of acres in
the conservation reserve (CRP) program, corn yields, and high energy
prices.  This information is presented in the accompanying Excel
spreadsheet entitled "FASOM Economic Impacts Sensitivity Runs."  It
should be noted that each of the sensitivity analysis compares the
sensitivity scenario relative to a different reference case.  For
example, the high corn yield sensitivity run assumes higher corn yields
in both the reference case and the scenario case.  

It is important to note that these economic impact scenarios are similar
to, but not identical to, the scenarios used to determine the greenhouse
gas emissions from the domestic agricultural sector for the lifecycle
analysis.  Due to the short timeframe available to develop the
greenhouse gas emissions estimates, the default assumptions in FASOM
were used to determine the energy prices, rather than the AEO 2008
projections.  A comparison of the price differences in included in the
two tables below.

Table 1: AEO 2008 Reference Case Energy Prices (From Tables 12, 8, and
15)

Table 2: FASOM Default Energy Prices

